The document discusses economics policies and monetary policy. It explains that there are three types of economics policies: monetary policy, fiscal policy, and trade policy. Monetary policy is concerned with managing the money supply through tools like interest rates, reserve requirements, and buying/selling government bonds. The quantity theory of money explains that the price level is directly proportional to the money supply. The document also outlines the role and functions of the central bank, including the Bangko Sentral ng Pilipinas, in implementing monetary policy and promoting price stability, financial stability, and efficient payments systems.

1. Economics Policies

2. Introduction
The government formulates economics
policies to achieve growth and development.
Thre are Three types of Economics polocies.
These are Monetary Policy, Fiscal Policy and
Trade policy.

3. Monetary Policy
Monetary policy is concerned with managing
the amoun of money in circulation. Monetary
policies may lead to increasingng or
decreasing th e volumeo of money supply in
circulation.

4. These include the following:
• Increasing or decreasing the interest rates
• Increasing or decreasing the reserve
requirements
• Increasing or decreasing the rediscounts rates
• Buying or selling the government bonds

5. Money supply refers to money in circulation. It
includes currency in circulation (Paper money
and coins issued by the Central Bank),
checking accounts (checks), savings and time
deposits. Money is used as a medium of
exchange, store of value and unit of account.

6. Monetary Theory
Monetary theory is simply the theory of the
value of money. The value of money refers to
its purchasing power. There is a popular
monetary theory which is the quantity theory
of money of money of the classical economist.
Such theory explains that’s:
MV=PQ

7. • M is the quantity of money or money supply
• Q is the number of goods and services
• P is the average price level of goods and
services
• V is the income velocity of money or the
number of times money is spent in one year.
•

8. Central Bank and Bangko Sentral
ng Pilipinas
Central Bank
A central bank is the central monetary authority
which provides monetary policy that cover the
areas of money, credit, and banking.
Central banking in the philippines started during
the term of President Elpidio Quirino where
The Central Bank Act(R.A. No. 265) was signed into
law on 15 June 1948 inaugurating the Central
bank of the philippines(CBP).

9. President Ferdinand Marcos signed Presidensial
Decree(PD) No. 72 that widened the scope of
the authority of CBP (under R.A No. 261): it
has the authority not only on the monetary
anf banking system, but on the entire financial
system well.

10. The objectives of the central bank have evolved
over the years since it’s establishment to make to
make it more responsive to the changing
economic conditions. In 1993, the old CBP was
restructured to pave way for the creation of the
banko Sentral ng Pilipinas(BSP) under the
enacment of R.A No. 7653 (effective 3 July 1993)
otherwise known as the New Central bank Act.

11. Bangko Sentral ng Pilipinas
The primary mandate of the BSP is, “to promote
price stability conducive to a balanced and
sustainable growth of the economy”, Par. 2,
Sec. 3 R.A. No. 7653. Aside from its main
responsibility, the BSP also have the following
functions through the years since 1993.

12. The BSP focuses on three main areas
• Price Stabilityt. This refers to the condition of low and
stable inflation rate. The BSP uses monetary policy to
help keep inflation low and stable.
• Financial Stabality. The BSP makes sure that financial
institution(bank and nonbank) follow the prudential
rules and regulations. It also ensures the protection of
depositors and investors and the prevebtion of
financial institution failures.
• Efficient Payments and Settlements System. The BSP
guarantees that the settlements of financial
transactions of the general public are safe, timely, and
accurate.