PART I

Philippine Money
Concept of Money
Our monetary system developed to meet the changing needs of
the economy.

Primitive economies consisted largely of self-sufficient units or

groups that lived by means of hunting, fishing, and simple
agriculture.

There was a need to exchange goods and services.

 As economies became more developed and some men
specialized, to a degree at least, the process of exchange of goods
for goods, or BARTER as it is known, tables of relative values were
developed from past experiences.
 “ She makes a lot of
money…”

He has a lot of

money…”
Money
as anything authorized by law.

generally accepted as medium of exchange.

one form in which we keep our wealth.

As defined by Farlex Dictionary, Money is a Currency and coin that

are guaranteed as legal tender by the government.
Functions of
Money
 As a Medium of Exchange

• Money facilitates buying and selling transactions. Its is basically the

tool used to pay or settle obligations.
• By being “generally acceptable for payment for goods and services’’,
it serves as physical means of conducting a business transactions.
 As a Medium of Exchange

• The use of money allows purchases and sales to be possible. The

introduction of money in turn reduces the time spent for a
transaction.
• As a transaction medium, it is a means of repaying debts, in the
exchange of assets, such as shares of common stock.
 As a Medium of Exchange

By definition, a Medium of Exchange is

anything that is used to determine value
during the exchange of goods and services.
Money allows us to use systems of trade
beyond the Barter System.
Bartering is directly trading one good or
service for another.
Your money acts as a common ground
for determining value.
 Unit of Account of Standard Value

• Money serves as a yardstick for measuring prices and values for

comparing items.
• In principle, any commodity can serve as a unit of account.
• We measure the values of items we want to acquire in terms of one
common denominator, our money value.
 Unit of Account of Standard Value

• Money can be used as a means to compare

the values of goods and services.
• You can use the monetary value assigned
to a specific good or service to compare it
to one offered by a different provider.
• Money allows us to compare similar offers
for goods and services to determine the
best value
 Store of Value
• Money is a reservoir of future purchasing power.
• It is both temporary and a permanent store of
purchasing power.
• A person who saves portion of his income is
storing purchasing power of his money
temporarily.
• A person who holds more money to carry our a
transaction in stocks, bonds, real estate or other
forms is storing purchasing power of money.
 Store of Value
• Money value can be stored in two forms: SAVINGS and
INVESTMENT.
• Income derived from savings is interest and from
investment is profit.
• If kept for future use, in the form of savings or
investment, it earn income.
• Financial assets serve as a means of storing
wealth. This includes various short-term
securities, bank deposits, stocks and the like
serving as vehicles for storing wealth over
time.
 Standard of Deferred Payment
• Money is used as a medium for fulfilling obligations of debtors to
creditors on maturity.
• It serves to measure the extent of obligations by debtors and claims
by creditors.
• Money as a standard of deferred payments means that promises to
pay at specified future time, whether verbal or written, is expressed in
money value.
Characteristics
of Good Money
Section 53 of the New Central Bank Act

Characteristics of the Currency “The Monetary Board,

with the approval of the President of the Philippines, shall prescribe
denominations, dimensions, designs, inscriptions and other
characteristics of notes issued by the Bangko Sentral: Provided,
however, that …..
“……said notes shall state that they are liabilities of the Bangko
Sentral and are fully guaranteed by the Government of the Republic
of the Philippines. Said notes shall bear the signatures, in facsimile,
of the President of the Philippines and of the Governor of the
Bangko Sentral”.
“Similarly, the Monetary Board, with the approval of the President
of the Philippines, shall prescribe the weight, fineness, designs,
denominations and other characteristics of the coins issued by the
Bangko Sentral. In the minting of coins, the Monetary Board shall
give full consideration to the availability of suitable metals and to
their relative prices and cost of minting.”
General acceptability
Durability
Portability
Divisibility
Stability of Money Value
Cognizability
Uniformity
Malleability
 General Acceptability

• This is the ready acceptance of people in a country for money.

