Gabrielle Olivier D.

Enverga
C061 – Financial Markets

Bangko Sentral ng Pilipinas

1. Based on your research, what was the original name and why and when was it
changed?
- The original name of BSP is the Central Bank of the Philippines it was named
in the American era wherein they passed a law that requires the country to
have its own central bank because of monetary law. A group of Filipinos had
conceptualized a central bank for the Philippines as early as 1933. It came up
with the rudiments of a bill for the establishment of a central bank for the
country after a careful study of the economic provisions of the Hare-Hawes
Cutting bill, the Philippine independence bill approved by the US Congress.

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

Ramos signed into law Republic Act No. 7653, the New Central Bank Act, on
14 June 1993. The law provides for the establishment of an independent
monetary authority to be known as the Bangko Sentral ng Pilipinas, with the
maintenance of price stability explicitly stated as its primary objective. This
objective was only implied in the old Central Bank charter. The law also gives
the Bangko Sentral fiscal and administrative autonomy which the old Central
Bank did not have. On 3 July 1993, the New Central Bank Act took effect.

2. Discuss the main function/functions of Bangko Sentral. How does it affect the
Financial Market here in our country?
- Monetary policy - The primary objective of the BSP's monetary policy is to
promote a low and stable inflation conducive to a balanced and sustainable
economic growth.
- Monetary operations - it refers to the implementation of monetary policy. To
ensure that the monetary policy decision is transmitted to the financial market
and the economy in general, the BSP uses its suite of monetary instruments
to influence the underlying demand and supply conditions for central bank
money.
- Systematic risk management - The objective of “Financial Stability” is to
enhance the resilience of the financial system, in its totality and in its
components, from shocks.
- Financial Supervision - Financial systems play a critical role for consumers
– both corporates and individuals – because they bridge the aspirations of
today with the economic fortunes of tomorrow.
- Payments and settlements system oversight - Payment systems are
essential to the effective functioning of financial systems worldwide. They
 provide the channels through which funds are transferred among banks and
other institutions to discharge payment obligations arising from economic and
financial transactions across the entire economy.
- Currency management - The Bangko Sentral ng Pilipinas has the exclusive
power and authority to issue coins and notes for circulation in the Philippines.
- Inclusive finance - Financial inclusion is a state wherein there is effective
access to a wide range of financial services for all, especially the vulnerable
sectors.
- Loans and credit operations - 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. It also grants loans or advances to banking institutions in precarious
financial condition or under serious financial pressures, subject to certain
conditions.

- The primary role of the Bangko Sentral ng Pilipinas is to implement policy in

the areas of money and banking, to support the promotion and maintenance
of price stability, external sustainability, and the integrity and value of the
Philippine peso through the effective management of external debt.

3. Who is the current Governor of Bangko Sentral?

- President Duterte appointed Benjamin Diokno to become the Governor of
Bangko Sentral, he was appointed last March 2019 up to date. The Governor
also serves as the chairman and principal representative of the Monetary
Board; chairman of Anti-Money Laundering Council and Philippine
International Convention Center; vice-chairman of the Governing Council of
Agriculture Credit Policy Council; member of the Capital Market Development
Council, Export Development Council, PhilExport board of trustees,
and Philippine Export-Import Credit Agency; and director of Philippine Deposit
Insurance Corporation, National Development Council, and National Home
Mortgage Finance Corporation.

4. What was the policy being maintained by Bangko Sentral on lending activities?
- Monetary policy in order to ensure the continued momentum of economic
recovery.

5. What was the cause of the continuous decline?

- The Community Quarantine. The National Government’s targeted fiscal
initiatives and health interventions will be crucial in boosting domestic
demand and strengthening the recovery.