BSP wins IACA Award for Cash Supply Innovation

The International Association of Currency Affairs (IACA) held its Excellence in Currency awards ceremony this month, the topic of which was 'Best Currency Initiatives Implemented in Response to The Covid-19 Pandemic’.

Bangko Sentral ng Pilipinas (BSP) won the central bank award for the work it has done to ensure cash supply in the Philippines during the pandemic.

In October 2020 BSP started a new scheme called the Cash Service Alliance (CSA), open to commercial banks to allow direct exchange of banknotes between them rather than having to source banknotes only from the BSP.

The BSP created an online facility which allowed banks to work together to match excess fit notes held with banks who needed additional notes. BSP introduced guidelines about how this should work. In the first seven months, 130 million notes were exchanged with a face value of P100 billion, representing 33% by volume and 36% by value of the cash needs of the banks.

Between March and May 2021 the Philippines went into another strict lockdown because of the pandemic. A further 44 million notes were exchanged with a face value of P34 million.

CSA has allowed fewer transportation trips, saving banks fees on collecting notes from BSP. In August this year, a fully automated version of CSA was launched, and this has resulted in even better demand and supply matching between banks.

A good example of using data, software and a willingness to do this differently to meet the needs of banks and the population, keeping cash flowing and relevant.