Bangko Sentral ng Pilipinas

PHILIPPINE FINANCIAL SYSTEMBANGKO SENTRAL NG PILIPINAS AND THE BANKING INDUSTRY

established on 3 July 1993 pursuant to the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993

BSP enjoys fiscal and administrative autonomy from the National Government in the pursuit of its mandated responsibilities.Two Objectives of BSPMaintain price stability conducive to a balanced and sustainable economic growth.

Promote and preserve monetary stability and the convertibility of the national currency.

Responsibilities of BSPThe BSP provides policy directions in the areas of money, banking and credit.

It supervises operations of banks and exercises regulatory powers over non-bank financial institutions with quasi-banking functions.

BSP Functions According to the New Central Bank ActLiquidity ManagementCurrency issueLender of last resortFinancial SupervisionManagement of foreign currency reservesDetermination of exchange rate policyOther activities

The BSP's Organizational Structure

Major functions of the Monetary BoardIssue rules and regulations it considers necessary for the effective discharge of the responsibilities and exercise of the powers vested in it;

2. Direct the management, operations, and administration of Bangko Sentral,

3.Establish a human resource management system which governs the selection, hiring, appointment, transfer, promotion, or dismissal of all personnel;4.Adopt an annual budget for and authorize such expenditures by Bangko Sentral 5. Indemnify its members and other officials of Bangko Sentral, against all costs and expenses reasonably incurred

AdvocaciesBSP Initiatives on Microfinance To provide the enabling policy and regulatory environment, To increase the capacity of banking sector on microfinance operationsTo advocate the development of sound and sustainable microfinance operations. Anti-Money LaunderingFinancial Literacy

Economic Informationenhance public awareness on the role of the BSP in the Philippine economy, and help manage inflation expectations and reputational risks. The BSP initiatives to improve the Overseas Filipinos (OFs) remittance environment Improving access to financial servicesEncouraging OFs and their families to increase savings and investmentPromoting financial learning among OFs and their beneficiariesMonetary Policy The primary objective of BSP's monetary policy is to promote a low and stable inflation conducive to a balanced and sustainable economic growth. The adoption of inflation targeting framework for monetary policy aimed at achieving this objective.

Monetary Policy Instruments used by the BSP1. Open Market Operations2. Acceptance of fixed-term deposits3. Standing Facilities4. Reserve requirementsregular or statutory reservesliquidity reserves

The Monetary Board decided to keep the BSPs key policy interest rates steady at 4 percent for the overnight borrowing or reverse repurchase (RRP) facility and 6 percent for the overnight lending or repurchase (RP) facility. The interest rates on term RRPs, RPs, and special deposit accounts (SDAs) were also left unchanged.

The Inflation Target is an approach to monetary policy that involves the use of a publicly announced inflation target set by the Government, which the BSP commits to achieve over a two-year horizon

Loans and Credit OperationsRediscountingOvernight Clearing LineEmergency Loans Lending RatesCredit Information System (CRIS)Electronic Rediscounting SystemCredit Surety Fund Program

COMPONENTS OF THE FINANCIAL SYSTEMBANKS (BANKING SECTOR)

Non-bank financial institutionsTypes of banksExpanded commercial banks or universal banksCommercial banksSpecialized banksThrift banksSmall private banksEXPANDED COMMERCIAL BANKS OR UNIVERSAL BANKSOffers wide variety of banking services among financial institutionsThey can engage in:Equity investments in non-allied undertakingUp to 100% equity investments in fiancial intermediaries other than commercial banksCOMMERCIAL BANKSConstitutes the bulk of the banking systemAccepts deposits, withdrawals, lending etc.Discount and negotiate promissory notes, drafts, bills of exchange etc.

GOVERNMENT BANKSDevelopment Bank of the PhilippinesProvides long term credit to finance private development projectsLand Bank of the PhilippinesFinancial arm of the land reform programTHRIFT BANKSThrift Bank Act of 1995 provided for the establishment, operation, and supervision of thrift banks to include savings and mortgage banks, private development banks, and stock savings and loan associationsSMB (Savings and Mortgage BanksSMALL PRIVATE BANKSRural banks and cooperativesPrivate development banks