The Philippine Islands were acquired by the United States in 1899 as part of a treaty with Spain ending the Spanish-American War of the previous year. A military government was replaced with a civil administration in 1901, and one of its first tasks was to sponsor a new coinage that was compatible with the old Spanish issues, yet was also legally exchangeable for American money at the rate of two Philippine pesos to the U.S. dollar.

The resulting coins were introduced in 1903 and bear the identities of both the Philippines (Filipinas in Spanish) and the United States of America. Following Spanish custom, the peso was divided into 100 centavos. A dollar-size coin valued at one peso was the principal issue in this series, but silver fractions were also minted in values of 50, 20, and 10 centavos. Minor coins included the copper-nickel five-cent piece, as well as one-centavo and half-centavo coins of bronze.

A rise in the price of silver forced the reduction of the fineness and weight for each silver denomination beginning in 1907, and subsequent issues are smaller in diameter. The smaller size of the new silver issues led to confusion between the silver 20-centavo piece and the copper-nickel five-centavo piece, resulting in a mismatching of dies for these two denominations in 1918 and again in 1928. A solution was found by reducing the diameter of the five-centavo piece beginning in 1930.

In 1935, the Commonwealth of the Philippines was established by an act of Congress, and a three-piece set of commemorative coins was issued the following year to mark this transition. Despite the popularity of United States commemoratives at that time, these sets sold poorly, and thousands remained within the Philippine Treasury at the onset of World War II. The commonwealth arms were adapted to all circulating issues beginning in 1937.

The advance on the Philippines by Japanese forces in 1942 prompted removal of much of the Treasury's bullion to the United States. More than 15 million pesos' worth of silver remained, mostly in the form of one-peso pieces of 1907 through 1912 and the ill-fated 1936 commemoratives. These coins were hastily crated and dumped into Manila's Caballo Bay to prevent their capture. Partially recovered after the war, these coins were badly corroded from their exposure to saltwater, adding further to the scarcity of high-grade prewar silver coins.

The Philippines became an independent republic on July 4, 1946, ending a historic and colorful chapter in U.S. history and numismatics.