Bangko Sentral ng Pilipinas

II. Learnings: The BSP proposes that it be exempted from all taxes, especially on its
open market operations. Not only will this reduce transaction and intermediation
costs in the financial system. It will also enable the BSP to more effectively pursue its
mandate of maintaining price stability. Other proposed amendments seek 1) to increase
the number of Deputy Governors to five (presently three), 2) to enable the Monetary Board
to avail of modern technology and meet via tele- or video-conferencing, when
circumstances warrant (a practice already allowed to ordinary banks under the General
Banking Law of 2000) and 3) to enable the BSP to more effectively organize, manage and
compensate its human resources.

III. Conclusion: The Philippine exchanged rate is express in terms of one unit of dollar versus
one unit of peso. There are two cases on how an exchanged rate would be determined the
first system is the free floating exchange rate where the supply and demand force of the
market is the index and the other system is the fixed exchange rate given directly by Bangko
Sentral ng Pilipinas. The free floating exchange rate would be given more consideration
since it's the system that mostly affect our economy and being supported by BSP adopted
since 1970. In the cases when the demand and supply is not stable, the BSP has the
authority to enter and provide guidance in the market to prevent the volatility effects in the
exchange rate fluctuations that affects inflation. They also fixed firmly the demands for
foreign currency by providing liquidity when required. This system applied in the Philippines
is consistent with its goal to aim external competitiveness through market efficiency.   Peso
appreciation provides numerous benefits on our economy like lowering inflationary
expectations or pressures and added additional savings resulted from foreign debt servicing
but it also negatively affects the export market and the beneficiaries of the remittances
given by the OFW.
 REACTION ON BANGKO
SENTRAL NG PILIPINAS

Submitted By; Mae-Ann V. Mission

FMA 3-C

Submitted To: Mrs. Ballados