by Lito Banayo
from MALAYA
Last Friday, March 19, we wrote about “The curious case of our legal tender”, which asked why the Bangko Sentral ng Pilipinas has been importing in increasingly large quantities, hundreds of millions of our banknotes, despite the fact that we have a huge security printing facility built as early as 1976 by Ferdinand E. Marcos. The then state-of -the-art machines have been in use since then, but because the volume of our demand for banknotes has increased on account of our booming population, on top of the fact that the humid and hot climate in this country renders our banknotes soiled much too easily, the by now 33 year-old machines need replacement.
After the Arrovo banknotes fracas, where Dona Gloria’s “illustrious” surname was misspelled by a foreign printer, the Bank initiated studies which would set the terms and specifications for the purchase of new printing equipment, considering that the machinery purchased in 1976 had long and well-served its fully depreciated purpose. An invitation to bid was issued on October 2009, but quietly withdrawn two months thereafter. Meanwhile, last February, the BSP announced that they would demonetize the current peso bills, and re-design the same, with new issues to be released to the public on November 2010. The BSP likewise stated in a news report that 702 million banknotes would be initially issued.
In welcome quick fashion, the Bank, writing through the Director for Corporate Affairs, Ms. Fe de la Cruz, responded and said:
“It is not true that the BSP is retiring all peso bills by November this year.” (I never said demonetizing the banknotes mean instant retirement of all peso bills. I fully understand that demonetization requires a phasing-out process). “While the BSP plans to start issuing new banknote designs with upgraded security features by December, the present banknotes…will remain legal tender for at least three more years”, the BSP states. Fine.
“And because it is true that it is more economical for us to print our money than to outsource it, the BSP is investing in new printing and minting equipment. BSP’s bidding for new printing equipment has not been abandoned but simply deferred…because new information regarding printing technology came in…(we) will proceed with the bidding for new printing equipment as soon as the revisions…are completed to reflect the latest innovations in printing technology. We want to make sure that we will get good value for our investments”.
But of course the Bank ought to husband public money properly. It is after all the fiduciary trustee of the Republic. Which is why it baffles me up to now why the same Bangko Sentral under a different leadership allowed a 1.5 billion peso loan to Capitol Development Bank in April 1998, and later accepted as payment in kind, titles to disputed property the provenance of which originate from the time when Mickey Mouse legal tender was in fashion, and where Commonwealth Act 141, as amended, declared the nullity of land transfers during the Japanese occupation. Now while the Bangko Sentral is not the issuer of Mickey Mouse money, which is what our lolo’s and lola’s called wartime-printed banknotes, surely the Bank should forgive our inquiry into their acceptance from the Villar’s bankrupt bank of Mickey Mouse land titles the date of preceding transfer of which occurred in July 25, 1944? Thus far the BSP has remained silent on our inquiries in this space, which is why we are particularly elated that in the “curious case of our legal tender”, they responded within the same day. Hurrah!
But the Bank reasons that “outsourcing as means to meet demand for currency is an established global practice”, and mentions Singapore, Finland, Brunei, Sweden, Bahrain, Peru, Luxembourg, Kenya, Kuwait, Sri Lanka and Qatar, as if to question my claim in that article that the Philippines and Nigeria, “among the world’s populous countries” still outsource their banknotes.
Vamos a ver. Isn’t this a case of comparing apples and oranges? Singapore, which is all of 272 square miles, has a population of 4.9 million people. It’s just slightly bigger than our National Capital Region, which has about two and a half times more people, at 12 million souls! Huge Finland has 5.3 million; Sweden in the same continent, has 9.3 million. Luxembourg has less than half a million inhabitants. Neighboring Brunei is all of 398,000 people. Qatar is 1.5 million strong, and while Kenya with 39 million and Peru with almost 30 million are bigger than these, the Philippines is now all of 93 million peso-using people, and counting. Oil-endowed Nigeria, has its naira, the currency in use of its 154.7 million inhabitants.
In ending her one-page letter, Ms. De la Cruz claims that the Bank is “proud of the security plant complex that is operated by an all-Filipino team…(and) once we get new printing equipment, we shall be able to raise our capacity to match currency demand, with room for growth”.
Indeed, the Bank ought to be proud of the well-trained professionals who man their security plant complex. Which is why those people wonder why in heaven’s name their fully depreciated though reliable 30-year old printing equipment have not yet been replaced, despite an earlier tender invitation. They too would want to see the Philippine peso as counterfeit-proof as the leading currencies of the world’s, with some of the very best in our neighboring Asean countries.
The Bank’s response makes us again curious. Why are they in a rush to redesign our currency? Why is there any compulsion to print newly-designed legal tender to be issued in November or December of this year? It is now March 25, and by noon of June 30, which is less than a hundred days distant, a new president is supposed to take over. And that new president, who will of course sign our currency as its legitimate and duly-constituted head of state, may want to have a say in the design of the currency. For starters, he may want to fully do away with those useless 5, ten and 25 centavo coins which can hardly buy anything. Or he may want to do away with the 20-peso paper note, and replace these with coins, just like our ten pesos. He may want to change the way history is depicted in our banknotes. He may even want to make our currency more feng-shui acceptable, removing the “manunggul” or redesigning the “nakapangalumbaba” and sad face of Ninoy Aquino, considering what a streak of bad luck this benighted land has been having.
Why must the Bank officials take it upon themselves to re-design our legal tender in the last few remaining weeks of the “Arrovo” administration? As much as Gloria Macapagal Arroyo wants to rule beyond her political grave, she likewise wants to inflict her re-designed and still signed currency upon the next president?
Or are some quick-buck artists just making a last two-minute deal in outsourcing banknotes? Even more curiously, are the same quick-buck artists trying to launder someone’s dirty money? Certainly not Governor Amando Tetangco, whose personal integrity and probity I have yet to find reason to question.
The Bangko Sentral, like the Supreme Court, operates under a virtual shroud of secrecy. What happens in deliberations of the Monetary Board for instance are hardly ever made public, and only hum-drum results are reported, even if their decisions impact greatly upon the economy. Of recent memory, the Central Bank had to be transmogrified into the Bangko Sentral by legislative fiat, the usual recourse policy-makers of the Republic undertake when its financial institutions founder under the weight of wrong policies compounded by questionable operations.
Questionable operations as when the Bank cavils to political pressure, as seems to have been the underlying reason for its having accepted spurious titles in payment for emergency loans given to an already hopelessly insolvent bank owned by an extremely powerful man. And now, another curiously questionable practice of continuing to outsource our currency for years and years on end, while keeping its printing assets at less than optimum production capacity.
(atbanayo.blogspot.com)
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