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BANGKO SENTRAL NG PILIPINAS

Bangko Sentral ng Pilipinas (BSP) – central bank of the Republic of the Philippines. It was established on 3
July 1993 pursuant to the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993.
The BSP took over from Central Bank of Philippines, which was established on 3 January 1949, as the country’s
central monetary authority. The BSP enjoys fiscal and administrative autonomy from the National Government
in the pursuit of its mandated responsibilities.

HISTORY OF THE BANK: Creating a Central Bank for the Philippines

Act No. 52 was passed by the First Philippine Commission placing all banks
1900 under the Bureau of Treasury. The Insular Treasurer was authorized to
supervise and examine banks and banking activities.
The Bureau of Banking under the Department of Finance took over the task
February 1929
of banking supervision.
Conceptualized a central bank for the Philippines after it came up with the
rudiments of a bill for the establishment of a central bank after a thorough
1933
study of the economic provisions of the Hare-Hawes Cutting bill, the
Philippine Independence bill approved by the US Congress.
Discussion about a Philippine central bank that would promote price stability
and economic growth continued.

1935-1941 (Commonwealth The country’s monetary system then was administered by the Department of
Period) Finance and the National Treasury.

The Philippines was on the exchange standard using the US dollar—which

was backed by 100 percent gold reserve—as the standard currency.
Required by the Tydings-McDuffie Act, the Philippine legislature passed a law
establishing a central bank.
1939
However, President Franklin D. Roosevelt disapproved it due to strong
opposition from vested interests.
1944 A second law was passed but the arrival of the American liberalization forces
(Japanese Occupation) aborted its implementation.
A joint Philippine-American Finance Commission was created to study the
Philippine currency and banking system.

After President Manuel Roxas assumed office, he instructed then Finance

Secretary Miguel Cuaderno, Sr. to draw up a charter for a central bank.
1946
The Commission, which studied Philippine financial, monetary, and fiscal
problems in 1947, recommended a shift from the dollar exchange standard to
a managed currency system.

The Commission recommended the reform of the monetary system, the

formation of a central bank and the regulation of money and credit.
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The charter of the Central Bank of Guatemala was chosen as the model of
the proposed central bank charter.

A central bank was necessary to implement the proposed shift to the new
system.
A Central Bank Council was formed to review the Commission’s report and
August 1947
prepare the necessary legislation for implementation.
President Manuel Roxas created the Central Bank Council to prepare the
February 1948 charter of a proposed monetary authority, produced a draft, and later on
passed the congress.
The newly proclaimed President Elpidio Quirino, who succeeded President
June 15, 1948 Roxas, affixed his signature on Republic Act No. 265, the Central Bank Act of
1948.
The Central Bank of the Philippines (CBP) was inaugurated and formally
opened with Hon. Miguel Cuaderno, Sr. as the first governor.

January 3, 1949 The broad policy objectives contained in RA No. 265 guided the CBP in the
implementation of its duties and responsibilities, particularly in relation to the
promotion of economic development in addition to the maintenance of internal
and external monetary stability.
RA No. 265 was amended by Presidential Decree No. 72 to make the CBP
more responsive to changing economic conditions.

PD No. 72 emphasized the maintenance of domestic and international

monetary stability as the primary objective of the CBP. Moreover, the CBP’s
authority was expanded to include not only the supervision of the banking
system but also the regulation of the entire financial system.
November 29, 1972
Presidential Decree No. 72 adopted the recommendations of the Joint IMF-
CB Banking Survey Commission which made a study of the Philippine
banking system.

The Commission proposed a program, and its most important

recommendations were related to the objectives of the Central Bank, its
policy-making structures, scope of its authority and procedures for dealing
with problem financial institutions.
The 1973 Constitution, the National Assembly was mandated to establish an
independent central monetary authority.
1973
Later, PD 1801 designated the Central Bank of the Philippines as the central
monetary authority (CMA).
Further amendments were made with the issuance of PD No. 1771 to improve
January 1981 and strengthen the financial system, among which was the increase in the
capitalization of the CBP from P10 million to P10 billion.
The 1987 Constitution adopted the provisions on the CMA from the 1973
Constitution that were aimed essentially at establishing an independent
1987
monetary authority through increased capitalization and greater private sector
representation in the Monetary Board.
The administration that followed the transition government of President
June 14, 1993 Corazon C. Aquino saw the turning of another chapter in Philippine central
banking.
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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.

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.

