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Bangko Sentral Ng Pilipinas

Bangko Sentral Ng Pilipinas

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Published by: maczkie on Dec 05, 2009
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Bangko Sentral ng Pilipinas
The
Bangko Sentral ng Pilipinas
(
BSP
) is the central bank of theRepublic of the Philippines. It was rechartered on July 3, 1993, pursuant to the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993. The BSP was established on January 3,1949, as the country’s central monetary authority.
History
In 1900, the First Philippine Commission passed Act No. 52, which placed all banks under theBureau of the Treasury and authorizing the Insular Treasurer to supervise and examine banks andall banking activity. In 1929, the Department of Finance, through the Bureau of Banking, took over bank supervision.By 1933, a group of Filipinos had conceptualized a central bank for the Philippines. It came upwith the rudiments of a bill for the establishment of a central bank after a careful study of theeconomic provisions of theHare-Hawes-Cutting Act, which would grant Philippineindependence after 12 years, but reserving military and naval bases for theUnited Statesandimposing tariffs and quotas on Philippine exports. However, the Hare-Hawes-Cutting Act would be rejected by the
at the urging of Manuel L. Quezon. This Senate thenadvocated a new bill that won President Franklin D. Roosevelt's support, this would be the Tydings -McDuffie Act, which would grant Philippine independence onJuly 4, 1946. During theCommonwealth period, the discussion about a Philippine central bank that would promote price stability and economic growth, continued. The country’s monetary system thenwas administered by the Department of Finance and the National Treasury. The Philippines wason the exchange standard using the US dollar, which was backed by 100 percent gold reserve, asthe standard currency.In 1939, as required by the Tydings-McDuffie Act, the Philippine legislature passed a lawestablishing a central bank. As it was a monetary law, it required the approval of the UnitedStates president; Roosevelt did not give his. A second law was passed in 1944, during theJapanese occupation, but the arrival of the American liberation forces aborted itsimplementation.Shortly after President Manuel Roxasassumed office in 1946, he instructed Finance Secretary Miguel Cuaderno, Sr. to draw up a charter for a central bank. The establishment of a monetaryauthority became imperative a year later as a result of the findings of the Joint Philippine-American Finance Commission chaired by Cuaderno. The Commission, which studiedPhilippine financial, monetary, and fiscal problems in 1947, recommended a shift from the dollar exchange standard to a managed currency system. A central bank was necessary to implementthe proposed shift to the new system.
 
Original BSP Seal (1949-1993)BSP Official seal of 1993Roxas then created the Central Bank Council to prepare the charter of a proposed monetaryauthority. It was submitted toCongressin February 1948. By June of the same year, the newly- proclaimed PresidentElpidio Quirino, who succeeded President Roxas, affixed his signature onRepublic Act(RA) No. 265, the Central Bank Act of 1948. OnJanuary 3, 1949, the Central Bank  of the Philippines was formally inaugurated with Miguel Cuaderno, Sr. as the first governor. Themain duties and responsibilities of the Central Bank were to promote economic development andmaintain internal and external monetary stability.Over the years, changes were introduced to make the charter more responsive to the needs of theeconomy. On November 29, 1972, Ferdinand Marcos's Presidential Decree No. 72 amdended Republic Act No. 265, emphasizing the maintenance of domestic and international monetarystability as the primary objective of the Central Bank. The Bank's authority was also expanded toinclude regulation of the entire financial system of the Philippines and not just supervision of the banking system. In 1981, RA 265, as amended, was further improved to strengthen the financialsystem, among the changes was the increase in the capitalization of the Central Bank fromPs10million to Ps10 billion.In the1973 Constitution, the Interim
 Batasang Pambansa
(National Assembly) was mandated toestablish an independent central monetary authority. Later, Presidential Decree No. 1801designated the Central Bank of the Philippines as the central monetary authority (CMA). Yearslater, the 1987 Constitution adopted the CMA provisions from the 1973 Constitution that wereaimed essentially at establishing an independent monetary authority through increasedcapitalization and greater private sector representation in the
Monetary Board
.In accordance with a provision in the 1987 Constitution, PresidentFidel V. RamossignedRepublic ActNo. 7653, otherwise known as the New Central Bank Act, into law onJune 14, 1993. The law provides for the establishment of an independent monetary authority to be knownas the Bangko Sentral ng Pilipinas, its primary objective being the maintenance of price stability.This objective was only implied in the old Central Bank charter. The law also gives the Bangko
 
Sentral fiscal and administrative autonomy which the old Central Bank did not have. OnJuly 3,1993, the New Central Bank Act took effect. Within the complex of the Bangko Sentral ngPilipinas, the nation's central monetary authority, resides a numismatist's haven - the Museo ngBangko Sentral ng Pilipinas. Inaugurated on January 3, 1999, as part of the celebration of the 50years of central banking in the Philippines, the Museo showcases the Bank's collection of currencies.As repository and custodian of the country's numismatic heritage, the Museo collects, studies and preserves coins, paper notes, medals, artifacts and monetary items found in the Philippinesduring its different historical periods. These collections have been placed on permanent displayat the Museo.Designed to "walk" the visitor through a number of galleries, individually dedicated to a specifichistorical period of the country, the Museo visually narrates the development of the Philippineeconomy, parallel to the evolution of its currency. Complementary paintings from the BSP artcollection, together with chosen artifacts, enhance each gallery.A panoramic memorabilia of 50 years of central banking in the Philippines, showcases thestrides made in bringing about price stability, to sustain economic growth in the country. Theexhibition hall also carries the busts of the governors of the Central Bank/ Bangko Sentral.OnJuly 31,2008, the Central bank entered into atax compromise agreement with theBureau of  Internal Revenue (BIR) and settled its P 3.6 billion. It represents 40% of the bank's original P 9 billion tax obligation, for unpaidgross receipt taxes(GRT) and finalwithholding taxeson government securities sold from 2004 to 2007.
Roles and responsibilities
As prescribed by the New Central Bank Act, the main functions of the Bangko Sentral are:1.Liquidity Management, by formulating and implementing monetary policy aimed atinfluencing money supply, consistent with its primary objective to maintain pricestability,
2.
Currency issue; the BSP has the exclusive power to issue the national currency. All notesand coins issued by the BSP are fully guaranteed by theGovernment and are considered legal tender  for all private and public debts,
3.
Lender of last resort, by extending discounts, loans and advances to banking institutionsfor liquidity purposes,4.Financial Supervision, by supervising banks and exercising regulatory powers over non- bank institutions performing quasi-banking functions,5.Management of foreign currency reserves, by maintaining sufficient internationalreserves to meet any foreseeable net demands for foreign currencies in order to preservethe international stability and convertibility of the Philippine peso,
6.
Determination of exchange rate policy, by determining the exchange rate policy of thePhilippines. Currently, the BSP adheres to amarket-oriented foreign exchange rate  policy, and7.Being the banker, financial advisor and official depository of the Government, its political subdivisions and instrumentalities and GOCCs.

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