Saving money in piggy banks? BSP explains risks, disadvantages of not saving in banks
Saving money in piggy banks? BSP explains risks, disadvantages of not saving in banks
CEBU CITY, Philippines — If you are saving money in your piggy banks, you might consider the advice from Bangko Sentral ng Pilipinas (BSP).
BSP Visayas Director Anna Clara Oville said that among the benefits of saving money in the banks is the interest that the people can earn, unlike saving the money in the piggy banks or any makeshift money or savings box.
This means that the people can grow their money by saving in banks.
Oville also has a reminder to people who would hoard their money, especially the coins, in their piggy banks.
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“We have this currency, notes, and coins circulation. We need to circulate all our currencies. Hindi naman sinasabing bawal kasi bata pa ta gitudluan nata mag alkansiya,” Oville added.
Oville also reminded the public, in case they are not familiar or knowledgeable about the law, the coins have to be recirculated as per BSP Coin Recirculation Program.
She added that the people should save money in the banks before they realize that the currency has been demonetized.
Oville recalled a previous encounter from many individuals who hoarded money without saving it in the bank.
She said they requested to change their old banknotes or paper bills to the new ones. However, Oville said that they could not do it since BSP has only a five-year extension for the transition to the new banknotes.
Demonetization
According to the BSP, demonetization refers to the action taken by the currency’s issuing authority to strip a legal tender of its value. Once demonetized, the currency will no longer be accepted as payment for goods and services.
The New Central Bank Act, specifically Section 57, states that the BSP has the authority to request the replacement of paper bills and coins that are older than five and ten years, respectively.
The New Design Series (NDS), which was circulated from 1985 to 2015, is the latest series of banknotes that were demonetized by the BSP. The deadline for exchanging these notes was December 29, 2017, as set by the BSP.
Moreover, the director of the Economic and Financial Learning Office, Marianne Santos, also shared another benefit of saving in the banks.
Santos said that once the bank receives a deposit, it will be used for economic activity.
“Which also nakatulong kayo sa ekonomiya ng ating bayan,” Santos said.
Santos said that another disadvantage when saving money through piggy banks is the possibility of it being consumed by termites or “anay” and if ever it is consumed by fire.
“Nagtataka nga po ako kung bakit tinatago nila sa bahay instead of having it in the bank,” Santos added.
Bank users
As of 2021, the Philippine digital payments landscape showed a significant increase of people opening up E-Money accounts.
There were 27.7 million e-wallet users and 18 million traditional bank account owners. The top purposes of people opening their accounts are for payments and savings purposes.
The BSP in 2023 said that they were targeting 70 percent of adult Filipinos to have bank accounts in a report by Philippine News Agency.
“In our financial inclusion survey in 2021, 56 percent of [adults] in the country had a bank account, a significant increase from just 23 percent in 2017,” said Governor Eli Remolona Jr. in his speech during the BSP 30th Anniversary Reception for the Banking Community in 2023.
The BSP Visayas conducted a media information session on Tuesday, May 7, that tackled various topics, such as central banking concepts, digitalization, Financial Consumer Protection Act (FCPA). Among the key speakers were Santos and Coville.