ST.

JOHN PAUL II COLLEGE OF DAVAO

COLLEGE OF BUSINESS
Physically Detached Yet Academically Attached

SIMPLIFIED COURSE PACK (SCP) FOR SELF-DIRECTED

LEARNING

FM107 – Monetary Policy and Central Banking

This Simplified Course Pack (SCP) is a draft version only and may not
be used, published or redistributed without the prior written consent of
the Academic Council of SJPIICD . A content of this SCP is only
intended for the consumption of the students who are officially enrolled
in the course/subject. Revision and modification process of this SCP
are expected.

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 ST. JOHN PAUL II COLLEGE OF DAVAO
COLLEGE OF BUSINESS

Physically Detached Yet Academically

Attached

Vision By 2023, a recognized professional institution providing quality, economically

accessible, and transformative education grounded on the teachings of St. John Paul II.

Serve the nation by providing competent JPCean graduates through quality teaching

Mission and learning, transparent governance, holistic student services, and meaningful
community-oriented researches, guided by the ideals of St. John Paul II.

Respect

Hard Work
Core Values Perseverance
Self-Sacrifice
Compassion
Family Attachment
Inquisitive

Graduate Attributes Ingenious

Innovative
Inspiring
Course Code/Title FM107-Monetary Policy and Central Banking
This course is designed to develop an understanding of financial institution and financial
markets and their relationship to public policies and management policies. Included are
studies of market structure, profit strategies of market structure, profit strategies,
relationship commercial banks and other financial institutions, problems of assets and
liability management and theory of interest and asset prices. This course explores
barter, payments and a money economy, money inflation, interest rates and outputs,
Course Description intermediation and the financial system, financial instruments, markets and institution,
interest rates and term structures, financial service industry, origin of banks ; why is the
financial industry special, banking and financial regulations, risk in financial
intermediation. Money creation and central banking, multiple deposit creation, demand
and supply for money and reserves, deposit creation by banks and the role of a central
bank, instruments of monetary policy, operation if the monetary board, central banking
chapters, crosses, models and curves, monetary theories, policies, ideas and results.
Course Requirement Critique Paper & Case Study
Time Frame 54 Hours
“Based 40” Cumulative Averaging Grading System

Grading System Periodical Grading = Attendance (5%) + Participation (10%) + Quiz (25%) + Exam

(60%)
Final-Final Grade = Prelim Grade (30%) + Midterm Grade (30%) + Final Grade (40%)
Contact Details
Instructor Charbie R. Castanares (09163729826)
Dean/Program Head Brian Shane M. Cortes, MBA (09291777303)
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COLLEGE OF BUSINESS
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Course Map

Monetary Policy and Central Banking - Simplified Course Pack (SCP)

SCP-Topics: Prelim Period SCP- Topics: Midterm Period SCP- Topics: Final Period

Week 1 The Role of Central Banks Week 7 Federal Reserve System Week 13 Monetary Policy

Week 2 Context of monetary policy Central Banks Role in the

The transmission mechanism of
Week 8 Administration of exchange Week 14
control monetary policy

Week 9 Central Banks Role in the

Week 3 Balance sheet of central banks Week 15 BSP Monetary Policy
Government

CB’s role in supervision of the

Week 4 Modern Banking Week 10
Week 16 BSP COINS and NOTES
payment system

Function Supervising and

Week 5 Central Banks functions Week 11 Regulating Financial Institutions Week 17 BSP Inclusive Finance
and Activities

Week 6 Prelim Examination Week 12 Midterm Examination Week 18 Final Examination

 Course Outcomes
1. Discuss the public economics of monetary policy.
2. Explain the essence of central banking, the relationship of government, central banks and
banks.
3. Explain the process of money accounting and creation
4. Recognize the different aspect of monetary policy, and
5. Analyze debt and its importance in the financial system.

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 ST. JOHN PAUL II COLLEGE OF DAVAO

COLLEGE OF BUSINESS
Physically Detached Yet Academically Attached

Welcome Aboard! This course covers topics on monetary policies

on central banking. This includes subjects such as financial
institutions, financial markets policies, money inflation, and
financial system, instruments, service industry, intermediation,
money creation, multiple deposit, demand and supply for money
and reserves, monetary policy, operation, models, theories and
banking. You would be able to appreciate the importance of this
course and its role in the success of a business. With the proper
understanding, practice and application in the monetary and
central banking you will arrive on a quality output which will equip
you as a future business Entrepreneurs.

