Question & AnswerQ&A (Republic Act No. 265)
The capital of the Central Bank of the Philippines is ten million (P10,000,000) pesos, appropriated from the assets of the Exchange Standard Fund.
The objectives are: (a) To maintain monetary stability in the Philippines; (b) To preserve the international value of the peso and its convertibility into other freely convertible currencies; and (c) To promote a rising level of production, employment, and real income in the Philippines.
The Monetary Board is composed of seven members: (a) Secretary of Finance (presiding officer); (b) Governor of the Central Bank; (c) President of the Philippine National Bank; (d) Chairman of the Board of Governors of the Rehabilitation Finance Corporation; and (e) Three other members appointed by the President with the consent of the Commission on Appointments.
Members must be of good moral character, unquestionable integrity and responsibility, and have recognized competence in banking, finance, commerce, agriculture, or industry. The Governor and deputy-governors must be competent in banking and must be natural-born Filipino citizens.
Yes, the President may remove a member for disqualification, fraudulent or illegal acts opposed to the aims of the Central Bank, or losing qualifications.
The Central Bank has the sole right and authority to issue currency within the Philippines. No other person or entity may circulate money or notes as currency.
The Central Bank may buy and sell gold and foreign currencies, engage in foreign exchange transactions with authorized entities, determine exchange rates within prescribed margins, and impose emergency restrictions during exchange crises.
Banks are required to maintain reserves against deposit liabilities, generally as peso deposits with the Central Bank. The Monetary Board can prescribe minimum reserve ratios for different deposit types, ranging from not less than 5% or more than 25% for time and savings deposits, and not less than 10% or more than 50% for demand deposits.
Refusal to report or permit examination can be punished by a fine up to ten thousand pesos or imprisonment up to one year, or both. Making false statements can be punished by a fine up to fifteen thousand pesos or imprisonment up to two years, or both.
The Central Bank acts as the fiscal agent and banker of the Government and its political subdivisions, handles representation with international financial institutions, serves as official depository, opens cash accounts for the Treasury, and may engage other banks as agents for fiscal operations.