This article describes the transformation of the Philippine currency system from a gold exchange standard to a dollar exchange standard during the first half of the twentieth century. During the American colonial period, Philippine foreign trade was closely bound to the United States. In terms of domestic investment, however, it was domestic Filipino or Spanish entrepreneurs and landowners who dominated primary commodity production in the Philippines, rather than American investors. How were both this US-dependent trade structure and the unique production structure of domestic primary commodities reflected in the management of the Philippine currency system? To answer this question, this article first discusses the introduction of the gold standard system in the Philippines in the early twentieth century. Second, the de facto conversion of the Philippine currency system from the gold standard to the dollar exchange standard in the 1920s is described, together with the mismanagement of the currency reserves and the debacle of the Philippine National Bank that functioned as the government depository of the currency reserves in the United States. Third, the formal introduction of the dollar exchange standard during the Great Depression is outlined, a clear example of the dependency of the Philippine currency system on the US in the 1930s.
* This is a revised version of the paper presented at the workshop “Multiple Monies in Asia and Africa” held at the Institute of Oriental Culture, University of Tokyo on 30 June and 1 July 2008. The author wishes to thank Professors Akinobu Kuroda, Willem Wolters and George Bryan Souza for their useful comments.