BANGKO SENTRAL NG PILIPINAS The Bangko Sentral ng Pilipinas (BSP) is the independent central monetary
authority of the Republic of the Philippines. Established under the New Central
Bank Act of 1993, the BSP is primarily mandated by law to ensure the
maintenance of price stability conducive to a balanced and sustainable growth of
the economy.
Policy-Making The Monetary Board is the highest policy-making body in the BSP. It consists
Body of five full-time private sector representatives and two government
representatives, namely, the BSP Governor, who is also the Chairman, and a
cabinet secretary.
Frequency of The Monetary Board meets at least once every week. Moreover, the Monetary
Meetings Board meets regularly every six weeks to review, discuss and decide on the
appropriate monetary policy stance of the BSP in order to keep inflation within
the target.
Degree of Under Section 1, Article I of the New Central Bank Act of 1993, it is mandated
Independence that the central monetary authority shall function and operate as an independent
and accountable body corporate in the discharge of its responsibilities
concerning money, banking and credit. In line with this policy, the BSP, while
being a government-owned corporation, enjoys fiscal and administrative
autonomy. The BSP is independent of the fiscal sector, even as the government
may be represented in the Monetary Board inasmuch as the law allows the
President of the Philippines to appoint any cabinet secretary to be the other
government representative. The BSP has the independence and flexibility
needed in the discharge of its duties. While the BSP has fiscal autonomy, it
realises the importance of coordinating closely with the National Government
(NG) to support the broad economic goals of the nation.
The powers and functions of the BSP are exercised by the Bangko Sentral
Monetary Board composed of seven members appointed by the President of the
Philippines. The Governor of the BSP is the Chairman of the Monetary Board.
The Governor, as the Chief Executive Officer of the BSP, directs and supervises
the operations and internal administration of the BSP.
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Under the New Central Bank Act, one of the Government sector members of the
Monetary Board must be a member of the Cabinet designated by the President of
the Republic of the Philippines, the position of which is currently held by the
Secretary of the Department of Finance. The other five (5) Monetary Board
members come from the private sector, all of whom serve on a full time basis.
All Monetary Board members, including the Governor, serve for a fixed term of
six years.1 With the exception of the member of the Cabinet, the Governor and
the other members of the Monetary Board may only be removed for cause. The
New Central Bank Act establishes certain qualifications for the members of the
Monetary Board and also prohibits members from holding positions in other
governmental agencies and private institutions that may give rise to conflicts of
interest. The New Central Bank Act authorises the Governor of the BSP to
appoint up to three Deputy Governors, subject to the approval of the Monetary
Board. Action by the Monetary Board requires the affirmative vote of at least
four members. The BSP is permitted by law to adopt its own compensation
schedule for certain positions independently of the national government sector.
To improve transparency regarding the conduct of monetary policy, the
highlights of the minutes of the meetings of the Monetary Board pertaining to
discussions on monetary policy are published with a lag of four (4) weeks.
Primary The BSP is primarily mandated by law to ensure the maintenance of price
Objective and stability conducive to a balanced and sustainable growth of the economy. Thus,
Responsibility price stability is considered a necessary complement, rather than an alternative,
to economic growth. The attainment of monetary stability and convertibility of
the Philippine peso is also an explicit goal of the Philippines' monetary authority.
The BSP also provides policy directions in the areas of money, banking and
credit. It supervises the operations of banks and exercises regulatory powers
over the operations of finance companies and other non-bank financial
institutions performing quasi-banking functions and institutions performing
similar functions.
MONETARY STABILITY On 24 January 2000, the Monetary Board approved in principle the shift to
inflation targeting as a framework for conducting monetary policy in the country.
Inflation targeting focuses mainly on achieving price stability as the ultimate
objective of monetary policy. This approach entails the announcement of an
explicit inflation target that the central bank promises to achieve over a given
time period. The target inflation rate is set jointly by the BSP and the
government through the Development Budget Coordination Committee (DBCC),
an inter-agency body comprising the Departments of Finance, Budget and
Management, and the National Economic and Development Authority. Although
achieving the target rests primarily with the BSP, this joint announcement
reflects active government participation in achieving the goal of price stability.
The BSP formally adopted inflation targeting as the framework for monetary
policy in January 2002.
1
Based on the provisions of Article II Section 6(c) of the New Central Bank Act, the initial appointment of three
of the members of the Monetary Board had a term of six years and the other two had a tenure of three years.
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The BSP’s shift from a variable annual inflation target in earlier years to a fixed
medium-term target for 2012 to 2014 was approved on 9 July 2010 under DBCC
Resolution No. 2010-3. The adoption of a fixed medium-term target is intended
to help promote a long-term view on inflation, increase the flexibility and
