Central Bank

Monetary
Operations
FINMAN 4: Monetary Policy and
Central Banking
Discussion Outline

Monetary Operations of the BSP

Interest Rate Corridor
Short-Term Monetary Policy Instruments
Primary Monetary Policy Instruments
 Refers to the:
• Buying/selling of government
securities (GS)
What is BSP’s • Lending/borrowing against
underlying assets as collateral
Monetary • Acceptance of fixed-term
Operations? deposits, foreign exchange
swaps
• Use of other monetary
instruments of the Bangko
Sentral
What is it
for?
To manage Liquidity in the
Financial System
Interest Rate
Corridor
On June 3, 2016, the BSP formally adopted an
interest rate corridor (IRC) system as a framework
for conducting its monetary operations. The IRC is
a system for guiding short-term market rates
towards the BSP policy interest rate which is the
overnight reverse repurchase (RRP) rate.
BSP’s Short-Term Monetary Instruments

Overnight Reverse Repurchase Agreement

BSP Securities
Term Deposit Facility
Standing Liquidity Facility
Rediscounting
Overdraft Credit Line
Emergency Loan
 Reserve Requirements

Central Banks’ Open Market

Primary Operations
Monetary Discount Rate
Tools
Interest on Excess
Reserves
Open Market Operations
Term Abbreviation Purpose

Repurchase Agreement RP, Repo A short-term loan where both

parties agree to the sale and future
repurchase of assets within a
specified contract period.

Reverse Repurchase Agreement RRP, Reverse Repo Sells a security to an eligible

counterparty with an agreement to
repurchase that same security at a
specified price at a specific time

Overnight Repurchase Agreement Overnight Repo A practice in which a bank or other

financial institution buys securities
with the proviso that the seller
repurchase the same securities the
following day. Financial institutions
do this in order to raise short-term
capital

Note: These securities are considered as Money Market instruments because of their maturity period.
 The one selling the Repo is effectively borrowing
and the other party is lending, since the lender is
credited the implicit interest in the difference in prices
from initiation to repurchase.

The implicit interest rate on these agreements is

known as the repo rate, a proxy for the overnight risk-
Open Market free rate.

Operations
A repurchase agreement, also known as a repo loan, is
an instrument for raising short-term funds. With a
repurchase agreement, financial institutions
essentially sell securities from someone else, usually a
government, in an overnight transaction and agree to
buy them back at a higher price at later date
To decrease the money supply, BSP sells bonds from its account, thus taking in cash and
removing money from the economic system.

To increase the money supply, BSP buys government bonds

 Banks/Institutions
BSP issues/sells
purchase these
Bonds
securities.

-Serves as the borrower -Decreases money in

circulation
-Less Spending
-Increase interest rates
 Banks/Institutions
BSP buy Bonds sell these
securities.

-BSP injects money in -Increase money supply

circulation that can be utilized by
banks
 Banks/Institutions
BSP buy Bonds sell these
securities.

If the BSP wants to tighten the money supply — removing money from the cash
flow — it sells the bonds to the commercial banks using a Repo. Later, they will
buy back the securities through a Reverse Repo, returning money to the
system.
BSP selling securities
When the central bank sells government bonds, it is essentially
taking money from the public and placing it out of
circulation. The money is no longer available to be used for
consumer spending or investment. When the central bank does
this, it is also likely to lead to an increase in interest rates.
 Reserve Requirement Money Supply

If banks are required to hold a greater amount in reserves, they

have less money available to lend out. If banks are allowed to hold a
smaller amount in reserves, they will have a greater amount of
money available to lend out.
Reserve Requirements
+Increasing Reserve Requirement is essentially taking money
out of the money supply and increasing the cost of credit.
+Lowering the reserve requirement pumps money into the
economy by giving banks excess reserves, which promotes
the expansion of bank credit and lowers rates.
Consumer
Protection
and
Financial
Education
FINMAN4: Central
Banking and Monetary
Policy
Discussion BSP Financial Consumer
Protection Framework
Outline
The Financial Regulators in the
Philippines
Common Financial Consumer
Protection Issues
Investment Scams in the
Philippines
Financial Well-being BINGO
Investment
Scams in the
Philippines
How does a Ponzi Scheme work?

Using funds from new investors to pay old investors

with high returns at little to no risk. The aim is to
constantly attract new investors to sustain the
payouts, otherwise the fund tanks and the cycle
ends.
Biggest Investment Scams in the
Philippines
Return
Company Name Nature Year Value of Loss
Promise
LEGACY GROUP Insurance and Double your
2008 P30 billion
OF COMPANIES Pension scam Money
Pyramid
AMAN FUTURES Scheme 80% return in
2012 P12 billion
GROUP (Commodities just 20 days
Investment)
PERFORMANCE
INVESTMENT
Forex Trading
PRODUCTS 2007 P11 billion 10-15%
service
CORPORATION
(PIPC)
Biggest Investment Scams in the
Philippines
Return
Company Name Nature Year Value of Loss
Promise
MATEO Crowd-
High-paying
MANAGEMENT Funding (20 P5 million
returns
GROUP (MMG) persons)
TIBAYAN 3%–5% a
Mutual Fund
GROUP month for a 6-
Investment P2 billion
INVESTMENT month to 1-year
Scam
CORP lock-in period
ROYAL Currency
4% yield per
MANCHESTER trading P2 billion
month
FIVE (RMF) scheme
Biggest Investment Scams in the
Philippines
Return
Company Name Nature Year Value of Loss
Promise
High-yield 4–5% income
FRANCSWISS investment 2007 P1 billion per day
products
12% daily return
Advertising on their
12DAILYPRO 2005 $500 million
Revenue invested funds
for 12 days
An investment
ONE DREAM of P888 was
GLOBAL supposed to
Unknown P3 billion
MARKETING get a payout of
INC P1,300 in just 4
days
Biggest Investment Scams in the
Philippines
Return
Company Name Nature Year Value of Loss
Promise
Treasury 12% higher
BANCAP P2.5 billion
Bills rates
MULTINATIONAL
Investment Guaranteed
TELECOM
and Loan P30 billion P15,000
INVESTORS
Programs commission
CORP
30% monthly
To donate at
KAPA MINISTRY return on
least 2019 P50 billion
INTERNATIONAL investments for
P10,000
life
How to spot a Scam

Effortless and Impressive ROIs

Name Changing
Recruitment Model
Complicated Investment Plans
No Physical Office
Examples of Advance Fee Scam
Investment
Scams in the Pyramid Scam
Philippines
Pump-and-Dump

Coaching Schemes

Wahana Investment Scam

Masa Mart Investment Scam

Online Investment Scams during
the Pandemic
• Bitcoin Revolution
Investors are promised to earn as much as $1,000 from a minimum investment of
$250 within a day, a 300% return on investment per day, or a total of 9,000% per
month.
• CROWD1
Solicits investments from the public by offering “educational packages” for a
minimum of ₱6,000 and as much as ₱240,000 and promises bonuses. It claims
that it generates income from online games. A person earns through referrals.
Online Investment Scams during
the Pandemic
• FORSAGE
Claims of an Ethereum (ETH) blockchain technology-based platform, which
supposedly provides long-term active and passive income to investors through a
crowdfunding referral system.
• RCashOnline
offers business packages, including Royale products for resale, starting at ₱18,660
for one account and going as high as ₱130,620 for seven accounts with insurance
worth ₱1 million. The scheme relies heavily on recruiting members in exchange
for high monetary rewards rather than on selling products.
Online Investment Scams during
the Pandemic
• The Saint John of Jerusalem Knights of Malta Foundation
Promises members ₱5,000 worth of grocery items every month and offers 21-
year-old male agriculture students and graduates an all-expenses-paid training
with $1,000 allowance in Israel for six months, in exchange for personal
information.
Online Investment Solicitation
without SEC License
• Azenzo-Online • Fast Track • My Gold Rev/My Gold Rev
Philippines
• Bayanihan Program of Billy Ford • Fil-Invest
Andrada • Sakto Online Advertising
• Friend$hip/Friend$hip
• Captcha Philippines, Philippines and World of Captcha • V2R Trades
Incorporated
• JOCALS688 • Won Project/Won Network/Won
• CashAB Foundation
• KwikPeso
• CashOcean • Xtreme House of Beauty Trading
• Lao Razon Trading and/or Lao
Corporation
• CashAB Lending Company Razon Marketing
• Zamoya Credit Ltd
• Cryptec • Little Cash
• CryptoInvestWith.Us • MAGINVESTKA.ONLINE (MIK.O)
• CryptoPeso • Mimosa Credit Ltd
FINANCIAL WELLNESS BINGO
“Do you know why so few
people are rich and
successful? Because the poor
try to emulate the result, not
the process.” –Alux.com
Maintaining a Financial Well-Being Bingo
Have life
Differentiates Have 6 months
Saves at least Allocates 40% of insurance
NEEDS and worth of
50% of Income income to needs coverage of at
WANTS Emergency Fund
least P1M
Owns Bond Beats inflation Pays credit card Have a checking Have a Financial
Investments every year bills in full, always account Adviser
Have read a
Owns a rental Have a Creates a budget Have a dollar
Personal Finance
Property retirement Fund and follows it account
book in 2021
Diversified
Does financial
Have stock portfolio into 7 Have UITF or Have multiple
inventory once a
Investments different asset mutual funds income streams
year
classes
Use surplus
income to Have a clearly
Have Health Have P50K safely Updates self with
purchase income developed
Insurance stored at home financial news
generating Financial Plan
assets
 CURRENCY
MANAGEMENT AND
INTERNATIONAL
RESERVES
DISCUSSION OUTLINE

