Philippine peso

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The Philippine peso (Filipino: piso) is the official currency of the Philippines. The word piso derives from the Spanish word peso, which means "weight". It is divided into 100 centavos or sentimos. Its ISO 4217 code is "PHP".

The symbol used for the Philippine peso is shown to the right. This symbol was added to the Unicode standard in version 3.2 and is assigned U+20B1. Due to the lack of font support, the symbol is often substituted with a simple P, a P with one horizontal line instead of two (available as the peseta sign, U+20A7, in some fonts), PHP, or Php.

Denominations

Coins
Contemporary Philippine coins and notes
Unit (P)Design on obverseDesign on reverse
1 centavo Numeral 1 Logo of the Bangko Sentral ng Pilipinas
5 centavos Numeral 5 Bangko Sentral ng Pilipinas name
10 centavos Numeral 10 Logo of the Bangko Sentral ng Pilipinas
25 centavos Numeral 25 Logo of the Bangko Sentral ng Pilipinas
1 peso Numeral 1 and portrait of José Rizal Logo of the Bangko Sentral ng Pilipinas
5 pesos Numeral 5 and portrait of Emilio Aguinaldo Logo of the Bangko Sentral ng Pilipinas
10 pesos Numeral 10 and portraits of Apolinario Mabini and Andres Bonifacio Logo of the Bangko Sentral ng Pilipinas
Notes
Unit (P)Person(s) on obverseLandmark on reverse
5 Emilio Aguinaldo Aguinaldo Mansion during the declaration of Philippine independence on June 12, 1898
10 Apolinario Mabini and Andres Bonifacio Barasoain Church and the siging of the agreement that established the Katipunan
20 Manuel Quezon Malacañang Palace
50 Sergio Osmeña National Museum of the Philippines
100 Manuel Roxas Bangko Sentral ng Pilipinas complex
200 Diosdado Macapagal EDSA Dos and the swearing-in of Gloria Macapagal-Arroyo on January 20, 2001
500 Benigno Aquino, Jr. Life of Benigno Aquino, Jr.
1000 Jose Abad Santos, Vicente Lim, and Josefa Llanes Escoda Banaue Rice Terraces, Manunggul jar cover, and Langgal

Philippine pesos are currently denominated in the following:

Notes

  • 1000 pesos
  • 500 pesos
  • 200 pesos³
  • 100 pesos
  • 50 pesos
  • 20 pesos
  • 10 pesos…
  • 5 pesos…

Coins

  • 10 pesos
  • 5 pesos
  • 2 pesos²
  • 1 peso
  • 50 centavos²
  • 25 centavos
  • 10 centavos
  • 5 centavos
  • 1 centavo

… No longer printed but still legal tender

² No longer minted (demonitized)

³ Commemorative

History

The Philippine peso, like the United States dollar, is descended from the Spanish pieces of eight. It is divided into 100 centavos. In the 1960s, the name of the currency was renamed piso and sentimo, respectively.

Pre-Hispanic Period

Philippine money–multi-colored threads woven into the fabric of our social, political and economic life. From its early bead-like form to the paper notes and coins that we know today, our money has been a constant reminder of our journey through centuries as a people relating with one another and with other peoples of the world.

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. Gold, which was plentiful in many parts of the islands, invariably found its way into these objects that included the piloncitos, small bead-likeb gold bits considered by the local numismatists as the earliest coin of the ancient Filipinos, and gold barter rings.

Spanish Colonial Period

The Spanish period saw a multitude of currencies circulating in the Philippines, the most popular being the Mexican peso. However, other currencies like the Alfonsino peso, Mexican cob coins (locally called hilis kalamay), other currencies, and coins from other Spanish colonies were also used. Many of the coins that reached the Philippines came because of the Manila Galleon which dominated trade for the next 250 years. These were brought across the Pacific, in exchange for odd-shaped silver coins called cobs or macuquinas. Other coins that followed were the dos mundos or pillar dollars in silver, the counterstamped coins and the portrait series ,also in silver.

Coins from other Spanish colonies that reached the Philippines would be counterstamped on one side with the word "MANILA", recognizing its circulation in the Philippines. Around 1830 the machinery of the "MANILA" counterstamping broke, so on 1832 King Ferdinand VII started counterstamping with his small initials "F 7" started and on 1834 Queen Isabel II started counterstamping with her small initials "YII" started after the death of her father Ferdinand VII. When Spain recognized its former Latin American colonies, the practice of counterstamping stopped in 1837. During the Mutiny of Spanish officers in 1868 , the Philippine Treasury received mounts of silver coins from Seville and Madrid showing the figures of Liberal Espana and Amadeo I of Spain on five pesetas coins which were circulated.

In the 18th century, the Royalty of Spain authorized the production of copper coins by the Ayuntamiento or Municipality of Manila in response to the acute shortage of fractional coins. These were called barrillas which first appeared in 1728. And in 1861,the Casa de Moneda de Manila minted the first gold coins with the word "Filipinas " inscribed, which were called Isabelinas and Alfonsinos.

