July 14th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) has asked Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla to issue guidance clarifying the acceptance of damaged, folded, or otherwise altered P1000 polymer bills by business establishments, in response to concerns raised by both businesses and consumers.
Salceda, whose committee not also oversees tax policy but also “monetary and financial affairs of the national government” according to Congressional rules, sent his request in writing today.
“I understand that one of the primary motivations for shifting to the polymer-based bill was that it is more durable than the paper bills. However, the lack of guidelines on what constitutes still-valid legal tender and which bills are damaged beyond being acceptable by business establishments has led to confusion in ordinary cash transactions,” Salceda wrote.
“As such, to resolve these concerns, may I request that the Bangko Sentral ng Pilipinas (BSP) issue guidelines on accepting polymer P1000 bills, and what remedial recourses cash-holders can resort to, should their polymer bills no longer be acceptable to establishments. I understand that, with the paper bills at least, damaged bills could still be exchanged with banks and the BSP,” Salceda added in his letter.
In subsequent comments, Salceda said that “in theory and in usual practice, the value of money is not affected by its appearance. What matters is the validity of the promise embedded in the currency. That should determine the value.”
“Money is fungible, so you should be able to exchange one bill with another and not lose value. One folded bill should be just as good as a bill not folded.”
“If the polymer bills are more sensitive and less flexible than the paper bills, the whole effort sort of defeats its own purpose, which is to make paper bills more durable.”
“I also have problems with enforcing the prohibitions against folding the bill. How do you tell who did what? There isn’t a record of who held which bills.”
“Anyway, I hope Philip [Medalla] directs the issuance of guidelines soon. We are not the only currency using polymer. Australia and Canada also do, and they’re not quite as finicky about the bills.”
Salceda said that he has also scheduled a meeting with the Bangko Sentral ng Pilipinas on the polymerization of other bills as well as their impact on the abaca sector. Abaca is used in some paper bills issued by the BSP.
“I will be meeting with BSP officials soon on some issues, and the polymerization effort is one of several. I will discuss the concerns with them.”