The Bangko Sentral ng Pilipinas (lit. Central Bank of the Philippines; commonly abbreviated
as BSP in both Filipino and English) is the central bank of the Philippines. It was established
on 3 July 1993, pursuant to the provision of Republic Act 7653 or the New Central Bank
Act of 1993.
== History ==
=== American era and World War II === In 1900, the First Philippine Commission passed
Act No. 52, which placed all banks under the Bureau of the Treasury and authorizing the
Insular Treasurer to supervise and examine banks and all banking activity. In 1929, the
Department of Finance, through the Bureau of Banking, took over bank supervision.
By 1933, a group of Filipinos had conceptualised a central bank for the Philippine Islands.
It came up with the rudiments of a bill for the establishment of a central bank after
a careful study of the economic provisions of the Hare–Hawes–Cutting Act, which would
grant Philippine independence after 12 years, but reserving military and naval bases for
the United States and imposing tariffs and quotas on Philippine exports. However, the
Hare–Hawes–Cutting Act would be rejected by the Senate of the Philippines at the urging
of Commonwealth President Manuel L. Quezon. This Senate then advocated a new bill that
won United States President Franklin D. Roosevelt's support, this would be the Tydings–McDuffie
Act, which would grant Philippine independence on July 4, 1946.
Under the Commonwealth, discussions continued regarding the idea of a Philippine central
bank that would promote price stability and economic growth. The country's monetary system
then was administered by the Department of Finance and the National Treasury, and the
Philippine piso was on the exchange standard using the United States dollar, which was
backed by 100 percent gold reserve, as the standard currency.
As required by the Tydings–McDuffie Act, the National Assembly of the Philippines in
1939 passed a law establishing a central bank. As it was a monetary law, it required the
approval of the President of the United States; Franklin D. Roosevelt did not give his. A
second law was passed in 1944 under the Japanese-controlled Second Republic during the Second World War,
but the 1945 arrival of American liberation forces, aided by Philippine Commonwealth troops
and recognised guerrillas, aborted its implementation.
=== Third Republic and martial law === Shortly after President Manuel Roxas assumed
office in 1946, he instructed then-Finance Secretary Miguel Cuaderno, Sr. to draw up
a charter for a central bank. The establishment of a monetary authority became imperative
a year later as a result of the findings of the Joint Philippine-American Finance Commission
chaired by Cuaderno. The Commission, which studied Philippine financial, monetary, and
fiscal problems in 1947, recommended a shift from the dollar exchange standard to a managed
currency system. A central bank was necessary to implement the proposed shift to the new
system. Roxas then created the Central Bank Council
to prepare the charter of a proposed monetary authority. It was submitted to Congress in
February 1948. By June of the same year, the newly proclaimed President Elpidio Quirino,
who succeeded President Roxas, affixed his signature on Republic Act (RA) No. 265, the
Central Bank Act of 1948.On January 3, 1949, the Central Bank of the Philippines was formally
inaugurated with Miguel Cuaderno, Sr. as the first governor. The main duties and responsibilities
of the Central Bank were to promote economic development and maintain internal and external
monetary stability.Over the years, changes were introduced to make the charter more responsive
to the needs of the economy. On November 29, 1972, President Ferdinand Marcos' Presidential
Decree No. 72 amended Republic Act No. 265, emphasizing the maintenance of domestic and
international monetary stability as the primary objective of the Central Bank. The Bank's
authority was also expanded to include regulation of the entire financial system of the Philippines
and not just supervision of the banking system. In 1981, RA 265, as amended, was further improved
to strengthen the financial system, among the changes was the increase in the capitalization
of the Central Bank from Php10 million to Php 10 billion.In the 1973 Constitution, the
interim Batasang Pambansa (National Assembly) was mandated to establish an independent central
monetary authority. Presidential Decree No. 1801 designated the Central Bank of the Philippines
as the central monetary authority (CMA). Years later, the 1987 Constitution adopted the CMA
provisions from the 1973 Constitution that were aimed essentially at establishing an
independent monetary authority through increased capitalization and greater private sector
representation in the Monetary Board.
