Monetary Standard
Chapter 2: History of Philippine Currency and Philippine Monetary Standards
Source: Financial System, Market & Management- the basics-
Laman, Rose Marie et al., 2008
Nature of the Monetary Standard • A country is said to have established a monetary standard or system when it sets down rules to govern the creation of money and control the quantity in circulation whether the rules are strictly followed or are to be accepted simply as guidelines for its own money managers • Standard money is the monetary unit recognized by the government as the ultimate basic standard of value upon which all other kinds of money are convertible. • In the Philippines, the monetary system is the managed currency system, and the monetary unit is the Peso.
A. Commodity Standard • is a monetary system in which the purchasing power or value of the monetary unit is equal to the value of a designated quantity of a particular commodity or set of commodities • sometimes called full-bodied money because it is one hundred percent (100%) backed-up by gold or silver reserves 1) Monometallic Standard • subdivided into: gold and silver standard • gold and silver standard are further subdivided into: coin standard, bullion standard and exchange standard a. Gold coin standard – a country is said to be in the gold coin/silver standard when the government allows the conversion of gold bullion into coins which are freely obtained by the citizens of the country in exchange for other forms of money b. Gold bullion standard- system wherein the monetary unit or standard money of the country is expressed in a definite weight and fineness of gold in bar or bullion form c. Gold exchange standard- the monetary unit of the country is expressed in terms of gold. Gold does not have to be coined or used as bullions but the monetary unit of the country must be defined in terms of specific quantity of gold ( In the Philippines, the
Source: Financial System, Market & Management- the basics-
Laman, Rose Marie et al., 2008
Nature of the Monetary Standard • A country is said to have established a monetary standard or system when it sets down rules to govern the creation of money and control the quantity in circulation whether the rules are strictly followed or are to be accepted simply as guidelines for its own money managers • Standard money is the monetary unit recognized by the government as the ultimate basic standard of value upon which all other kinds of money are convertible. • In the Philippines, the monetary system is the managed currency system, and the monetary unit is the Peso.
A. Commodity Standard • is a monetary system in which the purchasing power or value of the monetary unit is equal to the value of a designated quantity of a particular commodity or set of commodities • sometimes called full-bodied money because it is one hundred percent (100%) backed-up by gold or silver reserves 1) Monometallic Standard • subdivided into: gold and silver standard • gold and silver standard are further subdivided into: coin standard, bullion standard and exchange standard a. Gold coin standard – a country is said to be in the gold coin/silver standard when the government allows the conversion of gold bullion into coins which are freely obtained by the citizens of the country in exchange for other forms of money b. Gold bullion standard- system wherein the monetary unit or standard money of the country is expressed in a definite weight and fineness of gold in bar or bullion form c. Gold exchange standard- the monetary unit of the country is expressed in terms of gold. Gold does not have to be coined or used as bullions but the monetary unit of the country must be defined in terms of specific quantity of gold ( In the Philippines, the