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HOLY ANGEL UNIVERSITY

In Partial Fulfillment
of the Requirements for
Mathematics of Business and Finance

Submitted by:
Cruz, Audrey Renee
Cuenco, Shanleigh
Manuel, Sophia Ruth
Razon, Alyanna Rozchayne
Roxas, Danielle Pauleanna
Santiago, Immarene Danica
Sison, Reema
Supan, Ma. Katrina Cassandra
Tan, Mareya Izza

Submitted to:

Dr. Jennifer H. Operio

March 25, 2024

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BANKING IN THE PHILIPPINES

THE HISTORY OF BANKING IN THE PHILIPPINES

IN THE YEAR 1900

• Act No. 52 was passed by the First Philippine Commission placing all banks under the
Bureau of Treasury. The Insular Treasurer was authorized to supervise and examine
banks and banking activities.

IN FEBRUARY 1929

• The Bureau of Banking under the Department of Finance took over the task of
banking supervision.

IN THE YEAR 1933

• Particular group of Filipinos were trying to conceptualize a central bank for the
Philippines.
• Resulted from a careful understanding of the economic provisions of HARE HAWES
CUTTING BILL.

IN THE YEAR 1939

• A bill establishing a central bank was drafted by Secretary of Finance Manuel Roxas
and approved by the Philippine Legislature. However, the bill was returned by the US
government, without action, to the Commonwealth Government.

IN THE YEAR 1946

• A joint Philippine-American Finance Commission was created to study the Philippine

currency and banking system. The Commission recommended the reform of the
monetary system, the formation of a central bank and the regulation of money and
credit.

IN AUGUST 1947
• A Central Bank Council was formed to review the Commission’s report and prepare
the necessary legislation for implementation.

IN FEBRUARY 1948

• President Manuel Roxas submitted to Congress a bill “Establishing the Central Bank
of the Philippines”, defining its powers in the administration of the monetary and
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banking system, amending pertinent provisions of the Administrative Code with
respect to the currency and the Bureau of Banking, and for other purposes.

ON JUNE 15, 1948

• The bill was signed into law as Republic Act No. 265 (The Central Bank Act) by
President Elpidio Quirino.
ON JANUARY 3, 1949

• The Central Bank of the Philippines (CBP) was inaugurated and formally opened with
Hon. Miguel Cuaderno, Sr. as the first governor.
• The broad policy objectives contained in RA No. 265 guided the CBP in the
implementation of its duties and responsibilities, particularly in relation to the
promotion of economic development in addition to the maintenance of internal and
external monetary stability.
IN NOVEMBER 1972
• RA No. 265 was amended by Presidential Decree No. 72 to make the CBP more
responsive to changing economic conditions.
• PD No. 72 emphasized the maintenance of domestic and international monetary
stability as the primary objective of the CBP. Moreover, the CBP’s authority was
expanded to include not only the supervision of the banking system but also the
regulation of the entire financial system.
IN JANUARY 1981
• Further amendments were made with the issuance of PD No. 1771 to improve and
strengthen the financial system, among which was the increase in the capitalization
of the CBP from P10 million to P10 billion.
IN THE YEAR 1986

• Executive Order No. 16 amended the Monetary Board membership to promote

greater harmony and coordination of government monetary and fiscal policies.
ON JULY 3, 1993
• Republic Act No. 7653 was passed establishing the Bangko Sentral ng Pilipinas (BSP),
replacing CBP as the country's central monetary authority.
ON FEBRUARY 14, 2019
• Republic Act No. 11211 was passed amending RA No. 7653. The charter
amendments bolster the capability of the BSP to safeguard price stability and
financial system stability.
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BANGKO SENTRAL NG PILIPINAS (BSP)
The Bangko Sentral ng Pilipinas (BSP) is the central bank of the Republic of the Philippines.
It was established on 3 July 1993 pursuant to the provisions of the 1987 Philippine
Constitution and the New Central Bank Act of 1993.
The BSP took over from the Central Bank of Philippines, which was established on 3 January
1949, as the country’s central monetary authority. The BSP enjoys fiscal and administrative
autonomy from the National Government in the pursuit of its mandated responsibilities.

