Bangko Central ng Pilipinas

Cards (79)

  • The central bank maintains monetary stability to promote economic growth.
  • In 1945, it became known as the Central Bank of the Philippines under Republic Act No. 26.
  • In 1905, it became known as the Philippine National Bank (PNB).
  • It supervises and regulates the banking system to ensure a stable financial system and protect the financial interests of citizens.
  • It was established on June 17, 1902 as the National Bank of the Philippine Islands (NBPI) by Act No. 348.
  • The BSP is the central bank of the Philippines.
  • It issues currency and maintains adequate foreign exchange reserves.
  • It is the primary institution responsible for implementing monetary policy, regulating financial institutions, managing public debt, and promoting payment systems.
  • The BSP has three main functions: (1) maintaining price stability through monetary policy, (2) ensuring financial system stability, and (3) acting as fiscal agent and advisor to government on economic matters.
  • Monetary Policy - The process by which the central bank adjusts interest rates or other tools to influence inflation and stabilize prices.
  • It ensures the integrity and security of the country's currency through its issuance and management.
  • The BSP is responsible for maintaining price stability through its monetary policy framework.
  • The BSP has been granted independence from political interference since 1993.
  • The BSP's primary objective is to maintain price stability, which means keeping inflation at low levels over time.
  • The Philippines financial system refers to the network of institutions, markets, and intermediaries that facilitate the flow of funds and financial transactions within the country
  • Key components of the Philippine financial system include:
    • Commercial Banks
    • Universal Banks
    • Thrift Banks
    • Rural Banks and Cooperative Banks
    • NBFIs
    • Stock Exchange
    • Bond Market
    • Microfinance Institutions
    • Electronic Payment Systems
    • Regulatory Bodies
  • Financial System Participants:
    • Households or consumers
    • Financial institutions/intermediaries
    • Non-financial institutions
    • Government
    • BSP
    • Foreign participants
  • The Philippine financial intermediation sector is primarily composed of banks and non-bank financial institutions
  • The Role of Financial Intermediaries:
    • Mobilizing savings
    • Allocating funds to various sectors and industries in the economy
    • Providing credit to borrowers in various forms, such as loans, mortgages, and credit cards
    • Diversifying and managing risk
    • Facilitating the smooth flow of transactions by providing a variety of financial services
    • Providing information and advice to individuals and businesses
    • Providing liquidity to individuals and businesses
  • Classroom activity on financial intermediaries:
    • Divide the class into 4 groups and assign each group a different type of financial intermediary, such as a bank, credit union, insurance company, or investment firm
    • Each group should research their assigned financial intermediary and prepare a short presentation about its role in the financial system, its activities, and how it benefits consumers and businesses
  • Low Inflation - An annual rate of change in the average price level that does not significantly affect people's purchasing power.
  • The Deputy Governors are elected by the Monetary Board and serve as Vice Chairmen of the board.
  • Price Stability - A state where there are no significant fluctuations in the level of consumer prices.
  • Inflation refers to the general increase in the prices of goods and services in an economy.
  • Target Range - Refers to the upper and lower limits set by the BSP for the inflation rate.
  • Inflation Rate - Measures changes in the general level of prices of goods and services purchased by households.
  • Price Stability - Achieving an average annual inflation rate within the target range of 2-4% over the medium term.
  • Advisor to Government - It provides advice to the government on various aspects of macroeconomic policies.
  • Fiscal Agent - It manages the national government's borrowings from both domestic and international sources.
  • Financial System Stability - It promotes soundness and safety of banks and non-banking financial intermediaries, including insurance companies and investment houses.
  • Inflation Targeting Framework - A framework used by many central banks around the world, whereby they set an explicit target for inflation and use various instruments to achieve it.
  • Fiscal Agent and Advisor - Managing the government's finances, including issuing bonds and advising on tax policies.
  • Financial System Stability - Ensuring that banks are sound and solvent, preventing runs on banks, and protecting depositors' funds.
  • The BSP's headquarters are located at Ayala Avenue corner Makati Avenue, Makati City.
  • On August 1, 1993, it changed its name again to Bangko Sentral ng Pilipinas (BSP), which means "Central Bank of the Philippines" in Filipino.
  • In 1965, it became known as the Central Bank of the Republic of the Philippines (CBRP).
  • Regulator - It regulates banks, non-bank financial institutions (NBFIs), payment systems, and other related entities.
  • Payment Systems Oversight - It ensures that payment systems are safe, efficient, reliable, and accessible to all users.
  • Mandate - The legal authority given to the BSP to pursue specific goals related to price stability, financial system stability, and economic growth.
  • Central Bank - Responsible for implementing monetary policy and regulating commercial banking operations.