Manila, Philippines - The “old” banknotes called “New Design Series (NDS)” by the Bangko Sentral ng Pilipinas (BSP) will become collectors’ money or currency by 2015.
The BSP will stop the printing of NDS this first quarter, finally, and will only produce the “New Generation Currency (NGC)” that the public was first introduced to in December 2010.
For three years, the old and new banknotes were co-circulated.
In the next two to three months, however, the NDS notes bearing the 2014 stamp will be considered limited edition as the banknotes series will be printed for the last time.
BSP Deputy Governor Diwa C. Guinigundo said they will make the call demonetizing the NDS banknotes later this year.
After the announcement, the BSP will give the public one year as transition period to spend the old banknotes.
By 2016, only the six denominated NGC banknotes – the 20-piso, 50-piso, 100-piso, 200-piso, 500-piso and the 1,000-piso – will be recognized as the country’s legal tender.
The NDS was first issued in 1985.
In 1993 when the New Central Bank Act established the new BSP, some circles within the independent institution began calling it the “BSP Series.”
The original set of NDS included the banknotes version of the P5 or 5-piso and the P10 or 10-piso.
The lower denomination NDS, now produced as coins, saw its last print in 1996 and 2002, respectively.
With the phaseout of the P5 banknote brought out the new P200 banknote.
Currency demonetization, as BSP explained it, is the process of removing the monetary value of a legal tender currency.
This will be done through a “gradual process” as applied to unfit and mutilated currency notes and coins, and by replacement by a new series of banknotes’ design.
Guinigundo said the public will still be able to use the NDS banknotes for payments or exchange for normal transactions in 2015 after the Monetary Board, which is the BSP’s policy-making body, approves the demonetization schedule.
In a previous interview, Guinigundo said the NDS will be pulled out of circulation by end-2015.
“The public can still transact with NDS in 2015 and use it in a normal transaction,” he explained. “But beginning 2016, that’s no longer allowed.”
Still, anyone stuck with a few more NDS bills have the chance to exchange the notes with the BSP or through the banks but this has a deadline.
Printing Of Money
Guinigundo said they will no longer print NDS by the end of the first quarter. Since 2012, there were more NGC volume being circulated than NDS.
The BSP has increased the volume of locally-printed banknotes by 92.3 percent or from 1.3 billion pieces to 2.5 billion pieces with the improved capacity to print the country’s own money.
The BSP forecasts that with the expanding economy, the Philippine currency in circulation will grow beyond 13.8 percent in terms of peso value.
The Philippines is one of a handful of central banks that operates its own banknotes printing facility. In the region, China, Thailand, and Indonesia have their own banknotes printing plants.
Guinigundo said with the purchase of two superline banknotes printer, the BSP will gradually reduce and eventually stop the outsourcing of Philippine banknotes.
The BSP acquired the new banknotes printers in 2011 and 2012 in the amount of P2.8 billion.
However, the commissioning of the printers takes some time. To date, the two printers are already operational but not yet at full capacity.
At present, the BSP prints the lower denominations of the NGC or the 20-piso and the 50-piso, while the higher bills 100-piso, 200-piso, 500-piso and 1,000-piso are printed by foreign printers.
The printing of NGC notes started in 2012.
The BSP’s printing facility, the Security Plant Complex, prints about 50 percent of the total 2 billion to 2.5 billion banknotes requirements in a year, the rest printed by foreign companies as a “stop gap” temporary measure to meet “surges in currency demand.”