Monetary

Policy and
Central
Banking
Pre-final
 TOPICS
FUNCTIONS OF
01 OPERATIONS OF THE
BSP

REGULATIONS AND
SUPERVISIONS OF 02
FINANCIAL INSTITUTIONS
FUNCTIONS OF
OPERATIONS OF
 BSP
OBJECTIVES
 Monetary Policy RESPONSIB
ILITIES OF
Monetary Operations
THE
BANGKO
Systematic Risk
Management
SENTRAL
International Operations

International Economic
Cooperation

Economic Education
CORE FUNCTIONS OF THE
BSP (AS OF MARCH 2022)

Financial Stability
Price Stability

Efficient Payments & Settlements System

OTHER FUNCTIONS OF
THE BSP
Determination of the Manager of Official
Exchange Rate Policy Reserves Stability

Official Depository and

Bank of Banks/Lender Issuer of
of Last Resort Advisor of National
Money Government
RESPONSIBILI
TIES OF THE
BSP
It shall be the responsibility of the BSP:

1 2 3

To provide policy To supervise the operations of the To exercise regulatory and

direction in the areas banks and to exercise such examination powers over
of money, banking, and regulatory and examination money service businesses,
credit; powers as provided under credit granting businesses,
Republic Act No. 7653 (The New and payment system
Central Bank Act), as amended by operators.
Republic Act 11211, and other
pertinent laws over the quasi-
banking operations of non-bank
financial institutions; and
PRIMARY
OBJECTIVES OF
THE BSP
Its primary objective is to maintain price stability conducive to a balanced and
sustainable growth of the economy and employment.
It shall also:

1. Promote and maintain monetary stability and the convertibility of the peso;
2. Promote financial stability and closely work with the National Government
3. Oversee the payments and settlement systems in the Philippines
4. Promote broad and convenient access to high-quality financial services and consider
the interest of the general public.
REGULATION
S &
SUPERVISION
OF
The Manual of Regulations for
Banks (MORB)
The primary source of regulations
governing entities supervised by the
Bangko Sentral ng Pilipinas.
 REGULATIONS

FOREIGN GUIDELINES ON IMPLEMENTATION

EXCHANGE THE OF BASEL
REGULATIONS ESTABLISHMENT STANDARDS IN THE
OF BANKS PHILIPPINES
 REGULATIONS

COMPLIANCE FINANCIAL
WITH SECTOR OTHER
PFRS/PAS ASSESSMENT REGULATIONS
PROGRAM
GUIDELINES ON THE
ESTABLISHMENT OF
BANKS Banks in the Philippines may be
classified as
Classification of (1) Universal banks, (2) Commercial
Banks banks, (3) Thrift banks, (4) Rural
banks, (5) Cooperative banks, (6)
Islamic banks, and (7) Digital banks.
GUIDELINES ON THE
ESTABLISHMENT OF
BANKS
Consistent with relevant
Establishment of
Bank laws, rules and
regulations
GUIDELINES ON THE
ESTABLISHMENT OF
BANKS
A. Mode 1
Full Entry of B. Mode 2
Foreign Banks C. Mode 3
GUIDELINES ON THE
ESTABLISHMENT OF
BANKS Foreign bank applicants must comply with the following
selection criteria pursuant to R.A. No. 10641:
a. Geographic representation and complementation;
b. Strategic trade and investment relationships between the
Full Entry of Philippines and the country of incorporation of the foreign bank;
Foreign Banks c. Demonstrated capacity, global reputation for financial
innovations, and stability in a competitive environment of the
applicant bank;
d. Reciprocity rights enjoyed by Philippine banks in the
applicant’s home country;
GUIDELINES ON THE
ESTABLISHMENT OF
BANKS Foreign bank applicants must comply with the following
selection criteria pursuant to R.A. No. 10641:

