Today in Philippine History, April 6, 1828, the King of Spain issued a decree establishing a public bank in the Philippines

Thursday April 05, 2012 ()

On April 6, 1828, King of Spain, Ferdinand VII, issued a decree establishing a public bank in the Philippines to meet the requirements of increasing commerce and trade in the islands.

Presently known as Bank of the Philippine Islands, it is originally called El Banco Español Filipino de Isabel 2 named after Queen Isabela II, the daughter of King Ferdinand VII.

Pesos Fuertes
(Pesos Fuertes)

The bank is first in the Philippines and Southeast Asia.

The royal decree establishing the Banco Español Filipino also gave it the power to print Philippine currency.

The first time the Philippine peso was printed in the country were originally called pesos fuertes (PF), or "strong pesos".

First printed on May 1, 1852, they were redeemable at face value for gold or silver Mexican coins. Before 1852, a multitude of currencies were used, most notably the Mexican peso.

The first deposit with the bank was also done on that day by a man named Fulgencio Barrera. Three days later, a Chinese man named Tadian became the first borrowing client of the bank after the bank discounted to him a promissory note amounting to ten thousand pesos fuertes.

Before the establishment of El Banco Español Filipino de Isabel 2, the functions of banks were performed, though on a limited scale, by the obras pias (Spanish for "pious works").

Obras pias were an accumulation of bequests whose donors had specified that the funds be used for charitable, religious and educational purposes.

Some of the funds were managed by confraternities that invested capital in secular activities like underwriting cargoes for the galleon trade.

Reference: Philippine News Agency archives


4,808

Comments (Today in Philippine History, April 6, 1828, the King of Spain issued a decree establishing a public bank in the Philippines )