Just recently, I opened the piggy bank (a big jar, actually) to unleash a multitude of coins in varying denominations. I had kept them long enough, I thought. Best to put them in circulation now. Anyway, they were not earning any interest in the jar “bank.”
But instead of carrying them around, I opted to put them in a small plastic bag that I placed inside the car, primarily to pay for street and mall parking. No 1-, 5-, or 10-centavo coins in the bunch. Mostly P1 coins, a number of 5s and 10s, with a sprinkling of 25-centavo coins.
Sometime last week, I found myself on an errand that required me to park on Valero St. in Salcedo Village, Makati City. I needed P60 for three hours of parking. So I took out the bag and started counting. My priority, of course, was to unload the 25-centavo and P1 coins first.
But to my surprise, the parking attendant refused to accept the 25-centavo coins. When I asked why, she told me that they (I reckon the parking authority) do not accept Philippine quarters. It was only after I argued that these small denominations are still “money,” legal tender, that she relented.
However, I opted to pull back, reasoning that I did not want her to get into trouble for “accepting” my eight 25-centavo coins. I exchanged them for P1 coins, completed the P60, and took my ticket. Then we both went our separate ways.
It can be frustrating to see cash, small coins in particular, seemingly losing “value” as a mode of payment. I rarely bring cash nowadays, paying mainly by credit card, debit card, or electronic wallet. I am the tap-to-pay guy. But cash, particularly coins, is still an option.
I refuse to haul around heavy coins. That is why I leave them in the car, or give them to my son. The other disadvantage of cash is that merchants at times lack coins for change. Even parking booths ask for exact cash payment to avoid running short of change.
What is more annoying is carrying the coins only to have them rejected by payees who find them impractical or inconvenient. The Bangko Sentral ng Pilipinas (BSP) limit set in 2022 was up to P200 per transaction for 1-centavo, 5-centavo, 10-centavo, and 25-centavo coins. A P60 parking fee is within this limit. For P1, P5, P10, and P20 coins, the limit is up to P2,000 per transaction.
In short, unless the parking fee to be paid exceeds P200, parking attendants in Legaspi and Salcedo Villages have no right or authority, regardless of their official policy, to refuse payment in 25-centavo coins. They can politely decline and explain why. But if the car owner insists on paying with small coins, they cannot refuse.
I understand the concern. Imagine if everybody paid in small coins. The poor parking attendant would be hauling and handling heavy metal the whole day. Even so, there has to be a way for the parking authority to mitigate this. Having their motorized enforcers collect coins four times daily can help.
I reckon parking attendants resist centavo coins out of inconvenience. The same goes for the back office, which has to count all the coins at the end of the day. Add to this that coins are heavy to carry, and that banks typically require businesses to count, sort, and roll them meticulously before accepting them for deposit.
However, personal or operational inconvenience does not override national banking regulations. BSP regulations supersede local policies, municipal ordinances, and private management preferences, and the BSP frequently reiterates that valid centavo coins must be honored.
There was a time when supermarket cashiers kept bags of candies handy. When short of small coins for change, they offered customers candy instead. After all, it was not uncommon for them to have to give odd change like 13 or 17 centavos. And with 1-, 5-, and 10-centavo coins becoming uncommon, in many places the lowest denomination is 25 centavos.
Truth be told, I find electronic wallets and card payments more convenient. There is no need for the exact amount, or to fumble for change. And no issues with merchants unable to issue exact change. The places I patronize normally accept card or electronic payments, and I do most bill payments online or by check.
But cash is still handy, especially outside urban areas. And coins, while cumbersome, serve a practical purpose: small payments, tips, alms, and parking fees. After all, just three P20 coins make P60. In terms of purpose, the lowly 25-centavo coin and the big P20 coin are the same. They differ only in size and value. So why is the P20 coin acceptable while the 25-centavo coin is not?
Admittedly, in Metro Manila, cash is no longer the king it was about 10 years ago. To an extent, the shift is generational. Older folks still tend to pay in cash, while those who understand technology a little better use a mix of both. The younger ones, however, are paying electronically.
The impact is on cash use, the amount of cash circulating, and the payment cycle or transaction time. I get the impression that electronic payment takes longer to process, in which case technology leads to some degree of inefficiency. On the other hand, cash transactions carry the risk of human error, especially in handing out change.
The other aspect is behavior. People paying cash normally have the cash ready, with a running estimate in their heads of how much they need to pay. Once the final amount is determined, they hand over the cash. The cashier counts it, then gives the change (if any) and the receipt.
For electronic payments, payers often activate their mobile phones only when payment is due. This can be fast or slow, depending on the internet connection. Usually, a QR code needs to be scanned, an amount entered, and the transaction processed. After all this, the cashier still needs to confirm the transaction at her end.
As for credit cards, the cashier usually has to prepare the terminal, and the payer taps it. Once payment goes through, the receipt is issued. Then the cashier goes back to the register to finalize and close the transaction.
In many instances, when I am in line right behind someone paying at the supermarket or the parking lot, whether electronically or in cash, I get the impression that electronic wallet or credit card processing takes more time than cash. There is no clear data on this, of course. Just personal observation.
More important, with electronic wallets or credit and debit cards, there is always the chance that payment will not immediately go through, if it does not stall altogether. The process depends heavily on data connectivity, electricity or a full battery for wireless point-of-sale terminals, thermal paper for receipts, and the transfer of information from the terminal to the cash register, whether electronically or manually.
With cash, on the other hand, I pull out the money and hand it over. The cashier accepts it and gives me my change, and the receipt. And we are done. That is, if the cashier has enough coins for change. And at that point, even for just that moment, the lowly 25-centavo coin can still be king.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council.