The Market Monitor Minding the Nation's Business
By Riza Lozada
The Bangko Sentral ng Pilipinas (BSP) is beefing up coins in circulation by bidding out a contract for the supply of P1.2 billion worth of new metal currencies this year, based on a bid procurement offer issued this month.
BSP said that, while there is no coin shortage with about 23.31 billion pieces of coins amounting to P26.75 billion in circulation as of June 30, the demand for coins is rising.
The BSP said the submission of bids will close on August 26 for a tender that seeks the supply of P5 metal coins of 412,980 kilos, with total cost of P135 million; P1 metal coins of 3,346,740 kilos, worth P714 million; 25-centavo metal coins of 1,419,920 kilos at P292 million; and 5-centavo and 1-centavo coins of 397,440 kilos at a cost of P102 million. The BSP said that, while coins in circulation are ample, an artificial shortage of coins may occur because of the common practice by people of keeping coins idle in piggy banks, drawers, wallets, jars, etc., and not recirculating them.
In a recent market study, BSP noted an increased demand for P1 coins due to their use in “automatic tubig machines” and coin games.
The BSP said the number of coins in circulation is equivalent to a ratio of 227 pieces of coin for each of 100 million Filipinos.
The BSP noted that past efforts to smuggle P1 coins out of the country, including their illegal hoarding for melting and shipment to other countries, were closely monitored and successfully halted by the Bureau of Customs and BSP agents.
“To address the situation, the BSP has conducted information and awareness campaigns to make all sectors fully realize the importance of coins and develop the habit of regularly using them in payment of goods and services and in giving an exact change,” the BSP noted.
The BSP also launched the coin-recirculation program to promote the regular use of coins and to raise funds to benefit public elementary schools through programs such as Tulong Barya Para sa Eskwela and the Tulong Barya Para sa Gawad Kalinga.
The BSP said on the perceived notion that the metal component such as silver, copper, gold in Philippine coins had been devalued, that “all the coins issued by then Central Bank of the Philippines and the BSP do not contain precious metals, particularly silver and gold. Moreover, the value of the metallic contents of the BSP coins is determined by world market prices of metals.”
“The design of the current coinage was benchmarked against the currencies of other countries. The metallic composition (i.e., nickel and copper) of the existing coin series has been reduced, due to the rising cost of metals in the world market; but without sacrificing the appearance and durability of the current coinage,” the BSP said.
The lack of coins is more pronounced in rural areas, where consumers’ propensity for spending is mainly limited to retail outlets, wet markets, sari-sari stores, and fare for public-utility vehicles.