The Bangko Sentral ng Pilipinas (BSP) plans to begin local production of polymer banknotes by 2027 in a bid to decrease reliance on foreign suppliers as cash demand continues to grow alongside digital payments.
BSP Deputy Governor Mamerto Tangonan announced that the central bank intends to establish its first polymer banknote production line at the Security Plant Complex, with a projected capacity of 500 million bills annually.
Currently, the production of the country’s water-resistant polymer banknotes is outsourced to Australia.
While local manufacturing will gradually reduce dependence on imported currency, Tangonan noted that foreign suppliers will still be needed to meet the nation’s total demand. A single production line cannot cover all cash requirements, particularly since shifting production between different denominations can cause operational interruptions.
Meanwhile, the BSP anticipates a seasonal surge in the demand for newly printed banknotes during the Christmas holiday, a period traditionally marked by the demand for crisp bills for gift-giving.
Tangonan confirmed that this anticipated increase has already been factored into central bank projections.
“We really anticipate (an) increase in the demand, because seasonally, this season is always the highest in terms of demand for new banknotes,” Tangonan said.
Despite the growing adoption of electronic wallets and digital payment channels, Tangonan pointed out that physical cash remains heavily utilized across the country.
“Right now, we still haven’t reached the point where digital is directly substituting cash. So we still see a simultaneous growth in digital payments and cash demand,” he stated.
In light of the holiday spending rush, the BSP continues to encourage the public to use digital cash gifts, or e-Aguinaldo. The central bank also reminded citizens to remain vigilant and verify currency authenticity using the “look, feel and tilt” method to guard against counterfeiting during the busy season.