PHILIPPINE BANKNOTES: NEW GENERATION FEATURES CAN BE SEEN, BUT LEVELS III AND IV

CURRENCY SECURITY FEATURES ARE NOT FOR PUBLIC USE.

KATRINA MARIE M. MIRANDA, MBA
INSTRUCTOR LEVEL I: SECURITY FEATURES WHICH CAN BE
EASILY RECOGNIZED BY THE PUBLIC WITHOUT
The New Generation Currency (NGC) banknotes of our THE USE OF SPECIAL INSTRUMENT. THESE ARE
country feature some interesting security features never THE “LOOK,” “FEEL,” AND “TILT” ELEMENTS IN THE
before seen in previous Philippine paper money in NOTES, ENUMERATED BELOW.
circulation. I would like to share these security features 1. Embossed prints: The embossed or raised print
in this post. I am quoting from a publication by Bangko nature of the ink deposition combined with the quality of
Sentral ng Pilipinas entitled, The Bangko Sentral ng cotton-based paper gives the traditional banknote a
Pilipinas’ New Generation Currency Notes: unique tactile effect that makes it the first and the most
Safeguarding the Integrity of the Philippine Currency by important line of defense against counterfeiting. This can
Maja Gratia L. Malic & Nenette E. Malabrigo. This details be felt over the words “REPUBLIKA NG PILIPINAS,”
the new security features of the new banknotes that help denominational value in text, signatures, and value
consumers identify counterfeit bills from the real deal. panels particularly, the one located at the lower right
corner of the obverse.
FOR GREATER PROTECTION, THE NGC NOTES
WERE PROVIDED WITH FOUR LAYERS OF THE NEW BANKNOTES FEATURE EMBOSSED
SECURITY FEATURES: LETTERING. THE DENOMINATIONAL VALUE
Level I : Security features which can be easily PRINTED ON THE LOWER RIGHT OF EACH
recognized by the public without use of special BANKNOTE IS SEGMENTED WHEN SEEN THROUGH
instrument. These are the “look, feel, tilt” elements in the A MAGNIFYING GLASS.
notes such as watermark, security thread, security
fibers, and others. 2. Asymmetric Serial Number: Alphanumeric characters
Level II: Security features recognizable by professional at the lower left and upper right corners of the note
cash handlers/bank tellers with the use of magnifying bearing one or two prefix letters and six to seven digits,
lens or ultraviolet light. Examples are fluorescent with font increasing in size and thickness.
features, and microprinting.

3. Security Fibers: Visible red and blue fibers embedded

FOR GREATER PROTECTION, THE NGC NOTES on the paper and randomly scattered on the face and
WERE PROVIDED WITH FOUR LAYERS OF back of the note.
SECURITY FEATURES: 4. Watermark: Shadow image of the portrait with the
Level III: Hidden or covert security features that are highlighted denominational value that is particularly seen
reserved for the use of the BSP. against the light from either side of the blank space on
Level IV: Forensic security features which require the note.
special laboratory examination procedures and
equipment for identification; most relevant in establishing
the authenticity of a banknote in the course of any court 5. See-Through Mark: The pre-Hispanic script
proceedings. (Baybayin) at the lower right corner of the face of the
note slightly above the value panel. This is seen in
complete form only when the note is viewed against the
THE PUBLICATION GOES FURTHER TO DETAIL light. This script means “PILIPINO.”
LEVEL I SECURITY FEATURES FOR PUBLIC OBVERSE
KNOWLEDGE. SOME OF THE LEVEL II SECURITY REVERSE
VIEWED AGAINST THE LIGHT Why do people hold money?

