«We also need to protect the public. We don`t want them to walk around thinking we just gave a blank check to an institution like Bangko Sentral to determine what volume is legal or not,» he said. Excluded are persons who store coins in «savings trains» or «alkansya», glasses, drawers and handbags; small and medium-sized enterprises operating in retail stores that use coins for work, Tubig automatic machines, «Piso networks», vending machines, karera video machines and other types of amusement machines. The proposed law also did not cover the following: non-profit institutions, private banks, government banking and financial institutions, as well as government agencies and instruments that hold coins in the course of their commercial or official functions. At last Thursday`s hearing, Osmeña asked officials of Bangko Sentral ng Pilipinas (BSP) to set the limits on the storage of coins – in terms of value, number of coins and total value. Also excluded are non-profit institutions, private banks, state-owned banks and financial institutions, as well as government agencies and instruments that hold coins in the course of their commercial or official functions. Chronic coin shortages in the Philippines have been blamed on both coin hoarders and smugglers. Retail businesses are exempt from most hoarding rules because they use a large number of coins in their daily operations. Similarly, non-profit institutions, private banks and state-owned financial institutions that need large quantities of coins are excluded. He said «big boys» could hire lawyers to question things, but small savers should have a «comfort level» in terms of how many coins they could keep. All Philippine coins are made of copper, brass, nickel, aluminum or steel. The increasing value of these metals encouraged unions to hoard and export the coins, resulting in a shortage of coins that began in 2004. The bill, known as the «Anti-Hoarding of Legal Tender Coins In the Philippines,» provides for an eight-year prison sentence and a fine of at least the nominal or intrinsic value of coins that do not exceed 300,000 pesos for hoarding the coins.
TJ Burgonio Philippine parts are made of various alloys of copper, brass, nickel, aluminum or steel. Rising metal values — plus the fact that the intrinsic value of the metal is worth more than the face value of the coin — have encouraged unions to accumulate coins, the senator said. After the seizure of about 50 million pesos of 1 piso coins from a warehouse in Quezon City, the Bangko Sentral ng Pilipinas called for «the adoption of a law on the hoarding of an extremely large volume of coins, as the central bank believes that the criminalization of this activity reinforces ongoing efforts to maintain and protect the integrity of the Philippine currency.» The BSP pointed out that the hoarding of coins prevents their primary use as a medium of exchange and «hinders the efficient flow of transactions and causes an artificial deficiency that disrupts the financial system.» The BSP had previously estimated that the average per capita coin was 180 coins, well above the ASEAN standard of 50. Coins are widely used in the micro-retail of sari-sari stores. While sound cards are already used to pay the fare in MRT systems, coins – also called «barya» in Filipino – are still used as fares in public transport such as jeepneys, tricycles and buses. According to BSP, there is «negative seigniorage»; Seigniorage is «the profit a government derives from the issuance of money, especially the difference between the face value of coins and the cost of production.» For example, the cost of manufacturing a 1-Sentimo coin was once estimated at 1.12 centavos. Apparently, this cost gap is now being exploited by hoarders. The provisions relating to the hoarding of coins have not been the subject of such attention in the legislative revisions. In October 2021, 50 million 1 peso coins were seized during a raid on a warehouse in Barangay Laging Handa, Quezon City. Smuggling is a problem with coins; Their intrinsic value makes it profitable to dispose of them because of their metal content. The central bank uses nickel-plated steel in current coins to prevent the smuggling of coins due to their nickel content. The Senate version also exempts retail companies that use coins in their operations, as well as non-profit institutions, private banks, and state-owned financial institutions that need coins related to their functions.
Currently, anyone convicted of hoarding can be detained for one year and fined 100,000 pesos per thousand pieces, a fraction of that amount that has been hoarded. The fine cannot be paid from the hoarded coins seized by the government. The target group consists of «individuals or groups engaged in the hoarding and large-scale export of parts whose unions base and convert the parts to use as raw materials for mobile phones, computers or other industrial applications». Banking authorities acknowledged that hoarding coins to melt into commodities for mobile phones, computers and other devices was a «major problem.» Banks are required by the Anti-Money Laundering Act to question the origin of coins when coins are brought to them in large quantities. Although the central bank insists that it does not want to discourage people from saving certain coins in piggy banks at home, there is no legal definition of what constitutes hoarding that deals with what individuals may hold. The legal definition also does not deal with a significant number of pieces held by a person that the person could insist is a collection of coins. Could the hoarding of coins be illegal? Where would you draw the legal line between hoarding and a large collection of coins? These are on the table as the Philippines considers legislation that would enact stricter laws against counterfeit currency and the unnecessary accumulation or hoarding of coins. Despite BSP`s efforts to stop illegal activities and raise public awareness to encourage their use as a medium of exchange, Osmeña said that «the shortage of coins continues.» Sicat said the BSP could set a limit, say P5,000 for small savers, and another limit for retailers who keep coins for change. A lawmaker wants the hoarding of Philippine coins to be criminalized and hoarders to be punished with eight years in prison and a fine of at least 300,000 pesos. Rep.
Jerry Treñas of the city of Iloilo, author of House Bill 1662 or the Anti-Hoarding of Philippine Legal Tender Coins Bill of 2013, said that hoarding coins of each denomination causes an artificial shortage of small denomination denominations in the country, which is seen as the reason for the lack of change in various institutions. «The unscrupulous practice of hoarding coins amounts to economic sabotage and creates an artificial shortage of coins,» Treñas said. Treñas said the bill will criminalize the possession or possession of coins of any denomination that exceeds the total allowable value, number of coins and weight determined by the Bangko Sentral ng Pilipinas (BSP) by any person, company, partnership, association or other form of legal personality. The measure aims to recirculate the accumulated coins collected and stored by the unions that are currently accumulating coins with impunity in the Philippines, which in turn will be melted and converted into other materials for various industrial purposes.