sound and prudent practices consistent with

BANGKO SENTRAL NG the maintenance of financial stability.

PILIPINAS
Mission
The Bangko Sentral ng Pilipinas (BSP) is
To promote and maintain price stability, a strong
the central bank of the Republic of the Philippines.
financial system, and a safe and efficient
It was established on 3 July 1993 pursuant to the
provisions of the 1987 Philippine Constitution and payments and settlements system conducive to a
the New Central Bank Act of 1993. The BSP took sustainable and inclusive growth of the economy.
over from Central Bank of Philippines, which was
Vision
established on 3 January 1949, as the country’s
central monetary authority. The BSP enjoys fiscal The BSP aims to be recognized globally as the
and administrative autonomy from the National monetary authority and primary financial system
Government in the pursuit of its mandated supervisor that supports a strong economy and
responsibilities. promotes a high quality of life for all Filipinos.
BSP is establish by congress pursuant to PRICE STABILITY
R.A 7653 (BSP Charter).
To maintain the price stability, the BSP
In accordance with a provision in the 1987 implements the monetary policy. The primary
Constitution, President Fidel V. Ramos signed objective of the BSP's monetary policy is to
into law Republic Act No. 7653, the New Central promote a low and stable inflation conducive to a
Bank Act, on 14 June 1993. The law provides for balanced and sustainable economic growth. By
the establishment of an independent monetary keeping price stable, the BSP helps ensure
authority to be known as the Bangko Sentral ng strong and sustainable economic growth and
Pilipinas, with the maintenance of price stability better living standards.
explicitly stated as its primary objective. This
objective was only implied in the old Central FINANCIAL STABILITY
Bank charter. The law also gives the Bangko
Sentral fiscal and administrative autonomy which As a guide, the BSP and the Financial Stability
Coordination Council (FSCC) have adopted the
the old Central Bank did not have. On 3 July
following definition of "Financial Stability."
1993, the New Central Bank Act took effect.

The reason why eagle is the logo of BSP is

“Financial stability is the state when
because it aspires to soar towards becoming a
prospective systemic risks are mitigated so as
world-class monetary authority. The three stars to allow financial consumers, both individuals
represent the 3 Pillars of central banking: Price and corporate entities, to pursue viable
stability, financial stability, and payments & economic goals while avoiding disruptions to
settlement systems. the smooth functioning of the financial system
that can negatively affect the rest of the
Objectives: economy."
 The primary objective of the Bangko Sentral
is to maintain price stability conducive to a The promotion of “Financial Stability” is a
balanced and sustainable growth of the formal mandate that is uniquely ascribed to the
economy and employment. It shall also
Bangko Sentral ng Pilipinas (BSP). This is
promote and maintain monetary stability
provided for in the amended BSP Charter
and the convertibility of the peso.
(Republic Act No. 11211) which was signed by
 The Bangko Sentral shall promote financial
President Duterte in February 2019.
stability and closely work with the National
Government, including, but not limited to, The objective of “Financial Stability” is to
the Department of Finance, Securities and enhance the resilience of the financial system, in
Exchange Commission, the Insurance its totality and in its components, from shocks.
Commission, and the Philippine Deposit
This is done by managing systemic risks that
Insurance Corporation.
could affect the financial system so that finance
 The Bangko Sentral shall oversee the
continues to be a value proposition to consumers
payment and settlement systems in the
in normal times while remaining resilient when
Philippines, including critical financial
market infrastructures, in order to promote disruptions do arise.
To maintain the financial stability, the Financial  Currency issue.
Stability council (FSCC) made the The BSP has the exclusive power to
Microprudential Policy Strategy. Macroprudential issue the national currency. All notes
policy is the means for mitigating systemic risks. and coins issued by the BSP are fully
guaranteed by the Government and are
considered legal tender for all private
PAYMENTS AND SETTLEMENTS and public debts.

Payment systems are essential to the  Lender of last resort.

effective functioning of financial systems The BSP extends discounts, loans and
advances to banking institutions for
worldwide. They provide the channels
liquidity purposes.
through which funds are transferred among
banks and other institutions to discharge  A lender of last resort is whoever you
payment obligations arising from economic turn to when you urgently need funds
and financial transactions across the entire and you've exhausted all your other
economy. An efficient, secure and reliable options. Banks typically turn to their
payment system reduces the cost of lender of last resort when they cannot
exchanging goods and services, and it is an get the funding they need for their daily
essential tool for the effective implementation business.
of monetary policy, and the smooth
functioning of money and capital markets.   Financial Supervision.
The BSP supervises banks and
In the Philippines, the BSP takes the lead in exercises regulatory powers over non-
promoting an efficient payments and bank institutions performing quasi-
settlements system by providing: banking functions.

 Management of foreign currency

 a. the necessary infrastructure through reserves.
the operations of the Philippine Payment The BSP seeks to maintain sufficient
and Settlement System or the international reserves to meet any
“PhilPaSS”; and foreseeable net demands for foreign
 b. a policy and regulatory framework, currencies in order to preserve the
also known as the National Retail international stability and convertibility of
Payment System or NRPS, to establish the Philippine peso.
a safe, efficient and reliable retail
payment system in the country.  Reserve management is a process that
ensures that adequate official public
sector foreign assets are readily
Function: available to and controlled by the
authorities for meeting a defined range
Under the New Central Bank Act of 1993, the
of objectives for a country or union.1 In
BSP performs the following functions, all of
which relate to its status as the Republic’s this context, a reserve management
central monetary authority. entity is normally made responsible for
the management of reserves and
 Liquidity Management. associated risks.
The BSP formulates and implements
monetary policy aimed at influencing  Determination of exchange rate
money supply consistent with its primary policy.
objective to maintain price stability. The BSP determines the exchange rate
policy of the Philippines. Currently, the
 the issuance of BSP Securities provides BSP adheres to a market-oriented
the BSP with greater flexibility in foreign exchange rate policy such that
managing the liquidity in the financial the role of Bangko Sentral is principally
system, particularly in the face of large to ensure orderly conditions in the
structural liquidity surplus arising from market.
capital flows or additional liquidity
released from the reduction in the reserve  Under a market‐determined exchange
requirement ratios of banks.
rate framework, the BSP does not set
 the foreign exchange rate but instead
allows the value of the peso to be
determined by the supply of and
demand for foreign exchange

 Other activities.
The BSP functions as the banker,
financial advisor and official depository
of the Government, its political
subdivisions and instrumentalities and
GOCCs.

[ CITATION Ban20 \l 13321 ]