The Philippines, officially the Republic of the Philippines, is an archipelago, or a string of over 7000 islands, in Southeast Asia between the South China Sea and the Pacific Ocean.
The official currency of the Philippines is the Philippine peso or 'Piso' in Filipino. The currency code is PHP and it is denoted by the symbol ₱. So if you are in the Philippines, you will see the symbol used to show prices.
The evolution of the Philippine money is linked to the country's journey through years of colonization. The name Philippines comes from Philip II, who was king of Spain during the Spanish colonization of the islands in the 16th century.
The Philippine peso is derived from the Spanish Peso, an old silver coin of Spain and Spanish America equal to eight Reales. These Spanish pesos were brought over in large quantities from Spanish America by the Manila galleons (Spanish trading ships) of the 16th to 19th centuries. These ships were the sole means of communication between Spain and its Philippine colony.
The Spanish ruled the Philippines for 333 years and finally left the country in 1898 following the Spanish-American War. For the next 48 years, it was under the United States.
The country's independence was delayed by World War II and the invasion of Japanese troops from 1942 to 1945 until the surrender of Japan when the war ended. The Americans recognized the Philippines' independence in 1946.
The Philippines, being a previous US colony, used the English language on its banknotes and coins. Until 1967, the term 'Peso' was used. It was only after the introduction of the Filipino language that the word 'Piso' came to use on the notes and coins.
Regardless, English and Filipino are the official languages of the country. And the Philippines is the third-largest English-speaking country in the world.
Today, there are six banknotes in circulation: 20, 50, 100, 200, 500, and 1000 Peso bills.
There are coins of 1,5,10, 20 Pesos and coins of 1,5,10, and 25 Sentimo.
1 Peso is subdivided into 100 Centavos, or 'Sentimos' in Filipino.
The central bank of the Philippines is the Bangko Sentral ng Pilipinas (BSP), which is responsible for issuing coins and notes for circulation in the Philippines. The coins and banknotes are mostly produced in the BSP Security Plant Complex (SPC).
The Philippines banknotes and coins have undergone a lot of changes over the years.
The current banknotes of different denominations don't vary in size, but each has distinct and striking violet, orange, red, green, yellow, and light blue colors.
The latest designs include images of the Philippines' famous politicians, soldiers, and other significant people and also the country's endemic fauna and iconic natural wonders.
The color is an important part of the design, accentuating key elements such as value numerals, seals, and note edges.
As for the coins, they usually display the denomination value along with national heroes and the logo of BSP on the front and the seal of BSP on the reverse side.
The latest one, called the New Generation Currency (NGC) Coin series, comprises the 10 Piso, 5-Piso, 1-Piso, 25-Sentimo, 5-Sentimo, and the 1-Sentimo depicts national heroes, the BSP logo, and the endemic flora consistent with the design of the NGC Banknote Series.
The recently launched Philippine coins and notes come with enhanced security features such as the latest anti-counterfeiting technology and are designed to be more responsive to the needs of the elderly and the visually impaired, such as the inclusion of large intaglio printed numbers on the front of each denomination.
History of the Philippine currency follows an interesting timeline - from the pre-Hispanic era to the Republic of the Philippines that we know today.
The medium of exchange for goods and services in the pre-Hispanic era of the Philippines with countries like China, Thailand, Java, and other neighboring countries was conducted through the barter system.
As the barter system was highly inconvenient, 'Piloncitos' made of small pieces of gold were introduced as the first form of the local coinage system.
With the Spanish occupation starting from 1521, they introduced coins to the Philippines as a medium of exchange. The country adopted the first paper money in the form of Pesos Fuertes issued by the country's first bank, the El Banco Espanol Filipino de Isabel II, during the Spanish Era.
The 1898 Declaration of Independence led to a brief revolutionary period where the first local currency was introduced. However, the revolutionary currency was out of circulation and was declared illegal soon after the arrival of the Americans in 1901.