SCP-TOPICS: PRELIM PERIOD TOPICS

Week 16 BSP COINS and NOTES

Lesson Title Coins and Notes - New Generation Currency Banknotes
Learning Outcome(s) Describe the Banko Sentral ng Pilipinas Coins and Notes and
unique features.
Time Frame 3 Hours

At SJPIICD, I Matter!
I
LEARNING NTENT!
Terms to Ponder
This section provides meaning and definition of the terminologies
that are significant for better understanding of the terms used
throughout the simplified course pack of Monetary Policy and Central
Banking. As you go through the labyrinth of learning, in case you will
be confronted with difficulty of the terms refer to the defined terms for
you to have a clear picture of the learning concepts.

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Coins a flat, typically round piece of metal with an official stamp, used as
money.

Bank Notes a piece of paper money, constituting a central bank's promissory

note to pay a stated sum to the bearer on demand.

Essential Content

Coins and Notes

The Bangko Sentral ng Pilipinas has the exclusive power and authority to issue coins
and notes for circulation in the Philippines. The BSP has recently launched enhanced
Philippine coins and notes that are more responsive to the needs of the elderly and the
visually impaired, and feature the latest anti-counterfeiting technology. It also issues
legal tender commemorative coins and notes of limited quantity to celebrate or
recognize the significance of a person, place and event in Philippine history.

History of Philippine Money

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Coins and Notes - BSP Coin Series

BSP Coin Series (1995 – Present)

In 1995, a new set of coins and notes was issued which carried the logo of the new
BSP: 5- and 1-piso and 25-, 10-, 5- and 1-sentimo. On July 10, 2001, BSP issued the
10-piso coin for general circulation to commemorate its 8th year anniversary. It has
the profiles of Andres Bonifacio and Apolinario Mabini in a con-joint or in tandem
manner on the obverse side. The reverse side bears the seal of the Bangko Sentral ng
Pilipinas which is consistent with the common reverse design of the other six
denominations. This has been an additional denomination to the current coin
circulation and a replacement for the 10-piso NDS banknote.

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Coins and Notes - Coins

New Generation Currency Coin Series

New Generation Currency (NGC) Coin Series

On 26 March 2018, the BSP released the New Generation Currency (NGC) Coin
Series comprised of the 10-Piso, 5-Piso, 1-Piso, 25-Sentimo, 5-Sentimo and the
1-Sentimo into circulation.

These NGC coins feature three national heroes (Apolinario Mabini in the 10-
Piso, Andres Bonifacio in the 5-Piso and Jose Rizal in the 1-Piso), a stylized
three stars and a sun in the 25-, 5- and 1-Sentimo, the BSP logo, and endemic
flora consistent with the design of the NGC Banknote Series that highlights
Philippine fauna.

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The NGC Coin Series and the BSP Coin-Ed Campaign were among the top
three finalists in the Best New Circulating Coins and Best Public Education
Program categories, respectively, awarded by the International Association of
Currency Affairs (IACA) during the Excellence in Currency 2019 Coin Awards
at the biennial Coin Conference in Rome, Italy on 15 October 2019.

On 17 December 2019, the BSP released the new 20-Piso NGC coin and the
enhanced 5-Piso NGC coin with nine sides which are the latest to be circulated
under the BSP’s NGC Coin Series. The bi-color 20-Piso coin retains major
elements of the 20-piso banknote. The obverse side of the coin features Manuel
L. Quezon, while the reverse side shows the BSP logo, the Malacañan Palace,
and the Nilad plant.

The NGC Coin Series design features enhanced the aesthetics and security of
the coins. In particular, micro-printed details using laser-engraving technology
were included in the 20-Piso, 10-Piso and 5-Piso, which makes it difficult for
these coins to be duplicated using traditional coin counterfeiting methods. The
metallic composition of the NGC coins also discourages the illegal practice of
hoarding large quantities of coins for the extraction of their metal content.

The new 20-Piso and enhanced 5-Piso NGC coins shall co-exist as legal tender
with the currently-circulating 20-Piso NGC banknotes and round 5-Piso NGC
coins, which will be removed from circulation through natural attrition.

The BSP enjoins the public to properly use and recirculate our Philippine coins
for their economic and cultural value.

Banknotes: Coins and Notes - New Generation Currency Banknotes

New Generation Currency Banknote Series

New Generation Currency Series (2010-present)

In 1995, a new set of coins and notes was issued In 2009, the Bangko Sentral
ng Pilipinas announced that it launched a massive redesign for current
banknotes and coins to further enhance security features and improve
durability. The members of the numismatic committee include Bangko Sentral

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Deputy Governor Diwa Guinigundo and Dr. Ambeth Ocampo Chairman of the
National Historical Institute. The new banknote design features famous
Filipinos and iconic natural wonders. Philippine national symbols will be
depicted on coins. To provide a smooth transition from the New Design Series
to New Generation Currency series, BSP purposely retained some NDS
features, such as, the size, predominant colors and the featured personalities
in the NGC, except for the portrait of President Corazon Aquino which is an
added portrait on the 500-piso note. The BSP started releasing the initial batch
of new banknotes on December 16, 2010. The NGC will co-exist with the NDS
approximately until 2014, while BSP is building up its capability to print and
produce NGC banknotes with the latest anti-counterfeiting security features
incorporated through advanced technologies, benchmarked worldwide. Color
plays an important part in the design, accentuating key elements such as value
numerals, seals and note edges. The inclusion of large intaglio printed
numbers on the front differentiates each denomination to provide assistance
for the visually impaired.

