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Questions and Answers
What is the primary objective of the BSP's monetary policy?
Who is the Deputy Governor responsible for the Payments and Currency Management Sector?
What does the Financial Supervision Sector oversee?
Which Deputy Governor serves as the permanent alternate of the BSP Governor in the Board of Directors of the PDIC?
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What initiative does the BSP advocate for in terms of public education?
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Which Deputy Governor was appointed on March 1, 2022, for the Corporate Services Sector?
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What is the BSP's approach to maintaining the liquidity of the peso?
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Which deputy governor oversees the supervision of anti-money laundering measures?
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What is the primary goal of monetary policy?
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Which of the following is NOT considered an instrument of monetary policy used by the BSP?
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What is the primary function of the Bangko Sentral ng Pilipinas as a custodian?
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What does the inflation target approach to monetary policy involve?
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What is a potential consequence of government borrowing to finance increased spending?
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Which activity is NOT listed as a responsibility of the Bangko Sentral ng Pilipinas?
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What is the vision of the Bangko Sentral ng Pilipinas?
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Debt overhang can best be described as:
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Which term describes the Bangko Sentral ng Pilipinas in relation to its operations and autonomy?
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How can an increase in taxes affect consumer behavior?
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Who comprises the Monetary Board of the Bangko Sentral ng Pilipinas?
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Which of the following is an example of loan and credit operations?
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What does the term 'crowding out' specifically refer to?
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What key aspect is the mission of the Bangko Sentral ng Pilipinas aimed at maintaining?
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Which of the following is a primary objective of the Bangko Sentral ng Pilipinas?
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What is a distinctive characteristic of central banks, such as the Bangko Sentral ng Pilipinas?
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Study Notes
Bangko Sentral ng Pilipinas (BSP)
- Established on July 3, 1993
- Enjoys fiscal and administrative autonomy from the National Government
- Vision: To be recognized globally as the monetary authority and primary financial system supervisor that supports a strong economy and promotes a high quality of life for all Filipinos
- Mission: To promote and maintain price stability, a strong financial system, and a safe and efficient payments and settlements system conducive to a sustainable and inclusive growth of the economy.
BSP Objectives
- Maintain price stability conducive to a balanced and sustainable economic growth.
- Promote and preserve monetary stability and the convertibility of the national currency (peso).
BSP Responsibilities
- Provides policy directions in the areas of money, banking and credit.
- Supervises operations of banks and exercises regulatory powers over non-bank financial institution with quasi-banking functions.
Monetary Board
- Headed by the Governor and Deputy Governor.
- Composed of one member from Cabinet, five private sector members.
BSP Leadership
- Governor: 7th Governor of the BSP and Chairman of the Monetary Board
- Deputy Governor for Monetary Stability Sector: Francisco Dakila Jr. - supervises the sector in maintaining internal and external monetary stability, liquidity, and preserving the convertibility of the peso.
- Deputy Governor for Payments and Currency Management Sector: Mamerto E. Tongonan - tasked to address the interplay between digital money and physical currency, and support the digital transformation of the country’s financial services.
- Deputy Governor for Financial Supervision Sector: Chuchi G. Fonacier - oversees five subsectors handling onsite examination and offsite surveillance of banking and financial institutions, including specialized supervision of areas such as anti-money laundering, trust, financial market operations, and information technology.
- Deputy Governor for Corporate Services Sector: Eduardo G. Bobier - appointed Deputy Governor of the Corporate Services Sector on March 1, 2022. Previously served as Assistant Governor of the Comptrollership Sub-Sector.
- Deputy Governor for Regional Operations and Advocacy Sector:
BSP Advocacy
- BSP Initiatives on Microfinance
- Anti-Money Laundering
- Financial Literacy
- Economic Education
Monetary Policy
- The primary objective of BSP’s monetary policy is to promote a low and stable inflation conducive to a balanced and sustainable economic growth.
- The adoption of inflation targeting framework aims to achieve this objective.
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Instruments used by BSP:
- Open Market Operations
- Acceptance of Fixed-Term Deposits
- Standing Facilities
- Other Liquidity Management Facilities
The Inflation Target
- An approach to monetary policy that involves the use of a publicly announced inflation target set by the Government, which the BSP commits to achieve over a two-year horizon.
Loan and Credit Operations
- Rediscounting
- Overdraft
- Credit Line
- Emergency Loans
Regional Offices and Branches
- Davao City
- Cebu City
- La Union Branch
- San Fernando Branch
- Butuan Branch
- Bacolod Branch
- Cagayan De Oro Branch
- Iloilo Branch
- Cabanatuan Branch
- Cotabato Branch
- Roxas Branch
- Batac Branch
- General Santos Branch
- Dumaguete Branch
- Naga Branch
- Ozamiz Branch
- Tacloban Branch
- Lucena Branch
- Zamboanga Branch
- Legazpi Branch
- Tuguegarao Branch
Issues on Government Financing in the Philippines
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Crowding out: When government spending fails to increase overall aggregate demand because higher government spending causes an equivalent fall in private sector spending and investment.
- Question: Why does an increase in public sector spending by the government decrease the amount the private sector can spend?
- Answers: The government finances higher spending through increasing taxes or increasing borrowing.
- Debt Overhang: Refers to a debt burden so large that an entity cannot take on additional debt to finance future projects.
- Impact of higher government spending on aggregate demand: Increasing tax reduces discretionary income of consumers and firms.
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Description
Explore the fundamentals of the Bangko Sentral ng Pilipinas (BSP), including its establishment, vision, mission, objectives, and responsibilities. This quiz will help you understand the BSP's role in maintaining monetary stability and supporting the economy in the Philippines.