•
HISTORY
 HISTORY OF PHILIPPINE CURRENCY

Revolutionary Period
(1898-1899)
The Japanese Occupation
Pre-Hispanic Era (1942-1945)
3

4
The Philippine Republic
Spanish Era American Period
(1521-1897) 5
(1900-1941)
THE PHILIPPINE
CASH CYCLE

Production of Currency

Issuance, Distribution and Retirement

Currency in Circulation
PRODUCTION
 PROCESS OF PRINTING MONEY
(BANKNOTES)
Materials: 20% Abaca and 80% Paper

INTAGLIO PRINTING - Intaglio

printing is done from ink that is
below the surface of the plate. The
SHEET INSPECTION - Analyze and
LITHOGRAPHIC (OFFSET) design is cut, scratched, or etched
evaluate untrimmed printed
PRINTING into the printing surface or plate,
sheets.
which can be copper, zinc,
aluminum, magnesium, plastics, or
even coated paper.

DOUBLE CHECKING OR
OVERPRINTING OR NUMBERING FINISHING - The numbered
TENNING - Numbered sheets
- A unique combination of eleven sheets finally go through finishing
undergo inspection of every tenth
numbers and letters twice on the which involves cutting into notes,
sheet for other printing defects
front of the note. counting, packaging.
which were not detected earlier.
 BLANKING - The blanking press punches out the blanks like a cookie cutter.

ANNEALING - Blanks are annealed to prepare them for striking. Annealing

changes, the physical properties of the metal to make it softer and allow it to be
shaped without breaking.

PROCESS OF WASHING & DRYING - The blanks are washed to restore their original color.

MINTING
COINS UPSETTING - The upsetting mill feeds the blank into a groove slightly narrower
than its diameter. This pushes the metal up around the edge to form a rim.

STRIKING - The planchets travel to the coin presses for striking the design.

BAGGING & PACKAGING - Pennies and nickels are dropped into the bulk bags
without being counted. All the bags are weighed and then stored until they
travel to Federal Reserve Banks for distribution around the country.
Materials: Durable Nickel-
Plated Steel
ISSUANCE, DISTRIBUTION, AND
RETIREMENT

The Philippine cash cycle involves issuance of new coins

and notes, distribution to the regions of the country, and
retirement of unfit currency. The BSP adopts a Clean Note
and Coin Policy for the effective removal of unfit currency in
circulation as a means to maintain the integrity of
Philippine banknotes and coins.
ISSUANCE

 The BSP is the sole government institution mandated by law to issue notes
and coins for circulation in the Philippines. Section 50 of Republic Act (R.A)
No. 7653, otherwise known as The New Central Bank Act, as amended by
Republic Act No. 11211, stipulates that the BSP shall have the sole power
and authority to issue currency within the territory of the Philippines. It also
issues legal tender commemorative notes and coins.
DISTRIBUTION

 Distribution of notes and coins throughout the

country is done through designated bank
branches, called chests.
RETIREMENT

 The Bangko Sentral may call in for replacement

notes of any series or denomination which are
more than five years old and coins which are
more than ten years old.
DEMONETIZATION OF THE
OLD BANKNOTE SERIES
ENGLISH SERIES BANKNOTES
(1949-1974)
PILIPINO SERIES
BANKNOTES (1969-1974)
PILIPINO SERIES COINS
(1967-1998)
ANG BAGONG LIPUNAN
SERIES (1973-1993)
ANG BAGONG LIPUNAN
SERIES (1975-1998)
FLORA AND FAUNA SERIES
(1983 – 1998)
IMPROVED FLORA AND FAUNA
SERIES (1991 – 1998)
NEW DESIGN SERIES (NDS) (1985-
2017)
NEW DESIGN SERIES (NDS) (1985-2017)
DEMONETIZATION OF THE
OLD BANKNOTE SERIES
CURRENCY IN
CIRCULATION
OTHER POLICES AND PROGRAMS

• Clean Note and Coin Program

• Coin Recirculation
• Revised Reward System
• Report a Counterfeit
• Gold and Silver Buying and Selling
INTERNATIONAL
RESERVES
TOP 10 COUNTRIES
WITH THE BIGGEST
FOREX RESERVE
TOP CENTRAL
BANK GOLD
RESERVES
 BANGKO
SENTRAL NG
PILIPINAS
FOREIGN EXCHANGE RESERVES

These are assets held on reserve by a central bank in foreign

currencies. These may include foreign currencies, bonds, treasury
bills, and other government securities.
These reserves are used to back liabilities and influence monetary
policy.

It includes any foreign money held by a central bank.









COUNTRIES
A C C U M U L AT E
R E S E R V E S P R I M A R I LY
F O R T H E F O L LO W I N G
REASONS:
 Precautionary motive.
Adequate reserves would satisfy
COUNTRIES
foreign exchange requirements
A C C U M U L AT E
R E S E R V E S P R I M A R I LY in the case of insufficient
F O R THE F O L LO W I N G domestic foreign exchange
REASONS: supply and difficulty in obtaining
external finance for crisis
mitigation purposes (war chest
against future crises.
 COUNTRIES
A C C U M U L AT E
R E S E R V E S P R I M A R I LY
F O R THE F O L LO W I N G
REASONS:
 COUNTRIES
A C C U M U L AT E
R E S E R V E S P R I M A R I LY
F O R T H E F O L LO W I N G
REASONS:
Financial Supervision
and International
Economic
Cooperation
Discussion Outline

The BSP Financial

Stability Policy BSP Supervisory
BSP Banking
Assessment
Committee and Regulations
Framework
Coordinating Council

International
Supervised Financial Statistics provided by Economic Affiliations
Institutions the BSP of the BSP
FINANCIAL STABILITY
POLICY COMMITTEE
FINANCIAL STABILITY COORDINATING COUNCIL
 How the BSP
regulates the
Financial System
The BSP extends discounts, loans and advances to
banking institutions in order to influence the volume of
credit consistent with objective of price stability and
maintenance of financial stability.
Supervisory Assessment
Framework
 How will these

FINANANCIAL STABILITY
BSFIs impact our
Financial System
in case of
bankruptcy?

A BSFI with higher

impact and risk will
necessarily require a
higher degree of
Supervisory supervisory intensity.

