PHILIPPINE MONEY
Importance of Money •
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Money simplifies matters –
Medium of exchange
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Standard Standard of value
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Store of value
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Standard of deferred payment
Money contributes to economic development and growth
Classifications of Money •
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Money according to material used Money according to the character of the issuer
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Money according to popularity
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Money according to face value
Money according to material used •
Commodity money –
Money can be metallic in nature. •
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Money is used for the purposes other than as a medium of exchange if so desired like rice, salt, sugar and the like satisfying physiological physiological needs
Paper money –
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Precious metals like gold and silver are used as commodity money
High quality paper materials are used to stand a long period of time and to minimize counterfeiting
Bank money –
These are checks or other paper notes issued by financial intermediaries
Money according to the character of the issuer •
Treasury money –
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Central Bank money –
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Those issued by the National Treasury before 1949. they are notes and coins of various denominations Those issued by the Central Bank after 1949. they are the Central Bank’s notes and coins circulating in the Philippines
Commercial bank money –
Those issued by the Philippine National Bank and other commercial banks serving as promises to pay, legal tender, payable on demand or future time to bearer or order.
Money according according to popularity •
Paper money –
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Fiat money – – –
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Have no commodity value They are inconvertible paper money with no reserve Also called credit or fiduciary money Face value if higher than the value of paper-material used
Subsidiary coins –
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Representative-full bodied money made of base metals to settle small transactions. Not advisable for use in big transactions thereby having limited limited legal tender tend er power. power.
Money according to face value •
Standard money –
This is full-bodied money, authorized by law, where the weight, fineness, denominations and designs are prescribed by the government as standard basis for coinage.
Important concepts •
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Mint – the place for manufacture manufacture of money Minting – or coining or coinage is the process of manufacturing money Kinds of coinage: –
Free coinage – the government defines sizes, shapes, weight and designs of coins but allows people to bring their precious metal to the mint to convert such into standard coins. •
People or owners of these metals are charge with brassage or seigniorage fee.
Important concepts •
Kinds of coinage: –
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Gratuitous coinage – total responsibility for minting is borne by the government Limited coinage – government purchases precious metal in an open mark m arket et and mint them as a medium of ex exchange change at face value higher than material content to facilitate trade.
Monetary System •
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In any country the monetary system consists of the aggregate aggregate of money in use, the values of the various types of money being organically related to one another in both formal and substantive ways. In a system, there is a standard money and unit of account and every type of money is either a multiple or sub-multiple of that unit, that is, there are various ‘denominations’. There is provision for converting converting one type of money into another, or redeeming fiduciary money by standard money, on a parity or other basis.
Monetary System •
The monetary system of a country is a national affair –
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The central government usually acquires a monopoly or near control of the monetary affairs. The monetary system in a country is determined by law
Each country enacts its own coinage, banking and other monetary legislations. Stability of money is more frequently used to signify the constancy of its purchasing purchasing power over goods in general.
Kinds of Monetary Standards Standards •
Monometallic standard standard –
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Gold standard •
Gold coin standard
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Gold bullion standard
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Gold exchange standard
Silver standard
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Bimetallic standard
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Fiat standard
Evolution of Philippine Money
Pre-Hispanic Era •
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Trade among the early Filipinos and with traders from the neighboring islands was conducted through barter. The inconvenience of barter later led to the use of some objects as medium of exchange. exchange. ₰ Gold ₪Piloncitos - small bead-like gold bits considered by the local numismatists numismatists as the earliest coin of the ancient Filipinos ₪gold barter rings.
Spanish Era 1521-1897
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Three hundred years of Spanish rule rul e left many indelible imprints on Philippine numismatics. At the end of the Spanish regime, Philippine money was a multiplicity of currencies that included Mexican pesos, pesos, Alfonsino pesos and copper coins of other currencies.
Spanish Era 1521-1897 •
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The cobs or macuquinas of colonial mints were the earliest coins brought in by the galleons from Mexico Mexico and other Spanish S panish colonies. The silver dos mundos or pillar dollar is
considered one of the world’s most beautiful coins. The barilla barilla,, a crude bronze or copper coin worth about one centavo, was the first coin struck in the country.
Spanish Era 1521-1897 •
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Coins from other Spanish colonies also reached the Philippines and were counterstamped counterstamped.. Gold coins with the portrait of Queen Isabela were minted in Manila. Silver pesos with the profile of young Alfonso XIII were the last coins minted in Spain. The pesos fuertes, issued by the country’s country’s first bank, the El Banco Espanol Filipino de Isabel II, were the first paper money circulated in the country.
Revolutionary Period 1898-1899
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Asserting its independence, independence, the Philippine Republic of 1898 under General Emilio Aguinaldo issued its own coins and paper currency backed by the country’s natural resources. One peso and five peso notes printed as Republika Filipina Papel Moneda de Un Peso and Cinco Pesos were freely circulated. 2 centimos de peso copper were were also issued in 1899.
The American Period 1900-1941
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The Americans instituted a monetary system for the Philippine based on gold and pegged the Philippine peso to the American dollar at the ratio of 2:1. The US Congress approved the Coinage Act for the Philippines in 1903. –
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The coins issued under the system bore the designs of Filipino engraver and artist, Melecio Figueroa. Coins in denomination de nomination of one-half centavo to one peso were minted. The renaming of El Banco Ban co Espanol Filipino to Bank of the Philippine Islands in 1912 paved the way for the use of English from Spanish in all notes and coins issued up to 1933. Beginning May 1918, treasury certificates replaced the silver certificates series, and a one-peso note was added.
