10 UST Golden Notes - Banking.pdf - UST GOLDEN NOTES 2011 Government through the Secretary of Finance and the Secretary of Budget and Management may

10 UST Golden Notes - Banking.pdf - UST GOLDEN NOTES 2011...

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UST G OLDEN N OTES 2011 M ERCANTILE L AW T EAM : A DVISER : A TTY . A MADO E. T AYAG ; S UBJECT H EAD : E ARL M. L OUIE M ASACAYAN ; A SST . S UBJECT H EADS : K IMVERLY A. O NG & J OANNA M AY D.G. P EÑADA ; M EMBERS : M A . E LISA J ONALYN A. B ARQUEZ , A NGELI R. C ARPIO , A NTONETTE T. C OMIA , A LBAN R OBERT L ORENZO F. D E A LBAN , J OEBEN T. D E J ESUS , C HRIS J ARK A CE M. M AÑO , A NNA M ARIE P. O BIETA , R UBY A NNE B. P ASCUA , F LOR A NGELA T. S ABAUPAN , G IAN F RANCES N ICOLE C. V ILCHES BANKING LAWS # I. THE NEW CENTRAL BANK ACT (RA 7653) Q: What is Bangko Sentral ng Pilipinas (BSP)? A: The state s central monetary authority; it is the government agency charged with the responsibility of administering the monetary, banking and credit system of the country and is granted the power of supervision and examination over bank and non bank financial institutions performing quasi banking functions, including savings and loan associations. (Busuego vs. CA, G.R. No. L 48955, June 30, 1987) A. STATE POLICIES Q: What are the policies of the state with respect to the creation of the BSP? A: 1. The State shall maintain a central monetary authority that shall function and operate as an independent and accountable body corporate in the discharge of its mandated responsibilities concerning money, banking and credit. 2. In line with this policy, and considering its unique functions and responsibilities, the central monetary authority established under this Act, while being a government owned corporation, shall enjoy fiscal and administrative autonomy (Sec. 1.) B. CREATION OF THE BANGKO SENTRAL NG PILIPINAS Q: What are the salient considerations on the creation of BSP? A: 1. It is established as an independent central monetary authority. 2. Its capital shall be P50,000,000,000, to be fully subscribed by the Philippine Government. 3. The P10,000,000,000 of the capital shall be fully paid for by the Government upon the effectivity of this Act and the balance to be paid for within a period of 2 years from the effectivity of this Act in such manner and form as the Government, through the Secretary of Finance and the Secretary of Budget and Management, may thereafter determine. (Sec. 2) C. RESPONSIBILITY AND PRIMARY OBJECTIVE Q: What are the responsibilities of BSP A: 1. To provide policy directions in the areas of money, banking, and credit 2. To supervise bank operations 3. To regulate the operations of finance companies and non bank financial institutions performing quasi banking functions, and similar institutions. (Sec. 3) Q: What are the primary objectives of BSP A: 1. To maintain price stability conducive to a balanced and sustainable growth of the economy. 2. To promote and maintain monetary stability and the convertibility of the peso. (Sec. 3) Q: What are the function of BSP 1. Issuer of currency. (Sec. 49 60) 2. Custodian of reserves. (Secs. 64 66, 94, 103) 3. Clearing channel or house; especially where the PCHC does not operate . (Sec.
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