Framework
What are these
BSFIs
What is the
Composite
degree of
Rating? Or bank
supervisory
resiliency in
intensity?
terms of
uncertainties.
Risk Categories under the BSP Risk
Assessment Framework
Composite Rating Scorecard
Composite Rating
BSP’s Supervisory
Activities
 Foreign Exchange Regulations

Open Finance Framework

Reputational Risk Management

Banking
Regulations Systemic Risk Management

Macroprudential Framework

Virtual Asset Service Provider

Amendments to the foreign
exchange regulations
The major foreign exchange reforms include
allowing banks to sell foreign currency
without prior BSP approval for the following
transactions: e-commerce market
participants to support digital
payments/electronic transactions; and
offsetting of payables with receivables
between/among residents for various FX
transactions, and residents with non-
residents for their trade and non-trade
current account transactions.
Open Finance Framework
The issuance of the Open Finance
Framework is one of the initiatives
under the BSP’s Digital Payments
Transformation Roadmap, which
targets to have 70 percent of Filipino
adults with transaction accounts by
2023
Guidelines on Reputational Risk
Management
Risk management is a process of
identifying and mitigating various
sources of risk to the organization and
its operations, including financial,
operational, competitive, security,
privacy, compliance, and reputational
risks.
 Virtual Asset
Service Providers
Virtual asset service provider means
any natural or legal person who is
not covered elsewhere under the
Recommendations, and as a
business conduct one or more of
the following activities or
operations for or on behalf of
another natural or legal person:
exchange between virtual assets
and fiat currencies.
Macroprudential Framework
Addressing the build-up of systemic risks which in turn is defined as
disruptions to the financial system that can adversely affect the real
economy.
What is a Systemic
Risk?
Examples of Macroeconomic factors, such as
inflation, interest rates, currency
Systemic fluctuations.
Risk
Environmental factors, such as
climate change, natural disasters,
resource, and biodiversity loss.

Social factors, such as wars,

changing consumer perspectives,
population trends.
 Multiscale systematic risk

Examples of Systematic Risk of the Multinational Corporation

Systemic Risk
in the Diversification on Strategy and Systematic Risk

Financial
System Systematic Risk, Total Risk, and Size as
Determinants of Stock Market Returns

Systematic Risk and Timescales

Is it 2008 all over again?
 Supervised FIs
Accredited as
FIs with Foreign
Additional FIs with Trust Personal Equity Electronic Money
Currency Deposit
Derivatives Authority Authority Retirement Account Issuers
Unit
Market Participants

Money Service
Pawnshops Digital Banks Rural Banks Thrift Banks
Business

Virtual Asset Service

Universal Banks
Provider
 • Al-Amanah Islamic • Land Bank of the Philippines
Investment Bank of the • Metropolitan Bank and Trust
Philippines
Company
• Asia United Bank Corporation • Mizuho Bank, Ltd. - Manila
• Australia and New Zealand Branch
Banking Group Limited • Philippine National Bank
• Bank of the Philippine Islands • Philippine Trust Company
Universal • BDO Unibank, Inc. • Rizal Commercial Banking
Banks • China Banking Corporation Corporation
• Deutsche Bank AG • Security Bank Corporation
• Development Bank of the • Standard Chartered Bank
Philippines
• The Hongkong & Shanghai
• East West Banking Banking Corporation
Corporation • Union Bank of the Philippines
• ING Bank N.V.
 • Asia United Bank Corporation
• Bank of the Philippine Islands
• BDO Unibank, Inc.
• China Banking Corporation
• East West Banking Corporation
Private
• Metropolitan Bank and Trust Company
Domestic • Philippine National Bank
UBs • Philippine Trust Company
• Rizal Commercial Banking Corporation
• Security Bank Corporation
• Union Bank of the Philippines
Commercial Banks
• Bangkok Bank Public Co. Ltd. • JP Morgan Chase Bank, N.A.
• Bank of America, N.A. • KEB Hana Bank - Manila Branch
• Bank of China (Hongkong) Limited-Manila Branch • Maybank Philippines, Incorporated
• Bank of Commerce • Mega International Commercial Bank Co., Ltd.
• BDO Private Bank, Inc. • MUFG Bank, Ltd.
• Cathay United Bank Co., LTD. - Manila Branch • Philippine Bank of Communications
• Chang Hwa Commercial Bank, Ltd. - Manila Branch • Philippine Veterans Bank
• CIMB Bank Philippines Inc. • Robinsons Bank Corporation
• Citibank, N.A. • Shinhan Bank - Manila Branch
• CTBC Bank (Philippines) Corporation • Sumitomo Mitsui Banking Corporation-Manila Branch
• First Commercial Bank, Ltd., Manila Branch • United Overseas Bank Limited, Manila Branch
• Hua Nan Commercial Bank, Ltd. - Manila Branch
• Industrial and Commercial Bank of China Limited - Manila Branch
• Industrial Bank of Korea Manila Branch
 • Bank of Commerce
• BDO Private Bank, Inc.
• Philippine Bank of Communications
Private • Philippine Veterans Bank
Domestic KBs • Robinsons Bank Corporation
 • Bangkok Bank Public Co. Ltd. • JP Morgan Chase Bank, N.A.
• Bank of America, N.A. • KEB Hana Bank - Manila Branch
• Bank of China (Hongkong) Limited- • Mega International Commercial Bank
Manila Branch Co., Ltd.
• Cathay United Bank Co., LTD. - Manila • MUFG Bank, Ltd.
Branch
• Shinhan Bank - Manila Branch
Branches of • Chang Hwa Commercial Bank, Ltd. -
Manila Branch
• Sumitomo Mitsui Banking
Corporation-Manila Branch
Foreign • CIMB Bank Philippines Inc.
• United Overseas Bank Limited, Manila
• Citibank, N.A. Branch
Banks • First Commercial Bank, Ltd., Manila
Branch
• Hua Nan Commercial Bank, Ltd. -
Manila Branch
• Industrial and Commercial Bank of
China Limited - Manila Branch
• Industrial Bank of Korea Manila Branch
Digital Banks
• GoTyme Bank Corporation
• Maya Bank, Inc.
• Overseas Filipino Bank, Inc., A
Digital Bank of LANDBANK
• Tonik Digital Bank, Inc.
• Union Digital Bank
• UNObank, Inc.
Offshore Banking Units in the Philippines
• Taiwan Cooperative Bank

