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* SECOND DIVISION.
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PARAS, J.:
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MALACANANG
RESIDENCE OF THE PRESIDENT OF THE PHILIPPINES
MANILA
CHANGING THE PAR VALUE OF THE PESO FROM US$0.50 to US$0.2564103 (U.S.
DOLLAR OF THE WEIGHT AND FINENESS IN EFFECT ON JULY 1, 1944).
Pursuant to the power vested in me by Republic Act Numbered Two Hundred and Sixty
five, and in conformity with the provisions of all executive and international agreements
subscribed to and ratified by the Republic of the Philippines, and upon proposal of the
Monetary Board with the unanimous con
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x x x in the opinion of the Court, said Executive Order No. 195, contrary
to the contention of the plaintiff, has not officially devalued the
Philippine peso but merely modified the par value of the peso from
US$.50 to US$0.2564103 (U.S. Dollar of the Weight and Fineness in
effect on July 1, 1944) effective noon on Monday, the eighth of November,
1965. Said Executive Order certainly does not pretend to change the gold
value of the
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currence of the members of said Monetary Board, I, Diosdado Macapagal, President of the
Philippines, do hereby modify the par value of the peso from US$0.50 to US$0.2564103
(U.S. dollar of the weight and fineness in effect on July 1, 1944), effective noon on Monday,
the eighth day of November, 1965.
Done in the City of Manila, this 6th day of November in the year of Our Lord, nineteen
hundred and sixtyfive.
DIOSDADO MACAPAGAL
President of the Philippines
By the President:
SALVADOR L. MARINO
Acting Executive Secretary
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2 Be it noted that the gold equivalent of par value of the Philippine peso
is fixed by law and the manner in which changes in the par value can be
effected is likewise specifically provided for by the state. Secs. 48 and 49 of
the Central Bank (R.A. No. 265, as amended) read:
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(a) When the existing par value would make impossible the
achievement and maintenance of a balanced and sustainable
growth of the economy without:
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3 In Gonzalo L. Manuel & Co., Inc. v. Central Bank, L21789, April 30,
1971, 38 SCRA 533, We ruled:
Par value and rate of exchange are not necessarily synonymous. The first,
variously termed legal exchange rate or par of exchange, is the official rate of
exchange, established by a government, in contrast to the free market rate. It
signifies the amount it takes of one currency (for example, based on gold) to buy a
unit in another currency (also based on gold) that is, how many pieces of the one
unit (or their gold content) are necessary to equal the gold content of the other unit
x x x. The par value of a currency is the value as officially defined in terms of
gold or, under the silver standard, where there was such a standard, in terms of
silver. The par of exchange therefore applies only between countries having a
fixed metallic content for their currency unit. It would be possible to define a
currencys par value in terms of another currency such as the dollar or pound
sterling, but usage confines the meaning of par to the official value in terms of
gold.
The rate of exchange or exchange rate, on the other hand, is the price, or
the indication of the price, at which one can sell or buy with ones own domestic
currency a foreign currency unit. Normally, the rate is determined by the law of
supply and demand for a particular currency. The price of one currency in terms
of another is known as the rate of exchange. Thus, the rate of exchange in New
York or London has at various times been $4.86, $4.03, $2.89, etc. The rate is the
amount of American money required to pay 1. There is a difference between par
value and rate of exchange: the first is defined by law, and (as in the case of the
peso) is based upon its gold content. The second is conditioned by prevailing
economic factors which bear upon the demand for a particular currency and its
availability in the market.
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