Unlike the traditional paper money, plastic money is not susceptible to "wear and tear" because it has a coating that protects it from dirt and moisture. It lasts longer in circulation and is harder to counterfeit.
Paper money is made out of abaca and cotton whereas plastic money is produced from polymer substrate, which is also used in making other plastic products such as garbage bins and plumbing fittings.The BSP said it got a proposal from Australia, the first country to have a full set of circulating plastic banknotes for all denominations, regarding the shift to polymer money.
"They proposed to us to start using it and we're studying the pros and cons," BSP Deputy Governor and Officer-in-Charge Armando Suratos said.
Aside from Australia, other countries that use plastic banknotes include Bangladesh, Brazil, Brunei, Chile, Indonesia, Israel, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Singapore, the Solomon Islands, Sri Lanka, Thailand, Vietnam, Western Samoa, and Zambia.
On the other hand, countries that issue commemorative polymer notes include China, Kuwait, and Hong Kong.
Suratos admitted that polymer notes are more durable than the country's current paper bills. It could also prevent counterfeiting as plastic money would allow banknote manufacturers to incorporate security features such as optically variable devices that are difficult to reproduce.
However, Suratos said plastic bills would be more expensive to create. "We also have to consider how people handle bills."
At present, the Philippines prints money using a fiber composite of 20 percent abaca and 80 percent cotton. Suratos explained that the use of abaca fiber was deliberate, as this was meant to support the local abaca industry.
"We make sure Philippine abaca is used, not just any material. We ask them to certify their suppliers," he said.
Meanwhile, Suratos said the BSP has phased out P5 and P10 paper bills. "We have decided that in the new denominations, there will be no more P5 and P10 bills, but in coins only."