BSP: Cash in piggy banks create artificial shortage

MONEY saved in piggy banks and under mattresses cost the government more by creating an artificial shortage, according to the Bangko Sentral ng Pilipinas (BSP).

BSP Governor Benjamin E. Diokno said storing banknotes and coins in containers, such as jars, barrels, plastic bottles and cabinets hamper the efficient circulation of currency, causing an artificial shortage.

An artificial shortage would prompt the central bank to increase the amount of banknotes and coins in circulation, resulting in additional production costs.

“The BSP could mint fewer coins if they are efficiently circulating. The reduced production costs would allow the central bank to remit more dividends to the national government, which would help fund pandemic-response measures and social services,” Diokno said.

The central bank governor said it is still better for Filipinos to save money for a rainy day through formal accounts where they are safeguarded and insured.

The BSP therefore urges the public to deposit their savings in formal accounts with regulated institutions such as banks, e-money issuers, microfinance institutions, cooperatives and non-stock savings and loan associations.

Hard-earned savings placed in these formal accounts are safeguarded through regulations imposed by the BSP and other relevant agencies. In the case of bank deposits, these are insured by the Philippine Deposit Insurance Corp. and would earn interest over time.

“Account ownership serves as a gateway to financial inclusion. It enables people to participate in the benefits and opportunities of the formal financial system, empowering them to build a better financial future,” Diokno said.

The BSP regularly conducts information campaigns on coin recirculation and proper handling of Philippine currency, as well as on financial literacy and inclusion.