PHILIPPINE BANKNOTES: NEW GENERATION
CURRENCY SECURITY FEATURES
KATRINA MARIE M. MIRANDA, MBA
INSTRUCTOR
The New Generation Currency (NGC) banknotes of our
country feature some interesting security features never
before seen in previous Philippine paper money in
circulation. I would like to share these security features
in this post. I am quoting from a publication by Bangko
Sentral ng Pilipinas entitled, The Bangko Sentral ng
Pilipinas’ New Generation Currency Notes:
Safeguarding the Integrity of the Philippine Currency by
Maja Gratia L. Malic & Nenette E. Malabrigo. This details
the new security features of the new banknotes that help
consumers identify counterfeit bills from the real deal.
FOR GREATER PROTECTION, THE NGC NOTES
WERE PROVIDED WITH FOUR LAYERS OF
SECURITY FEATURES:
Level I : Security features which can be easily
recognized by the public without use of special
instrument. These are the “look, feel, tilt” elements in the
notes such as watermark, security thread, security
fibers, and others.
Level II: Security features recognizable by professional
cash handlers/bank tellers with the use of magnifying
lens or ultraviolet light. Examples are fluorescent
features, and microprinting.
FOR GREATER PROTECTION, THE NGC NOTES
WERE PROVIDED WITH FOUR LAYERS OF
SECURITY FEATURES:
Level III: Hidden or covert security features that are
reserved for the use of the BSP.
Level IV: Forensic security features which require
special laboratory examination procedures and
equipment for identification; most relevant in establishing
the authenticity of a banknote in the course of any court
proceedings.
THE PUBLICATION GOES FURTHER TO DETAIL
LEVEL I SECURITY FEATURES FOR PUBLIC
KNOWLEDGE. SOME OF THE LEVEL II SECURITY
FEATURES CAN BE SEEN, BUT LEVELS III AND IV
ARE NOT FOR PUBLIC USE.
LEVEL I: SECURITY FEATURES WHICH CAN BE
EASILY RECOGNIZED BY THE PUBLIC WITHOUT
THE USE OF SPECIAL INSTRUMENT. THESE ARE
THE “LOOK,” “FEEL,” AND “TILT” ELEMENTS IN THE
NOTES, ENUMERATED BELOW.
1. Embossed prints: The embossed or raised print
nature of the ink deposition combined with the quality of
cotton-based paper gives the traditional banknote a
unique tactile effect that makes it the first and the most
important line of defense against counterfeiting. This can
be felt over the words “REPUBLIKA NG PILIPINAS,”
denominational value in text, signatures, and value
panels particularly, the one located at the lower right
corner of the obverse.
THE NEW BANKNOTES FEATURE EMBOSSED
LETTERING. THE DENOMINATIONAL VALUE
PRINTED ON THE LOWER RIGHT OF EACH
BANKNOTE IS SEGMENTED WHEN SEEN THROUGH
A MAGNIFYING GLASS.
2. Asymmetric Serial Number: Alphanumeric characters
at the lower left and upper right corners of the note
bearing one or two prefix letters and six to seven digits,
with font increasing in size and thickness.
3. Security Fibers: Visible red and blue fibers embedded
on the paper and randomly scattered on the face and
back of the note.
4. Watermark: Shadow image of the portrait with the
highlighted denominational value that is particularly seen
against the light from either side of the blank space on
the note.
5. See-Through Mark: The pre-Hispanic script
(Baybayin) at the lower right corner of the face of the
note slightly above the value panel. This is seen in
complete form only when the note is viewed against the
light. This script means “PILIPINO.”
OBVERSE
REVERSE
VIEWED AGAINST THE LIGHT
6. Concealed Value: The denominational value
superimposed at the smaller version portrait at the upper
left portion of the note. This becomes clearly visible
when the note is rotated 45 degrees and slightly tilted.
7. Security Thread (Embedded or Windowed):
Embedded thread that runs vertically across the width of
20- and 50- piso notes when viewed against the light.
Also, the stitch-like metallic thread on the 100-, 200-,
500- and 1000-piso notes which changes color from red
to green and bears the cleartext of “BSP” and the
