Where have Philippine Coins Gone?|
December 26, 2013
You can blame it on the consumer – maybe, but where have all the coins really gone?
According to Bangko Sentral ng Pilipinas (Central Bank of the Philippines) statistics there should be 207 coins for every person living in the Philippines. As of June there were 20.08 billion coins in circulation, with a face value of 22.77 billion pesos. About 56.6 percent of this is in low denomination coins. The Philippines currently uses coins in denominations of 1, 5, 10, and 25 centavos, and 1, 5, and 10 pesos. Bank notes are issued in higher denominations.
If you accept what the National Statistical Coordination Board says, the reason coins aren’t circulating is due to an artificial shortage the board is blaming on everyone except the government.
Is there really a coinage shortage in the Philippines? An article published in the Oct. 25 ABS-CBN News reads: “Don’t you hate it when you scramble to find coins to pay for your jeepney ride or coffee at the vending machine? Or when the cashier tells you that your change is 25 centavos short because there are no coins? These instances of ‘walang barya’ are enough to make some Filipinos think there’s a coin shortage in the country.”
NSCB Secretary General Jose Ramon G. Albert was recently quoted as saying, “The BSP explains that occasionally there is an artificial shortage of coins due to the habit of people of keeping coins in wallets, drawers, and piggy banks instead of using them as payment for goods and services, or depositing them in banks.”
Albert spread the blame around, adding, “The central bank also reports that there is an increased demand for 1-peso coins also due to the popularity of coin games which interfere in the circulation of coins throughout the economy.”
Just in case he hadn’t sufficiently blamed everyone except the banks and the government, Albert pointed out that the Bureau of Customs has recorded attempts to smuggle coins out of the country with the objective being to scrap the coins for their metal value. It is illegal to export hoards of Philippine coins. Albert didn’t present any statistics on how many coins were being smuggled.
According to BSP San Fernando La Union spokesperson Mariane Suaso, “There are enough coins produced and what we are experiencing is a perceived shortage.” She cited a statistic that 20 billion coins have been produced, but didn’t say over how long a period.
Suaso was quoted in the Oct.15 Sun Star newspaper as saying, “There is a Memorandum of Agreement between the BSP and the bankers association, for any bank to change unfit notes, regardless if an individual has no account in their bank.”
This is important, as was explained in the Sun Star article: “By re-circulating the country’s coins and notes, the public can help the BSP estimate how much pieces of coins and notes are needed to be produced to balance the supply and the needed demand, according to Suanso.”
There is some mystery surrounding why the public appears to be hoarding Philippine coins at a higher rate than elsewhere. According to NSCB statistics, M1 or “narrow money” as a medium of exchange (coins, bank notes, and demand deposits) was estimated at $38.9 billion in 2012, while M1 for Indonesia was at $87 billion and for Thailand at $52.2 billion at the same time.
Government programs including Tulong Barya Para sa Eskweal or “Loose Change for Schools” and Tulong Barya Para sa Gawad Kalinga or “Loose Change for Gawad Kalinga” (Gawad Kalinga is a housing project) are aimed at getting some of this coinage back into circulation. The greater question may be why Philippine consumers appear to be hoarding an unusually high number of coins as are being hoarded in other countries.
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