The law also gives the Bangko Sentral fiscal and administrative autonomy
which the old Central Bank did not have.
Executive Order No. 16 amended the Monetary Board membership to
1986 promote greater harmony and coordination of government monetary and
fiscal policies.
The New Central Bank Act took effect.
July 3, 1993
Republic Act No. 7653 was passed establishing the Bangko Sentral ng
Pilipinas (BSP), replacing CBP as the country's central monetary authority.
Republic Act No. 11211 was passed amending RA No. 7653.
February 14, 2019
The charter amendments bolster the capability of the BSP to safeguard price
stability and financial system stability.

PRICE STABILITY
The BSP's main responsibility is to formulate and implement policy in the areas of money, banking and credit
with the primary objective of preserving price stability. Price stability refers to a condition of low and stable
inflation. By keeping price stable, the BSP helps ensure strong and sustainable economic growth and better
living standards.
Monetary Policy – Primary objective is to promote a low and stable inflation conducive to a balanced and
sustainable economic growth.
Monetary Policy Report was launched in February 2022 and it replaces the quarterly publication of the
Inflation Report and serves as the flagship BSP publication on monetary policy. This provides the public
a detailed view of the BSP’s forecasts as well as guidance on the likely direction of monetary policy over
the near term.
Monetary Policy Decisions decided to raise the interest rate on the BSP’S overnight reverse repurchase
facility by 50 basis points to 3.75 percent, effective this August 19,2022. Accordingly, the interest rates
on the overnight deposit and lending facilities were raised to 3.25 percent and 4.25 percent, respectively.
Calendar of Policy Meetings holds monetary policy meetings eight (8) times a year, with meeting
intervals of six (6) to eight (8) weeks, to deliberate, discuss, and decide on the appropriate monetary
policy stance of the BSP in order to keep inflation within the target.
Highlights of MB meetings on Monetary Policy is when the BSP publishes the highlights of the
meetings of the Monetary Board on monetary policy to help the public gauge the BSP's commitment to
achieve the inflation target.
Open Letter to the President is to ensure accountability in cases where the BSP fails to achieve inflation
target, the BSP Governor issues an Open Letter to the President outlining the reasons why actual inflation
did not fall within the target, along with the steps that will be taken to bring inflation towards the target.
Open Letters to the President have been issued on 16 January 2004, 18 January 2005, 25 January 2006,
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19 January 2007, 14 January 2008, 26 January 2009, 28 January 2016, 27 January 2017, 25 January
2019 and 18 January 2022
The BSP was able to achieve its inflation target from 2009 to 2014, 2017, 2019, and 2020. For
this reason, no Open Letters were issued for this period.
Inflation Targeting is the BSP’s way of conducting monetary policy to achieve its primary objective of
price stability. The BSP adopted the inflation targeting framework in January 2002.
Monetary Operations – Refer to the implementation of monetary policy. The BSP uses its suite of monetary
instruments to influence the underlying demand and supply conditions for central bank money.
Monetary Operations under the Interest Rate Corridor Framework
Overthinking Reverse Repurchase Facility is the RRP facility is the primary monetary instrument of
the BSP. The RRP interest rate signals the policy rate of the BSP.
The overnight RRP is offered using a fixed-rate and full-allotment method.
Issuance of BSP Securities are monetary instruments issued by the BSP for its monetary policy
implementation and liquidity management operations to steer short-term market interest rates towards
the policy rate and influence liquidity conditions in the financial system.
Term Deposit Facility is a key liquidity absorption facility, commonly used by CBs for liquidity
management. Currently, three tenors— 7 days, 14 days and 28 days—are offered in weekly auction.
Standing Liquidity Facilities are available on demand to qualified counterparties during BSP business
hours in order to help them adjust their liquidity positions at the end of the day.

FINANCIAL STABILITY
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. In this context, making sure that banks operate in
a safe and sound manner is in the public interest. Its focus is on managing so-called “systemic risks” and this is
done through macroprudential policy.
The promotion of “Financial Stability” is a formal mandate that is uniquely ascribed to the Bangko Sentral ng
Pilipinas (BSP). This is provided for in the amended BSP Charter (Republic Act No. 11211) which was signed
by President Duterte in February 2019.
Systemic Risk Management – affects the financial system so that finance continues to be a value proposition
to consumers in normal times while remaining resilient when disruptions do arise. This is the overarching global
norm in financial system oversight.
Macroprudential Framework reflects the Council’s thinking, the institutional arrangements as well as
the tools that will be used to sustain and enhance the health of the financial system. This health is
specifically defined in terms of the system’s resilience against “systemic risks.” It also highlights the
collaborative nature inherent to the FSCC.
Institutional Arrangements warrants an institutional arrangement to ensure continuous focus while
setting clear accountabilities.
Recent Initiatives contains the recent initiatives of the BSP and the FSCC in the collective pursuit on
Financial Stability.
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Financial Supervision
Supervisory Framework
Banking Regulations
Directories of Supervised Fls
Banking Statistics
Advisories for Supervised Fls

