Bangko Sentral ng Pilipinas (BSP) urged the public to deposit their savings in a formal account. Such as banks, loan associations, e-money issuers, and cooperatives. Instead of keeping the money at home and storing it in a jar, cabinets, plastic bottles, and barrels.
Keeping money at home affects the efficient circulation of currency around the Philippines which causes an artificial shortage. If there’s a shortage the BSP will be forced to increase the production of banknotes and coins resulting in additional production costs.
As per BSP Governor Benjamin Diokno, “The unnecessary accumulation of banknotes and coins prevents Philippine currency from being recirculated and used as payment instrument”.
Producing a few coins will reduce costs and allow the central bank to remit dividends to the government, Diokno added.
He said, “The BSP could mint fewer coins if they are efficiently circulating. The reduced production costs would allow the central bank to remit more dividends to the national government. If that so it would help fund pandemic-response measures and social services,”
BSP stated that once money is placed in a formal account, it will be safeguarded by them. In addition, it will be insured by the Philippine Deposit Insurance Corporation and will earn interest over time.
Diokno added, “Account ownership serves as a gateway to financial inclusion. It enables people to participate in the benefits and opportunities of the formal financial system, empowering them to build a better financial future,”.
BSP’s goal is to bring 70% of the adult population into the formal financing system by opening their own bank account. So if you don’t have a bank account yet, you may consider opening one now.