predictability of monetary policy, and better anchor inflation expectations.
As part of the institutional framework for inflation targeting, staff assessments
and forecasts are presented to the Advisory Committee, which is tasked to
formally recommend policy actions to the Monetary Board in matters pertaining
to monetary policy. The Committee is chaired by the Governor of the BSP and
comprises four other members, namely the Deputy Governor of the Monetary
Stability Sector, the Deputy Governor of the Supervision and Examination
Sector, the Assistant Governor of the Monetary Policy Sub-Sector, and the
Assistant Governor of the Treasury Department. The Advisory Committee meets
eight times a year (or approximately every six to eight weeks) to deliberate,
discuss, and make recommendations to the Monetary Board on issues relating to
the formulation and implementation of monetary policy. However, the
Committee may also meet in between the regular meetings, whenever it is
deemed necessary.
Policy Instruments
In the operational conduct of monetary policy, the BSP uses primary and
secondary tools to influence money supply in order to achieve the inflation target
for the year.
Primary Tool. The BSP’s primary monetary policy instruments are the
overnight reverse repurchase (RRP) or borrowing rate and overnight repurchase
(RP) or lending rate. The BSP sets these key policy rates during the meetings of
the Monetary Board on monetary policy to steer inflation towards the target.
Secondary Tools. The reserve requirement is used as one of the secondary
tools of monetary policy.2 The reserve requirement is the portion of deposits and
deposit substitute liabilities that banks and/or quasi-banks are required to set
aside to allow the BSP to have greater control over liquidity conditions and to
help protect depositors by ensuring that banks have sufficient cash on hand to
service depositors’ withdrawals. Regular or statutory reserves may be held by
banks in the form of cash in their vaults, as deposits with the BSP in demand
deposit accounts (DDAs), or in reserve-eligible government securities.3 Banks’
outstanding DDA balances or 40 percent of their regular reserve requirements,
whichever amount is lower, are remunerated at 4 percent per annum. 2
The BSP has raised the statutory reserve requirement ratio by a total of two percentage points in June and July
2011 as a pre-emptive move to guard against liquidity-driven inflationary pressures that could result from
strong cross-border inflows.
3
These securities refer to bonds or other evidences of indebtedness representing direct obligations of the
National Government. These securities were qualified as reserve-eligible government securities under the old
Central Bank. The BSP discontinued the policy of allowing the use of government securities as part of banks’
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BANGKO SENTRAL NG PILIPINAS
Policy Instruments Meanwhile, liquidity reserves are that proportion of peso deposits and deposit
substitute liabilities of banks and/or quasi-banks which may be held in the form
of a three-month term deposit in the reserve deposit account (RDA) facility with
option for the BSP Treasury Department (TD) to extend the tenors to 6 months
and 12 months. Remuneration on liquidity reserves is typically higher than that
for statutory reserves—at least one-half percent (or 50 basis points) lower than
the prevailing market rate for the 91-day T-bill.4
Another policy tool is the rediscount window, which allows the BSP to manage
the volume of credit in the financial system. Rediscounting is a standing credit
facility that the BSP extends to banking institutions to help them meet temporary
liquidity needs by refinancing the loans they extend to their clients. Moreover,
the BSP maintains a regular peso rediscount budget in order to ensure that the
rediscount credits it extends are consistent with its price stability objective.
Depending on prevailing liquidity conditions, the BSP adjusts the rediscounting
budget to increase or reduce liquidity in the system.5 The BSP currently offers
two rediscounting facilities to qualified banks: the peso rediscounting facility
and the Exporters’ Dollar and Yen Rediscount Facility (EDYRF).
Special Deposit Accounts (SDAs) complement open market operations in
managing liquidity. Banks, including trust entities under BSP supervision, are
allowed to place funds with the BSP under the SDA facility. These placements
are not collateralized, and they earn various interest rates depending on their
tenor.
Policy Signals
What to Look For. The BSP looks at a wide set of indicators of price and output
conditions, including real gross domestic product (GDP) growth, commodity
prices, and remittance inflows, among others, in assessing the appropriateness of
policy settings. The movements of monetary aggregates such as the levels of
reserve money (RM), base money (BM), and domestic liquidity or M3 are also
monitored as indicators of monetary conditions. The BSP also follows closely
international developments and their potential impact on the local economy.
Monetary policy is guided primarily by the inflation outlook as reflected in the
BSP’s inflation forecasts. Adjustments in the BSP’s overnight borrowing or
overnight lending rates indicate the stance of monetary policy.
The 91-day Treasury bill rate is used as the benchmark reference rate by banks
and other financial institutions in the Philippines for the pricing of loans. Other
market interest rates also track the movements of the Treasury bill rate.
Where to Look At. The BSP has its own Web Page in the Internet
(http://www.bsp.gov.ph) where key information about the Philippine economy
and the financial system, including the BSP’s policy issuances, media releases,
selected publications (Annex 1) as well as various economic and financial
