Business ethics

Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with noneconomic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporations promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters. Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." [1] Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. [2] Ethics implicitly regulates areas and details of behavior that lie beyond governmental control. [3] The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.

BangkoSentralngPilipinas
y Objectives

The BSPs main primary objective is maintain price stability conducive to balanced and sustainable economic growth. The BSP also aims to promote and preserve monetary stability and the convertibility of the national currency. y Responsibilities

The BSP provides policy directions in the areas of money, banking and credit. It supervises operations of banks and exercises regulatory powers over non-bank financial institutions with quasi-banking functions.

Functions of the BSP

Under the New Central Bank Act of 1993, the BSP performs the following functions, all of which relate to its status as the Republics central monetary authority. y Liquidity Management.

The BSP formulates and implements monetary policy aimed at influencing money supply consistent with its primary objective to maintain price stability. y Currency issue.

The BSP has the exclusive power to issue the national currency. All notes and coins issued by the BSP are fully guaranteed by the Government and are considered legal tender for all private and public debts. y Lender of last resort.

The BSP extends discounts, loans and advances to banking institutions for liquidity purposes. y Financial Supervision.

The BSP supervises banks and exercises regulatory powers over non-bank institutions performing quasi-banking functions. y Management of foreign currency reserves.

The BSP seeks to maintain sufficient international reserves to meet any foreseeable net demands for foreign currencies in order to preserve the international stability and convertibility of the Philippine peso. y Determination of exchange rate policy.

The BSP determines the exchange rate policy of the Philippines. Currently, the BSP adheres to a market-oriented foreign exchange rate policy such that the role of BangkoSentral is principally to ensure orderly conditions in the market. y Other activities.

The BSP functions as the banker, financial advisor and official depository of the Government, its political subdivisions and instrumentalities and GOCCs. The Lawphil Project - Arellano Law Foundation

THE PHILIPPNE FINANCIAL SYSTEM

THE STRUCTURE OF THE PHILIPPNE FINANCIAL SYSTEM y FNANCIAL SYSTEM a network that generates, circulates, and controls money and credit. SURPLUS INCOME refers to the excess incomes of an individual.

OBRAS PIAS the first credit institution n the Philippines; started by Fr. Juan Fernandez de Leon in 1754 and ended in 1820. y y BANCO ESPAOL Filipino de Isabella II the First Philippine Bank establish in 1851 FIRST AGRICULTURAL BANK OF THE PHILIPPINES established n 1906 and in 1916 all of its asset and liabilities were transferred to the newly organized PNB.

FINANCIAL MARKET are physical locations or electronic forums that facilitate the flow of funds among nvestors, businesses and governments. It provides the mechanism for allocating financial resources of funds from savers to borrowers. y ROLES OF THE FNANCIAL MARKET: 1.Money market operation. 2.Expedites the transaction of financial claims. 3.Serves as a mean of bringing the forces of demand and supply of financial Clams. 4.Facilitates the flow of funds among investors, business, and governments. 5.Provides the mechanisms for allocating financial resources or funds from savers to borrowers. 6.Raises money by selling shares to investors and its existing share can be bought or sold. 7.Where lenders and their agents can meet borrowers. 8.Convenes many interested sellers n one place.

9.Provides the place where many commodities are traded. 10.Used to match those who want capital to who have it. 11.Facilitates: The raising capital in capital markets The transfer of risk in the derivatives market International trade in the currency market y 1942 PNB closes its doors because of the coming of the Japanese imperial Forces. Rehabilitation Finance Corporation formed in 1946 to provide credit facilities for the rehabilitation of agricultural, commerce and industry reconstruction of war-damaged properties and later become the Development Bank of the Philippines. Offshore Banking Units any branch, subsidiary of affiliate of Foreign Banking Corporation that conduct banking transactions in foreign currencies.