The Philippine peso on paper did not come into existence until May 1, 1852, when El Banco Español-Filipino de Isabel II (now Bank of the Philippine Islands) issued the first pesos fuertes (strong pesos) for use in Philippine business transactions. The Philippine peso on paper continued aside from Bank of the Philippine Islands the Philippine Colonial Insular Treasury printed 1,4,25 pesos fuertes equivalent to Spanish-Mexican-Philippine Money

Revolutionary Period

Asserting its 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 also issued in 1899.

American Colonial Period

The origins of the modern Philippine peso began with an Act of US Congress. The Philippine Bill of July 1, 1902, entitled An Act Temporarily to Provide for the Administration of the Affairs of Civil Government in the Philippine Islands, and for other Purposes.

Sections 76-83 of that Act provide for the establishment of a mint and for the purchase of silver bullion and other metals in order to coin currency for use in the islands.

This act was superseded by another Act of Congress on March 2, the following year. Entitled An Act to establish a standard of value and to provide for a coinage system in the Philippine Islands

The Philippine Coinage Act of March 3, 1903 fixed the weight and fineness of the Philippine coins.

Section 1 formally defined the Philippine peso in the US Code under Title 48, Chapter 5, Sections 1141-1156 as a weight of measure equivalent to 12.9 grains of pure gold, exactly half the gold content of the US dollar, as defined by the US Coinage Act of 1849.

Volume III of the 1925 Administrative Code with Comments and Annotations by Gregorio Araneta, (Book II, Title VII, Chapter 41, Article II)
1611. Unit of monetary value in the Philippine Islands
The unit of value in the Philippine Islands shall be the gold peso consisting of twelve and nine-tenths grains of gold, nine-tenths fine; two pesos gold shall be equal in weight, fineness, and value to the gold standard dollar of the United States.
[Act of Cong., Mar. 2, 1903, sec 1; 2657-1770; 2776-1; 3058-1]
1612. Legal tender
The Philippine silver peso and half peso, and gold coins of the United States at the value of one dollar for two pesos, shall be legal tender for all debts, public and private, unless otherwise specifically provided by contract. Philippine subsidiary coins of twenty centavos and ten centavos shall be legal tender in amounts not exceeding twenty pesos. Philippine minor coins of nickel and copper shall be legal tender in amounts not exceeding two pesos.
[Act of Cong., Juk 1, 1902, sec 79; Act of Cong., Mar. 2, 1903, secs 3, 5; 2657-1771; 2776-1; 3058-1]

Unfortunately, coining a peso in gold under this specification would have resulted in a very tiny coin that could be easily lost. To this end, silver coins of appoximate value were minted for general circulation.

Gresham's law Strikes

The weight and fineness of the coins were later reduced by Act No. 1564 of the Philippine Commission, enacted December 6, 1906.
1613. Weight and fineness of Philippine coins
The lawful weight and finess of Philippine coins shall be as follows, and all coins hereafter coined shall be minted in accordance therewith:
The peso shall be equal to one hundred centavos and shall contain twenty grams of silver eight hundred thousandths fine.
The fifty-centavo piece shall contain ten grams of silver seven hundred and fifty thousandths fine.
The twenty-centavo piece shall contain fourgrams of silver seven hundred and fifty thousandths fine.
The ten-centavo piece shall contain two grams of silver seven hundred and fifty thousandths fine.
The alloy of the above-mentioned silver coins shall be copper.
The five centavo piece shall cointain four grams and eighty-seven centigrams of an alloy composed of seventy-five per cent of copper and twenty-five per cent of nickel.
The one centavo piece shall cointain five grams and one hundred and eighty-four milligrams of an alloy composed of ninety-five per cent of copper and five per cent of tin and zinc.

When the Americans took over the Philippines in 1901,the US Congress passed the Philippine Coinage Act, which authorized the mintage of silver coins from 1903 to 1912. Subsequently, Silver Certificates were issued until 1918.These were replaced with Treasury Certificates from 1918 to 1935. The American Government deemed it more economical and convenient to mint silver coins in the Philippines, hence, the re-opening of the Manila Mint in 1920, which produced coins until the Commonwealth Period. Banks aside from the Treasury printed their own notes such as El Banco Espanol de Filipino/ Bank of the Philippine Islands and Philippine National Bank. BPI Notes in Spanish were circulated in 1904 which were reduced in size in 1908, from Five to two hundred pesos. BPI Notes in English were printed in 1912. Both series were ceased during the outbreak of WWII. PNB Notes were printed in 1916 in 2,5 & 10. 1918 - One Peso,1919 - Twenty and 1920 - Fifty and One Hundred . During the shortage of notes, BPI Notes in English in five,ten & twenty series 1912 were overprinted by PNB around 1919 or 1920. WWI also became a problem to PNB so carboard printing of small change happened. In ten,twenty,fifty centavos and One peso in 1917. Last shipment of PNB Notes were in 1937 and circulated until 1947. This also became the first seat of the Central Bank in 1949.

