The True Value of American Dollar Bills in the Philippines: A Warning

The "small head" fifty dollar bill refused by banks in the Philippines.
Photo source: http://people.ku.edu/~kaf/pmoney/frn.htm

If a US dollar bill with a "small head" lands on your hands, beware. It's worthless in the Philippines. No bank would change it. No money changer would accept it. Not even the black market foreign exchange stalls in the sleaziest parts of town would trade it.  So I write this blog entry as a form of public service to fellow Pinoys who are still in the dark. If you have "small head" bills in your possession, toughen your hearts - be ready for heartbreak when you try to convert them here in the Philippines, or elsewhere in the developing world for that matter. They aren't worth a singkong duling.

Gone are the days when having dollars is a safe bet. I remember back in the 80's and 90's, when my parents would hold on to dollars as though they were lifesavers to keep us afloat when a currency crisis hits. I remember wads of dollars, tied with rubber bands, hidden under the bed. Hahaha, I know, I know, it sounds primitive. But there were 9 coup d'etats that year, and we were always ready to take flight at a moment's notice, so everything had to be transportable. Even our stash of cash.  Those days of political crisis, the preferred currency to stash was  the revered US dollar. GONE ARE THOSE DAYS. A dollar bill in your hand can be worth less than a wad of tissue to wipe your bum.  At least the wad of tissue is clean and can get the job done. The "small head" bill isn't even good enough for that. With so many versions and innovations on the design of US notes, banks and money changers have adopted policies on which kinds of bills are acceptable or not, and the public isn't always abreast with the latest standards.

Narra received a 50 dollar bill from a relative (thanks Tito! in case you're reading this) who was visiting from the US, and she was excited about it. I took her to the bank yesterday, with plans of opening her own little junior-saver's account with her own little passbook. I wanted to deposit all her cash gifts in her name, so she can grow up cherishing the rituals of saving. When I got to the bank, the dollar bill was refused. That was BDO. So I called my other bank, Citibank, where I had a dollar account. They said they accept old US bills for as long as I deposit it to my account and not encash it. So off to Citibank we went. And when we got there - "oh no!" said the bank officer when she saw the bill - "we don't accept this kind, this is older than the old version we accept" - huh? what? duh? come again? errrrrr? are you kidding me?  When is an old bill considered older than old? How infuriating. Apparently, bills published prior to 1991 are too old indeed. Those of the 1996 series are borderline cases - they must be in good condition - crisp, clean, and with no tears. If a 1996 series bill has the tiniest tear, it may be refused. The newer the series (2003) the better. Now is this fair? For banks to refuse to change money?

There's something we must remember about the nature of paper money as "legal tender" or a medium of payment allowed by law and recognized by a legal system to be valid for meeting a financial obligation. A US $50 dollar bill is legal tender in the US, and must be accepted there. Back home in the Philippines, which is its own independent country (Mabuhay and Inangbayan!), Philippine pesos are legal tender here and US dollars are not, which means the green currency can be refused. I can get mad all I want at the banks and money changers in the country, but by law, they are not obligated to accept US legal tender if they don't want to, after all, this land is NOT an extension of the US of A.

Now, before you think I am mad at the Tito who gave Narra that bill, let me set things straight - I treasure this gift and will keep it safe in her scrapbook for sentimental reasons. Many collectors are keeping their "small head" bills as they are becoming harder to find in the USA. I read a coin collector's forum, and followed their discussion on the perceived value of these rare bills.  I know the feeling of wanting to hold on to old designs of money. I was studying in Spain right before they converted to the Euro, and I diligently collected pesetas for posterity. The lovely thing about my coin collection is that the coins featured different parts of Spain. Every place I visited, I made sure to acquire and save a coin - and now, I have a way to relive my journeys through Spanish regions each time I view my collection.  I wish I also saved old 2 peso bills (the blue ones), and the old 5 pesos (with Bonifacio), and the old 10 pesos (the brown ones).... money of my childhood. Sigh, 10 pesos used to be my daily  baon in kindergarten.  So just like these pesos I feel sentimental about, many American citizens are becoming sentimental about the old "small head" bills from decades back. 

The updated "big head" version that's more widely accepted.
Photo source: http://people.ku.edu/~kaf/pmoney/frn.htm

The rest of the world, however, with no emotional attachment to things American, have no use for them.  From Cambodia and Myanmar, to Tanzania and Kenya - "small head" bills are systematically rejected. So what do you do if you have a wad of "small heads"? Look for US-based relatives and friends, and ask if they can take these dollars off you - or if they can exchange them for big head dollars that actually have value to you. They can use the "small heads" in the US where it is legal tender.  But for fellow Pinoys, please don't carry them with you as travel money elsewhere in the world - you may end up very, very frustrated indeed. 

And if family members and friends are planning to visit from abroad, do them the service of informing them beforehand to take only "big head" dollars with them. Because it's unfortunate when someone with a big heart gives a cash gift with a "small head" - for the value of the gift can be severely diminished,  in monetary terms, or otherwise.