Overview of the 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.
The BSP Seal
/ The BSP seal is a composite of the Filipino flag, the risen sun and mountains framed by a wheel and ringed by the inscription, "THE BANGKO SENTRAL NG PILIPINAS."The FLAG symbolizes the country and expresses the Filipino people's nationalism and unity.
The RISEN SUN signifies the bright future and renewed spirit of the nation.
The MOUNTAINS represent stability and the WHEEL signifies movement and industry, the key to the nation's economic progress.
The BSP Main Complex
/ The BSP Main Complex in Manila houses the offices of the Governor, the Monetary Board and the different operating departments/ offices. The Complex has several buildings, namely: 5-Storey building, Multi-storey building, the EDPC building and the BSPMoneyMuseum, which showcases the Bank's collection of currencies.The BSP Security Plant Complex
/ The Security Plant Complex which is located in Quezon City houses a banknote printing plant, a securities printing plant, a mint and a gold refinery. The banknote printing plant and the mint take care of producing currency notes and coins, respectively.Products | Gallery Tour
The BSP Regional Offices and Branches
/ The BSP has three regional offices performing cash operations, cash administration, loans and rediscounting, bank supervision and gold buying operations. These regional offices are located in La Union, CebuCity and DavaoCity.There are also 18 BSP branches situated in Batac (Ilocos Norte), Tuguegarao City (Cagayan), Dagupan City (Pangasinan), Cabanatuan City (Nueva Ecija), Angeles City (Pampanga), Lucena City (Quezon), Naga City (Camarines Sur), Legazpi City (Albay), Dumaguete City (Negros Oriental), Bacolod City (Negros Occidental), Iloilo City (Iloilo), Kalibo (Aklan), Tacloban City (Leyte), Cagayan de Oro City (Misamis Oriental), Ozamiz City (Misamis Occidental), Cotabato City, General Santos City (South Cotabato) and Zamboanga City (Zamboanga del Sur). They perform cash operations, cash administration, and in certain areas, gold buying operations.
Creating a Central Bank for the Philippines
A group of Filipinos had conceptualized a central bank for the Philippines as early as 1933. It came up with the rudiments of a bill for the establishment of a central bank for the country after a careful study of the economic provisions of the Hare-Hawes Cutting bill, the Philippine independence bill approved by the US Congress.
During the Commonwealth period (1935-1941), the discussion about a Philippine central bank that would promote price stability and economic growth continued. The country’s monetary system then was administered by the Department of Finance and the National Treasury. The Philippines was on the exchange standard using the US dollar—which was backed by 100 percent gold reserve—as the standard currency.
In 1939, as required by the Tydings-McDuffie Act, the Philippine legislature passed a law establishing a central bank. As it was a monetary law, it required the approval of the United States president. However, President Franklin D. Roosevelt disapproved it due to strong opposition from vested interests. A second law was passed in 1944 during the Japanese occupation, but the arrival of the American liberalization forces aborted its implementation.
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 Mr. 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.
Immediately, the Central Bank Council, which was created by President Manuel Roxas to prepare the charter of a proposed monetary authority, produced a draft. It was submitted to Congress in February1948. By June of the same year, the newly-proclaimed President Elpidio Quirino, who succeeded President Roxas, affixed his signature on Republic Act No. 265, the Central Bank Act of 1948. The establishment of the Central Bank of the Philippines was a definite step toward national sovereignty. Over the years, changes were introduced to make the charter more responsive to the needs of the economy. On 29 November 1972, Presidential Decree No. 72 adopted the recommendations of the Joint IMF-CB Banking Survey Commission which made a study of the Philippine banking system. The Commission proposed a program designed to ensure the system’s soundness and healthy growth. Its most important recommendations were related to the objectives of the Central Bank, its policy-making structures, scope of its authority and procedures for dealing with problem financial institutions.
Subsequent changes sought to enhance the capability of the Central Bank, in the light of a developing economy, to enforce banking laws and regulations and to respond to emerging central banking issues. Thus, in the 1973 Constitution, the National Assembly was mandated to establish an independent central monetary authority. Later, PD 1801 designated the Central Bank of the Philippines as the central monetary authority (CMA). Years later, the 1987 Constitution adopted the provisions on the CMA 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.
The administration that followed the transition government of President Corazon C. Aquino saw the turning of another chapter in Philippine central banking. In accordance with a provision in the 1987 Constitution, President Fidel V. Ramos signed into law Republic Act No. 7653, the New Central Bank Act, on 14 June 1993. The law provides for the establishment of an independent monetary authority to be known as the Bangko Sentral ng Pilipinas, with the maintenance of price stability explicitly stated as its primary objective. 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 3 July 1993, the New Central Bank Act took effect.
The BSP Vision and Mission
Vision
The BSP aims to be a world-class monetary authority and a catalyst for a globally competitive economy and financial system that delivers a high quality of life for all Filipinos.
Mission
BSP is committed to promote and maintain price stability and provide proactive leadership in bringing about a strong financial system conducive to a balanced and sustainable growth of the economy. Towards this end, it shall conduct sound monetary policy and effective supervision over financial institutions under its jurisdiction.
