INTRODUCTION

It is time to picture the Canlaon City of today in its proper

perspective, by viewing it according to its noble goals and objectives,

which are formulated towards attaining a transformation from what she

has done in the past, towards what she can do at the present, in

garnering a dependable socio-economic image specifically geared towards

development. With the inclusion of Canlaon City in the third batch of

CDS (city development strategy) cities, its envisioned plan is to craft a

well formulated tool for planning and development which will be truly

responsive to the demands of the future.

As local government gains experience in managing growth and

change, its institutional capability improves considerably. The present

investments from both public and private sectors have greatly improved

the quality of service and utilities made available to the constituents.

This is expected to raise the level of the public’s well being, and foster

social change and development.

It has been noted, however, that a city without a bank is not

complete. After the closure of the Rural Bank of Canlaon in September

1986, most financial transactions have ended up being made outside of

Canlaon, thereby pulling out cash for circulation and putting it into
nearby cities with banking institutions, instead of circulating the

resources within the area. It is evident that Canlaon is generating income

but other municipalities/cities are gaining from the proceeds of it.

Based on an analysis of the interviews conducted, mismanagement

could be pinpointed as one of the reasons why RB Canlaon closed after

approximately 5 years of operation. Unsecured loans to farmers without

proper assessment or appraisal of the area, without follow ups and

assistance, led to a majority of loans defaulted upon and giving rise to

the sentiment occasionally voiced that “the people didn’t like to pay back

their loans.” No other banks wanted to buy Rural Bank of Canlaon since

the CB required that any sale would also have to include assuming the

Rural Bank’s previous accountability with Central Bank which amounts

to approximately P80 million.

We recommend that in order to avoid repeating the mistakes of RB

Canlaon, DCDB Canlaon branch should: maintain a high liquidity ratio

especially during its first 3 years of operation, carefully screen all loan

applicants to ensure their capability to pay, monitor its loan portfolio

constantly with regard to non performing loans, invest in a varied

portfolio such as t-bills and other government securities, and only grant

loans which are backed up by sufficient collateral.

 In order to foster the goals of the city towards development for a

larger swathe of the community, it is imperative that a financial

institution with integrity, supply much needed financial services to the

local population from within the locality. This fits right in with the vision

of Dumaguete City Development Bank which in its 26 years of operation

has remained a responsible partner in serving the local and neighboring

Visayas and Mindanao business communities and has also attained the

highest public trust.

In the CDS plan for the year 2007, one of the strategies of Canlaon

City is the “development of commercial and industrial growth centers

outside the present city center.”

As the study team proposes a suitable location that is in the

Uptown area, this will further coincide with the City’s plans for

development. The proposed location is in the Uptown area, which is

outside the city center. The land is beside the City Mayor’s residence,

fronting the market for the region’s high-value crops, such as lettuce,

cabbage, cauliflower, and others. However, worth noting is the statement

of the landowner explaining that this was an excellent location due to the

proximity to the Mayor’s residence and the security provided at that

location.
OBJECTIVE OF THE STUDY

This study aims to determine the feasibility of establishing a

branch of Dumaguete City Development Bank in Canlaon City.

This study also aims to identify which products and services of a

bank the prospective market would like to avail of.

It also seeks to determine the size of the prospective market and

aspects related to the success of the bank.

SCOPE AND LIMITATIONS

The main focus of this project study is the feasibility of the

proposed branch of DCDB in Canlaon City. Like most business

proposals, feasibility criteria have major aspects that need to be

considered in arriving at final conclusions and recommendations. The

aspects that need to be factored into this study are divided into

marketing, organization and management; the technical, financial, socio-

economic aspects, and legal aspects.

Responses to the questionnaire were limited to employed residents

of Canlaon City, both government and non-government, as well as small

and medium business establishments. These were considered the target

market as they are the most likely users of the banks services both as
depositors and loan makers as they possess sufficient income to save

and also have the capability to repay loans taken. Only those who were

identified as part of the target market were considered and given the

chance to answer the questionnaires regarding the establishment of the

bank.

SIGNIFICANCE OF THE STUDY

The intention of this study is to aid, guide, and assist the

proponent in determining whether or not to establish the business. This

study would help the DCDB Board of Directors in determining the

viability of establishing a branch in Canlaon City.

METHODOLOGY

A market survey was conducted to determine the market demand

for the proposed project.

An analysis of the market demand is important in order to

determine if the target market will patronize the proposed project.

To draw a conclusion for its market demand, the researchers first

determined who the target markets were. The target markets identified

were the employed residents of Canlaon City and small and medium

business establishments.
 Employed residents refer to the City’s labor force and are

categorized as follows: government, private and self-employed

individuals. In order to define the population of these markets, the

researchers requested assistance from the City Planning Office of

Canlaon, obtaining and reviewing documents showing the total number

of employed residents of that city.

The sample size was determined using Slovin’s Formula.

Questionnaires were distributed to respondents based on the computed

sample size. After retrieving the questionnaires, the responses were

tallied and graphed. These were then analyzed and interpreted.

SLOVIN’S FORMULA:

n = N
2
1 + N (e)

where:

n = sample size

N = total population, male and female of the employed sector if

Canlaon City

e = sampling error of 5%
Permanent Government Employees 343
Permanent Private Employees 4,618
Self Employed 4,838
Total 9,799
Figures based on Population Distribution by Status of Employment 2003

NSO Census 2003

n= 9,799
2
1 + 9,799 (5%)

= 384 sample size

The researchers also conducted interviews with key people whose

inputs were essential to the feasibility study. Please see the section on

Market Feasibility regarding the highlights of the interviews.

FEASIBILITY CRITERIA

There are several factors considered from the different aspects of

the study:

The demand for a bank and the willingness of the respondents to

patronize the products and services of the proposed project were the

factors used in determining the feasibility of the market study.

The factors considered in determining the technical feasibility of

the project were the location of the building, accessibility to the target

market, layout and human resources required, equipment costs, and

cost of land.
 The evaluation of the financial feasibility was done through the

financial projections.

The socio-economic aspect of the project considered its economic

contributions and other benefits to the City and the society as a whole.
PROJECT
SUMMARY
A. NAME OF THE PROJECT

The name of the proposed project is Dumaguete City Development

Bank (DCDB), Canlaon Branch, Negros Oriental.