Money must be acceptable as a tool for settlement of obligations
between creditors and debtors, or between buyers and sellers.
Section 52 of the New Central Bank Act

Legal Tender Power states that “All notes and coins issued by
the Bangko Sentral shall be fully guaranteed by the Government of
the Republic of the Philippines and shall be legal tender in the
Philippines for all debts, both public and private: Provided, however,
That, unless fixed by the Monetary Board,
“........Coins shall be legal tender in amounts not exceeding Fifty
Pesos (Php50.00) for denominations of Twenty-five centavos and
above, and in amounts not exceeding Twenty-pesos (Php 20.00) for
denominations of Ten centavos or less.
 Durability
• A characteristic where money must be able to bear normal wear
and tear when use in any transaction. It must be made of materials
which can last for a reasonable long period of time without losing
its usefulness as a medium of exchange. Designs and inscriptions
there in must be visible and recognizable.
Section 57 of the New Central Bank Act

Retirement of Old Notes and Coins “The Bangko Sentral

may call in for replacement notes of any series or denomination
which are more than five (5) years old and coins which are more than
ten (10) years old…….”
“…Notes and coins called in for replacement in
accordance with this provision shall remain
legal tender for a period of one (1) year from
the date of call. After this period, they shall
cease to be legal tender but during the
following year, or for such longer period as the
Monetary Board may determine, they may be
exchanged at par without charge in the Bangko
Sentral for this purpose….”
“….After the expiration of this latter period, the
notes and coins which have not been
exchanged shall cease to be a liability of the
Bangko Sentral and shall be demonetized. The
Bangko Sentral shall also demonetize all notes
and coins which have called in and replaced”.
Portability
•Money must be easy to carry for faster
settlement of transactions. Materials
used, like metal alloys must not be
bulky. For higher denominations,
paper-based materials are preferable
for easy transport.
Divisibility
•Money as a unit of account must be
capable of being subdivided into
smaller denominations to settle
obligations or collections arising from
various transactions.
Section 48 of the New Central Bank Act

Section 48 states that “The monetary

unit in the Philippines is the “PESO”
which is represented by the sign “P”.
The peso is divided into one hundred
(100) equal part called “CENTAVOS”
which are represented by the sign “c”.
 Stability of Money Value

• The purchasing power of money must be maintained for a period of

time to maximize economic development thereby increasing
employment level, production and income level.
Purchasing Power of Money Defined
The value of a currency expressed in terms of the amount of goods
or services that one unit of money can buy. Purchasing power is
important because, all else being equal, inflation decreases the
amount of goods or services you'd be able to purchase.
Read
more: http://www.investopedia.com/terms/p/pur
chasingpower.asp#ixzz3dYsTxdIg
 Section 64 of the New Central Bank Act

International Monetary Stabilization states that “The Bangko

Sentral shall exercise its powers under this Act to preserve the
international value of the peso and to maintain its convertability into
other freely convertible currencies primarily for, although not necessarily
limited to, current payments for foreign trade and invisibles.”
Section 65of the New Central Bank Act

International Reserves states that “In order to maintain the

international stability and convertability of the Philippine Peso, the
Bangko Sentral 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. The Board shall give
special attention to the volume and maturity of the
Bangko Sentral’s own liabilities in foreign
currencies, to the volume and maturity of the
foreign exchange assets and liabilities of other
banks and, in so far as they known can be
estimated, the volume and maturity foreign
exchange assets and liabilities of all other persons
and entities in the Philippines.”
Cognizability
• Good money must be easy to recognize. Each denomination must
be distinct to avoid confusion with other denomination during
exchange transactions. Weight, fineness, designs and other
characteristics of coins and notes, as prescribed by the Monetary
Board, must be unique for a denomination.
 Homogeneity or Uniformity
• Money belonging to the same denomination must have the same
characteristics in terms of weight, fineness and designs. Coins of
the same denomination, must have uniform weight of metal alloy,
fineness, shape, size and inscriptions. Paper bills, under the same
denomination must possess uniform design, size, color and other
physical characteristics.
Malleability
• Materials for the minting of money must be capable of being
stamped with proper design and durable to maintain its form. The
form and design of coins are a compromise of objectives. The least
wear and tear can be attained by a spherical form and a minimum
of design; but such a form would be awkward to handle, difficult
to recognize, and therefore easy to counterfeit.
• Design of a coin is a compromise between the artistry of high relief
and the exposure to abrasion. Pure gold and silver are very soft,
and so it is necessary to harden them by adding alloys of copper,
nickel, tin or zinc. The harder the material but malleable, less is the
wear and tear, lesser is the possibility for counterfeits.
Importance of Money
Money simplifies matters.
Money becomes the medium of exchange.
With money, there is low-uncertainty-high-exchangeability
requirement.
Money also contributes to economic development and growth.
Money is a store of value.
Philippine Monetary
System
Related Laws
Philippine Coinage Act of 1903

