CENTRAL BANK OF THE PHILIPPINES

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

- it shall promote financial stability and closely work with the National Government, including, but not limited to, the Department of Finance, Securities and
Exchange Commission, the Insurance Commission, and the Philippine Deposit Insurance Corporation.

- it shall oversee the payment and settlement systems in the Philippines, including critical financial market infrastructures, in order to promote sound and
prudent practices consistent with the maintenance of financial stability.

- In general, it shall promote broad and convenient access to high quality financial services and consider the interest of the general public. This is often called
Banks of Banks.

1. Price stability – it is achieved through the conduct of monetary policy. BSP's monetary policy helps to promote a low and stable inflation conducive to a
balanced and sustainable economic growth.

- maintaining price stability supports economic growth because it allows households and businesses (including export enterprises) to plan ahead and arrive at
better-informed decisions about their consumption, investment, saving and production needs.(SINCE NAMONITOR AT NABAWASAN ANG PAGTAAS NG PRESYO
NG RAW MATERALS, IT COULD RESULT TO greater productive activitieS AND MORE JOB OPPURTUNITIES FOR FILIPINOS AND IMPROVE THE WELLBEING OF
FILIPINO.

- Price stability also promotes income equality by protecting the purchasing power of the poor who often do not have assets (real or financial) that allow them to
hedge against inflation. (nakakatulong ito upang PROTEKTAHAN Ang purchasing power ang mahihirap or mga nasa laylayan na makabili ng produkto/services na
sapat lamang sa kanilang kinikita,pera OR BUDGET.

- monetary policy - used by a nation's central bank to control the overall money supply and promote economic growth and employ strategies such as revising
interest rates and changing bank reserve requirements.

FISCAL POLICY -

- Inflation - refers to the rate of change in the average prices of goods and services typically purchased by consumers. If inflation is low and stable, then we say
that there is price stability. Inflation is typically defined as the annual percentage change in the Consumer Price Index (CPI). we can say that there is price
stability when the inflation is low and stable. it means that the general price level changes are minimal. (ang pagbabago ng pangkalahatang antas ng
presyo ay minimal lamang)

BSP as the main government agency responsible for promoting price stability among the various government bodies, the Bangko Sentral ng Pilipinas (BSP) is
uniquely qualified to promote price stability because it has the sole ability to influence short-term market interest rates. By influencing short-term interest rates,
the BSP is able to affect the demand of households and firms for various goods and services. Domestic demand and the aggregate supply of goods and services
determine the general price level. Central banks raise or lower short-term interest rates to ensure stability and liquidity in the economy. 
BSP’s role in relation to inflation The BSP controls inflation through its conduct of monetary policy which is done primarily by moving its policy interest rate.
Adjustments in the interest rate for the BSP’s overnight reverse repurchase (RRP) facility, the primary monetary policy instrument, typically leads to
corresponding movements in market interest rates, thus affecting the demand by households and firms for goods and services. This, together with the aggregate
supply of goods and services, determines the level of prices.

Monetary policy is a set of measures or actions implemented by the central bank to affect the supply of money and credit in the economy. Monetary policy
actions of the BSP are aimed at influencing the timing, cost and availability of money and credit, as well as other financial factors, in support of its key objective
of keeping inflation low and stable.

BSP implementation monetary policy primary monetary policy instrument of the BSP is the overnight RRP rate. The RRP rate is the rate at which the BSP
borrows money from commercial banks within the country. The BSP can raises or reduces its overnight RRP rate depending on the BSP’s assessment of the
outlook for inflation and GDP growth.( contractionary monetary policy&expansionary monetary policy) (ang bsp ay my kakayahan na pataasin o pababain ang
overnight rrp rate depende sa sa kung paano nila inasses ang inflation at ang gdp growth ng isang ekonomiy)

Basic approach to monetary policy in the Philippines The BSP uses the inflation targeting framework as its basic approach to monetary policy. Under this
approach, the BSP announces an explicit inflation target and strongly commits to achieving it over a policy horizon using various monetary policy instruments.
The inflation targeting approach that is currently adopted by the BSP formally replaced the monetary aggregate targeting approach in January 2002. IT HAS
TARGET, MONITOR THE MOVEMENT.