B. LOCATION

The DCDB Canlaon Branch will be located in Uptown Barangay

Mabigo, Canlaon City. Its main office or head office is located at the

corner of Dr. V. Locsin Street and Cervantes Street, Dumaguete City.

Canlaon City, situated on the eastern side of Mt. Kanlaon, in the

province of Negros Oriental, is politically bound on the north by San

Carlos, Province of Negros Occidental; on the east by Vallehermoso,

Province of Negros Oriental; on the west by the Municipalities of La

Castellana and Pontevedra, Province of Negros Occidental; and on the

south by the Municipality of Guihulngan, Province of Negros Oriental.

The city is strategically situated nine-and-a-half (9.5) kilometers

from the foot of Mount Kanlaon – an active volcano in Negros Island,

bearing geographic location at 10° 24.7’ North Latitude, 23° 7’ East

Longitude.
 The City is geographically divided into three sectors: Downtown,

Midtown/City Center, and Uptown. The City Center is 38 kilometers

away from San Carlos City, Negros Occidental; 50 kilometers from

Guihulngan City; 20 kilometers from Vallehermoso; 102 kilometers from

Bacolod City, the capital of Negros Occidental (taking the cross-island

country road traversing Negros Occidental and Negros Oriental via

Canlaon City) and 166 kilometers from Dumaguete City, the capital of

Negros Oriental.

It takes three hours to Dumaguete City; two-and-a-half hours from

Bacolod City via La Castellana; and a four- to five-hour trip from Cebu

City by land and sea transport via San Carlos City.

The main industries of Canlaon city are Rice production with a

total of 3,289 hectares, and sugarcane production with a total of 3,238

hectares out of a total area devoted to Agriculture of 9,783 hectares. The

remaining area produces a mix of corn, vegetables, and livestock. These

figures are cited from the Canlaon City CDS 2007.

Further information was gathered from an interview with Mr.

Roderick Schon. He volunteered that there are 4 major and traditional

sugarcane planters in the area. He mentioned the Schon farm, Valmayor

Hermanos, Jalandoni farm, and the Amador farm. Another major

property holder especially around the mabigo barrangay is the Bautista

family.
 These major planters each have total land areas of between 120 to

130 planted hectares.

The rice growers on the other hand are composed of numerous

smaller lot holders each holding between 20 to 30 hectares.

Apart from these planters and farmers there are also a few

businessmen in the community who run hardware shops, a mini grocery

and restaurant as well as branches of known motorcycle distributors

such as RUSI and Du Ek Sam. Some of the more prominent business

men/women are: Cecil Canada, Julius Amador, and the Jalandonis.

PROPOSED SITE

The lot under consideration for the proposed DCDB bank branch

site is located on Aquino Street, beside the present mayor’s residence,

fronting the Uptown market complex. The added security is an extra

feature of this location. Other advantages of this location are: the lot is

offered at market value price, the lot has good drainage and a first class
cement barrangay road connecting the lot to the city, the Uptown market

complex which faces it is the trading area for vegetables and livestock

and is a bustling commercial hub, and this location is identified in the

CDS strategies for economic development as an area targeted for

economic growth.

C. DESCRIPTIVE DEFINITION OF THE PROJECT

Incorporated July 1980 by Julio 0. Sy, Lourdes M. Calumpang,

Tita R. Sung, Jose E. Romero, Jr. and Gregorio E. Uymatiao, Sr., the

Dumaguete City Development Bank was registered with the Securities

and Exchange Commission. on October 17, 1980. The Central Bank of

the Philippines granted DCDB authority to operate as a private

development bank and formally started operations in Dumaguete City,

Negros Oriental. In July 1990, DCBD established its first branch in the

Municipality of Valencia, Bukidnon Province.

On August 8, 1992, the bank acquired the Rural Bank of Sibulan

(Negros Oriental), Inc. On August 27, 1993, a second branch in the

Municipality of Quezon, Bukidnon Province formally started operations.

On October 16, 1993, the Lapu-Lapu City branch was its third branch.

November 10, 1993, the Bangko Sentral ng Pilipinas granted the bank

authority to accept demand deposits. On November 16, 1994,

computerization of branches’ Current Account/Savings Account began.

 Today DCDB Canlaon City branch Negros Oriental is the next

target of DCDB incorporators for the expansion of the bank. The mission

of Canlaon city today is to …

“Sustain Canlaon City's position as a special growth center of

Northern Negros through the protection of its environmentally critical
area system, maximize the output of its agricultural, commercial,
infrastructure, transport, agro-industrial and eco-tourism resources and
promote massive livelihood initiatives in the rural areas for sustainable
development.”

The proponent recognizes the potential of Canlaon City in terms of

its resources and the need for a bank in that area. The project would

fulfill, in part, DCDB’s mission to the community to be “a responsible

partner in the countryside economic growth and development,” benefiting

the community and contributing to the development of the city as well.

C. PROJECT’S LONG-RANGE OBJECTIVES

Establishing a DCDB branch in Canlaon, a city rich in agricultural

resources, will provide the community with the banking and other

financial services the community needs. Accomplishing this would

contribute to the proponent’s vision to become the leading development

bank in the Visayas-Mindanao region.

A development bank’s objectives may be organized as follows:

 (1) Accumulating the savings of depositors and investing them,

together with capital loans secured by bonds, mortgages in real estate

and insured improvements thereon, chattel mortgage, bonds and other

forms of security or in loans for personal or household finance, whether

secured or unsecured, or in financing for homebuilding and home

development; in readily marketable and debt securities; in commercial

papers and accounts receivables, drafts, bills of exchange, acceptances

or notes arising out of commercial transactions; and in such other

investments and loans which the Monetary Board may determine as

necessary in the furtherance of national economic objectives;

(2) Providing short-term working capital, medium- and long-term

financing, to businesses engaged in agriculture, services, industry and

housing; and

(3) Providing diversified financial and allied services for its chosen

market and constituencies especially for small and medium enterprises

and individuals.

