Name: Vhetty May C.

Posadas
BSHM 2-A
May 04, 2022

Activity 5: ESSAY:

1. Discuss the functions of Bangko Sentral ng Pilipinas (15 points)

 The Bangko Sentral ng Pilipinas steps in to regulate the Philippine's money
supply, thereby influencing the nation's interest rates and the amount of currency
in circulation. The BSP seeks to promote and maintain price stability as a policy
anchor for a healthy macroeconomic environment. This is the first time that we
have an independent central bank, BSP, mandated to focus on this objective,
because it is understood that low and stable inflation promotes investment,
employment generation and sustainable growth.
 The BSP performs several important functions that have significant effect on the
value of money.
 The Money Manager. The BSP manages the amount of money available to the
public in order to keep the price of goods and services from being increased.
 The Supplier of Money. The Bangko Sentral Pilipinas is the only entity legally
allowed to issue money, paper notes, and coins in any amount.
 The Banker’s Bank. The Bangko Sentral ng Pilipinas, or BSP, grants loans to
and accepts deposits only from banks. However, it also has the power to grant
loans to banks for commercial, production, and similar purposes as well as
exports and agricultural activities.
 The Supervisor of Banks. In the exercise of its responsibility to supervise banks
and their compliance with banking rules and regulations, the Supervisor of Banks
is responsible for certain tasks.
 The Main Bank of the Government. The BSP is the official depository of the
government.

2. Differentiate between Philippine National Bank from Development bank of the

Philippines. (10 points)
 Philippine National Bank and the Development Bank of the Philippines have
distinct roles in the Filipino economy. PNB, a commercial bank, attends to the
requirements of normal times, granting loans and providing credit to productive
enterprises, while the Development Bank of the Philippines was established in
1946 as the Rehabilitation Finance Corporation to attend to the requirements of
rehabilitation and development after World War II.