Wednesday, July 09, 2008

paper money

Sometime in the not so distant past of the now ruling Malacañang occupant, there was both an interesting and distressing little show proudly staged at the Hall of Congress by no less than the incumbent national leadership. It was an ominous display of governing folly that people preferred to forget, the sooner the better. “Bankang Papel”—this was the title of that pitiful episode that became the big joke of those days.

A boat made of paper is in reality nothing more than paper. In substance, paper is the same whether it is used for writing, for wrapping, for going to the little room. A paper boat or paper car, a paper doll or paper house and the like, remain paper. Whatever be their size or form, their color or fold, paper they all are and remain. The same is true of money made of paper.

The paper money of the Philippines comes in but one and the same size—although with different colors and various drawings made thereon. There is nevertheless one distinct modification in everyone of them: Each has a printed amount from twenty to one thousand pesos. But exactly the same material and measurement they remain. Except for their printed amount and given color, the same paper with the same size they all remain.

Of course, there is the government claim plus official guarantee that every piece of paper money is equivalent to the value printed thereon. Really? It might be good for someone to personally know how true is such a claim, how real is the said guarantee. How? Let him or her bring a paper money supposedly worth one thousand pesos, to the Central Bank of the Philippines. Let him or her then ask for the exchange of the paper bill into its value equivalent. It would be interesting what the Bank employee would say—if any. It would be also intriguing to know what the Bank would give in exchange for the paper money—if any. In all probability, anyone who dares make such a venture would be looked down upon as rather strange if not altogether suffering from dementia praecox.

Things brings to fore the ingrained difference of coins—be these made of brass or copper, silver or gold, or mixtures of such metals. Unlike paper money, every coin carries its own distinct value inherent to the metal used at the time of its minting. This is why while Philippine paper money has exactly the same size no matter the value appended thereto; coins become bigger as they increase in value. Hence, v.g., the 5-peso coin is bigger than the 1-peso coin, which in turn is bigger than the 25-centavo coin. In fact, metals in general, appreciate in value in the course of time. That is why, as a concrete example, a 5-peso coin of 1975 is already equal to no less than three 5-peso smaller coins in 1997!

None of the above is meant to demean paper money—much less to question the monetary system of the country. All the above are meant only to call attention to the truth of “perang paper” vis-à-vis the reality of “banking paper”.

9 July 2008