Creating a Central Bank for the Philippines
Chronology of Events: Central Banking in
the Philippines
1900
Act No. 52 was passed by the First Philippine Commission placing all
banks under the Bureau of Treasury. The Insular Treasurer was
authorized to supervise and examine banks and banking activities.
February 1929
The Bureau of Banking under the Department of Finance took over the
task of banking supervision.
1939
A bill establishing a central bank was drafted by Secretary of Finance
Manuel Roxas and approved by the Philippine Legislature. However, the
bill was returned by the US government, without action, to the
Commonwealth Government.
1946
A joint Philippine-American Finance Commission was created to study
the Philippine currency and banking system. The Commission
recommended the reform of the monetary system, the formation of a
central bank and the regulation of money and credit.
The charter of the Central Bank of Guatemala was chosen as the model
of the proposed central bank charter.
August 1947
A Central Bank Council was formed to review the Commission’s report
and prepare the necessary legislation for implementation.
February 1948
President Manuel Roxas submitted to Congress a bill “Establishing the
Central Bank of the Philippines, defining its powers in the administration
of the monetary and banking system, amending pertinent provisions of
the Administrative Code with respect to the currency and the Bureau of
Banking, and for other purposes.
15 June 1948
The bill was signed into law as Republic Act No. 265 (The Central Bank
Act) by President Elpidio Quirino.
3 January 1949
The Central Bank of the Philippines (CBP) was inaugurated and formally
opened with Hon. Miguel Cuaderno, Sr. as the first governor.
The broad policy objectives contained in RA No. 265 guided the CBP in
the implementation of its duties and responsibilities, particularly in
relation to the promotion of economic development in addition to the
maintenance of internal and external monetary stability.
November 1972
RA No. 265 was amended by Presidential Decree No. 72 to make the
CBP more responsive to changing economic conditions.
PD No. 72 emphasized the maintenance of domestic and international
monetary stability as the primary objective of the CBP. Moreover, the
CBP’s authority was expanded to include not only the supervision of the
banking system but also the regulation of the entire financial system.
January 1981
1986
3 July 1993
Further amendments were made with the issuance of PD No. 1771 to
improve and strengthen the financial system, among which was the
increase in the capitalization of the CBP from P10 million to P10 billion.
Executive Order No. 16 amended the Monetary Board membership to
promote greater harmony and coordination of government monetary and
fiscal policies.
The Bangko Sentral ng Pilipinas (BSP) was established to replace the
CBP as the country’s central monetary authority.
The BSP Vision and Mission
Vision
The BSP aims to be a world-class monetary authority and a catalyst for a globally competitive
economy and financial system that delivers a high quality of life for all Filipinos.
Mission
BSP is committed to promote and maintain price stability and provide proactive leadership in
bringing about a strong financial system conducive to a balanced and sustainable growth of the
economy. Towards this end, it shall conduct sound monetary policy and effective supervision
over financial institutions under its jurisdiction.
Overview of Functions and Operations
Objectives
The BSP’s primary objective is to
maintain price stability conducive to a
balanced and sustainable economic
growth. The BSP also aims to
promote and preserve monetary
stability and the convertibility of the
national currency.
Responsibilities
The BSP provides policy directions in
the areas of money, banking and
credit. It supervises operations of
banks and exercises regulatory
powers over non-bank financial
institutions with quasi-banking
functions.
Under the New Central Bank Act, the
BSP performs the following functions,
all of which relate to its status as the
Republic’s central monetary
authority.
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Liquidity Management. The BSP
formulates and implements
monetary policy aimed at
influencing money supply
consistent with its primary
objective to maintain price
stability.
Currency issue. The BSP has the
exclusive power to issue the
national currency. All notes and
coins issued by the BSP are fully
guaranteed by the Government
and are considered legal tender
for all private and public debts.
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Lender of last resort. The BSP
extends discounts, loans and
advances to banking institutions
for liquidity purposes.
Financial Supervision. The BSP
supervises banks and exercises
regulatory powers over non-bank
institutions performing quasibanking functions.
Management of foreign currency
reserves. The BSP seeks to
maintain 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.