 This defines our monetary

system as follows:
 That gold coins contain 12.9
grains of gold and .9 fineness
 That silver coins contain 416
grains of silver and .9 fineness
“Fineness” is the ratio of weight of
pure metal to total weight.
U.S. Coinage Act of 1903

 Philippine money was

redeemable in drafts or check
payable in full gold standard
currency.
 In order to maintain value of
peso with gold, a currency
reserve known as “Gold
Standard Fund” was set up.
Gold Reserve Act of 1934

 Under this monetary standard,

the Philippine currency was not
redeemable in gold but in
dollars. Dollars devaluated by
forty-one percent, and US govt.
was given title to all gold coins,
bullion, and certificates held by
Federal Reserve Banks.
Dollar Exchange Standard

 Philippine currency was

redeemable in dollar instead of
gold. Currency issued was
backed up by silver coins, and
dollars, on demand.
“Mickey Mouse” Notes

 The Japanese military

government issued paper bills
called “mickey mouse” notes,
not because they were legal
tender but because of fear from
authorities on ground of non-
cooperation. From 1946 to
1949, money supply increased
tremendously.
Managed Currency System
 With the creation of Central Bank, the
country’s monetary system and banking
system were reorganized.
 Central Bank Act known as Republic Act
No. 265 was enacted.
 This placed bank in better position to
meet the credit needs of existing
business enterprises and credit
requirements for new development
projects.
 When Central Bank started business, it
assumed the liabilities of Exchange
Standard Fund for all treasury certificates
and coins in circulation.
COINAGE
 The place for manufacture of money is
called the “mint” and the process is
called “minting” or “coining” or “coinage”
 If gold or silver coins are to circulate
freely by count of their face value rather
than weight, the public must be assured
that they are of standard weight and
fineness, and their circulation is
promoted by putting the precious metal
into shapes and sizes that are
convenient, and by giving them an
attractive and readily recognizable
design.
COINAGE
 As the government has pre-
empted the right of coinage, any
private coinage is counterfeit; and
if the government is coming freely
and gratuitously, it may be
assumed that counterfeit coins
have less than the standard
weight and or fineness.
PRINCIPLES OF COINAGE
 Laid down by Dr. Neil Carothers
 Coinage should be solely on
government account
 The coins should be issued only
through sales to the public at their
face values in exchange for
standard money
 Total coinage, total issue, and
total circulation should be
unrestricted
PRINCIPLES OF COINAGE
 The market value of the metal in
the coins should be well below the
face values
 The coins should be redeemable
without charge, without delay, and
without limit, at the issue price, in
standard money, regardless of the
extent of wear.
 The coins should be a legal tender
in private and public payments.
PRINCIPLES OF COINAGE
 The legal tender power should be
limited to sums representing a
proper maximum use of the coins.
 The denominational system
should be decimal with
intermediate coins in multiples of
five.
 The coins should be convenient in
size, attractive in appearance,
durable in use, and individual in
feature.
KINDS OF COINAGE

 Free Coinage
 Gratuitous Coinage

 Limited Coinage
FREE COINAGE

 The government defines sizes,

shapes, weight and designs of
coins but allows people to bring
their precious metal to the mint
to convert such into standard
coins. People or owners of there
metals are charge with brassage
or seigniorage fee
GRATUITOUS COINAGE

 Totalresponsibility for
minting is borne by the
government.
LIMITED COINAGE

 Government purchases
precious metal in an open
market and mint them as
a medium of exchange at
face values higher than
material content to
facilitate trade.
 CLASSIFICATIONS OF MONEY
 MONEY ACCORDING TO MATERIAL
USED
 COMMODITY MONEY- This can be
metallic in nature. It is used for
purposes other than medium of
exchange if so desired like rice, salt,
sugar, and the like satisfying
physiological needs.
 PAPER MONEY- High quality paper
materials are used to stand long period
of time and to minimize counterfeiting
 BANK MONEY- These are checks
or other paper notes issued by financial
intermediaries.
 CLASSIFICATIONS OF MONEY
 MONEY ACCORDING TO CHARACTER OF
THE ISSUER
 TREASURY MONEY- Those issued by the
National Treasury before 1949. They are
notes and coins of various
denominations.
 CENTRAL BANK MONEY- Those issued
by the Central Bank after 1949. They are
the Central Bank’s notes and coins
circulating in the Philippines.
 COMMERCIAL BANK MONEY- Those
issued by the Philippine National Bank
and other commercial banks serving as
promises to pay, legal tender, payable on
demand or future time to bearer or order
CLASSIFICATIONS OF MONEY
 MONEY ACCORDING TO POPULARITY
 PAPER MONEY- have no commodity
value
 FIAT MONEY- They are convertible
paper money with no reserve. Face
value is higher than value of paper-
material used.
 SUBSIDIARY COINS- Representative
full-bodied money made of base
metals to settle small transactions.
Not advisable for use in big
transactions thereby having limited
legal tender power.
CLASSIFICATIONS OF MONEY
 MONEY ACCORDING TO FACE
VALUE
 STANDARD MONEY- This full-
bodied money, authorized by law,
where the weight, fineness,
denominations, designs are
prescribed by the government as
standard basis for coinage.
Definition of Terms
 LEGAL TENDER