Non-Bank with Quasi-Banking Functions

• Cebu International Finance Corporation
• Philippine Depository and Trust Corporation
• RCBC Capital Corporation
• RCBC Leasing and Finance Corporation
• Toyota Financial Services Philippines Corporation (TFSPH)
Non-Bank without Quasi-Banking Functions
• AB Capital and Investment Corporation
• Asia United Leasing & Financial
Corporation
• Bancasia Financial & Investment
Corporation
• BDO Capital & Investment Corporation
• BDO Leasing & Finance Inc.
• BPI Century Tokyo Lease & Finance
Corporation
• BPI Capital Corporation
• China Bank Capital Corporation
• CitiCorporation Capital Philippines Inc.
• CitiCorporation Financial Services and
Insurance Brokerage Philippines Inc
• DBP Leasing Corporation • PNB-Ibjl Leasing And Finance Corporation
• East West Leasing and Finance • SB Capital Investment Corporation
Corporation
• SB Finance Company Inc
• First Metro Investment Corporation
• SBM Leasing Inc
• LBP Leasing Corporation
• Security Finance And Leasing Inc
• Maybank Atr Kim Eng Cap Partners inc
• Small Business Guarantee and Finance
• Orix Metro Leasing and Finance Corporation
Corporation
• Sumisho Motor Finance Corporation
• PBC Capital investment Corporation
• UCPB Ciif Fin & Devt Corporation
• PBcom Finance Corporation
• UCPB Leasing And Finance Corporation
• Phil Comml Capital Inc
• Unicapital Finance & Investments Inc
• Philippine Guarantee Corporation
• Unicapital Inc
• PNB Capital & Inv'T Corporation
Non-Stock Savings and Loans Associations
• Air Materiel Wing Savings & Loan Association, Inc. •
(AMWSLAI)
• Armed Forces and Police Savings and Loan
Association, Inc. (AFPSLAI)
• Arsenal Savings and Loan Association, Inc.
• ASLA Savings & Loan Association, Inc.
• Baguio Vendors Savings & Loan Association, Inc.
• Basa Air Base Savings & Loan Association, Inc.
• Batanes Government Employees Savings & Loan
Association, Inc.
• BIR Savings & Loan Association, Inc.
• Bottlers Employees Savings & Loan Association, Inc.
• Bureau of Jail Management and Penology Savings
and Loans Association, Inc.
• Cavite Naval Base Savings and Loan Association, Inc.
(CNBSLAI)
• CDCP Employees Savings & Loan Association, Inc.
• Certified Savings & Loan Association, Inc.
Composite Wing Savings and Loan Association, Inc.
(CWSLAI)
• Department of Economic Research Savings and
Loan Association, Inc. (DERSALA)
• Department of Engineering and Public Works
Savings and Loan Association, Inc.
• Faculty and Employees Savings and Loan
Association of Adamson University, Inc.
• Fernando Air Base Savings & Loan Association, Inc. •
(FABSLAI)
• Forestry Savings & Loan Association, Inc.
• Iligan City Public School Teachers Savings & Loan
Association, Inc.
• ISDA Savings and Loan Association, Inc.
• Isla Lipana & Co. Employees Savings & Loan
Association, Inc.
• Jemba Savings & Loan Association, Inc.
• Judiciary Savings & Loan Association, Inc. (JUSLAI)
• Kapisanan sa Pag-iimpok at Paghiram ng mga
Kawani ng Pamahalaang Lungsod ng Quezon, Inc.
• Lepanto Savings & Loan Association, Inc.
• Mactan Air Base Savings & Loan Association, Inc.
(MABSLAI)
• Malacañang Employees Savings and Loan
Association, Inc.
• Manila Teacher's Savings & Loan Association, Inc.
Mantrasco Employees Savings & Loan Association,
Inc.
• Mariwasa Employees Savings & Loan Association,
Inc.
• Mead Johnson Nutrition Employees Savings and
Loan Association, Inc.
• Meralco Employees Savings and Loan Association,
Inc. (MESALA)
• Multi-Savings & Loan Association, Inc.
• National Bureau of Investigation Savings and Loan
Association, Inc.
Non-Stock Savings and Loans Associations
• NIA Savings & Loan Association, Inc. • Savings & Loan Association of Government Auditors, Inc.
• NPC Savings & Loan Association, Inc. • Savings and Loan Association of P&G Phils., Employees, (PECA) Inc.
• Philippine Coast Guard Savings & Loan Association, Inc. (PCGSLAI) • Science Savings & Loan Association, Inc.
• Philtrust Company Employees Savings & Loan Association, Inc. • Shell Employees Savings & Loan Association, Inc.
• Phimco Employees Savings & Loan Association, Inc. • SM Savings and Loan Association, Inc.
• PNB Employees Savings and Loan Association (PESLAI) Incorporated • Southernside Savings & Loan Association, Inc.
• Port Community Savings & Loan Association, Inc. • Supreme Court Savings & Loan Association, Inc. (SCSLAI)
• Professional Regulation Commission Savings & Loan Association, • Telecommunications Savings & Loan Association, Inc.
Inc.
• Toyota Motor Philippines Savings & Loan Association, Inc. (TMPSLAI)
• Public Safety Savings & Loan Association, Inc. (PSSLAI)
• University of Luzon Savings & Loan Association
• RGC Employees Savings & Loan Association, Inc.
• Water and Sewerage Sector Savings and Loan Association, Inc.
• RPP Savings & Loan Association, Inc.
• Wyeth Philippines Employees Savings & Loan Association, Inc.
• Sanitary Care Products Asia Employees Savings and Loans
Association, Inc. (SCPA ESLAI)
Others
Rural Banks
Cooperative Banks
Thrift Banks
Trust Corporations
Electronic Money Issuers (G-Xchange, Inc.)
Supervised Pawnshops
Registered Money Service Business (PetNet, Philippine Seven Corp.)
Virtual Asset Service Providers (i-Remit, Inc.)
 Monetary, External and Financial
Statistics

Statistics Banking Statistics

provided by
the BSP Non-Banking Statistics

PhilPass Statistics
Monetary, External and Financial Statistics

International
Balance of Survey of IT-BPO International
Investment
Payments Services Reserves
Position

Foreign Currency Overseas

External Debt Deposit Units Filipinos' Exchange Rates
Investment Remittances

Foreign Interest
Rates
Financial and Monetary Account

BSP: Assets and

Resources of the
Depository Other Financial Liabilities and
Central Bank Survey Monetary Survey Philippine Financial
Corporations Survey Corporations Survey Statement of Income
System
and Expenses

Total Loans (Gross),

Loans Outstanding: Loans Outstanding: Loans Outstanding: KB Loans Outstanding
Number of Financial Loan Loss Provisions
Other Depository Philippine Banking Universal and to the Real Estate
Institutions and NPL by Type of
Corporations System Commercial Banks Sector
KBs

Reserve Requirement Domestic Interest Balance Sheet

Flow of Funds Matrix
Ratios Rates Approach
 Gross National Income by Industrial
Real Sector Account
Origin (At Current Prices)

Gross National Income by Expenditure

Shares (At Current Prices)

Gross National Income by Industrial

Origin (At Constant Prices)

Gross National Income by Expenditure

Shares (At Constant Prices)
Other Real Sector Account

Land Area, Production Index of

Population, and Key Manufacturing
Stock Market Price Earning Ratio
Density of Enterprises by
Population Industry

Producer Price Philippines'

Meralco's
Index for Purchasing
Registered Energy
Manufacturing by Managers' Index
Sales
Industry Group (PMI)
 Consumer Price Index, Core Inflation,
Inflation Rates & Purchasing Power of the
Peso

General Wholesale Price Index in the

Philippines

General Retail Price Index in the National

Capital Region Residential Real Estate Price
Index
Prices

Core Inflation Measures

 National
Government Cash
Operations
Fiscal Account

Consolidated Public
Sector Financial
Position
 Balance Sheet

Income Statement
Financial
Statements Published Balance Sheet
Included in this section are the
Financial Statements of all the
Universal Banks, Commercial Banks,
Thrift Bank Group, and Rural/
Trust and Other Fiduciary Business
Cooperative Banks. and other Management Activities
 Loans Outstanding
Regional
for Production and
Distribution of
Household
Portfolio
Consumption

Loan Account Real Estate

Exposure
Consumer Loans

Consumer Loans:
Consumer Loans:
Credit Card
Auto Loans
Receivables
Others

•
International
Economic
Affiliations of
the BSP
 AMRO
The Macroeconomic Research Office (AMRO) of the
Association of Southeast Asian Nations (ASEAN) +3
is a regional macroeconomic surveillance body that
strives to contribute to the ASEAN+3 region's
macroeconomic and financial stability. AMRO was
founded in April 2011 as a corporation limited by
guarantee in Singapore with three basic functions:
(1) macroeconomic surveillance, (2) assisting the
Chiang Mai Initiative Multilateralisation (CMIM)
implementation, and (3) offering technical help to
members.
ASEAN
The Association of Southeast Asian Nations
(ASEAN) is a political and economic organization
whose members are united in their desire to
promote economic progress, active engagement,
mutual assistance, and regional peace and stability.
Brunei Darussalam, Cambodia, Indonesia, Lao PDR,
Malaysia, Myanmar, Philippines, Singapore,
Thailand, and Vietnam are currently members of
ASEAN.
ASEAN 3+
The ASEAN+3 Finance Process strives to
improve policy conversation, coordination,
and collaboration on financial, monetary, and
fiscal challenges that are common to all
ASEAN members. The Process had four
components when it was established: I the
Economic Review and Policy Dialogue
(ERPD); (ii) the Chiang Mai Initiative (CMI); (iii)
the Asian Bond Markets Initiative (ABMI); and
(iv) the ASEAN+3 Research Group.
SEACEN
The SEACEN Centre is composed of 19
regular member CBs, each of which is
represented in the SEACEN Board of
Governors. Meanwhile, the Centre has an
outreach of 16 other CBs which are
invited to the Centre’s learning programs.
It has envisioned itself to be the regional
learning hub for central banks (CBs) in the
Asia-Pacific Region. It aims to build
capacity in central banking and foster
networking and collaboration.
EMEAP
EMEAP is a regional cooperative organization of
central banks and monetary authorities in East Asia
and the Pacific, whose principal goal is to improve
monetary and central banking cooperation among
its members. People's Bank of China, Hong Kong
Monetary Authority, Bank Indonesia, Bank of Japan,
Bank of Korea, Bank Negara Malaysia, Reserve Bank
of New Zealand, Bangko Sentral ng Pilipinas,
Monetary Authority of Singapore, and Bank of
Thailand are the current members of EMEAP.
ADB
The Asian Development Bank (ADB) is
dedicated to making Asia and the Pacific a
prosperous, inclusive, resilient, and sustainable
region while continuing to fight extreme
poverty. It helps its members and partners
achieve social and economic development by
offering loans, technical support, grants, and
equity investments. The ADB currently has 68
member countries, 49 of which are from Asia
and the Pacific.
IMF
The IMF is an international organization
of 189 member countries and its
fundamental mission is to ensure the
stability of the international monetary
system. It does so in three ways: (1)
keeping track of the global economy and
the economies of member countries
through annual Article IV consultations;
(2) lending to countries with balance of
payments difficulties; and (3) giving
practical help to members through
technical assistance and trainings.
WB
The World Bank is a global financial institution that aims
to reduce the share of the global population living in
extreme poverty to 3 percent by 2030 and promote
shared prosperity by increasing the incomes of the
poorest 40 percent of people in every country.

