REVIEWER IN IBT FINANCIAL STRUCTURE AND MONETARY POLICIES
FINANCIAL STRUCTURE AND MONETARY
POLICY IN THE PHILIPPINES
BANGKO SENTRAL NG PILIPINAS
 The central bank of the Republic of the
Philippines
 It was established on July 3 1993
pursuant to the provision 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
January 3 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.
MANDATE, FUNCTIONS & RESPONSIBILITIES
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. The adoption of inflation
targeting framework for monetary
policy in January 2002 is aimed at
achieving this objective
Monetary Operation
 Monetary operations refers to the
buying/selling of government securities,
lending/borrowing against underlying
assets as collateral, acceptance of fixed-
term deposits, foreign exchange swaps,
and the use of other monetary
instruments of the Bangko Sentral
aimed to Influencing the underlying
demand and supply conditions for
central bank money.
Systematic Risk Management
 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.
Financial Supervision
 The Bangko Sentral has supervision over
the operations of banks and exercises
such regulatory powers as provided in
the New Central Bank Act and other
pertinent laws over the operations of
finance companies and non-bank
financial institutions performing quasi-
banking functions.
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. 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
 REVIEWER IN IBT FINANCIAL STRUCTURE AND MONETARY POLICIES
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.
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.
Inclusive Finance
 In line with its strategic mandate to
promote broad and convenient access
to high quality financial services and
considers the interest of the general
republic, the BSP undertakes various
programs and policy initiatives aimed at
enhancing financial inclusion, financial
education, and consumer
empowerment.
Loans and Credits
 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 for a
significantly contributed to domestic
policy formulation; assured partners
through established crisis prevention
safe nets; broadened opportunities
offered by financial integration and
cooperation agreements; and raised
skills and knowledge through capacity
building initiatives.
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
Philippines economy. As the portal
 REVIEWER IN IBT FINANCIAL STRUCTURE AND MONETARY POLICIES

strategically presents the BSP’s available Integrity

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.
VISION, MISSION AND CORE VALUES
VISION
 The BSP aims to be recognized globally
as the monetary authority and primary
financial system supervisor that
supports a strong economy and
promotes a high quality of life for all
Filipinos.
 Performing mandate with sincerity,
honesty and uprightness, worthy of
respect and emulation from others.
Solidarity
 Performing with team spirit; acting and
thinking as one in the pursuit of
common goals and objectives
Accountability
 Taking full responsibility for one’s or
group’s actions.
ORGINIZATIONAL STRUCTURE

MISSION 1. MONETART BOARD

2. GOVERNOR
 To promote and maintain price stability, 3. MONETARY AND ECONOMICS SECTOR
a strong financial system and a safe and 4. FINANCIAL SUPERVISION SECTOR
efficient payments and settlements 5. CORPORATE SERVICES SECTOR
system conducive to a sustainable and 6. PAYMENTS & CURRENCY
inclusive growth of the economy MANAGEMENT SECTOR
CORE VALUES

Excellence

 Consistently doing our best to master

our craft, continually improving our
competencies and learning new things
in pursuit of the organizational goals,
comparable to the best practices of
other central banks

Patriotism

 Selfless commitment to the service of

the Filipino people and the country
 REVIEWER IN IBT FINANCIAL STRUCTURE AND MONETARY POLICIES

