1900
The BSP has the exclusive
• Act No. 52 was passed by the First Philippine
Commission placing all banks under the
Bureau of Treasury.
1933
• Particular group of Filipinos were trying to
conceptualize a central bank for the
Philippines.
• Resulted from a careful understanding of the
economic provisions of HARE HAWES
CUTTING BILL.
FEBRUARY 1929
• The Bureau of Banking under the Department
of Finance took over the task of banking
supervision.
1939
• A bill establishing a central bank was drafted
by Secretary of Finance Manuel Roxas and
approved by the Philippine Legislature.
However, the bill was returned by the US
government, without action, to the
Commonwealth Government.
FEBRUARY 1948
• President Manuel Roxas submitted to
Congress a bill “Establishing the Central
Bank of the Philippines, defining its powers
in the administration of the monetary and
banking system, amending pertinent
provisions of the Administrative Code with
respect to the currency and the Bureau of
Banking, and for other purposes.
JUNE 15 1948
• The bill was signed into law as Republic Act
No. 265 (The Central Bank Act) by President
Elpidio Quirino.
JANUARY 3 1949
• The Central Bank of the Philippines (CBP)
was inaugurated and formally opened with
Hon. Miguel Cuaderno, Sr. as the first
governor.
JULY 3 1993
• The Bangko Sentral ng Pilipinas (BSP) was
established to replace the CBP as the
country's central monetary authority.
BANGKO SENTRAL NG PILIPINAS
• central bank of the Republic of the Philippines.
• established on 3 July 1993 pursuant to the
provisions of the 1987 Philippine Constitution
and the New Central Bank Act of 1993.
• provides policy directions in the areas of
money, banking and credit.
Under the New Central Bank Act
• Liquidity Management. The BSP formulates
and implements monetary policy aimed at
influencing money supply consistent with its
primary objective to maintain price stability.
• Currency issue.
power to issue the national currency.
• Lender of last resort. The BSP extends
discounts, loans and advances to banking
institutions for liquidity purposes.
• Financial Supervision. The BSP supervises
banks and exercises regulatory powers over
non-bank institutions performing quasi-banking
functions.
• Management of foreign currency reserves.
The BSP seeks to maintain 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.
• Determination of exchange rate policy. The
BSP determines the exchange rate policy of
the Philippines.
Deputy Governor <operating sector>
• Monetary and Economics Sector is mainly
responsible for the operations/activities
related to monetary policy formulation,
implementation, and assessment
• Financial Supervision Sector is mainly
responsible for the regulation of banks and
other BSP-supervised financial institutions, as
well as the oversight and supervision of
financial technology and payment systems
• Currency Management Sector is mainly
responsible for the forecasting, production,
distribution, and retirement of Philippine
currency, as well as security documents,
commemorative medals, and medallions
• Corporate Services Sector is mainly
responsible for the effective management of
corporate strategy, communications, and
risks, as well as the BSP's human, financial,
technological, and physical resources to
support the BSP's core functions
Financial Institution
• government agency or privately owned
entity that collects funds from the public, and
from other institutions
• Financial institutions channel the funds from
lenders to borrowers. They can also be the
lenders and borrowers themselves.
Depository Financial institution
• Any group that includes commercial banks,
savings and loan associations, mutual savings
banks, and credit unions-conduct business by
accepting public deposits.
Non Depository Financial institution
• Such as brokerage firms, life insurance
companies, pension funds, and investment
companies, fund their investment activities
directly from the financial markets by selling
securities to the public
The private banking institutions are comprised of Bank is a financial institution which accepts money
commercial banking such as universal banks and from the public for the purpose of lending or
ordinary commercial bank. investment repayable on demand or otherwise
withdrawable by cheques, drafts or order or otherwise.
6 Private Banking Institution
1. Commercial bank institution DEFINITION ACCORDING TO CULBERSTON
2. The savings and mortgage banks “Commercial banks are the institutions that make short
3. The savings and loan association term loans to business and in the process create
4. The private development banks money.”
5. The rural banks
6. The thrift banks TYPES OF COMMERCIAL BANKS
DEPOSIT BANKS
The government banking institutions on the other INDUSTRIAL BANKS
hand consist of Philippine National Bank, Development SAVINGS BANKS
Bank of the Philippines, Land Bank of the Philippines EXCHANGE BANKS
and the Philippine Al-Amanah Bank. AGRICULTURAL BANKS
MISCELLANEOUS BANKS
4 Government Banking Institution
1. The Philippine national bank
PRIMARY FUNCTIONS (commercial banks)
2. The development bank of the Philippines
Acceptance of deposits
3. The landbank of the Philippines
4. The al-Amanah Islamic investment bank of the • It is the most important function of commercial
Philippines banks.

