The Bangko Sentral ng Pilipinas tapped Note Printing Australia, a wholly-owned unit of Reserve Bank of Australia, to print 500 million pieces of 1,000-piso polymer banknotes to be rolled out by the middle of 2022, BSP Governor Benjamin Diokno said in an online briefing Thursday.
“We have reached an agreement with Australia’s central bank, the Reserve Bank of Australia, and its wholly-owned subsidiary Note Printing Australia for the production of the polymer banknotes,” Diokno said.
Australia is the first country to issue full series polymer banknotes, and produced and supplied polymer banknotes to several countries.
“As such, their advanced technology and expertise in the printing of polymer banknotes will be the best benchmark for our first circulation. Delivery of the first batch of polymer notes will be in April 2022,” Diokno said.
Diokno said that in line with global best practices, the BSP continuously seeks ways to improve Philippine currency. As the sole issuer of Philippine money, he said the BSP ensures that notes and coins serve the needs of the Filipino people.
“The 1000-piso note will begin circulating in mid-2022,” Diokno said.
Deputy Governor Mamerto Tangonan said in October the circulation of polymer 1,000-piso banknotes would gauge the people’s acceptance of it compared to the existing paper bills.
He said that since the start of the pandemic, sanitizing frequently-touched objects, including banknotes and coins, became a widespread need among the public. In the current setup, abaca fiber and cotton composite are used to print banknotes. The BSP prints money using a fiber composite of 20-percent abaca and 80-percent cotton for added durability.
Tangonan also said that crime syndicates kept improving their techniques in counterfeiting the new generation currency banknotes that are in circulation. He also said the production of banknotes could be made more sustainable especially considering the increasing scarcity of water, energy and other inputs.
Aside from being more durable, polymer banknotes could also prevent counterfeiting because it would allow banknote manufacturers to incorporate security features, such as optically variable devices that are extremely difficult to reproduce, he said.
Asked why the BSP chose to circulate the 1,000-piso polymer banknotes instead of the other denominations, Tangonan said it is the bill that is mostly used by the public.
The BSP outsources the master die used in printing bank notes but it makes the plates for their security printing plant.
Tangonan said the planned circulation of the 1,000-piso polymer banknotes would be done nationwide to get the needed feedback from the public. He said the BSP also wanted to see if the benefits of polymer banknotes observed in other countries would also hold true under the Philippine condition.
Australia became the first country to have a full set of circulating polymer banknotes of all denominations. Other countries that also use plastic banknotes are Bangladesh, Brazil, Brunei, Chile, Indonesia, Israel, Malaysia, Mexico, Nepal, New Zealand, Papua and New Guinea, Romania, Singapore, the Solomon Islands, Sri Lanka, Thailand, Vietnam, Western Samoa and Zambia.
Other central banks, such as the Bank of England and the Reserve Bank of Australia, reported that polymer banknotes are less likely to host viruses and bacteria due to their smooth and non-absorptive surfaces. Polymer banknotes can also be sanitized without damage, compared to paper banknotes.
Tangonan said polymer banknotes have a smaller carbon footprint, lower water and energy usage, and less environmental toxicity. Moreover, polymer banknotes last at least 2.5 times longer than paper banknotes, reducing the environmental impact associated with regular production of banknotes to replace those that become unfit from wear and tear.
A Philippine banknote’s usable life ranges from 0.8 to 1.8 years depending on denomination and other usage factors.
When polymer notes are retired, they can be recycled unlike paper notes, which must be shredded or burned. Polymer banknotes can also withstand extreme temperatures and were found to last 2.5 to 4 times longer than paper money.
Tangonan said the BSP’s shift to polymer banknotes was expected to have a minimal impact on the abaca industry.
“Job losses and foregone revenues are not significant. Lower banknote production costs redound to higher BSP dividend remittance to the national government,” he said.
He said the possible displacements costs could be offset by emerging opportunities and continuing modernization of the abaca industry.
“There will be phased transition, allowing industry players to adjust over time,” he said.
The Department of Agriculture earlier shared the recommendation of the Philippine Council for Agriculture and Fisheries and Philippine Fiber Industry Development Authority to retain abaca in the banknotes.
In response, the BSP gave its commitment to maintain an open dialog with key players of the abaca industry and relevant agencies as it carries out the limited test circulation of 1000-piso notes.
Tangonan said if the test is successful, depending on the acquired data, the monetary authorities would then decide to proceed or not with the production of other denomination of banknotes.