In this age of electronic payments where thousands of monetary considerations are transferred, conveyed and negotiated through money substitutes such as checks, ATM cards, credit cards and electronic transfers, and while no actual cash changes hands, the monetary value of these transactions is denominated in terms of a specific currency. This is done by stipulating the currency system to govern the transaction such as Philippine pesos, US dollars or other jurisdictions’ currencies.
In the Philippines, the unit of monetary value is the Philippine “peso” (Sec. 48, R.A. No. 7653). Other countries however also make use of the “peso” to identify their currencies like Argentina, Chile, Colombia, Cuba and Mexico. It is thus common in legal contracts to designate the monetary consideration in “Philippine currency” or “Philippine pesos”, to distinguish such peso from the pesos of other countries. The use of the word “Philippine” in these contracts is not simply a matter of form. It serves a legal and specific purpose. It avoids confusion as to the currency being referred to.
Previously, there was a law, Republic Act No. 529, which was enacted in 1950, which required that all monetary obligations in the Philippines shall be settled in the Philippine currency which is legal tender in the Philippines. This law was however repealed in 1996 by Republic Act. No. 8183, by virtue of which the parties may now agree that the obligation or transaction shall be settled in any other currency at the time of payment. The parties are now free to stipulate payment in foreign currencies, but similar to the comment above, it is not sufficient to just mention “dollars”, for example, but there is a need to specify as well the currency system referred to like US dollars, because there are also other jurisdictions using “dollars” for their monetary value like Hongkong, Singapore and Australia.
Each currency system issues currencies measured by their designated monetary values. In Philippine law, the word “currency” is defined as “meaning all Philippine notes and coins issued or circulating in accordance with the provisions of this Act”(Sec. 49, R.A. No. 7653). Philippine currency has these characteristics:
1. The Bangko Sentral is its sole issuer and no other person, or entity, public or private, may put into circulation notes, coins or any object which might circulate as currency, and which are thereby considered as counterfeit. As may be noted, counterfeiting is a criminal offense.
2. Notes and coins issued by the Bangko Sentral shall be liabilities of the Bangko Sentral and may be issued only against, and in amounts not exceeding, the assets of the Bangko Sentral. These notes and coins shall be a first and paramount lien on all assets of the Bangko Sentral.
3. All notes and coins issued by the Bangko Sentral shall be fully guaranteed by the Government of the Republic of the Philippines, and such guarantee shall be stated on the face of the notes. The notes shall bear the signatures, in facsimile, of the President of the Philippines and of the Governor of the Bangko Sentral.
4. All such notes and coins shall be legal tender in the Philippines for all debts, both public and private. The term “legal tender” means it is that currency which has been made suitable by law for the purpose of a tender of the payment of debts. In consonance with these tenets, all forms of currency issued by Bangko Sentral must be accepted when offered as payment of debts, public or private (Banking Laws of the Philippines, Vol. I, Bangko Sentral ng Pilipinas, p. 231).
The above comments are the personal views of the writer.
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