Financial Structure and Monetary Policy in the Philippines

  • S. Y. Lee
  • Y. C. Jao
Chapter

Abstract

The financial structure comprises the Monetary Authorities (Central Bank of the Philippines and the Ministry of Finance), 32 commercial banks, 931 rural banks, 10 savings banks, 37 development banks, 72 stock savings and loans associations, 250 finance companies, 12 investment houses, 59 investment companies, 448 pawnshops, and various specialised financial institutions (Table 7.1 and Appendix 4). Some of the financial institutions are government- or semi-government-owned, e.g. the Philippine National Bank, the Philippine Veterans Bank, the Development Bank of Philippines, Land Bank, Philippine Amanah Bank, and the specialised, non-bank institutions. The public sector plays an important part in the financial system in terms of the share of Government financial institutions’ assets to the total assets of the financial system and the share of Government financial institutions’ lending to the total.

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Notes and References

  1. 11.
    See The World Bank, The Philippines: Priorities and Prospects for Development, July 1976, Chapter 8, ‘Industrial Growth, Employment and Investment’; and Chapter 9, ‘The Changing Role of Industry’, pp. 186–237. Also Frank H. Golay, op. cit. Chapter XI, ‘Industrialization Policy’, pp. 241–65.Google Scholar
  2. 13.
    The LBP is engaged in financing the acquisition by the Government of agricultural landed estates that are subsequently sub-divided and sold to tenant-farmers on instalment or amortisation basis. The Ministry of Agrarian Reform undertake the allocation of lots and issuance of Certificates of Land Transfer to tenant-beneficiaries. See Land Bank of the Philippines, Annual Reports, 1978, p. 6.Google Scholar
  3. 17.
    For the consolidated assets and liabilities of all development banks, see Statements of Condition of the Development Bank of Philippines and Private Development Banks, as reported in the Central Bank of the Philippines, Statistical Bulletin, as appendix to the Annual Report 1978, pp. 111–12;Google Scholar
  4. and Central Bank of the Philippines, Philippines Financial Statistics, December 1979.Google Scholar
  5. 18.
    See Development Bank of the Philippines, Annual Report 1978, pp. 6–17.Google Scholar
  6. 20.
    For the assets and liabilities of savings banks, see the ‘Statements of Condition of Savings Banks’, as reported in the Central Bank of the Philippines, Statistical Bulletin, Appendix to the Annual Report 1978, p. 107.Google Scholar
  7. 24.
    Source of basic data: Central Bank and National Economic and Development Authority (NEDA). See Private Development Corporation of the Philippines, Philippine Business Review, Vol. XII, No. 3, 3rd Qr. 1979, pp. 2–3. Similarly, the subsequent figures in this sector are from that same source.Google Scholar
  8. 28.
    See Frank H. Golay, The Philippines: Public Policy and National Economic Development (Ithaca: Cornell University Press, 1961), pp. 214–17.Google Scholar
  9. 29.
    For the changes in legal reserve requirements since 1949, see the Central Bank of the Philippines, Statistical Bulletin (appendix to the Annual Report, 1978), p. 4.Google Scholar
  10. 30.
    Quoted from the Central Bank of the Philippines, Annual Report, 1978, p. 5.Google Scholar
  11. 36.
    Quoted from Central Bank of the Philippines, Annual Report, 1978, p. 5.Google Scholar
  12. 39.
    For a detailed analysis of the monetary growth on quarterly basis, see Federal Reserve Bank of San Francisco, Pacific Basin Economic Indicator, June 1980, p. 50:Google Scholar
  13. 40.
    See A. Marshall, Money, Credit and Commerce (London: Macmillan, 1923). He had a monetary equation, which had long been forgotten, although his simplier equation (M = kY) is well-known:Google Scholar
  14. 43.
    See Jose Encarnacion and Amado A. Castro, ‘A Monetary Submodel of the Philippine Economy, 1950–69’, Philippine Economic Journal, No. 22, Vol. XI, No. 2 (Second Semester 1972); Edita A. Tan, ‘Considerations for changing the Interest Rate Policy’ (Quezon City: UPSE-IEDR), Discussion Paper No. 74–7, 1974; and Edita A. Tan, ‘Philippine Monetary Policy and Aspects of the Financial Market: a Review of the Literature’, unpublished manuscript presented to the University of the Philippines.Google Scholar

Copyright information

© S.Y. Lee and Y.C. Jao 1982

Authors and Affiliations

  • S. Y. Lee
    • 1
  • Y. C. Jao
    • 2
  1. 1.National University of SingaporeSingapore
  2. 2.University of Hong KongChina

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