PAYMENTS AND SETTLEMENTS

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. An efficient, secure, and
reliable payment system reduces the cost of exchanging goods and services, and it is an essential tool for the
effective implementation of monetary policy, and the smooth functioning of money and capital markets. It is this
key role played by payment and settlement system (PSS) in the smooth functioning of an economy in general
and its financial and monetary system in particular that gives the central bank (CB) a strong incentive for ensuring
that an effective, reliable and secure payment and settlement system is in place.
In the Philippines, the BSP takes the lead in promoting an efficient payments and settlements system by
providing:
a. the necessary infrastructure through the operations of the Philippine Payment and Settlement System or the
“PhilPaSS”; and
b. a policy and regulatory framework, also known as the National Retail Payment System or NRPS, to establish
a safe, efficient, and reliable retail payment system in the country.
Roles of the BSP
Operator of the real time gross settlement system known as PhilPaSS serves as the payment
system operator responsible for the operation and maintenance of PhilPaSS and its critical components.
It ensures that the operation of PhilPaSS is continuous, safe and efficient so that time-critical payments
are completed as expected to facilitate and enhance economic processes, manage risks, and absorb
shocks in order to promote financial stability.
Provider of credit facilities to banks as a lender of last resort
Intraday Liquidity Facility (ILF) fully collateralized facility established to maintain the smooth and
efficient operation of the payments system in order to avoid interbank payments gridlock in the
settlement process within PhilPaSS business hours.
Overdraft Credit Line (OCL) collateralized facility which aims to assist bank experiencing
unexpected or higher than usual volume of inward check transactions.
Overseer of the payments and settlements system oversees the payment systems in the country to
ensure safeguards are in place to mitigate systemic risks arising from settlement, credit and liquidity risks
of payments and settlement systems participants.
User of its own RTGS system
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The automated collection and settlement of Supervision and Examination Sector annual
supervisory fees;
Online processing of eRediscounting loan proceeds and collection of banks’ maturing loans with
Department of Loans and Credit;
Processing/posting of banks’ cash deposit and withdrawal transactions with Cash Department;
Investment/maturities of funds placed by the Provident Fund Office; and
Trading transactions as well as payments of maturing RRP/SDA placements with Treasury
Department
Initiate changes/reforms for the payments system initiated reform to the retail payment systems in
the country is the National Retail Payment System.
Laws and Regulations
National Payment Systems Act (NPSA)
Principles for Financial Market Infrastructures
Publications and Reports
Real Time Gross Settlement (Rtgs) System: PhilPaSS
PhilPaSS is the acronym for Philippine Payment and Settlement System, a real time gross settlement (RTGS)
system owned and operated by the Bangko Sentral ng Pilipinas (BSP) that processes and settles interbank high
value payment transactions of banks through the demand deposit accounts of the bank maintained with the BSP.
Membership Requirements
Forms
PhilPaSS Advisories
Manuals and Guides
National Retail Payment System
The National Retail Payment System or NRPS is a policy and regulatory framework that aims to provide policy
direction in carrying out retail payment activities through BSP supervised financial institutions (BSFIs) by defining
high-level policies, principles, and standards, which when adopted, would lead to the establishment of a safe,
efficient and reliable retail payment system.
Regulatory Framework
Empowering Every Juan and Maria
Fees on Electronic Payments
PesoNet Participants
InstaPay Participants
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CURRENCY MANAGEMENT
The BSP has the exclusive power and authority to issue the national currency. BSP’s notes and coins are issued
against, and in amounts not exceeding, the assets of the BSP. 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.
Coins and Notes
The Bangko Sentral ng Pilipinas has the exclusive power and authority to issue coins and notes for circulation
in the Philippines. The BSP has recently launched enhanced Philippine coins and notes that are more
responsive to the needs of the elderly and the visually impaired, and feature the latest anti-counterfeiting
technology. It also issues legal tender commemorative coins and notes of limited quantity to celebrate or
recognize the significance of a person, place and event in Philippine history.
1000-Piso Polymer Banknote calls for the use of polymer substrate, which is known to be more hygienic
and sanitary, durable and cost-effective, secure and difficult to counterfeit, and sustainable. In April 2022,
the BSP began the circulation of the new and improved 1000-Piso polymer banknote. This will be used
alongside the 1000-Piso paper banknotes.
BSP Coin Series issued starting in 1995 and is still in circulation as legal tender coins.
New Generation Currency Coin Series launched in 2018, the New Generation Currency Coin Series
features historical figures and native flora.
New Generation Currency Banknote Series now in circulation was first issued in December 2010. The
BSP launched in 2020 enhanced Philippine banknotes that are more responsive to the needs of the
elderly and the visually impaired and feature the latest anti-counterfeiting technology.
Security Features in order to ascertain the genuineness of Philippine banknotes, the BSP advises the
public to carefully feel, look and tilt their banknotes to check for security features.
Demonetized Coins and Notes Demonetization is the process by which a central bank removes the
monetary value of a legal tender currency it issues. Demonetized currencies are no longer accepted as
payment for goods and services.
English Series
Pilipino Series
Ang Bagong Lipunan Series
Flora and Fauna Series
Improved Flora and Fauna Series
New Design Series
Commemorative Currency
Commemorative Coins
Commemorative Notes
Commemorative Coins and Notes Available for Sale
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History of Philippine Money