E. HIGLIGHTS OF THE PROJECT

1. PROJECT

A project feasibility study about the proposed project was

conducted. After determining the viability of the project, the proposal

will be forwarded to the Board of Directors of DCDB for review and

approval. Land acquisition and the construction of the building will

follow after compliance with the necessary requirements (please refer

to Appendix F). Bangko Sentral ng Pilipinas prerequisites necessary in

establishing a branch should be complied with at this time. After all

the legal requirements have been met, and after the authority to

establish a branch has been given, the branch shall be opened within

six months from the date of approval. The target date the researchers

are suggesting is August 8, 2008 for the obvious reason that round

numbers for the Chinese origin is believed to be a lucky number that

could bring good fortune and good luck.

2. MODE OF FINANCING

The establishment of the proposed branch of DCDB in

Canlaon City will be financed solely from the capital funds of the

Dumaguete City Development Bank. On the basis of the information

supplied by the Vice President, the amount for the purchase of the lot

and the construction of the building shall be taken from existing

funds of the bank that have been earmarked for this purpose. The

DCDB Board of Directors has the intention of purchasing the land

and constructing a building that the DCDB Canlaon branch will

occupy.
F. MAJOR ASSUMPTIONS, SUMMARY OF FINDINGS AND
CONCLUSIONS OF THE FOLLOWING:

1. MARKET FEASIBILITY
In the survey conducted by the group, it was

ascertained that one of the reasons that there is a need for a

banking institution in Canlaon City is due to the absence of certain

financial services in the city such as: savings deposits, checking

accounts, commercial loans and other services that a bank normally

provides. The residents and the members of the local government of

the city have expressed their desire for a bank and emphasized the

importance and role of a bank in their city. It was also determined

that there are a number of probable clients, 99 percent of the

respondents to be exact, who would be willing to avail of the

products and services that the DCDB Canlaon branch will offer.

City Treasurer Ma. Luisa L. Luza, informed us of the

possibility of using the bank as a depository for all the financial

transactions of the government, both local and national. The

quarterly Internal Revenue Allotment, or IRA of Canlaon City for

2007 is P44,574,756.00. The monthly operating expense of the local

government is P6,458,090.00.
 According to City Financial Analyst Rowena F. Oralde, if a

bank would be established, she would recommend that all salary

transactions go through the bank instead of her preparing the

necessary documents in order to withdraw the amount from San

Carlos and transporting the said amount back to Canlaon. The total

monthly salary transactions for regular government employees of the

city is P3,107,628.76.

An interview was also conducted with Ms. Doris Flores,

the City Administrator of Canlaon. Ms. Flores described the people

of Canlaon as hardworking and resilient. When asked about the

state of the City’s peace and order, she stated that said aspect was

well maintained. The internal revenue allotment (IRA) of Canlaon as

mandated by law is deposited with the Development Bank of the

Philippines (DBP) in San Carlos City and other accounts are

maintained with Landbank and the Philippine National Bank (PNB).

The requirement that the Government deposit its money in a

government bank presupposes that there is a government bank in

the immediate area but in the absence of such the government may

deposit its IRA in any private bank in the locality for convenience as

mentioned in Chapter four of R.A. 7906.

 According to Ms. Flores, attempts had been made to

attract banks to establish branches in Canlaon City. A resolution to

this end had previously been passed. However, no bank responded,

it was believed, because of security reasons.

If the proponent decides to open a branch in Canlaon,

Ms. Flores said that the City would provide the security services

needed by the bank branch and that she will talk with the Mayor

regarding this. She added that the City has continuity of plans,

negating any concern regarding a change in the administration. She

said, “We really need a bank, we would be very happy if this would

push through, we will support them if they need equity for

construction. We will place our local revenues and income in

DCDB.”

Aside from security concerns, former Councilor Hernani

Blanco, who is now part of the Mayor’s policy determining body,

stated that the road conditions were the main problem banks did

not want to open a branch in Canlaon. This problem is no longer of

concern as the city government has embarked on an infrastructure

improvement program and as a result many farm-to-market roads

have been concretized and the national highway connecting the city

has also been improved.

 Regarding the security concerns Blanco opined “They

don’t need to worry…we have two battalions: the 11th and 12th

Infantry Brigade assigned in Canlaon. Peace and order situation is

ok now.” This is backed up by a city crime rate of .05 percent as

seen in the CDS of 2007.

2. TECHNICAL FEASIBILITY

The technical aspect of the study shows that the project is

feasible because of certain factors.

The accessibility of the location is convenient to residents

and customers of the bank as it is within a 2 kilometers of the city

center. There is ample parking as the lot fronts the Uptown market

and also the lot is of a substantial size that a parking lot may be

incorporated into the design.

 It is also feasible considering that the branch structure is

based on an existing DCDB branch (Valencia branch) and initial

human resource requirements are minimal.

The building and lot will be purchased by the bank and will

be owned by the bank. The cost of the lot is priced competitively

based on comparisons with the other prospective sites that were

identified. The lot is priced at 1,500 pesos per square meter and the

recommendation is to buy a 500 square meter lot. The building will

cover 150 square meters initially with the capacity to add a second

story, and will cost approximately 2,000,000 pesos.

The project is deemed viable because of the availability of

appropriate material and human resources of DCDB.

The description of products and services was based on

existing products and services offered by DCDB head office and

other branches. Based on the Agri Agra Law (PD 717), 25 percent of

the banks loanable funds shall be allocated for agricultural credit.

Another consideration is the established bank operations

policies and procedures which are applicable to the Canlaon branch

without further modification.

 3. FINANCIAL FEASIBILITY

The financial study was made based on the following

assumptions:

Operational Assumptions

a) The branch will start its operation on August 8, 2008

b) Bank hours will be from 9:00am to 3:00pm

c) Employees will work till 8:00am to 5:00pm with 1 hour lunch

break.

d) The bank will be open on weekdays and be closed on all public

and special holidays.

e) Cut- off for clearance of cheques will be 11:30am to allow for

travel time to BPI San Carlos whose cut off time is 1:00pm.

f) Excess funds will be deposited with BPI- San Carlos or loaned

to DCDB head office at a rate of 9 percent. A portion may be

invested in government securities depending upon the approval

of the board of directors and in accordance with the rules and

regulations of the monetary board regarding investments.

g) Maximum of 10 percent current/saving deposits will be kept as

cash in vault

h) Company will procure a motorcycle for bank use.

 i) Main office will provide a service vehicle for branch manager’s

use.

j) There will be a provision of an ATM machine in the bank layout

but it will not be installed in the first year of operation, until the

bank will be financially stable to purchase one.

k) All policies and regulations of the Department of Labor and

Employment (DOLE) will be complied with.

l) All policies, rules and regulations of the DCDB main office will

apply to the branch office.

m) The first branch manager will be an officer from DCDB main

office.

n) Rank and file staff will be recruited from qualified residents of

Canlaon.