2. financial stability: - aims to provide use strong financial system. participates in currency trade to prevent the peso from moving up too fast or from dropping
too fast, as both could trigger adverse effects on the economy. about managing financial system risks so that these risks do not create negative consequences to
the rest of the economy. BSP Conducts financial supervision and regulation to all components of the financial system.

= A financial system is a set of institutions, such as banks, insurance companies, and stock exchanges, that permit the exchange of funds.

= The financial system also includes sets of rules and practices that borrowers and lenders use to decide which projects get financed, who finances projects, and
terms of financial deals. (WE CAN USED FINANCIAL SYSTEM TO STORE OUR SAVINGS NA MAAARI NATING MAGAMIT KAPAG KINAKAILANGAN LIKE WE CAN
ACQUIRE FINANCIAL ASSETS as well as real properties, through the financial market PWEDE TAYONG MAGLOAN UPANG BUMILI NG BAHAY, KOTSE, OR
CREDIT CARD SERVICES)

= financial systems develop through the banking industry because of the nature of fiat money. In this context, making sure that banks operate in a safe and
sound manner is in the public interest. Banks, after all, manage our savings, offer critical services in the transfer of funds and the payment of obligations, while
providing a venue for entrepreneurs to pursue their economic plans through credit. Banking authorities nurture this by defining the regulatory framework that
encourages innovation while monitoring that banks operate within prescribed governance guidelines.
=  fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater
control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar,
are fiat currencies.
Functions of BSP

1. Systemic Risk Management- defined as the risk associated with the collapse or failure of a company, industry, financial institution, or an entire economy.

- The most important feature of systemic risk is that the risk spreads from unhealthy institutions to relatively healthier institutions through a transmission
mechanism. it can bring down the economy.

= Controlling systemic risk is a major concern for regulators, particularly given that consolidation in the banking system has led to the creation of very large
banks.

= Financial stability is the state when prospective systemic risks are mitigated. To pursue viable economic goals while avoiding disruptions to the smooth
functioning of the financial system that can negatively affect the rest of the economy.

= 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)

2. Financial Supervision- The Bangko Sentral has supervision over the operations of banks and exercises such regulatory powers as provided in the New Central
Bank Act and other pertinent laws over the operations of finance companies and non-bank financial institutions performing quasi-banking functions.

3. Efficient payments and settlement systems- Payment systems are essential to the effective functioning of financial systems worldwide. They provide the
channels through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial
transactions across the entire economy.

= An efficient, secure and reliable payment system reduces the cost of exchanging goods and services, and it is an essential tool for the effective implementation
of monetary policy, and the smooth functioning of money and capital markets.

= It is this key role played by payment and settlement system (PSS) in the smooth functioning of an economy in general and its financial and monetary system in
particular that gives the central bank (CB) a strong incentive for ensuring that an effective, reliable and secure payment and settlement system is in place. In the
Philippines, the BSP takes the lead in promoting an efficient payments and settlements system by providing:

• the necessary infrastructure through the operations of the Philippine Payment and Settlement System or the “PhilPaSS”

• a policy and regulatory framework, also known as the National Retail Payment System or NRPS, to establish a safe, efficient and reliable retail payment system
in the country.
ANG ISANG MAHUSAY,LIGTAS, AT MAAASAHANG SISTEMA NG PAGBABAYAD AY NAKAPAGBABABA NG GASTUSIN SA PALITAN NG GOODS AT SERVICES.
MAARI RIN NITONG PALAWAKING ANG PRODUCTION AT OPERASYON NG ISANG NEGOSYO

there is price stability when the general price level of goods and services in the country moves at a low and predictable rate thus
preserving the value of your money

contractionary- limit under business paglabas ng pera, slow down economic growth,higher interest rates
central bank act.
qualification members OF THE MONETARY BOARD- NATURAL BORN CI, 35 YEARS AGE EXCEPT GOVERNOR WHICH 40 YEARS
OLD,CHARACTER,INTEGRITY
monitary board
corporate powers of MONETARY BOARD- power to adapt
composition of monetary board
grounds FOR REMOVAL – GUILTY OF ACTS
major funCtion
how disqualify ang governor
what provision
PRIVATE SECTOR, 6 YEARS(MONETARY BOARD)
AMMENDMENT: 2019

PHILIPPINE MONEY - SOURCES OF CREDIT