IAN JAMES G.

TAN 2019880
MAY 11, 2021

1. Rational expectations are the best guess for the future.For my Opinion this are the
different signifance of the theory. Firmost Rational expectations mean that, although
people will be incorrect at times, they would be right on average. Reasonable
assumptions, in fact, suggest that individuals benefit from their failures. Another is
Economic policy is influenced by rational aspirations. If people adjust their behavior
when they expect a certain result from the program, the effect of expansionary fiscal
policy would be different. Next, With rational expectations, people always learn from
past mistakes and Forecasts are impartial, and people make choices based on all
available data and economic theories. Lastly, People have a good understanding of
how the economy works and how government interventions affect macroeconomic
factors including market levels, unemployment rates, and gross production.

2. The BSP's overarching goal in RA No 7653 is price stabilization, with no

discussion of development or any other target related to the actual market.
Consequently, the Philippine Constitution guarantees the BSP's institutional
sovereignty. Furthermore, the Bangko Sentral's primary goal is to preserve market
stability in order to promote steady and long-term economic development. It will also
work to foster and preserve monetary stability and peso convertibility. The country's
inflation rate is heavily influenced by monetary policy. RA 7653 establishes a
straightforward and well-defined “primary” goal for the BSP.

3. An Act Allowing Full Entry of Foreign Banks in the Philippines (RA 10641)....
This legislation, which was passed in order to "develop a more open market and
promote greater international investment," appears to have aided in the growth of
foreign banks and subsidiaries in the Philippines. Furthermore, the Law requires the
Monetary Board to recognize regional distribution and complementation, as well as
strategic exchange and investment partnerships between the Philippines and the
foreign bank's country of incorporation. It also Examine the applicant's demonstrated
capability, global reputation for financial technologies, and stability in a competitive
environment; ensure that Philippine banks have reciprocity privileges in the
applicant's country; and recognize their readiness to completely share their
technology.

Foreign banks contribute to the economy by providing employment prospects for

Filipinos, acting as a source of additional resources for firms, and investing through
Foreign Direct Investments, which has increased one's bank's competitiveness. By
rising the level of competition versus domestic banks, foreign banks boost one's
financial services. Global banks demonstrate innovative banking strategies and
technologies that improve a bank's competence level, and they also encourage
domestic banks to expand their client base. Furthermore, foreign banks serve as a
replacement for inadequate informative infrastructures, especially in emerging credit
markets and as a source of alternative finance. Lastly, international banks serve as a
barometer of success and a sign of a country's willingness to invest in global markets.

International banks can be approved by the Monetary Board. to conduct business in

the Philippine banking system using any of the following methods modes of entry
include gaining, buying, or controlling up to 60% of the company. 60% of an existing
bank's voting stock by investing in up to sixty percent of its voting stock. sixty
percent (60%) of the voting shares of a newly formed banking subsidiary under
Philippine law, or by establishing full-fledged branches in the Philippines.
banking supervisory authority Provided, though, that a foreign bank can only use one
mode of entry. Provided, however, that a foreign bank or a Philippine bank is
involved. A corporation may own up to 60% (60%) of the voting stock of only one
company. a new banking subsidiary or a single domestic bank