Last Updated: November 28th, 2018
Money, with its contribution to the seamless process of the exchange of goods and services, can trace its history to the barter-like methods practiced at least 100,000 years ago. The Philippines’ development from the earliest records of barter of goods and inter-island trade connected early Filipinos to our neighbors across the seas–from the Chinese to Japanese and to the rest of Southeast Asia. The galleon trade, with all its faults, opened our country to the rest of the world and allowed for different currencies, cultures, and ideas to make their way to the minds of early Filipinos. And later on, the minting of coins by our Spanish colonizers eventually started the evolution of our country to adapt the modern way of paying for goods.
- Southeast Asian Trade
Prior to the arrival of our Spanish colonizers, the people of the Philippine islands were already trading with our neighbors in the Pacific, China, East Asia, and Southeast Asia. Items that included pottery, silks, swords, and spices were commonly traded and in return, the Philippines provided beeswax, cotton, and sandalwood and even gold and slaves.
And while barter was the most common means to trade items, the use of currency was also utilized.
- Inter Island Trade
Inter-island trade between early Filipinos also flourished before the arrival of the Spaniards. This claim was further supported when Spanish reports noted their encounters of traders in Butuan in Mindanao.
A majority of the items that were traded at that time include root crops and grain which highlights the value of rice to early Filipinos. The word “salapi” which is now used as a Filipino term for money was originally used to refer to bundles of newly harvested rice.
THE SPANISH PERIOD
- The Galleon Trade
For two and a half centuries, Spanish trading ships linked Mexico and the Philippines across the Pacific Ocean through the ports of Acapulco and Manila. Originally intended to provide income for those in need, the business became so lucrative that many traders wanted to participate. Due to this, shipping spaces were also traded–and later on, only a few rich individuals and religious institutions controlled the galleon trade.
The galleon provided the only link the Philippines had with Spain and the rest of the world. The Philippines’ connection with Mexico also explains its influence in Filipino customs, cuisine, and even art. Mexican cobs and Latin American coins were also circulated in the Philippines as a result of the Galleon.
After the galleon trade ceased, a strong native merchant class began to prosper in the Philippines.
- The State
With the end of the galleon trade, the Spanish colonial government sealed the end of the participation of the Philippines in international commerce. This would later lead to the underdevelopment of its connected sectors.
Having the power to regulate the use of currency, the Spaniards would then issue its first coin that was used at the time–the toston silver coin which was later renamed as salapi by Filipinos. The salapi was later divided into kalahati, sikapat, kalatios or aliw, kunding, and alimaymay.
With numerous currencies circulating during this period, the Casa Moneda de Manila was later established as the first minting plant in the Philippines on March 19, 1861, by virtue of a royal order.
- The Church
Being one of the most powerful institutions during the Spanish colonial era, the Church was deeply embedded in state affairs. Its control of huge tracts of lands, bequests received from parishioners, and profits from the galleon trade, allowed them to accumulate excess wealth which were later reinvested in the form of loans with sizable interests.
Institutions like the Brethren of Santa Misericordia were set up to manage donations and would later become one of the financiers of the galleon trade. And with its riches, the church would embellish its places of worship with melted silver and gold coins to make decorations for its altars and statues of saints.
THE REVOLUTIONARY PERIOD
With the start of the First Philippine Republic in 1898, the Malolos Congress would approve the issuance of paper notes that valued up to 3 Million Pesos to be amortized in three years. Aguinaldo would himself sign the law authorizing the issuance of coinage and paper currency that are backed by the natural resources of the Republic.
To prevent counterfeiting of the newly issued paper notes, they were all signed individually by three influential members of the Malolos Congress–Pedro Paterno, Telesforo Chuidian, and Mariano Limjap.
The New Republic didn’t last long, however, due to the outbreak of the Philippine-American War. With this, the use of these coins and currency were not as widespread, and its existence was short-lived.
Towards the end of the Philippine-American War in 1901, the Americans would spearhead the overhaul of the country’s monetary system that has been poorly administered in the past. Several currencies were in circulation at that time including the Spanish-Philippine pesos, Mexican pesos, and the American silver dollars. The United States Congress would then pass the Philippine Coinage Act in 1903 which tied the peso to the American gold standard at two pesos to the dollar. Filipino sculptor and engraver, Melecio Figueroa, was commissioned to design the new coins with allegorical images posed beside Mt. Mayon, and an American eagle and shield on the reverse. The image of the standing woman was used for all silver coins and would later be used by the Central Bank for its English series issued from 1958-1966.
While short-lived, the occupation of the Japanese Imperial Army of the Philippines limited the issuance of currency to paper money. And though metallic coins were never minted, the Japanese colonizers managed to produce various medals which were struck in silver and bronze and are considered very rare today.
Under the administration of President Manuel Roxas, a charter for the country’s central bank was drawn up and was signed by his successor, President Elpidio Quirino. Miguel Cuaderno was designated as the Central Bank’s first governor.
On June 14, 1993, President Fidel V. Ramos signed into law Republic Act No. 7653 which established an independent central monetary authority which is now known as the Bangko Sentral ng Pilipinas.
The Money Museum is located inside the Bangko Sentral ng Pilipinas Complex and is open from 9AM-4PM from Monday to Friday.
The Manila Project
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