Trade among the early Filipinos and with traders from the neighboring islands was conducted through barter. The inconvenience of barter later led to the use of some objects as a medium of exchange. Gold, which was plentiful in many parts of the islands, invariably found its way into these objects that included the piloncitos, small bead-like gold bits considered by the local numismatists as the earliest coin of the ancient Filipinos, and gold barter rings.
Spanish Colonial Period
The Spanish period saw a multitude of currencies circulating in the Philippines, the most popular being the Mexican peso. However, other currencies like the Alfonsino peso, Mexican cob coins (locally called hilis kalamay), other currencies and coins from other Spanish colonies were also used. Many of the coins that reached the Philippines came because of the Manila Galleon which dominated trade for the next 250 years. These were brought across the Pacific Ocean in exchange for odd-shaped silver cobs, which are also known as macuquinas. Other coins that followed were the dos mundos or pillar dollars in silver, the counterstamped coins and the portrait series, also in silver.
In the 18th century, the Royalty of Spain authorized the production of copper coins by the Ayuntamiento (Municipality) of Manila in response to the acute shortage of fractional coins. These were called barrillas and first appeared in 1728.
In 1852, the peso was introduced at a rate of 8 reales = 1 peso. However, not until 1864 did the Philippines decimalize and the real cease to circulate.
Copper coins were issued in denominations of 1 octavo (⅛ real), 1, 2 and 4 quartos (¼, ½ and 1 real). Coins from other Spanish colonies that reached the Philippines were counterstamped. From 1828, the word "MANILA" was stamped on the coins. In around 1830, the machinery of the "MANILA" counterstamp broke, so, in 1832, the king's initials "F 7" were used, changing in 1834 to those of his successor, "YII". When Spain recognized its former Latin American colonies in 1837, the practice of counterstamping stopped.