REPUBLIC ACT NO.

7653 OR “THE NEW CENTRAL BANK ACT”

“The New Central Bank Act” is an amendment by the R.A. No. 11211, also known as “An Act
Amending the New Central Bank Act” and which became effective on March 01, 2019. This
seeks to strengthen the Bangko Sentral ng Pilipinas (BSP) by expanding its regulatory power.
CHAPTER I: ESTABLISHMENT AND ORGANIZATION OF THE BANGKO
SENTRAL NG PILIPINAS

ARTICLE I. CREATION, RESPONSIBILITIES AND CORPORATE POWERS OF THE

BANGKO SENTRAL
SECTION 1. Declaration of Policy
 The State shall maintain a central monetary authority that shall function and operate as an
independent and accountable body corporate in the discharge of its mandated responsibilities
concerning money, banking and credit.
 While being a government owned corporation, it shall enjoy fiscal and administrative
autonomy
SECTION 2. Creation of the Bangko Sentral
There is hereby established an independent central monetary authority, which shall be a body
corporate known as the Bangko Sentral ng Pilipinas.
 50 billion pesos- required capital of BSP to be fully subscribed by the Government of the
Republic
- 10 billion pesos of which: be fully paid for by the Government upon the effectivity of this
Act
- The balance: to be paid for within a period of 2 years from the effectivity of this Act
SECTION 3. Responsibility and Primary Objective
 Primary objective of the Bangko Sentral: to maintain price stability conducive to a
balanced and sustainable growth of the economy
 The Bangko Sentral shall:
1. provide policy directions in the areas of money, banking, and credit
2. have supervision over the operations of banks and exercise such regulatory powers over
the operations of finance companies and non-bank financial institutions performing
quasi-banking functions
3. promote and maintain monetary stability and the convertibility of the peso
SECTION 4. Place of Business.
 Principal place of business: Metro Manila
 May maintain branches, agencies and correspondents in such other places as the proper
conduct of its business may require
SECTION 5. Corporate Powers
 BSP is hereby authorized to:
1. adopt, alter, and use a corporate seal which shall be judicially noticed
2. enter into contracts
3. lease or own real and personal property, and to sell or otherwise dispose of the same
4. sue and be sued
5. do and perform any and all things that may be necessary or proper to carry out the
purposes of this Act
 The BSP
- may acquire and hold such assets and incur such liabilities in connection with its
operations authorized by the provisions of this Act
- may compromise, condone or release, in whole or in part, any claim of or settled liability
to the BSP, regardless of the amount involved, under such terms and conditions as may
be prescribed by the Monetary Board to protect the interests of the Bangko Sentral.