Comprised of 189 member countries, the WB offers

financing instruments through investment project
financing, development policy financing, program-for-
results, trust funds and grants, private sector options,
customized options and risk management and
multiphase programmatic approach. It also offers
technical Assistance, Reimbursable Advisory Services,
Economic and Sector Work, Business advice and Donor
aid coordination.
WTO
The World Trade Institution (WTO) is the sole
international organization that deals with international
trade rules. The WTO agreements, negotiated and
signed by the majority of the world's trading nations
and recognized by their parliaments, are at its heart.
The goal is to make trade as seamless, predictable, and
unrestricted as feasible. Over 160 nations are members
of the WTO, representing 98 percent of global
commerce, and more than 20 countries are pursuing
membership.
APEC
The Asia-Pacific Economic Cooperation (APEC) is a
cooperative, multinational economic and trade forum
with 21 member economies. It was founded in 1989 with
the goal of lowering trade and investment obstacles
without needing its members to sign legally binding
agreements.
APEC meets its objectives through encouraging
conversation and reaching decisions by consensus, with
equal weight given to the opinions of all members.
Individual Action Plans and Collective Action Plans are
used by APEC Member Economies to report progress
toward achieving free and open trade and investment
goals.
Is an independent think tank for central banking,
economic policy and public investment,
providing a neutral platform for public and
private sector engagement worldwide.
Established in 2010, OMFIF focuses on global
policy and investment themes relating to central
banks, sovereign funds, pension funds,
regulators and treasuries, with offices based in
London, Singapore and the United States.
IIF
IIF is a global association of financial
institutions whose mission is to assist the
financial industry in risk management, develop
sound industry practices, and advocate for
regulatory, financial, and economic policies
that promote global financial stability and
sustainable economic growth in the broad
interests of its members. Over 450 people from
more than 70 countries are members of the IIF.
CEMLA
➢ CEMLA is an association of Latin American and
Caribbean central banks with the mission of
promoting a better understanding of monetary and
banking issues, assisting in the improvement of
central bank staff training, conducting research and
systematizing the findings, and informing members
about events of international and regional interest in
the areas of monetary and financial policies. CEMLA
is based in Mexico City and currently has 51
members, 30 of which are Associate members and
the rest are Collaborating members (11 central
banks from other regions and 10 financial
institutions).
BIS
The Bank for International Settlements (BIS) is an
international institution based in Basel, Switzerland,
that aims to promote international monetary and
financial cooperation and serves as the bank for
central banks (CBs). The BIS is made up of 62 central
banks. The BIS fulfills its mandate by acting as: (1) a
forum for discussion and decision-making among
CBs; (2) a center for economic and monetary research;
(3) a prime counterparty for CBs in their financial
transactions; and (4) agent or trustee in connection
with international financial operations.
 An Introduction
Prepared by: Katrina Bianca V. Sicat, DBA
 DISCUSSION OUTLINE
• History of Money in the Philippines
• Timeline of the Philippine Central Bank
• Organizational Structure of the Bangko Sentral ng Pilipinas
• Roles of the BSP under the New Central Bank Act
1949 OLD CENTRAL BANK BUILDING
• Piloncitos are tiny
engraved bead-like gold
bits unearthed in the
Philippines. They are the
first recognized coinage in
the Philippines circulated
between the 9th and 12th
centuries. They emerged
when increasing trade
made barter inconvenient.
Pre-Hispanic Period
Spanish Era
Cincuenta (50) Pesos Fuertes
issued by El Banco Español Filipino de
Isabel II (1865)
The famous word “barya” was from the Spanish word “barilla” which means
crude bronze or copper coin usually equivalent to one centavo.
Cincuenta (50) Pesos
Fuertes
issued by El Banco
Español Filipino (1883)
Veinte Cinco (25) Pesos
Fuertes
Treasury Note issued by
El Banco Español Filipino
(1877)
Revolutionary
Period
• Un Peso Banknote
• Philippine Republic of
1898
Revolutionary
Period
One peso and five peso
revolutionary notes printed as
Republika Filipina Papel Moneda
de Un Peso and Cinco Pesos were
freely circulated.
These were handsigned by Pedro
Paterno, Mariano Limjap and
Telesforo Chuidian.
With the surrender of General
Aguinaldo to the Americans, the
currencies were withdrawn from
circulation and declared illegal
currency.
DID YOU KNOW?

After ruling for 333

years, the Spaniards
finally left in 1898
and were replaced by
the Americans who
stayed for 48 years.
American
Colony Series
• Obverse: William A. Jones
and seal of the Philippine
National Bank
Reverse: Seal of the
Philippine National Bank

20 Pesos Banknote
Philippine National Bank Circulating
Note (series of 1937)
American
Colony Series
The Americans instituted a
monetary system for the
Philippine based on gold and
pegged the Philippine peso to
the American dollar at the ratio
of 2:1.

The US Congress approved the

Coinage Act for the Philippines
in 1903
20 Pesos Banknote
Philippine National Bank Circulating
Note (series of 1937)
 1941 Ten Pesos Banknote
American Period Treasury Certificate
(series of 1941)

Obverse: George Washington and

seal of the Philippine-American
Commonwealth
200 Peso Banknote –
Bank of the Philippine
Islands (1928)
American Regime

This is one of the rarest banknotes

ever issued during the American
Regime. Only 1,700 were printed and
not so many have survived. A more
worn out version of this banknote
was sold at ebay for more than
$1,000.
The renaming of El Banco
Espanol Filipino to Bank of the
Philippine Islands in 1912
paved the way for the use of
English from Spanish in all
notes and coins issued up to
1933.
Twenty Peso Banknote
American Period Treasury Certificate
The front features Maj. Gen. Henry
W. Lawton. An overprint on top of
the PNB seal reads "Manila, P.H.,
May 2, 1916". The reverse features
the seal of the Philippine National
Bank.
 DID YOU
KNOW?

In 1907, under the American government, the Philippines experienced a leprosy problem. General
William Taft was tasked to provide a solution to the health crisis by converting the Culion Island in
Palawan as a Leper Colony.
DID YOU KNOW?