=== Present === In accordance with a provision in the 1987
Constitution, President Fidel V. Ramos signed Republic Act No. 7653, otherwise known as
the New Central Bank Act, into law on June 14, 1993. The law provides for the establishment
of an independent monetary authority to be known as the Bangko Sentral ng Pilipinas,
its primary objective being the maintenance of price stability. This objective was only
implied in the old Central Bank charter. The law also gives the Bangko Sentral fiscal and
administrative autonomy which the old Central Bank did not have. On July 3, 1993, the New
Central Bank Act took effect.
On the evening of September 26, 2012, a Wednesday, the BSP website was hacked by a group named
Anonymous Philippines in a protest against the recently passed Cybercrime Prevention
Act of 2012. The website was promptly restored in the early hours of the following day.On
April 23, 2013, The Asian Banker named the BSP as the Best Macroeconomic Regulator in
the Asia-Pacific Region for 2013 in The Asian Banker Leadership Achievement Awards in Jakarta,
Indonesia. The BSP was cited as a “good, strong, and fair-minded regulator.” About
a month later, the BSP was given the country award by the Child and Youth Finance International
in its 2013 International Summit in Istanbul, Turkey, in recognition of its initiative to
integrate financial education in the Philippine elementary school curriculum.
== Roles and responsibilities == As prescribed by the New Central Bank Act,
the main functions of the Bangko Sentral are:
Liquidity management, by formulating and implementing monetary policy aimed at influencing money
supply, consistent with its primary objective to maintain price stability,
Currency issue. The BSP 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 tender for all private and public debts, Lender of last resort, by extending discounts,
loans and advances to banking institutions for liquidity purposes,
Financial supervision, by supervising banks and exercising regulatory powers over non-bank
institutions performing quasi-banking functions, Management of foreign currency reserves, by
maintaining sufficient international reserves to meet any foreseeable net demands for foreign
currencies in order to preserve the international stability and convertibility of the Philippine
peso, Determination of exchange rate policy, by
determining the exchange rate policy of the Philippines. Currently, the BSP adheres to
a market-oriented foreign exchange rate policy, and
Being the banker, financial advisor and official depository of the Government, its political
subdivisions and instrumentalities and GOCCs.
== Organization of the Bangko Sentral == The basic structure of the Bangko Sentral
includes:
The Monetary Board, which exercises the powers and functions of the BSP, such as the conduct
of monetary policy and supervision of the financial system;
The Monetary Stability Sector, which takes charge of the formulation and implementation
of the BSP's monetary policy, including serving the banking needs of all banks through accepting
deposits, servicing withdrawals and extending credit through the rediscounting facility;
The Supervision and Examination Sector, which enforces and monitors compliance to banking
laws to promote a sound and healthy banking system; and
The Resource Management Sector, which serves the human, financial and physical resource
needs of the BSP.The powers and function of Bangko Sentral are exercised by its Monetary
Board, whose seven members are appointed by the President of the Philippines. As provided
for by RA 7653 or the New Central Bank Act, one of the government sector members of the
Monetary Board must also be a member of Cabinet. Members of the Monetary Board are prohibited
from holding certain positions in other government agencies and private institutions that may
give rise to conflicts of interest. The members have fixed and overlapping terms, except for
the Cabinet Secretary representing the incumbent administration.The current members of the
Monetary Board are:
Nestor Espenilla, Jr., BSP Governor and Chairman of the Monetary Board
Carlos Dominguez III, Secretary of the Department of Finance
Antonio S. Abacan, Jr. Juan D. De Zuñiga, Jr.
V. Bruce J. Tolentino Felipe M. Medalla
Peter B. Favila
== Convertible currencies == The Bangko Sentral has 19 currencies directly
convertible with the Philippine piso, which serves as a benchmark for all Philippine banks.