Governance of the Bank Structure of the Philippine Banking System

 The Monetary Board exercises the

powers and functions of the BSP, such TYPE OF BANK NO
as the conduct of monetary policy and
supervision of the financial system. Its Universal Banks 21
chairman is the BSP Governor, with five
Private Domestic 12
full-time members from the private
sector and one member from the Government 3
Cabinet. The Governor is the chief
executive officer of the BSP and is Foreign Branches 6
required to direct and supervise the
operations and internal administration Commercial Banks 7
of the BSP
Private Domestic 5
Financial System Foreign Subsidiaries 2
 A financial system is a set of
institutions, such as bank, insurance Thrift Banks 47
companies, and stock exchanges that Rural Banks 420
permit the exchange of funds. Financial
systems exist on firm, regional, and Cooperative Banks 25
global levels. Quasi-banks 7
 Borrowers, lenders, and investors
exchange current funds to finance Non-stock S&Ls 63
projects, either for consumption or Foreign Bank Branches* 18
productive investments, and to pursue
a return on their financial assets/ Foreign Bank Rep. Offices 13
 The financial system also includes sets Total Banking Institutions 621
of rules and practices that borrowers
and lenders use to decide which *Not having Universal or Commercial Bank
projects get financed, who finances Charters
projects, and terms of financial deals. Non-Bank Financial Institutions

Philippines Financial System structure Private Non-Bank Institutions

 Includes banks, investment houses,
Investment House/Bank
finance companies, investment
companies, securities dealers/brokers,  AYALA
pawnshop, lending investors, non-stock  BDO
savings and loan associations, venture  MERALCO
capital corporations, and credit card  SM
companies, which are under BSP’s  METROBANK
supervision.
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Securities Brokers/Dealers (BEST FOREX PRIVATE INSURANCE

BROKERS IN THE PHILIPPINES)
15 best insurance company in Philippines
 Markets.com
1. Sun Life
 Xtb
 Fpmarkets 2. AIA Philippines
3. Pru Life UK
 Pepper stone
 Etoro 4. AXA Philippines
5. InLife
 AvaTrade
 OX 6. BPI-AIA
7. Manulife
 Markets
8. BDO Life
Building and Loan Associations 9. Allianz PNB Life
10. Manulife China Bank Life
 HC MUTUAL building and loan 11. Sun Life Grepa Financial
association 12. FWD
 HOME CREDIT mutual building and loan 13. Cocolife
association 14. Pioneer Life
 PHILIPPINES COAST GUARD SAVINGS 15. EastWest Ageas Insurance
AND LOAN ASSOCIATION INC
(Authorized by the Bangko Sentral ng Top 10 Life Insurance Companies in the
Pilipinas) Philippines (2014)

Credit Cooperative/Union (COOP) 1. Sun Life of Canada (Phil’s.)

2. Philippine AXA Life
 Sacred Heart Saving Cooperative 3. Philamlife
 San Dionisio Credit Cooperative 4. Prulife of UK
 Barangka Credit Cooperative 5. BPI Philam
 MSCCP 6. Manulife
7. Insular Life
8. Sun Life Grepa
9. Generali Philippines
10. Manulife Chinabak

Pawnshop

 CEBUANA LHULLIER
 TAMBUNTING
 PALAWAN PAWNSHOP
 VILLARICA
 REVIEWER IN IBT FINANCIAL STRUCTURE AND MONETARY POLICIES

Non-Stock Savings and Loan Associations Monetary Policy Instruments

 Armed Forces and Police Savings & Loan
Association, Inc.
 Public Safety Savings and Loan
Association, Inc. (PSSLAI)
 MESALA INC.
 Bureau of Jail Management and
Penology Savings and Loan Association,
Inc. (BJMPSLAI)
Trust Companies
 Sun Life (Investment Management)
 First Metro Investment Corporation
(Metro bank Group)
 Asia Link (Finance Corporation)
 Sumisho (Motor Finance Corporation)
Monetary policy actions are aimed at
influencing the timing cost and availability of
money and credit and for other financial factors
for the purpose of influencing the price level.
Monetary policy instruments in the Philippines
are classified into:
 Open Market Operations
 Rediscounting
 Reserve Requirement
 Direct Controls
 Moral Suasion

Government Non-bank Financial Institutions

 GSIS
 Social Security System (SSS)
 PhilEXIM (Philippine Export-Import
Credit Agency)
 National Home Mortgage Finance
Corporation (NHMFC)

MONETARY POLICY

What is Monetary Policy?

 Refers to the measures or actions taken

by the central bank to influence the
general price level and the level of
liquidity in the economy.