MONEY

FUNCTIONS OF MONEY
• MONEY as UNIT OF ACCOUNT – measures the
value of various goods and services.

• MEDIUM OF EXCHANGE – facilitates

transaction of goods

• STORE OF VALUE - savings

 DEMAND FOR MONEY
• Affected by several factors including the level of income, interest, and inflation
as well as uncertainty about the future. The way in which these factor affect
money demand is usually explained in the 3 MOTIVES IN DEMANDING MONEY:

• TRANSACTION MOTIVE - most transactions involve exchange of money.

Transactions made in the economy tend to increase as income rises, hence if
there is an increase in income, the demand for money also increases.

• PRECAUTIONARY MOTIVE – People often demand money as precaution

against uncertain future.

• SPECULATIVE MOTIVE – Arises in situation where holding money is perceived

less risky.
 THE ROLE OF THE CENTRAL BANK
OBJECTIVE
•The BSP’s primary objective is to maintain price stability conducive to a balanced and
sustainable economic growth. The BSP also aims to promote and preserve monetary
stability and the convertibility of the national currency.

RESPONSIBILITY
•The BSP provides policy directions in the areas of money, banking and credit. It
supervises operations of banks and exercises regulatory powers over non-bank
financial institutions with quasi-banking functions.
Under the New Central Bank Act, the BSP performs the following functions, all of
which relate to its status as the Republic’s central monetary authority.

.
• 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. The BSP has the exclusive power to issue the national
currency. 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.

• 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. Currently, the BSP adheres
to a market-oriented foreign exchange rate policy such that the
role of Bangko Sentral is principally to ensure orderly conditions in
the market.

• Other activities. The BSP functions as the banker, financial advisor

and official depository of the Government, its political subdivisions
and instrumentalities and government-owned and -controlled
corporations.
THE NEW GENERATION
PHILIPPINE BANKNOTES
Obverse : President Manuel L. Quezon, Malacanan Palace, Seal of the Republic of the
Philippines, New Bsp Seal.

Reverse: - Banaue Rice Terraces, Palm Civet, Weave design from the
Cordilleras
Obverse: President Segio Osmena, First National Assembly 1907,
Leyte Landing, Seal of the Republic of the Philippines, and the New
Bsp Seal.
Reverse: Taal Lake, Maliputo, embroidery design handcrafted in
Batangas Province
Obverse: President Manuel A. Roxas, Central Bank of the Philipines (1949),
Inauguration of the Third Republic(july 4, 1946), Seal of the Republic of the Philippines,
and the New Bsp Seal.

Reverse: Mayon Volcano, Whale Shark, Indigenous textile from the

Bicol Region
Obverse: Pres. Diosdado P. Macapagal, EDSA people power II, Independence
House, Barasoain Church, Seal of the Republic of the Philippines, New Bsp Seal.

Reverse: Bohol Chocolate Hills, Tarsier, handcrafted design from the Visayas in
Central Philippines.
Obverse: Icons of Democracy : President Corazon C. Aquino, Senator Benigno
Aquino Jr. EDSA People Power I February 1986, Ninoy Monument, Seal of the
President, New Bsp Seal.

Reverse: Puerto Princesa Subterranean River Nationa Park (UNESCO World

Heritage Site), Blue-naped Parrot, woven cloth from the Southern Philippines.
Obverse : War Heroes - Josefa Llanes Escoda, Vicente P. Lim and Jose Abad Santos,
Centennial of Philippine Independence, Medal of Honor, Seal of the Republic of the
Philippines, New Bsp seal.

Reverse: Tubbataha Reefs Natural Park (UNESCO World Heritage Site), South Sea
Pearl, Tinalak or Ikat-dyed abaca woven in Mindanao in Southern Philippines.
Security Features
1. EMBOSSED PRINTS – raised prints that feel rough to 4. WATERMARK - a shadow image of the
the touch, i.e. THE WORD “REPUBLIKA NG PILIPINAS” & portrait & the numeral “20” seen at the blank
“DALAWANDAANG PISO”, portrait, signatures, value space of the note when viewed against the light
panels on the face of the note from either side of the note.
2. SERIAL NUMBER – composed of 1 or 2 prefix 5. SEE-TROUGH MARK - word “Pilipino”
letters & 6 or7 asymmetric (increasing in size)digits written in Baybayin is seen in complete from
located at the lower left & upper right corners of the when the note is viewed against the light.
face of the note. 6. CONCEALED VALUE – denomination value
3. SECURITY FIBERS – red & blue visible fibers superimposed on the smaller version portrait at the
embedded on the paper at random & glow in 2 upper left side of the note becomes obvious when
colors under ultraviolet light. the note is rotated 45 deg & tilted down.
7. SECURITY THREAD – embedded thread running vertically across the
note is visible from either side of the note when viewed against the light.
7. SECURITY THREAD - a stitch like metallic tread running vertically across the note
changes color from red to green. The front of the thread bears the alphanumeric
“BSP100” in clear text while the back is imprinted w/ “BSP”, both in repeated series.
8. OPTICALLY VARIABLE DEVICE – reflective foil that bears the image of the
Blue -naped Parrot & a small BSP Logo. The color of the parrot changes from red to
green when the note is rotated at 90 degrees.
8. OPTICALLY VARIABLE DEVICE –
reflective foil that bears the image of the
South Sea Pearl inside an oyster & a small
BSP logo. The color of the oyster changes
from red to green when the note is
rotated at 90 degrees.
9. OPTICALLY VARIABLE INK –
embossed “1000” denominational
value at the lower right corner of
the face of the note changes color
from green to blue when viewed at
different angle.