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The Original Seal of the Central Bank of the Philippines was designed by Dan
Zamora of Crispulo Zamora & Sons based on the ideas suggested to him by Governor
Miguel Cuaderno, Sr. From an interview with Zamora in 1975, Rufo Buenviaje of the
Department of Economic Research called the following symbolic interpretation of the
seal¶s features:
            
|   A man symbolizing
the Filipino Nation pushing the
è

›   Rays of the rising


sun denoting the  
 ! and revealing the
country¶s traditional agricultural
products as the basic ingredients
for industrial production and
commerce.

The arms proper is a circle,


symbolizing perpetuity, and
around it, the text 
c 

      c to
suggest that the Bank provides - the original seal
the necessary fiscal, commercial
and monetary policies.


During the time of Governor
Gregorio S. Licaros, the original
realistic rendering of the Central
Bank seal gave way to graphical
presentation based on the same
design.



 







The BSP seal is a composite of the Filipino flag, the risen sun and mountains framed
by a wheel and ringed by the inscription, ³BANGKO SENTRAL NG PILIPINAS."

The c
 symbolizes the country and
expresses the Filipino people's
nationalism and unity.

The  " signifies the bright


future and renewed spirit of the nation.

The # "
 represent stability
and the è c signifies movement
and industry, the key to the nation's
economic progress.
The new BSP logo is a perfect round shape in blue that features three gold stars and a
stylized Philippine eagle rendered in white strokes. These main elements are framed on
the left side with the text inscription ³Bangko Sentral ng Pilipinas´ underscored by a gold
line drawn in half circle. The right side remains open, signifying freedom, openness, and
readiness of the BSP, as represented by the Philippine eagle, to soar and fly toward its
goal. Putting all these elements together is a solid blue background to signify stability.

Principal Elements:

1. The Philippine Eagle, our national bird, is the world¶s largest eagle and is a symbol of
strength, clear vision and freedom, the qualities we aspire for as a central bank.

2. The three stars represent the three pillars of central banking: price stability, stable
banking system, and a safe and reliable payments system. It may also be interpreted as
a geographical representation of BSP¶s equal concern for the impact of its policies and
programs on all Filipinos, whether they are in Luzon, Visayas or Mindanao.


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%#!&

- Monetary policy can be implemented by changing the size of the monetary base.
This directly changes the total amount of money circulating in the economy. A central
bank can use open market operations to change the monetary base. The central bank
would buy/sell bonds in exchange for hard currency. When the central bank
disburses/collects this hard currency payment, it alters the amount of currency in the
economy, thus altering the monetary base.The monetary authority exerts regulatory
control over banks. Monetary policy can be implemented by changing the proportion of
total assets that banks must hold in reserve with the central bank. Banks only maintain
a small portion of their assets as cash available for immediate withdrawal; the rest is
invested in illiquid assets like mortgages and loans. By changing the proportion of total
assets to be held as liquid cash, the Federal Reserve changes the availability of
loanable funds. This acts as a change in the money supply. Central banks typically do
not change the reserve requirements often because it creates very volatile changes in
the money supply due to the lending multiplier.

' () ** 

- Discount window lending is where the commercial banks, and other depository
institutions, are able to borrow reserves from the Central Bank at a discount rate. This
rate is usually set below short term market rates (T-bills). This enables the institutions to
vary credit conditions (i.e., the amount of money they have to loan out), there by
affecting the money supply. It is of note that the Discount Window is the only instrument
which the Central Banks do not have total control over.

- By affecting the money supply, it is theorized, that monetary policy can establish
ranges for inflation, unemployment, interest rates ,and economic growth. A stable
financial environment is created in which savings and investment can occur, allowing for
the growth of the economy as a whole.

+

- The contraction of the monetary supply can be achieved —— by increasing


the nominal interest rates. Monetary authorities in different nations have differing levels
of control of economy-wide interest rates. In the United States, the Federal Reserve can
set the discount rate, as well as achieve the desired Federal funds rate by open market
operations. This rate has significant effect on other market interest rates, but there is no
perfect relationship. In the United States open market operations are a relatively small
part of the total volume in the bond market. One cannot set independent targets for both
the monetary base and the interest rate because they are both modified by a single tool
² open market operations; one must choose which one to control.