Due to the colony’s isolation, Culion Island

minted its own coin and issued its own
currency through the Bureau of Health and
was circulated within the island.
 Japanese
Invasion Money
One Thousand Peso
banknote issued in the
Philippines during the
Japanese occupation

As inflation crept in, the

Japanese printed banknotes
in larger denominations. This
bill is the last of the third
series along with the 100 and
500 peso JIM. It was printed
just before their surrender in
1945.
 Japanese
Invasion Money
These war notes had no
back up reserves, thus,
Filipinos dubbed it “Mickey
Mouse” money. During the
worst inflation in Philippine
history, Filipinos would go to
the market laden with
bayongs of Mickey Mouse
bills, since one duck egg cost
75 pesos, and a box of
matches more than 100
pesos.
Guerilla
Notes
• One Peso Emergency
Guerilla Note
Series of 1944
Victory
Series

Obverse: Miguel Lopez de

Legazpi, seal of the Philippine-
American Commonwealth
Reverse: "Central Bank of the
Philippines VICTORY"
overprint, seal of the
Philippine-American
Commonwealth
1949 English
Series
Filipino Series
New Design Series
New
Generation
Series
Enhanced New Generation Series
 Polymer
Banknotes
 WHICH DESIGN OF OUR PREVIOUS AND
PRESENT CURRENCY DID YOU FIND MOST
INTERESTING?
Pres-Spanish Period | Spanish Era |Revolutionary Period | American Colony Series | Japanese Invasion Money | Guerilla
Notes | Victory Series | English Series | Filipino Series | New Design Series | New Generation Series | Enhanced New
Generation Series
 INDIVIDUAL ACTIVITY
Do you have an old Philippine currency still being kept at your
house? If yes, take a selfie or post a photo of the bill/coin.
A brief Timeline
of the Philippine
Central Bank
Commonwealth
Period (1935-1941)
1939

• During the Japanese occupation, a

1944 second attempt to pass this law took
place. But the American liberalization
forces aborted its implementation.
1946
• As instructed by newly-elect President
Manuel Roxas, the former Finance
Secretary Miguel Cuaderno Sr. drew the
first charter of the Central Bank.
• A Central Bank will serve as a way for the
Philippines to shift from the dollar
exchange standard to a managed currency
system.
• It was in February 1948 when the charter
draft was submitted to the Congress.
1948
• The Central Bank Act of
1948 was successfully
realized.
• This was a definitive
step of having full
national sovereignty.
1987
The Central Bank became
the Central Monetary
Authority of the country.
1993
• President Fidel Ramos signed into law
Republic Act No. 7653, which is the New
Central Bank Act, on June 14, 1993.
• The name of the Central Bank was
officially changed to Bangko Sentral ng
Pilipinas.
• This new law gave fiscal and
administrative autonomy to BSP.
2021
• On January 13, 2021, The Bangko
Sentral ng Pilipinas (BSP) and the
Bases Conversion and
Development Authority (BCDA)
signed a contract for lease of a
parcel of land at the New Clark
City’s National Government
Administrative Center (NCC-
NGAC) in Capas, Tarlac that will
become the site for the new BSP
Complex.
 • Liquidity Management
Roles of the • Currency Issue
BSP • Lender of Last Resort
(New Central • Financial Supervision
• Management of Foreign Currency
Bank Act) Reserves
• Determination of exchange rate policy
• Being the banker, financial advisor
and official depository of the
Government, its political subdivisions
and instrumentalities and GOCCs.
Contractionary
Policy
Expansionary
Policy
 • Operator of the real time
gross settlement system
Payments and known as PhilPaSS
• Provider of credit facilities to
Settlements banks as a lender of last
resort
• Overseer of the payments
and settlements system
• User of its own RTGS (Real
Time Gross Settlement)
system
• Initiate changes/reforms for
the payments system
 TOPIC 5
BSP CONSUMER PROTECTION AND FINANCIAL EDUCATION

Circular No. 1048 or the BSP Regulations on Financial Consumer Protection seeks to fundamentally strengthen
market conduct practices of Bangko Sentral ng Pilipinas’ (BSP) supervised financial institutions (BSFIs) by
establishing guidelines that institutionalize consumer protection as an integral component of corporate
governance and culture, as well as risk management.
This is part of the BSP’s commitment to promote broad and convenient access to high quality financial services
and consider the interest of the general public, as mandated by its amended charter. In doing so, the BSP aims
to ensure that financial service providers conduct ethical business practices and do not engage in practices that
may cause harm to the consumer in the conduct of their business. The consumer protection standards of
conduct, i.e., disclosure and transparency, protection of client information, fair treatment, effective recourse
mechanism, and financial education and awareness should be embedded into the corporate culture of the BSFI,
enhancing further its defined governance framework while addressing conflicts that are inimical to the interests
of the financial consumer.
Section 1
It stated that the objective of the Framework is for BSFIs to manage the risks of financial loss that are
detrimental to the financial consumers or consumer protection risks inherent to the BSFIs' operations that, if not
properly managed, would affect other relevant risks, such as compliance, reputational, legal, operational and
credit risks.
In addition, A BSFI should have a CPRMS that is integrated into the BSFI's enterprise-wide risk management
processes and risk governance framework. The CPRMS includes the governance structure, policies, processes,
measurement and control procedures to ensure that consumer protection risks are identified, measured,
monitored, and mitigated. A carefully devised, implemented, and monitored CPRMS provides the foundation for
ensuring the BSFI's adherence to consumer protection standards of conduct and compliance with consumer
protection laws, rules and regulations, thereby, ensuring that identified risks to the BSFI and associated risk of
financial harm or loss to consumers are properly managed.
Overseeing consumer protection is a responsibility of the board or directors and the senior management. The
Board of directors shall be primarily responsible for approving and overseeing the implementation of the BSFI's
CPRMS while The Senior Management shall be responsible for ensuring that the practices of the BSFIs are
aligned with the approved consumer protection policies and risk management system and consistently displayed
throughout the BSFI's place of business particularly across all business units that deal directly with consumers
Under section 2 as the Policies and Procedures, Consumer Protection Standards of Conduct.
The CPRMS and CAM should ensure systematic application of policies and procedures, including the Consumer
Protection Standards of Conduct (Standards). The Standards should reflect the core principles, which BSFIs must
observe at all times in their dealings with financial consumers: Provided, further, that these Standards should be
embedded into the corporate culture of the BSFI, enhancing further its defined governance framework while
addressing conflicts that are inimical to the interests of the financial consumer.
Disclosure and Transparency
BSFIs must ensure that their consumers have a reasonable holistic understanding of the products and services
which they may be acquiring or availing. In this context, full disclosure and utmost transparency, to the extent
allowed under applicable laws and regulations, are the critical elements that empower the consumer to make
comparisons and informed financial decisions. This is made possible by providing the consumer with ready
access to information that accurately represents the nature and structure of the product or service, its terms
and conditions, as well as its fundamental benefits and risks.
The BSFI demonstrates adherence to appropriate and adequate disclosure and transparency when:
a. The manner of disclosure, whether in advertising materials, terms and conditions, and other forms of
communication, are clear, concise, accurate, understandable and not misleading.
b. Information are disclosed before, during and after a sale of a financial product or service and during key
stages of the relationship with the consumer; especially if there are any changes in the terms and conditions.
c. Terms and Conditions contain all significant provisions of the financial product or service giving prominence to
key features/facts
- information on risks, return, possible warnings, any waiver of rights and limitations of liabilities,
consumer's rights and responsibilities, consequences of failure to meet obligations, rights and responsibilities of
the BSFI, involvement of authorized agents, any conflict of interest by BSFI staff, cancellation and product
portability,
- The full price or cost to the consumer including all interest, fees, charges, and penalties. The terms and
conditions must clearly state whether interest, fees, charges, and penalties can change over time
- For more complex products, such as investment products, the key features as well as costs and risks
shall be highlighted in a key facts statement or Product Highlight Sheet (PHS
D. Advertising materials are not false, misleading, or contain deceptive statements or omit key information that
may materially and/or adversely affect the decision of the consumer to avail of a service or acquire a product.
BSFIs are responsible for all the statements made in said advertising materials.
E. The terms and conditions, advertising materials and other communications must contain Contact and
information of the BSFI's internal complaints handling unit; and Statement that the BSFI is a regulated entity and
contact information of the regulator.
F. Communication of the BSFI staff is conducted in such a manner that clients can understand the terms of the
contract and their rights and obligations, taking into consideration client segments that may have financial
literacy limitations.
G. Adequate time is given to consumers to review, ask questions and receive information to fully understand the
terms and conditions prior to signing the contract or executing the transaction. BSFI should ensure that
documents signed by the consumer are completely filled out and have no blank terms.
H. Statements of Account or Billing Statements are provided regularly in a convenient manner to the consumer,
or through the channel through which the product was sold, commensurate to the type of product and terms.
The principles of the above standards for disclosure and transparency shall be applicable even to products and
services offered electronically as well as to products catering to different market segments with particular
consideration for segments that may have limited financial literacy.