The Japanese Occupation 1942-1945 •
The outbreak of World War II caused serious disturbances in the Philippine monetary system.. Two kinds of notes circulated in the system country during this period. ₰ The Japanese Occupation Forces issued war notes in big denominations. denominations. Provinces and municipalities municipalities issued their own guerrilla ₰ Provinces notes or resistance currencies, most of which were sanctioned by the Philippine government in-exile, and partially redeemed after the th e war. war.
The Philippine Republic
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A nation in command of its destiny is the message reflected in the evolution of Philippine money under the Philippine Republic. Having gained independence from the United States following the end of World War II, the country used as currency old treasury certificates overprinted overprinted with the word “Victory”.
The Philippine Republic
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With the establishment of the Central Bank of the Philippines in 1949, the first currencies issued were the English series notes printed by the Thomas de la Rue & Co., Ltd. in England and the coins minted mi nted at the US Bureau of Mint. The Filipinization of the Republic coins and
paper money began in the late 60’s and is carried through to the present.
The Philippine Republic
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In the 70’s, the Ang Bagong Lipunan (ABL) series notes were circulated, which were printed at the Security Printing Plant starting 1978. A new wave of change swept through the Philippine coinage system with the flora and fauna coins initially issued in 1983. 198 3. These series featured national heroes and species of flora and fauna. The new design series of banknotes issued in 1985 replaced the t he ABL series. Ten years later, later, a new set of coins coins and notes were issued carrying ca rrying the logo of the Bangko Sentral ng Pilipinas. Pilipinas.
Laws on Philippine Monetary System •
Philippine Coinage Act of 1903
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US Coinage Act of 1903
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Gold Reserve Act of 1934
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Dollar Exchange Standard S tandard
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“Mickey Mouse” Notes
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Managed Currency System System
Philippine Coinage Act of 1903 •
Defines our monetary system as follows: –
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Gold coins contain 12.8 grains of gold and 0.9 fineness Silver coins contain 416 grains of silver and 0.9 fineness
The series of coins that resulted from this decision is often referred to as "CONANT COINS" after Charles A. Conant, an American monetary expert.
US Coinage Act of 1903 •
Philippine money was redeemable in drafts or checks payable in full gold standard currency. –
In order to maintain value of peso with gold, a
currency reserve fund known as “Gold Standard Fund” was set up.
Gold Reserve Act of 1934 •
Under this monetary standard, the Philippine currency was not redeemable in gold but in dollars. –
Dollars devaluated by forty-one percent, and US government government was given title to all gold coins, bullion and certificates held by Federal Reserve Banks.
Dollar Exchange Standard •
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Philippine currency was redeemable in dollar instead of gold. Currency issued was backed up by silver coins, and dollars, on demand.
“Mickey “Mickey Mouse” Notes •
The Japanese military government issued paper bills called “mickey mouse” notes, not because they were legal legal tender but because of fear from from authorities on ground of noncooperation. cooperation. From 1946 to 1949, money supply increased tremendously.
Managed Currency System •
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With the creation of Central Central Bank, the country’s country’s monetary system and banking system were reorganized. Central Central Bank Act, known as Republic Act No. 265 was enacted. –
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This placed bank in better position to meet the credit needs of existing business enterprises and credit requirements for new development projects. Central Bank Act defines the monetary unit as ‘peso’, sign is P, divided into one hundred equal parts called ‘centavo’ represented by ȼ sign. sig n.
Piloncitos and Gold Barter Rings
Macuquinas
Silver dos mundos or Pillar Dollar
Barilla
This uniface cast bronze (copper) piece signals the start of specifically Philippine coinage coinage under Spain. It is inscribed at the center with the royal royal seal of the City of Manila, dated 1728 (perhaps (perhaps its first year of issue) and labelled "BARILLA" (a name carried over to today's bariya bariya meaning small change which it probably was at that time).
Counterstamped Coins
Gold Coins minted in Manila
Silver Coins minted in Madrid for Philippine Circulation
On the left is a set of silver coins of the Isabel II series in 50, 20 and 10 centimos de peso denomination all dated 1868. On the right right is a similar set of the Alfonso XII series all dated 1885. All the the above were minted minted by the Casa de Moneda de Manila. At center is the crown-size silver peso of Alfonso XIII dated 1897 which was minted in Madrid for Philippine circulation
Pesos Fuertes (P.F.) issued by El Banco Español Filipino de Isabel
Revolutionary Government Currency Revolutionary copper coin of 2 centimos de peso dated 1899. At 26 mm diameter d iameter,, it is the th e smaller of two types typ es of patterns / coins issued by President Emilio Aguinaldo. The larger version, also in copper and likewise dated 1899, is approximately approximately 30 mm in diameter and bears the triangle of the Katipunan.
One Philippine Peso
American Period Philippine Currency
American Period Philippine Currency
Obverse and reverse of the famous 1906-S Philippine Peso (38 mm) designed and engraved by Melencio Figueroa Figueroa and minted in San Francisco, Francisco, California. It is the t he most popular and the signature coin of the U.S. - Philippine Series
American Period Philippine Currency
Twenty Peso Banknote American Period Period Treasury Treasury Certificate Certificate
Japanese Period Philippine Currency
Japanese Period Philippine Currency
Emergency Notes during Japanese Occupation
Emergency note issued in Ilocos Norte
Emergency note issued in Aklan
Emergency note issued in Cebu
Victory Notes
