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History of Philippine pesoThe peso (Filipino: piso ; sign: ₱; code: PHP) is the currency of the Philippines. It is subdivided into100 centavos (Filipino: sentimo, Visayan: sentabo).[1]Before 1967 as a former colony of the UnitedStates, the language used on the banknotes and coins was in English, and so the word "peso" wasused. Since the adaption of  Filipino language for banknotes and coins, the Filipino term " piso" is nowused on Philippine money.

The peso is usually denoted by the symbol "₱". Other ways of writing the Philippine peso sign are"PHP", "PhP", "Php", or just "P". The "₱" symbol was added to the Unicode standard in version 3.2

and is assigned U+20B1 (₱). The symbol can be accessed through some word processors by typingin "20b1" and then pressing the Alt  and X  buttons simultaneously. Font support for the Unicode Pesosign has been around for some time as the peso is also the currency used by Mexico andother  former colonies of  Spain in Latin America, which still use the currency. 

The Philippine coins and banknotes are minted and printed at the Security Plant Complex ofthe Bangko Sentral ng Pilipinas (Central Bank of the Philippines) in Quezon City. 

History

Piloncitos 

Pre-colonial coinage

Trade among the early Filipinos and with traders from the neighboring islands was conductedthrough barter. The inconvenience of barter later led to the use of some objects as a medium ofexchange. Gold, which was plentiful in many parts of the islands, invariably found its way into theseobjects that included the piloncitos, small bead-like gold bits considered by the local numismatists asthe earliest coin of the ancient Filipinos, and gold barter rings.

Spanish colonial period= 

The Spaniards brought their coined money when they came in 1521 and the first European coinwhich reaches thePhilippine Islands with Ferdinand Magellan's arrival was the teston or four-realessilver coin. The teston became the de factounit of trade between Spaniards and Filipinos before thefounding of  Manila in 1574. The native name for the coin wassalapi  (Tagalog for money ).

Pre-decimal coinage

With the establishment of Manila, the Spanish introduced the silver  real de a ocho, already knownacross the Spanish Empire colloquially as the  peso, which was divided into 8 reales and furthersubdivided into 4 cuartos or 8 octavos.

The monetary situation in the Philippine Islands was chaotic due to the circulation of many types ofcoins, with differing purity and weights, coming from mints across the Spanish-speaking world.Spanish coins circulated freely with those from the newly independent Spanish colonies including

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reales fuertes, reales de vellón,  peseta columnaria,  peseta sencilla, pesos deminas, tomines, ducados, maravedis among others. Value equivalents of the different monetarysystems were usually difficult to comprehend and hindered trade and commerce.

Decimal coinag

 An attempt to remedy the monetary confusion was made in 1848, with the introduction of the

decimal system in 1857 under the second Isabelline monetary system. Overseeing the conversionwas Fernándo Norzagaray y Escudero, governor general in the period 1857-60.

Conversion to the decimal system with the peso fuerte (Spanish for strong peso) as the unit ofaccount solved the accounting problem, but did little to remedy the confusion of differing circulatingcoinage. Renewed calls for the Philippine Islands to have a proper mint and monetary system finallycame to fruition in September 1857, when Queen Isabel IIauthorized the creation of the Casa deMoneda de Manila and purchase of required machinery. The mint was inaugurated on March 19,1861.

Despite the mintage of gold and silver coins, Mexican and South and Central American silver stillcirculated widely.

The Isabel la peso  or peso fuerte  

Main article: Philippine peso fuerte The Isabelline peso, more formally known as the peso fuerte, was a unit of account divided into 100centimos (equivalent to 8 reales fuertes or 80 reales de vellón). Its introduction led to the Philippines'brief experiment with the gold standard, which would not again be attempted until the  Americancolonial period. The peso fuerte was also a unit of exchange equivalent to 1.69 grams of gold, 0.875fine (0.0476 XAU), equivalent to ₱2,934.31 (refers to the modern peso; as of 22 December 2010).  

Coin production at the Casa de Moneda de Manila began in 1861 with gold coins (0.875 fine) ofthree denominations: 4 pesos, 2 pesos, and 1 peso. On March 5, 1862, Isabel II granted the mintpermission to produce silver fractional coinage (0.900 fine) in denominations of 10, 20, and50 centimos de peso. Minting of these coins started in 1864, with designs similar to the SpanishSilver Escudo. 

The Al fonso peso , the Spanish-Filipino peso

The currency in the Philippines was standardized by the Spanish government with the minting of asilver peso expressly for use in the colony and firmly reestablishing the silver standard as thePhilippine monetary system. The coin, which was to be later known as the Spanish-Filipino peso,was minted in Madrid in 1897 and bore the bust of  King Alfonso XIII. The specifications of the coinwas 25 grams of silver .900 fine. This configuration was also used in the creation of the Puerto Ricanprovincial peso in 1895 giving both coins the equivalency of 5 pesetas. 

The new monetary standard finally established the Peso as 25 grams silver, 0.900 fine (0.7234XAG), equivalent to ₱942.535 modern pesos of as of 22 December 2010.