- In other nations, the monetary authority may be able to mandate specific interest
rates on loans, savings accounts or other financial assets. By raising the interest rate(s)
under its control, a monetary authority can contract the money supply, because higher
interest rates encourage savings and discourage borrowing. Both of these effects
reduce the size of the money supply.

)(!&*

- A currency board is a monetary arrangement that pegs the monetary base of one
country to another, the anchor nation. As such, it essentially operates as a hard fixed
exchange rate, whereby local currency in circulation is backed by foreign currency from
the anchor nation at a fixed rate. Thus, to grow the local monetary base an equivalent
amount of foreign currency must be held in reserves with the currency board. This limits
the possibility for the local monetary authority to inflate or pursue other objectives. The
principal rationales behind a currency board are three-fold:

1. To import monetary credibility of the anchor nation;

2. To maintain a fixed exchange rate with the anchor nation;

3. To establish credibility with the exchange rate (the currency board arrangement is
the hardest form of fixed exchange rates outside of dollarization).

- In theory, it is possible that a country may peg the local currency to more than one
foreign currency; although, in practice this has never happened (and it would be a more
complicated to run than a simple single-currency currency board). A gold standard is a
special case of a currency board where the value of the national currency is linked to
the value of gold instead of a foreign currency.

- The currency board in question will no longer issue fiat money but instead will only
issue a set number of units of local currency for each unit of foreign currency it has in
its vault. The surplus on the balance of payments of that country is reflected by
higher deposits local banks hold at the central bank as well as (initially) higher deposits
of the (net) exporting firms at their local banks. The growth of the domestic money
supply can now be coupled to the additional deposits of the banks at the central bank
that equals additional hard foreign exchange reserves in the hands of the central bank.
The virtue of this system is that questions of currency stability no longer apply. The
drawbacks are that the country no longer has the ability to set monetary policy
according to other domestic considerations, and that the fixed exchange rate will, to a
large extent, also fix a country's terms of trade, irrespective of economic differences
between it and its trading partners.

- Hong Kong operates a currency board, as does Bulgaria. Estonia established a


currency board pegged to the Deutschmark in 1992 after gaining independence, and
this policy is seen as a mainstay of that country's subsequent economic success
(see Economy of Estonia for a detailed description of the Estonian currency
board). Argentina abandoned its currency board in January 2002 after a severe
recession. This emphasized the fact that currency boards are not irrevocable, and
hence may be abandoned in the face of speculation by foreign exchange traders.
Following the signing of the Dayton Peace Agreement in 1995, Bosnia and Herzegovina
established a currency board pegged to the Deutschmark (since 2002 replaced by the
Euro).

- Currency boards have advantages for ˜ ,  economies that would find
independent monetary policy difficult to sustain. They can also form a credible
commitment to low inflation.




##    # 
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Hon. Jaime Fernandez, Presiding officer


Secretary of finance

Hon. Miguel Cuaderno, Sr.


Governor, Central bank of the Philippines

Hon. Arsenio J. Jison (1957)


President, Philippine National Bank

Hon. Eduardo Z. Romualdez


Chairman, Board of Governors
Rehabilitation Finance Corporation
President, Philippine National Bank (1958)

Gregorio S. Licaros
Chairman, board of governors
Development Bank of the Phils.

Hon. Vicente G. Sinco (1957)


Hon. Amando M. Dalisay (1957)
Hon. Jaime C. Velasquez (1957-1958)
Roberto T. Villanueva (1958)
Gaudencio E. Antonino (1958)
Antonio De Las Alas
Jose Leido
Leonides S. Virata
%,.%

Hon.Dominador R. Aytona, Presiding Officer


Secretary of finance

Andres V. Castillo
Governor, Central Bank of the Phils.

Eduardo Z. Romualdez
President, Philippine National Bank

Gregorio S. Licaros
Chairman, Board of Governors
Development Bank of the Phils.

Marcel S. Balatbat
Mariano B. Penaflorida

Hon.Rufino G. Hechanova
Secretary of finance

Rafael S. Recto
President, PNB
Pablo Lorenzo
Chairman, Board of governors
Development bank of the Phils.