Philippine coins and notes are the treasure of our nation. They are woven into the fabric of our social, political
and economic life. From its early bead-like form to the paper notes and coins that we know today, our money
has been a constant reminder of our journey through centuries as a people relating with one another and with
other peoples of the world.
Pre-Hispanic Era Long before the Spaniards came to the Philippines, trade among the early Filipinos
and with traders from the neighboring lands like China, Java, Borneo, and Thailand was conducted
through barter.
The inconvenience of the barter system led to the adoption of a specific medium of exchange – the cowry
shells. Since the Philippines is naturally rich in gold, it was used in ancient times for barter rings, personal
adornment, jewelry, and the first local form of coinage called Piloncitos.
These had a flat base that bore an embossed inscription of the letters “MA” or “M” like the Javanese script
of the 11th century.
Spanish Era (1521-1897) The cobs or macuquinas of colonial mints were the earliest coins brought in
by the galleons from Mexico and other Spanish colonies Spanish dos mundos were circulated extensively
not only in the Philippines but the world over from 1732-1772Treasured for its beauty of design, the coin
features twin crowned globes representing.
Spanish rule over the Old and the New World, hence the name “two worlds.”
Revolutionary Period (1898-1899) Philippine Republic of 1898 under General Emilio Aguinaldo issued
its own coins and paper currency backed by the country’s natural resources. At the Malolos arsenal, two
types of two-centavo copper coins were struck. One peso and five-peso revolutionary notes printed as
Republika Filipina Papel Moneda de Un Peso and Cinco Pesos were freely circulated.
Designed by Pedro Paterno, Mariano Limjap and Telesforo Chuidian.
American Period (1900-1941) 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. The coins issued under the system bore the designs of Filipino engraver
and artist, Melecio Figueroa.
Japanese Occupation (1942-1945) 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.
On the other hand, Guerrilla Notes or Resistance Currencies which are in low denominations, were issued
by different provinces and, in some instances, municipalities through their local currency boards to show
resistance against the Japanese occupation.
Philippine Republic The “Filipinization” of the Republic coins and notes began in the late 60’s and is
carried through to the present. In the 70’s, the Ang Bagong Lipunan (ABL) series notes were circulated,
which were printed at the Security Printing Plant starting 1978. A new wave of change swept through the
Philippine coinage system with the Flora and Fauna Coin Series initially issued in 1983. The New Design
Series of banknotes issued in 1985 replaced the ABL series.
Ten years later, a new set of coins and notes were issued carrying the logo of the Bangko Sentral ng
Pilipinas.
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The Philippine Cash Cycle

Production of Currency Philippine coins and banknotes are mostly produced in the BSP Security Plant
Complex (SPC). Over the past four decades, the SPC has become a world-class producer of quality
coins and notes. It has overseen the design, production and issuance of four generations of legal tender
Philippine currency.
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.
Currency in Circulation The annual volume/value of currency issued is based on currency demand that
is estimated from a set of economic indicators which generally measure the country’s economic activity.
The total amount of banknotes and coins that the BSP may issue should not exceed the total assets of
the BSP.

INCLUSIVE FINANCE
In line with its strategic mandate to promote broad and convenient access to high quality financial services and
consider the interest of the general public, the BSP undertakes various programs and policy initiatives aimed at
enhancing financial inclusion, financial education, and consumer empowerment.

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.

INTERNATIONAL RESERVES MANAGEMENT

The BSP maintains a healthy level of international reserves to provide liquidity support in times of volatility in the
exchange rate and balance of payments.

