Collector sets to be demonetized|
June 22, 2018
Are governments only fair weather friends when it comes to honoring the face value of their own coins? Are non-circulating legal tender commemorative coins truly legal tender? Just because a coin has a denomination stamped onto it, is that coin truly money?
These are all fair questions now being raised as the Bangko Sentral ng Pilipinas (Philippines Central Bank) announced on May 18 that it will be demonetizing commemorative and collector coins issued between 1974 and 1994.
According to a central bank statement, “By virtue of Circular No. 81 dated July 28 1995 the coin series of which these coins were part of were demonetized and ceased to be a liability of the BSP after January 2, 1998,” continuing, “Starting May 1, 2020 the commemorative Pilipino, ABL [Ang Bagong Lipunan series], and Flora and Fauna coins in sets and in individual packaging shall be considered demonetized.”
The central bank clarified its remarks by stating individual and set packaged coins from these series were not mentioned in the 1995 circular and for that reason were excluded from the 1998 demonetization. The central bank also acknowledged the specially packaged coins can be redeemed for face value between May 1, 2019 and April 30, 2020. This is less than the sets cost when first purchased from the mint.
There are no outmoded Philippine bank notes that are still being redeemed, according to the most current issue of MRI Bankers’ Guide to Foreign Currency. The central bank did not make itself clear on the status of overprinted bank notes issued to mark historic events but commented that these notes are issued apart from bank notes intended for circulation, suggesting commemorative bank notes cannot be spent.
There are commemorative coins issued between 1974 and 1994 composed of 0.925 fine, 0.900 fine, or 0.500 fine silver as well as composed of 0.900 fine or 0.500 fine gold. The central bank bulletin did not address these coins.
All precious metal content Philippine commemoratives from this period have a higher intrinsic value than face value. That gives the owners a reason to continue to hold them.
The immediate impact of this new central bank policy falls on the individually and set packaged base metal coins. Both mint and proof sets were issued between 1974 and 1994. Many of the mint sets have been realizing close to their face value on the secondary market rather than having a significant premium.
It stands to reason that those collectors and dealers who own these base metal sets could want to cash them in at face value before that possibility ends May 1, 2020. Redeeming them would be the only definite way to get their present value. What their secondary market value will be after May 1, 2020, only time will tell.
As an example of what could happen to the precious metals coins, consider the 0.500 fine silver 1983 100 piso marking the 75th anniversary of the University of the Philippines. It had a face value exchange rate of about $1.91 at the time this article was being written. The coin’s intrinsic value was about $6.58 based on the spot price of silver at $16.38 per ounce. As long as melt value is higher than face value, no one would turn this coin in simply for face value.
This article was originally printed in World Coin News. >> Subscribe today.
More Collecting Resources
• The Standard Catalog of World Coins, 1901-2000 is your guide to images, prices and information on coinage of the 1900s.
• If you enjoy reading about what inspires coin designs, you'll want to check out our Fascinating Facts, Mysteries & Myths about U.S. Coins.
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