Talino at Galing ng Pinoy (TGP) Partylist Representative Jose J. Teves Jr. last week reiterated his call on the Bangko Sentral ng Philipinas (BSP) to continue using abaca fiber in the production of Philippine peso banknotes.
In an interview with a national daily, the partylist congressman from Catanduanes said the BSP’s move to replace abaca (Manila hemp) with polymer in making peso bills has had a negative effect on the local abaca industry.
Industry officials and even the Catanduanes State University have expressed their dismay over the decision as the Bicol region, the top producer of abaca in the country, would be the worst affected area.
Philippine Fiber Industry Development Authority (PhilFIDA) provincial fiber officer Roberto Lusuegro was quoted as saying that Catanduanes alone produces 100 metric tons of abaca annually, with a third of this is raw material in the production of peso bills.
Cong. Teves disclosed in the interview that farmers from other abaca-producing regions are also worried about losses if paper banknotes are replaced by polymer.
“Since the polymer banknote, particularly the P1,000 paper bill, was introduced, the sale of abaca was affected, considering that the Philippine peso bill is made of 80 percent cotton and 20 percent fiber,” the lawmaker told the Philippine Daily Inquirer.
In Catanduanes, the buying price of abaca fiber has gone down from P80-P90 per kilo to just P60 per kilo, with the situation worsened by the prevailing rainy weather due to the northeast monsoon in most of the 11 towns.
It is claimed that in Viga, the buying price fell to as low as P40 per kilo, with some traders refusing to buy as farmers have been unable to properly dry the fiber.
Cong. Teves said in the article the central bank should realize that the continued use of paper banknotes, while not as long-lasting as polymer, would be best for the country in the long run.
He reasoned that if the country shifts to buying plastic to make its peso bills, instead of abaca fiber that brings in dollars, it would be forced to import plastic and this would negatively impact dollar reserves.
He told the Inquirer that the Philippines could end up the laughing stock of other countries “since we are rich in abaca fiber but we don’t use it.”
According to some market goers in Virac, vendors refuse to accept the plastic P1,000 bill and prefer the old bill made of cotton and abaca fiber.
In November 2022, the TGP representative filed House Resolution No. 595 urging the BSP to maintain the utilization of abaca fiber in the production of Philippine bank notes.
The measure has been referred to the House Committee on Banks and Financial Intermediaries.