Revenue Assumptions

a) Agricultural loans will have an interest rate of 15-18 percent, as

prescribed by DCDB bank policy and the Agri-Agra Law.

b) Commercial loans will have an interest rate of 15-18 percent,

prescribed by DCDB bank policy and the BSP.

c.) Excess funds will be loaned to DCDB main branch at the rate of

9 percent per annum.

Expense Assumptions
 a) The salary of the bank branch employees will have a three

percent merit increase every year.

b) The utility expense will increase according to current market

statistics.

c) Bank premises, furniture, fixtures and equipment are carried at

acquisition cost or construction cost less depreciation

and impairment losses.

Depreciation is computed on the straight-line basis over the

estimated useful lives of the assets as follows:

Buildings 40 years

Furniture, fixtures and equipment 1-10 years

Leasehold improvements are amortized over the terms of the

related leases or the useful lives of the improvements whichever is

shorter.

4. SOCIO-ECONOMIC FEASIBILITY

The project will be consistent with Canlaon’s economic

expansion and growth since DCDB supports the Philippine

Countryside Development Program wherein the bank strives to be

known as a “Responsible Partner for Growth” in the local business

community.
 The branch should focus on getting the local government

unit as a main customer; the City Administrator stated the City’s

willingness to assist in this regard with a board resolution. The city

treasury and accounting office have also expressed their anticipation

for the establishment of a bank in the City. This would eliminate the

time required and the safety concerns inherent in traveling to and

from San Carlos and other banking institutions to conduct the City’s

banking business. The local government employees and the teachers

and employees of the various schools in the area would be able to

use these banking services, forgoing the inconvenience of having to

cash a check within the city or going to San Carlos to do the same.

The presence of a bank in Canlaon will also have a ripple

effect on the economy of the area because by providing loans for

agricultural improvement or post harvest facilities, or commercial

loans for the start up of new businesses such as a supermarket or a

department store the standard of living of the residents will improve.

More jobs will be made available and more services will also be

accessible to the residents of Canlaon.

5. MANAGEMENT FEASIBILITY

The management structure adopted by the project is based on

the existing management structure of existing DCDB branch offices.

This provides for a bank manager, a cashier, an accountant, an

 accounting assistant, a loan processor, one teller, and a

messenger/janitor.

PROJECT STATUS AND TIMETABLE

The research project started with the identification of the

proponent and the prospect study. On July 26, 2007, soon after the

proponent, Dumaguete City Development Bank, and the study to be

undertaken was identified, the group began formulating the survey

questionnaire. This took one week. The formal distribution of survey

questionnaires began on the first week of August, and lasted for three

weeks. The researchers then tallied the results during the second and

third weeks. After tallying the results, the group commenced analyzing

the collected data and drafting the feasibility study. The researchers

collected the information necessary to accomplish the project during the

fourth and fifth weeks. The period from August 13 to September 3 was

used to focus on the Technical and Financial Study of the project.

Finally, the last week of the study was spent on encoding and reviewing

of the completed draft. The study ended on September 7, 2007.

PROJECT TIMETABLE

A. Project Feasibility Study

B. Ocular/Site Inspection

C. Purchase of Land

D. Processing of Business Permit

• Building Permit
• Fencing Permit
• Fire Safety
• Sanitary Permit
• Occupancy Permit
• Mayor’s Permit

E. Construction of Building

F. Application for Authority to Establish a Branch (Form 1)

• “Agreement to Organize a Bank” (Form 2)

 • Bio-data sheet of each of the incorporators, proposed directors and
officers, and subscribers (Form 3)
• Copy of Board Resolution authorizing the corporation to invest in
such branch; and designating the person who will represent the
corporation in connection therewith
• Copy of the latest Articles of Incorporation and By-Laws
• List of directors and principal officers
• List of major stockholders, indicating the citizenship and the
number, amount and percentage of the voting and non-voting
shares held by them
• A copy of the corporation’s audited financial statements for the last
two (2) years prior to the filing of application
• A copy of the corporation’s annual report to the stockholders for
the year immediately preceding the date of filing of application
• Certified photocopies of Income Tax Returns for the last (2)
calendar years
• BIR clearance
• Detailed Plan of Operation and Economic Justification for
Establishing the branch
• Projected monthly financial statements for the first three (3) years
of operations, together with reasonable assumptions.
• Certificate of Compliance signed by the president stating required
capital for the branch

G. Hiring and Training of Officers and Staff

H. Issuance of authority to operate requirements

• Receipt of advice of approval by the Monetary Board/Governor of

the application for authority to establish the branch
• Complete construction and furnishing of the bank building, which
shall be equipped with vault and appropriate security devices such
as lighting system, time delay device, tamper-resistant locks, alarm
systems, etc. and provided with furniture, fixtures, equipment and
bank forms;
• Effect and complete the recruitment and hiring of officers and
employees of the bank
• Submit the following documentary requirements at least thirty (30)
days before the scheduled start of operations:
-Proof of registration of Articles of Incorporation and By
Laws
-Certification of compliance with the conditions of approval
duly signed by the incorporators
-List of officers and their respective designation and salaries;
 -Bio-data sheet, evidence of citizenship and NBI and BIR
clearances of each of the officers (who have not had the
previous approval of the Monetary Board/Governor) which
are needed for the evaluation of their qualification as
officers
-Chart of Organization
-Manual of Operations embodying the policies and operating
procedures of each department/unit/office.
-Plantilla showing the positions with corresponding salaries
-Two (2) sets of specimens of principal bank accounting and
other forms
-Bond policy of officers and custodial employees
-Insurance policy on bank properties required to be insured
-Blueprint of floor layout of bank premises

I. Inauguration/Opening of the branch for business (Target Date is

August 8, 2008)

J. Requirements within 30 days after first day of operations

• Inform BSP of the first day of operation and the banking hours and
days
• Submit a Statement of Condition as of the first day of operation

GANNT CHART
 ORGANIZATION
AND
MANAGEMENT
ASPECT

A. ORGANIZATION AND MANAGEMENT

A thrift bank shall be organized in the form of a stock

corporation. The Monetary Board shall fix the minimum paid-up capital
of thrift banks in such amount as the Board may consider necessary for

the safe and sound operation of thrift banks taking into account the

development thrusts of this Act and due protection of the general

public. No thrift bank shall be organized without a certificate of authority

from the Monetary Board.