Private non-bank institution main kinds of deposits

1. Investment house/banks
2. Securities broker/dealers
3. Building and loan association
4. Credit unions
5. Private insurance
6. The pawnshop
7. Trust companies
8. Nom stock savings and loan
association
9. Financing companies
Government Non-Financial Institution
1. The government service insurance system
2. The social security system
3. The national home mortgage \finance
corporation
Under Section 5 of Presidential Decree No. 1267
• To purchase, acquire, sell, discount, refinance,
or otherwise deal in home mortgages
• To borrow funds from domestic or foreign
private or public financial institutions
• debentures, and other debt instruments in local
or foreign currency.
• To own, lease, purchase or otherwise acquire,
sell or otherwise dispose of property, real or
personal
• To invest funds or monies of the corporations
Financial System describes collectively the financial
markets, the participants, and the instruments and
securities that are traded in the said markets.
1. Current account deposits or demand deposits
- are repayable by the banks on demand
2. Fixed deposits or time deposits
which the amount is deposited with the bank
for a fixed period of time.
3. Saving deposit
deposits combine features of both current
account deposits and fixed deposits
Advancing of Loans
• The deposits received by banks are not allowed
to remain idle.
o Cash credit
o Demand loans
o Short term loans
Creation of credit
• is most significant function of commercial
banks. They do not provide cash.
Clearing of cheques
• the process of moving a cheque from the
bank in which it was deposited to the bank on
which it was drawn, and the movement of the
money in the opposite direction. “Clearing
cycle”
SECONDARY FUNCTIONS (commercial
banks)
Agency Services
• Banks act as agents to their customers in
different ways
General Utility Service
• Commercial banks also provide certain
services of general utility to the society
 • US Congress passed the Banking Act of 1933, • Under R.A. No. 9576, the PDIC may proposed
which created the Federal Deposit Insurance to adjust the MDIC, subject to the approval of
Corporation (FDIC). the President of the Philippines, in case of a
condition that threatens the monetary and
June 22, 1963 financial stability of the banking system that
• In order to stabilize the situation and restore may have systematic consequences.
confidence in banks, the Philippines government
created its own version of deposit insurance system • ‘insured deposit’ means the amount due to
through Republic Act 3591, which created the any bona fide depositor for legitimate deposits
Philippine Deposit Insurance Corporation in an insured bank net of any obligation of the
(PDIC) on June 22, 1963 to protect depositors depositor to the insured bank as of date of
and help maintain financial stability. closure, but not to exceed P500,000.00.
• Voluntary membership by banks
Shall the depositor pay any insurance premium to
• Mr. Basilio Estanislao, then Special Assistant to PDIC?
Central Bank Governor Andres Castillo and later - No. Insurance premium is paid by the banks, not by
Director of the PDIC itself, was tasked to prepare the depositors.
the manuscript for Republic Act 3591.
Can PDIC insurance coverage be increased by
• President Franklin D. Roosevelt <first “fireside having several accounts in the same name in an
chat”> March 12, 1933 insured bank?
“After all, there is an element in the readjustment of our - No. Deposit insurance coverage is not determined on
financial system more important than currency, more a per-account basis.
important gold, and that is the confidence of the people.”
If I have deposits in several different insured banks,
1968 will my deposits be added together for insurance
The commenced operations of PDIC after the purposes?
appointment of the Board of Directors and the release - No. Deposits in different banking institutions are
of the PDIC’s initial permanent insurance fund in the insured separately.
amount of Php5 million.
Republic Act 5571 made banks’ membership with the
PDIC mandatory.
Year MDIC Total Total number Number of
Deposit of deposit members
accounts banks
1963 10,000 3,876 1,754,562 Not avail.
1978 15,000 53,157 17,457,566 1,092
1984 40,000 150,574 26,789,471 1,098
1992 100,000 492,236 17,939,968 919
2004 250,000 2,754,233 26,169,561 891
2009 500,000 4,660,722 34,522,007 785
2012 500,000 5,746,298 41,775,024 696

What is the Philippine Deposit Insurance

Corporation (PDIC)?
• government instrumentality created in 1963 by
virtue of Republic Act 3591 to insure the
deposits of all banks which are entitled to the
benefits of insurance.
What is PDIC’s overall mandate?
• PDIC exists to provide deposit insurance
coverage for the depositing public to help
promote public confidence and stability in
the economy.
What are the functions of PDIC?
• Deposit Insurer
• Co-regulator of Banks
• Receiver and Liquidator of Closed Banks
What is PDIC’s maximum deposit insurance
coverage?
• Effective June 1, 2009, the maximum deposit
insurance coverage is P500,000 per
depositor.