BSP resolves coin supply shortage

By LEE C. CHIPONGIAN

 MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) continues to find ways to resolve and avert coin supply shortfalls owing to high demand for coins from banks.

In a report, the BSP said it has averted a projected shortfall in the supply of coins last year, and these supply constraints resulted from either the public hoarding of coins or delivery delays from outsourced mint makers. It noted that an artificial shortage of coins may occur because of the common practice by people of keeping coins idle in bank vaults, drawers, piggy banks, and not re-circulating them.

The volume of coins released in 2010 was lower than demand, which for banks located in Metro Manila, was 1.18 billion pieces. The BSP had enough supply of 10-piso coins but had a slight shortfall in the smaller coin denominations.

The BSP, which outsource coin blanks, have been resolving yearly supply constraints for coins since 2007. However officials noted an artificial scarcity due to the high demand for 1-piso and 25-sentimo coins. “This could be traced to the slow recirculation of coins which led banks to demand more coins from the BSP,” said the report submitted to the Monetary Board.

The central bank is implementing measures to avoid artificial scarcity of coins in the future. During consultation meetings with BSP regional offices, one of the causes for the poor recirculation of coins was the use of coins as tokens for so-called ‘automated tubig machines’ video games and videoke machines. Coins were also used as accessories, kept inside churches, piggy banks, and even melted for metals.

To improve the recirculation of coins, the BSP is intensifying the ‘Tulong Barya Para sa Eskwela’ program. In the last two years (2008 to 2010) the BSP said the program has successfully recirculated almost six million coins. Last year along, some P7 million worth of coins have been deposited under the program. So far since it started in 2006, the program has collected P14-million worth of coins.

In its 2010 annual report, the BSP said its mint and refinery operations delivered a total of 582.02 million pieces of circulation coins. The demand from banks for coins last year totaled 1.1 billion pieces.

The BSP will demonetize all denominations of coins in preparation for new designed coins for circulation beginning next year. The New Generation Currency banknotes in all six denominations were introduced in December last year.