The BSPís main primary objective is maintain price stability conducive to balanced and sustainable economic growth. The BSP also aims to promote and preserve monetary stability and the convertibility of the national currency.
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.
Functions of the BSP
Under the New Central Bank Act of 1993, the BSP performs the following functions, all of which relate to its status as the Republicís central monetary authority.
The BSP formulates and implements monetary policy aimed at influencing money supply consistent with its primary objective to maintain price stability.
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.
Lender of last resort.
The BSP extends discounts, loans and advances to banking institutions for liquidity purposes.
The BSP supervises banks and exercises regulatory powers over non-bank institutions performing quasi-banking 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.
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.
The BSP functions as the banker, financial advisor and official depository of the Government, its political subdivisions and instrumentalities and GOCCs.