A new currency was formed that was pegged to the price of gold and was at the time worth half the price of a U.S. dollar until the country became independent in 1946.
The Japanese invasion of the Philippines during World War II also had a part in the history of the Philippines' currency. Two kinds of notes in big denominations were issued, which the Filipinos called the "Mickey Mouse Money" due to hyperinflation. It made the Japanese-Philippine Pesos worthless.
The country gained independence in 1946 and became the Republic of the Philippines. In 1949, the Central Bank of the Philippines was established, and the Philippine Peso was reintroduced as the official currency of the nation.
The USD to PHP exchange rate from 1946 to 1962 stood at 2/USD. The currency devalued substantially under the pegged system. By 1986, it was trading at 20/USD. The black market exchange rates for the currency during these periods were always higher than official rates, where the was regularly traded at 3:1.
After the country's 1993 New Central Bank Act, the Philippine Peso became a free-floating currency. This brought stability to the currency, although the exchange rate was way higher than the earlier pegged levels. And the black market rates finally disappeared.
In the early 1990s, the Peso depreciated to 28/USD. In October 2004, 1 USD was equal to 56.341, the highest depreciated value of the currency in the history of the USD to PHP exchange rate pairing.
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Since the exchange rate is free-floating, depending on the supply and demand of the currency market, the value of how many dollars to Philippine Peso will fluctuate by the day and by the minute.
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Know how the exchange rates work
There are various factors affecting the exchange rate. The mid-market or the interbank rate is the real exchange rate and the ones you see on Google. You can get the latest USD to PHP online. Use an online currency converter to get an idea of what your money is worth and to get the best rate when you want to send money to the Philippines.
Most money transfer companies and banks offer a marked-up exchange rate which can be anywhere between 3%-5% on the real rate. The marked-up rates are often hidden costs that reduce the amount of money your recipient is supposed to get at the other end.
If you are sending money from the U.S. to the Philippines, the weak PHP against the USD is in your favor because your recipient receives more Pesos for your dollars after conversion.
According to the BSP, the Overseas Filipino Workers (OFWs) sent home $31.418 billion in 2021, up 5.1% from $29.903 billion in 2020. The U.S. was the biggest contributor, making up 40% of the total remittance in 2021, followed by Singapore, Saudi Arabia, Japan, the UK, the UAE, Canada, Taiwan, Qatar, and South Korea. Remittances from these countries accounted for 78.9% of the cash remittances.
Know your transfer fees before sending
Choose a money transfer specialist that displays fees upfront before you press send. You don't want to be surprised at the end when you see they have cut a portion of your money as fees without your knowledge. It can happen when there are intermediary parties involved in the transfer process. This happens mostly when you use your banks for international transfers.
Most money transfer specialists have price estimators on their websites to check how much you might be paying before sending your money. Or simply compare their money transfer offers on the CompareRemit website or App available for both iOS and Android.
Compare exchange rates and fees of different money transfer companies
The rates offered by money transfer companies vary widely. Some even offer the mid-market rate, while others may offer marked-up rates that can be competitive. Some may allow locking in your favorable rate for a certain period so that the fluctuation in the rates doesn't affect your transfer.
There are also trade-offs. Higher transfer fees may get your money delivered faster, while lower fees may take longer. You will have to choose the ones that suit your transfer needs. So comparing your options is highly recommended.
Use Discount Codes and Coupons to save money
Money transfer companies generally waive the transfer fees for your first transfer. Make use of such an offer to reduce your transfer costs. And from time to time, they offer discounts and coupons that let you save more money.
In 2021, the value of the Philippine money declined by 4.2% against the USD. The Peso is expected to decline in the year 2022 against the USD. The dip in the PHP against the USD can encourage OFWs in the U.S. to send more money to their families in the Philippines.
If you are looking to send money to the Philippines, there are plenty of cheap options, but first, compare them and choose the most suitable one for your circumstances.
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