MONEY

MONEY DEFINED….

• It is something generally accepted as a medium of exchange, a measure of value, or a

means of payment. – Merriam-Webster

• It is anything authorized by law to be generally accepted as legal tender, as a medium

of exchange, and a standard of value in payment of goods and services without
reference to the general standing of the person who offers it.
MONEY DEFINED….

• Money is the lawful token used in our society to pay goods, services, and debt.

• It is anything which is used as a medium of exchange and which is widely acceptable

for the payment of goods and services without reference to the general standing of the
person who offers it. Miranda(2004)
 MONEY

1 Medium of exchange

Legal tender 2

Measure of value
3
 MONEY

4 Means of payment

Standard of value 5
CHARACTERISTICS OF MONEY

Scarcity
Divisibility
Portability
Durability
CHARACTERISTICS OF
MONEY
Scarcity
It makes something valuable, and over-abundance makes it worthless. Scarcity
means rare or hard to find. This is based on the basic economic law of supply and
demand.

The harder a thing is to find, the more that thing becomes. This is the reason why
precious metals, especially gold and silver, deemed a good choice as a medium of
exchange. However, limited supply makes these metals impractical or too
expensive to use.
CHARACTERISTICS OF
MONEY
Divisibility
It is another feature that enables one to suit the medium of exchange to the kind of
transaction, big or small. Small units apply to small transactions and big units apply
to big transactions.

It refers to the quality of being broken down into smaller units. The property of
malleability of metals makes them desirable for coinage because they can be melted
and formed into different shapes and sizes and different denominations.
CHARACTERISTICS OF
MONEY
Portability

An ease in handling or carrying makes one thing desirable as a medium of

exchange.

This allows people to bring it with them anywhere they go to enter into a
transaction.

A piece of metal is easier to carry than a carabao. Paper money is more portable
than metals or even coins.
CHARACTERISTICS OF
MONEY
Durability
It means long lasting. Metal is almost indestructible that is why it became a
medium of exchange for a long time.

There are countries nowadays that use plastic polymer money in place of paper
money. Plastic is more durable than paper.

Philippine Coins are made of metals while paper bills are composed of 80% cotton
and 20% abacca.
ANNUAL REPORT W W W. R E A L LY G R E AT S I T E . C O M 2024

FUNCTIONS OF
MONEY
The basic functions of money:
To facilitate the exchange of goods and
services

To lessen the time and effort required to

carry on trade
FUNCTIONS OF MONEY

Medium of Exchange
Standard of Value
Store of Value
Means of Deferred Payment
Conveyance
FUNCTIONS OF MONEY
Medium of Exchange
The use of money to facilitate the transfer of goods and services and settle obligations has
made money the basic medium of exchange.

In the history of money, various commodities had been used as a medium of exchange.
Therefore, we can say that in those times, whatever commodity was used to effect transfer
could be considered “money”- cowries, wampums, and cattle.

Money, as a medium of exchange, can be used for exchange of goods and services.
FUNCTIONS OF MONEY
Standard of Value

Money is our measuring stick to measure the value or worth of something.

Goods, services, assets, liabilities, and net worth (equity or capital) are all measured in
terms of money.

As a standard of value, money measures the relative worth of goods and services. In short,
money is the common denominator, the basis for comparison.
FUNCTIONS OF MONEY
Standard of Value

The excess of income over expenses is usually saved. Our savings, usually in the form of
money, is stored either in the bank or at home for future use – that is the idea of store of
value.

The value needed in the future is stored. When we make investments in the form of
stocks, bonds, or other securities and fixed assets like land, or excess money is stored in
these assets. In case we need money in the future, we can sell them and produce the
money we need.
FUNCTIONS OF MONEY
Means of Deferred Payment

As legal tender, money is acceptable in payment of debts or liabilities. If payment is to be

made in the future, money becomes a means of deferred payment.

