1. Powers and Functions of the Monetary Board

Powers and Functions of the Monetary Board

The powers and functions of the Bangko Sentral are exercised by the Monetary Board, which is composed of seven members appointed by the President of the Philippines for a term of six years¹. In the exercise of its authority, the Monetary Board is empowered to issue rules and regulations necessary for the effective discharge of its responsibilities and powers, which must be reported to the President and the Congress within fifteen days from their issuance². The Board also directs the management, operations, and administration of the Bangko Sentral, reorganizes personnel, exercises exclusive supervision and control over its legal units, and establishes the human resource management system governing all personnel².

The Bangko Sentral provides policy directions in the areas of money, banking, and credit, exercising supervision over the operations of banks and regulatory and examination powers over quasi-banking operations of non-bank financial institutions³. As may be determined by the Monetary Board, regulatory and examination powers are likewise exercised over money service businesses, credit granting businesses, and payment system operators, and the Monetary Board is expressly empowered to authorize entities or persons to engage in money service businesses³. Additionally, confidential data gathered on individuals and firms other than banks may not be made available outside the Bangko Sentral except by court order or under conditions prescribed by the Monetary Board⁴.

The Bangko Sentral, through the Monetary Board, exercises police power to summarily close an erring bank without prior hearing upon finding that the institution cannot continue in business without probable losses to depositors or creditors⁵. In Aguilar v. Pilipinas, G.R. No. 254333, 14 January 2025, the Supreme Court ruled that the Monetary Board's decision to close a bank is a discretionary act and not a ministerial duty compellable by mandamus⁵. The Monetary Board's factual findings regarding insufficient realizable assets and operating losses are generally binding on the courts, and under Section 30 of Republic Act No. 7653, as amended, any action assailing the closure resolution may only be brought via a petition for certiorari filed by stockholders of record representing the majority of the capital stock within ten days from receipt of the order⁵.