The Philippine Financial System An Overview
The Philippine Financial System An Overview
The Philippine Financial System An Overview
FNANCIAL SYSTEM – a network that generates, circulates, and controls money and
credit.
OBRAS PIAS – the first credit institution n the Philippines; started by Fr. Juan
Fernandez de Leon in 1754 and ended in 1820.
BANCO ESPAÑOL – Filipino de Isabella II the First Philippine Bank establish in 1851
FIRST AGRICULTURAL BANK OF THE PHILIPPINES – established n 1906 and in 1916 all
of its asset and liabilities were transferred to the newly organized PNB.
FNANCIAL MARKET – are physical locations or electronic forums that facilitate the
flow of funds among nvestors, businesses and governments. It provides the
mechanism for allocating financial resources of funds from savers to
borrowers.
1942 – PNB closes its doors because of the coming of the Japanese imperial Forces.
CENTRAL BANK – a financial institution vested by the State with the function of
regulating the supply, cost and use of money with a view to promoting
national and international economic stability and welfare.
The central bank of countries within the region of Southeast Asia are
comparatively young having been established mostly only after the end of
the Second World War. The Philippines, a young nation, is not an exception. It
established its central bank only on January 3, 1949,
• Liqudity Management
• Currency Issue
• Lender of Last Resort
• Financial Supervsion
• Management of Foreign Currency Reserves
• Determination of Exchange Rate Policy
• Other Activities (Functions as the banker, financial advisor and official
depository of the Government)
OBJECTIVES OF BSP
MONEY SUPPLY – the sum of notes and coins in the circulation and peso demand
depositions subject to withdrawal by check
MONETARY BOARD – policy making body of the BSP; exercise the powers and
functions of the BSP
1. Issues rules and regulations it considers necessary for the effective discharge
of the responsibilities and exercise the powers vested upon it.
2. Direct the management, operations and administration of the BSP
3. Establish a human resource management system
4. Adopt an annual budget for and authorize such expenditures by Bangko
Sentral
5. Indemnify uts members and other officials of Bangko Sentral
CENTRAL BANK OF THE PHILIPPINES – responsible for executing the monetary policy;
gives primary and immediate importance to the maintenance of monetary
stability
CONFIDENCE OF MONEY – basis for all economic activities in a society based upon
credit
ADVANTAGES
1. Impersonal
2. Flexible in operation
3. Operates for the most part free from the weight of political pressures
DISADVANTAGES
1. Financial Resources
2. Banking System
3. Non-Bank Financial institution
ISSUES ARISNG
1. Financial Stability
2. Integrated Regulator (s)
3. Financial Transparency
4. Deregulation of Financial Market
5. Rapid Financial Innovation
6. Space Age Technology]
CHALLENGES ENCOUNTERED