indicators (Annex 2), are made available. The BSP’s Economic Database (EDB)
likewise facilitates more timely and accurate processing, analysis and
presentation of the statistical series being monitored by the Monetary Policy
Sub-sector (MPSS).
4
Per Circular No. 539, Series of 2006.
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Other Policy
Information
Released by the
BSP
Policy decisions of the Monetary Board (MB) are released through circulars,
circular letters and memoranda to financial institutions under the BSP’s
supervision, and through periodic press releases and statements. These decisions
include changes on the monetary policy stance of the BSP, prudential
regulations, foreign exchange and other regulations affecting the operation of
banks and non-banks supervised/regulated by the BSP and establishment of
banks and bank branches. In addition, a report on highlights of the MB meeting
reflecting the BSP’s monetary policy stance is also being made available to the
public through the BSP website.
The BSP also publishes a quarterly inflation report that provides an assessment
of economic and financial conditions, a review of BSP monetary policy actions
and the reasons for these actions, and a discussion of the outlook for inflation for
the policy horizon. To ensure accountability in cases where the BSP fails to
achieve the inflation target, the BSP Governor issues an Open Letter to the
President outlining the reasons why actual inflation did not fall within the target,
along with the steps that will be taken to bring inflation towards the target. The
inflation report and Open Letter can also be found in the BSP website where
other BSP policy decisions and regulations are posted. Likewise, the BSP
announces every December of each year the inflation target two years in
advance. This is consistent with the BSP’s forward-looking monetary policy
framework.
Philippines-IMF Participation in the Financial Transactions Plan (FTP). In line with its
Relations commitment to help address threats to the international monetary system and
given its sufficiently strong balance of payments and reserve position, the
Philippines was assessed eligible to participate in the Fund’s FTP, a currency
exchange arrangement between the Fund and its member to finance its lending
and borrowing operations. Philippine participation commenced in August 2010
and remains to be an active participant of the FTP. In exchange for the use of the
Fund’s holdings of members’ currency in loan transfers, the Philippines acquires
an equivalent increase of SDR in its reserve tranche position in the Fund altering
the composition, but not the level, of its gross international reserves (GIR). As of
26 October 2011, total drawdown from the Philippines for six countries
amounted to SDR163.8 million (about US$255 million6), of which 54.2 percent
were disbursed to European countries indicating the Philippines’ involvement in
the global efforts to address the crisis in the Euro zone area.
Participation in the New Arrangements to Borrow (NAB). On 10 May 2010, the
Philippines, along with twelve (12) new participants, were invited to participate
in the NAB facility of the IMF. The NAB is a credit arrangement which took
effect in November 1998 between the IMF and a group of member countries and
institutions to provide supplementary resources of up to SDR34 billion (about
US$53 billion) to the IMF to forestall or cope with an impairment of the
international monetary system or to deal with an exceptional situation that poses
a
threat
to
the
stability
of
that
system.
On
12 October 2011, the BSP in its letter to the Managing Director of the IMF
5
The rediscounting budget was increased by P20 billion each in November 2008 and March 2009 to reach P60
billion in response to the global economic slowdown. Amid improved credit and liquidity conditions, the peso
rediscounting budget was subsequently reduced by P20 billion each in March and May 2010 to revert to the
pre-crisis level of P20 billion.
6
USD1 = SDR0.642698 (as of 6 December 2011) 97
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notified the IMF that the BSP, in accordance with its laws and with the consent
of the Republic of the Philippines as member of the IMF, adheres to the Decision
on the NAB. The BSP committed the amount of SDR340 million (about
US$529 million).
Continued support in country surveillance activities by the Fund. IMF
surveillance takes the form of regular comprehensive consultations with member
nations. The consultations are referred to as Article IV Consultation and are
required under the Article IV of the Fund’s Articles of Agreement. The IMF
conducted a Staff Visit to the Philippines on 11-20 July 2011. The Mission Team
met with authorities and key market players to discuss economic developments
and identify key risk areas and policy reforms. The Team found the recovery
phase well managed, with a gradual withdrawal of policy stimulus and the
initiation of reforms to address long-standing constraints to growth. Near term
outlook for the Philippines remains favorable, characterized by moderating but
still rapid growth, within target inflation, balance of payments surplus and
appropriate fiscal consolidation. The Mission also conducted a local visit to
assess if economic growth is cascaded in the region. The Team visited Lipa City
in Batangas (south of Metro Manila) and held meetings with local officials, local
bankers and local business representatives.
Meanwhile, the 2011 Article IV Consultation commenced on 1 December 2011
and concluded on 12 December 2011. The IMF Mission Team conducted a local
visit in Davao City on 4-6 December 2011 similar to the program followed in
Lipa City. A conference featuring the topics included in the selected issues paper
of the 2011 Staff Report for the Philippines and with the theme, “Policy
Challenges for the Philippines in an Uncertain World,” was held on 13 December
