BANGKO SENTRAL

NG PILIPINAS
The Bangko Sentral ng Pilipinas (BSP) is the central
bank of the Republic of the Philippines. It was
established on July 03, 1993pursuant to the
provisions of the 1987 Philippine Constitution and
the New Central Bank Act of 1993. The BSP took over
from Central Bank of the 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.
 CHRONOLOGY OF EVENTS:
CENTRAL BANKING IN THE PHILIPPINES
Act No. 52 was passed by
1900 the First Philippine
Commission placing all
banks under the Bureau of
Treasury. The Insular
The Bureau of Banking Treasurer was authorized to
under the Department of February supervise and examine banks
Finance took over the task 1929 and banking activities.
of banking supervision.

A bill establishing a central

bank was drafted by Secretary of
Finance Manuel Roxas and
1939 approved by the Philippine
Legislature. However, the bill
was returned by the US
government, without action, to
the Commonwealth Government.
 CHRONOLOGY OF EVENTS:
CENTRAL BANKING IN THE PHILIPPINES

A joint Philippine-American 1946

Finance Commission was created
to study the Philippine
currency and banking system.
The Commission recommended the
reform of the monetary system, A Central Bank Council was
the formation of a central August formed to review the
bank and the regulation of 1947 Commission’s report and
money and credit. prepare the necessary
  legislation for
implementation.
The charter of the Central
Bank of Guatemala was chosen
as the model of the proposed
central bank charter.
 CHRONOLOGY OF EVENTS:
CENTRAL BANKING IN THE PHILIPPINES

February
President Manuel Roxas
submitted to Congress a bill 1948
“Establishing the Central Bank
of the Philippines, defining
its powers in the
administration of the monetary
and banking system, amending
The bill was signed into law
pertinent provisions of the June 15, as Republic Act No. 265 (The
Administrative Code with 1948
respect to the currency and Central Bank Act) by
the Bureau of Banking, and for President Elpidio Quirino.
other purposes.
 CHRONOLOGY OF EVENTS:
CENTRAL BANKING IN THE PHILIPPINES

RA No. 265 was amended by

The Central Bank of the January Presidential Decree No. 72 to make
Philippines (CBP) was 3, 1949 the CBP more responsive to changing
inaugurated and formally opened
economic conditions.
with Hon. Miguel Cuaderno, Sr.
as the first governor.  
  PD No. 72 emphasized the
maintenance of domestic and
The broad policy objectives November international monetary stability as
contained in RA No. 265 guided
1972 the primary objective of the CBP.
the CBP in the implementation of
Moreover, the CBP’s authority was
its duties and responsibilities,
expanded to include not only the
particularly in relation to the
supervision of the banking system
promotion of economic
but also the regulation of the
development in addition to the
entire financial system.
maintenance of internal and
external monetary stability.
 CHRONOLOGY OF EVENTS:
CENTRAL BANKING IN THE PHILIPPINES

Further amendments were made January

with the issuance of PD No.
1771 to improve and strengthen
the financial system, among
which was the increase in the
capitalization of the CBP from
1986
P10 million to P10 billion
1981
Executive Order No. 16
amended the Monetary Board
membership to promote greater
harmony and coordination of
government monetary and
fiscal policies.

Republic Act No. 7653 was

passed establishing the
Bangko Sentral ng Pilipinas July 3,
(BSP), replacing CBP as the 1993
country's central monetary
authority.
 CHRONOLOGY OF EVENTS:
CENTRAL BANKING IN THE PHILIPPINES

Republic Act No. 11211 was

passed amending RA No. 7653.
The charter amendments
February
bolster the capability of the
14, 2019
BSP to safeguard price
stability and financial
system stability
 PRIMARY OBJECTIVE OF THE
BSP
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
convertibility of the national currency.
 VISION and MISSION

VISION MISSION
To promote and maintain
The BSP aims to be price stability, a
recognized globally as strong financial system,
the monetary authority ad a safe and efficient
and primary financial payments and settlements
system supervisor that system conducive to a
supports a strong sustainable and
economy and promotes a inclusive growth of the
high quality of life economy.
for Filipinos.
 