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COLLEGE OF BUSINESS
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 ST. JOHN PAUL II COLLEGE OF DAVAO

COLLEGE OF BUSINESS
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Coins And Notes - Demonetized Coins and Notes

Demonetization of the Old Banknote Series

Demonetization is the process by which a central bank removes the monetary value of
a legal tender currency it issues. Demonetized currencies are no longer accepted as
payment for goods and services.

The process of demonetization is widely practiced throughout the world, though

reasons for demonetizing can be varied. Among the common reasons are the following:

 The prevention of counterfeiting

 Benchmarking with other countries
 A change in the type or form of government
 A change in the type of currency as part of political or social reform

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 Redefining the value of money in response to hyperinflation

 Shift to a single design series of currency in countries where more than one
series are in circulation

The BSP is demonetizing the old banknote series as a way to safeguard the integrity of
our currency. As a matter of practice, central banks around the world change the
design of their currencies that have been in circulation for over 10 years. In the case of
the Philippines the old banknote series, introduced in 1985 or 30 years ago, is being
replaced by the New Generation Currency (NGC) series which was launched in 2010.

Demonetization is within the BSP’s jurisdiction as stated in RA No. 7653, or The New
Central Bank Act.

The Bangko Sentral may call in for replacement of notes of any series or denomination
which are more than five (5) years old and coins which are more than ten (10) years old.
Notes and coins called in for replacement in accordance with this provision shall remain
legal tender for a period of one year from the date of call. After this period, they shall
cease to be legal tender but during the following year, or for such longer period as the
Monetary Board may determine, they may be exchanged at par and without charge in
the Bangko Sentral and by agents duly authorized by the Bangko Sentral for this
purpose. After the expiration of this latter period, the notes and coins which have not
been exchanged shall cease to be a liability of the Bangko Sentral and shall be
demonetized. The Bangko Sentral shall also demonetize all notes and coins which have
been called in and replaced.

 English Series
 Pilipino Series
 Ang Bagong Lipunan Series
 Flora and Fauna Series
 Improved Flora and Fauna Series
 New Design Series

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 ST. JOHN PAUL II COLLEGE OF DAVAO

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Coins And Notes - Commemorative Currency

Commemorative Coins
Commemorative coins may vary in size with the ordinary circulation coins. These
coins were minted to honor a specific person or recognize the significance of a place or
event that made a mark in the history of Philippines. Most of these commemorative
coins are minted from precious metals like gold and silver making them extraordinary
and more expensive. The following are the commemorative Philippine Peso coins
issued since 1947:

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ST. JOHN PAUL II COLLEGE OF DAVAO

COLLEGE OF BUSINESS
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ST. JOHN PAUL II COLLEGE OF DAVAO

COLLEGE OF BUSINESS
Physically Detached Yet Academically
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 ST. JOHN PAUL II COLLEGE OF DAVAO

COLLEGE OF BUSINESS
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 Coins And Notes - Commemorative Currency

Commemorative Notes
Commemorative notes are being issued by the Bangko Sentral ng Pilipinas (BSP) to
memorialize an event of historic significance to the country. Usually, these are in
limited volume, set apart from the banknotes intended for circulation and overprinted
with an emblem or text descriptive of the theme or occasion being celebrated. In 1998,
when the Philippines celebrated 100 years of independence from Spanish rule, the
BSP issued commemorative notes specially designed `for the occasion which were
made bigger than the circulation notes. In fact, the 100,000-piso Centennial
Commemorative Note was recorded as the largest banknote in 1998 in the Guinness
Book. The following are the commemorative banknotes which the BSP has issued
since 1990:

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 ST. JOHN PAUL II COLLEGE OF DAVAO

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Title Price Description

Coral Box 3525 Coral Box Blue

Blue (Large)
(Large)

Coral Box 2520 Coral Box Blue

Blue (Medium)
(Medium)

BSP Ruler 10 BSP Ruler -

- Savings Savings

Refrigerato 90 Refrigerator
r Magnet: Magnet: 10-Piso
10-Piso People Power
Coin

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ST. JOHN PAUL II COLLEGE OF DAVAO

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Title Price Description

BSP 520 BSP Umbrella -

Umbrella - Folding
Folding

BSP T- 180
BSP T-Shirt (Sari-
Shirt Sari Vendor,
Sarimanok)

