Major Functions of the Monetary Board:

-issue rules and regulations it considers necessary

for the effective discharge of the responsibilities
and exercise of the powers vested in it;
-direct the management, operations, and
administration of Bangko Sentral, organize its
personnel and issue such rules and regulations as
it may dee necessary or desirable for this purpose;
-establish a huan resource management system
which governs the selection, hiring, appointment,
transfer, promotion, or dismissal of all personnel;
-adopt an annual budget for and authorize such
expenditures by Bangko Sentral;
-indemnify its members and other officials of
Bangko Sentral;

BSP, as the central monetary authority of the

country,
is expected to provide the country with a safer,
more
flexible, and more stable and healthy monetary and
financial system that will help support a stronger
economy. It is enjoined to:
*maintain monetary policies conducive to a balanced and
sustainable growth of the economy;
*maintain price stability in the country;
*promote and maintain monetary stability and the
convertibility of the peso;
*maintain stability of the financial system;
*provide payment and other financial services; and
*supervise and regulate depository institutions.

Functions of BSP
1. Bank of Issue- BSP has the monopoly of printing
money bills and minting money coins.

2. Government's banker, agent, and adviser- BSP

handles the banking accounts of government

agencies and instrumentalities.

3. Custodian of the cash reserves of banks- all

banks are regulated to have adequate reserves

with BSP in proportion to their deposit liabilities
to ensure availability of cash to depositors who
wish to withdraw deposits.

4. Custodian of th nation's reserves of international currencythe early years of central banking required central
banks to maintain a minimum reserve of golds, and
later of international currency, as a guarantee for its
issuance of currency bills or notes and deposit
liabilities.

5. Bank of rediscount and lender of last resort- The

rediscounting function of the central bank means the

central bank lends money to the banks in distress on
the basis of their promissory notes or the promissory
notes of the bank borrowers.

6. Bank of central clearance and settlement- the central

bank acts as a sort of clearing house.

7. Controller of credit- controlling money supply requires

controlling credit.

Monetary Policy and the Financial

System
Monetary Policy refers to the manipulation of

the money supply to affect the economy of the

country as a whole.
Among the tools of monetary policy are money
supply, open market operations, reserve
requirements on banks, discount rate, interest
rate, credit control, among others.