2011. The conference seeks to foster an interactive exchange of views on the
latest thinking on issues and challenges confronting the Philippine economy
amidst uncertainties in the global environment.
FINANCIAL STABILITY Authorities
Responsible for
Financial Stability
and Supervision of
the Financial
Sector
The relevant authorities responsible for financial stability and supervision of the
financial sector in our economy are the following:
a)
b)
c)
d)
Bangko Sentral ng Pilipinas (BSP)
Insurance Commission (IC)
Securities and Exchange Commission (SEC)
Philippine Deposit Insurance Corporation (PDIC)
With regards to the promotion of financial stability, the BSP has started laying
the groundwork in providing the required institutional support for its financial
stability function. A high-level Financial Stability Committee (FSC), composed
of senior management and chaired by the Governor, was established within the
BSP on 14 September 2010. The Committee is tasked to define BSP’s
organizational roadmap to adequately mitigate the build-up of systemic risks to
the financial system and further advance an enabling financial stability
framework in the Philippines.
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Institutional The institutional coverage of the following financial supervisory authorities are
Coverage of the as follows:
Financial
Supervisory Bangko Sentral ng Pilipinas
Authorities
a. Banks engaged in the lending of funds obtained in the form of deposits
classified into: Universal banks (UBs) 7; Commercial banks (KBs);
Thrift banks (TBs)8, Rural banks (RBs)9 and Cooperative banks (CBs)10.
b. Non-Bank Financial Institutions with Quasi-Banking Functions11. Quasibanking functions consist of the following:
(1) Borrowing funds for the borrower's own account;
(2) Twenty (20) or more lenders at any one time;
(3) Methods of borrowing are issuance, endorsement, or acceptance of
debt instruments of any kind, other than deposits, such as:
i) acceptances;
ii) promissory notes;
iii) participations;
iv) certificates of assignment or similar instruments with
recourse;
v) trust certificates;
vi) repurchase agreements; and
vii) such other instruments as the Monetary Board may determine.
(4) Purpose:
i) relending; or
ii) purchasing receivables or other obligations.
c.
Subsidiaries and affiliates of banks and quasi-banks engaged in allied
activities
d. Trust entities
e. As provided by special laws such as non-stock savings and loan
associations and pawnshops
Insurance Commission
All insurance companies
Securities and Exchange Commission
Corporations (other than those under the supervision of the BSP and IC) and
partnerships
7
Including the government-owned Al-Amanah Islamic Investment Bank of the Philippines as defined in R.A.
No. 6848, “The Charter of the Al-Amanah Islamic Investment Bank of the Philippines”
8
As defined in Republic Act (R.A.) No. 7906, “An Act providing for the regulation of the organization and
operation of Thrift Banks, and for other purposes,” which shall be composed of: (a) savings and mortgage
banks, (b) stock savings and loan associations, and (c) private development banks;
9
As defined in R. A. No. 7353, “An Act Providing for the Creation, Organization and Operation of Rural
Banks, and For Other Purposes”
10
As defined in R. A. No. 6938, “The Cooperative Code of the Philippines”
11
Refers to investment houses, finance companies, trust entities and all other non-bank financial institutions
with quasi-banking functions.
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Philippine Deposit Insurance Corporation
All operating banks in the Philippines are members of the PDIC.
Strategy for
Supervision and
Monitoring of
Financial Stability
The BSP has three main regulations (which are updated/revised from time to
time) with regard to banks’ risk-based capital adequacy ratio (CAR) – Circular
Nos. 538, 360 and 280 dated 4 August 2006, 3 December 2002 and 29 March
2001, respectively. These regulations set out the methodologies for quantifying
the risks faced by banks, and computing the amount of capital that banks should
hold to ensure an effective buffer in case these risks translate to actual losses.
Circular Nos. 538 and 360 set out the methodology for determining the capital
requirement for the credit risk, market risk, and operational risk exposures of
universal and commercial banks, and all their subsidiary banks and quasi-banks.
Circular No. 280, on the other hand, sets out the methodology for determining
the capital requirement for the credit risk exposures of banks.
The BSP has likewise issued Circular No. 400 dated 1 September 2003, which
implemented credit risk CAR for stand-alone quasi-banks.
Meanwhile, stand-alone thrift, rural and cooperative banks, which refer to banks
that are not subsidiaries of U/KBs, shall be covered by a separate revised riskbased capital adequacy framework. The implementing guidelines as contained
in Circular No. 688 dated 26 May 2010, is also locally referred to as Basel 1.5
since only few elements of Basel 2 have been incorporated to the existing Basel
1 guidelines. These include, among others, new capital requirement for
operational risk, higher capital charge for real and other properties acquired
(ROPA) exposures, enhanced disclosure requirements. The guidelines, which
will take effect on 1 January 2012, highlight a phased-in implementation of the
increases in capital requirements for the subject banks covering said items.
BSP requires that banks and quasi-banks maintain a risk-based CAR of at least
10%.
Simultaneous with the rationalisation of the legislative and regulatory
framework, the BSP is re-aligning its systems and processes in the supervision
and examination of banks. The shifting of gears towards a consolidated
approach to supervision as well as a risk-based examination of banks has started
long before the enactment of the new General Banking Law of 2000.

