EVOLUTION OF MONEY IN THE PHILIPPINES

A Term Paper
Presented to
Mr. Gregorio Calamba
Holy Cross Of Davao College, Inc.

In Partial Fulfilment
Of the Requirements for
English 2
By: May Rose R. Gonzaga
12 October 2010
I. Introduction
A. Background about the topic
II. The Body
A. History of Money
1. The Significance of Barter
2. Coinage
B. Functions of Money
1. Kinds of Money
2. Detecting Counterfeited Bills
III. Conclusion
A. Effects of Money in the Economic growth
 Introduction

This term paper information about money coinage, significance of barter, functions of
money, and kinds of money. Money is the standard medium of exchange in business
transactions. It is refers to the currency and coins which are in the circulation and legal tender.
Now a day’s money is important. Because without money we cannot buy what we want. Because
we cannot purchased things without exchange of it. Today’s teenagers find ways how to get
money to meet their needs. Many people said money is very important. Yes it is important. But it
cannot buy our true happiness. Like a rich man he has lots of money. But when he died?. He can
bring with him his money?. Nobody can do that. But in practical situation money is very
important. Like people here in urban areas. They need money because how can they eat their
meals without money to buy?. How they pay their expenses?. For short how can they meet the
demands of their needs if they don’t have money?. Lucky who are in the rural areas because their
need are in nature. But we cannot deny that they need also money for their some needs that
nature can’t give. Through this man find a ways to get money. He needs to find a job and receive
a salary. Through this working man, the circulation of money helps the economic growth. Lots of
people investing and saving money, through this also it helps to our economic growth. On the
other hand in the time of our ancestors, what their medium of exchange?. Barter?. Yes barter.
Barter is one of the earliest systems of exchange. It is “the direct exchange of”, “one commodity
for another”, of goods for goods, service for service, and vice versa.
As a student we must know were money came from, how it is evolve. The function of it. In
the Philippine coinage. The coin is the product of coinage. Coin is defined as a mass of metal
cast in some convenient shape with a definite weight and fineness. The coin “Piloncito” is a
named after sugar receptacles they resemble called “pilon’. The earliest coins brought to the
country from mexico were the Macuqinas or the cobs. The most beautiful coins designed ever
produce were the Dos Mundos or Columnarias. The barilla was the first copper coin minted in
the Philippines. In this term paper you can read more information about money.
 Barter as a form of exchange also a system was the first stage of monetary development.
It is the “direct exchange of”, “one commodity for another”, of goods for goods, services for
services and vice versa. There are lots of examples of barter system that exercise earlier; good
for goods exchange of rice for fish: services for services, the service of a barber for a service of a
tailor; services for goods, a carpenter does a house for a kilo of a who meat. Barter in ancient
time it is the practiced throughout the Philippines also worldwide. But this system find more
difficulties because it is hard to find whose need of good for service; service for goods, and a
like. There are some difficulties of barter system like; it was difficult to find or to look for a
person who has the things you need also a person who wants the things you offering for
exchange; there was no common denominator to measure the value of goods and services sought
for exchange; most of the goods traded have unequal values; it is time consuming and very
convenient for individuals to use the barter system and it lacks generalized purchasing power.
( Laman and Bernardo. 1995). Through this difficulties man invented, find ways to look for
another medium of exchange. Then it was led to the evolution of money. It is a tool conceived to
overcome difficulties that barter system brought. Also it gives knowledge to the man to create
another system of exchange to meet our needs. Money is the standard medium of exchange in the
business transactions. It is refers to the currency and coins which are in the circulation and legal
tender. Also money according to Leuterio and Estepa, 2001, money is a medium of exchange and
his quality of exchange ability serves as its most significance purpose. It is differ to another tools
only in the sense that every man has opportunity to use it. The buy and sell are products of
money economy. The buyer gives up the money, the seller receives it. money is differ from
barter in that only one party gets an objective that may directly and immediately satisfy his
desire. The development of money was helped us to made easier our transactions. Through this
money it simply buys a kilo of rice and paid it how much the price of it. Through this money it
gives a step to the social, economic and political development of time.
The coinage in the Philippine, the pre-Hispanic settings the first used was the use of seashells
market the transition from the barter system. The yellow money cowry was practiced in the Indo-
Pacific region. The first mention was the pre-Hispanic Chinese-Philippine relations, the used was
the used of gold, wax cloth, small seashells, dye wood, carabao horns, metal bells, and silver
wires rolled up like the wax tapers. This are the acceptable currency that period. Then between
the 8th to 14th centuries, our ancestors begun to trading in gold. The gold ornaments and altering
were used specifically trading with the Arabs and the Chinese. A coin in the form of a button-
shaped gold nugget was the next developed as a medium of exchange. This coin was called
“Piloncito’, a named after sugar receptacles they resembled and called “pilon’. During the
Spanish occupation, when they came here in the Philippines in 1521 they brought with them the
first European coin called teston. Also it is the first silver coin. When the Galleon trade exercised
the earliest coins during the Spanish colonization was the Macuqinas or the cobs. It has a
irregular, oddly-shaped coins stamped with a cross on the other side side and a royal coat of arms
