MANILA -- The Bangko Sentral ng Pilipinas is phasing out old banknotes or New Design Series bills starting new year.

BSP Deputy Governor Diwa Guinigundo announced Monday that the demonetization of old banknotes will start on Jan. 1, 2015 to preserve the integrity of the Philippine peso as well as to benchmark with other countries' central banks practice of demonetizing banknotes every ten years to prevent counterfeiting.

Guinigundo said the move is in line with the provisions of Section 57 of Republic Act No. 7653, or the New Central Bank Act, that authorizes BSP to replace banknotes that are more than five years old. The NDS banknotes have been in circulation for almost three decades, he said.

These NDS that will be phased out include old 20-peso bill; 50-peso bill; 100-peso bill; 200-peso bill; 500-peso bill; and one thousand-peso bill.

The two old designs of 10-peso bill bearing the face of Apolinario Mabini alone and Mabini together with Andres Bonifacio as well as the five-peso-Emilio-Aguinaldo-design bill are included in the demonetization. These three old banknote designs have no formal demonetization in the past years even they were replaced with new 10-peso and five-peso coins.

The NDS bills that will be demonetized are set to replace with the New Generation Currency or the latest designs of paper money introduced by the BSP in December 2010.

The central bank official said the public may continue to use the old banknotes until December 31, 2015 in paying and buying of goods and services and other business or financial transactions requiring the use of cash.

By Jan. 1, 2016, old banknotes can no longer be used in day-to-day transactions. However, from the said date up to Dec. 31, 2016 the public may exchange the NDS for NGC with authorized financial institutions such as universal and commercial banks, thrift banks, rural banks, and cooperative banks or with the BSP at full face value and without charge.

Guinigundo also said that for overseas Filipinos, who have NDS banknotes which could not be exchanged within the prescribed period, they may register from October 1, 2015 until December 31, 2015 through the BSP website. The NDS banknotes may be exchanged with the BSP within one year from date of registration.

By January 1, 2017, the old banknotes will no longer have monetary value and will be considered demonetized.

Guinigundo said that there are 729 pieces of old banknotes or about P192 billion to be demonetized. These are 25 percent of the total volume and 26 percent of the total value in the circulation.

The demonetization of NDS will result in the circulation of a single currency series in the country -- the NGC series.

The BSP had stopped the production of old banknotes since last year.*PNA

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