The history of Philippine money covers currency in use before the Hispanic era with gold Piloncitos and other commodities in circulation, as well as the adoption of the peso during the Hispanic era and afterwards.
The Philippine peso is ultimately derived from the Spanish peso or pieces of eight brought over in large quantities by the Manila galleons of the 16th to 19th centuries. From the same Spanish peso or dollar is derived the various pesos of Latin America, the dollars of the US and Hong Kong, as well as the Chinese yuan and the Japanese yen.
History
Long before the Spaniards came to the Philippines in 1521, the Filipinos had established trade relations with neighboring lands like China, Java, Borneo, Thailand and other settlements. Barter was a system of trading commonly practiced throughout the world and adopted by the Philippines. 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, making possible the availability of local gold coinage called piloncitos. The original silver currency unit was the rupee or rupiah (known locally as salapi), brought over by trade with India and Indonesia. The salapi continued under Spanish rule as a teston worth four reales or half a Spanish peso.
Early Philippine history (c. 900 AD–1565)
Piloncitos
Piloncitos were used in Tondo, Namayan and Rajahnate of Butuan in present-day Philippines. Piloncitos are tiny engraved bead-like gold bits unearthed in the Philippines. They are the first recognized coinage in the Philippines circulated between the 9th and 12th centuries. They emerged when increasing trade made barter inconvenient.
Piloncitos are so small—some are of the size of a corn kernel—and weigh from 0.09 to 2.65 grams of fine gold. Large Piloncitos weigh almost 1 mace, or 1/10th of a tael. Piloncitos have been excavated from Mandaluyong, Bataan, the banks of the Pasig River, Batangas, Marinduque, Samar, Leyte and some areas in Mindanao. They have been found in large numbers in Indonesian archeological sites leading to questions of origin. That gold was mined and worked here is evidenced by many Spanish accounts, like one in 1586 that said:
Barter rings
The early Filipinos also traded along with the Barter rings, which is gold ring-like ingots. These barter rings are bigger than a doughnut in size and are made of nearly pure gold.
Spanish era (1565–1898)
The Spanish silver peso worth eight reales was first introduced by the Magellan expedition of 1521 and brought in large quantities by the Manila galleons after the 1565 conquest of the Philippines. See Spanish dollar. The local salapi continued under Spanish rule as a half-peso coin. Additionally, Spanish gold onzas or eight-escudo coins were also introduced with identical weight to the Spanish dollar but valued at 16 silver pesos.
Silver Cobs and Columnarios
The earliest silver coins brought in by the galleons from Mexico and other Spanish colonies were in the form of roughly-cut cobs or macuquinas. These coins usually bore a cross on one side and the Spanish royal coat-of-arms on the other. Locals called these crudely-made coins "hilis-kalamay" due to its resemblance to flattened rice cakes. These were replaced starting 1726 by machine-minted coins called Columnarios (pillar dollars) or dos mundos (two worlds) containing 27.07 grams of 0.917 fine silver (revised to 0.903 fine in 1771).
These pillar dollars circulated extensively not only in the Philippines but all over the world in the 18th and 19th centuries due to its beauty of design, consistency of weight and fineness, universal recognition among merchants worldwide, and a serrated edge which prevented the clipping away of the precious metal. From the same Spanish peso or dollar is derived the various pesos of Latin America, the dollars of the US and Hong Kong, as well as the Chinese yuan and the Japanese yen.
Fractional currency and Cuartos
Silver coins were minted in denominations of 8 real () and 4, 2, 1 and real. Gold coins came in denominations of 8 escudos () and 4, 2, 1 and escudos. Small change was also made by cutting a whole coin, most commonly into eight wedges each worth one Spanish real.