on the other. These coins circulated over 183 years from 1585 to 1768. During the reign of King
Philip the fifth of Spain the first rounded machine struck coins with milted edges appeared.
These coins called the Dos Mundos or Columnarias. It is one of the most beautiful coin ever
produce. It came the time of the coins “Barillas’, the first copper coins to be minted in the
Philippines and after how many colonizers came to our country currency changes. Coinage
define by westerfield as “the act of manufacturing uniform coins”. Coins are made metal alloys
rather than pure metals so as to give them durability. The peso that we have right now that
issued by the treasury contains 80% silver and 20% alloy. The denominations from 50 centavo
contains 75% silver and 25 alloy. There are also kinds of coinage the free coinage, gratuitous
coinage, and limited coinage. The free coinage that government defines sizes, shapes, weight and
designs of coins but allows people to bring their precious metal to the mint to convert such into
standard coins. The gratuitous coinage is the total responsibility of minting borne by the
government and the limited coinage was the government precious metal in an open market and
mint them as a medium of exchange at face values higher than material content to facilitate
trade. The coins that circulated today is limited coins. In 1994, Central Bank was established,
there by replacing gold and silver coins made of metal and alloys as base. Standard coins are
made of metal like gold. Also known as the full-bodied money. It is monetary system in which
the value of commodity circulating as money or metal coins is the same as the non-monetary and
monetary purposes. During the early times our coins were made abroad, but with the creation of
Central Bank, it maintains a mint in order to minimize expenses and provide employment
opportunity.
Money was derived from Moneta, another name for the Roman goddess Juno has been
defined in a number of ways. It is clear to the definitions of money is to facilitate exchange
transactions of goods and services. However, in the performance of such basic function, money
has been observed to discharge the following incidental functions. Money as medium of
exchange, as a unit of exchange, or a means of exchange, as a store value, and as a differed
payment. As a medium of exchange, money does not eliminate certain difficulties that attend to
every barter transaction but at the same time, enables consumers to manifest their preferences for
certain goods which they purchased in the market. As a unit of account, money measures the
value of goods and services. It is used as a yardstick in pricing of things. The monetary unit of
country is used as standard value. As a store value, money can kept for future use. Since money
is acceptable widely it enjoys a generalized purchasing power and can serve as store value. It
means the holder of money have desire weather he/she spend it when he/she likes to. The two
ways of keeping the money for future use, are by saving and investing. There are two methods
keep money in the bank, ii productively and unproductively. Example if you keep the money
from the bank, it becomes productively because you are earning interest from it. Investing on the
other hand can be made in 1) business, 2) corporate or government securities, 3) money market,
4) real state property and 5) jewellery. Money as a deferred payment because money as standard
deferred payments in all debts which are in contracts are expressed in terms of money. All debts
which are specify the payment of definite sum in the future are using as money standard of
deferred payment. And last money as conveyance. As far as national economy is concerned,
money is merely a conveyance where the flows of production is facilitated and enlarge through
specialization and division of labor. Each worker performs some highly specialized task and is
paid for his services in money. As above mention the functions of money, it is evolve from the
simple monetary exchange to a measure or a standard value and as a store value. It helps us a lot.
Because it summarized it on how we used our money. According to their functions we can’t find
hard to classify when and where we can used our money.
It is also covered the characteristics of a good money. For money to be able to perform the
four functions, it is important that the materials used have a good characteristic because it is
circulated over our country. Not only one using money but a million of people using it every day.
For the money not to be easily broke or damage. There are some attributes of good money
namely; general acceptability, stability of value, portability, cognizability, divisibility,
homogeneity and durability. Good money should be acceptable to everybody in a specific
territory. General acceptability refers to the willingness of people to accept the money in
exchange in the values of money being circulated. Stability value is dependent on control
measures adopted by the monetary authority. The portability refers to the quality of money being
easily carried from place to place. It is necessary that the material used as money should conform
with his characteristics. The cognizability, it is necessary that the money circulated is easily
recognize even by a child and the unschooled. Even also the blind can recognize by the sense of
touch. The divisibility, it is refers to the equivalent, example a one piso is equivalent of four 25
centavo coins. Although it divided to smaller denominations it is the same equivalent. The
homogeneity, it is refers that the money should not only capable of being divided into equal parts
or smaller units, but that such parts should have equal weight and fineness, that made of the same
material and posses equal values. The elasticity, it is refers to the monetary supply. It is refers to
the reserves of money, that the money in circulation could be increased or decreased according to
the requirements of the trade and industry. Last is the durability of money, it is refers to the
money chosen would have to withstand normal wear and tear. Like the paper money it is used by
almost all countries or the world, it is made by the special kind of paper which has extra strength
to withstand usage.