BSP VISION and MISSION

Vision of the BSP

The BSP aims to be recognized globally as the monetary authority and primary financial
system supervisor that supports a strong economy and promotes a high quality of life for all
Filipinos.

Mission of the BSP

To promote and maintain price stability, a strong financial system, and a safe and efficient
payments and settlements system conducive to a sustainable and inclusive growth of the
economy.

DUTIES, FUNCTIONS, and OPERATIONS OF THE BANGKO SENTRAL NG PILIPINAS

Functions and Operations

The BSP’s Mandate: Responsibility and Primary Objective

(Sec. 3, RA 7653 of New Central Bank Act, as amended by RA 11211)

Responsibility:
The Bangko Sentral shall provide policy directions in the areas of money, banking, and credit.
It shall have supervision over the operations of banks and exercise such regulatory powers as
provided in this Act and other pertinent laws over the operations of finance companies and
non-bank financial institutions performing quasi-banking functions, hereafter referred to as
quasi- banks, and institutions performing similar functions.

Objective:
The primary objective of the Bangko Sentral is to maintain price stability conducive to a
balanced and sustainable growth of the economy. It shall also promote and maintain
monetary stability and the convertibility of the peso.

Core Functions of the BSP

➢ Price stability - achieved through the conduct of Monetary Policy
• What is Price Stability & Why is it important?
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• Low and stable inflation (rate of change in the average prices of goods and
services)
• Average prices of goods and services do not change substantially over time
➢ How does the BSP promote Price Stability?

➢ Financial Stability - managing systemic risks and promoting a secure and reliable
banking system by ensuring the safe and sound operation of banks and other BSP
Supervised Financial Institutions (BFSIs)
• Overview of the Philippine Financial System

➢ How does the BSP conduct financial supervision and regulation?

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➢ Efficient Payments and Settlements System

• Providing channels through which funds are transferred among banks and other
institutions.
• Includes institutional and infrastructure arrangements and processes through which
money is transferred from one party to another.
• How does the BSP take the lead in promoting an efficient payments & settlements
system?

Other Functions of the BSP

1. Liquidity Management – formulates and implements monetary policy aimed at

influencing money supply consistent with its primary objective to maintain price
stability.
2. Currency issue – has the exclusive power to issue the national currency. All notes and
coins issued by the BSP are fully guaranteed by the Government and are considered
legal tenders for all private and public debts.
3. Lender of last resort – The BSP extends discounts, loans and advances to banking
institutions for liquidity purposes.
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4. Financial Supervision – The BSP supervises banks and exercises regulatory powers
over non-bank institutions performing quasi-banking functions.
5. Management of foreign currency reserves – The BSP seeks to maintain sufficient
international reserves to meet any foreseeable net demands for foreign currencies to
preserve the international stability and convertibility of the Philippine peso.
6. Determination of exchange rate policy – determines the exchange rate policy of the
Philippines.
7. Other activities, the BSP functions as the banker, financial advisor and official
depository of the Government, its political subdivisions, and instrumentalities and
government-owned and -controlled corporations.

GOVERNANCE OF THE BANK

The Monetary Board exercises the powers and functions of the BSP, such as the conduct of
monetary policy and supervision of the financial system. Its chairman is the BSP Governor,
with five full-time members from the private sector and one member from the Cabinet.

The Governor is the chief executive officer of the BSP and is required to direct and supervise
the operations and internal administration of the BSP.

➢ Current Governor: Dr. Eli Remolona, Jr.

A Deputy Governor heads each of the BSP's operating sectors as follows:

• Monetary and Economics Sector (MES) - mainly responsible for the
operations/activities related to monetary policy formulation, implementation, and
assessment.

➢ Current Deputy Governor - Francisco G. Dakila, Jr.

• Financial Supervision Sector (FSS) - mainly responsible for the regulation of banks
and other BSP-supervised financial institutions, as well as the oversight and
supervision of financial technology and payment systems.

➢ Current Deputy Governor - Chuchi G. Fonacier

• Corporate Services Sector (CSS) – mainly responsible for the effective management
of BSP’s human, financial, and physical resources to support the BSP’s core
functions, including oversight of the operations of the New Clark City – Program
Management Office.