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Determination of exchange rate
policy. The BSP determines the
exchange rate policy of the
Philippines. Currently, the BSP
adheres to a market-oriented
foreign exchange rate policy such
that the role of Bangko Sentral is
principally to ensure orderly
conditions in the market.
Other activities. The BSP
functions as the banker, financial
advisor and official depository of
the Government, its political
subdivisions and instrumentalities
and government-owned and controlled corporations.
The BSP's Organizational
Structure
as of June 2009
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Executive Management Services
Functional Sectors
o Monetary Stability Sector
o Supervision and Examination Sector
o Resource Management Sector
Security Plant Complex
The Monetary Board
The powers and function of Bangko
Sentral are exercised by its Monetary
Board, which has seven members
appointed by the President of The
Philippines. Under the New Central
Bank Act, one of the government
sector members of the Monetary
Board must also be a member of the
Cabinet designated by the President.
The New Central Bank Act
establishes certain qualifications for
the members of the Monetary Board
and also prohibits members from
holding certain positions with other
governmental agencies and private
institutions that may give rise to
conflicts of interest. With the
exception of the members of the
Cabinet, the Governor and the other
members of the Monetary Board
serve terms of six years and may
only be removed for cause.
The Monetary Board meets at least
once a week. The Board may be
called to a meeting by the Governor
of the Bangko Sentral or by two (2)
other members of the Board. Usually,
the Board meets every Thursday but
on some occasions, it convenes to
discuss urgent issues.
The major functions of the Monetary
Board include the power to:
1. Issue rules and regulations it
considers necessary for the
effective discharge of the
responsibilities and exercise of the
powers vested in it;
2. Direct the management,
operations, and administration of
Bangko Sentral, organize its
personnel and issue such rules
and regulations as it may deem
necessary or desirable for this
purpose;
3. Establish a human resource
management system which
governs the selection, hiring,
appointment, transfer, promotion,
or dismissal of all personnel;
4. Adopt an annual budget for and
authorize such expenditures by
Bangko Sentral as are in the
interest of the effective
administration and operations of
Bangko Sentral in accordance with
applicable laws and regulations;
and
5. Indemnify its members and
other officials of Bangko Sentral,
including personnel of the
departments performing
supervision and examination
functions, against all costs and
expenses reasonably incurred by
such persons in connection with
any civil or criminal action, suit or
proceeding, to which any of them
may be made a party by reason of
the performance of his functions or
duties, unless such members or
other officials is found to be liable
for negligence or misconduct.
The BSP Monetary Board
Chairman
Amando M.
Tetangco, Jr.
Members
Cesar V. Purisima
Juanita D. Amatong
Nelly Favis-Villafuerte
Alfredo C. Antonio
Ignacio R. Bunye
Peter B. Favila
The Governor
The Governor is the chief executive
officer of BSP and is required to
direct and supervise the operations
and internal administration of BSP.
Specifically, the Governor:
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prepares the agenda for the
meetings of the Monetary Board
and submits policy
recommendations for
consideration of the Board;
executes and administers policies
and measures approved by the
Monetary Board;
appoints and fixes the
remunerations and other
emoluments of personnel, as well
as imposes disciplinary measures
upon personnel of the Bangko
Sentral;
renders opinions, decisions, or
rulings, which shall be final and
executory until reversed or
modified by the Monetary Board,
on matters regarding application
or enforcement of laws pertaining
to institutions supervised by the
BSP and laws pertaining to quasibanks, as well as regulations,
policies or instructions issued by
the Monetary Board, and the
implementation thereof; and

exercises such other powers as
may be vested in him by the
Monetary Board.
The Governor is the principal
representative of the Monetary Board
and of the BSP. As such, the
Governor is empowered to:

represent the Monetary Board and
the BSP in all dealings with other
offices, agencies and
instrumentalities of the
Government and all other persons
or entities, public or private,
whether domestic, foreign or
international; and

sign contracts entered into by the
BSP, notes and securities issued
by the BSP, all reports, balance
sheets, profit and loss statements,
correspondence and other
documents of the BSP.
Governor Amando M. Tetangco, Jr.
Past Governors
Profile of the Governor
Amando M. Tetangco, Jr.
assumed office as Governor
of the Bangko Sentral ng
Pilipinas in July 2005. He is a
career central banker, occupying
different positions in the organization
in a span of over three decades.
Immediately prior to his appointment
as BSP Governor, he was Deputy
Governor in-charge of the Banking
Services Sector, Economic Research
and Treasury.
As BSP Governor, he is also the
Chairman of the Monetary Board,
Anti-Money Laundering Council
(AMLC) and Philippine International
Convention Center (PICC); ViceChairman of the Agriculture Credit
Policy Council (ACPC); Member of
the Capital Market Development
Council (CMDC), Export
Development Council (EDC),
PhilExport Board of Trustees
(PHILEXPORT), Philippine ExportImport Credit Agency (PHILEXIM);
and Director of Philippine Deposit
Insurance Corporation (PDIC),
National Development Council (NDC)
and National Home Mortgage
Finance Corporation (NHMFC).
He also represents the country in
various international and regional
organizations, including the
Executive Meeting of East Asia and
Pacific (EMEAP) Central Banks;
ASEAN and ASEAN+3; South East
Asia Central Banks (SEACEN);
South East Asia, New Zealand and
Australia (SEANZA); Center for Latin
American Monetary Studies
(CEMLA); and Asia-Pacific Economic
Cooperation (APEC). He is the
Governor for the Philippines in the
International Monetary Fund (IMF)
and the Alternate Governor in the
World Bank (WB) and in the Asian
Development Bank (ADB).
Before joining the Central Bank of the
Philippines in 1974, Mr. Tetangco
was connected with the Management
Services Division of accounting firm
SGV & Co.
Mr. Tetangco took up AB Economics
at the Ateneo de Manila University
where he graduated cum laude. He
took up graduate courses in business
administration in the same institution.
As a central bank scholar, Mr.
Tetangco took up his MA in Public
Policy and Administration
(concentration in Development
Economics) at the University of
Wisconsin in Madison, USA. Earlier,
he finished his elementary and high
school education at Don Bosco
Academy in Pampanga.
Mr. Tetangco is married to Elvira Ma.
Plana. They have three children: a
son and two daughters.
Central Bank Governors
Name
Tenure
3 January 1949 Miguel Cuaderno,
31 December
Sr.
1960
6 January 1961 Andres V. Castillo 31 December
1967
1 January 1968 Alfonso Calalang
9 January 1970
10 January 1970
Gregorio S.
- 15 January
Licaros
1981
16 January 1981
Jaime C. Laya
- 18 January
1984
19 January 1984
Jose B.
- 19 February
Fernandez, Jr.
1990
20 February 1990
Jose L. Cuisa, Jr.
- 2 Juy 1993
Bangko Sentral Governors
Name
Gabriel C.
Singson
Tenure
6 July 1993 - 5
July 1999
Rafael B.
Buenaventura
Amando M.
Tetangco, Jr.
6 July 1999 - 3
July 2005
4 July 2005Present