The BSP Charter
The New Central Bank Act (RA 7653) - PDF file, 155 KB
Chapter I - Establishment And Organizations of the Bangko Sentral ng Pilipinas
Article I. Creation, Responsibilities and Corporate Powers of the Bangko Sentral
Article II. The Monetary Board
Article III. The Governor and Deputy Governors of the Bangko Sentral
Article IV. Operations of the Bangko Sentral
Article V. Reports and Publications
Article VI. Profits, Losses and Special Accounts
Article VII. The Auditor
Chapter II - The Bangko Sentral and the Means of Payment
Article I. The Unit of Monetary Value
Article II. Issue of Means of Payment
Chapter III - Guiding Principles of Monetary Administration by the Bangko Sentral
Article I. Domestic Monetary Stabilization
Article II. International Monetary Stabilization
Chapter IV - Instruments of Bangko Sentral Action
Article I. General Criterion
Article II. Operations in Gold and Foreign Exchange
Article III. Regulations of Foreign Exchange Operations of the Bank
Article IV. Loans to Banking and Other Financial Institutions
Article V. Open Market Operations for the Account of the Bangko Sentral
Article VI. Composition of Bangko Sentral's Portfolio
Article VII. Bank Reserves
Article VIII. Selective Regulation of Bank Operations
Article IX. Coordination of Credit Policies by Government Institutions
Chapter V - Functions as Banker and Financial Advisor of the Government
Article I. Functions as Banker of the Government
Article II. The Marketing and Stabilization of Securities for the Account of the Government
Article III. Functions as Financial Advisor of the Government
Chapter VI - Privileges and Prohibitions
Article I. Privileges
Article II. Prohibitions
Chapter VII - Transitory Provisions
Overview of Functions and Operations
Objectives
The BSP’s primary objective is to maintain price stability conducive to a balanced and sustainable economic growth. The BSP also aims to promote and preserve monetary stability and the convertibility of the national currency.
Responsibilities
The BSP provides policy directions in the areas of money, banking and credit. It supervises operations of banks and exercises regulatory powers over non-bank financial institutions with quasi-banking functions.
Under the New Central Bank Act, the BSP performs the following functions, all of which relate to its status as the Republic’s central monetary authority.
- Liquidity Management. The BSP formulates and implements 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. The BSP extends discounts, loans and advances to banking institutions for liquidity purposes.
- Financial Supervision. The BSP supervises banks and exercises regulatory powers over non-bank institutions performing quasi-banking functions.
- Management of foreign currency reserves. The BSP seeks to maintain 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. The BSP determines the exchange rate policy of the Philippines. Currently, the BSP adheres to a market-oriented foreign exchange rate policy such that the role of Bangko Sentral is principally to ensure orderly conditions in the market.
- 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.
Advocacies
The BSP is deeply involved in various projects and activities aimed towards alleviating poverty, contributing to the global fight against money laundering, increasing transparency of monetary policy and improving the financial literacy of the public.
- The BSP has declared microfinance as its flagship program for poverty alleviation in Year 2000 and has since then played a key role in the development of sustainable microfinance in the country. The BSP initiatives have focused on the policy and regulatory environment, training and capacity building as well as on promotion and advocacy.
- In order to implement its continued commitment and support of the global fight against money laundering, the BSP worked for the passage of the Anti-Money Laundering Act and issued a number of measures to bring the Philippines' regulatory regime on money laundering closer to international standards.
- The BSP has been conducting public information campaigns in line with the effort to increase public awareness on the role of the BSP in the economy and the financial system and to further enhance the transparency of monetary policy.
- The BSP has also taken a proactive stance in embarking on a consumer education program that aims to improve the basic financial literacy of the public.
The BSP undertakes various bank-related initiatives to improve the remittance environment and to channel remittances to productive undertakings. Through these initiatives, the BSP intends to maximize the benefits of remittances aimed at: (1) ensuring the smooth inflow of remittances, and (2) promoting their use for development by channeling them to the financial sector so that these funds can be mobilized for lending and other productive activities.
BSP Educational Scholarship and Training Program (BEST)
Over the years, the Bangko Sentral ng Pilipinas has created a track record of delivering high performance and excellent service. Such a high level of success is made possible by ensuring that at its helm is the best and brightest manpower. Through its continuous development of its workforce, the Bank is assured of maintaining the prominence that it enjoys. Thus, the BSP invests in professional development programs which aim to develop its intellectual capital. One of these is the Bangko Sentral ng Pilipinas Educational Scholarship and Training Program (BEST) which provides funding to qualified employees to pursue graduate and post-graduate courses in recognized schools here and abroad.
As the BSP’s organizational capability-building program, BEST aims to provide the long-term requirements for technical experts in the field of Economics, Finance, Statistics, Law, Information Technology, and Human Resource. Similarly, it ensures that the Bank is at par with the best practices of similar institutions in the region and throughout the world. Ultimately, this guarantees that the BSP fulfills its role not only as a regulating body but more importantly, as a sustainer of the country’s economy.
The Sectoral Scholarship Assessment Committees (SSAC) is tasked with the selection process and ensures that candidates are no more than 40 years old at the start of classes for a Master’s, Ph.D. or Master of Laws degree. Other requirements are 2 years of government service (one year of which should be with the BSP), physical and psychological fitness, and a firm commitment to serve the Bank after graduation. Prospective applicants undergo an online assessment and a panel interview based on which the BEST Oversight Committee makes a recommendation for the Governor’s approval. To date, the program has granted scholarships to 33 bank personnel in schools here in the Philippines and in the USA, UK, and Australia.
To ensure the Program’s sustainability, a post-scholarship follow-through known as Scholar – CARED (Career Development) Program tracks the career progression of the scholar upon his/her return after graduation. Scholar-CARED is part of the BSP’s Career Management System that addresses the career paths of BSP employees, including scholars, to ensure that they have a fulfilling career in the Bank.