 Any kind of money which

according to law, must
generally accepted when
offered as payment for any
obligation expressed in
terms of country’s monetary
unit. In the Philippines,
“PESO” is the legal tender.
Definition of Terms
 CURRENCY

 Any kind of money which

has limited acceptability
expressed in a monetary
unit. Money of other
countries are currencies
because if their limited
acceptability in the
Philippines.
MONETARY SYSTEM
 Is determined by Law
 In any country, the monetary
system consists of the aggregate
of money in use, the values of the
various types of money being
organically related to one another
in both formal and substantive
ways.
 STABILITY OF MONEY VALUE –
refers to the stability of
purchasing power over a
considerable list of commodities
or services used as a sample.
KINDS OF MONETARY STANDARD
MONOMETALLIC STANDARD

GOLD STANDARD- a monetary

system in which the monetary unit
kept at par with a fixed weight or
value of gold. Stability of money
value and exchange rates were
observe under this standard
because of fixed gold value.
MONOMETALLIC STANDARD
GOLD STANDARD
Gold Coin Standard- monetary
unit is defined in terms of coin
containing a certain amount of
gold with prescribed purity of
fineness. Gold coins were an alloy
of gold and other base metals.
Such gold are referred to as nine-
tenths fine. It was also legal to
melt at will gold coins at any
quantity.
MONOMETALLIC STANDARD
GOLD STANDARD
Gold Bullion Standard- all gold is
under the control of government
which decreased the demand for
gold and made it possible to issue
a larger amount of money on the
same gold base. This gives the
monetary authorities more
flexibility in regulating the money
supply and this makes internal
monetary management easier.
MONOMETALLIC STANDARD
GOLD STANDARD
Gold Exchange Standard- under
this system, the money of a
country is redeemable not in gold
but in the currency of a foreign
country. Philippine money was
then redeemable in dollars to
which the Philippine government
had a claim because it had
deposits in American Banks.
MONOMETALLIC STANDARD

SILVER STANDARD
The monetary standard is based
upon silver as the standard metal.
The set up under silver standard
and its operations are same as
those described for gold
standard. Types are Silver coin
standard, Silver bullion standard,
and Silver exchange standard.
BIMETALLIC STANDARD
 This uses both gold and silver in
the coinage.
 Purchasing power of money is
more stable due to non-
dependence on single metal
value.
 GRESHAM’S LAW – states that
when several types of money
exist in an economy, the one
which is overvalued as money in
relationship to the others will
circulate while the others will
disappear from circulation.
BIMETALLIC STANDARD

 Both gold and silver have the

same nominal value or face
value in bimettalic standard
 BIMETTALISM – was based
upon the assumption that it was
desirable to use both metals
simultaneously as the standard
of value.
BIMETALLIC STANDARD

 The bimettalic system of

alternate gold or silver contrasts
with the so-called “Limping
Standard” in which one metal,
the undervalued one, remains
the standard metal while the
coins of the other metal possess
a fiduciary character.
FIAT STANDARD
 This is a monetary system in
which the face value of money is
higher than the value of
materials used for coinage.
 Types:
 UTOPIAN PAPER STANDARD
 INVOLUNTARY PAPER STANDARD