Ernesto V. Santos
Belen Enrile-Gutierrez

%,.,

Hon. Eduardo Z. Romualdez, presiding officer


Secretary of finance

Hon. Alfonso Calalang


Governor, CBP

Hon. Roberto S. Benidicto


Presiding, PNB

Hon. Gregorio S. Licaros


Chairman, board of governors
Development bank of the Phils.
Hon. Ramon Mitra Sr.
Hon. Belen Enrile ±Gutierrez
Hon. Cesar c. Zalamea

Gregorio s. Licaros ± chairman


Governor, CBP

Cesar E.A. Virata


Secretary of finance

Gerardo P. Sicat
Director-general
National economic and Development Authority

Roberto V. Ongpin
Chairman, Board of investment

Cesar C. Zalamea

%,/.

Hon. Jose B. Fernandez Jr.


Governor

Hon. Jaime Ongpin


Minister of Finance
Hon. Solita Collas-Monsod
Director-general
National Economic and Development Authority

Hon. Jose Concepcion, Jr.


Hon. Alberto G. Romulo
Minister of the Budget
Hon. Cesar Buenaventura

Members:
Vicente R. Jayme
Secretary of finance

Jose S. Concepcion Jr.


Chairman, Board of Investment
Guillermo N. Carague
Secretary of budget and management

Solita C. Monsod
Secretary of Economic Planning and
Director-general, NEDA

Luis F. Lorenzo
Private sector representative
(President and chairman, Davao
Lapanday group of companies)
Jesus V. Ayala
private sector representative
(President and chairman,
Fruits Corp., chairman, JVA
Management Corporation)


%,,'

Jose L. Cuisia Jr.


Chairman
Governor, CBP

Ramon R. Del Rosario, Jr.


Secretary of Finance
(Assumed position June 30, 1992 Vice Jesus P. Estanislao)

Rizalino S. Navarro
Chairman, Board of Investments
(Assumed position June 30, 1992 Vice Lilia R. Bautista)

Salvador M. Enriquez, Jr.


Secretary of budget and management
(Assumed position Feb.12, 1992 Vice Guillermo N. Carague)

Cielito F. Habito
Director- General, NEDA
(Assumed position June 30, 1992
Vice Cayetano W. Paderanga, Jr.)

Renato L. Paras
Private sector representative

(Assumed position Feb.12, 1992 Vice Jesus V. Ayala)


Jose P. Pardo
Private sector representative
(Assumed position Sept.23, 1992)


%,,.

Gabriel C. Singson
Governor

Members:
Guillermo N. Carague
Cayetano W. Paderanga, Jr.
Vicente B. Valdepenas, Jr.
Cesar B. Bautista
Teodoro B. Montecillo
Aurelio O. Periquet, Jr.

'00

Rafael B. Buenaventura
Governor

Members;
Juanita D. Amatong
Antonio L. Alindogan, Jr.
Juan Quintos, Jr.
Mielito S. Salazar, Jr.
Vicente B. Valdepenas, Jr.
Fe B. Barin

'001

Amando M. Tetangco Jr.


Governor

Members:
Romulo Neri
Vicente B. Valdepenas, Jr.
Raul A. Boncan
Juanita D. Amatong
Nelly F. Villafuerte
Alfredo C. Antonio


'0%0

Amando M. Tetangco Jr.


Governor

Members:
Juanita D. Amatong
Alfredo C. Antonio
Raul A.Boncan
Ignacio R. Bunye
Peter B. Favilla
Nelly F. Villafuerte

#! *

The powers and function of Bangko Sentral are exercised by its Monetary Board, which
has seven members appointed by the President of The Philippines. Under the New
Central Bank Act, one of the government sector members of the Monetary Board must
also be a member of the Cabinet designated by the President.

The New Central Bank Act establishes certain qualifications for the members of the
Monetary Board and also prohibits members from holding certain positions with other
governmental agencies and private institutions that may give rise to conflicts of interest.
With the exception of the members of the Cabinet, the Governor and the other members
of the Monetary Board serve terms of six years and may only be removed for cause.

The Monetary Board meets at least once a week. The Board may be called to a meeting
by the Governor of the Bangko Sentral or by two (2) other members of the Board.
Usually, the Board meets every Thursday but on some occasions, it convenes to
discuss urgent issues.