The BSP’s supervisory techniques include the following:
1) Consolidated Supervision
The Supervision and Examination Sector of the BSP shifted to a
consolidated supervision approach (SE Sector Order No. 11 dated 16
October 1998). This is in line with its initiatives aimed at strengthening
the BSP regulatory oversight.
2) Risk-based Approach to Examination
The BSP shifted from the traditional checklist approach to a risk-based
approach to bank examination (SE Sector Order No. 10 dated 24
November 1997) to include, among others, the evaluation of the risk
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BANGKO SENTRAL NG PILIPINAS
management systems of banks covering the following:
a) Active Board and Senior Management oversight;
b) Adequate policies, procedures and limits;
c) Adequate risk measurements, monitoring and management systems;
and
d) Comprehensive internal controls.
The BSP approved the guidelines on supervision by risk under Circular
No. 510 dated 3 February 2006, setting forth the expectations on the
conduct of risk management by financial institutions under its
supervision.
3) On-site Examination
This refers to an investigation of an institution under the supervisory
authority of the BSP to determine compliance with laws and
regulations. It includes the determination of whether the institution is
conducting its business on a safe and sound basis and requires full and
comprehensive examination of the operations and books of institutions.
Regular or periodic examinations are done once in every 12 months,
with an interval of twelve months from the last date thereof while special
examinations may be conducted earlier, or at a shorter interval, when
authorized by the Monetary Board by an affirmative vote of five (5)
members.
4) Off-site Surveillance System
Compliance with the BSP-prescribed prudential norms is monitored in
between examination periods based on the periodic reports submitted by
banks. In addition to this, the BSP has early warning tools that qualify a
bank for close monitoring and when deemed necessary, subjected to a
special examination and other related supervisory actions and sanctions.
5) Bank Performance Rating
The BSP has adopted the following rating systems: (a) CAMELS
(Capital Adequacy, Asset Quality, Management, Earnings and Liquidity)
rating system which has been revised to incorporate the bank’s
sensitivity to market risks; (b) Risk Assessment System (RAS), which is
used to supplement the risk-based examination approach; (c) Risk
Management, Operational Control, Compliance and Asset Quality
(ROCA) developed and implemented for foreign bank branches; and (d)
Strength of Support Assessment (SOSA) rating system that
specifically assesses the strength of support of a foreign parent bank to
its branches.
6) Trust Rating System
The Trust Rating System (TRS) is utilized as an internal supervisory tool
that is prepared after each regular examination of the trust entity. This is
to effectively supervise the operations of trust departments of banks and
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BANGKO SENTRAL NG PILIPINAS
non-bank financial institutions authorized to engage in trust, other
fiduciary business and investments management activities.
7) Manual on Supervision and Examination on Financial Institutions
To align supervisory process with international best practice using the
risk-based approach, the BSP adopted the Manual on Supervision and
Examination on Financial Institutions. The BSP is currently revising the
said Manual, particularly on the examination procedures and the content
of the Report of Examination to reflect the new developments and
regulations in the banking system.
8) Prompt Corrective Action Units
As a matter of policy, banks with potential problems are subject to
intensive monitoring by specialised prompt corrective action units of the
BSP. As problems are confirmed, prompt and corrective actions (PCA)
are initiated depending on the severity of deviation from prudential
norms, particularly on solvency. The Monetary Board approved the
prompt corrective action framework or the PCA Framework (Circular
No. 523 dated 23 March 2006) for the enforcement of prompt corrective
action on banks and other financial institutions with solvency problem,
low CAMELS rating and/or serious supervisory concern. Upon PCA
initiation, the BSP shall require the bank to enter a Memorandum of
Understanding (MOU) committing to the PCA plan. The MOU shall be
subject to approval by the Monetary Board (Circular No. 664 dated 15
September 2009).
9) Data Warehousing
The data warehousing project is a bank-wide initiative to be executed in
phases. The first phase will focus on the requirements of the SES with
linkages to the Department of Economic Research (DER) and Philippine
Deposit Insurance Corporation (PDIC) while the second phase shall
