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The oldest bank in the Philippines is the Bank of the Philippine Islands (BPI). Its history dates back in 1828 when King Ferdinand VII of Spain issued a decree to establish a public bank in the Philippines.
It took twenty-three years before the bank was actually established. The man who was behind the establishment of the oldest bank in the Philippines was the Philippine Governor and Captain-General Antonio de Urbiztondo y Eguia.
About Antonio de Urbiztondo y Eguia
Antonio de Urbiztondo was a marquis in Spain who was chosen as governor-general in the Philippines in 1850. During his term, many administrative innovations took place. Six years later, he was called back to Madrid to take on a bigger position, as Spain's new minister of war.
He held the highest-ranking government position in the Philippines. He ask for support from the Junta de Autoridades (a committee composed of civil and ecclesiastical officials) in order to approve the bank's statutes and by-laws. In August 1, 1851, the Junta approved the bank's statutes and by-laws. But the Spanish Crown had confirmed such approval.
"El Banco Español Filipino de Isabel 2" - the first name of the oldest bank in the Philippines
The name of bank was "El Banco Español Filipino de Isabel 2" (in English translation: "The Spanish Filipino Bank of Isabel II). This was to honor Isabella II, the queen of Spain and the daughter of King Ferdinand VII.
The office of the bank was established at the Royal Custom House, called Aduana (which is now called Intramuros). Intramuros was the original Manila, a city resembled as European-style because it was enclosed by strong and huge stone walls.
Organizational Structure of the Oldest Bank of the Philippines
Jose Maria Tuason and Fernando Aguirre were the first managers of the bank. They took turns as managing director every year. The bank's highest policy-making board members were mainly Spanish civil and ecclesiastical officials. Another member was a businessman whom the Spanish Crown chosen to represent the business community of Manila. This prominent businessman was Antonio de Ayala of Casa Roxas, predecessor of Ayala y Cia, which is now Ayala Corporation.
Issuance of Paper Money
Another royal decree was created that authorized the bank to print and issue paper money. This was the precursor of Central Bank of the Philippines' currency-issuing authority during the post-war. The present central bank, the Bangko Sentral ng Pilipinas (the official issuer of Philippine money), just started to operate in 1949.
The bank issued bank notes that were called "pesos fuertes" which means "strong pesos". The Philippines' first paper money had the issue date May 1, 1852 and could be redeemed in Mexican coins in silver or gold. The first paper money bore the name of the bank ""El Banco Español Filipino de Isabel 2" and the portrait of Queen Isabella II.
It was recorded in May 1, 1852 the first transaction of the bank, which was a lending transaction. A Chinese man named Tadian was the first client who borrowed money from the bank. The bank gave him a promissory note amounting to 10,000 pesos fuertes. After three days, the bank gained its first depositor.
Change of Name of the Oldest Bank in the Philippines
In 1869, the bank renamed as El Banco Español Filipino when a revolution took place which overthrew Queen Isabella II. In 1892, the bank's office was transferred in Binondo due to the economic inactivity of the former office.
Binondo, Manila was an active business center. Chinese people dominated the retail businesses in Manila while British businessmen mostly operated the export-import business. The place was a profitable source of new businesses and opportunities for El Banco Español Filipino.
Dependent Authorization of the Bank with the Spanish Crown
The oldest bank in the Philippines is closely linked and under the authority of the Spanish Crown. The bank couldn't its first branch without the authorization of the Spanish Crown. It was in 1896 when the Spanish Crown issued a royal order for the bank to open branches.
Evolution of the bank's name, Bank of the Philippine Islands (BPI)
In 1912, El Banco Español Filipino was renamed into Bank of the Philippine Islands (BPI). Its Spanish version "Banco de las Islas Filipinas" was used until decades later. Spanish remained as one of the Philippines' official languages up to 1987.
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