The Spanish-Filipino peso remained in circulation and were legal tender in the islands until 1904,when the American authorities demonetized them in favor of the new US-Philippine peso.

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 andpaper currency backed by the country’s natural resources. The coins were the first to use thename centavo for the subdivision of the peso. The island of  Panayalso issued revolutionary coinage.

 After Aguinaldo's capture by American forces in Palanan, Isabela on March 23, 1901, therevolutionary peso ceased to exist.

American Colonial Period

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US Administration 50 Centavos (half Peso) silver coin minted in San Francisco in 1918.

 After the United States took control of the Philippines, the United States Congress passedthe Philippine Coinage Act (March 3, 1903), established the unit of currency to be a theoretical goldpeso (not coined) consisting of 12.9 grains of gold 0.900 fine (0.026875 XAU), equivalent to₱2,933.07 modern pesos of as of 22 December 2010. This unit was equivalent to exactly half thevalue of a U.S. dollar and maintained its purchasing power until the opening day of the Central Bankof the Philippines in 1949.

The act provided for the coinage and issuance of Philippine silver pesos substantially of the weight

and fineness as the Mexican peso, which should be of the value of 50 cents gold and redeemable ingold at the insular treasury, and which was intended to be the sole circulating medium among thepeople. The act also provided for the coinage of subsidiary and minor coins and for the issuance ofsilver certificates in denominations of not less than 2 nor more than 10 pesos.

It also provided for the creation of a gold-standard fund to maintain the parity of the coins soauthorized to be issued and authorized the insular government to issue temporary certificates ofindebtedness bearing interest at a rate not to exceed 4 per cent per annum, payable not more thanone year from date of issue, to an amount which should not at any one time exceed 10 millions ofdollars or 20 millions of pesos.

1945 ten-centavo coin, minted inDenver, Colorado, showing the coat of arms of the Philippine Commonwealth 

World War II 

In 1942, the Japanese occupiers introduced fiat notes for use in the Philippines.Emergencycirculating notes (also termed "guerrilla pesos") were also issued by banks and local governments,using crude inks and materials, which were redeemable in silver pesos after the end of the war.The puppet state under  José P. Laurel outlawed possession of guerrilla currency and declared amonopoly on the issuance of money and anyone found to possess guerrilla notes could be arrested.Because of the fiat nature of the currency, the Philippine economy felt the effects of  hyperinflation. 

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Combined U.S. and Philippine Commonwealth military forces including recognized guerrilla unitscontinued printing Philippine pesos, so that, from October 1944 to September 1945, all earlier issuesexcept for the emergency guerrilla notes were considered illegal and were 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, in which was vested the power of administering the banking & creditsystem of the country. Under the act, all powers in the printing and mintage of Philippine currencywas vested in the CBP, taking away the rights of the banks such as Bank of the Philippine Islandsand the Philippine National Bank to issue currency.

In a repeat of Japanese wartime monetary policy, the government defaulted on its promises toredeem its banknotes in silver or gold coin while promising to maintain the two-to-one peso to dollarparity. This decision, compounded with the deliberate overprinting of fiat banknotes, resulted in thepeso dropping in value by almost 300% against the US dollar within the first three hours of openingday. The government effort to maintain the peg devastated the gold, silver and dollar reserves of thecountry.

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

From the opening of the Bangko Sentral ng Pilipinas in 1949, successive governments havecontinued to devalue the currency to lower the accumulated domestic debt in real terms, which inDecember 2005 reached ₱4.02 trillion. Many Filipinos perceive the peso's value in relation to the USdollar — rather than consider the currency's purchasing power  — and thus tend to blame whateverregime is in power for the worsening exchange rate. 

In 1967, the language used on all coins and banknotes was changed to Tagalog. As a consequence,the wordings of the currency changed from centavo and peso to sentimo and piso.

However, centavo is more commonly used by Filipinos in everyday speech.Current economy

Based on the current price of gold, the Philippine peso has now lost 99.9328% of its original 1903 –1949 value. As of December 22, 2010, it takes ₱2,933.07 modern pesos to equal theintrinsic purchasing power parity of the 1903 –1949 Philippine Commonwealth peso, as per its legaldefinition: 12.9 grains of pure gold (or 0.026875 XAU).[ 

 As of 11 May 2010, the Philippine money supply (M1) totaled about ₱1.22 trillion. 

Coins[ Main article: Coins of the Philippine peso 

The American government deemed it more economical and convenient to mint silver coins in thePhilippines, hence, the re-opening of the Manila Mint in 1920, which produced coins untilthe Commonwealth Era. 

In 1937, coin designs were changed to reflect the establishment of the Commonwealth. Duringthe Second World War , no coins were minted from 1942 to 1943 due to the Japanese Occupation. Minting resumed in 1944, including production of 50 centavos coins. Due to the large number ofcoins issued between 1944 and 1947, coins were not minted again until 1958.

