What to do with unfit or mutilated Philippine notes and coins

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I read this news banner in Inquirer.net about the BSP(Bangko Sentral ng Pilipinas) asking the public to turn in dirty peso notes to bank. I remember before that every 10 years or so the BSP collects old currency unfit for use for replacement. Again the BSP calls us to turn in such notes and coins unfit for circulation.

New Generation of Philippine Notes

source: http://www.bsp.gov.ph

Of course such turned in notes and coins will be replace with exceptions. Such rules and guides are in the BSP Circular No. 61 Series of 1995. Under Section 15, Chapter V of Circular No. 61 the following guidelines must be followed and met:

source: http://www.bsp.gov.ph/bspnotes/clean.asp

For banks and their branches

a. Banks shall classify their cash deposits into two types: (1) clean or fit notes and (2) dirty or unfit notes in accordance with the “Currency Guide for Bank Tellers, Money Counters and Cash Custodians” prepared by the Cash Department of the BSP. The notes thus classified shall be further sorted by series and denomination.b. Banks shall provide securely sealed bags or containers separately for the clean or fit notes and for the dirty or unfit notes accompanied by a deposit slip for each type/category. The deposit slip for the unfit currency notes shall be clearly labeled as “unfit.”c. To facilitate handling of deposits, banks’ deposits shall be packed in sealed bags or containers in standard quantity of twenty (20) full bundles per denomination (each bundle containing 1,000 notes in ten (10) equal straps, each strap containing 100 notes).d. Provincial branches of banks may make direct deposits of currency notes, duly identified and sorted, with the nearest Bangko Sentral Regional Office/Branch. In areas where there are no Bangko Sentral Regional Office/Branch, provincial branches of banks shall arrange with their respective Head Offices the shipment of their unfit or dirty notes for deposit with the Cash Department of BSP in Manila. Cost of shipment and other related expenses to be incurred shall be solely for the account of the bank concerned.

Under Section 56 of Republic Act No. 7653, or the New Central Bank Act the following are the guidelines when replacing such unfit and mutilated notes and coins:

The Bangko Sentral shall withdraw from circulation and shall demonetize all notes and coins which for any reason whatsoever are unfit for circulation and shall replace them by adequate notes and coins. Provided, however, that the Bangko Sentral shall not replace notes and coins the identification of which is impossible, coins which show signs of filing, clipping or perforation, and notes which have lost more than two-fifths (2/5) of their surface or all of the signatures inscribed thereon. Notes and coins in such mutilated condition shall be withdrawn from circulation and demonetized without compensation to the bearer.

A currency note shall be considered unfit for circulation when:

a. It contains heavy creases which break the fiber of the paper and indicate that disintegration has begun. Provided, however, that mere creasing or wrinkling which has not broken nor weakened the note does not render the note unfit for circulation; orb. It is badly soiled/contaminated and/or with writings even if it has proper life or sizing; orc. It presents a limp or rag-like appearance.

A currency note shall be considered mutilated when:

a. Torn parts of banknotes are joined together with adhesive tape in a manner which tries to preserve as nearly as possible the original design and size of the note; orb. The original size of the note has been reduced/lost through wear and tear or has been otherwise torn, damaged, defaced or perforated through action of insects, chemicals or other causes; orc. It is scorched or burned to such an extent that although recognizable as such, it has become frail and brittle as to render further handling thereof impossible without disintegration or breaking; ord. It is split edgewise; ore. It has lost all the signatures inscribed thereon.

A currency coin shall be considered unfit for circulation when:

a. It is bent or twisted out of shape or defaced, but its genuineness and/or denomination can still be readily and clearly determined/identified; orb. It has been considerably reduced in weight by natural abrasion/wear and tear.

A currency coin shall be considered mutilated when:

a. It shows signs of filing, clipping or perforation; orb. It shows signs of having been burned or has been so defaced, that its genuineness and/or denomination cannot be readily and clearly identified.

Currency notes and coins considered unfit for circulation shall not be re-circulated, but may be presented for exchange to or deposited with any bank.

Currency notes and coins considered mutilated shall not be re-circulated nor deposited/exchanged, but may be presented or forwarded, for determination of their redemption/exchange value to:

a. The Cash Department
Bangko Sentral ng Pilipinas
Security Plant Complex, East Avenue,
Diliman, Quezon City

b. The nearest Bangko Sentral Regional Office/Branch

I remember my sister who work in a bank before scolding me when I folded my two 100 peso bills to be dropped at the donation during mass. She told me that the BSP is using lots of tax money just to print fit Philippine notes. Imagine just a simple act of folding those peso bills will cost us tax money no wonder taxes keeps on going up.

So how will we keep our peso bills fit?

Besides the noted damages above that we should avoid doing(like removing the security thread, defacing coins by filling or clippings, tearing parts of the peso bill etc.), my sister told me that instead of folding peso bills better roll them vertically that is rolling it from the short side of the bill. If you are using a wallet as much as possible make sure that the middle fold(for folded wallets) is not fully folded. And one of the mistakes we have been doing is ironing peso bills. Never ever iron peso bills to make them crisp because such will make it brittle susceptible to further breaking of the peso bill.


Love the Philippines by keeping our Philippine notes and coins fit for circulation.

About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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3 comments for “What to do with unfit or mutilated Philippine notes and coins

  1. March 18, 2018 at 5:09 pm

    Good day sir. Last March 15,2018 i withdraw at BDO Savemore in Marulas, Valenzuela City. When I got home I noticed that one 500 peso bill was ripped/torn in the side. Can I exchange it to the bank because I now stores will not accept it if I try to use it as a payment and I know also that it is against the law. What should I do? Please response. Thank you.

    • March 19, 2018 at 5:24 pm

      Hi Renzy,

      Yes you can exchange it in the bank specially to the bank you witdrew it from. Let them know that it was ripped.

      Hope this helps.

  2. Kim
    June 9, 2018 at 6:51 am

    Hi! I How much will it cost to exhange a torn peso bill?

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