INTERNATIONAL OPERATIONS
The BSP’s mandate on international operations under the purview of the International Operations Department is
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, foreign investments and other foreign
exchange (FX) transactions.

INTERNATIONAL ECONOMIC COOPERATION

The BSP’s proactive engagement in various regional and international fora significantly contributed to domestic
policy formulation; assured partners through established crisis prevention safety nets; broadened opportunities
offered by financial integration and cooperation agreements; and raised skills and knowledge through capacity
building initiatives.
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ECONOMIC EDUCATION
The BSP’s Economic Education Portal provides the general public a guided access on the BSP’s collection of
information on economic education for them to better understand and appreciate the role of the BSP, as the
country’s central bank, in the Philippine economy. As the portal strategically presents the BSP’s available
learning materials, it aims to develop and strengthen the public’s knowledge on economic concepts that could
eventually guide them in making sound economic and financial decisions.

INVESTOR RELATIONS GROUP (IRG)

The Investor Relations Group (IRG) of the Bangko Sentral ng Pilipinas (BSP, the Central Bank of the Philippines)
was created in July 2001 to raise the Philippine government’s credit profile and promote the country as a viable
investment destination.
Now under BSP’s Strategic Communication and Advocacy, the core of IRG’s mandate is to communicate before
an international audience key messages on the strengths of the Philippine economy, including sound
macroeconomic fundamentals, improved investment climate, game-changing policy reforms, and long-term
economic growth potential.

VISION, MISSION, AND CORE VALUES ORGANIZATION AND GOVERNANCE

GOVERNANCE OF THE BANK

Monetary Board – exercises the powers and functions of the BSP, such as the conduct of monetary policy and
supervision of the financial system. Its chairman is the BSP Governor, with five full-time members from the
private sector and one member from the Cabinet.
Governor – chief executive officer of the BSP and is required to direct and supervise the operations and internal
administration of the BSP.
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Monetary and Economics Sector (MES) is mainly responsible for the operations/activities related to
monetary policy formulation, implementation, and assessment.
Financial Supervision Sector (FSS) 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.
Corporate Services Sector (CSS) is mainly responsible for the delivery of the human, financial, and
physical resource needs of the BSP. The ODG-CSS supervises four (4) sub-sectors in-charge of the
areas of Human Resource, Comptrollership, Procurement, and Management Services, while also
exercising supervision over the BSP’s Provident Fund and Security Services.
Payments and Currency Management Sector (PCMS) is mainly responsible for maintaining the safety
and integrity of the Philippine currency and ensuring a well-functioning payments and cash ecosystem
that facilitates the economic activity and supports long-run economic growth.
Regional Operations and Advocacy Sector (ROAS) is mainly responsible for overseeing the
operations of the Financial Inclusion Office, Economic and Financial Learning Office, Consumer
Protection and Market Conduct Office, Strategic Communication and Advocacy, New Clark City –
Program Management Office, and Regional Operations.

BSP SEAL

AUDITED FINANCIAL STATEMENTS

The Management of the Bangko Sentral ng Pilipinas (BSP) is responsible for the preparation and fair
presentation of the financial statements in accordance with Republic Act No. 7653 (the New Central Bank Act)
and applicable Philippine Financial Reporting Standards and Philippine Accounting Standards as aligned with
the International Financial Reporting Standards and International Accounting Standards, and for such internal
control as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
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FACILITIES
BSP Museum is within thecomplex of the Bangko Sentral ng Pilipinas, the nation's central monetary
authority, resides a numismatist's haven - the Museo ng Bangko Sentral ng Pilipinas. Inaugurated on
January 3, 1999, as part of the celebration of the 50 years of central banking in the Philippines, the Museo
showcases the Bank's collection of currencies.
Economic and Financial Learning Center is the focal point of contact of the public of information
concerning economic and financial matters. Instead of gathering various information from different
departments/locations within the BSP, researchers can just visit the EFLC for their information
requirements.
KYM Briefing is the Payments and Currency Management Sector (PCMS) regularly conducts two (2)
Know Your Money (KYM) Programs with gallery tour of the various phases of printing banknotes and
security documents.

ACQUIRED PROPERTIES FOR SALE

BSP-acquired properties are available for sale initially through public auction, and in case of unsuccessful
bidding, are offered for negotiable sale. The sale of BSP-acquired properties shall be on an "As is, Where is"
basis and the buyer shall undertake the responsibility to acquire and maintain peaceful possession and
enjoyment of the property at his expense.
Properties for Public Auction
Properties for Negotiated Sale