== Microfinance and financial inclusion == In 2000, the General Banking Law mandated
the BSP to recognize microfinance as a legitimate banking activity and to set the rules and
regulations for its practice within the banking sector. In the same year, the BSP declared
microfinance as its flagship program for poverty alleviation. The BSP has become the prime
advocate for the development of microfinance. To this end, the Bangko Sentral aims to:
Provide the enabling policy and regulatory environment;
Increase the capacity of the BSP and banking sector on microfinance operations; and
Promote and advocate for the development of sound and sustainable microfinance operations.The
Bank is active in promoting a financial inclusion policy and is a leading member of the Alliance
for Financial Inclusion. It is also one of the original 17 regulatory institutions to
make specific national commitments to financial inclusion under the Maya Declaration during
the 2011 Global Policy Forum held in Mexico.
== Anti-money laundering == With money laundering being one of the problems
of the Philippines, the BSP has issued a number of measures to bring the Philippines' regulatory
regime on money laundering closer to international standards. In September 2001, the Anti-Money
Laundering Act, or AMLA, was made into law. The AMLA defined money laundering a criminal
offense, and prescribed corresponding penalties. It also provided the foundation for a central
monitoring and implementing council called the Anti-Money Laundering Council (AMLC).
The AMLC is composed of the Governor of the Bangko Sentral as Chair, and the Commissioner
of the Insurance Commission and the Chairman of the Securities and Exchange Commission
as members, all acting unanimously in the discharge of the group's mandate.In February
2013, Philippine President Benigno Aquino III signed R.A. No. 10365, known as An act
further strengthening the Anti-Money Laundering Law, which aims to strengthen the AMLC by
requiring that any suspicious transaction in foreign exchange, real estate, and jewelry
and precious metal trading be reported.
== Governors ==
== Museum == Within the Manila complex of the Bangko Sentral
ng Pilipinas is the Museo ng Bangko Sentral ng Pilipinas (English: Museum of the Central
Bank of the Philippines). Inaugurated on January 3, 1999, as part of the celebration of the
50 years of central banking in the Philippines, the museum showcases the Bank's collection
of currencies.As repository and custodian of the country's numismatic heritage, the
Museo collects, studies and preserves coins, paper notes, medals, artifacts and monetary
items found in the Philippines during its different historical periods. These collections
have been placed on permanent display at the Museo.
Designed to "walk" the visitor through a number of galleries dedicated to a specific historical
period of the country, the Museo visually narrates the development of the Philippine
economy, parallel to the evolution of its currency. Complementary paintings from the
BSP art collection, together with chosen artifacts, enhance each gallery.
A panoramic memorabilia of 50 years of central banking in the Philippines, showcases the
strides made in bringing about price stability, to sustain economic growth in the country.
The exhibition hall also carries the busts of the governors of the Central Bank/Bangko
Sentral.
== Security Plant Complex == The Security Plant Complex, or SPC, was formally
established on September 7, 1978 to safeguard the printing, minting, refining, issuance,
distribution and durability of coins, banknotes, gold bars, government official receipts, lottery
tickets, internal revenue stamps, passports, seaman identification record books, strip
stamps, official documents, registration certificates, Torrens titles, treasury warrants, stocks
and bonds, government contracts, ration coupons, official ballots, election return forms, checks
and other security printing or minting jobs of the Philippine government.
Printing of official ballots and other public documents was later transferred to the National
Printing Office pursuant to Executive Order No. 285 issued on July 25, 1987.On August
4, 2003, President Gloria Macapagal-Arroyo issued Administrative Order No. 79, which
designated the SPC as the sole manufacturer of presidential medals and decorations.
== References ==
About the Bangko SentralBSP 100
== Publications == Villegas, Ramón N. (1983). Kayamanan: The
Philippine Jewelry Tradition. Central Bank of the Philippines. ISBN 9711039001. Retrieved
24 April 2014.
== External links == Official website