The Bangko Sentral ng Pilipinas (BSP) is the central bank of the Republic of the Philippines. It was rechartered on July 3, 1993, pursuant to the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993. The BSP was established on January 3, 1949, as the country’s central monetary authority.
By 1933, a group of Filipinos had conceptualized a central bank for the Philippines. It came up with the rudiments of a bill for the establishment of a central bank after a careful study of the economic provisions of the Hare-Hawes-Cutting Act, which would grant Philippine independence after 12 years, but reserving military and naval bases for the United States and imposing tariffs and quotas on Philippine exports. However, the Hare-Hawes-Cutting Act would be rejected by the Senate of the Philippines at the urging of Manuel L. Quezon. This Senate then advocated a new bill that won President Franklin D. Roosevelt's support, this would be the Tydings-McDuffie Act, which would grant Philippine independence on July 4, 1946.
During the Commonwealth period, 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; Roosevelt did not give his. A second law was passed in 1944, during the Japanese occupation, but the arrival of the American liberation forces aborted its implementation.
Shortly after President Manuel Roxas assumed office in 1946, he instructed 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 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. Roxas then created the Central Bank Council to prepare the charter of a proposed monetary authority. It was submitted to Congress in February 1948. By June of the same year, the newly-proclaimed President Elpidio Quirino, who succeeded President Roxas, affixed his signature on Republic Act (RA) No. 265, the Central Bank Act of 1948. On January 3, 1949, the Central Bank of the Philippines was formall inaugurated with Miguel Cuaderno, Sr. as the first governor. The main duties and responsibilities of the Central Bank were to promote economic development and maintain internal and external monetary stability.
Over the years, changes were introduced to make the charter more responsive to the needs of the economy. On November 29, 1972, Ferdinand Marcos's Presidential Decree No. 72 amdended Republic Act No. 265, emphasizing the maintenance of domestic and international monetary stability as the primary objective of the Central Bank. The Bank's authority was also expanded to include regulation of the entire financial system of the Philippines and not just supervision of the banking system. In 1981, RA 265, as amended, was further improved to strengthen the financial system, among the changes was the increase in the capitalization of the Central Bank from Ps10 million to Ps10 billion.
In the 1973 Constitution, the Interim Batasang Pambansa (National Assembly) was mandated to establish an independent central monetary authority. Later, Presidential Decree No. 1801 designated the Central Bank of the Philippines as the central monetary authority (CMA). Years later, the 1987 Constitution adopted the CMA provisions 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.
In accordance with a provision in the 1987 Constitution, President Fidel V. Ramos signed Republic Act No. 7653, otherwise known as the New Central Bank Act, into law on June 14, 1993. The law provides for the establishment of an independent monetary authority to be known as the Bangko Sentral ng Pilipinas, its primary objective being the maintenance of price stability. 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 July 3, 1993, the New Central Bank Act took effect. Within the complex of the Bangko Sentral ng Pilipinas, the nation's central monetary authority, resides a numismatist's haven - the Museo ng Bangko Sentral ng Pilipinas. Inaugurated on January 3, 1999, as part of the celebration of the 50 years of central banking in the Philippines, the Museo showcases the Bank's collection of currencies.
As repository and custodian of the country's numismatic heritage, the Museo collects, studies and preserves coins, paper notes, medals, artifacts and monetary items found in the Philippines during its different historical periods. These collections have been placed on permanent display at the Museo.
Designed to "walk" the visitor through a number of galleries, individually dedicated to a specific historical period of the country, the Museo visually narrates the development of the Philippine economy, parallel to the evolution of its currency. Complementary paintings from the BSP art collection, together with chosen artifacts, enhance each gallery.
A panoramic memorabilia of 50 years of central banking in the Philippines, showcases the strides made in bringing about price stability, to sustain economic growth in the country. The exhibition hall also carries the busts of the governors of the Central Bank/ Bangko Sentral.
On July 31, 2008, the Central bank entered into a tax compromise agreement with the Bureau of Internal Revenue (BIR) and settled its P 3.6 billion. It represents 40% of the bank's original P 9 billion tax obligation, for unpaid gross receipt taxes (GRT) and final withholding taxes on government securities sold from 2004 to 2007.
As prescribed by the New Central Bank Act, the main functions of the Bangko Sentral are:
t of foreign currency reserves, by maintaining 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,
The powers and function of Bangko Sentral are exercised by its Monetary Board, whose seven members are appointed by the President of the Philippines. As provided for by the New Central Bank Act, one of the government sector members of the Monetary Board must also be a member of the President's Cabinet. Members of the Monetary Board are prohibited from holding certain positions in other government agencies and private institutions that may give rise to conflicts of interest. The members have fixed, overlapping, terms, except for the cabinet secretary representing the incumbent administration.
The current members of the Monetary Board are:
With money laundering being one of the perennial problems of the Philippines, the BSP has issued a number of measures to bring the Philippines' regulatory regime on money laundering closer to international standards. In September 2001, the Anti-Money Laundering Act (AMLA) signed into law and defined money-laundering as a criminal offense, prescribed penalties for such crimes committed and formed the foundation of a central monitoring and implementing council called the Anti-Money Laundering Council (AMLC). The AMLC is composed of the Governor of the Bangko Sentral as Chairman and the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members. It acts unanimously in the discharge of its functions.
|Term started||Term finished||Name|
|Governors of the Central Bank|
|1949||1960||Miguel Cuaderno, Sr.|
|1961||1967||Andres V. Castillo|
|1970||1981||Gregorio S. Licaros|
|1981||1984||Jaime C. Laya|
|1984||1990||Jose B. Fernandez, Jr.|
|1990||1993||Jose L. Cuisia, Jr.|
|Governors of the Bangko Sentral|
|1993||1999||Gabriel C. Singson|
|1999||2005||Rafael B. Buenaventura|
|2005||present||Amando M. Tetangco, Jr.|
However, the issuance failed to discourage monetary authorities from completing the project. During the same year, while the national government was reeling from the effects of overspending, the BSP, which regulates the country’s financial institutions, continued to support the project’s construction, worth anywhere from P150 to P170 million. Thus, directly or indirectly, the BSP contributed to the ballooning fiscal deficit at a time when Malacañang issued orders asking agencies to cut unnecessary expenses.
Although the facility broke ground in November 2003 at the BSP’s compound in Quezon City, the cash center’s construction—and its eventual completion—proceeded with very little hitches. While the BSP did suspend work on the CMC days after the COA issued the document, the suspension lasted for only a month.
In June of the same year, the BSP’s Monetary Board (MB), whose deliberations are kept private, lifted the suspension, allowing the project to be finally completed late 2005. However, to this day, the CMC remains inoperable.