➢ Current Deputy Governor - Mamerto E. Tangonan

• Payments and Currency Management Sector (PCMS) – mainly responsible for

maintaining the safety and integrity of the Philippine currency and ensuring a well-
functioning payments and cash ecosystem that facilitates the economic activity and
supports long-run economic growth.
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➢ Current Deputy Governor - Eduardo G. Bobier

• Regional Operations and Advocacy Sector (ROAS) - mainly responsible for the
management of activities related to regional operations, consumer empowerment
and advocacy, and communications.
➢ Current Deputy Governor - Bernadette Romulo-Puyat

A Senior Assistant Governor/Assistant Governor assists the Governor and/or the Deputy
Governor in formulating and implementing programs and policies, and manages the overall
operations of his/her Sub-Sector/Office.

Senior Assistant Governors

• Office of the General Counsel and Legal Services – Elmore O. Capule

• Monetary Policy Sub-sector – Iluminada T. Sicat
• Office of Systemic Risk Management – Johnny Noe Estanilao Ravalo
• Financial Markets – Edna C. Villa

Assistant Governors/Executive Director II

• Financial Supervision Sub-sector 3 – Arifa A. Ala

• Policy and Specialized Supervision Sub-sector – Lyn I. Javier
• Anti-Money Laundering Council Secretariat – Matthew M. David
• Internal Audit – Mary Jane T. Chiong
• BSP Research Academy – Laura L. Ignacio
• Currency and Securities Production Sub-sector – Mary Anne P. Lim
• Office of the Governor – Pia Bernadette R. Tayag

BSP's IN THE PHILIPPINES

The BSP has 23 offices/branches throughout the country, including its Main Office in Manila
and its Security Plant in Quezon City.

1. BSP Main Complex

• The Governor's office, the Monetary Board office, and the different operating
departments/offices are in the BSP Main Complex in Manila. Within the main
Manila complex of the BSP is the Museo ng Bangko Sentral ng Pilipinas.
Displayed at the museum is the BSP's collection of currencies.
2. BSP Security Plant Complex
• The BSP's currency production plant, the Security Plant Complex (SPC), is in
Quezon City. The SPC creates commemorative coins and presidential medals
in addition to printing land titles for the Land Registration Authority, minting
gold, and producing banknotes and coins. Its establishment proves the nation's
ability to produce its own currency.
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Additional Information:

The National ID physical card is also printed in the BSP. (PhilSys) Registry Office Deputy
National Statistician Fred Sollesta said that BSP has printed 54 million national ID cards so far.

Also, before, official ballots and other public documents were printed in the BSP but later
transferred to the National Printing Office.

The BSP will relocate its security plant complex from Quezon City to the National Government
Administrative Center district of New Clark City in Capas, Tarlac, after it signed a
memorandum of agreement in 2019. The BSP is also planning to retrofit and renovate the BSP
headquarters along Roxas Boulevard in Manila.

3. BSP Regional Offices

• The BSP has five (5) regional offices, and they are located in Quezon City,
Manila, Baguio City, Cebu City, and Davao City. The BSP regional offices provide
central banking services such as Currency Management Operations, Regional
Economic Affairs, and Gold Buying Operations.

Additional Information:

The BSP has the exclusive power and authority to issue the national currency. BSP's notes and
coins are issued against, and in amounts not exceeding, the assets of the BSP. All notes and
coins issued by the BSP are fully guaranteed by the government and are considered legal
tenders for all private and public debts.

REFERENCES:
Bangko Sentral ng Pilipinas. (n.d.). https://www.bsp.gov.ph/SitePages/Default.aspx
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GROUP 1 MEMBERS AND CONTRIBUTIONS:

• Cruz, Audrey Renee – Scriptwriter, Host, Reporter
• Cuenco, Shanleigh – Scriptwriter, Reporter
• Manuel, Sophia Ruth – Leader, Researcher, Scriptwriter, Reporter, Host
• Razon, Alyanna Rozchayne – Powerpoint Editor, Technical Support
• Roxas, Danielle Pauleanna – Researcher, Scriptwriter, Reporter
• Santiago, Immarene Danica – Researcher, Scriptwriter, Reporter
• Sison, Reema – Scriptwriter, Reporter
• Supan, Ma. Katrina Cassandra – Researcher, Scriptwriter, Host
• Tan, Mareya Izza – Host, Reporter