Gourt Home::Gourt :: Philippine peso
The Philippine peso (Filipino: piso) is the official currency of the Philippines. Since the Philippine peso uses the decimal system, it is divided into 100 centavos (Filipino: sentimo). Its ISO 4217 code is "PHP".
The Philippines is one of a handful of countries formerly colonized by Spain that use the peso as their currencies, joining countries such as Mexico, Colombia and Argentina (for more information on this, see peso). As of October 2005, the Philippine money supply (M1) totaled about 569.2 billion pesos.
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. However, the standard peso sign is used in written and some printed material.
Denominations
Philippine pesos are currently denominated in the following:
Notes
- 1000 pesos
- 500 pesos
- 200 pesos²
- 100 pesos
- 50 pesos
- 20 pesos
- 10 pesos¹
- 5 pesos¹
Coins
- 10 pesos
- 5 pesos
- 1 peso
- 25 centavos
- 10 centavos³
- 5 centavos³
- 1 centavo³
¹ No longer printed but still legal tender
² Commemorative
³ Not in wide use
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
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 a 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-like 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 Ocean in exchange for odd-shaped silver cobs, which are also known as 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. By 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 his daughter, Queen Isabel II, started counterstamping with her small initials "YII" started after the death of her father. 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 España and King Amadeo I on five-peseta coins which were then circulated.
In the 18th century, the Royalty of Spain authorized the production of copper coins by the Ayuntamiento (Municipality) of Manila in response to the acute shortage of fractional coins. These were called barrillas which first appeared in 1728. In 1861, the Casa de Moneda de Manila minted the first gold coins with the word "Filipinas" inscribed. These coins were called Isabelinas and Alfonsinos.
The Philippine peso on paper did not come into existence until May 1, 1852, when the Banco Español-Filipino de Isabel II (now Bank of the Philippine Islands) issued the first pesos fuertes (strong pesos, written PF) for use in Philippine business transactions. They were printed in denominations of ten, twenty-five, fifty and two hundred PF and were redeemable for gold or silver Mexican coins. However, while the first PF notes were printed on May 1, 1852, it was not until October 17, 1854 that they were released for general circulation after a royal decree confirmed Banco Español-Filipino's by-laws. The same decree permitted the bank to exercise its right to issue banknotes to the general public (before that, PF notes were in limited circulation and were usually used for bank transactions).
Over the history of the peso fuerte, 2,350 pieces of PF notes in different denominations have been issued with a total value equivalent to one hundred thousand pesos fuertes. These consisted of one thousand pieces of ten pesos fuertes, six hundred pieces of twenty-five pesos fuertes, five hundred pieces of fifty pesos fuertes and two hundred fifty pieces of two hundred pesos fuertes.
In 1886, Philippine colonial authorities started the gradual phase-out of all Mexican coins in circulation in the Philippines, citing that Mexican coins were by then of lesser value than the coins minted in Manila.
Revolutionary Period
Asserting its independence after the Philippine Declaration of Independence on June 12, 1898, the República Filipina (Philippine Republic) under General Emilio Aguinaldo issued its own coins and paper currency backed by the country’s natural resources.During the Spanish-American and Philippine-American wars, one and five-peso notes were printed as República Filipina Papel Moneda de un Peso and Cinco Pesos. With the printing of the new notes came three variations of the dos centimos de peso copper coin.
After Aguinaldo's capture by American forces in Palanan, Isabela on March 23, 1901, the revolutionary peso ceased to exist.
American Colonial Period
The origins of the modern Philippine peso began with an Act of the United States 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 of 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 Philippine coins.
Section 1 of the Philippine Coinage Act 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.
- ''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.
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 four grams 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 BPI and Philippine National Bank. BPI banknotes in Spanish (under Banco Español-Filipino) circulated in 1904 from five to two hundred pesos. They were later reduced in size in 1908. BPI banknotes in English were printed in 1912, when BPI converted from a Spanish institution to a Philippine one. Both series ceased circulating during the outbreak of WWII. PNB notes were printed in 1916 in 2, 5 and 10-peso denominations, followed by a one-peso denomination in 1918, the twenty-peso denomination in 1919 and the fifty and one hundred-peso denominations in 1920.
During the shortage of notes, PNB in around 1919 or 1920 started overstamping 1912 series BPI five, ten and twenty-peso notes. World War I brought problems to PNB since it was unable to mint coins, so it resorted to print small change on cardboard in ten , twenty and fifty-centavo and one-peso denominations in 1917. The last shipment of PNB notes were in 1937 and circulated until 1947.
The Peso in War
During the Japanese occupation of the Philippines in World War II, 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 World War II, U.S. forces continued printing Philippine pesos, so on October 1944, all banknotes of BPI, PNB(except for Emergency/Guerrilla Notes), Yokohama-Specie Bank (Japanese fiat pesos) and of the Philippine Silver & Treasury Certificates (except Victory Series No. 66) were considered illegal and no longer legal tender.
Independence
Republic Act No. 265 created the Central Bank of the Philippines (CBP, now the Bangko Sentral ng Pilipinas) on January 3, 1949, which was vested the power of administering the banking & credit system of the country. Under the act, all powers in the printing and mintage of Philippine currency was vested in the CBP, taking away the rights of the banks such as BPI and PNB to issue Philippine pesos.There are five series of Philippine banknotes. 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, with a minor change in 1993 after the approval of the New Central Bank Act of 1993, which revised the Bangko Sentral's charter.
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 improved in 1992 and a new series was introduced in 1995. All series of coins remained legal tender until the demonitization of all the series except the new 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 CBP 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 December 2005 reached PHP 4.02 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 an old gold one peso coin would be (per definition 12.9 grains of pure gold), would now cost P642 on the international commodities markets.
Alternative solutions
Reference: 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 Fujianese, 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.
See also
- Philippine peso bills
- Philippine peso coins
- Bullion
- American Gold Eagle
- American Silver Eagle
- American Platinum Eagle
Current PHP exchange rates
AUD | CAD | CHF | EUR | GBP | INR | NZD | USD |
References
- Philippine Coins at the Bohol.ph website
- Philippine Coins a website dedicated to collecting Philippine coins.
Philippinischer Peso | Peso filipino | Peso philippin | Filipijnse peso | フィリピン・ペソ | Filippinsk peso | Filippinsk peso | Piso ng Pilipinas
"Philippine peso"