The BSP, as the Philippine Central Bank, has the authority to supervise and regulate banks and various non-bank financial institutions including non-stock savings and loan associations, pawn shops, trust corporations, electronic money issuers, and money service businesses, as well as payment system operators, based on relevant laws.

The BSP supervises financial institutions through a combination of off-site surveillance and on-site examinations. Off-site surveillance involves monitoring performance, analyzing reports, and assessing risk, while on-site examinations cover operations, corporate governance, risk management, internal controls, and financial condition. The BSP also provides guidance and employs enforcement tools like fines, sanctions, and license revocations when necessary.

The BSP collaborates with other agencies through two inter-agency bodies: the Financial Sector Forum (FSF) and the Financial Stability Coordination Council (FSCC). The FSF, composed of the BSP, SEC, Insurance Commission, and PDIC, focuses on microprudential regulation and supervision of individual financial institutions. The FSCC, chaired by the BSP Governor and including the Department of Finance, addresses systemic risks and promotes macroprudential policy interventions.

Understanding the BSP's role in the financial system empowers professionals and consumers to make informed financial decisions. For instance, when choosing a bank or financial institution, individuals should verify its license, review its financial reports, understand terms and conditions, and know their rights. This knowledge helps protect consumers from scams and contributes to economic growth.