BSP

NON-BANK
SPECIALIZED GOVT
COMMERCIAL BANK THRIFT BANKS FINANCIAL GOVERNMENT BANKS
BANKS
INSTITUTION

INVESTMENT
HOUSES,
PNB,DBP,LANDBANK
INSURANCE
COMPANIES ETC
RA 7653 ( The new Central
Bank Act)
June 15, 1993
Creating the new Central
Monetary Authority (CMA)
-- BANGKO SENTRAL
NG PILIPINAS
THE old Central Bank (CB) was heavy
in debt caused mainly by the Marcos
administration
 CB was used as the piggy bank of the
government
 Advanced money for membership to IMF/WB
 Backed and absorbed questionable loans for
cronies
 Provided subsidies and took huge debts for
Philippine companies and banks
Itsquasi-fiscal operations
constrained income maximization
 Continuing support by the CB to the
national government
 Emergency loans and overdrafts to
distressed financial institutions
 Provided subsidized credits to priority
sectors ( agriculture/ exports)
 To maintain price stability conducive to a
balanced and sustainable growth of the
economy
 To promote and maintain monetary stability
and convertibility of the Peso
 Capitalization= P 50B
 Transfer of assets and liabilities  3
members of the monetary board
 Transfer of powers
 Phase out regulatory powers over finance
companies without quasi banking
 Phase out fiscal agency functions transfer to
the Department of Finance
 Prohibited from acquiring shares as collateral ;
no participation in ownership or management of
any enterprise
 Prohibited from engaging in development banking
and financing
 MONETARY BOARD
 THE GOVERNOR
 Represents the monetary board and the BSP
in all external dealings
 Sign contracts
 Represent the BSP
 Delegate his powers to represent the BSP

 AMANDO M. TETANGCO, JR.

Issue rules and regulations
Direct the management, operations
and administration of the BSP
Establish human resources
Adopt an annual budget
Indemnify the members and other
officials for any cause of litigation
Cesar Purisima
Alfredo Antonio
Ignacio Bunye
Peter Favila
Felipe Medalla
Juanita Amatong
Nelly Favis Villafuerte
 Research and statistics
 Forecast of balance of payments
 Statistics on monthly movements
 Reports and publications
 General balance sheet
 Gold and foreign exchange
 Budget profit and loss statements
 State f the financial system
 Abnormal movements and general price level
 Annual reports
 Analysis of economic and financial circumstances
 Moral suasion
 Operations in gold and foreign exchange
 Regulation of forex operations of banks
 Loans to banking and other financial
institutions
 Open markets operations
 Reserve requirements
 Selective regulation of bank operations
 As bank of the government
 Supervision and examination
 Appointment of a conservator
 Main/ primary objective of the BSP is to
maintain monetary stability
 Without monetary stability it will be difficult
to achieve high rate of savings
 Management of the expansion and
contraction of the volume of new in
circulation is very important
 MONETARY POLICY
 Includes all measure taken by the
government, the BSP and the Treasury to
affect the amount, availability and the use of
money and credit
 Regulations regulating the money supply
 Expansionary-> to stimulate economic
activity
 Restrictive-> to dampen inflationary
tendencies
 Impersonal
 Non-discriminatory
 Minimal gov’t interference
 Flexible in operation
 Inabilityto expand income and investment
 It can only improve the opportunity for
private business to expand them
 Quantitative ( changes in money supply)
 Changes in discount rates
 Open market operations
 Changes in reserve requirements

 Selective
 Limit amount of money available for certain
specific purposes
 WITH POWER
COMES
RESPONSIBILITY