Philippine

Banking System

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 Bangko Sentral ng Pilipinas The 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

Philippine
Banking System
 BANKING
BSP
OTHER FINANCIAL
INSTITUITIONS INSTITUTIONS
UNIVERSAL BANKS

QUASI BANKING
COMMERCIAL BANKS FUNCTIONS

THRIFT BANKS
MONEY
CHANGERS
RURAL BANKS

PAWNSHOPS
COOPERATIVE BANKS
TOP BANK OF THE PHILIPPINES

https://doingbusinessinthephilippines.com/list-of-banks-in-the-philippines/
THREE PRIMARY
ROLES OF
CENTRAL • PRICE STABILITY
BANKING •
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FINANCIAL STABILITY

• EFFICIENT PAYMENT
AND SYSTEM
SETTLEMENT
THREE PRIMARY
ROLES OF • PRICE STABILITY
The primary objective of the
CENTRAL BSP's monetary policy is “to
promote price stability

BANKING
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conducive to a balanced and
sustainable growth of the
economy” (Republic Act
7653). The adoption of
inflation targeting
framework of monetary
policy in January 2002 is
aimed at achieving this
objective.
 INFLATION
• CONSUMER PRICE
HOW TO COMPUTE
INDEX
THE INFLATION
RATE?
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• INFLATION
 PRICE LEVEL VS. INFLATION
YR 1 YR 2 YR 3

100 110 120

PESO PER PESOS PER PESOS PER
BASKET BASKET BASKET

INCREASE
IN PRICE 10 PESO 10 PESO

INFLATION
( 110-100 )
___________
( RATE OF
INCREASE
10% 9.09%
I.R = x 100
IN PRICES) 100
YR 2 I.R = 10 percent
 PRICE LEVEL VS. INFLATION
YR 1 YR 2 YR 3

100 110 120

PESO PER PESOS PER PESOS PER
BASKET BASKET BASKET

INCREASE
IN PRICE 10 PESO 10 PESO

INFLATION
( 120-110 )
___________
( RATE OF
INCREASE
10% 9.09%
I.R = x 100
IN PRICES) 110
YR 3 I.R = 9.09 percent
How does the BSP BSP
promote price • Monetary policy
stability?  Instruments
 Policy rates
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 Open market operations
 Reserve equipment’s
 Rediscounting
 Special deposit accounts
THREE PRIMARY
ROLES OF
CENTRAL
• PRICE STABILITY
BANKING
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• FINANCIAL STABILITY
• EFFICIENT PAYMENT
AND SYSTEM
SETTLEMENT
 In a situation that there is too excessive
demand that brings inflationary pressures, the
duty is to control or slow down the inflation
by implementing contractionary monetary
policy. The BSP now will increase policy on
interest rate, this action will result increase in
interest rate of banks. On the side of borrower
this is a disadvantage due to high cost of
borrowing which has two effects, first is
investment growth will be slower and second
consumption growth will be slower if these
SAMPLE two happens the aggregate demand growth
will be slower and finally results to lower
SENARIO inflation
THREE PRIMARY
ROLES OF
CENTRAL
• PRICE STABILITY
BANKING
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• FINANCIAL STABILITY
• EFFICIENT PAYMENT
AND SYSTEM
SETTLEMENT
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FUNCTIONS OF
BSP
• THE MONEY MANAGER
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• THE SUPPLIER OF MONEY

• THE BANKER’S BANK
• THE SUPERVISOR OF ALL BANKS
• THE MAIN BANK OF THE GOVERMENT