Marcos Gold Coin

 

Today, I chanced upon a listing in a Facebook group for numismatists selling a commemorative gold coin minted by the Central bank in 1975. The coin features former president Marcos Sr. which is interesting because I saw in the news a few days ago that a coin featuring Trump was just issued in the US and it was the first time a sitting US president was featured on a coin in a century.

Corazon Aquino also had a gold coin issued in 1992 (this may have been after her presidency) to commemorate 6 years of democracy restored since 1985. How are we enjoying that democracy?

What made the listing for the marcos gold coin special was that it came with the original receipt. Unfortunately, it was hard to decipher the handwriting. But in the end, I was able to deduce that the listing featured two coins, one proof and another one that isn't and that the price was 1000 pesos for the non proof coin and 1350 pesos for the proof coin.

The face value of the coin is 1000 pesos so the non proof coin was sold at face value while the proof coin cost 35% more.

The reason it caught my attention was because I always want to compare how much the present value is of gold purchased in the past.

According to Numista, this coin has 8.955 grams of pure gold content. And just the bullion value (without any collector's premium) is already worth about 80,000 pesos.

In October 1975, the spot price of 8.955 grams of pure gold would have been between approximately $39.59 and $41.72

If you paid ₱1,000 PHP for that gold in October 1975, you paid a massive premium of approximately 237.40% above the actual market value.

At that time, we still maintained a peg to the US dollar at ₱7.25 per USD. This means that the average value of that amount of gold was approximately ₱296.38 during that time.

If you paid ₱1,000 for that gold coin in October 1975, you paid a massive premium of approximately 237.40% above the actual market value.

According to this article, a kilo of rice back in 1975 was about 2 pesos and if we are to use 50 pesos as the cost of a kilo of rice today, the cost of rice has risen by 2,400% from 1975 to today. The cost has multiplied by exactly 25 times!

Now let's see how much that ₱1,000 investment made on a gold coin back in 1975 is worth today to see if it managed to outpace the 2,400% rice cost inflation.

It turns out the 1975 Marcos gold coin purchase completely outran the 2,400% inflation. Despite paying a massive 237% premium at the time, the value of the investment has grown exponentially.

Today, the total nominal growth of the value of the coin is at 7,927% (the value multiplied by more than 80 times versus rice inflation at 25 times).