History of Philippine Currency and Monetary Standards | Business Finance
Summary
TLDRThis discussion provides an overview of the history of Philippine currency and monetary standards. It explains the role of money in the economy, the establishment of the monetary unit (the Philippine peso), and the country's managed currency system. Key points include the issuance of currency by the Central Bank, rules governing currency circulation, and the process for replacing unfit or damaged currency. The presentation touches on the historical evolution of currency, notable features of new-generation coins and banknotes, and the importance of understanding these aspects for business finance and exams.
Takeaways
- 💰 The Philippines follows a managed currency system, with the peso as its monetary unit.
- 📜 Standard money is the monetary unit recognized by the government as the basic standard of value.
- 🏦 The power to issue notes and coins in the Philippines rests with the Bangko Sentral ng Pilipinas.
- 🔒 All notes and coins issued by the central bank are backed by the assets of the bank and guaranteed by the Philippine government.
- 💱 The central bank must exchange Philippine currency on demand for different denominations to meet business and economic needs.
- ❌ Mutilated or unfit notes and coins, like those that have lost significant parts of their surface or signatures, will not be replaced by the central bank unless damaged accidentally.
- 🔥 Old notes and coins, over five years for bills and twelve years for coins, are subject to retirement and destruction under strict surveillance.
- 📅 The first mint in the Philippines was established by a royal decree in Intramuros in 1857.
- 🖼️ The latest currency designs include new security features and artistic elements like the 1000-peso polymer note featuring a South Sea pearl and traditional designs.
- 📚 Students are encouraged to read about the history of Philippine currency for their first-term exam, particularly focusing on key regimes and monetary standards.
Q & A
What is a monetary standard or system?
-A monetary standard or system is established when a country sets rules to govern the creation of money and control its quantity in circulation. These rules may be followed strictly or accepted as guidelines for money management.
What is the monetary unit of the Philippines?
-The monetary unit of the Philippines is the Philippine peso.
What is 'standard money' in the context of the Philippine monetary system?
-Standard money is the monetary unit recognized by the government as the ultimate basic standard of value, upon which all other kinds of money are convertible.
What is the current monetary system in the Philippines called?
-The current monetary system in the Philippines is called the managed currency system.
Who is responsible for issuing currency in the Philippines?
-The Banco Central ng Pilipinas (Central Bank of the Philippines) is responsible for issuing notes and coins in the country.
What happens to mutilated or damaged currency in the Philippines?
-Mutilated or damaged notes and coins, such as those that have lost more than two-fifths of their surface, are demonetized without compensation unless it can be proven that the damage occurred due to accidental causes or forces beyond the holder's control.
What is the process for retiring old notes and coins in the Philippines?
-Notes that are over five years old and coins that are over twelve years old are retired. The retired paper currency is perforated, bundled, stamped with a perforation date, and incinerated under heavy surveillance.
What is the significance of the 'people power' coins mentioned in the transcript?
-The 'people power' coins are historical Philippine coins. The first mint in the Philippines was established in Intramuros by royal decree in 1857.
What are some key security features of the new generation Philippine currency?
-The new generation Philippine currency includes security features such as a giant pearl, the Tinalak design, and security elements designed to prevent counterfeiting.
What is the role of the Central Bank in currency exchange and replacement?
-The Central Bank is responsible for exchanging Philippine currency of any denomination on demand. If the requested denomination is unavailable, it will provide notes or coins of the closest possible value.
Outlines
💵 Overview of Philippine Currency and Monetary Standards
This paragraph introduces the discussion on the history of Philippine currency and monetary standards. It explains that a monetary standard involves rules for the creation and control of money. The Philippine peso is the standard unit of currency, and the country operates under a managed currency system with the Bangko Sentral ng Pilipinas being the sole authority. The importance of understanding the different elements of the financial system, including the history and factors affecting currency value, is emphasized.
💰 Exchange and Denomination of Philippine Currency
This section discusses the Central Bank's role in facilitating business transactions by exchanging Philippine currency for different denominations on demand. If the bank is unable to meet the requested denomination, it must provide an approximate alternative. It also outlines the replacement policy for unfit or mutilated notes and coins, which are not replaced if they have lost significant portions or have been tampered with. The bank is responsible for withdrawing and demonetizing such currency without compensation unless proven to be damaged by uncontrollable forces.
