Knowing the BSP The central bank is responsible in maintaining low and stable inflation and providing a proactive

leadership to ensure a strong financial system for a balanced and sustainable growth of the economy. The BSP provides a solid anchor for the economy while meeting the challenges of the times Functions: 1. Promoting price stability 2. Supervisors of all banks ---- monitors and examines the operations of the banks. 3. Regulates other financial institutions including pawnshops.

BSP - the only agency that can issue banknotes and coins. BSP manages international reserves; BSP helps keep the piso stable; BSP determines the exchange rate policy; BSP bank of all banks and as lender of last resort it can provide loans and assistance to banks when necessary. BSP is the financial adviser and official depository bank of the government.

3 Pillars of Central Banking

1. Price stability keeping inflation low to promote economic efficiency and improve the economic well-being of the people. 2. Financial stability ensures banks compliance with the rules and regulations and ensuring bank business conduct in a safe and sound manner. 3. Efficient payments and settlements system enables people to make safe, timely, and accurate settlements of financial transactions.

BSP is headed by the governor---also the chair of the monetary board---the policy making body.

6 members of the monetary board, 5 from private sector and 1 from the cabinet. 3 deputy governors. 1. Monetary stability sector 2. Supervision and examination sector 3. Resource management sector

BSP Security Plant Complex where:

1. Coins

are minted--- A mint is an manufactures coins for currency. 2. Banknotes are printed; 3. Gold is refined.

industrial

facility

which

3 regional offices 1. La Union 2. Cebu 3. Davao

18 branches in the key cities and municipalities.

1st Pillar stable.

Price Stability

keeping

inflation

rate

low

and

Monetary policy refers to the measures or actions taken by the BSP to help keep inflation low and stable.

The BSP conducts monetary policy using an approach called INFLATION TARGETING keeping the average inflation close to a pre-announced target. If prices are rising more rapidly than the desired inflation rate because of the strong demand for goods relative to supply then the BSP will take action to bring down inflation to target level by TIGHTENING MONETARY POLICY. On the other hand, if the forecasted inflation is below the target due to weak demand for goods and services then the BSP will EASE MONETARY POLICY.

To tighten monetary policy the BSP; a. Raise its policy interest rates; b. Sell government securities;

c. Raise the reserve requirements imposed on banks.

To ease monetary policy the BSP will do the opposite.

2nd Pillar

Financial Stability

Banking is business founded on public trust. Banks are uniquely allowed to take deposits then transforming these deposits into loans and other financial assets that fuels the requirements of the economy.

Banks are subject to close supervisions by the BSP.

6 Major Categories of Banks

1. Universal 2. 3. 4.

5. 6.

Banks a universal bank is a bank that offers both banking and stock broking services to its clients. Commercial Banks - a bank that provides transactional, savings, and money market accounts and that accepts time deposits. Thrift Banks - a financial institution focusing on taking deposits and originating home mortgages. Rural Banks - a rural bank is a financial institution that helps rationalize the developing regions or developing country to finance their needs specially the projects regarding agricultural progress. Cooperatives a business organization owned and operated by a group of individuals for their mutual benefit. Islamic Bank - a banking activity that is consistent with the principles of Islamic law.

These banks differ in terms of: a. Size b. Activities c. Ownership

3rd Pillar

Efficient Payments and Settlements System

PhilPaSS

The BSP takes the lead in maintaining a safe, sound and efficient payments and settlement system for the country.

Some transactions are simple involving small amounts, examples. Payments settled in cash, cheques, debit and credit cards. Other transactions are more complex involving large payments such as interbank loans, purchases and sale of government securities.

The BSP sees to it that payments are made safely, promptly and accurately.

The New Generation of Philippine Banknotes

The color of money represents/symbolizes the story of our peopleas we evolve so does our money.

1949 CB was established. 1993 - BSP was created.

Printing Process

The BSP department of economic research determines currency demand based on expected price movement as well as the growth of the economy. After this, the cash department places the order to the Security Plant Complex which in turn procures the materials needed to produce and print the banknotes. When the designs of the banknotes are changed by the monetary board, final approval of the president of the republic is required. From the approved design, a prototype banknote is prepared. The banknote image is then placed in a master dye from which printing plates are produced. Ink experts mixed the exact colors of the money. With the ink and plates ready, printing begins in a special security paper that is composed of 80% cotton and 20% Philippine Abaca that give it distinctive design and texture different from the ordinary paper. The sheets of the banknotes go through offset printing where 15 to 20 colors of the design are printed at a time. Then the paper goes through the intaglio printing process which gives the money its embossed look and feel. Raised ink from intaglio printing requires drying for several days. After this, the banknotes sheets are submitted for a series of inspection. The serial numbers are then printed on each banknote and then passes through a series of inspection again. The sheets are then cut and packed into bundles of 1000 pieces each. This are now delivered by the security plant complex to the currency management group from where banks exchanged or withdraw their currency requirements. From the banks, the banknotes finally find its way to the economy and our wallet.

Given the ability to print money, why cant we just print a lot of money? As a matter of policy, BSP print only the amount of money projected to be sufficient to promote stable movement of consumer prices conducive to balance and sustain the level of economic growth. Printing more money than need is BAD POLICY because it will lead to a high consumer prices and lower buying power for the family.

Security Features of the New Generation Philippine PISO

Serial Numbers are of asymmetric design or increasing size.

Watermark show the shadow image of the portrait and the banknote denominational value in the blank space when viewed against the light.

The word PILIPINO written in a baybayin alphabet located @ the lower right corner.

Concealed denominational value is seen n smaller image of the portrait when the note is rotated at 45 degrees.

Viewed against the light both 20 and 50 piso notes have a 2mm wide embedded security threads.

4mm wide windowed security threads for 100, 200, 500 and 1000 banknotes. Viewed in different angles, its color changes from red to green. The front of the thread carries the initials of the BSP and the numeric denomination in repeated series as well as the back of the thread.

The 500 and 1000 piso banknotes now have optically variable device patch, a reflective foil. The patches changes colors from red to green when the note is rotated 90 degrees.

The security feature exclusive to the 1000 piso note is the optically variable ink for the embossed denominational value at the lower right corner of the face of the note and changes color from green to blue when viewed in different angles.

Take time.more time to get to know our new banknotes. Its our money our national symbols that make us proud to be FILIPINOS.