Cleaner banknotes from BSP

The Bangko Sentral ng Pilipinas (BSP) is helping the country reduce waste and energy consumption through its more durable polymer banknotes.

This was the conclusion of the researchers at De La Salle University (DLSU)-Center for Engineering and Sustainable Development Research commissioned by the BSP for the manufacturing of the complete set of polymer banknotes unveiled to President Ferdinand Marcos Jr. last 18 December. The denominations of the banknotes are P1,000; P500; P100; and P50. The 1,000-banknote was first introduced in April 2022.

Polymer banknotes are made of polypropylene incorporated into plastic materials. Unlike the traditional paper notes made out of cotton, polymer banknotes are waterproof and more resistant to stain and damage.

Studies show that polymer banknotes are 38.36 percent less harmful to the environment or have lower global warming potential.

“The lower global warming potential is attributed to the longer lifespan of polymer banknotes, which reduces the consumption of resources, such as electricity, throughout their life cycle. This finding aligns with studies by other central banks, such as Bank of England, Bank of Canada and Banco de Mexico,” BSP said in a statement to the media.

The DLSU study revealed BSP’s polymer banknotes can remain intact under various conditions up to 7.5 years compared to paper notes’ 1.5 years.

“Other countries report similar findings: polymer notes last 4.8 times longer in New Zealand and 2.5 times longer in Canada,” BSP added.

Once the polymer banknotes reach the end of their lifespan or become structurally weak, central banks collect them and deliver them to third-party recycling firms for recycling into pellets which are used to create other products, such as plastic chairs and household, building, and industrial products.

While central banks would need to use energy in re-manufacturing a specific number of polymer banknote pieces, researchers at the Bank of Canada said the process still helps reduce overall carbon emissions in a country as the polymer banknotes do not decompose and release greenhouse gases over time.

“Paper notes cannot also be recycled due to their high quantities of ink and their foil marks. Unfit paper notes are shredded and sent to a landfill, where they emit greenhouse gases as they decompose,” a study by the Bank of Canada said.

Since the BSP released the 1,000 denomination polymer banknote, the Central Bank said only 0.08 percent or 689,571 pieces of the total number of pieces as of November last year were returned by the public due to some damage in the banknotes.

“In comparison, of the 1000-piso paper banknotes issued during the same period, 54.4 percent (or about one billion pieces) were returned to the BSP as worn-out and damaged banknotes,” the financial institution said.

BSP said it will continue to make polymer banknotes due to its environmental benefits and growing demand for such banknotes in the country and many other parts of the world.

“Over 40 countries worldwide now use polymer banknotes, underscoring the global trend toward this smarter, cleaner, and stronger alternative,” the Central Bank said.

According to the 2023 BSP’s Sustainability Report, the country could lose P645 billion each year until 2030 if climate change worsens due to massive carbon emissions from various industries.