Coins — they lurk in the nooks and crannies of pockets and bags, refusing to be found when you need them the most.
But do we really need coins — which can hardly buy anything — in the first place, when experts say that digitalization is pushing us toward a cash-lite society?
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the Philippines could be “coinless” by 2025.
In this B-Side episode, Eloisa T. Glindro, Director at the Currency Policy and Integrity Department of the BSP, explains to BusinessWorld reporter Luz Wendy T. Noble the role of small change in our financial system and why we should stop hoarding coins.
Coin hoarding can either be illicit or unintentional.
This October, the BSP urged legislators to pass a measure against coin hoarding after conducting a warehouse raid, together with law enforcement agencies, wherein P50 million worth of coins were seized in Quezon City.
“We have of course uncovered some of those who tried to melt them for the metallic composition,” Ms. Glindro said of coin hoarders.
Meanwhile, there are also people who inadvertently accumulate coins. Multiply these people by several factors, add the illicit hoarders, and the BSP could have an artificial shortage on its hands. The BSP, as the primary caretaker of currency, will need to spend more to produce coins.
Keeping a piggy bank is not coin hoarding, but your money is better kept at a bank.
It’s not illegal to keep a piggy bank at home. But the BSP is urging the public to instead deposit the money they have in their piggy banks to financial institutions to ensure better circulation of the currency and prevent damage on the bills and coins.
Ms. Glindro noted banks offer a basic deposit account which does not have maintaining balance or a dormancy fee. To open an account, one needs an initial deposit of P100 and government IDs (or just the national ID).
Even though digital transactions gain traction, coins will remain relevant.
The central bank hopes that 50% of all payments in the country will be done digitally by 2023.
Consequently, Ms. Glindro expects cash usage to decrease as digital transactions continue to gain traction. However, financial inclusion also means having bills and coins available for those who need them.
“The journey towards a cash-lite society will be governed by broadening the payment choices available to Filipinos and that is by maintaining a healthy mix of safe … digital payment options alongside consistently good quality, physical currency,” she said.