Full Entry of e. Willingness to fully share their banking technology;

f. Established, reputable and financial soundness of the
Foreign Banks
applicant bank; and
g. Widely owned and publicly listed, unless the applicant bank
is owned and controlled by the government of its country of
origin
GUIDELINES ON THE
ESTABLISHMENT OF
BANKS
The application for authority to establish
a bank shall be submitted to the
Relevant Supervisory Policy and Research
Regulations and Department (SPRD) and Islamic
Documentary Banking Supervision Group (IBSG), in
Requirements the case of Islamic Banks.
• Risk-Based Capital Adequacy Framework
in the Philippines
• Basel III Leverage Ratio Framework
• Basel III Framework for Dealing with
IMPLEMENTATI
Domestic Systemically Important Banks
(DSIBs) ON OF BASEL
• Basel III Framework for Liquidity STANDARDS IN
Coverage Ratio (LCR)
THE
COMPLIANCE
WITH
PFRS/PAS
The BSP in its Circular No. 915 dated 05 July 2016 Deviations between local and
international accounting standards only apply to the preparation of prudential reports
to the BSP and these are, as follows:

a. Consolidated financial statements

b. Provisioning requirement
c. Accrual of interest income on non-performing loans
 Financial Sector Assessment
Program
The results of the FSAP review are reflected in the Technical
Notes on "Focused Update of the Basel Core Principles for
Effective Banking Supervision (BCP)" and "Access to
Finance", which are posted on the website of The World Bank.
 OTHER REGULATIONS

Registration of Pawnshops
Pawnshops and
Money Service - BSP Circular No. 1039
Businesses - BSP Memorandum No. M-2019-019
(MSBs) - BSP Memorandum No. M-2019-013
 OTHER REGULATIONS

Registration of Money Service Businesses (MSBs)

Pawnshops and
Money Service - BSP Circular No. 1039
Businesses - BSP Memorandum No. M-2019-018
(MSBs) - BSP Memorandum No. M-2018-030
 OTHER REGULATIONS

Request for Monetary Request for MB opinion by local

government units (LGUs)
Board Opinion on
Domestic Government 1. LGU Request Letter
Borrowings 2. List of Outstanding Loans
3. Pro-forma Ordinance
4. Pro-forma Waiver Resolution
5. Post-Borrowing Report
 OTHER REGULATIONS

Request for Monetary Request for MB opinion by

GOCCs/WDs/SUCs
Board Opinion on
Domestic Government 1. GOCC/WD/SUC Request Letter
Borrowings 2. Pro-forma Board Resolution
3. Pro-forma Corporate Secretary's Certificate
4. List of Outstanding Loans
5. Post-Borrowing Report
 OTHER REGULATIONS

Request for Monetary Reportorial requirements for lending

institutions
Board Opinion on
Domestic Government 1. Post-Loan Release Report - LGUs
Borrowings 2. Post-Loan Release Report - GOCCs, WDs, SUCs
3. Pro-forma Corporate Secretary's Certificate
4. Sworn Certification on Lendings - LGUs
5. Sworn Certification on Lendings - GOCCs, WDs,
SUCs
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3FMB
REFERENCES
1. Bangko Sentral ng Pilipinas Regulations. (n.d.).
https://www.bsp.gov.ph/SitePages/Regulations/RegulationsList.aspx?TabId=4
2. https://www.bsp.gov.ph/Inclusive%20Finance/EFLP/Role_Students.pdf
3. https://www.bsp.gov.ph/About%20the%20Bank/BSP%20Org%20Primer.pdf
4. Bangko Sentral ng Pilipinas About the Bank. (n.d.).
https://www.bsp.gov.ph/SitePages/AboutTheBank/AboutTheBank.aspx
5. Bangko Sentral ng Pilipinas Foreign Exchange Regulations.
(n.d.). https://www.bsp.gov.ph/SitePages/Regulations/FxRegulations.aspx
REFERENCES
6. Regulations - Guidelines and Other Regulations. (n.d.).
https://www.bsp.gov.ph/Pages/Regulations/GuidelinesOnTheEstablishmentOfBanks/Gui
delinesOnTtheEstablishmentOfBanks.aspx
7. Regulations - Guidelines and Other Regulations. (n.d.).
BSP MISSION
https://www.bsp.gov.ph/Pages/Regulations/GuidelinesOnTheEstablishmentOfBanks/Ove
rview.aspx
To(n.d.).
8. Regulations - Guidelines and Other Regulations. promote and maintain price stability, a
strong financial system, and a safe and efficient
https://www.bsp.gov.ph/Pages/Regulations/GuidelinesOnTheEstablishmentOfBanks/Reg
payments and settlements system conducive to
istrationOfPawnshopsAndMoneyServiceBusiness.aspx
a sustainable and inclusive growth of the
9. Bangko Sentral ng Pilipinas About the Bank. (n.d.).
https://www.bsp.gov.ph/SitePages/AboutTheBank/AboutTheBank.aspx economy.
https://www.bsp.gov.ph/Media_And_Research/Multimedia/About%20the%20BSP/eflc_aboutthebsp.mp4