I had coffee yesterday with a big businessman from Davao. He doesn’t want his name printed, but he’s been around long enough to see 5 presidents come and go.
“Jun,” he said, “the billions they stole from flood control and ghost projects? It’s not in banks. It’s in houses. Brand new houses.”
He meant cash. Polymer cash. The ones printed in Australia.
Then he dropped this: “Because that money isn’t circulating, BSP is being forced to print more. That’s why banks and even casinos are recalibrating their money counters.”
I listened. Then I checked.
What’s true:
The polymer notes are real. Since 2022, our ₱1000, ₱500, ₱200 bills are made of polymer and printed by Note Printing Australia. They’re tougher, waterproof, and yes, they jammed old counting machines. BSP had to tell banks and casinos to recalibrate. That part checks out.
When money comes from kickbacks, you don’t deposit it. AMLC will see it. It gets hoarded So it goes to vaults, to “safehouses,” to assets. We’ve all seen the news — cash stashed in suitcases delivered in a mansion in Manila and Forbes Park and flown by chopper to Ilocos, in boxes and paper bags and boxes elsewhere. The money exists, but it’s dead money. It’s not paying teachers, not buying rice, not building classrooms.
What’s shaky: The idea that BSP is printing more because corrupt money disappeared. BSP prints based on economic growth and replacement of worn bills, not because politicians are hoarding. The economy is mostly digital now anyway. Hoarded cash hurts, but it doesn’t force the central bank’s hand.
What’s also true: “Big business is holding back,” my friend said. “We’re keeping our investment capital until after Marcos.”
And I believe him. Talk to contractors in Tagum, developers in Davao City, exporters in General Santos. Big business in the Metro Manila. They’re in “wait and see” mode. Impeachment, ghost projects, ₱19 trillion in debt — why expand now?
DOF itself admitted we lost ₱42B to ₱118B per year just in flood control from 2023-2025. That’s 25% to 70% of the budget gone. Former Ombudsman officials have been saying for years we lose ₱700 billion annually to corruption. That’s 20% of the national budget.
Every peso hoarded is a school not built. A hospital not staffed. A flood control project that exists only on paper.
So the “hoarding effect” is real. Not because BSP is panicking. But because the money never made it to us hoi polloi.
The cash is stored in new houses not in banks. And the people? We’re still waiting for these to circulate.
Before we parted, my friend had one last suggestion. “When VP Sara becomes President,” he said, “she should demonetize all polymer bills. Make them worthless after 60 days unless you can prove where you got them.”
It’s a bold idea. It would flush out the cash in those new houses. But it would also send the fish vendor in Agdao running to the bank with her life savings.
Revenge is sweet. But policy is harder.
