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•The prevailing medium of exchange was barter although there were already some coins circulating in our country as early as the 8th century.

•Commodity money such rice, coffee, sugar, rolled silver wires, gold dust, gold, cowry money, ( see Figure 1) silver nuggets which were accepted for their weights and purity and the carabao which is our domestic animal were used as money.

•Rice has long been used as the principal primitive currency since it is the staple food of the people.

•People used to measure their wealth by the number of carabaos they own.

•Between the 8th to the 14th century, the penniform gold barter ring was being used in trading with foreign merchants.

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•After the arrival of the Spaniards in 1521, trade was conducted by using irregular shaped coins, hammered in Mexico, Varieties of these silver coins were popularly called “Hilis Kalamay” which bore the seals of the Spanish rulers Charles II, Philip IV, and Philip V.

•1571, Coins that were minted in Mexico like the silver cobs which are called cabo de bara de plata in Spanish were known to be the first coins that were widely circulated during and after the reign of King Philip II.

•1700-1746, the first coin minted in the Philippines was called he Spanish Barilla.

•In the 17" to the 19" century, Manila became one of the major centers of trade in the Far East.

•1732-1772, The Spanish Dos Mundos also known as the Mexican pillar dollar were struck at the Mexican mints.

•In 1766, a second coin was minted in the Philippines, known as colderillas.

•In 1720, the Spanish government ordered from the mint of Spanish Mexico 6,000 silver quartillos.

•During the reign of Ferdinand VII that was 1808-1833, the coins bearing his head were generally circulated.

•In 1880, the value of silver peso was higher than that of the American gold dollar.

•In 1852, the first Philippine bank note was printed. It was called the pesos Fuertes issued by the El Banco Espanol-Filipino de Isabel II.

•In 1855, the five pesetas silver coins were circulated. These coins were believed to have been minted either in Madrid or in Paris.

•In 1887, the Isabel silver one real was issued and the word Manila was engraved below the neck of Queen Isabel II.

•In 1859 they issued the 20, 40 and 80 Reaux (reals), It had the following words engraved on the overse side: “Isabelle Il Reiner D’ Espangne”.

• In 1861 to 1864 gold coins were issued in denominations of one, two and four pesos bearing the bust of Queen Isabel II.

•In 1864-1868 silver coins of 10, 20, 50 centavos were minted. it had a diameter of 18, 23 and 30respectively.

•During the reign of King Alfonso XIII (1874-1885) more coins were minted, They were in the denomination of 10,20, and 50 centavo silver coins.

•In 1880-1885 four gold coins bore the bust of King Alfonso III with the inscription: ALFONSO XIII POR LA 6— DE DIOS 1880-1885.

•In 1877 a royal decree was promulgated to allow Manila Mint to coin silver coins of the same fineness as the Spanish coins of .835 instead of the .900.

•In 1880 gold coins were minted of the same weight and fineness as the previous one.

•In 1887, the first Treasury Certificates were issued bearing the official seal of the Philippine Government, It bore the signatures of Clem de Santiago, the Insular Treasurer.

•1886-1931 — Fractional coins were minted in denominations of one centavo and two centavos made of copper specifically in 1894.

•In 1897, the one peso silver coins bearing the bust of the young King Alfonso XIII were issued.

•In 1897, several coins were received by the Philippines from the Spanish government in Madrid to alleviate a shortage of coins because of the great increase of world trade which affected the country.

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•Emilio Aguinaldo who was the leader of the Philippine Revolution, issued paper money that was backed up by the resources of the Philippines.

•Emilio Aguinaldo issued coins minted in 1899 in denominations of two centimos, which were made of copper.

•REPUBLICA FILIPINA around the upper half portion of the edge, with the sun and the three stars in the center, the rugged islands below the sun, and the year 1899 at the bottom.

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•The American regime started in the Philippines on August 28, 1898.

•Various currencies circulating in the country earlier were allowed to continue circulating until 1904 when the American Civil Government in the Philippine demonetized it.

•In 1901, an American expert in Banking and Finance, Charles Conant came to the Philippines as a financial adviser of the government. He then recommended a monetary system for the country, which was the gold exchange standard. The monetary unit was based on gold.

•The American Congress acted upon this recommendation in March 2, 1903, when they passed the Philippine Coinage Act contained in the organic Act of July 1902, known as the Gold Exchange Standard.

•Later, the price of silver in the market increased between 1903 to 1906, which resulted to the exportation of the Philippine coin to China. This depleted our supply of coins so people begun to hoard it.

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•With the volume of trade increasing due to the increased demand for Philippine products. the money supply of the country was insufficient to meet the needs of trade.

•the newly created Philippine National Bank was authorized to issue the Philippine Bank Notes.

•Later the El Banco De Las Islas Filipinas known as the Bank of the Philippine Island was authorized to issue its own bank notes.

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•In 1933, the United States of America abandoned the gold standard when the United States President; Franklin Delano Roosevelt proclaimed the gold embargo in his territories and colonies.

•Since the Philippine monetary unit was linked to the United States dollar, it had to adopt a new standard called the Dollar Exchange Standard.

•The Philippine peso was kept at par with the dollar at an exchange rate of 2 to 1. Under the Gold Reserve Act of 1934, the dollar had to be devalued from 25.8 grains of gold .9 fine to 15 15/21 grains of gold .9 fine.

•As a result of the devaluation of the peso, the Philippine gold reserves were increased by 40.94 percent.

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•they issued a great quantity of paper bills called the Japanese War Notes, these were popularly known as the “Mickey mouse” money, these bills had no reserves, neither was it backed up by any government asset.

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In July 4, 1944 after the American forces defeated the Japanese imperial army, the Philippine Commonwealth was established under President Sergio Osmena.

•The president issued executive order 4049 where he declared all

Japanese currency circulating in the Philippines “illegal”, He ordered the closing of all banks and declared the withdrawal of all Philippine National Bank notes from circulation

•The Central Bank was established in 1949 to improve the exchange controls and to adopt the manage currency standard.

•A new currency called the Central Bank Notes was ordered issued by then President Manuel A. Roxas

•In June 16, 1956, the paper money denominated in P200 and P500 were demonetized or withdrawn

from circulation although these were returned again with a different design and color.

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•The word hawala is Hindi meaning "trust" or "exchange".

•hawala is an unoficial alternative remittance and money exchange system enabling the transfer of funds without their actual physical move.

•Hawala has been a traditional method of moving money in south Asia long before Western banking became established in the region protecting early merchants along the silk road against robbery

•Hawala is illegal in many countries. However, Islamic and Western banks all over the world, and even central banks, make use of the system.

For instance, in May and June 2001, the State Bank of Pakistan was said to have turned to hawala shops in Islamabad to buy dollars in order to support the own currency Even top-ranking Western corporations tum to hawaladars for transactions to regions without a modern western-style banking system.