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In 1958, new coinage entirely of base metal was introduced, consisting of bronze 1 centavo, brass 5centavos and nickel-brass 10, 25 and 50 centavos. In 1967, the coinage was altered to reflect theuse of Filipino names for the currency units. 1-peso coins were introduced in 1972. In 1975, the  AngBagong Lipunan Series was introduced with a new 5-peso coin included. Aluminium replacedbronze, and cupro-nickel replaced nickel-brass that year. The Flora and Fauna series wasintroduced in 1983 which included 2-peso coins. The sizes of the coins were reduced in 1991, with

production of 50-centavo and 2-peso coins ceasing in 1994. The current series of coins wasintroduced in 1995, with 10-peso coins added in 2000.

Denominations below 1 peso are still issued but are not in wide use. In December 2008 a  PhilippineCongress resolution called for the retirement and demonetization of all coins less than one peso. [ 

BanknotesMain article: Banknotes of the Philippine peso 

The front side of a two-hundred peso bill (New Generation Currency ).

In 1949, the Central Bank of the Philippines took over paper money issue. Its first notes wereoverprints on the Victory Treasury Certificates. These were followed in 1951 by regular issues indenominations of 5, 10, 20 and 50 centavos, 1, 2, 5, 10, 20, 50, 100, 200 and 500 pesos. Thecentavo notes (except for the 50-centavo note, which would be later known into the half-peso note)were discontinued in 1958 when the English Series coins were first minted.

In 1967, the CBP adopted the Filipino language on its currency, using the name Bangko Sentral ngPilipinas, and in 1969 introduced the "Pilipino Series" of notes in denominations of 1, 5, 10, 20, 50

and 100 pesos. The "Ang Bagong Lipunan Series" was introduced in 1973 and included 2-pesonotes. A radical change occurred in 1985, when the CBP issued the "New Design Series" with 500-peso notes introduced in 1987, 1000-peso notes (for the first time) in 1991 and 200-peso notes in2002.

Philippine banknotes are currently issued in the following denominations:

Denomination Obverse Reverse Portrait

20 pesos Manuel L. Quezon

50 pesos Sergio Osmena

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100 pesos Manuel Roxas

200 pesos Diosdado Macapagal

500 pesos Corazon Aquino & Benigno "Ninoy" Aquino, Jr. 

1000 pesosJosé Abad Santos, Vicente Lim & Josefa Llanes

Escoda 

New Design/BSP Banknote seriesMain article: New Design series 

 A one peso coin issued to commemorate the 150th anniversary of the birth of  José Rizal. 

The "New Design Series" was the name used to refer to Philippine banknotes issued from 1985 to1993; it was then renamed into the "BSP series" due to the re-establishment of Bangko Sentral ngPilipinas from 1993 to 2010. It was succeeded by the "New Generation banknotes" issued onDecember 16, 2010. Until 2013 the existing banknotes are still in print. Existing banknotes willremain legal until 2014.

New Generation Currency

In 2009 the Bangko Sentral ng Pilipinas (BSP) announced that has launched a massive redesign forcurrent banknotes and coins to further enhance security features and improve durability.[16] Themembers of the numismatic committee include BSP Deputy Governor Diwa Guinigundo and AmbethOcampo, Chairman of the National Historical Institute. The new banknote designs feature famousFilipinos and iconic natural wonders. Philippine national symbols will be depicted on coins. The BSPstarted releasing the initial batch of new banknotes in December 2010 and new coins wasintroduced in 2012. Current banknotes will remain legal tender for at least three years exactly inDecember 2013.

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Several, albeit disputable, errors have been discovered on banknotes of the New Generation seriesand have become the subject of ridicule in social networking sites. Among these are the exclusionof  Batanes from the Philippine map on the reverse of all denominations, the mislocation of thePuerto Princesa Subterranean Underground River on the reverse of the 500-peso bill and theTubbataha Reef on the 1000-peso bill, and the incorrect coloring on the beak and feathers of theblue-naped parrot on the 500-peso bill.[17][18] The scientific names of the animals featured on the

reverse sides of all banknotes were incorrectly rendered as well,[

  but these were eventually realizedto be due to the color limitations of intaglio printing.

Exchange rates 

 As of 23 July 2012, the Philippine Peso traded at 41.80 per US$,50.79 per  EUR,[  6.62 per CNY. 

 As of 23 May 2013, Goldman Sachs predicted that in the next 12 months from March 2013, the pesowill rise to 37.5 pesos to the dollar. The bank said the country’s GDP growth will likely maintain anaverage of 5 per cent between 2013 to 2016.[ 

Historical exchange rate

In the 1950s, the exchange rate is 2 peso against the US dollar. The fluctuating free rate was

abolished in 1965. Several devaluations were followed, with the peso trading at 11 per dollar in1983, and 20 per dollar three years later. In the early 1990s, the peso devalued again to 28 perdollar. Due to 1997 Asian financial crisis, the peso devalued from 26 per dollar in May 1997 to 40 in1998 and about 50 in 2000.