Ex-finance secretary Purisima calls for demonetization of P1,000 and P500 bills to make corruption harder
Former finance secretary Cesar Purisima suggested demonetizing the P1,000 and P500 bills to make corruption harder in light of the flood control project scandal.
In a Facebook post on Sept. 24, Purisima, who worked during the Aquino administration, noted how district engineers in Bulacan "gave us a chilling window into how corruption is fueled in our country."
"They described billion-peso cash deliveries where they said each large suitcase of P1,000 bills could only contain about P50 million," he said. "They mentioned that a P1 billion cash delivery to a Congressman at the Shangri-La BGC parking lot required around 20 suitcases, multiple vehicles, and massive coordination."
Purisima suggested having P200 as the largest bill in circulation.
"That same P1 billion would have needed 100 suitcases, a convoy of vehicles, and a warehouse just to store the cash," he said. "The sheer impracticality would make this kind of corruption much harder to hide."
In Purisima's proposed plan, he suggested the public must be given six months to exchange old P1,000 and P500 bills. He also recommended presenting the National ID for bank transactions, and those exceeding P500,000 must be deposited into a bank account and reported to the Anti-Money Laundering Council.
Nevertheless, Purisima acknowledged that this proposal isn't foolproof.
"Corruption will always look for ways to adapt," he said. "But it will raise the cost, the risk, and the logistical difficulty of hiding and moving dirty money. It will also force billions currently stashed in vaults, basements, under beds and closets back into the banking system where accountability can reach it."
He cited examples from other countries, such as India, the European Union, Nigeria, Singapore, and Canada, saying that withdrawing large bills is a recognized global tool to shrink the shadow economy and strengthen transparency.
Purisima also listed down "anticipated arguments," like demonetization bringing inconvenience to small businesses and ordinary citizens. He said that's why there's a six-month window to allow direct deposit for larger sums. "For most families and small shops, the amounts are manageable and can be exchanged at nearby banks," he said.
Regarding fears that demonetization will slow down economic activity, Purisima said that while adjustments are real in the short term, the long-term benefit is healthier, leading to more transparent financial flows.
"Clean money in banks means better access to credit, stronger tax collection, and a more stable economy," he said.
If corrupt people were to move into crypto, Purisima said there are limitations.
Crypto, he said, leaves digital trails and global regulators are tightening rules. More importantly, the last-mile problem of bribery remains, as it relies on cash.
"Moving billions into crypto doesn’t solve the corrupt official’s need to eventually pay people in pesos. At some point, dirty money must re-enter the banking or cash system, where it becomes traceable," he said.
And even if corrupt people try to find another way, Purisima said demonetization will still make corruption more expensive, riskier, and harder to hide.
"Raising the logistical barriers matters," he added. "Demonetizing the P1000 and P500 bills is about making corruption harder and transparency stronger. So the question is: What are we waiting for?"
Flood control mess
Hearings at the House of Representatives and the Senate revealed billions of pesos lost to corruption, which prompted the formation of the Independent Commission on Infrastructure that will specifically investigate irregularities in flood control projects in the last 10 years.
On Sept. 11, DPWH Secretary Vince Dizon filed criminal complaints against officials of the Bulacan 1st District Engineering Office and four private contractors linked to such anomalies.
The government has also frozen the bank accounts and vehicles of the contractors and DPWH officials with alleged involvement in the issue.
On Sept. 21, thousands of Filipinos took to the streets to protest corruption in flood control initiatives. In Metro Manila, the “Baha sa Luneta” rally, which was organized by activist groups and university students, saw thousands of people on the streets on Sunday morning. The “Trillion Peso March” that afternoon, referring to the trillions allegedly lost to systemic corruption, at the People Power Monument on EDSA saw the closure of all northbound lanes due to the swelling of the crowd.
