The central bank said it continues to require banks to accept unfit notes—those that are heavily creased, disintegrating or badly soiled —contrary to previous reports that these institutions will no longer accept such notes.
In a statement on Monday, the Bangko Sentral ng Pilipinas (BSP) cited BSP Circular 289, dated March 13, which stated that currency notes and coins considered unfit for circulation shall not be recirculated but may be presented for exchange to or deposited with any bank.
“Therefore all banks are mandated to exchange or accept for deposit any unfit currency notes from the public. The BSP shall ensure sufficient new notes to allow the
banks to carry out this mandate,” the central bank said.
The BSP, however, advised the public of the characteristics of notes considered unfit for circulation.
Unfit notes are those that contain heavy creases that break the fiber of the paper and indicate that disintegration has begun, it said. They are also described as those that are badly soiled, contaminated and/or bear extra writings.
The BSP added that notes that are limp or have raglike appearance and/or do not sustain an upright position when held at the mid portion of one of the shorter borders are also considered unfit.
According to the New Central Bank Act, the BSP has the sole power and authority to issue the official currency within the territory of the Philippines.
Notes and coins issued by the BSP are liabilities of the BSP and may be issued only against, and in amounts not exceeding its assets.
All notes and coins issued by the BSP are fully guaranteed by the government and are legal tender in the Philippines for all debts, both public and private.