BSP Puzzle 100

BSP Puzzle Cube
Cube

BSP 95 BSP Square

Square Notepad (BSP
Notepad Painting
Collection)

BSP 35 BSP Notepad

Notepad (BSP Pottery
Collection)

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Title Price Description

BSP Mug 125

BSP Mug
(Still Life)

BSP Fan 35
BSP Fan
(Interaction
Painting, Tabing
Ilog)

Foldable 331 Foldable Duffel

Duffel Bag Bag

BSP Eco 50
BSP Eco Bag -
Bag - Three Pillars of
Three Central Banking
Pillars of
Central
Banking

BSP 300 BSP Canvas Bag -

Canvas (Bandera
Bag - Española)
(Bandera
Española)

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 ST. JOHN PAUL II COLLEGE OF DAVAO

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Title Price Description

BSP 430 BSP Canvas Bag -

Canvas (Serenade, Tabing
Bag - Ilog)
(Serenade,
Tabing
Ilog)

Insulated 250 Insulated Lunch Bag -

Lunch Bag Abstraction (Birds)
1200 4-Zippered Currency

4-Zippered
Currency Leather Wallet
Leather
Wallet

4-Wheel 3000 4-Wheel Luggage Bag

Luggage 2800 Text Book/Reference
Bag

The Story of
Philippine Book
Central
Banking:
Stability and
Strength at
Seventy

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ST. JOHN PAUL II COLLEGE OF DAVAO

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The Bangko 2200 Text Book/Reference

Sentral and Book
the
Philippine
Economy -
Softbound
The Bangko 2700 Text Book/Reference

Sentral and Book

the
Philippine
Economy -
Hardbound

Tanaw: 3750 Tanaw: Perspectives

Perspectives on the BSP Painting
on the BSP Collection - Book
Painting Jaime Laya Alice
Collection - Guillermo Cid Reyes
Book Ma. Victoria Herrera
Philippine 2000 Fatima Lasay Edited
by: Ramon E.S.
Lerma

Text Book/Reference
Central Book
Banking: A
Strategic
Journey to
Stability

Money and 500 Text Book/Reference

Banking in Book
the
Philippines -
Soft Bound

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Likha: 6000 Coffeetable Book

Enduring Likha: Enduring
Legacies of Legacies of Filipino
Filipino Artistry The
Artistry Decorative Arts
The Collection of the
Decorative Bangko Sentral ng
Arts Pilipinas Corazon
Collection of Alvina Esperanza B.
the Bangko Gatbonton Martin I.
Sentral ng Tinio Jr. Cynthia O.
Pilipinas Valdez Ramon N.
Villegas

Central 2600 Text Book/Reference

Banking in Book Central Banking
Challenging in Challenging Times:
Times: The The Philippine
Philippine Experience The
Experience Macroeconomic
Perspective by
Governor Amando M.
Tetangco, Jr. Edited
by Dr. Vicente B.
Valdepeñas, Jr.
200 Tanaw: Perspectives
"Tanaw":
Perspectives on the BSP Painting
on the Collection - CD of the
Bangko Catalogue Jaime
Sentral ng Laya Alice Guillermo
Pilipinas Cid Reyes Ma.
Painting Victoria Herrera
Collection Fatima Lasay Edited
by: Ramon E.S.
Lerma
1800 Coffeetable Book
50 Years of
Central 1500 Text Book/Reference
Banking in
the
Philippines -
Hard Bound

Banking
Laws of the Book
Philippines
Book II - The
General
Banking Law
(Annotated)

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Ma'i - 500 Coffeetable Book

Panorama of
the
Philippine
Primeval

SELF -SUPPORT: You can click the URL Search Indicator below to help you further understand the lessons.
Search Indicator

Bangko Sentral ng Pilipinas: Coins and Notes - New Generation Currency

Banknotes https:// www.bsp.gov.ph/SitePages/ CoinsAndNotes/
NewGeneration Currency Banknotes.aspx#

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 ST. JOHN PAUL II COLLEGE OF DAVAO

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LET’S IINITIATE!
1. Under what authority does the Bangko Sentral ng Pilipinas (BSP)
issue currency?

2. What are New Generation Currency banknotes?

3.What What are the reasons for the conversion of the 20-Piso banknote
into coin?

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I
LET’S NQUIRE!
Activity 1. Let us try to check your understanding of the topics.

1.) How does the BSP determine the volume/value of notes and
coins to be issued annually?

2.) What will happen to the BSP Coin Series currently in

circulation?

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LET’S INFER!
Activity 1

What are the enhancements on the design and security features of the NGC
banknotes?

 Security Thread

 Optically Variable Ink (OVI)

 Tactile Marks

 Enhanced Value Panel for 1000-Piso and 500-Piso

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