cater to the data requirements of other BSP departments.
10) Internal Capacity Building
The BSP has also been improving its internal capacity and has set-up
performance standards by providing necessary training and logistical
support to bank supervisors. In 2005, a structured training
programme was developed and implemented to emphasise the
assessment of bank risks.
11) Cooperative Arrangements with Domestic Counterpart Regulators
The BSP has formalized cooperative arrangements with other regulators
and government agencies through its membership in the Financial Sector
Forum (FSF) since 2004.
Plan and Basel II in the Philippines
Progress for the
Implementation of Initial Basel II take-off
Basel II
The BSP formally implemented Basel II on 1 July 2007 through the issuance of
Circular No. 538 dated 4 August 2006 (Revised Risk-Based Capital Adequacy
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BANGKO SENTRAL NG PILIPINAS
Framework). The implementing guidelines, which cover all universal and
commercial banks (U/KBs) and their subsidiary banks and quasi-banks, address
Pillar 1 (i.e., the computation of capital requirements for credit, market and
operational risks using the standardized approaches) and Pillar 3 (i.e., the
disclosure of capital structure and adequacy, and risk management system,
including risk exposures and assessments) of the Basel II capital framework.
Pillar 2 Implementation
In line with its commitment to fully adopt Basel II, the BSP has issued the Pillar
2 guidelines on banks’ Internal Capital Adequacy Assessment Process (ICAAP)
and BSP’s Supervisory Review Process (SRP) as contained under Circular No.
639 dated 15 January 200912. The ICAAP guidelines are applicable to U/KBs on
a consolidated or group level. Said banks were required to submit a trial
“ICAAP Document” to the appropriate Central Point of Contact Department of
the BSP on 31 March 2009. The guidelines will come into force on 1 January
2011. Thereafter, they shall submit the ICAAP Document on an annual basis
every end of January.
The SES, thru its central point of contact, developed a phased-in approach in
reviewing the soundness of banks’ ICAAP. The first two phases involve
dialogues or meetings between the bank’s management and the SES personnel
composed of central point of contact and examiners. The final phase may
necessitate an on-site examination of the banks to verify representations in the
ICAAP document. Currently, the BSP is in its second phase of dialogues with
the banks regarding the detailed discussions on the assessment of each risk type.
The BSP, through the ICAAP guidelines, expects the banks to document in
writing their actual capital planning and budgeting practices in view of their
business or strategic plans and operating environment. Similarly, banks shall
consider in their capital adequacy assessment not only the risks covered by the
regulatory capital framework (i.e., credit, market and operational risks) but also
the other material risks not covered by the framework and forward-looking
factors (e.g., stress testing impact).
Moving Forward
The BSP has started preparing domestic banks for their eventual migration to
Basel III with the issuance of guidelines defining the qualifying capital
instruments under Basel III standards under Circular No. 716 dated 25 March
2011. Banks are expected to comply with the BCBS eligibility criteria on
additional going concern capital and Tier 2 capital to determine the eligibility of
capital instruments to be issued by Philippine banks and quasi-banks as hybrid
Tier 1 capital and lower Tier 2 capital, respectively, under the existing Riskbased Capital Adequacy Framework for banks and quasi-banks effective 01
January 2011.
12
The guidelines covering the ICAAPs of foreign bank branches are outlined under Circular No. 731 dated 28
July 2011.
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BANGKO SENTRAL NG PILIPINAS
CURRENT MONETARY OFFICIALS (As of 9 December 2011)
Monetary Board
Members
Chairman Mr. Amando M. Tetangco, Jr.
Members
Mr.Alfredo C. Antonio
Mr. Ignacio R. Bunye
Mr. Peter B. Favila
Dr. Felipe M. Medalla
Mr. Cesar V. Purisima
Atty. Armando L. Suratos
Management and
Senior Officials
Governor Mr. Amando M. Tetangco, Jr.
Deputy Governors
Mr. Juan D. De Zuñiga, Jr.
Resource Management Sector & Security Plant Complex
and concurrent General Counsel
Mr. Nestor A. Espenilla, Jr.
Supervision and Examination Sector
Mr. Diwa C. Guinigundo
Monetary Stability Sector
Executive Mr. Vicente S. Aquino
Director II Anti-Money Laundering Council Secretariat
Assistant Ms. Ma. Ramona Gertrudes D.T. Santiago
Governors Treasury Department
Ms. Ma. Almasara Cyd N. Tuaño-Amador
Monetary Policy Sub-sector
Ms. Ma. Dolores B. Yuvienco
Supervision and Examination Sub-sector III
Mr. Manuel H. Torres