BANGKO SENTRAL NG PILIPINAS AND ITS ROLE N THE DEPOSIT EXPANSION AND MONEY SUPPLY CENTRAL BANK a financial institution vested by the State with the function of regulating the supply, cost and use of money with a view to promoting national and international economic stability and welfare. y DEVELOPMENT OF THE BANGKO SENTRALNG PILIPINAS The central bank of countries within the region of Southeast Asia are comparatively young having been established mostly only after the end of the Second World War. The Philippines, a young nation, is not an exception. It established its central bank only on January 3, 1949, The concept of a central bank was developed in 1933 by Miguel Cuaderno, the first governor of the Central Bank of the Philippines. The Central Bank of the Philippines was patterned after similar central banks established in Paraguay and Guatemala, two countries which, like the Philippnes have the same export economies. The Central Bank of the Philippines came to existence as a result of the approval by the former President ElpdioQurinopf Republic Act No. 265, otherwise known as the Central Bank Act on June 15, 1948. However, actual operations did not commence until January 3, 1949 when the bank open its doors for business in the old Intendencia Building located at Intramuros, Manila. With the accumulation of losses incurred by the

Central Bank, P317B as of December 1992, there emerged the CMA bill to transform the Central Bank into Central Monetary Authority. This CMA bill is also in response to a call of the International monetary Bank and World Bank to ease the foreign debt burden and strengthen the credit standing of the Philippines. And then when the CMA law also known as The New Central Bank Act took effect on June 14, 1993 there is established an independent Central Monetary Authority which is known as the BangkoSentralngPilipInas and has a capital of P50 billion. THE FUNCTION OF THE BANGKO SENTRAL NG PILIPNAS Liqudity Management Currency Issue \ Lender of Last Resort Financial Supervsion Management of Foreign Currency Reserves Determination of Exchange Rate Policy Other Activities (Functions as the banker, financial advisor and official depository of the Government) OBJECTIVES OF BSP 1.To maintain price stability conducive to a balanced and sustainable growth of the economy 2.To promote and maintain monetary stability and convertibility of the Philippine peso THE BSP ON MONEY SUPPLY AND DEPOSIT EXPANSION y MONEY SUPPLY the sum of notes and coins in the circulation and peso demand depositions subject to withdrawal by check DEPOSIT EXPANSION the change in money supply as a result of an increase in bank reserve MONETARY BOARD policy making body of the BSP; exercise the powers and functions of the BSP THE MAIN FUNCTONS OF THE MONETARY BOARD 1.Issues rules and regulations it considers necessary for the effective discharge of the responsibilities and exercise the powers vested upon it. 2.Direct the management, operations and administration of the BSP 3.Establish a human resource management system 4.Adopt an annual budget for and authorize such expenditures by Bangko Sentral 5.Indemnify uts members and other officials of BangkoSentral

THE BSP MONETARY BOARD

Chairman: Armando M. Tetangco, Jr. Members: Juanito D. Amatong Alfredo C. Antonio Raul A. Boncan Ignacio R. Bunye Peter Favila Nelly F. Villafuerte MONETARY POLICY AND ITS OBJECTIVES MONETARY POLICY the management of the expansion and contraction of the volume of money in circulation for the explicit purpose for attaining a specific objective. y CENTRAL BANK OF THE PHILIPPINES responsible for executing the monetary policy; gives primary and immediate importance to the maintenance of monetary stability y y y y CONFIDENCE OF MONEY basis for all economic activities in a society based upon credit ADVANTAGES 1. Impersonal 2.Flexible in operation 3.Operates for the most part free from the weight of political pressures y DISADVANTAGES 1.Attempts to change available money supply through the banking system 2.Results to high-priced goods and services QUANTITATIVE AND SELECTIVE INSTRUMENTS 1.QUANTITATIVE (Open Market Operations) used to regulate total quality of money available for all purposes 2.SELECTIVE employed to limit the amount of money available for certain specific purposes

RELATION OF INTEREST RATES TO SAVINGS AND INVESTMENT INVESTMENT induce a significant increase when the depressions of driving interest rates down y y SAVINGS it is contended when there is an increase in interest rate

TIGHT MONEY POLICY AND EASY MONEY POLICY y TIGHT MONEY SUPPLY contraction of money supply EASY MONEY POLICY expansion of money supply

FINANCIAL STABILITY SSUES AND CHALLENGES KEY FACTORS THAT AFFECTS THE FINANCIAL SYSTEM: 1. Financial Resources 2. Banking System 3. Non-Bank Financial institution ISSUES ARISNG 1. Financial Stability 2.Integrated Regulator (s) 3. Financial Transparency 4.Deregulation of Financial Market 5.Rapid Financial Innovation 6.Space Age Technology] CHALLENGES ENCOUNTERED 1. Improving Asset Quality 2. Managing Risk Exposure 3.Developing the Domestic Capital Market