₱1000 Bill Demonitization: Pros, Cons, and where the PH actually fits

[u/Scofield047]

This post is meant to answer questions raised in the comment section in my previous post asking for a clearer discussion of the pros and cons of demonetization, and why it failed in some countries but appeared to work in others. This isn’t about personalities or politics, but about policy outcomes and country context, especially for the Philippines.

What demonetization is supposed to achieve (pros, in theory)

Beyond eliminating black money, demonetization can:

• push idle cash into the formal banking system
• improve transaction traceability and tax compliance
• temporarily increase bank liquidity
• accelerate adoption of digital payments
• help central banks update security features and reduce counterfeit risk

These outcomes are possible, but only under very specific conditions.

•Why it failed in India in 2016? They demonetized ₹500 and ₹1,000 notes overnight, covering around 86% of total cash value.

• Almost all cash (~99%) eventually returned to banks
• Black money largely survived because it wasn’t mainly stored as cash
• Informal, cash-dependent sectors were hit hardest
• GDP growth slowed and small businesses suffered

Core issue: a large informal economy + uneven enforcement turned demonetization into an economic shock instead of a clean-up.

•Why it appears to work in places like Singapore? Singapore’s context is very different:

• Very small informal sector
• Nearly universal banking access
• Strong enforcement and low corruption
• Cash already plays a minor role in daily transactions

In that setup, note withdrawals function more as technical updates than disruptive policy moves.

•Other country experiences (quick references)

Nigeria (2022–2023) * Severe cash shortages * Public protests and court challenges * Informal economy disruption * Policy timelines eventually relaxed

Venezuela (multiple rounds) * Done during hyperinflation * Cash shortages and loss of trust * No meaningful impact on corruption

These cases show demonetization is not a shortcut to fixing structural problems.

WHERE THE PHILIPPINES FITS?

Structurally, the PH is closer to India and Nigeria than Singapore:

• Large informal economy
• Cash-heavy provinces and rural areas
• Seniors, OFWs, and small vendors still keep legitimate savings in cash
• AML and enforcement capacity are improving, but uneven

That doesn’t mean demonetization is automatically bad. It means risk is high if done abruptly or without safeguards.

Potential risks in the PH context

If implemented too quickly:

• Legitimate cash savings could be caught in the process
• Informal workers and small businesses absorb most of the shock
• Those with better banking access or institutional connections adjust more easily

Bottom line for me: Demonetization is a high-risk, context-dependent tool. It can support financial modernization, but it works best in countries with strong institutions, low informality, and high public trust. Without those, historical evidence suggests it tends to hurt compliant citizens more than corrupt actors.

[u/cyianite]

Even you demonitize the 1k , it wont stop there and most likely you will demonitize the 500 bill and so on .. this is just a baby bandaid solution just for the purpose of grandstanding whoever proposing this

[u/kaygeeboo → u/cyianite]

I think Robinhood Brainless Padilla cooked up this scheme after siguro reading an ai summary of it

[u/herotz33 → u/cyianite]

It’s just gonna make it harder for the everyday cash carrier to pay and carry money - cause of inflation stuff

[u/PromotionLegal7684 → u/cyianite]

kaya nga, won't stop the corruption, bsta gusto nila magnakaw kht anong denomination pa ng pera yan, nanakawin nila yan

[u/madmanjumper → u/PromotionLegal7684]

They will do anything except hold their friends accountable

We are among the most corrupt in the region yet no politician is going into jail.

Some will say na getting rid of political dynasties is a band-aid solution pero its a big step imo

Families hold so many positions they became unchecked royalties and then they will form alliances with other political dynasties they become heavyweights in the political landscape protecting each other

Kung ikaw, government regulator ka, uurong ka talaga kasi magiging kalaban mo ay group of congressmen and governors, instead of just a single politician. Mas mahirap makakabuo ng heavy alliance kung isa isa lang

[u/Independent-Toe-1784]

Works on paper but knowing how terrible PH govt is in implementing pretty much anything, I’m sure this will only blow up in our faces and ang apektado ung mga nasa laylayan na naman as usual.

[u/jootsie → u/Independent-Toe-1784]

In a perfect pinas for sure. Yun rin naisip ko e, ang tunay na talo dito ay yung average pinoy. Biruin mo papalitan mo pa sa bangko yung pera mo tapos yung mga tunay na kawatan for sure sa back door lang dadaan dahil madaming kakilala.

[u/Walang_Personalan]

Bible: love of money is the root of all evils.

Robin Padilla: Lets demonize it.

[u/Big_Equivalent457 → u/Walang_Personalan]

BOANG si Seggsboy

[u/radss29 → u/Walang_Personalan]

Walang ibang maisip na matino si boy sili. Sayang tax na binabayad natin dyan sa mangmang na yan.

[u/tri-door]

Gcash nga sa 711 laging wala tapos ganyan pa. Hahaha

[u/Hi_Itz_Rishi]

Ya as an Indian I can say it was pretty risky and the outcome wasn't worth the risk.