6. Concealed Value: The denominational value TRANSACTIONS DEMAND FOR MONEY - arises from
superimposed at the smaller version portrait at the upper the need of households and firms to have money for the
left portion of the note. This becomes clearly visible regular payments of goods and services.
when the note is rotated 45 degrees and slightly tilted. PRECAUTIONARY DEMAND FOR MONEY -
7. Security Thread (Embedded or Windowed): Households want extra money for contigencies like
Embedded thread that runs vertically across the width of paying bills, for unexpected hospitalization.
20- and 50- piso notes when viewed against the light. Demand for Money
Also, the stitch-like metallic thread on the 100-, 200-,
500- and 1000-piso notes which changes color from red SPECULATIVE OR PORTFOLIO ALLOCATION
to green and bears the cleartext of “BSP” and the MOTIVE - demand stems form the preference of the
denominational value on the obverse and “BSP” on the households and firms to hold other assets that are
reverse, both in repeated series. "perfectly liquid and perfectly free from risk of
depreciation in terms of money" in order to "take
advantage of market movements"
8. Optically Variable Device (OVD) Patch: Found only in Demand for Money
500- and 1000-piso notes, this patch is a reflective foil,
bearing the image of the Blue-naped parrot for 500- Demand for money is primarily determined by the level
piso/clam with South Sea pearl for 1000-piso, changes of real output or income and interest rate.
color from red to green when the note is rotated 90 Other factors:
degrees. credit availability and affordability
*Incorporated on the OVD patch is a logo of BSP that expectations on future income
also changes color when viewed from different angles, expectations on prices
the denomination at the upper right and bottom center, risk and expected returns
the text BANGKO SENTRAL NG PILIPINAS on the DEMAND FOR MONEY
upper left of the oval, and a micro print right below the
clam or parrot. M1 consists of items used as medium of exhange such
as currency or coins in circulation and demand deposits.
9. Optically Variable Ink (OVI): Found only in the 1000- M2 consists of M1, plus savings and small time deposits.
piso note, this embossed denominational value at the SUPPLY OF MONEY
lower right corner of the face of the note changes color
from green to blue when viewed at different angles. M3 refers to money supply, peso savings, negotiable
VIEWED AT 45 DEGREES order of withdrawals (NOW accounts), time deposits
VIEWED FROM ABOVE M4 currency deposits of non bank residents
SUPPLY OF MONEY

The BSP is the central monetary authority that governs

the level of money supply through policies set by the
Monetary Board, the BSP's policy-making arm
MONETARY SYSTEM INSTRUMENTS OF MONETARY CONTROL
It makes use of monetary instruments
Measures or actions taken by the Central Bank to Reserve requirement
regulate the supply of money in the economy. Rediscount rate
Open market operations
What is MOnetary System?
Reserve Requirement
This is the minimum amount of reserves that bank must Settings of Monetary Policy
hold against deposits. It serves as a prudential
safeguard for depositors.

Rediscounting
This refers to transactions whereby the BSP extends
credit to a bank collateralized by its loan papers with
customers.

Rediscounting Rate
It is the interest rate charged by the BSP to the banks
that borrow from them.

Open Market Operations (OMO)

It involves the buying and selling of government
securities from banks and financial institutions of the
BSP in order to expand or contract the supply of money.

MONETARY POLICY IN THE PHILIPPINES

Why is it important to know the MONETARY POLICY
in our country?

Monetary Policy It is a set of actions to control a nation's

overall money supply and achieve economic growth. Settings of Monetary Policy

BSP'S PRIMARY OBJECTIVE

● TO MAINTAIN A PRICE
● STABILITY CONDUCIVE TO A BALANCED
& SUSTAINABLE GROWTH OF THE
ECONOMY AND EMPLOYMENT

The Philippine economic and financial

landscape has greatly shaped the evolution of
the country's
central banking in the last 70 years
To better respond to these challenges, the conduct of MONETARY POLICY FRAMEWORK
central banking has also evolved through the adoption
of different monetary policy frameworks.
MONETARY POLICY FRAMEWORK
BSP's Monetary Policy over the Years

MONETARY POLICY FRAMEWORK

Philippine Interest rates

Philippine Interest rates