Week 2 Flashcards
What is the Bangko Sentral ng Pilipinas (BSP)?
The central bank of the Philippines responsible for managing the country’s money supply and maintaining price stability.
The BSP acts as the banker’s bank and oversees the financial system.
What type of ownership does the BSP have?
Public ownership, fully owned and controlled by the Philippine government.
This characteristic ensures that the BSP operates in the public interest.
What is the BSP’s role as a monetary authority?
Sole authority to issue Philippine pesos and regulate the money supply.
This role is crucial for controlling inflation and ensuring economic stability.
What does it mean that the BSP acts as a ‘banker’s bank’?
Maintains accounts for commercial banks and acts as a clearinghouse for interbank transactions.
This function facilitates smooth operations within the banking system.
What is the primary goal of the BSP regarding price stability?
To maintain stable inflation levels through monetary policy adjustments.
Price stability is vital for economic growth and consumer confidence.
What is the BSP’s role in financial system oversight?
Supervises and regulates the banking system to ensure financial stability.
This oversight helps prevent financial crises and protects depositors.
What does it mean for the BSP to be a lender of last resort?
Provides emergency funding to banks facing liquidity issues.
This role is essential to maintain trust in the banking system during crises.
How does the BSP manage the payment system?
Oversees the efficiency and security of the national payment system.
A secure payment system is crucial for economic transactions.
What is one of the BSP’s functions related to economic research?
Conducts research to inform monetary policy decisions and provide economic insights.
This research supports evidence-based policy making.
What is the BSP’s role regarding currency issuance?
The sole issuer of the Philippine currency, including banknotes and coins.
This authority helps control the money supply in the economy.
What is the BSP’s responsibility in managing foreign currency reserves?
Manages foreign currency reserves to support the country’s financial stability.
Reserves are crucial for maintaining exchange rate stability.
What are the goals of the BSP? List at least two.
- Promoting and maintaining price stability
- Promoting a globally competitive economy and financial system
These goals aim to enhance the overall economic well-being of the country.
When was the BSP established?
Under the New Central Bank Act of 1993.
This act restructured the central banking system in the Philippines.
Fill in the blank: The BSP conducts _______ to promote price stability and a strong financial system.
monetary policy
Monetary policy includes tools like interest rate adjustments.
True or False: The BSP is responsible for determining the exchange rate policy.
True
The BSP’s policies directly impact the value of the Philippine peso.
What is the BSP’s role in liquidity management?
Manages liquidity to ensure stability in the banking system.
Effective liquidity management is essential for preventing bank runs.
What is the Sec 3, RA 7653 (New Central Bank Act)?
The primary objective of the BSP is to maintain price stability, promote financial stability, oversee the payment & settlement systems, and promote broad & convenient access to high-quality financial services
What is the 3 core functions of the BSP?
Price Stability, Financial Stability, and Efficient Payments & Settlements System
What is the Expansionary?
What is Contractionary?
What is the Inflation Targeting Process?