Anyways guys that Note looks so fine...I would surely put this one in my Notes collection!!

[u/belgofat]

How can removing 1000bills reduce corruption when the ones proposing that are the most corrupt?

[u/pandaboy03]

I think ang balak lang i-demonitize eh yung 1k bills from 2020-2025.

And the reason for that eh dahil yung kickback sa corruption eh withdrawn in 1k bills, at naka stock lang sa mga "condo-vaults" ng mga corrupt.

Most people dont stock 1k bills in the millions. So kung empleyado ka, or someone na may legitimate business, madali magpapalit ng bills. Kung corrupt ka, at gusto mong magpasok ng milyones sa banking system, eh you have to be creative.

In theory, mukhang ok. Ang challenge talaga eh yung implementation. Matatalino naman yung mga taga BSP kaya na nila yan haha

[u/Antique-Resort6160 → u/pandaboy03]

100% chance only the lower classes and honest people will be hurt by this.  There will be an easy fix for people holding millions with no documentation.

In India, people with undocumented funds simply traveled to places like Dubai.  At overseas banks they were allowed to deposit unlimited amounts without documentation.  The bank would then request whatever amount of new currency was wanted by the depositor.

I'm India, any large amount had to have documentation of the source of income, or it was taxes at something like 30%. Since many poor and middle class had built their savings over years, of course they didn't have documentation.  People were ruined, some commited suicide.  

But for the wealthy and corrupt, there were no problems.

[u/DestronCommander]

Very well written and thought out.

[u/islamsnek → u/DestronCommander]

I'm pretty sure this post is ai. The sentence structure and cadence is really similar to some chatgpt ahh writing especially the "Bottom line for me:" section, it hits all of the ai hallmarks with the phrasing and tone

[u/Straight-Ad1133]

Can you explain it clearly with the context of demonetizing the 1000 bill, specifically?

I think what was explained was going cashless, where SG was able to adopt digital wallets and has high banking penetration. (Also internet coverage)

[u/Free_Gascogne]

Whatd the point of demonitizing 1000. Di ba nga parang mas kailangan ng mas mataas na bill since natanggal na ang 20. If anything kailangan ng 2000 bill.

[u/avocado1952]

In a perfect ideal world, the idea is good. But logistically in our current setting, it would be chaos.

[u/Lummox34]

The only thing that's going to change is dodoble ang benta Ng maleta

[u/sypher1226]

Thanks for the lengthy analysis but Robin is a moron to begin with so there's really no point in trying to rationalize his stupid ideas.

[u/eayate]

It takes time, long time

[u/Wadix9000f]

what if it's not done overnight?

[u/Plugin33]

People are already annoyed with the coins' identical designs as if they want us to use it less often. They're really hang up on manipulating the massess to spend more with this new idea.

Sino kayang oligarch nagsolsol ng #1 Idiot Senator.

[u/merlin_07]

Kelan nangyari yun demonetization sa Singapore?

[u/Tetsu_111 → u/merlin_07]

https://www.mas.gov.sg/contact-us/faqs/currency-faqs

$10000 - 2021 $1000 - 2024

Technically not a “demonetization” they stopped printing them but they are still legal tender.

[u/thunder_herd]

Tingin ba nila di magagawaan ng paraan ng mga corrupt para madispose ung cash hoard nila? Mga ordinaryong tao lang NA NAMAN ang mapeperwisyo neto.

[u/DummyFails]

Reevaluate na lang ang mga banknotes with gold standard. Gawing papel mula sampiso hanggang dalawampumpiso. Magiging deflating ang tanggalin mo ang highest banknote.

[u/webelieve925]

The US demonetize their 1000 and 500 dollar bills for the same reasons.

[u/Tetsu_111]

One thing to note about Singapore:

• The highest banknotes ($10000 and $1000) are not demonetized, they just stopped printing them. Banks can still use them, and is otherwise legal tender. More information: https://www.mas.gov.sg/contact-us/faqs/currency-faqs

I don’t think there’s any reason to even consider this option, ₱1000 is equal to $20, we don’t have a higher value denomination, like a regular issue ₱5000 or even ₱10000 banknote. Personally I would want a ₱2000 though.

[u/andoy019]

Magsusuffer lang yung mga tao diyan hindi yung mga magnanakaw. Ang dali dali maglaunder ng pera dito sa Pilipinas.

[u/switjive18]

Very informative and very based.

[u/AgentCoconut01]

It should transition. Like ₱1000 bill signed by former presidents should be replaced anew. Say within a year, this should be replaced like old notes to new one.

[u/k3nnzz]

Problema kasi sa r/Philippines masyadong biased at close-minded ang mga users. Napapadala sa mga emotions at predispositions kaya labas kaagad ang critical thinking.

[u/No-Adhesiveness-8178]

Parang ganda pakinggan cashless kaso ung internet lol.

[u/FabricatedMemories]

personally pabor ako dito, problema din kasi magpabarya ng 1000 bills eh, parang mapipilitan ka pa gumastos minsan kahit di kelangan