The Japanese Peso is considered invasion money and was officially known as Southern Development Banknotes. The Japanese military authority issued this currency to replace local currency after Japan invaded countries and colonies in World War II.
This was done under the authority of the Japanese government, which passed laws establishing the Wartime Finance Bank and the Southern Development Bank. The Wartime Finance Bank primarily financed a wide range of ventures, including hydroelectric generators and power plants. The Southern Development Bank primarily dealt with the currency and financial matters of the countries that were captured.
Why Were Japanese Pesos Issued?
The Philippines had been American territory since control of the region was taken from the Spanish in 1898. Transition to independence had begun with the passage of the Tydings–McDuffie Act in the U.S. Congress. This created a new constitution for the Philippines, and the island nation became known as the Commonwealth of the Philippines. The new country had its own coinage and currency as dictated by the U.S. Congress.
On December 8, 1941, the Japanese invaded the Philippines. When the Japanese gained control of the Philippines later, in December of 1941, the military confiscated all hard currency from the government and civilians. It is estimated that they seized more than $20.5 million U.S. dollars and local cash. An unknown amount of foreign currency and bullion were also confiscated. Japan used the money that was confiscated to purchase raw material, food, and weapons to supply its war machine during World War II.
They replaced the confiscated currency with locally printed notes bearing a proclamation that they were for military use and bore the name of the Imperial Japanese government. This practice was also instituted in Malaya, Singapore, North Borneo, Sarawak, Brunei, Burma, Dutch East Indies (or the Netherlands), and Oceania (British New Guinea, the Solomon and Gilbert Islands, and several small island outposts).
Under the occupation of the Japanese government, The Second Philippine Republic was created. President José P. Laurel, a puppet of the Japanese government, outlawed possession of any hard currency. This was referred to as guerrilla currency. Additionally, he declared a monopoly on the issuance of any money. Any citizen found in possession of guerrilla notes would be arrested and possibly executed.
Although some notes declared "promises to pay the bearer on demand," Philippine citizens realized that this currency was useless. Many of the locals referred to them as "Mickey Mouse Money." When the Japanese were overthrown in the Philippines, tons of these paper notes were burned.
Before they left, Japanese troops destroyed bank records and any remaining currency. However, large amounts of these currencies were obtained by the Allied forces and local civilians. At the end of the war, many were kept and are now available to collectors.
After the Japanese confiscated the hard currency, they replaced it with fiat currency. Unfortunately, inflation ravaged the Philippine economy. This led to the Japanese government issuing several series of Japanese invasion money in the Philippines:
- 1, 5, 10, and 50 Centavos
- 1, 5, and 10 Pesos
1943 Issue of Replacement Notes
- 1, 5, and 10 Pesos
- 100 and 500 Peso
- 1,000 Peso
Government Printed Counterfeit Notes
The United States government counterfeited notes throughout the war in an attempt to destabilize the local economy in the Philippines. This was an attempt to demoralize the occupying Japanese forces and to give the Philippine guerrilla soldiers a supply of money to finance their underground war.
However, this was not as easy as it sounds. First, the United States government had to locate a supply of plants native to Japan in order to manufacture a similar paper. Unfortunately, that supply was exhausted rather quickly. Manufacturing of counterfeit notes was then transferred to Australia.
Counterfeit Notes Printed
The United States government produced the following counterfeit notes:
- 10 Peso notes: 5 Million
- 5 Peso notes: 3 million
- 1 Peso notes: 500,000
- 50 Centavos notes: 500,000
What Is a Japanese Peso Worth Today?
Since these notes were printed in large volumes, compared to the small population of the Philippine Islands, the initial supply was very plentiful. At the end of World War II, many of the notes were burned or thrown in the garbage. Many people saved these notes as a memento. Therefore, well-circulated notes can be obtained for a couple of dollars, and crisp uncirculated notes can be purchased for between ten and twenty dollars.