Law Summary
Scope of Demonetization
- The demonetization involves the old coins issued by the defunct Central Bank of the Philippines.
- The demonetization aims to phase out the old coins and replace them with new coins issued by the BSP.
- The demonetization process specifically targets coins, not paper currency.
Exchange Period and Process
- The old coins may be exchanged for new Bangko Sentral coins starting January 2, 1997.
- The exchange window is valid until January 2, 1998, allowing one-year for the public to exchange old coins.
- Exchanges can be made directly with BSP, its branches, or any bank.
- The exchange is done at par and without any additional charge.
Public Awareness and Notification Measures
- BSP took measures to ensure maximum public awareness through various channels.
- Announcement of phase-out and new coin issuance published in newspapers.
- Consultative meetings conducted with various organizations.
- Lectures and seminars held for bank tellers and cashiers nationwide.
- Multiple announcements reiterated in January and February 1995.
- Full-page advertisements were placed in leading newspapers on October 23, 1996.
- Banks and NBQBs (non-bank financial institutions authorized to do deposits and withdrawals) were instructed to post the "Notice to the Public" in conspicuous places.
Distinguishing Features of New Coins
- New coins issued by BSP bear the new logo of Bangko Sentral ng Pilipinas.
- The 5-centavo coin uniquely has a hole in the middle, differing from its old counterpart.
- The physical distinctiveness facilitates identification and prevents confusion during the exchange process.
Legal Effects of Demonetization
- Old coins remain legal tender during the one-year call period.
- Upon lapse of one year from the call, old coins cease to be legal tender.
- During the following exchange period, the BSP remains liable to redeem these coins.
- After the exchange period, unredeemed coins are fully demonetized and no longer recognized as currency.
- Once demonetized, old coins are no longer enforceable as legal tender and are removed from circulation.
Administrative Implementation
- The BSP Deputy Governor Alberto V. Reyes officially adopted the circular on January 14, 1997.
- Banks and financial institutions were mandated to assist in disseminating information and conducting the exchange.
This comprehensive framework ensures an orderly transition from the old coinage system to the new BSP coinage while protecting the interests of the public and maintaining monetary stability.