🔥 Retirement and Security of Philippine Currency
This paragraph focuses on the retirement and incineration of old currency. Notes and coins that exceed their life span (five years for notes, twelve years for coins) are withdrawn and destroyed under strict surveillance. It also provides some historical trivia about the Philippine mint, new generation currency coins, and security features of recent currency. The paragraph encourages reading the provided reference book for a more detailed understanding of the monetary standards and the characteristics and history of Philippine currency.
📚 Conclusion and Further Reading on Philippine Currency History
The final paragraph wraps up the discussion by highlighting that the detailed history of Philippine currency will not be covered in depth during the presentation. Instead, it is recommended for personal reading, emphasizing key historical periods such as the Japanese regime. The paragraph hints at the importance of this historical knowledge for future exams and stresses the need to appreciate the evolution of the Philippine currency as part of a broader understanding of business finance.
Mindmap
Keywords
💡Monetary Standard
💡Standard Money
💡Bangko Sentral ng Pilipinas (BSP)
💡Managed Currency System
💡Currency Circulation
💡Inconvertibility of Currency
💡Mutilated Notes
💡Currency Retirement
💡Philippine Peso
💡New Generation Currency
Highlights
Introduction to the Philippine monetary system, focusing on the managed currency system.
Definition of standard money as the basic unit of value recognized by the government.
Banco Central ng Pilipinas holds the sole power to issue notes and coins in the Philippines.
The notes and coins issued by the central bank are liabilities and must not exceed the total assets of the bank.
Central bank safeguards the issuance of currency, which is fully guaranteed by the government of the Philippines.
Philippine currency is convertible on demand, and the central bank must exchange denominations when requested.
Mutilated notes and coins that lose more than two-fifths of their surface area will not be replaced by the central bank.
The central bank is responsible for the retirement of old notes (after five years) and coins (after twelve years).
Currency retirement procedures involve incinerating old bills weekly under strict surveillance by central bank officials.
The first mint in the Philippines was established in Intramuros by royal decree in 1857.
Introduction of the new generation currency coins issued by a recent administration.
Overview of security features and designs of the latest generation of Philippine currency.
Recent introduction of the 1000-peso polymer banknote featuring a South Sea pearl design.
Historical context of the monetary system under different regimes, including the Japanese occupation.
The Hawala system, a trust-based exchange system, is briefly introduced in relation to business finance.
Transcripts
welcome to our discussion for module 2
the history of philippine currency and
the philippine monetary standards so
before we deal with the
history proper we look at
our general view of the
philippine currency in the monetary
standards
so
a country said to establish a monetary
standard or system when it sets down
rules to govern the creation of money
and control the quantity in circulation
whether the rules are strictly followed
or are to be accepted simply as
guidelines for its own money managers it
will start out by deciding what its
monetary unit will be so in the
philippines we have the philippine peso
so there is a terminology called the
standard money standard money is the
monetary unit recognized by the
government as the ultimate basic
standard of value upon which all other
kinds of money are convertible in the
philippines the monetary system
is called the managed currency system
so only
is the bank of central pilipinas
and the monetary unit is the peso so at
the end of this discussion we will be
able to still understand and learn the
different key elements that meet up the
financial and economic system the
importance history the factors that
affect their
value
okay let's go
so we already have discussed the role of
money in our economic system in the
previous discussion video so we will
proceed with the history of philippine
currency and philippine monetary
standards focusing on the nature of
monetary standard the classification of
the monetary standards and the outline
of this of the history of philippine
monetary system so
normally
history in a philippine monetary system
i will not be discussed it uh
in detail one by one because this is
already available in our reference book
because
uh interpretation on the history of
philippine monetary system simply
because
uh
monetary system right let's go with uh
a brief description of what currency is
according to central bank act section
51. it includes all filipino notes and
coins issued or which are circulating
within the philippines the power to
issue notes and coins is
under the prerogative of the banco
central
philippines right
safeguards the issue ones of notes and
coins all notes and coins issued by the
central bank shall be the liabilities of
the banks