The major functions of the Monetary Board include the power to:

1. Issue rules and regulations it considers necessary for the effective discharge of
the responsibilities and exercise of the powers vested in it;
2. Direct the management, operations, and administration of Bangko Sentral,
organize its personnel and issue such rules and regulations as it may deem
necessary or desirable for this purpose;
3. Establish a human resource management system which governs the selection,
hiring, appointment, transfer, promotion, or dismissal of all personnel;
4. Adopt an annual budget for and authorize such expenditures by Bangko Sentral
as are in the interest of the effective administration and operations of Bangko
Sentral in accordance with applicable laws and regulations; and
5. Indemnify its members and other officials of Bangko Sentral, including personnel
of the departments performing supervision and examination functions, against all
costs and expenses reasonably incurred by such persons in connection with any
civil or criminal action, suit or proceeding, to which any of them may be made a
party by reason of the performance of his functions or duties, unless such
members or other officials is found to be liable for negligence or misconduct.

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m —  Composition of the Monetary Board. - The powers and


functions of the Central Bank shall be exercised by a Monetary Board, which shall
be composed of seven members, as follows:

a) The Secretary of Finance, who shall preside at the meetings of the Monetary
Board. Whenever the Secretary of Finance is unable to attend a meeting of the
Board, the Undersecretary of Finance shall act as his alternate, but shall not
preside.

b) The Governor of the Central Bank, who shall preside at the meetings of the
Board in the absence of the Secretary of Finance. The Governor shall be
appointed for a term of six years by the President of the Philippines with the
consent of the Commission on Appointments. Whenever the Governor is unable to
attend a meeting of the Board, the ranking deputy-governor shall act in his stead.

c) The President of the Philippine National Bank, whose alternate shall be the
senior vice-president of said bank.

d) The Chairman of the Board of Governors of the Rehabilitation Finance


Corporation, whose alternate shall be the ranking governor of said corporation.

e) Three other members, to be appointed for terms of six years by the President
with the consent of the Commission on Appointments: Provided, however, That the
first members appointed under the provisions of this subsection shall have terms of
office of two, four and six years, respectively.

m —  Composition of the Monetary Board. - The powers and


functions of the Bangko Sentral shall be exercised by the Bangko Sentral Monetary
Board, hereafter referred to as the Monetary Board, composed of seven (7)
members appointed by the President of the Philippines for a term of six (6) years.
The seven (7) members are:

a. the Governor of the Bangko Sentral, who shall be the Chairman of the Monetary
Board. The Governor of the Bangko Sentral shall be head of a department and his
appointment shall be subject to confirmation by the Commission on Appointments.
Whenever the Governor is unable to attend a meeting of the Board, he shall
designate a Deputy Governor to act as his alternate: Provided, That in such event,
the Monetary Board shall designate one of its members as acting Chairman;
b. a member of the Cabinet to be designated by the President of the Philippines.
Whenever the designated Cabinet Member is unable to attend a meeting of the
Board, he shall designate an Undersecretary in his Department to attend as his
alternate; and
c. five (5) members who shall come from the private sector, all of whom shall serve
full-time: Provided, however, That of the members first appointed under the
provisions of this subsection, three (3) shall have a term of six (6) years, and the
other two (2), three (3) years.

º"
c
 

 - The members of the Monetary Board must be natural-born citizens of the
Philippines, at least thirty-five (35) years of age, with the exception of the Governor who
should at least be forty (40) years of age, of good moral character, of unquestionable
integrity, of known probity and patriotism, and with recognized competence in social and
economic disciplines.

º"
c
 

- In addition to the disqualifications imposed by Republic Act No. 6713, a member of
the Monetary Board is disqualified from being a director, officer, employee, consultant,
lawyer, agent or stockholder of any bank, quasi-bank or any other institution which is
subject to supervision or examination by the Bangko Sentral, in which case such
member shall resign from, and divest himself of any and all interests in such institution
before assumption of office as member of the Monetary Board.