As we used money it is very important that the money that we used for exchange is not
fake. It is important that when we received money especially large equivalents, we always put to
our minds to check the money if it is counterfeited bills. The notes to be remember also we need
to familiarize to check the money are the paper, portrait, water mark, security fiber, security
thread, background design, color of each denomination, style and size of serial number, vignette
and cleanliness of the print. The genuine paper are readily feel of our fingers the main prints of
the front and back of the fairly notes while in the counterfeit it generally smooth, our fingers can
hardly feel the main print even on the notes. In the portrait, the genuine, appears life-like. The
eyes “sparkle”. It is always check the dots forming the detail of the face, hair and etc. are clear,
sharp, and well defined. While in the counterfeit appears “dead”, dull, smudgy and poorly
printed. The eye does not the same with the portrait. In the security thread, this is a special thread
place vertically on the paper during manufacture. While in the counterfeit, fakes by means of
printing vertically line on the inner side of the paper. Its security fibers in genuine the red and
blue fibers are scattered at random on both surfaces, in the counterfeited it is simulated by
printed lines, cannot be picked off; it is also easily erased with a ordinary rubber. Their colors of
each denomination, the genuine note have polychrome with one predominant color. The 1000-
piso- blue; 500-piso- yellow; 100-piso- mauve, 50-piso- red; 20-piso-orange. In the counterfeited
there is an irregular spattering of white spot caused by non-registry or breaks of the background.
In the background designs, in the genuine the background are multi-colored and are composed of
sharp lines which are continuous are traceable even at joints. While in the counterfeit the
background designs often blurred, rough, and blotched on the intersection resulting in different
scheme. In the serial number, the spacing of numbers is uniform evenly and alignment is even.
While in the counterfeited the spaced are not is evenly and poorly aligned. In the vignette, the
lines and dots are composing, the vignette are fine, distinct and sharp, while in the counterfeited
usually dull and poorly printed. The last is the cleanliness of print; in genuine the registry of
different printed feature is perfect. The lines are very clean and sharp. While in the counterfeited
in general, a spurious note exhibits a “second hand” look. It is dirty due to the spattering of ink
on the enterior area. On the other hand as detecting the genuine and counterfeited coins, the
genuine coins show an even flow of metallic grains. The details of the profile, the seal of the
Republic of the Philippines, letterings and numerals are high relief. While in the counterfeited
coins, it is feeling greasy and appears slimy. The letterings and numerals are low and worn out
due to lack of sharpness and signs of filling.

The last topic that I’ve discuss is all about the kinds of money. It is also connection about
money. We must know that the kinds of money. We all know the two basic types of money,
namely; the metallic and paper money. There are also some kinds of money. Also we used in
especially in the business. There are three important kinds of money, namely; commodity
money, credit money and fiat money. The commodity money is the type of money that has a
commodity value. The commodity value should equal its money value. While under a modern
monetary system, it is appears in the metallic form, the face value of which approximates that of
the value of the metal itself. In the past, some commodities were used as money. Example the
basis of wealth in ancient time, Irish and Persia times are the size of flocks and herds, and a
number of slaves. Salt, corn, tea, wool, tobacco, were used by the English colonists in the north
America. Iron was used in China. While in modern times, the types of commodity are gold and
silver. The credit money is described as in the nature of a promissory note. The value of credit
money is important to be equal to the value of standard money. It has three types, the
representative paper money, fiduciary paper money and bank note. A bank note refers to the
promise of a bank to pay the bearer or the holder. The representative money is backed up by
100% silver reserves; on the other hand the fiduciary paper money is by a partial gold or silver
silver reserve. The fiat money is issued by a government or decree. It is used by command. “Fiat’
a Latin word means ‘let it be done”. Most of it are issued during a war. Examples are the fiat
money that Japanese military authorities issued during the period of occupation of the
Philippines. Last is the legal tender money, a kind of money that circulates because of its legal
tender power. Legal tender describe as “any kind of money which, according to law, must be
acceptable when offered in payment of any obligation expressed in terms of the country’s
monetary unit.
 References

Fajardo, Felicino. R. and Mansala, Manuel M. (1993). Money Credit and Banking.
Manila, Philippines: 24K Printing Co., Inc.
Miranda, Gregorio S. (2004). Essential of Money Credit and Banking.
San Juan, Manila, Philippines: L &G Business House
Laman, R. and Bernarde, D. (1994). Banking Credit and Money the Basics.
Manila, Philippines: GIC Enterprises & Co., Inc.
Laminar, Ruby F. (2009). Introduction to the Philippine Money Credit and Banking.
Manila, Philippines: MC Reprographics.
Leuterio, Mercedes M. and Estepa, Consuelo B. (2001). Economics of Money andBanking.
Manila, Philippines: UST Publishing House.
Pagoso, C. et. al. Principles of Money Banking and Credit. Paranaque, Metro, Manila,
Philippines: Nelson Publishing House.
Mejarado, Nenita D. Business Finance. Manila, Philippines: Goodwill Trading Co.