Change in the system of the Monetary Board: (2) from the Government, (5) from the private sector. Objectives:
Adoption of price stability
Conductive to a balance sustained growth
Maintenance of monetary stability
Convertibility of the peso
Bangko Sentral strengthens the regulations and supervision framework for banks and quasi-bank.
Chronology of Events: Central Banking in the Philippines
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. June 15, 1948
The bill was signed into law as Republic Act No. 265 (The Central Bank Act) by President Elpidio Quirino. January 3, 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.
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. 1986
Executive Order No. 16 amended the Monetary Board membership to promote greater harmony and coordination of government monetary and fiscal policies. July 3, 1993
The Bangko Sentral ng Pilipinas (BSP) was established to replace the CBP as the country’s central monetary authority.