MONETARY REVIEWER LESSON 1

11問 • 1年前

問題一覧

- It facilitates the country’s payment system. - Peso bills or coins, printed or minted by the central bank. - It facilitates the transfer of high-valued goods and services among economic agents by providing the necessary infrastructure for alternative modes of payment, such as checks and electronic transfer. - It provides formal financial services. - it has something to do with the opening and closure of banks. - the country's keeper of official international reserves, which can be used to pay for imports of goods and services and foreign debts.

Central Bank

Two Core Functions of Central Bank

► Monetary Policy. ► Bank Supervision Functions.

What changes the functions of these Core Functions

• Economic Crisis. • Attitudes of Policy Makers. • Business Sector. • Households. • Non-government Organizations. • Demand for greater transparency and accountability. • Globalization of Financial Intermediation. • The Banking in itself.

which was established by virtue of Republic Act (RA) No. 265 (1948), was also mandated to promote the increase on level of production, employment, and real income.

Central Bank of the Philippines (CBP)

then President Marcos issued Presidential Decree (PD) No. 72, amending RA 265. The fact that ______ out of the original 142 provisions were affected by this amendment

56 provisions

1. Broad Policy Objectives The 1948 CB (June) The 1972 CB (November) The 1993 BSP (June)

The 1948 CB (June) 1. To maintain monetary stability 2. To preserve international value of the peso into other freely convertible currencies. 3. To promote rising level of production, employment, and real income. The 1972 CB (November) 1. Primarily to maintain internal and external monetary stability in the Philippines, and to preserve the international value of the peso and the convertibility of the peso into other freely convertible currencies. 2. To foster monetary credit and exchange conditions conducive to a balanced and sustainable growth of the economy. The 1993 BSP (June) Primarily to maintain price stability conducive to a balanced and sustainable growth of the economy

III. Organizational Structure The 1948 CB (June) The 1972 CB (November) The 1993 BSP (June)

The 1948 CB (June) Seven members: 1-Governor (appointed by the President for a term of 6 years) 1-Secretary of Finance (presides the meeting of the Monetary Board) 1-DBP Governor 1-PNB President 3-Private sector representatives (appointed) The 1972 CB (November) Seven members: 1-Governor (appointed by the President to a term of six years; acts as chairman of theMonetary Board.) 1-Ministry of Finance 1-NEDA1-BOI 3-Private sector representatives (appointed by the President to a term of six years) The 1993 BSP (June) Seven members: 1-Governor (appointed by the President for a term of 6 years; Chairman of the Monetary Board.) 1-member of the Cabinet to be designated by the President. 5-full-time, appointed by the President for a term of 6 years. Note: No member of the Monetary Board may be re-appointed more than once.

IV. Scope of Control The 1948 CB (June) The 1972 CB (November) The 1993 BSP (June)

The 1948 CB (June) The Monetary Board controls not only commercial banks but also all banking institutions, with the exception of insurance companies. It has both supervisory and policy powers. The 1972 CB (November) The Central Bank has been given a wider scope of authority to oversee not only the monetary and banking system but also the entire financial and credit system. The 1993 BSP (June) The BSP is tasked to provide policy directions in the areas of money, banking, and credit. It has supervision over the operations of finance companies, quasi-banks and institutions performing similar functions.

In June 1993, or roughly 21 years after substantially amending the original charter of the CBP, Republic Act No. 7653, otherwise known as the New Central Bank Act, was passed creating a new central bank, called ________________.

Bangko Sentral ng Pilipinas (BSP)

provides a clear and highly focused "primary" objective of the BSP, which is "to maintain price stability conducive to a balanced and sustainable growth of the economy.”

RA 7653

The CORE ELEMENTS of Republic Act. No. 7653 otherwise known as the New Central Bank Act First Second Third Fourth Fifth

FIRST, it has created an independent Monetary Board composed of seven members with a fixed term of six years, except the lone representative of the government, who serves at the pleasure of the President. The members of the Monetary Board obtain their political legitimacy by being appointed by the President, who is elected by the people. SECOND, unlike other government -owned and controlled corporations, the BSP enjoys budgetary independence. Corollary to this is that the BSP started with a clean balance sheet. THIRD, the BSP is prohibited from engaging in development banking or financing-a favorite program among politicians, so that it can focus on purely central banking functions. FOURTH, BSP's provisional advances to the national government have been shortened to three months, renewable for another three months, provided the total does not exceed 20 percent of the average annual income of the government for the last three preceding fiscal years. This will prevent the national government from pressuring the BSP to extend to it longer-term loans with unlimited amounts, which potentially can undermine the latter's stabilization function. FIFTH element is the reporting system prescribed by the Act, which is intended to enhance the BSP's transparency and accountability to the public.

STRAT MIDTERM EXAM

Shiela Caber · 55問 · 1年前

STRAT MIDTERM EXAM