Decolonizing money Central banks in the Philippines and Indonesia

Abstract

This chapter compares the monetary systems of the Philippines and Indonesia and the establishment of central banks in both countries. The aim of this comparison highlights particular aspects of each country's financial policies and woes. Monetary organization and economic development took divergent paths in the two countries. While Indonesia succumbed to economic chaos and runaway inflation in the late 1950s and early 1960s, the Philippines saw a much more orderly monetary and economic development during the 1950s. The exchange and import controls of the 1950s strengthened the state's role in determining who could get dollar allocations. The Philippines central bank governor withstood government pressure to loosen the reigns of money supply and credit creation. In the late 1950s and early 1960s the political scene was dominated by a contest for power and control over the course of the Indonesian revolution.Keywords: central banks; economic development; Indonesian revolution; monetary systems; Philippines