Republic Act 8791, The General Banking Law, Section 15,

“Board of Directors”. The provisions of the Corporation Code to the

contrary notwithstanding, there shall be at least five (5), and a maximum

of fifteen (15) members of the board or directors of a bank, two (2) of

whom shall be independent directors. An "independent director" shall

mean a person other than an officer or employee of the bank, its

subsidiaries or affiliates or related interests.

Non-Filipino citizens may become members of the board of

directors of a bank to the extent of the foreign participation in the equity

of said bank.

The meetings of the board of directors may be conducted through

modern technologies such as, but not limited to, teleconferencing and

video-conferencing. Sec. 16. Fit and Proper Rule, To maintain the quality

of bank management and afford better protection to depositors and the

public in general the Monetary Board shall prescribe, pass upon and
review the qualifications and disqualifications of individuals elected or

appointed bank directors or officers and disqualify those found unfit.

After due notice to the board of directors of the bank, the Monetary

Board may disqualify, suspend or remove any bank director or officer

who commits or omits an act which render him unfit for the position.

In determining whether an individual is fit and proper to hold the

position of a director or officer of a bank, regard shall be given to his

integrity, experience, education, training, and competence.”

Republic Act 7906, Thrift Bank Act, Section 7, “Directors and

Officers”, states, “At least a majority of the members of the board of

directors of any thrift bank which may be established after the effectivity

of this Act shall be citizens of the Philippines: Provided, however, That no

appointive or elective official, whether full-time or part-time, shall at the

same time serve as officer of any thrift bank, except in cases where such

service is incident to financial assistance provided by the government or

a government-owned or controlled corporation to the bank: Provided,

further, That in the case of merger or consolidation duly approved by the

Monetary Board, the limitation on the number of directors in a

corporation, as provided in Section 14 of Republic Act 7906 ,shall not be

applied so that membership in the new board may include up to the total
number of directors provided for in the respective articles of

incorporation of the merging or consolidating banks.”

DCDB SENIOR MANAGEMENT

Executive Committee
Gregorio L. Uymatiao, Jr. Chairman
Susano O. Sy Vice-Chairman
Nicholas S. Ramas-Uypitching Member
Silvestre H. Sung Member
Ma. Vivian Joyce V. Sastrillo Member

Corporate Management and Officers

Julio O. Sy President
Gregorio E. Uymatiao, Sr. Treasurer
Ma. Vivian Joyce V. Sastrillo Executive Vice President
Sinfronio C. Viloro Vice President/Area Manager
Margarito E. Credo Assistant Vice President
Rowena I. Buling Comptroller
Billiam G. Sy Internal Auditor

Head Office
Consolacion Gilda F. Elli Assistant Manager-HRD
Walden E. Justalero Loan Officer

Dumaguete Branch
Floranita U. Calaurian Manager
Ma. Rosario I. Espina Cashier
Ma. Elvie J. Teves Accountant

Assets and Liabilities Committee

Ma. Vivian Joyce V. Sastrillo Chairman
Gregorio L. Uymatiao, Jr. Vice-Chairman
Silvestre H. Sung Member
Jocelyn S. Limkaichong Member
Rowena I. Buling Member
Floranita U. Calaurian Member
Consolacion Gilda F. Elli Member
Walden E. Justalero Member

Compliance, Audit and Examination Committee

Nicholas S. Ramas-Uypitching Chairman
 Miguel A. Diaz Vice-Chairman
Julio O. Sy Member

B. FORM OF OWNERSHIP

Ownership of thrift banks, “At least forty percent (40%) of the

voting stock of a thrift bank which may be established after the approval

of this Act shall be owned by citizens of the Philippines, except where a

new bank may be established as a result of a merger or consolidation of

existing thrift banks with foreign holdings in which case, the resulting

foreign holdings shall not be increased but may be reduced and, once

reduced, shall not be increased thereafter beyond sixty percent (60%) of

the voting stock of thrift banks. The percentage of the foreign-owned

voting stocks shall be determined by the citizenship of individual

stockholders and in case of corporations owning shares, by the

citizenship of each stockholder in the said corporations.”

C. ORGANIZATIONAL CHART

ORGANIZATIONAL CHART OF PROPOSED DCDB CANLAON BRANCH

 Branch Manager

Messenger/Janitor

Branch Cashier Branch Accountant Loan Processor

Branch Teller Accounting

Assistant
Loans book keeper

D. JOB DESCRIPTION

Position Title: BRANCH MANAGER

BASIC RESPONSIBILITIES:

Responsible for the overall supervision of the Cash, Accounting

and Account Services Sections to ensure achievement of deposit targets,

maintain good client relations as well as the proper implementation of

bank policies and procedures including submission of accurate and

timely reports required by the Head Office.

SPECIFIC RESPONSIBILITIES:

1. Develops marketing strategies, plans and programs needed to

ensure achievement of performance targets in terms of deposit

levels.

2. Reviews daily call reports of Accounts Services Representatives;

monitors significant accomplishments; provides marketing support

whenever necessary to capture available opportunities.

3. Monitors daily performance of Accounts Services Representatives

and Accounts Services Assistant; provides training to enhance

marketing skills.

4. Monitors quality of service rendered by field and office personnel to

maintain good client relations. Ensures fast, timely and reliable

servicing of accounts; renders corrective measures to remedy

customer complaints, answers inquiries or addresses concerns

raised by clients.
 5. Monitors movements of accounts; studies the peculiarities of each

account to identify business potentials.

6. Supervises the Cashiering and Accounting functions to comply

with the bank’s policies, procedures and reporting requirements.

7. Supervises the preparation and distribution of the monthly bank

statements.