ARTICLE II. THE MONETARY BOARD

SECTION 6. Composition of the Monetary Board
The powers and functions of the BSP shall be exercised by the Bangko Sentral Monetary Board
composed of 7 members appointed by the President of the Philippines for a term of 6 years.
The 7 members are:
(a) The Governor of the Bangko Sentral
- Chairman of the Monetary Board
- head of a department and his appointment shall be subject to confirmation by the
Commission on Appointments
- alternate when unable to attend a meeting of the Board: Deputy Governor
 in such event, the Board shall designate one of its members as acting Chairman
(b) A member of the Cabinet designated by the President of the Philippines
- alternate when unable to attend a meeting of the Board: his designated Undersecretary in
his Department
(c) Five members who shall come from the private sector
- all shall serve full-time
- the members first appointed under the provisions of this subsection, three shall have a
term of six years, and the other two, three years.
 No member of the Monetary Board may be reappointed more than once.
SECTION 7. Vacancies
Any vacancy in the Monetary Board created by the death, resignation, or removal of any member
shall be filled by the appointment of a new member to complete the unexpired period of the
term of the member concerned.
SECTION 8. Qualifications
The members of the Monetary Board must be
1. natural-born citizens of the Philippines
2. at least 35 years of age (with the exception of the Governor who should at least be 40 years
of age)
3. of good moral character, unquestionable integrity, known probity and patriotism
4. with recognized competence in social and economic disciplines
SECTION 9. Disqualifications
 Disqualifications imposed under Republic Act No. 6713 or the “Code of Conduct and Ethical
Standards for Public Officials and Employees”
 Monetary Board member is disqualified from being a director, officer, employee, consultant,
lawyer, agent or stockholder of any bank, quasi-bank or any other institution which is subject
to supervision or examination by the BSP
o such member shall resign from, and divest himself of any and all interests in such
institution before assumption of office as member of the Monetary Board
 Monetary Board members coming from the private sector shall not hold any other public
office or public employment during their tenure.
 No person shall be a member of the Monetary Board if :
a. he has been connected directly with any multilateral banking or financial institution
b. has a substantial interest in any private bank in the Philippines within one year prior
to his appointment
 No member of the Monetary Board shall be employed in any such institution within two
years after the expiration of his term except when he serves as an official representative of
the Philippine Government to such institution.
SECTION 10. Removal
The President may remove any member of the Monetary Board for any of the following reasons:
(a) If he is subsequently disqualified under the provisions of Section 8 of this Act
(b) If he is physically or mentally incapacitated that he cannot properly discharge his duties and
responsibilities and such incapacity has lasted for more than six (6) months
(c) If he is guilty of acts or operations which are of fraudulent or illegal character or which are
manifestly opposed to the aims and interests of BSP
(d) If he no longer possesses the qualifications specified in Section 8 of this Act
SECTION 11. Meetings
 The Monetary Board
- shall meet at least once a week
- may be called to a meeting by the Governor of BSP or by 2 other members of the Board
 - all decisions of the Board shall require the concurrence of at least four (4) members,
unless otherwise provided in this Act
 The presence of 4 members shall constitute a quorum, the Governor or his duly designated
alternate shall be among the four
 BSP shall maintain and preserve a complete record of the proceedings and deliberations of
the Monetary Board, including the tapes and transcripts of the stenographic notes, either in
their original form or in microfilm.
SECTION 12. Attendance of the Deputy Governors
Deputy Governors - may attend the meetings of the Monetary Board with the right to be heard
SECTION 13. Salary
 Salary of the Governor and the Monetary Board Members from private sector:
- fixed by the President of the Philippines at a sum commensurate to the importance and
responsibility attached to the position
SECTION 14. Withdrawal of Persons Having a Personal Interest
 In addition to the requirements of R.A. No. 6713, or the “Code of Conduct and Ethical
Standards for Public Officials and Employees,” any Monetary Board member with personal
or pecuniary interest in any matter in the agenda of the Board shall disclose his interest to the
Board and shall retire from the meeting when the matter is taken up.
 The decision taken on the matter shall be made public and the minutes shall reflect the
disclosure made and the retirement of the member concerned from the meeting.
SECTION 15. Exercise of Authority
The Monetary Board shall:
a) issue necessary rules and regulations
- it shall be reported to the President and the Congress within 15 days from the date of
issuance
b) direct the management, operations, and administration of the Bangko Sentral, reorganize its
personnel, and issue such rules and regulations as it may deem necessary
- the legal units of BSP shall be under the exclusive supervision and control of the
Monetary Board
c) establish a human resource management system
- shall govern the selection, hiring, appointment, transfer, promotion, or dismissal of all
personnel
- shall aim to establish professionalism and excellence at all levels of BSP
- As an integral component, human resource development program shall institute a
compensation structure based on job evaluation studies and wage surveys and
subject to the Board's approval
o It shall conform as closely as possible with the principles provided for under
Republic Act No. 6758(“Compensation and Position Classification Act of 1989”)
 o Compensation and wage structure of employees whose positions fall under salary
grade 19 and below shall be in accordance with the rates prescribed under R.A.
No. 6758
o On the recommendation of the Governor, appoint, fix the remunerations and other
emoluments, and remove personnel of the Bangko Sentral
 The Board shall have exclusive and final authority to promote, transfer,
assign, or reassign personnel of the BSP and these personnel actions are
deemed made in the interest of the service and not disciplinary
 The Board may delegate such authority to the Governor under such
guidelines as it may determine
d) adopt an annual budget for and authorize such expenditures by the BSP as are in the interest
of the effective administration and operations of the BSP
e) indemnify its members and other officials of the BSP, including personnel of the departments
performing supervision and examination functions against all costs and expenses reasonably
incurred by such persons
f) in connection with any civil or criminal action, suit or proceedings to which he may be, or is,
made a party by reason of the performance of his functions or duties, UNLESS he is finally
adjudged in such action or proceeding to be liable for negligence or misconduct.

 In the event of a settlement or compromise, indemnification shall be provided only if such

matters covered by the settlement as to which the BSP is advised by external counsel that the
person to be indemnified did not commit any negligence or misconduct.
o Cost and expenses incurred may be paid by the BSP in advance of the final
disposition upon receipt of an undertaking by or on behalf of the member, officer, or
employee to repay the amount advanced should it ultimately be determined by the
Monetary Board that he is not entitled to be indemnified as provided in this
subsection.
SECTION 16. Responsibility
Acts where members of the Monetary Board, officials, examiners, and employees of BSP shall
be held liable for any loss or injury suffered by BSP or other banking institutions:
1. Violation of this Act
2. Negligence, abuse, malfeasance, misfeasance or failure to exercise extraordinary diligence in
the performance of his duties
3. Disclosure of any information of:
a. A confidential nature
b. The discussions or resolutions of the Monetary Board
c. The confidential operations of the Bangko Sentral, unless
o the disclosure is in connection with the performance of official functions with BSP
o with prior authorization of the Monetary Board or the Governor
4. The use of such information for personal gain or to the detriment of the Government, the
Bangko Sentral or third parties provided, however, that any data or information required to
 be submitted to the President and/or the Congress, or to be published under the provisions of
this Act shall not be considered confidential.

