Change is coming: Do we really need new coins?

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The release of the New Generation Currency Coins, particularly the five peso coin which looks like the current one peso coin, has created a confusion among people. What are the conditions that led to this change? Photo by JL JAVIER

Editor’s note: Thirdy Acosta is a medical practitioner and post-graduate student at University of Santo Tomas - Faculty of Civil Law. He is a private collector of Philippine currency. The opinions expressed in this commentary are his.

Manila (CNN Philippines Life) — The Bangko Sentral ng Pilipinas (BSP) has just launched the New Generation Currency Coins, designed to gradually replace the current BSP Coin Series which has been in circulation since 1995.

But the BSP’s release of the first of the six coins, the five-peso coin, to coincide with last year’s Bonifacio Day, has brought on a lot of negative reactions from the public, many of whom claim that it gives unnecessary confusion, as it is easily mistaken for a lower denomination, the one- peso, if held together.

This raised questions on the necessity of implementing such changes in our currency. Why was there a need to change our coins in the first place?

Coins are made of metallic planchet, a blank metallic disc, which are pressed to bear the denomination and design of a specific coin. It is made up of metals ranging from plain to (usually) alloys of different metals.

The world market of metal prices has been erratically changing in response to global economy. To date, the cost of the metals used to make our coins are as follows: $1.46/lb for zinc, $5.93/lb for nickel, and $3.02/lb for copper. While the new generation series uses steel coated in nickel, which costs $1.18/lb for steel (cast).

Unknown to most people, hoarding of specific currencies is a common issue. During the recent spike in nickel prices, some people would exploit the coin to extract the metal.

Photo-2 (1).jpg We have to keep in mind that the New Generation Coins were designed to circulate exclusively. As a set, they work to complement each other such that, even in a pool of coins, one person would be able to easily differentiate one coin from another based on their face or the markings on the sides. Photo by JL JAVIER

To address the growing issue of currency and medium imbalance, the BSP has resorted to another choice as the base of coin currencies — steel. It is durable, readily available, and more importantly, cheaper to mint compared to the old series. Our advances in plating technology also address concerns on susceptibility to rust and resistance to the daily abuses of commerce.

Why not use other cheaper metals?

There are other metals that can technically be used to mint our coins, such as aluminum. But most cheap metals are friable and cannot withstand day-to-day use.

The other issue is counterfeiters — as more counterfeit money dilutes the market, the economy suffers. BSP is mandated to safeguard the integrity of our currency against possible counterfeiters, and the longer a country maintains the same set of currencies, the easier it is to be copied and perfected by counterfeiters.

To prevent this from happening, mints redesign currency features ranging from mere alterations to a total revamp of the currency.

One of the biggest concerns people have with the new coins is their similarities and how difficult it will be for many to distinguish them. Here, we address some of the concerns most commonly brought up.

Why not coat the coins in different colors?

Whether through natural wear and tear or efforts done by those attempting to exploit the coins, metal plating can eventually peel off and expose the base metal and coating. Discoloration or rusting will eventually be enough to be consider the coin mutilated, which the BSP must then recoat or remint to restore it. This process is costly and a waste of resources.

Discoloration of the surface of the coins or worse, rusting, will eventually be enough to be considered mutilated. Hence, BSP will either facilitate its recoating or reminting just to restore. A process that occurs more than it should will cost money, therefore, impractical waste thereof.

To address the matter, the BSP enhanced some of the old features of the coins. They have put more emphasis on our heroes’ portraits by increasing their size ratio and contrasting denomination against micro-printed scripts. The coins likewise feature an array of local flora on the reverse side to replace the previously uniform rising sun image.

Unknown to most people, hoarding of specific currencies is a common issue. During the recent spike in nickel prices, some people would exploit the coin to extract the metal.

To aid the visually impaired, size differences among high denomination were retained. Ten-peso coins will have a 27mm diameter, five-peso coins with 25mm, and the new one-peso coins marked at 23mm. 2mm differences help with differentiation.

On the side of the coins, perceptible differences in ridges were also made The 10-peso coin will be the only coin to bare a milled edge with the inscription “BANGKO SENTRAL NG PILIPINAS.” Edge inscription is among the technologically advanced features of today’s coins. The five-peso coin will still have the same smooth edge, while the one-peso coin will have the segmented reeded edge (similar to today’s 10-peso coin).

Why not make them in different sizes?

Irregularly shaped coins are very difficult to make, and with increasing difficulty, comes a costlier production.

Initial confusion is not at all surprising, hence proper information must be released for the general public to educate them of the new features to further avoid misperception.  

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The confusion about the coins likely stems from the early release of the five-peso coin, as it bears a strikingly similar diameter with the current one-peso coin.

We have to keep in mind that the New Generation Coins were designed to circulate exclusively. As a set, they work to complement each other such that, even in a pool of coins, one person would be able to easily differentiate one coin from another based on their face or the markings on the sides.

However, monetary replacement takes time, and coexistence with the present set is inevitable. Until such time that the market has completely converted, we must exercise extra caution.