8. Performs other tasks as may be assigned from time to time.

Position Title: CASHIER

BASIC RESPONSIBILITIES:

Responsible for the custodianship of items of value such as cash,

managers checks, time deposit certificates, passbooks, checkbooks,

security/investment papers, unused DCDB checks of other banks and

accountable forms. Also responsible for ensuring that Tellers and other

frontliners under the Cash Section render quality service and are

customer oriented at all times.

SPECIFIC RESPONSIBILITIES:
1. Monitors the daily flow of cash to ensure adequacy of cash

reserve/cash in vault; maintains the Cashier’s Accountability Book

reflecting daily cash movements;

2. Ensures that actual cash in vault balances off with records all the

time and that bills have been carefully counted and bundled

preventing shortages or overages.

3. Assists in monitoring daily cash transactions of Main Branch and

other branches to ensure adequacy of bank reserve in compliance

with Central Bank requirement.

4. Coordinates fund transfers to and from branches with the Fund

Management Unit and depository bank.

5. Verifies and approves over the counter withdrawals and

encashment to authenticate signatures and check the identity of

payees as well as validate sufficiency of account balance.

6. Monitors amount of cash handled by each Teller; replenishes cash

upon request; verifies and receives surrendered excess cash to

maintain safe levels in Teller’s box.

7. Assists Tellers in reviewing the day’s transactions to trace errors

resulting to shortages, overages or incorrect proof sheet balances.

8. Reviews checks deposited; supervises transmittal/deposit of

checks to depository bank for clearing; notifies clients of returned

checks.
 9. Calls on current account clients in case of insufficiency of funds to

avoid nonpayment or non-clearing of issued checks.

10.Leads and trains the front liners in rendering good service and

maintaining professional client relations.

11.Reviews the Teller’s proof sheet before submission to Accounting.

12.Closely coordinates with corporate clients regarding payroll

arrangements for continued satisfactory service.

13.Acts as custodian of all accountable forms of the bank and monitors

its usage and inventory level. Safe keeps signature cards, unreleased

checks to clients (TD interest, loan proceeds, loan rebates, etc.) and

unused Time Deposit certificates.

14.Countersigns for IOAs, checks and withdrawals from other banks,

investments and borrowings.

15.Assists Tellers in the delivery of cash to valued accounts upon

request.

16.Performs other tasks as may be assigned from time to time.

Position Title: ACCOUNTANT

BASIC RESPONSIBILITIES:

Responsible for the over-all supervision of Main Branch accounting

work mainly the recording, checking of computations and verification of

time deposit and loan transactions. Also responsible for overseeing the
preparation of daily accounting and cash reports and the disbursement

functions.

SPECIFIC RESPONSIBILITIES:

1. Checks and verifies computation of time deposit transactions such

as placements, terminations, pre-terminations and renewals.

2. Supervises the Accounting Staff and Bookkeepers in areas of

receiving loan payments and time deposit placements,

disbursements, timekeeping, updating accounts, loans

bookkeeping and general accounting.

3. Verifies entries in the trial balance against source documents to

check correctness of accounting classification and figures

recorded.

4. Checks and verifies computation of interest in loans.

5. Checks and verifies list of back accounting transactions to ensure

correctness of entries and figures.

6. Approves over-the-counter transactions independently for

withdrawals of P20,000.00 and below; co-signs with Cashier for

withdrawals of more than P20,000.00.

7. Reviews tickets prepared by Accounting Staff such as payment of

expenses and deposits to other banks.

8. Checks monthly reports prepared by Bookkeepers of time deposit,

loans and general accounting.

 9. Verifies bank reconciliation statements on a monthly basis.

10.Countersigns for/recommends approval of IOAs, cash advances and

DCDB checks issued.

11.Performs other tasks as may be assigned from time to time.

Position Title: TELLER

BASIC RESPONSIBILITIES:

Responsible for the efficient handling of transactions involving

receipt and payment of cash and checks. Also responsible for rendering

quality service to maintain good client relations and promote the bank’s

services.

SPECIFIC RESPONSIBILITIES:

1. Receives cash and checks for such transactions as savings and

current account deposit, time deposit placement, loan payments,

SSS payments and others.

2. Checks quality of bills and verifies cash count.

3. Sorts cash according to quality and bundles them accordingly to

facilitate counting.

4. Pays cash for such transactions as withdrawals, check

encashment and others’.

 5. Verifies validity of order to pay; checks date, name of payee as

against identity of presentor, amount in words and figures and

authenticity of signatures.

6. Checks account balances and secures the approval of assigned

authorities prior to any payment.

7. Updates passbooks after completion of each transaction.

8. Maintains adequate amount of cash to serve transactions; requests

additional cash or surrenders excess cash whenever necessary for

security reasons.

9. Prepares proof sheet to summarize transactions processed during

the day and counter check totals with other sections.

10. Verifies cash count of withdrawals from depository bank.

11. Acts a Roving Teller; picks-up deposits.

12. Performs other tasks as may be assigned from time to time.

Position Title: LOAN PROCESSOR

BASIC RESPONSIBILITIES:

Responsible for effectively identifying business prospects,

preparing suitable loan packages that meet clients’ needs, processing

and monitoring of loan accounts.

SPECIFIC RESPONSIBILITIES:

1. Identifies potential loan borrowers; visits prospective accounts and

offers the bank’s loan facilities and discusses how the bank can

assist in the growth of the business.

2. Studies and analyzes the business prospects, its viability as well as

the credit worthiness of the borrower and the project. This would

involve interviews with prospects, ocular inspection of project sites,

review of feasibility study and analysis of financial projections and

other related activities that can further strengthen the positive

prospects of the business.

3. Ensures timely submission of complete loan

requirements/documents.

4. Prepares loan reports that provide accurate figures and reliable

data/information that can be used by the Credit Committee in

endorsing loan applications for approval of the Board of Directors.

5. Follows-up the documentation process; prepares the credit

implementation ticket to ensure prompt release of loan proceeds.

6. Computes for net loan proceeds and verifies correctness from

Accounting.

7. Personally attends to clients for signing of loan documents and

actual release of loan proceeds.

8. Visits projects and monitors business progress and collection

performance.
 9. Prepares post-release documents of refinanced accounts.

10.Regularly updates loan documents of existing loan accounts.

11.Coordinates with Collection Unit regarding problem accounts; offers

solutions to problems encountered by borrowers.