Deferred means postponed or held for future use. So long as prices remain stable, the
amount owed is what is paid, and the creditor is able to buy the same amount of goods or
services.
However, when prices rise, the amount owed will be able to buy less (creditors lose);
when prices go down, the amount owed will be able to buy more (creditors gain).
 FUNCTIONS OF MONEY

Conveyance
It refers to the means of transport or transfer.
In law (which finance uses), conveyance means the process of or
the documents effecting the transfer of property from one owner
to another. The said document is the money because it facilitates
transfer of ownership, while the process is the transfer of title or
ownership.
CLASSIFICATIONS
OF MONEY
PAPER MONEY
• The Chinese invented printing and the use of paper money during the
Tang Dynasty (618-906 AD).
• Mongolia was the second country to begin using paper money in the
11th century.
• The Bank of Sweden issued the first paper money in Europe in the
17th century.
PAPER MONEY
• The government issued paper money to represent certain quantities of
gold or silver kept by the government to cover what has been issued,
representative paper money.
• The was replaced with the term fiat money.
PLASTIC (POLYMER) MONEY
• Plastic money is actual cash made of super-resistant polymer film
(instead of paper).
• Polymer money feels like regular paper bill, but lasts longer.
• Australia was the first country to develop and use polymer notes in
general circulation in 1988 after significant research and development
done by the Commonwealth Scientific and Industrial Research
Organization (CSIRO) and the Reserve Bank of Australia.
 PLASTIC
MER) MONEY
 PLASTIC MONEY
It is the hard plastic cards used in everyday exchange transactions in place of
actual bank notes:

Credit Cards
Debit Cards
Cash Cards
Gift Card/Certificate
Store Card
Multi-currency Prepaid Card
PLASTIC MONEY
Credit Card

• Allows owners to buy products on credit from different stores and establishment, in
lieu of cash or money, except that it has a credit limit, that is, the maximum amount
that can be charged to the credit card.

• It bears a relatively higher rate of interest, but if the cardholder pays his balance in
full each moth (on or before the due date), no interest is charged.
Examples: American Express, Visa, MasterCard, and Discover
PLASTIC MONEY
Debit Card

• The bank where the account is maintained issues the debit card.

• Payments using this card are immediately charged to the cardholder’s bank account,
instead of paying the card at a later date.
PLASTIC MONEY
Cash Card

• It only allows withdrawal of money through an Automated Teller Machine (ATM).

• It can be used as a debit card as well.

• It is convenient in that the holder need to stay in line inside the bank to withdraw
money.
PREPAID CASH CARD
Gift Card/ Certificate

• A prepaid cash card that can be given as gift so that the recipients can choose what
they want as a gift.

• This card can be a specific prepaid cash card issued by the store where it can be used
for purchase.

• It can also be issued by financial institutions and can be used at any store, just like
credit card.

• Once fully used, it has no value at all.

PREPAID CASH CARD
Store Card

• It is like a credit card, generally issued by a particular store and can be used for
purchase in the same store.

• This is a simple credit granted by stores to encourage customers to spend more in

their store.
PREPAID CASH CARD
Multi-currency Prepaid Card

• An example of this card was launched by EastWest Bank last Sept. 30,2013,
Southeast Asia’s first multi-currency prepaid card.

• It can load up to six different currencies – US dollar, Euro, British pound, Hong Kong
dollar, Australian dollar, and Japanese yen.

• It can be used from all Visa-affiliated merchants here in the Philippines and abroad
regardless of the currencies loaded.
CLASSIFICATION OF
MONEY
• Full-bodied Money
• Representative full-bodied money
• Issued by government
• Token coins
• Representative token money
• Circulating promissory notes
• Issued by banks
• Circulating promissory notes issued by central bank
• Circulating promissory notes issued by other banks
• Demand deposits subject to check
FULL-BODIED MONEY

Money whose value as a

commodity for non-monetary
purposes is as great as its value
as money
REPRESENTATIVE FULL-BODIED MONEY

• Usually made of paper

• It has no significant value as a commodity, but it represents in circulating an amount

of metal with a commodity value equal to the value of the money.
GOLD CERTIFICATE
CREDIT MONEY OR FIAT MONEY

• Any money, except of representative full-bodied money, that circulates at a value

greater than the commodity value of the material from which it is made.

