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Following the collapse of the old central bank under US$11billion of debt, president Fidel Ramos signed on June 14 1993 the Republic Act Number 7653, better known as the New Central Bank Act. According to Gabriel Singson, governor of the Bangko Sentral ng Pilipinas, "the bank's mandate, as provided [for in the Act] continues to be the maintenance of price stability."
The New Central Bank Act guarantees the independence of Bangko Sentral's seven-member governing board. Key is the provision of a Ps50 billion capitalization to Bangko Sentral which will be fully paid in by the government over a two-year period. Other measures include fiscal and administrative autonomy, the prohibition of development financing and the gradual phasing out of all other peripheral functions.
Philippine monetary policy is designed to "support the liquidity requirements of a targeted rate of economic growth while keeping inflation at a manageable level". The country's target for M3 expansion in 1994 is 13.5%. "However, M3 and the other monetary aggregates,"...