Security Plant Complex
Managing Directors Mr. Willie S. Asto
Comptrollership Sub-Sector
Ms. Teresita S. Bulseco
Information Technology Sub-sector
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BANGKO SENTRAL NG PILIPINAS
Managing Directors Mr. Augusto C. Lopez-Dee
Monetary Operations Sub-Sector
Ms. Wilhelmina C. Mañalac
International Sub-sector
Mr. Johnny Noe E. Ravalo
Central Supervisory Support Sub-sector
Ms. Chuchi G. Fonacier
Supervision and Examination Sub-sector II
Ms. Leny I. Silvestre
Supervision and Examination Sub-sector III
Mr. Gerardo S. Tison
Human Resource Sub-sector
Mr. Pedro P. Tordilla, Jr.
Regional Monetary Affairs Sub-sector
Ms. Edna C. Villa
Office of the Governor
Iluminada T. Sicat
Acting Managing Director, Currency Management Sub-sector
Directors and OICs Silvina M. Roxas
of Departments/ Administrative Services Department
Offices Ms. Violeta F. Mejia
Cash Department
Mr. Zeno Ronald R. Abenoja
Economic and Financial Learning Center
Ms. Geraldine C. Alag
Asset Management Department
Ms. Patria B. Angeles
International Operations Department
Ms. Ma. Lux T. Berciles
BSP Regional Monetary Affairs
Mr. Vincent Z. Bolivar
Deputy General Counsel
Office of the General Counsel & Legal Services
Mr. Elmore O. Capule
Deputy General Counsel
Office of the General Counsel & Legal Services
Mr. Demetrio E. Casipong
BSP Davao Regional Office
Mr. Aaron G. Cervantes
Facilities Management & Engineering Department
Mr. Antonio B. Cintura
Department of Economic Research
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Directors and OICs Ms. Loida D. Cruz
of Departments/ Human Resource Management Department
Offices
Mr. Francisco G. Dakila, Jr.
Center for Monetary and Financial Policy
Ms. Fe M. De La Cruz
Corporate Affairs Office
Ms. Teodora I. San Pedro
Office of Supervisory Policy Development
Mr. Vicente T. De Villa III
Supervisory Data Center
Ms. Elvira E. Ditching-Lorico
Human Resource Development Department
Ms. Rosalinda S. Dumaliang
Department of Loans and Credit
Mr. Restituto C. Cruz
Examination Department I
Mr. Alberto A. Reyes
Examination Department II
Mr. Rogelio A. Encinas
Examination Department III
Ms. Regina R. Fajardo
Risk Management Office
Mr. Claro P. Fernandez
Executive Director I, Investor Relations Office
Ms. Judith E. Sungsai
Central Point of Contact Department I
Ms. Gail U. Fule
Central Point of Contact Department II
Mr. Victor G. Garlitos
Provident Fund Office
Mr. Edgar C. Gatumbato
Security, Investigation and Transport Department
Mr. Benjamin P. Gulapa
Head Executive Assistant, Office of the Governor
Ms. Dahlia D. Luna
Project Development & Management Office
Mr. Arturo C. Manuel
Department of General Services
Mr. Thomas Benjamin B. Marcelo
International Relations Department
Ms. Rowena S. Martinez
Office of the Secretary, Monetary Board
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Directors and OICs Ms. Helen P. Montalbo
of Departments/ Corporate Planning Office
Offices Ms. Lagrimas R. Nuqui
Internal Audit Office
Ms. Carlyn A. Pangilinan
BSP Institute
Mr. Alfonso C. Penaco IV
Office of Special Investigation
Mr. Primo B. Quetulio
BSP La Union Regional Office
Mr. Nestor B. Salanio
Banknotes and Securities Printing Department
Ms. Bella S. Santos
Payments and Settlements Office
Mr. Carlos O. Santos
IT Infrastructure & Operations Department
Mr. Antonio A. Grageda
Crisis Management Office
Ms. Susan Y. Sison
Medical and Dental Clinic
Mr. Virgilio P. Tiongson
Financial Accounting Department
Mr. Roberto T. Syquia
Currency Issue & Retirement Office
Mr. Alphew T. Cheng
Chief Reserve Management Officer, Treasury Department
Ms. Catherine B. Regala
Systems Method Office
Ms. Rosabel B. Guerrero
Officer-in-Charge, Department of Economic Statistics
Ms. Ma. Belinda G. Caraan
Officer-in-Charge, Integrated Supervision Department I
Ms. Dolores C. Joson
Officer-in-Charge, Integrated Supervision Department II
Ms. Pauline Theresa D. Eusebio
Officer-in-Charge, Administrative Services Department
Mr. Rolando F. Garcia
Officer-in-Charge, Mint & Refinery Operations Department
Ms. Lilian S. Gelvezon
Officer-in-Charge, Application Systems Management Department
Mr. Enrique C. Domingo
Officer-in-Charge, Management Services Sub-sector
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Directors and OICs Ms. Estrellita C. Berbaño
of Departments/ Officer-in-Charge, Procurement Office
Offices Ms. Ma. Mediatriz M. Boelsch
Officer-in-Charge, Financial Markets Operation Group – Treasury Department
Ms. Amor D. Flores
Investment Risk and Analytics Group – Treasury Department
Address: Bangko Sentral ng Pilipinas, A. Mabini Street, Manila, PHILIPPINES
Telephone: (632) 708-7701 ; Telex: 62003 CENBANK PN ;
Email: bspmail@bsp.gov.ph; Website: http://www.bsp.gov.ph
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Annex 1
Regular BSP Publications