so they may be issued only against and
in amounts not exiting the total assets
of the bank
uh moreover said notes and coins shall
represent the first and paramount lien
on all assets of the central bank so
essentially
our
these are liabilities on the part of the
central bank
[Music]
however the central bank's holdings of
its own rules and coins shall not be
considered part of its currency issue
and accordingly therefore shall not form
part of the assets or liabilities of the
bank
currency in general circulation
depending on
it shall not be considered as part of
the assets and liabilities of the bank
and printed
in papers
excuse me
all such notes and coins issued by the
central bank and in circulation in the
philippines
enjoy the full guarantee of the
government of the philippines
[Music]
in convertibility of currency
so in order to facilitate business
transactions and to meet the needs of
the various sectors of the economy
central bank shall exchange on demand
and without charge philippine currency
of any denomination
for the nodes and coins
of any other denomination requested
social
philippine currency of any denomination
for the philippine nodes
and coins of any other denomination
requested
is
in cases with the central bank failed to
meet the required denomination it shall
provide notes
and coins of the nomination mostly
approximators requested that is if an
interested party requested for a
thousand one thousand bills and at the
moment it can provide the numbers then
it shall provide notes of 500.
so yeah don't see this happening
replacement of currency and fit for
circulation
mutilated notes and coins
central bank
okay
[Music]
impossible to identify
or
coins that show signs of filing clipping
or perforations being serana
lost more than two over five of their
surface or all of the signature
inscribed there their in should not be
replaced by the central bank
so
two fifths of the surface
okay so allah
bills
the president of the philippines and the
governor of the bangkok central
philippines
because of the mutilation
filing clipping perforation
indianapolis
rather they shall be withdrawn from
circulation and are demonetized without
compensation to the owner or better
unless it can be shown to the
satisfaction of the central bank that
the currency became unfit
for securities as a result of the
accidental causes or forces beyond the
control of the holder
retirement of the notes and the coins
notes now of any cities or denominations
which are more than five years and old
and coins which are more than twelve
years old
so yeah
currency life
bug notes
five years
coins 12 years depending on the
circumstances of
the
paper or the currency
okay
okay
so s
paper
are counted subjected to series of
perforations handed in packets of 100
notes each stamped with a date of
perforation and signed by the
perforator
so men on currency retirement division
these old bills are burned in the in
incinerator once a week under heavy
surveillance with central banks official
security card
as a currency retirement division
central
so there are other trivia
boxes here for your
reading
people power coins
the philippine mean the first mid in the
philippines was established by the royal
decree of e357 the corner of recoletos
and cabildo in intramuros
so this is also for your reading these
are just trivia boxes no
so dito on our presentation we uh
presented um
a new generation currency coins issued
by the previous administration
so this will only
on our currency before we deal on the
business finance per se
so this is also for your reading
security features giant which
and other features of the
new generation papers
and the latest ones are the 1000
peso polymer
the image of the south sea pearl
the tinala
okay
and some of the items here are taken
from
uh
uh illustrations from the internet we're
in uh in identifying obverse and reverse
sides then adding currency nothing
philippine currency
this is only for your
understanding
and if you look our uh book our
reference book mahaba in discussion on
the history of philippine currency
i just wanted you to read
the portions we're on
in specifying monetary standard human
commodity non-commodity standard
human disadvantages
in particular standard
and
human characteristics of that particular
standards because we will not be dealing
i see your name on historical items on
our philippine currency
okay
no i just wanted you to read the
particular history of philippine
currency for us to appreciate because
some of the
items will
be reflected on your
first term exam
now on on what particular regime
you just have to take a note a quick
note on and about maryland's japanese
regime and
yet i want to appreciate
more of that no
suppose
no we will not be uh discussing more of
that casey
this is
business finance the hawala system
the trust or exchange
system is s
assignment posted
history of philippine currency
so i think i have to end the discussion
with you for the history of philippine
currency and this chapter is more of
your reading because
discuss one by one in particular regime
at history of philippine currency this
would be for your reading only thank you
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