VERY FEW people are aware of it, but we are going to have a new set of peso bills very, very soon. We may be giving our godchildren the new bills as gifts this Christmas. The present set of paper Philippine currency will be phased out. New coins will be issued later. The question is, why is the Bangko Sentral ng Pilipinas (BSP) doing this secretly and hastily? The nation is totally unaware of what will happen to their money or how the new money will look like. Malacañang, Congress and the Supreme Court did not know anything about it beforehand. The BSP claims that it is an independent entity and can do anything it wants. In other words, it is the fourth branch of government, a co-equal of the executive, legislative and judicial branches. To get a favorable reaction from President Aquino, the images of his parents, Ninoy and President Cory, will be in the P500 note. But no one, except insiders and a privileged few, have seen the designs. The new banknotes will be printed by several European printers led by the British company De La Rue although we have a Security Printing Plant that cost the Filipino taxpayers billions of pesos. The BSP’s ostensible reason for completely changing the nation’s currency—dubbed as the New Generation Currency Project—is “to guard against counterfeiters by making it very difficult and costly for counterfeiters to produce exact copies of our money.” It will do this by upgrading the security features in all our peso bills “to make it easier for the public to detect fake money.” It said it will educate the public “on how to tell genuine banknotes from counterfeits.” The financial and business community is mystified by the project for several reasons: 1. The reason given by the BSP for the project is to make the country’s currency “counterfeit-proof.” But the present peso bills are not being counterfeited, or facing a “clear and present danger” of being sabotaged by counterfeiters. The BSP has not offered any proof, or even claim, that our currency is being counterfeited. We had a counterfeit president, a counterfeit senator and many counterfeit congressmen, but not many counterfeit peso bills. Financial experts say the Philippine peso is not likely to be targeted by serious counterfeiters because it is not widely used and the volume is small. Counterfeiters will focus their talents, energies and resources on the US dollar, the euro and other heavyweight currencies because the criminal returns there are huge. 2. A wholesale makeover of a currency is very rare among nations. It happens only when there’s a major political development that requires it, such as the European Community’s decision to adopt one common currency, the euro. Sometimes a government does it to cope with hyperinflation, when the nation’s currency is completely revalued and changed. In normal times, currencies are changed painstakingly one note at a time. And even then, the substitution of one note is studied and undertaken over a period of years, such as the case of the new US $100 note, which was 10 years in the making. The same with Hong Kong’s introduction of a new banknote. In the case of the new RP currency, the makeover is not only total (all bills will be changed), it is also being done in haste. Why? BSP Gov. Amado Tetangco is retiring very soon. 3. Banks are worried about the haste and secrecy in changing our currency. They say that new bills have to be tested and recalibrated for ATMs and cash acceptors. This can happen only if the BSP provides technical details to banks and suppliers before releasing the currency. There are only four months left before the new currency is circulated in December. 4. The new peso bills will totally be printed by foreign printers because the BSP has set up the project in such a way that printing by foreign printers would be necessary. The so-called security features will prevent our own Security Printing Complex (SPC), which has been printing our present currency, from doing any printing of the new currency. Our own SPC will be totally out of the picture. 5. The SPC in Quezon City, built in 1978 for billions of pesos, has been unable to upgrade its printing facilities because of the BSP’s failure to bid out and buy the needed equipment. As a result, it can print only half of the country’s bank-note requirements. The rest are printed by foreign printers. The BSP imports 900 million finished banknotes annually (up from only 100 million notes in 1998), a little less than half of the country’s yearly requirement. The BSP is spending roughly $35 million to $40 million a year for these notes. With the printing of the New Generation Currency, the cost will go as high as $70 million, enough to buy the needed new equipment. The sentiment of the business community is that the BSP and the Monetary Board should make a full disclosure of the New Generation Currency Project. It wants to know: • When will the new banknotes be in circulation? • Who will be printing the banknotes? • Why is there need for the new currency now? • Is there really a case of counterfeiting plaguing the country? • What is the status of our Security Printing Complex? Why has its equipment not been upgraded? • How are national sovereignty and security concerns served when the nation’s currency is being produced by foreign commercial printers? Tetangco must answer all these questions now because only a few months are left before December. The answers given by Deputy Governors Diwa Gunigundo and Armando Suratos have been evasive and confusing. |
Published in Philippine Daily Inquirer August 18, 2010
No comments:
Post a Comment