´   # 2%/



MALACAÑANG
MANILA

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"#   %/

PRESCRIBING THE SALARY OF THE GOVERNOR


AND THE MEMBERS OF THE MONETARY BOARD OF THE
›
 m
 

Whereas, in compliance with the mandate of the Constitution to create an
independent central monetary authority, Congress enacted Republic Act No. 7653,
establishing the ›   ——— ˜ as an independent and accountable body
corporate which shall enjoy fiscal and administrative autonomy;
Whereas, the economic development of the nation shall be greatly dependent
upon the success or failure of the ›      ——— ˜ as it is mandated to
provide policy directions in the areas of money, banking, and credit, and shall have
supervision over the operations of banks and exercise such regulatory powers provided
in said law and other pertinent laws over the operations of finance companies, quasi-
banks and other institutions performing similar functions;

Whereas, the powers and functions of the ›   ——— ˜, shall be
exercised by the Monetary Board which shall be composed of the Governor of the
›   ——— ˜ who shall be the Chairman, a member of the Cabinet, and
five (5) other members from the private sector who shall serve full time;

Whereas, the said law provides that the salary of the Governor and the members
of the Monetary Board from the private sector shall be fixed by the President of the
Republic of the Philippines at a sum commensurate to the importance and responsibility
attached to the position;

Whereas, considering the importance of the mandate and purpose of the


Monetary Board, it is in the public¶s interest that the best qualified and the most
competent should serve in the Monetary Board;

Whereas, the Governor and the full-time members of the Monetary Board are
required to limit their professional activities to those pertaining directly to their positions,
and as such may not accept, save in the instances provided in the law, any other
employment, whether public or private, remuneration or    ; and

Whereas, it is therefore imperative that the salary and other emoluments of the
Governor and members of the Monetary Board be comparable and competitive to those
received by directors or officers of equivalent rank of leading commercial banks and
other financial institutions here and in other countries.

Now, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines,


by virtue of the powers vested in me by law, do hereby order that:

1. The salary of the Governor of the Bangko Sentral ng Pilipinas shall be One
Hundred Fifty Thousand Pesos (Php 150,000.00) a month, and that each of
the full-time members from the private sector of the Monetary Board shall be
One Hundred Twenty Thousand Pesos (Php 120,000.00) a month.

2. The said salaries shall be exclusive of any allowances which are normally
granted government officials as the Monetary Board may fix:  —

  
that said allowances shall not exceed ten percent (10%) of the
respective salaries of the members of the Monetary Board.
This order shall take effect immediately.

Done in the City of Manila, this 15th day of July in the year of Our Lord,
Nineteen Hundred and Ninety-Three.

(Sqd.) FIDEL V. RAMOS


˜— ———˜

%,/1    ) 


 (34 (5!* 5!

Section 20. The Congress shall establish an independent central monetary authority,
the members of whose governing board must be natural-born Filipino citizens, of known
probity, integrity, and patriotism, the majority of whom shall come from the private
sector. They shall also be subject to such other qualifications and disabilities as may be
prescribed by law. The authority shall provide policy direction in the areas of money,
banking, and credit. It shall have supervision over the operations of banks and exercise
such regulatory powers as may be provided by law over the operations of finance
companies and other institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the Philippines operating
under existing laws, shall function as the central monetary authority.


( ( 
1.6+

- In accordance with a provision in the 1987 Constitution, President Fidel V. Ramos


signed m  No.


> Gabriel Singson


> Margarito µ Gary µ B. Tevez
> Sec. Alberto G. RomuLo
> Sen. Francisco µkit¶ Tatad.
> Sen. Raul Roco.

cc 
   

Central Bank of the Philippines which started its operation on January 3, 1949 was
located in — ›——  ˜
 — 


Background History:

The   was the custom house


during the Spanish regime. The structure was
built from 1823 to 1829 based on the designs
of Spanish engineer  ˜  ˜. The 1863
earthquake left the structure unsound that it
was ordered to be demolished in 1872. The
Custom offices were moved across the Pasig
River to the San Nicholas area.

A new building was built in 1876 to


house some of the Custom offices, the
Intendencia General de Hacienda, the
Treasury and the new Casa de Moneda (Mint).
The building became popularly known as the — or civil administration office.

During the American Period, Senate President Manuel Luis Quezon¶s office was
housed in the Intendencia (while Speaker Sergio Osmena occupies the Ayuntamiento).
The building was damaged by the Japanese bombs in 1941 and by the American
artillery in 1945.

 —  ˜ ˜     ˜ —˜   Y   


  —  
 ˜  —˜˜—   — ˜—  — ———˜— 

The     ( , translated as  


   ) is the central bank of the Republic 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.