Monetary Policy (Chapter 5)
The primary objective of BSP's monetary policy is to promote a low and stable inflation conducive to a balanced and sustainable economic growth.
Monetary Policy
refer to the buying/selling of government securities, lending/borrowing against underlying assets as collateral, acceptance of fixed-term deposits, foreign exchange swaps, and the use of other monetary instruments of the Bangko Sentral aimed at influencing the underlying demand and supply conditions for central bank money.
Monetary Operations
The promotion of "financial stability" is a formal mandate that is uniquely ascribed to the Bangko Sentral ng Pilipinas (BSP).
Systematic Risk Management
The bangko sentral has supervision over the operations of banks and exercised such regulatory powers as provided in the New Central Bank Act and other pertinent laws over the operations of finance companies and non-bank financial institutions performing quasi-bankinh functions.
Financial supervision
are essential to the effective functioning of financial system worldwide. They provide the channels through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial transactions across the entire economy.
Payments and Settlements System Oversight
The BSP has the exclusive power and authority to issue the national currency.
Currency Management
In line with its strategic mandate to promote broad and convenient access to high quality financial services and consider the interest of the general publid, the BSP undertakes various programd and policy initiatives aimed at enhancing financial inclusion, financial education, and consumer empowerment.
Inclusive finance
exercise the powers and functions of the BSP, such as the conduct of monetary policy and supervision of the financial system.
Monetary Board
is the BSP Governor, with five full-time members from the private sector and one member from the cabinet.
Chairman
is the chief executive officer of the BSP and is required to direct and supervise the operations and internal administration of the BSP.
Governor
is a set of institutions, such as banks, insurance companies, and stock exchanges, that permit the exchange of funds.
Financial System
refers to the measures or actions taken by the central bank to influence the general price level and the level of liquidity in the economy.
Monetary Policy
are aimed at influencing the timing cost and availability of money and credit and for other financial factors for the purpose of influencing the price level.
Monetary Policy Actions
is an activity by a central bank to exchange liquidity in its currency with a bank or a group of banks.
Open Market Operations
(of a central bank) discount (a bill of exchange or similar instrument) that has already been discounted by a commercial bank.
Rediscounting
the amount of funds that a bank holds in reserve to ensure that it is able to meet liabilities in case of sudden withdrawals.
Reserve requirement
a control that is directly imposed upon the manufacturing, pricing, and distribution of specific goods in contrast with an indirect or general control (such as a credit and fiscal policy) that affects the economy in its entirety and specific goods only indirectly.
Direct Controls
the act of persuading a person or group to act in a certain way through rhetorical appeals, persuasion, or implicit and explicit threats—as opposed to the use of outright coercion or physical force.
Moral Suasion