The Peso in War

During the Japanese occupation of the Philippines in the Greater East Asia War, two currency standards were used: Japanese government-issued fiat pesos (also referred to as "Mickey Mouse money" because the people did not want it) and "Emergency Circulating Notes" or guerilla pesos, which were issued by banks and local governments using crude inks and materials and redeemable in lawful silver pesos after the end of the war. The Japanese-sponsored Second Republic under Jose P. Laurel outlawed possession of guerilla currency and declared a monopoly on the issuance of money and anyone found to possess guerilla notes could be arrested. Because of the fiat nature of the currency, the Philippine economy felt the effects of Hyperinflation. During WWII, U.S. Forces continued printing Philippine Pesos so on October 1944 all banknotes of the Bank of the Philippine Islands , Philippine National Bank , Yokohama-Specie Bank ( Mickey Mouse Money ) and of the Philippine Silver & Treasury Certificates ( except VICTORY SERIES NO. 66 ) were considered illegal and no more legal tender.

Independence

Republic Act No.265 created the Central Bank of the Philippines (CBP) on January 3, 1949, which was vested the power of administering the banking & credit system of the country. Initially, the CBP issued the Victory Notes with the overprint "Central Bank of the Philippines " in 1949. The first official banknotes issued by the Central Bank were the English series in 1951, followed by the Pilipino series in 1967, the Ang Bagong Lipunan series in 1973 and the New Design series in 1985. Central Bank coins of the English series were also issued in 1959, followed by the Pilipino series in 1967, and the Ang Bagong Lipunan series in 1975. The Flora and Fauna series were introduced in 1983, and subsequently, the improved version in 1992, until the demonetization of all the series in 1998.

The Coinage Act for the Philippines legally gave the Philippine peso an equivalency value of 50 US cents and whose value remained stable for next half-century until the opening of the Bangko Sentral ng Pilipinas on January 3, 1949, when (in a repeat of Japanese wartime monetary policy) the government defaulted on its promises to redeem its banknotes in silver or gold coin while promising to maintain the two-to-one peso to dollar parity. This decision, compounded with the deliberate overprinting of fiat banknotes resulted in the Philippine peso dropped in value almost 300% against the US dollar within the first three hours of opening day. The government effort to maintain the peg devastated the gold, silver and dollar reserves of the country.

While it could be argued that Independence resulted in the delegislation of the American-sponsored 1903 Philippine Coinage Act, the now-independent Republic refused to legally define the new peso in the Philippine Civil Code. Today, the Philippine peso can cynically be said to be "whatever the government says it is".

By 1964, the bullion value of the old silver pesos was worth almost twelve times their face value and were being hoarded by Filipinos rather than being surrendered to the government at face value. In desperation, then-President Diosdado Macapagal demonitised the old silver coins and floated the currency. The peso has been a Floating currency ever since, which means that the currency is a physical representation of the domestic debt and whose value directly tied to people's perception of the stability of the current regime and its ability to repay the debt.

Peso weakness

From the opening of the Bangko Sentral ng Pilipinas in 1949, successive governments have continued to devalue the currency in order to lower the accumulated domestic debt in real terms, which in November 2004 reached PHP 3.8 trillion. Many Filipinos perceive the peso's value in relation to the US dollar and tend to blame whatever regime is in power for the worsening Exchange rate.

Compared to the price of gold, the Philippine peso has now lost 99.998% of its original 1903-1949 value. The amount of gold one old peso would be (per definition 12.9 grains of pure gold), would now cost PHP 642 on the international commodities markets.

Alternative solutions

Ref: Raiders of the Taxpayer's Money by Grant Nülle

Barter deals are now a common way to preserve the value of investments, even among the large multi-national companies in the Philippines. This method of transaction is highly frowned upon by the Philippine Bureau of Internal Revenue and other government officials because barter deals do not require record-keeping and are completely untaxable. Barter is rather unwieldy and requires many cumbersome trades before arriving at a desirable conclusion. In answer to this, the Fuchienese, Spanish, Pampangueño, and Maguindanaoan communities in San Juan, Metro Manila in cooperation with the Free Militia Movement are experimenting with a commodity-based "Trade Unit" as a natural extension to current barter practices.

Some argue that the only way to return confidence in the Philippine peso is to return to the Gold standard or an equivalent. Discussion is under way to either privately mint silver and gold bullion of an original design, or import Silver Libertad or American Silver Eagle bullion from North America. A third alternative is to introduce the American Liberty Dollar into domestic circulation.

See also

Current PHP exchange rates

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This page is based on the Wikipedia article ''Philippine peso''. It is licensed under the GNU free documentation license.

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