Protection of Client Information

Financial consumers have the right to expect that their financial transactions, as well as relevant personal
information disclosed in the course of a transaction, are kept confidential and are secured. Towards this end,
BSFIs must ensure that they have well-articulated information security guidelines, well-defined protocols, a
secure database, and periodically re-validated procedures in handling the personal information of their financial
consumers. This should be an end-to-end process that should cover, among others, the array of information that
will be pre-identified and collected, the purpose and manner of gathering each information, the Information
Technology (IT)-security infrastructure of the BSFI, and the protocols for disclosure, both within the BSFI and
especially to third parties.
The BSFI demonstrates the ability to protect client information if it is able to:
a. Have a written privacy policy to safeguard its consumer's personal information.
b. Ensure that privacy policies are regularly communicated throughout the organization.
c. Have appropriate systems in place to protect the confidentiality and security of the personal data of its
consumers against any threat or hazard to the security or integrity of the information and against unauthorized
access.
d. Have a strong lT System in place to protect the confidentiality, security, accuracy, and integrity of consumer's
personal information
e. Subject to the provisions of existing laws and regulations on data privacy, send written communication to its
consumers informing and explaining how it will use and share the consumer's personal information.
f. Obtain the consumers' written consent, unless in situations allowed as an exception by law or Bangko Sentral-
issued regulations on confidentiality of consumer's information, before sharing consumers' personal information
with third parties
g. Provide access to consumers to the information shared and allow consumers to challenge the accuracy and
completeness of the information and have these amended as appropriate.

Fair Treatment
This principle ensures that financial consumers are treated fairly, honestly, and professionally at all stages of its
relationship with the BSFI. BSFIs shall adopt mechanisms to safeguard the interest of their consumers which
shall include rules regarding ethical staff behavior, acceptable selling practices, fair and equitable terms and
conditions, provision of products and services appropriate to the capacity and risk appetite of the consumers,
among others, and incorporate the same in their policies and procedures, control functions and agreements
with outsourced third parties.
Effective Recourse
Financial consumers should be provided with accessible, affordable, independent, fair, accountable, timely, and
efficient means for resolving complaints with their financial transactions. BSFIs should have in place mechanisms
for complaint handling and redress, and may employ various modalities or technological innovations.

Financial Education and Awareness

Financial education initiatives give consumers the knowledge, skills, and confidence to understand and evaluate
the information they receive and empower them to make informed financial decisions.
Because BSFIs deal directly with financial consumers, they have the reach, expertise, and established
relationships ideal to deliver financial education, distinct and separate from information about their products.
BSFIs should provide basic information on consumers’ and the BSFI’s rights and responsibilities.
BSFIs should demonstrate efforts at financial education, which may include digital literacy for products offered
electronically, with the presence of programs whether as specific initiatives or as aspects embedded in their
regular interface with consumers.
Section 5 as the Bangko Sentral Regulations on FinancialConsumer Protection
Credit card issuers/Pawnshops shall adopt a system for promptly addressing the complaints of their customers.
The Financial Consumer Protection Framework of the Bangko Sentral ng Pilipinas as stated under Part Ten of the
MORNBFI-Q Regulations shall be adopted insofar as these are applicable to credit card/pawnshop operations.
Section 6 as the Applicable Regulations on Trust Corporations
Trust operations and investment management activities of trust corporations shall be subject to the applicable
regulations

FINANCIAL REGULATORS IN THE PHILIPPINES

Philippine Deposit Insurance Corporation (PDIC)
PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all
banks. PDIC exists to protect depositors by providing deposit insurance coverage for the depositing public and
help promote financial stability.

Insurance Commission (Komisyon ng Seguro)

To regulate and supervise the insurance and pre-need industries in accordance with the provisions of the
Insurance Code and the Pre-Need Code of the Philippines. Legal Basis: Created and existing under and by
authority of R.A. No. 275 and the Insurance Code of1978, as amended and Republic Act 9829 "An Act
Establishing the Pre-Need Code of the Philippines".

Bangko Sentral ng Pilipinas (Central Bank of the Philippines)

the central bank of the Philippines. It was established on July 3, 1993, pursuant to the provision of
Republic Act 7653 or the New Central Bank Act of 1993. 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 at influencing

money supply, consistent with its primary objective to maintain price stability,
2. Currency issue. The BSP has the exclusive power to issue the national currency. All notes and
coins issued by the BSP are fully guaranteed by the Government and are considered legal tender for all private
and public debts,
3. Lender of last resort, by extending discounts, loans and advances to banking institutions for 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 international reserves to
meet any foreseeable net demands for foreign currencies in order to preserve the international stability and
convertibility of the Philippine peso,
6. Determination of exchange rate policy, by determining the exchange rate policy of the Philippines. Currently,
the BSP adheres to a market-oriented foreign exchange rate policy

Department of Finance (DOF)

The government's steward of sound fiscal policy, It formulates revenue policies that will ensure funding of
critical government programs that promote welfare among our people and accelerate economic growth and
stability.

Philippine Securities and Exchange Commission (SEC)

The agency of the Government of the Philippines responsible for regulating the securities industry in the
Philippines. In addition to its regulatory functions, the SEC also maintains the country's company register.

Its major functions include registration of securities, analysis of every registered security, and the evaluation of
the financial condition and operations of applicants for security issue.

Bureau of Treasury
As principal custodian of government funds, the Bureau of the Treasury (BTr) is responsible for ensuring the
sufficiency of Government financial resources including the active management and investment of excess funds

Common Financial Consumer Protection Issues

As financial consumers gain access to wide range of financial products and services, they become vulnerable and
exposed to different types of risks such as risks on financial loss, data breaches and identity theft.

Six (6) Consumer Protection Issues

• Online Scams

• Fraudulent Commercial Document

• Unfair Collection Practice

• Deposit of Deceased Persons

• Currency Exchange

• Financial Learning

Online Scams

The term internet scam or online scam is a general way to define the different types of fraud that consumers
face when using the Internet.

Fraudulent Commercial Document

Used to facilitate terrorism, smuggling, drug trafficking, immigration violations, and many other crimes.
Fraudulent documents also are documents that refer to academic degrees, courses and grades that the holder
of the document has not earned.

Unfair Collection Practice

Unfair collection practice also known as credit card debt collection practice considered unfair under BSP
regulations.

Deposit of Deceased Person

It is a tracing of bank deposit. Tracing is a process which may be available in certain cases to enable a claimant to
recover funds or assets which have been unjustly lost to a knowing recipient.

Currency Exchange

Currency exchange is a licensed business that allows customers to exchange one currency for another.

Financial Learning

Financial learning or financial education is the systematic process of acquiring financial literacy, enables people
to better manage their financial lives and optimize the benefits of accessing financial services.

I. What is Financial Health?

➢ According to our research, it represents the personal financial situation of an individual and it
encompasses all the various aspects of your financial life, such as income, expenses, savings,
investment, debts, etc. It is also actually the key for you to lead a happy and successful life if
you plan it well. If you can’t plan for the future, you have little freedom. Ultimately, that’s what
financial health is all about.
➢ Conversely, when you are financially healthy, it is much easier to improve other areas of your
life because you are not stressing about the due dates or bills you have to pay, and another
advantage of it is you have the time of your life doing what you want to do like pursuing your
goals as you have more resources and free time to use.

II. The Importance of being Financially Healthy

➢ Well, a lot of people take it for granted but financial health is an important part of one’s well-
being. You can’t say that being financially well is like affording a luxury vacation or like
purchasing something at a hefty price. It is actually more of an individual’s ability to establish a
healthy relationship with money so that they are more in control of their finances. It also means
more financial freedom and independence so that you are not stressing a lot when it comes to
meeting both short term and long term goals.
➢ In addition, solid financial planning can help us turn dreams into reality. It’s usually not about
skimping - it’s about asking yourself what you value and what you’re willing to give up in the
short term for a larger reward in the future.

III. Signs that you are Financially Healthy

1. When you always check in with your money - it doesn’t matter what method you are
using to look through in your financial life. What actually matters the most is you have a
system that you are following to understand all your financial matters.
 2. When you are focusing on the future - you are heading in the right direction when you
focus on the future and if you are creating short-term saving goals and long-term
investment plans.
3. You commit to learning - the people who are most comfortable with money all know
one thing: you can’t know everything. As an individual who commits to learn new things
regarding your financial health, you can also gain the rewards and compensation of
knowledge, skills and income.
4. When you already forgiven yourself - no one is perfect. To truly reach the pinnacle of
financial well-being, you need to move on from past money mistakes and overcome
some of your financial fears.