• It can also result as the issuing authority buys all the money material offered to it, but
at a price significantly below the monetary or face value of the money into which it is
transformed.
TYPES OF MONEY
ISSUED IN THE
PHILIPPINES

• Standard Money – Central Bank

Notes
TYPES OF MONEY ISSUED IN THE PHILIPPINES

• Representative Money – Philippine Treasury

Certificates 1903
TYPES OF MONEY ISSUED IN THE PHILIPPINES

• Convertible Representative Money – Philippine

Treasury Certificates 1903
TYPES OF MONEY ISSUED IN THE PHILIPPINES
• Fiat Money (old concept) – Japanese War Notes
TYPES OF MONEY ISSUED IN THE PHILIPPINES

• Fiat Money (current concept) – bangko sentral notes

• Token Coins – Metallic Coins
TYPES OF MONEY ISSUED IN THE PHILIPPINES

• Credit Money – Bangko Sentral Notes

GUERILLA NOTES
printed by local government units and banks using crude inks and materials
FORMS OF MONEY
• Commodity Money
• It has its own value other than using it as money.
• It has its own intrinsic value, the value of the
commodity itself.
• Example: shells, cattle
FORMS OF MONEY
2. Currency (Bills and Coins)

• The government of any country issues currency that is legal tender in the country,
• These bills and coins are in different denominations (the divisibility feature), minted
and printed, by the central bank of a country.
• Domestic currency can only be used in its country of origin.
3. CHECK
• It is generally used by businesses and persons in conducting business, as well as
personal transactions.

• It is a written order to a bank (drawee), by the person, who issues the check (maker or
drawer) to pay someone whose name is written on the face of the check (payee) a
certain amount of money on demand (upon presentation/immediately) or at a future
date (post-dated check).
PARTIES TO A CHECK
• Maker – the drawer or writer of the check
• Drawee – the bank which is order to pay the payee
• Payee – the one to whom the check is to be paid
Personal Check – issued by persons to be drawn against their own
current/checking account in the bank
Business Check
– a check issued by companies/businesses. It is drawn on the issuer’s
bank checking or current account. It is used for business transactions
Cashier’s Check
– it is issued by the bank against its own account ensuring availability
of funds. It is purchased with a fee from a bank that issues the check. It
can be signed by the bank cashier or any other bank official.
Certified Check
– it is issued by the bank certifying that the account of the person issuing it
has available funds (just like any ordinary personal check). The bank certifies
the availability of fund by earmarking the corresponding amount on the
check which will only be used to pay the check itself.
Traveler’s Check
- it is a fixed amount check which is preprinted, allowing the signatory of the
financial institution who is selling the traveler’s check to make an
unconditional payment to whoever has the traveler’s check in his possession.
 Parties to a traveler’s check
• Issuer or obligor – the company issuing or producing the traveler’s check
• Agent – the financial institution who sells the traveler’s check.
• Purchaser – the person buying the traveler’s check and will use it as a form
of money
• Payee – the seller of goods or services to be paid with the traveler’s check.
4. Bank Draft
• is issued by banks against their own account
• Ensure availability of funds without any need to check on the
character of the person issuing the check
• Prevalent in the UK
Types of Bank Draft
• Demand Draft (sight draft) – payable on demand or upon sight
• Time Draft – payable sometime in the future like post-dated check
• Local Draft – issued by a bank in a single country
• International Draft – used globally or internationally
• Automatic Bank Draft (ABD)- takes out money from the payer’s account
electronically at a regular intervals
Money Order
– it refers to the instrument issued generally by the post office of a country
ordering a sum of money to be paid to the payee indicated on the instrument
itself. This under R.A. 7354, an Act Creating the Philippine Postal
Corporation under Art. II, Sec. 6.
Warehouse Receipt (WR)
• It covers all warehouses, whether public or private, bonded or not
• A document of title to goods
• A proof of the possession or control of the goods
• Authorizing or purporting to authorize the possessor of the documents to
transfer or receive, either by endorsement or by delivery goods
represented by such document
Warehouse Receipt
SECURITY
FEATURES OF
PHILIPPINE
MONEY
THE PHILIPPINE
NEW
GENERATION
CURRENCY
COIN SERIES