ARTICLE III. THE GOVERNOR AND DEPUTY GOVERNORS OF THE BANGKO

SENTRAL
SECTION 17. Powers and Duties of the Governor
 Governor- chief executive officer of the Bangko Sentral
- principal representative of BSP and the Monetary Board (Sec. 18)
Powers and duties of the Governor:
a. Prepare the agenda for the meetings of the Monetary Board and to submit for the
consideration of the Board the policies and measures necessary to carry out the purposes and
provisions of this Act
b. Execute and administer the policies and measures approved by the Monetary Board
c. Direct and supervise the operations and internal administration of BSP
o may delegate certain of his administrative responsibilities to other officers or may
assign specific tasks or responsibilities to any fulltime member of the Board without
additional remuneration or allowance whenever he may deem fit or subject to such
rules and regulations as the Monetary Board may prescribe
d. Appoint and fix the remunerations and other emoluments of personnel below the rank of a
department head in accordance with the position and compensation plans approved by the
Board and to impose disciplinary measures upon personnel of BSP, subject to the provisions
of Section 15(c) of this Act:
o Removal of personnel shall be with the approval of the Monetary Board
e. Render opinions, decisions, or rulings, which shall be final and executory until reversed or
modified by the Board regarding:
o application or enforcement of laws pertaining to institutions supervised by BSP
o laws pertaining to quasi-banks
o regulations, policies or instructions issued by the Monetary Board, and the
implementation thereof
f. Exercise such other powers as may be vested in him by the Board
SECTION 18. Representation of the Monetary Board and the Bangko Sentral
The Governor shall be empowered to:
a) represent the Monetary Board and the Bangko Sentral in all dealings with other offices,
agencies and instrumentalities of the Government and all other persons or entities, public or
private, whether domestic, foreign or international
b) sign contracts entered into by the BSP, notes and securities issued by the BSP, all reports,
balance sheets, profit and loss statements, correspondence and other documents of BSP
o The signature of the Governor may be in facsimile whenever appropriate.
c) represent the BSP, either personally or through counsel, including private counsel, as may be
authorized by the Monetary Board, in any legal proceedings, action or specialized legal
studies; and
d) delegate his power to represent the BSP, as provided in subsections (a), (b) and (c) of this
section, to other officers upon his own responsibility
o In order to preserve the integrity and the prestige of his office, the Governor may
choose not to participate in preliminary discussions with any multilateral banking or
financial institution on any negotiations for the Government within or outside the
Philippines
o During the negotiations, he may instead be represented by a permanent negotiator.

SECTION 19. Authority of the Governor in Emergencies

 In case of emergencies where time is insufficient to call a meeting of the Monetary Board,
Governor of BSP, with the concurrence of 2 other members of the Board, may decide any
matter or take any action within the authority of the Board
o The Governor shall submit a report to the President and Congress within 72 hours after
the action has been taken.
o At the soonest possible time, the Governor shall call a meeting of the Monetary Board to
submit his action for ratification.
SECTION 20. Outside Interests of the Governor and the Fulltime Members of the Board
 The Governor of the Bangko Sentral and the full-time members of the Board
- shall limit their professional activities to those pertaining directly to their positions
with the Bangko Sentral.
- may not accept any other employment, whether public or private, remunerated or ad
honorem, except
1. Of the positions in eleemosynary, civic, cultural or religious organizations
2. By designation of the President, the Governor or the full-time member is
tasked to represent the interest of the Government or other government
agencies in matters connected with or affecting the economy or the financial
system of the country
SECTION 21. Deputy Governors
 Deputy Governors
- shall not be more than 3 in number
- appointed by the Governor of BSP, with the approval of the Monetary Board
- shall perform duties as may be assigned to them by the Governor and the Board
- in the absence of the Governor, shall act as chief executive of BSP and shall exercise
the powers and perform the duties of the Governor
- whenever the Governor is unable to attend meetings of government boards or
councils in which he is an ex officio member pursuant to provisions of special laws, a
Deputy Governor shall be vested with authority to participate and exercise the right
to vote in such meetings