BSP trims outsourced banknote volume
The Bangko Sentral ng Pilipinas (BSP) is gradually reducing the volume of outsourced banknotes and could reach zero level by 2017.
BSP Deputy Governor Diwa C. Guinigundo said that with the expanding economy, the requirement for banknotes have increased to three billion pieces from two billion pieces three years ago.
While the BSP has purchased two new superline banknotes printers – both are already commissioned – the central bank is still only producing two billion pieces of different denominations’ banknotes.
“Our requirement is three billion pieces (of notes), so one-third is outsource,” said Guinigundo. “But the volume (of outsourced banknotes) could be even less. It is reduced.”
With the new banknotes printers, Guinigundo said they have also increased workforce and daily shifts.
Printing production is now done six days a week from a previous three to four days, and shifts went up from two to three at full capacity.
There are two banknotes’ series in circulation, the 35-year old New Design Series (NDS) and the New Generation Series (NGS) first introduced in 2010.
The BSP is taking NDS off circulation beginning on January 1, 2016 but while it will no longer be accepted as legal tender, it can still be exchanged in banks or with the BSP until December 31, 2016.
Guinigundo said they have stopped printing NDS since 2013. At the end of 2014, there are still 711 million pieces of NDS in the system out of 3.4 billion pieces of currency in circulation, or about 21 percent.
Guinigundo said since last year, the BSP is already printing 1,000-piso and 500-piso denominations. These two bills were previously outsourced, as most of the 200-piso and 100-piso notes.
In 2013, the central bank’s Security Plant Complex (SPC, where banknotes are printed, coins are minted and where the country's gold reserves are refined) in Quezon City have started printing a larger volume of 50-piso and 20-piso bills and in 2012, the 200-piso and 100-piso.
In anticipation of further increasing banknotes in circulation and completely printing all
banknotes locally, the BSP’s Monetary Board approved the acquisition of a third superline printer which is estimated to cost 1 billion to 1.5 billion.
The proposal was part of a 10-year expansion program of the SPC which was also approved.
The long-term modernization plan would make the Philippines as one of the few countries with central banks that have the capacity to print all of its banknotes requirements.
The central bank has started to wind down its orders of outsourced printing of banknotes to save the government on cost. The BSP used to outsource about 50 percent of its banknotes requirements which costs up to 4 billion a year.