The Philippine peso Explained

Ashly Chole Senior Finance Researcher

Last Updated 24 June 2025

In the Philippines, the recognized legal tender is the peso, which is divided into 100 centavos. One centavo is equal to one-hundredth of a peso. The creation of the peso was intended to replace the foreign convertible currencies that were previously utilized in the country. The Bangko Sentral ng Pilipinas (BSP) is responsible for issuing the Philippine Peso, which has since become the country's official currency and exclusive medium of exchange. As a result, export receipts are now issued in US dollars instead of the local currency in the form of coins or banknotes.

Due to hyperinflation that led to significant losses for both consumers and businesses, dollar-denominated notes were utilized to replace the currency, but they were later discontinued. Subsequently, the Philippine peso was reinstated and has been in circulation ever since. The Bangko Sentral ng Pilipinas (Central Bank of the Philippines) uses the ISO currency codes 'PHP' and 'P' to issue the peso. The current version of the currency was introduced after the Philippine economy had fully recovered from a series of financial crises. While the US dollar is often quoted against other currencies, such as the euro, as EUR/USD rates, the peso is typically quoted against the US dollar using PHP/USD rates.

It is subdivided into 100 centavos

The peso's alternative name is centavo, which means 'one-hundredth of a peso.' Its weight is 2 grams, and it is worth 1/100 of a peso (0.002 kg). Even though the Philippines has yet to create the coin, it was manufactured in Mexico. The plan is to produce coins that depict images from Filipino history, which will be utilized in transactions in the same way as other nations' national currencies. One peso is made up of 100 centavos.

The Spanish word peso

During the 18th century, the Spanish term peso was introduced to the Philippines, referring to the nation's currency. In 1776, the first Reales de Manila (Manila silver coins), which were considered Spain's silver coins, was released. They were similar to 4 ducados or 8 reales de cámara (small silver coins) and 5 pesos fuertes or 1/2 real de plata plateada (large silver coins). After two centuries of Spain's Bourbon Royal House governing its colonies in Asia and Africa, Spain lost control over them. The colonies were renamed Republics, and their local currencies, such as the Banco Espanol de Indias y Filipinas, the Banco Nacional, and the Banco Internacional Hipotecario, were made legal tender in addition to those issued by Madrid's central bank. Initially, the Philippines produced banknotes in denominations of 1, 5, and 10 pesos. During the Commonwealth administration, which was established after the Japanese occupation of 1942–1945, it was referred to as the 'Peso Republica Filipina.'

The first peso banknotes

Initially, during the Spanish colonial era in the Philippines, peso banknotes were printed using paper, cotton, and linen fibers. They featured a portrait of Francisco Pizarro on one side and Ferdinand Magellan on the other, with a value equivalent to one Spanish piso (peso). After their defeat in what is now referred to as World War II against American forces led by General Douglas MacArthur, who liberated Manila and captured many Filipino prisoners because they did not want any prisoners sent back home, the Spanish colonial government began issuing Peso Bank Notes as soon as the Philippines gained independence. To avoid damaging international relations at the time, they simply got rid of those individuals. To do this, they hung them upside down until they died, and then they dumped them into mass graves with others who did not want anything terrible to happen to them.

To summarize, the executions were a result of limited resources due to natural disasters, specifically the frequent typhoons that struck Manila and caused destruction elsewhere. However, it is important to note that most Filipinos did not want any harm to occur, and ultimately, it worked out well for everyone involved, except for families who lost loved ones alongside others. Although we should not ignore these events, let's focus on more crucial matters, such as determining how much money is required each month before payday to avoid any future financial issues, which is a relief.

President Ferdinand Marcos

The Philippine currency, also known as the Peso Filipino, is represented by the ISO code PHP in financial transactions. Under President Ferdinand Marcos, a revision was made to the declaration that one peso was equivalent to 25 senetas and instead declared that one new centavo was equivalent to 100 old centavos, or 25 senetas for every new peso piece. The Bangko Sentral ng Pilipinas, also known as the Central Bank of the Philippines, is responsible for issuing the currency. The current currency designs are the same as those used by the previous administration. While coins are produced by the Bangko Sentral ng Philippines, they are not manufactured by the BSP itself but rather by its subsidiary, the Security Plant Complex.

In a surprise announcement

President Marcos made an unexpected declaration that terminated the convertibility of gold and silver and introduced a new monetary system with the same value as one peso. Additionally, the legal currency value of gold and silver pieces worth 500 seneta each increased. The exchange rate for one Philippine peso was set at one US dollar. However, due to market fluctuations or government intervention, this rate changes frequently. The central bank or Treasury Department often made adjustments that affected the value of PHP relative to other currencies, such as the US dollar.

The peso is the second most widely used currency in the world after the dollar. Many nations, including Brunei, Indonesia, Malaysia, and Singapore, also use it as a global currency. Senetas were used as legal tender for domestic transactions as well as to pay taxes and fees collected by local governments on behalf of federal government organizations such as the Bureau of Internal Revenue (BIR) or the Bureau of Customs. Senetas were also used for payments abroad through conversion at official rates established by law (BOC).