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Questions and Answers
What is the main objective of the Banko Sentral ng Pilipinas?
To maintain price stability conducive to a balanced and sustainable economic growth.
Which of the following are major roles of banks in the Philippines? (Select all that apply)
The Bangko Sentral ng Pilipinas was created by the Republic Act No. 7653.
True
Who are the members of the Monetary Board of the BSP?
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The two categories of banking institutions in the Philippines are private banking and ______.
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What does the BSP supervise?
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Match the following types of banks with their descriptions:
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Study Notes
Objectives
- Understand the Philippine financial system.
- Identify various financial institutions in the country.
- Learn about the Banko Sentral ng Pilipinas and its role as the monetary authority.
Financial System Overview
- Acts as a catalyst for national growth and development.
- Custodian of the Philippines' liquid reserves, founded on public trust and confidence.
Financial Institutions
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Banks in the Philippines serve dual roles:
- Participants in the money creation process.
- Intermediaries in the saving-investment process.
Banko Sentral ng Pilipinas (BSP)
- Established under Republic Act No. 7653 (New Central Bank Act of 1993).
- Central monetary authority directing money, banking, and credit policies.
BSP Objectives
- Maintain price stability for balanced and sustainable economic growth.
- Promote and preserve monetary stability and the national currency's convertibility.
BSP Responsibilities
- Provides policy direction for money, banking, and credit.
- Supervises bank operations and regulates non-bank financial institutions with quasi-banking functions.
BSP Functions
- Liquidity management, including currency issuance and acting as a lender of last resort.
- Financial supervision of banking operations.
- Management of foreign currency reserves and determination of exchange rate policy.
BSP Organization
- Governed by a Monetary Board with seven members:
- The Governor, five private sector members, and one cabinet member.
- Operating sectors include:
- Currency Management Sector.
- Financial Supervision Sector.
- Monetary and Economics Sector.
- Corporate Services Sector.
Banking Institutions Categories
- Divided into private and government banking.
Private Banking Institutions
- Include various types:
- Universal Banks.
- Commercial Banks.
- Thrift Banks.
- Rural Banks.
- Cooperative Banks.
Universal and Commercial Banks
- Represent the largest group of financial institutions in the Philippines based on resources.
- Offer a variety of banking services to the populace.
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Description
This quiz explores the financial system of the Philippines, focusing on various financial institutions operating within the country. It also highlights the role of the Banko Sentral ng Pilipinas as the monetary authority essential for the nation's growth and development. Test your knowledge on these critical financial concepts and institutions.