Annual Report. Report submitted annually to the President of the Philippines and the Congress
highlighting the major developments in the Philippine economy and the key activities, policies
and operations of the BSP during the year.

Inflation Report. Published quarterly as part of the BSP's transparency mechanism under
inflation targeting and to convey to the public the overall thinking and analysis behind the BSP's
decision on monetary policy.

Balance of Payments Report. Contains a comprehensive analysis of the developments in the
Philppines’ balance of payments including the current account (i.e., trade-in-goods and services,
income, and current transfers) and the capital and financial account (i.e., direct, portfolio and
other investments). Also included are brief discussions on the Philippines’ gross international
reserves and exchange rate.

Business Expectations Report. Report on the results of the quarterly Business Expectations
Survey conducted by the BSP to generate indications of overall business sentiment and
prospects/outlook.

Consumer Expectations Report. The Consumer Expectations Survey captures the economic
outlook of consumers as an indication of the nation's future economic conditions.

BS Review. Serves primarily as a forum for presenting the research findings of BSP staff;
includes analytical and policy-oriented research articles on various economic, financial and
statistical issues of interest to the BSP.

Status Report on the Philippine Financial System. A comprehensive assessment of major
developments in the Philippine financial system during the semester.

Quarterly Report on Economic and Financial Development. A quarterly report which outlines
the major developments in the real, monetary and fiscal sectors of the Philippine economy.

BSP Working Paper Series. The BSP Working Paper Series constitutes studies that are
preliminary and subject to further revisions. They are being circulated only for the purpose of
soliciting comments and suggestions for further refinements. The views and opinions expressed
are those of the author(s) and do not necessarily reflect those of the Bangko Sentral ng Pilipinas.

Report on Regional Economic Developments.
The report on Regional Economic
Developments in the Philippines tracks economic activities in the regions, focusing on the
demand and supply conditions, price developments and monetary conditions, as well as the
emerging outlook. Analysis of regional trends and developments supplements BSP’s analytical
tools for monetary policy formulation and financial supervision. Qualitative and quantitative
information used in the report are collected from primary and secondary sources and reflect the
extensive information gathered by the BSP regional offices and branches.

BSP Economic Newsletter. The BSP Economic Newsletter aims to provide to the BSP
community and the public a readily accessible, up-to-date, concise and reader-friendly
compendium of studies on current economic and financial issues.
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BANGKO SENTRAL NG PILIPINAS

Manual of Regulations. These are compilations of regulations and policies issued by the BSP
for banking and other financial institutions under its supervision, including regulations governing
foreign exchange transactions. They are available in hard and soft copies, and are convenient
references and guides for banks, other financial institutions, and other stakeholders. These
include the Manual of Regulations for Banks, Manual of Regulations for Non-Bank Financial
Institutions, Manual of Regulations on Foreign Exchange Transactions, and Manual of
Regulations for Pawnshops.

Philippine Flow of Funds. The Philippine Flow of Funds presents the financial transactions
among the different institutions of the economy, and between these institutions and the rest of the
world; also shows which institutions are net lenders and net borrowers in the series of
transactions.

Coordinated Portfolio Investment Survey (CPIS) Results. The Coordinated Portfolio
Investment Survey (CPIS) is an annual survey on residents’ holdings of foreign-issued equities
and long- and short-term debt securities. CPIS is a global undertaking spearheaded by the
International Monetary Fund (IMF) in coordination with participating countries worldwide to
improve statistics on holdings of external portfolio investment assets and promote international
data comparability.

International Investment Position. The IIP is a companion framework to the Balance of
Payments (BOP) statistics. While the BOP is a statistical statement that records the Philippines’
transactions or flows with the rest of the world for a given period, the IIP summarizes the nation’s
stock of financial claims on and financial liabilities to the rest of the world as of a specific
reporting period. Unlike the BOP, which is reported quarterly, the IIP is released annually with a
lag of nine months.

Directory of Philippine Exporters. A ready reference and easy guide to foreign buyers of
Philippine products, local suppliers of exporters, foreign investors, government agencies,
commercial banks and the interested public in general.

Monthly Selected Philippine Economic Indicators. A monthly compilation of various statistical
tables on external accounts, financial system, fiscal, prices, and other real sector accounts.
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Annex 2
Economic and Financial Indicators

External Accounts









Balance of Payments (BOP)
External Debt
External Trade
Foreign Currency Deposit Units
Foreign Direct Investments
Net Portfolio Investments
OF Remittances
Exchange Rates
International Reserves

International Investment Position

Flow of Funds

Monetary and Financial System Accounts





Monetary Survey
Depository Corporations Survey
BSP Assets and Liabilities and Statement of Income and Expenses
Philippine Financial System/Institutions
U/KBs Loans Outstanding

Interest Rates
 Selected Domestic Interest Rates
 Selected Foreign Interest Rates

Fiscal Accounts



Income and Expenditure Accounts



NG Cash Operations
Consolidated Public Sector Financial Position
Gross Domestic Product
Gross National Product
Prices




Consumer Price Index (CPI)
Inflation Rates
General Wholesale Price Index
Retail Price Index
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
Other Real Sector Accounts







Volume/Value of Production Index
Producers’ Price Index
Selected Labor and Wage Indicators
Stock Volume and Price Indices
Stock Market
Price-Earning Ratio
Population

Economic Indicators of Selected Economies (Asian and Advance Economies)

Banking Statistics













112
Number of Automated Teller Machines (ATMs) and Banks with Electronic Banking
Regional Distribution of Banking Offices
Regional Distribution of Loan Portfolio
Regional Distribution of Deposit Liabilities
Consolidated Statement of Condition
Consolidated Statement of Income and Expenses
Consumer Loans
Selected Asset Quality Indicators
Real Estate Loans
Auto Loans
Credit Card Receivables
Trust and Other Fiduciary Business and Other Management Activities
Published Statement of Condition (UKBs and TBs only)
BANGKO SENTRAL NG PILIPINAS