denominational value on the obverse and “BSP” on the
reverse, both in repeated series.
8. Optically Variable Device (OVD) Patch: Found only in
500- and 1000-piso notes, this patch is a reflective foil,
bearing the image of the Blue-naped parrot for 500-
piso/clam with South Sea pearl for 1000-piso, changes
color from red to green when the note is rotated 90
degrees.
*Incorporated on the OVD patch is a logo of BSP that
also changes color when viewed from different angles,
the denomination at the upper right and bottom center,
the text BANGKO SENTRAL NG PILIPINAS on the
upper left of the oval, and a micro print right below the
clam or parrot.
9. Optically Variable Ink (OVI): Found only in the 1000-
piso note, this embossed denominational value at the
lower right corner of the face of the note changes color
from green to blue when viewed at different angles.
VIEWED AT 45 DEGREES
VIEWED FROM ABOVE
MONETARY SYSTEM
Measures or actions taken by the Central Bank to
regulate the supply of money in the economy.
What is MOnetary System?
Why do people hold money?
TRANSACTIONS DEMAND FOR MONEY - arises from
the need of households and firms to have money for the
regular payments of goods and services.
PRECAUTIONARY DEMAND FOR MONEY -
Households want extra money for contigencies like
paying bills, for unexpected hospitalization.
Demand for Money
SPECULATIVE OR PORTFOLIO ALLOCATION
MOTIVE - demand stems form the preference of the
households and firms to hold other assets that are
"perfectly liquid and perfectly free from risk of
depreciation in terms of money" in order to "take
advantage of market movements"
Demand for Money
Demand for money is primarily determined by the level
of real output or income and interest rate.
Other factors:
credit availability and affordability
expectations on future income
expectations on prices
risk and expected returns
DEMAND FOR MONEY
M1 consists of items used as medium of exhange such
as currency or coins in circulation and demand deposits.
M2 consists of M1, plus savings and small time deposits.
SUPPLY OF MONEY
M3 refers to money supply, peso savings, negotiable
order of withdrawals (NOW accounts), time deposits
M4 currency deposits of non bank residents
SUPPLY OF MONEY
The BSP is the central monetary authority that governs
the level of money supply through policies set by the
Monetary Board, the BSP's policy-making arm
INSTRUMENTS OF MONETARY CONTROL
It makes use of monetary instruments
Reserve requirement
Rediscount rate
Open market operations
Reserve Requirement
This is the minimum amount of reserves that bank must Settings of Monetary Policy
hold against deposits. It serves as a prudential
safeguard for depositors.

Rediscounting
This refers to transactions whereby the BSP extends
credit to a bank collateralized by its loan papers with
customers.

Rediscounting Rate
It is the interest rate charged by the BSP to the banks
that borrow from them.

Open Market Operations (OMO)

It involves the buying and selling of government
securities from banks and financial institutions of the
BSP in order to expand or contract the supply of money.

MONETARY POLICY IN THE PHILIPPINES

Why is it important to know the MONETARY POLICY
in our country?

Monetary Policy It is a set of actions to control a nation's

overall money supply and achieve economic growth. Settings of Monetary Policy

BSP'S PRIMARY OBJECTIVE

● TO MAINTAIN A PRICE
● STABILITY CONDUCIVE TO A BALANCED
& SUSTAINABLE GROWTH OF THE
ECONOMY AND EMPLOYMENT

The Philippine economic and financial

landscape has greatly shaped the evolution of
the country's
central banking in the last 70 years
To better respond to these challenges, the conduct of MONETARY POLICY FRAMEWORK
central banking has also evolved through the adoption
of different monetary policy frameworks.
MONETARY POLICY FRAMEWORK
BSP's Monetary Policy over the Years

MONETARY POLICY FRAMEWORK

Philippine Interest rates

Philippine Interest rates