Case of the Missing Coins

Article excerpt

(Concluded from last week)Five years ago, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) created a special committee to address the problems arising from the circulation of Philippine currency — challenges which persist up to the present.BSP Governor Amando Tetangco Jr., who was then the first chairman of the Currency Management Committee (CuMC), stressed the importance of creating such a committee because of three main concerns: The perceived shortage of coins in some regions in the country, the indications that coins are not being circulated effectively, and the need for BSP to produce more coins to make up for those not in circulation. The production cost runs into millions of pesos.Last week, I discussed the main reason behind the country’s perennial shortage of coins, particularly the lower-denominated ones: The negative attitude and low regard for small currency.Instead of using coins to purchase goods (and in effect circulating them in the market where they rightfully belong), many Filipinos consider them as “excess baggage” and leave them at home.The practice of keeping coins in piggy banks for a long time also leads to this artificial, but persistent, shortage of coins.The BSP sees another reason behind this problem: Coin smuggling.Dr. Paterson Encabo, head of BSP’s Mint Refinery Operations Division (MROD), explained that in the last two years, there have been some attempts to smuggle out coins, particularly one piso, because of the increased international demand for copper and nickel.Encabo explained this was because of the higher metal content of one piso coins belonging to an earlier series. …