Podcast
Questions and Answers
What happens when the Central Bank 'loosens' the faucet to expand the money supply?
What happens when the Central Bank 'loosens' the faucet to expand the money supply?
- More savings occur
- Interest rates increase
- Less borrowing occurs
- Less savings occur (correct)
Higher interest rates result in more spending in the economy.
Higher interest rates result in more spending in the economy.
False (B)
What is the primary goal of monetary policy according to the content?
What is the primary goal of monetary policy according to the content?
Price stability
When there is ‘too little money’ in the economy, the BSP may implement ________ policy.
When there is ‘too little money’ in the economy, the BSP may implement ________ policy.
Match the following monetary policy roles with their functions:
Match the following monetary policy roles with their functions:
Which act established the Central Bank of the Philippines?
Which act established the Central Bank of the Philippines?
The velocity of money refers to the rate at which money changes hands over a given period.
The velocity of money refers to the rate at which money changes hands over a given period.
The Central Bank controls ________ liquidity in the economy.
The Central Bank controls ________ liquidity in the economy.
What are the primary responsibilities of the Bangko Sentral ng Pilipinas (BSP)?
What are the primary responsibilities of the Bangko Sentral ng Pilipinas (BSP)?
The new BSP logo features a square shape with green colors.
The new BSP logo features a square shape with green colors.
What does the Philippine Eagle symbolize?
What does the Philippine Eagle symbolize?
The BSP is responsible for maintaining the stability of the Philippine _____ .
The BSP is responsible for maintaining the stability of the Philippine _____ .
Which of the following colors represents stability in the new BSP logo?
Which of the following colors represents stability in the new BSP logo?
Match the following colors from the BSP logo with their meanings:
Match the following colors from the BSP logo with their meanings:
The primary objective of the BSP is to ensure that currency inflation is maintained at a manageable level.
The primary objective of the BSP is to ensure that currency inflation is maintained at a manageable level.
Name the three pillars of central banking represented by the three stars in the BSP logo.
Name the three pillars of central banking represented by the three stars in the BSP logo.
What is the primary goal of the BSP's influence on the money supply and interest rates?
What is the primary goal of the BSP's influence on the money supply and interest rates?
The BSP does not have any role in managing exchange rates.
The BSP does not have any role in managing exchange rates.
What does BSP stand for?
What does BSP stand for?
The BSP sets benchmark interest rates, including the overnight borrowing and __________ rates.
The BSP sets benchmark interest rates, including the overnight borrowing and __________ rates.
Which of the following is NOT a function of the BSP?
Which of the following is NOT a function of the BSP?
Match the following BSP functions with their descriptions:
Match the following BSP functions with their descriptions:
The Term Deposit Facility (TDF) is used to bolster long-term interest rates.
The Term Deposit Facility (TDF) is used to bolster long-term interest rates.
What is one facility offered by the BSP to manage liquidity?
What is one facility offered by the BSP to manage liquidity?
Which of the following is NOT mentioned as a counterfeiting prevention feature in currency design?
Which of the following is NOT mentioned as a counterfeiting prevention feature in currency design?
The Term Lending Facility offers short-term loans to banks for specific purposes.
The Term Lending Facility offers short-term loans to banks for specific purposes.
What type of agreements does the BSP engage in to lend money to banks?
What type of agreements does the BSP engage in to lend money to banks?
The facility that encompasses printing operations for banknotes and minting operations for coins is known as __________.
The facility that encompasses printing operations for banknotes and minting operations for coins is known as __________.
What is the main purpose of the Credit Risk Management facility?
What is the main purpose of the Credit Risk Management facility?
Quality Control measures are only implemented after the currency has been printed.
Quality Control measures are only implemented after the currency has been printed.
What does the Term Deposit Facility (TDF) allow banks to do?
What does the Term Deposit Facility (TDF) allow banks to do?
Match these BSP facilities with their functions:
Match these BSP facilities with their functions:
What is the purpose of the know-your-customer (KYC) procedures required by the BSP?
