Carinoza Jea Ann B.

BSA-3
A. Discuss the following items (History of Money in the Philippines) in 4
sentences per item (5 pts)

1. Pre-Spanish Regime
Long before the Spaniards came to the Philippines in 1521, the Filipinos had
established trade relations with neighboring lands. The inconvenience of the
barter system led to the adoption of a specific medium of exchange – the cowry
shells. Cowries produced in gold, jade, quartz and wood became the most
common and acceptable form of money through many centuries.
The Philippines is naturally rich in gold. It was used in ancient times for barter
rings, personal adornment, jewelry, and the first local form of coinage called
Piloncitos. These had a flat base that bore an embossed inscription of the letters
“MA” or “M” similar to the Javanese script of the 11thcentury. It is believed that
this inscription was the name by which the Philippines was known to Chinese
traders during the pre-Spanish time.
Barter rings made from pure gold, were hand fashioned by early Filipinos during
the 11th and the 14th centuries. These were used in trading with the Chinese
and other neighboring countries together with the metal gongs and other
ornaments made of gold, silver and copper.
2. Spanish Regime
The cobs or macuquinas of colonial mints were the earliest coins brought in by
the galleons from Mexico and other Spanish colonies. These silver coins usually
bore a cross on one side and the Spanish royal coat-of-arms on the other.

The Spanish dos mundos were circulated extensively not only in the Philippines
but the world over from 1732-1772. Treasured for its beauty of design, the coin
features twin crowned globes representing Spanish rule over the Old and the
New World, hence the name “two worlds.” It is also known as the Mexican Pillar
Dollar or the Columnarias due to the two columns flanking the globes.

Due to the shortage of fractional coins, the barrillas, were struck in the
Philippines by order of the Spanish government. These were the first crude
copper or bronze coins locally produced in the Philippines. The Filipino term
“barya,” referring to small change, had its origin in barilla.
 In the early part of the 19th century, most of the Spanish colonies in
Central and South America revolted and declared independence from
Spain. They issued silver coins bearing revolutionary slogans and symbols
which reached the Philippines. The Spanish government officials in the islands
were fearful that the seditious markings would incite Filipinos to rebellion. Thus,
they removed the inscriptions by counter stamping the coins with the word F7 or
YII. Silver coins with the profile of young Alfonso XIII were the last coins minted
in Spain. The pesos fuertes, issued by the country’s first bank, the El Banco
Español Filipino de Isabel II, were the first paper money circulated in the
Philippines.

3. American Regime
With the coming of the Americans 1898, modern banking, currency and credit
systems were instituted making the Philippines one of the most prosperous
countries in East Asia. The monetary system for the Philippines was 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.

The coins issued under the system bore the designs of Filipino engraver and
artist, Melecio Figueroa. Coins in denomination of one-half centavo to one peso
were minted. The renaming of ElBanco 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.

4. Japanese Regime
The outbreak of World War II caused serious disturbances in the Philippine
monetary system. Two kinds of notes circulated in the country during this period.
The Japanese Occupation Forces issued war notes in big denominations.
Provinces and municipalities, on the other hand, issued their own guerrilla
notes or resistance currencies, most of which were sanctioned by the
Philippine government in-exile, and partially redeemed after the war.

5. Post-War Period
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 US following the end of World War II, the country used as currency
old treasury certificates overprinted with the word “Victory".

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 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. In the 70's, the Ang Bagong
Lipunan (ABL) series notes were circulated, which were printed at the Security
Printing Plant starting1978. A new wave of change swept through the Philippine
coinage system with the flora and fauna coins initially issued in 1983. These
series featured national heroes and species of flora and fauna. The new design
series of banknotes issued in 1985 replaced the ABL series. Ten years later, a
new set of coins and notes were issued carrying the logo of the Bangko Sentral
ng Pilipinas.

B. Define the following terms (5 pts.)

1. Future Value
Future value is the dollar amount that will accrue over time when that sum is
invested.
2. Present Value
Present value is the sum of money that must be invested in order to achieve a
specific future goal.
3. Transaction demand
-money needed to buy goods – this is related to income.
4. Precautionary demand
-money needed for financial emergencies.
5. Speculative demand
-when people wish to hold money rather than buy assets/bonds/risky investment.