Guiding Principles of Monetary Administration by The Bangko Sentral

GUIDING PRINCIPLES OF
MONETARY ADMINISTRATION
BY THE BANGKO SENTRAL
DOMESTIC MONETARY STABILIZATION
• The Monetary Board shall endeavor to control any expansion or
contraction in monetary aggregates which is prejudicial to the
attainment or maintenance of price stability
Action When Abnormal Movements Occur in the
Monetary Aggregates, Credit, or Price Level
(a) take such remedial measures as are appropriate and within the powers granted to the Monetary Board and the Bangko Sentral under the
provisions of this Act; and
(b) submit to the President of the Philippines and the Congress, and make public, a detailed report which shall include, as a minimum, a
description and analysis of:
(1) the causes of the rise or fall of the monetary aggregates, of credit or of prices;
(2) the extent to which the changes in the monetary aggregates, in credit, or in prices have been reflected in changes in the level
of domestic output, employment, wages and economic activity in general, and the nature and significance of any such changes; and
(3) the measures which the Monetary Board has taken and the other monetary, fiscal or administrative measures which it
recommends to be adopted.
• Whenever the monetary aggregates, or the level of credit, increases or
decreases by more than fifteen percent (15%), or the cost of living index
increases by more than ten percent (10%), in relation to the level existing
at the end of the corresponding month of the preceding year, the
Monetary Board shall submit the reports mentioned in this section, and
shall state therein whether, in the opinion of the Board, said changes in the
monetary aggregates, credit or cost of living represent a threat to the
stability of the Philippine economy or of important sectors thereof.
• The Monetary Board shall continue to submit periodic reports to the

President of the Philippines and to Congress until it considers that the
monetary, credit or price disturbances have disappeared or have been
adequately controlled.
International Monetary Stabilization
• The Bangko Sentral shall exercise its powers under this Act to
preserve the international value of the peso and to maintain its
convertibility into other freely convertible currencies primarily for,
although not necessarily limited to, current payments for foreign
trade and invisibles.
International Reserves
• In order to maintain the international stability and convertibility of
the Philippine peso, the Bangko Sentral shall maintain international
reserves adequate to meet any foreseeable net demands on the
Bangko Sentral for foreign currencies.
• In judging the adequacy of the international reserves, the Monetary

Board shall be guided by the prospective receipts and payments of
foreign exchange by the Philippines.
Composition of the International Reserves
• The international reserves of the Bangko Sentral may include but shall
not be limited to the following assets:
• (a) gold; and
• (b) assets in foreign currencies in the form of: documents and

instruments customarily employed for the international transfer of
funds; demand and time deposits in central banks, treasuries and
commercial banks abroad; foreign government securities; and foreign
notes and coins.
Action When the International Stability of the
Peso Is Threatened
(a) take such remedial measures as are appropriate and within the powers granted to the Monetary Board and the Bangko Sentral under the
provisions of this Act; and
(b) submit to the President of the Philippines and to Congress a detailed report which shall include, as a minimum, a description and analysis
of:
(1) the nature and causes of the existing or imminent decline;
(2) the remedial measures already taken or to be taken by the Monetary Board;
(3) the monetary, fiscal or administrative measures further proposed; and
(4) the character and extent of the cooperation required from other government agencies for the successful execution of the
policies of the Monetary Board.

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GUIDING PRINCIPLES OF

• The Monetary Board shall continue to submit periodic reports to the

• In judging the adequacy of the international reserves, the Monetary

• (a) gold; and

• (b) assets in foreign currencies in the form of: documents and

(1) the nature and causes of the existing or imminent decline;

(3) the monetary, fiscal or administrative measures further proposed; and

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