12.Perform other tasks as may be assigned from time to time.

Position Title: GENERAL BOOKKEEPER

BASIC RESPONSIBILITIES:

Responsible for the preparation of the daily trial balance and

counterchecking T-accounts of other Sections to validate consolidated

report. Also responsible for the maintenance of the general ledger and

subsidiary ledgers of the Main Branch.

SPECIFIC RESPONSIBILITIES:

1. Prepares the daily trial balance and counterchecks entries with

proofsheet of other sections.

2. Manually balances CA/SA transactions and counterchecks with

computer print-out on a daily basis; balances computer print-out

of accounts by subtype and size against trial balance.

3. Posts daily transactions in the general ledger and subsidiary

ledgers.
 4. Computes for the month-end accruals of expenses payables and

amortization of prepaid expenses and deferred expenses to prepare

the month-end proofsheet.

5. Files transaction tickets according to account title.

6. Prepares Main Branch accounting reports for submission to the

Controllership Unit.

7. Prepares SSS collection remittance for all branch collections.

8. Prepares month-end and quarterly reports such as income

statement and various schedules of the Main Branch. Performs

other tasks as may be assigned from time to time

Position Title: MESSENGER/JANITOR

BASIC RESPONSIBILITIES:

Responsible for the prompt and efficient delivery of letters, bank

statements, reports and other communication materials to clients, other

banks and other private and government agencies. Also responsible for

maintaining cleanliness of office premises which includes work stations,

executive rooms, reception areas, toilets, the conference room, etc. as

maybe assigned.
SPECIFIC RESPONSIBILITIES:

1. Plans daily itinerary and daily work priorities to maximize time and

effort as well as ensure prompt delivery of outgoing documents.

2. Regularly cleans service vehicle.

3. Regularly cleans assigned areas. Collects and disposes garbage at

the end of the day. Washes dishes at the end of the day.

4. Assists in the repair and maintenance of office facilities, plumbing

and electrical works, office equipment and furniture.

5. Assists in the purchasing functions of immediate supervisor.

6. Performs other tasks as may be assigned from time to time.

E. JOB SPECIFICATION

MINIMUM QUALIFICATION REQUIREMENTS

MANAGER

• Must be a graduate of a business course

• At least 5 years work experience in marketing or client

relations

• With very good communications and interpersonal skills

• He must be fit and proper for the position he is being

proposed/appointed to. In determining whether a person is

fit and proper for a particular position, the following matters

must be considered:
 - integrity/probity;

- competence;

- education;

- diligence; and

- experience/training.

CASHIER
• Must be a graduate of a business course preferably

accounting

• At least five years work experience in bank operations in a

supervisory capacity

ACCOUNTANT

• Must be a Certified Public Accountant

• At least five years bank accounting work in a supervisory

capacity

LOAN PROCESSOR

• Graduate of a four-year course

• At least 2 years experience in a related field

• Must have working knowledge on credit investigation,

appraisal, financial analysis

 • Must be aggressive and a self-starter; able to work with

minimum supervision

• Must be an effective communicator (oral & written

communication skills)

GENERAL BOOKKEEPER

• Must be an accounting graduate

• At least one year accounting work experience

TELLER

• Must be a graduate of a business course

• With good communications and interpersonal skills

MESSENGER/JANITOR

• At least college level

• Has ability to drive a motorcycle and car

• Hardworking
MARKETING
ASPECT
A. PROJECT DESCRIPTION

The name of the project is Dumaguete City Development Bank,

Canlaon City Branch, Negros Oriental. As defined in Republic Act No.

8791 The General Banking Law of 2000, banks shall refer to entities

engaged in the lending of funds obtained in the form of deposits. There

are many classifications of banks, most common of which are the

universal banks, commercial banks, rural banks, cooperative banks and

thrift banks.

Republic Act No. 7906 also known as the “Thrift Banks Act of

1995” refers thrift banks to include savings and mortgage banks, private

development banks, and stock savings and loans associations organized

under existing laws.

“In addition to powers granted it by this Act and existing laws, any

thrift bank may:

(1) Accept savings and time deposits

(2) Open current or checking accounts: Provided, That the thrift

bank has net assets of at least Twenty million pesos (P20,000,000)

subject to such guidelines as may be established by the Monetary Board;

and shall be allowed to directly clear its demand deposit operations with

the Bangko Sentral and the Philippine Clearing House Corporation

(3) Act as correspondent for other financial institutions

(4) Act as collection agent for government entities, including but

not limited to, the Bureau of Internal Revenue, Social Security System,

and the Bureau of Customs

(5) Act as official depository of national agencies and of municipal,

city or provincial funds in the municipality, city or province where the

thrift bank is located, subject to such guidelines as may be established

by the Monetary Board

(6) Rediscount paper with the Philippine National Bank, the Land

Bank of the Philippines, the Development Bank of the Philippines, and

other government-owned or controlled corporations. Said institutions

shall specify the nature of paper deemed acceptable for rediscount, as

well as rediscounting rate to be charged by any of these institutions

(7) Issue mortgage and chattel mortgage certificates, buy and sell

them for its own account or for the account of others, or accept and

receive them in payment or as amortization of its loan.

Such mortgage and chattel mortgage certificates shall be issued

exclusively in national currency and exclusively for the financing of

equipment loans, mortgage loans for the acquisition of machinery and

other fixed installations, conservation, enlargement or improvement of

productive properties and real estate mortgage loans for: (a) the
construction, acquisition, expansion or improvement of rural and urban

properties; (b) the refinancing of similar loans and mortgages; and (c)

such other purposes as may be authorized by the Monetary Board.

A thrift bank shall coordinate the amounts and maturities of its

certificates with those of its loans, so as to ensure adequate cash receipts

for the payment of principal and interest at the time they become due.