 MANAGED CURRENCY
STANDARD
FIAT STANDARD
 Types:
 UTOPIAN PAPER STANDARD- the
seal of the government and mark of
legal tender qualify money to be
acceptable as payment for goods
and services.
 INVOLUNTARY PAPER
STANDARD- came to the scene
when the government was not able
to redeem money under gold
standard thereby accepted paper
money as other form of legal
tender
FIAT STANDARD
 Types:
 MANAGED CURRENCY
STANDARD- makes use of
inconvertible paper money that
is irredeemable by reason that it
is issued against no reserve. In
1949, the Philippines was on a
managed currency system. This
was the time that the country’s
monetary system begins to be
under the administration of the
Central Bank of the Philippines.
 Sources:
• Farlex Dictionary
• Investopedia
• Alminar-Mutya, R. (2002). Introduction to Philippine
Money, Credit, and Banking. Brgy. Ugong, Pasig City:
Capitol Publishing House, Inc.
•
 HISTORY AND
REVOLUTION OF MONEY
 Bangko Sentral ng Pilipinas
- nation’s central monetary authority
 Museo ng Bangko Sentral ng
Pilipinas
- formerly Central Bank Museum
- 1974
- showcases the banks collection of
currencies
- collects, studies, preserve coins,
paper notes, monetary items
PHILIPPINE NUMISMATIC
HISTORY
 EARLY PHILIPPINE COINS
 Money, to all civilization is a
medium of exchange or something
to spend.
 Barter was practiced
 Certain objects were used as
medium of exchange such as sea
shells, gold dust, fiber cloth, betel
nuts, coconuts, beads and even
pearls.
 Between the 8th to the 14th
centuries, our ancestors began
trading in gold.
PRE-HISPANIC ERA
 piloncitos: first
recognized form
of coinage in the
country. A coin in
the form of
 The inscription at the
button-shaped base of the piloncito
gold nugget. has been interpreted
Named after as representing the
symbol “ma” stood
sugar receptacles MA-I, a name that the
they resembled Philippines was
called during the pre-
called “Pilon” hispanic times.
EARLY PHILIPPINE COINS

 Barter rings:
other objects
used as
medium of
exchange
SPANISH ERA
 When the Spaniards came in 1521,
they brought with the the first
European coin called the “Teston” The
first silver coin seen by the natives.
 Galleon Trade
- was responsible for transforming
Manila into a trade center for oriented
goods.
 Cobs or macuquinas: oddly-shaped
coins stamped with a cross on one side
and royal coat of arms on the other.
These are the earliest coins brought to
the country
SPANISH ERA

Others coins that

followed:

- dos mundos or
pillar dollars

- counterstamped
coins

- Portrait series
SPANISH ERA

 18th Century: Royalty of Spain

authorized the production of
copper coins by the
Ayuntamiento or Municipality of
Manila

 Barrillas: copper coins

SPANISH ERA

 Pesos fuertes: first bank notes that

were issued in 1852
SPANISH ERA

 Casa de Moneda de Manila

- minted the first gold coins
with the word “Filipinas” inscribed,
which were called Isabelinas and
Alfonsinos
Revolutionary Period

- Two types of 2- centavo coins

were struck in the army weapon
store of Malolos

- rare collection

- paper notes were also issued, but

the circulation was limited
American Regime

- US Congress passed the Philippine

Coinage Act, which authorized the
mintage of silver coins from 1903
to 1912
American Regime

 Silver Certificate: were issued until

1918
American Regime

 Treasury Certificate: replaced

Silcer Certificate from 1918 to
1935
American Regime

 Manila Mint
- produced coins until the
Commonwealth period

- first seat of the Central Bank

JAPANESE OCCUPATION:
WORLD WAR II
 Japanese Invasion Money
- Japanese Government
JAPANESE OCCUPATION:
WORLD WAR II
 Guerrilla Notes or Resistance
Currencies
- Filipino Guerrillas
Republic Period

 Central Bank of the Philippines

- created by the Republic Act
No. 265, January 3, 1949
Republic Period

 Victor notes: issued by CBP with

overprint “Central Bank of the
Philippines”
Republic Period

 English Series
- first bank notes issued by CBP
Republic Period

 Ang Bagong Lipunan series: 1973

Republic Period

 New Design Series: 1985

Republic Period

Central Bank Coins

 English Series: 1959
Republic Period

 Pilipino series: 1967

Republic Period

 Ang Bagong Lipunan series:

