BSP completes SPC facility upgrades
The central bank has completed a major part of its modernization and expansion of its banknotes printing and coin minting facility, making the Philippines one of a few that could produce its entire currency requirement.
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said that for “operational resilience” however, they still outsource its banknotes requirement, partly because the expanding economy has a need for more banknotes, a volume that at any given point, is higher than the capacity of the BSP’s Security Plant Complex (SPC) in Quezon City.
“We still outsource a portion (and it is) for two reasons,” said Espenilla. “Our needs are huge and we'll need even bigger facility to handle all. At the same time, partial outsourcing is good for operational resilience and business continuity in case of problems.”
To address the higher requirement for currency, the BSP in 2014 approved a 10-year modernization and expansion of its SPC facility. It has an existing modernization program before the 10-year program was placed on the table.
The 10-year SPC program included the purchase of additional banknotes printers or superlines. The cost of each superlines range from R1 billion to R1.8 billion. The program also provided for the construction of new facilities and security enhancements within the complex.
Espenilla said the upgrades have been “substantially completed already” to meet the growing demand for money which on an annual basis, is increasing by at least 12 to 14 percent.
In 2017, the banknotes requirement totaled 4.4 billion pieces, of which 3.3 billion pieces were outsourced finished banknotes and 1.1 billion pieces were produced in-house.
With the completed installation of two banknotes printers last year, in June and in October, 2017, the BSP said this has increased the SPC notes production capacity to 3.6 billion pieces from 1.8 billion.
As for its mind and refinery operations, a total of 2.3 billion pieces of coins were delivered, which was more than the order of 1.7 billion pieces for 2017. The BSP has started minting New Generation Currency coins which was already in circulation alongside the old design coin series.
Overall, the central bank reported that currency in circulation as of end2017 increased to R1.3 trillion, up by 13.8 percent year-on-year.
The BSP has done enhancements to ensure there is sufficient supply of banknotes and coins at all times and according to the report, they continue to improve its forecasting method to evaluate the currency requirements of an expanding economy and the “close monitoring of currency inventory for a more efficient management of currency holdings”.
The BSP said it is also implementing the second phase of the Enhanced Cash Management services as well as improving the acceptance of deposits for credit to banks’ demand deposit accounts and facilitating efficient of banknote and coin deposits. It is likewise expediting the retirement of unfit notes through the use of Currency Disintegrator System, purchasing foreign currencies from banks as part of the BSP’s service to banks, and facilitating shipment of foreign currencies to correspondent banks abroad, it said.