What is the purpose of the know-your-customer (KYC) procedures required by the BSP?
BSP has the authority to revoke licenses of NBFIs for non-compliance.
BSP has the authority to revoke licenses of NBFIs for non-compliance.
What does BSP stand for?
What does BSP stand for?
The BSP aims to promote ________ by encouraging NBFIs to provide accessible financial services.
The BSP aims to promote ________ by encouraging NBFIs to provide accessible financial services.
Which of the following risks is NOT mentioned as being managed by the BSP for NBFIs?
Which of the following risks is NOT mentioned as being managed by the BSP for NBFIs?
Match the following roles of BSP with their corresponding purposes:
Match the following roles of BSP with their corresponding purposes:
The BSP assists NBFIs only in terms of economic growth with no focus on illegal activities.
The BSP assists NBFIs only in terms of economic growth with no focus on illegal activities.
What is the role of the Anti-Money Laundering Council (AMLC) in relation to the BSP?
What is the role of the Anti-Money Laundering Council (AMLC) in relation to the BSP?
Flashcards are hidden until you start studying
Study Notes
Bangko Sentral ng Pilipinas (BSP)
- Established in 1949, the BSP is the central bank of the Philippines
- Replaced the Central Bank of the Philippines, which was established in 1948
- Holds the mandate to manage the country's monetary policy and ensure financial stability
Evolution of the BSP's Monetary Policy Framework
- Initially focused on supporting economic recovery efforts
- Adopted a Monetary Policy Framework in 1995, shifting towards a greater emphasis on price stability
- Implemented a Modified Monetary Targeting framework in 1972, emphasizing the importance of price stability
BSP's Functions
- Implements monetary policy to control inflation and stabilize the currency
- Regulates and supervises the banking system, ensuring financial stability
- Acts as the lender of last resort during financial distress
- Manages the country's international reserves and exchange rate
- Promotes financial inclusion by encouraging access to financial services for underserved populations
The BSP's Role: Expanding the Money Supply
- Loosens the money supply ("Opens the Faucet") during periods of low economic activity
- Increases money supply to stimulate economic growth and counter deflationary pressures
- Reduces the money supply ("Tightens the Faucet") during periods of high inflation
- Decreases the money supply to manage inflation and prevent overheating of the economy
BSP's Monetary Policy Tools
- Sets Policy Interest Rates:
- Influences overall borrowing costs within the economy
- Includes the overnight repurchase (repo) and lending rates
- Reserve Requirements:
- Sets the percentage of deposits that banks must hold in reserve
- Controls the amount of money banks can lend out
- Liquidity Management Facilities:
- Offers tools like the Term Deposit Facility (TDF) and the Reverse Repurchase (RRP) Facility
- Manages short-term interest rates and liquidity in the banking system
BSP's Currency Management
- Security Features:
- Implements advanced designs and security features to prevent counterfeiting
- Uses holograms, watermarks, and specialized inks
- Research & Development:
- Improves and innovates currency design and production techniques
- Adapts to emerging security challenges in the currency
- Printing & Minting:
- Oversees the production of banknotes and coins
- Inventory Management:
- Maintains an adequate supply of currency while preventing overproduction
- Quality Control:
- Ensures high production standards for all issued currency
BSP's Supervision & Regulation of Non-Bank Financial Institutions (NBFIs)
- Ensures Financial Stability: - Prevents systemic risks and financial crises
- Protects Consumers: - Promotes transparency and fair treatment for borrowers and consumers of financial services
- Prevents Financial Crime: - Implements Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) measures - Monitors institutions to prevent misuse for illegal activities
- Encourages Innovation and Inclusion: - Promotes financial inclusion by encouraging NBFIs to make financial services accessible to underserved populations
- Mitigates Risk: - Helps NBFIs manage risk effectively, including: - Credit risk - Liquidity risk - Operational risk
- Upholds Legal & Regulatory Compliance: - Ensures NBFIs comply with relevant laws, rules, and regulations
- Facilitates Efficient Financial Markets: - Creates an environment where financial markets function effectively
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