1975
Republic Period

 Flora and Fauna: 1983,

improved in 1992
Republic Period

 Improved Faura anf Fauna

series
THE MINT
 In 1969, the idea of making money
was conceived by Filipino
craftsmen. This was because the
currency shortages which recurred
not only in the Philippines but also
in other countries. Thus on May
19, 1966, Congress passed R.A.
4700 authorizing the Department
of General Services to acquire
printing equipment for making
bank notes.
THE MINT
 Presidential Decree No. 783 dated
August 27, 1975 amending PD
No. 484 authorized the
establishment of the Security
Printing Plant, Mint and Gold
Refinery of the Central Bank
 The “money factory” is responsible
for printing bank notes and other
security instruments like checks,
minting coins and refining gold
and silver.
THE MINT
 The mint started producing coins
in November 1977 and bank notes
in January 1978. This plant is
capable of producing 384 million
bank notes and 120 million coins a
year.
 The plant is a concrete symbol of
our efforts towards self-reliance.
 THEORIES ABOUT VALUE
OF MONEY
 An increase in the quantity of
money in a country still causes
people to spend more
 This greater spending will cause
an increase in nominal national
Income or Gross National Product.
 Money velocity is the rate of
spending and income available,
before the next income is
received.
 THEORIES ABOUT VALUE
OF MONEY
 TRANSACTION-VELOCITY
APPROACH – is also known as
Classical Theory of Money,
according to Fisher. This theory
holds that the more money people
have, the more they will spend;
and the more they will spend, the
greater nominal national income
the sale of goods and services.
 THEORIES ABOUT VALUE
OF MONEY
 CASH-BALANCE THEORY -
proposes that money value is
equivalent to the ‘cash balance’ of
the people during the same
period. This refers to the amount
of cash on hand left for spending
consumption patters, after alloting
amount for savings or investment
out of personal income.
 THEORIES ABOUT VALUE
OF MONEY
 INCOME THEORY – made an
assumption that money by people
in an economy is equivalent to the
cost of production for the same
period. Cost of production is gross
national product which includes
consumer, capital, foreign and
government goods.
FUNCTIONS OF MONEY

 Creation of Money
 Transferring of Money
 Accumulations of Savings in
Financial Institutions
 Lending and Investing of Money
 Marketing of Claims and Wealth
 Facilitating the Lending and
Investing Process
EXCHANGE RATES

 When residents of one country trade

with residents of another country, they
must generally convert funds between
the currencies of the two countries to
facilitate payments. Currency
conversion requires a rate to define the
value of one currency in terms of
another currency.
 Exchange Rate - is the price of one
unit of a currency expressed in units of
another currency.
FOREIGN EXCHANGE
MARKET (FOREX)
 Is an institutional and
communications network like any
other financial market.
 Functions:
 Facilitation of trading in currencies
 Determination of exchange rates
between currencies by the interaction of
demand and supply forces.
 Facilitation of interaction of fund
transfers
 Facilitation of trading functions for
hedging currency risk.
GOVERNMENT DEBT
 GOVERNMENT SECURITIES – are an
obligation of the Philippine government. All
participants – the household sector, the
banking sector and BSP, hold them.
 TREASURY BONDS OR T-BONDS –
long-term treasury certificates, with a
maturity of more than 10 years.
 TREASURY NOTES OR T-NOTES –
intermediate term treasury certificates with
maturity of 1 to 10 years.
 TREASURY BILLS OR T-BILLS – have
maturity of less than 1 year.
 THE CENTRAL BANK OF
THE PHILIPPINES
 The Central Bank is the monetary
authority of the Philippines charged with
regulating the banking and financial
system.
 Was organized on January 3, 1949 by
the virtue of R.A. 265
 Its principal function is to control of the
country’s supply of money and credit.
 It has the sole right to issue currency
 Referred as the “bank of banks”
 It is the depositary of “cash reserves” of
the banks.
THE BANGKO SENTRAL NG
PILIPINAS
 Created under Section 2 of RA 7653,
better know as “The New Central
Bank Act”.
 Began Operations in July 3, 1993
 Is responsible for maintaining price
stability conducive to a balanced and
sustainable growth of the company.
 Keeps the prices of goods and
services steady and at reasonable
levels so the economy can run
unhampered.
FUNCTIONS OF BSP

 The Money Changer

 The Supplier of Money

 The Banker’s Bank

 The Supervisor of all Banks

 The Main Bank of the

Government
BANGKO SENTRAL NG PILIPINAS
MONETARY BOARD
 The BSP Monetary Board is the policy-
making body of the Bank. It is headed by
the BSP Governor who is concurrently the
chairman of the Board, with full-time
member from the private sector and one
member from the Cabinet.