IV. Signs that your Financial Health is Suffering

1. You don’t think about your money at all - when you are the type of person who does
not care about your money. If you spend more than you save then your financial health
is suffering and you will regret it if you are not going to make a change today.
2. All you think is money - when thoughts of money wake you up at night or keep you
from sleeping, that;s another critical indicator that it’s time to start working on your
financial health.
3. You only live in the present or the past - when you are struggling in your financial life,
you’re probably suffering from a severe case of YOLO. You also probably haven’t given
much thought to the future you or retirement savings.
4. You don’t ask questions - asking a question is the first step to truly learning. However,
people are often very quiet about money. Whatever the reason, it is often hard to speak
up about financial concerns.

The 5 Pillars Of Financial Health

The 5 pillars of financial health includes spend, save, invest, borrow, and plan. It is crucial to actively work on
improving the health of each one component.

• Spend. To spend wisely, you need a budget plan. The first step in taking control of your finances is
understanding the inflow and outflow of your money. The second step in budgeting has to do with
deciding what takes priority, how to spend less, and then planning and projecting your financial
situation in the short and medium term. There are also tools and applications that you can download to
automate the budgeting process. most people get the right budget and then they just stop. This is a
financially fatal mistake! Whichever method you choose to use to budget, you must stick to this budget.
That means using healthy spending habits to stay on (or better yet, under) budget.

• Save. In general, you should save at least 10% of your monthly income. Kung hindi possible, any amount
saved will help improve your financial capacity. Once you start saving, these funds should not be
touched. They are not intended for monthly bills or impulse purchases. Instead, they should be used to
start building an emergency fund later in life and that means there will be a lot of unexpected expenses.
 You should never save in the long term! Saving cash in an account always results in a lost but saving is an
excellent strategy, not to generate wealth, but to achieve certain short- and medium-term goals.

• Invest. If your budget isn't looking good, put your money to work for you. That way, you also free
yourself from the mindset that money will buy you things. The power of money is not in how much it
can buy, but the power of money lies in its ability to reproduce. That is investing: multiplying money.
How do you invest then? You should first put money in an emergency fund and make sure your strategy
is right for your situation. Before you invest a single peso, you need to consider a few factors, including:
Your tolerance for risk. If you are young and have a long time before retirement, you can invest up to
100% in stocks. However, if you are more risk- adverse, you can adjust this percentage. Funds that
conform to your values and objectives. Do you want to invest in riskier companies that offer higher
potential returns, or do you prefer to stick with established, tried and tested companies that may not
burst your portfolio growth? Also consider the type of business in which the companies in which you
invest are invested. For example, if you want to help the environment, consider green businesses that
use recycling and renewable energy as part of your strategy.
• Borrow. Being in debt is not necessarily a bad thing. The key is to develop good credit habits so that you
can keep your debt under control. Believe it or not, some debts are considered "good debts." The first
step in making sure you get reasonable credit is understanding the difference between that and "bad
debt." Good debt is lower-interest borrowing should be no more than 15% of your income (not including
mortgage and transportation loans). It involves borrowing to finance something that can benefit you
financially in future. "Bad debt" is higher-interest borrowing, such as payday loans. You can also think of
bad debt as debt that results from purchases that you don't really need or that will get you nowhere in
the long run. Remember that higher debt payments may indicate that your debt burden is no longer
sustainable and therefore unhealthy. But we must also remember that debt is just a number, not who it
is. Why are you in debt? Because you spend more than you earn. Go out there and invest and do
business. Your mind is your most powerful weapon, so train and maintain it to grow financially. That said,
the real way to get out of debt is to increase your income and spend less.
• Plan. Where do you see yourself financially in 5 years, and where would you like to be? Those questions
are part of planning your healthy financial future. Take some time to figure out what you want your life
to look like in the future: do you need retirement funds? Do you want to be able to buy a house or
maybe an income property? Will you need to help a child with college tuition costs? Should I get
insurance? What type of insurance should I get? These questions factor into your goals and what you
need to do (or change) to get there. By focusing on long-term goals, rather than just monthly spending,
you can start to re-prioritize your budget in ways that make sense for your goals. And don’t be afraid to
seek out a financial planner. They can help you better prepare for the future and put you on track to
meet all of your long-term financial goals.

The 8 Indicators In Measuring Financial Health

1. Spend less than income- This indicator is pivotal because it indicates the individual’s ability to
successfully manage cash flow. Spending less than income directly affects the ability to build savings and
be resilient in the face of unexpected events. To improve this, it is advisable to collect the total amount
of income and expenses over the past twelve months, and analyze them on a monthly basis, to curb
unnecessary expenses.
2. Pay bills on time and in full- There are two types of bills: high priority bills, that is, those that have less
flexibility and more severe consequences if left unpaid, such as mortgage payments, and low priority
bills, which are more flexible and more lenient with late payments, such as subscriptions or cable bills.
The extent to which individuals are keep up with their bill payments, both high and low priority, sheds
light on how well they are able to manage their cash flow and day-to-day financial commitments.
 3. Have sufficient living expenses in liquid savings- At a certain point of our financial lives, we all have to
face unexpected expenses: repairs, medical treatments, a fall in income ... It is advisable to have enough
savings to face them and, thus, keep from taking on unsustainable debt. Saving enough capital cover six
months or more of living expenses with no income is one of the benchmarks of financial health
4. Have sufficient long-term savings or assets- Having the short and medium term covered is positive for
finances, but having sufficient long-term savings is necessary to achieve financial security and TAKE
ADVANTAGE OF OPPORTUNITIES such as investing in a home or a child’s education, or facing retirement
in a comfortable position. In the case of retirement, it is convenient to consider the replacement rate in
order to have the greatest possible purchasing power when it is time to retire.
5. Have sustainable debt loan- Individuals that know how to manage their debts lead a quieter financial
life, and will not be consumed by late fees or having lots of debts.
6. Have a prime credit score- According to the study, people with a 'super prime' or 'good prime' profile –
i.e., individuals with an excellent credit score, who lenders or creditors consider virtually risk-free
customers - have better financial health.
7. Have appropriate insurance- Low quality insurance may give users a false sense of protection. It is
advisable to buy these products considering variables such as family size and the required coverage level.
Lack of sufficient coverage may become a financial problem when dealing with, for example, a medical
emergency.
8. Plan ahead for expenses- People who plan for their finances (making budgets, transferring money to
saving products, etc.) and know how to deal with the financial challenges of the future, are those that
show better financial health. Healthy financial habits are essential to have access to better
opportunities and lead a comfortable financial life. Why this indicator? Planning for expenses indicates
that individuals are future-oriented and interested in improving their financial situation. In Health Study,
planning behavior was highly correlated with financial health.

The Traits Of Financially Healthy Students.

How does one become a financially healthy student? Financially healthy students share most of the following
traits:

• They are organized. Most of us think we are pretty good at keeping track of our money, even without
creating a spending plan. The only problem is that we are... often wrong. To avoid wasteful spending,
financially healthy students track their income, monthly bills, and daily expenses. In a short time, we can
learn about creating monthly budgets, using the internet to keep your finances organized, and making
sure you don't miss payments. Being organized doesn't take much time, and it will help to ensure that
you are spending money on what matters the most to you.

• Next, financially healthy students are informed. They understand any fees associated with their bank or
credit union accounts, and they know how much these fees add up to each month. They check their
credit report at least once per year to spot errors and to check for the warning signs of identity theft.
They also know the interest rates on all of their debt, and understand what could possibly cause those
rates to change. By being informed, financially healthy students can create a plan for minimizing the
most expensive debt while in school - possibly saving thousands of dollars over the life of their loans.
• Finally, financially healthy students think about the future. They may not have all the answers, but they
have a good idea about where they would like to be - financially - after graduation. They have thought
about their career and what their financial situation may be like as far as five years into their career.
These are the big questions that too few students consider when making decisions about college,
careers, and debt levels. If you haven't thought about your long term goals, a journaling exercise is a
great idea to start.