 RESPONSIBILITIES
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. Currency Issue. The BSP

The BSP formulates has the exclusive power to
and implements issue the national
monetary policy currency. All notes and
aimed at influencing coins issued by the BSP
money supply are fully guaranteed by
consistent with its the Government and are
primary objective to considered legal tender
maintain price for all private and public
stability. debts.
RESPONSIBILITIES
Financial Supervision.
Lender of last resort.
The BSP supervises
The BSP extends
banks and exercises
discounts, loans and
regulatory powers over
advances to banking
non-bank institutions
institutions for
performing quasi-
liquidity purposes.
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.
RESPONSIBILITIES
Determination of Exchange
Rate Policy.
The BSP determines the Other Activities.
exchange rate policy The BSP functions as the
of the Philippines. banker, financial advisor and
Currently, the BSP official depository of the
adheres to a market- Government, its political
oriented foreign subdivisions and
exchange rate policy instrumentalities and
such that the role of government-owned and
Bangko Sentral is controlled corporations.
principally to ensure
orderly conditions in
the market.
 BANGKO SENTRAL AS A FISCAL
AGENT

To be the To be the
official To be the financial
representative
depository adviser of To manage
of the
government to banker of the the public debts.
financial government; government;
entities; and
 GOVERNANCE OF THE BANGKO SENTRAL NG
PILIPINAS
The BSP’s Organizational Structure
as of July 2018
MONETARY
BOARD

GOVERNOR

MONETARY
FINANCIAL CURRENCY CORPORATE
AND
SUPERVISION MANAGEMENT SERVICES
ECONOMICS
SECTOR SECTOR SECTOR
SECTOR
ADVOCACIES
The BSP has declared microfinance as its flagship program for
poverty alleviation in Year 2000 and has since then played a
key role in the development of sustainable microfinance in the
country. The BSP initiatives have focused on the policy and
regulatory environment, training and capacity building as well
as on promotion and advocacy.

The BSP has been conducting public information

campaigns inline with the effort to increase public
awareness on the role of the BSP in the economy and
the financial system and to further enhance the
transparency of monetary policy.

The BSP has also taken a proactive stance in

embarking on a consumer education program that aims
to improve the basic financial literacy of the
public.
The BSP undertakes various bank-related
initiatives to improve remittance
environment and to channel remittances to
productive undertakings. Through these
initiatives, the BSP intends to maximize
the benefits of remittances aimed at: (1)
ensuring the smooth inflow of remittances,
and (2) promoting their use for development
by channeling them to the financial sector
so that these funds can be mobilized for
lending and other productive activities.
 INSTRUMENT OF CENTRAL BANK
ACTIONS
The devices that may be used by BSP are the following:

1.Control of legal reserve requirement

2.Control of discount and rediscount
3.Open market operation
4.Control of collateral required on bank loans
5.Imposition of portfolio ceiling
6.Minimum capital ratio
7.Margin requirements for L/C
8.Moral suasion
 OTHER MONETARY POLICIES OF THE BSP
TO STABILIZE BANKING OPERATION
1. Bangko Sentral may also fix the maximum interest that the bank may
pay on deposit substitutes for the purpose of preventing competition
among banks in attracting depositors.
2. Bangko Sentral may establish priorities for bank loans especially
with respect to funds, which has been borrowed from the Bangko
Sentral.
3. Bangko Sentral may fix maturities in bank loans for the purpose of
credit control or as a means of payment.
4. Bangko Sentral makes periodic examination of the banks accounting
records and required banks to submit their financial statement at the
end of every quarter.
5. Bangko Sentral looks into the character and integrity of the bank’s
incorporators and members of the board as well as the top-ranking
executives of the bank.
Thank You!