The bank shall accept its own certificates at least at the actual price of

issue, in any prepayment of loans which mortgage or chattel mortgage

debtors may wish to make: Provided, That the date of maturity of the

certificates is not later than the date on which the payment would

otherwise become due, in the absence of the aforesaid prepayment

(8) Purchase, hold and convey real estate under the same

conditions as those governing commercial banks

(9) Engage in quasi-banking and money market operations

(10) Open domestic letters of credit

(11) Extend credit facilities to private and government employees:

Provided, That in the case of a borrower who is a permanent employee or

wage earner, the treasurer, cashier or paymaster of the office employing

him is authorized, notwithstanding the provisions of any existing law,

rules and regulations to the contrary, to make deductions from his

salary, wage or income pursuant to the terms of his loan, to remit

deductions to the thrift bank concerned, and collect such reasonable fee

for his services

 (12) Extend credit against the security of jewelry, precious stones

and articles of similar nature, subject to such rules and regulations as

the Monetary Board may prescribe

B. DESCRIPTION OF TARGET MARKET

The target markets of the proposed project are the local

government of Canlaon City, the employed residents of Canlaon City and

nearby municipalities and the small and medium business

establishments. Employed residents refer to the labor force of the city

and are categorized as: government, private and self-employed

individuals.

Other Target Markets identified are the large scale planters and

different businessmen in the community who would most likely avail of

loans.

C. DEMAND FOR BANKING SERVICES

The survey showed that 60 percent of the respondents have an

existing bank account. Thirty-six percent do not patronize any banking

institution. Four percent did not answer the question. To determine the

demand for the business, the data gathered, as shown in Figure 12

shows 99 percent in favor of DCDB opening a branch in Canlaon City

and 99 percent ready to avail of its products and services. One percent

do not favor the project.

Canlaon City is a third class city in the province of Negros

Oriental, Philippines. According to the 2000 census, it has a population

of 46,548 people in 9,302 households.

The financial resources of the local government of Canlaon for the

year 2007 are broken down as follows:

Revenue per Month

Taxes, Licenses, Permits P14,224,342.32

National Government Subsidiaries P 14,858,252.00

Other Sources P 1,233,522.76

In Negros Oriental, the government plans to concentrate on the

development of the province’s geothermal resources. It is building an

additional 20-megawatt power plant at Palinpinon II, and another 40-

megawatt power facility in Northern Negros near Canlaon City.

As mentioned in the project description, the additional powers of a

thrift bank is to act as an official depository of national agencies and of

municipal, city or provincial funds in the municipality, city or province

where the thrift bank is located, subject to such guidelines as may be

established by the Monetary Board. The government sector would be the

major client of the prospective bank. The list of clients would include

teachers of the various schools in the area, employees of privately-owned

businesses, and small and medium enterprises.

For the government clients and other businesses, payroll can be

facilitated through the bank, negating the need for transacting business

in San Carlos or elsewhere. Currently, Canlaon employees have to travel

to San Carlos City, Negros Occidental, to collect their salary, cash their

cheques, or have them cashed at certain establishments in Canlaon for a

fee.

At present, these resources are not put to use productively in

Canlaon City; the employees tend to do their shopping in San Carlos City

since they are already there. The market opportunities created by a

bank branch in Canlaon City for small to medium businesses make this

project viable.

D. SUPPLY
 Although there are no existing banking institutions in Canlaon

City, there are other financial institutions that more or less provide

similar services. There are three pawnshops: Palawan Pawnshop,

Chamar Pawnshop, and Cebuana Lhullier which also provides the

service of pera padala, and Western Union. There is one lending

investor, AAA Agency, which is based in San Carlos City. Credit

cooperatives also accommodate loans, and among the three biggest in

Canlaon are the Bucalan Multipurpose Credit Cooperative, Canlaon City

Government Employees Credit Cooperative and Canlaon City

Multipurpose Development Credit Cooperative. As shown in Figure 15,

47.9 percent of the respondents avail their loans from SSS/GSIS, 22.9

percent from Credit Cooperatives, 20.2 percent from pawnshops, 7.3

percent from informal lending and 1.7 percent from other institutions.

And as shown in Figure 8, 60 percent of the respondents have existing

bank accounts.

Based on the survey conducted, the respondents avail of the

services of the institutions mentioned above.

E. DEMAND-SUPPLY ANALYSIS

In determining the demand and the supply for financial services of

the proposed project, the researchers concluded that there is a high

demand for a bank in Canlaon City. The lack of a bank in the city has

resulted in the respondents turning to other financial institutions like

credit cooperatives and pawnshops. Aside from that they use the services

of banks outside the city regardless of distance, cost and time

considerations. This shows that there is demand and a lack of supply of

financial services which a local bank could provide.

F. PRICE STUDY
Bank charges:
Bank certification P50.00
Purchase of a Manager’s check, MC P20.00
Documentary stamp on MC P1.50
Inter-branch transfer P50.00
regardless of amount
Below minimum balances P25.00 per month
(current and savings, or C&S)
Dormant C&S accounts P30.00 per month

Overnight checks:
if funded or deposited after closing
time or a late deposit P100.00

if funded on the next banking day

before clearing or cut-off time P600.00

if not funded or returned P1,100.00

Demand deposits:
Minimum initial deposit P 5,000.00
Minimum maintaining balance P 2,000.00
Average daily balance to earn interest P50,000.00

Savings deposits:
Minimum initial deposit P 500.00
Average daily balance to earn interest P1,000.00

Preferred savings deposit:

Minimum deposit of P50,000.00 for one month (renewable)

The interest, amount earned on time deposits, are subject to

twenty percent withholding tax, as prescribed by the BSP policy.
Deposits are covered under PDIC maximum of P250,000.00
DCDB offers these rates for the following deposit products:

- Super Privileged Time Deposit gives 6.5% per annum with a term

of five years; interest payable monthly and will be credited to your

current or savings account.

- Interest rates on Time Deposits and Preferred Savings Deposit:

AMOUNT (Pesos) Interest Rates (%)

5,000.00- 99,999.99 2.25

100,000.00- 499.99.99 2.50

500,000.00- 999,999.99 2.75

1,000,000.00- 4,999,999.99 3.00

On 5M and above, a special rate may be given.

- Savings Deposit accumulates 1.5% per annum, which requires a

monthly minimum balance.

- As for the loans, the rates range from 15% - 18% per annum,

explains DCDB Loans Department.

G. MARKET ANALYSIS

There are basically two factors affecting the market; these are

internal and external factors.

INTERNAL FACTORS

1. Location
 Most if not all of the respondents do their banking in

San Carlos City, Guihulngan City, Dumaguete or outside the City

of Canlaon. Accessibility of the business or the bank would attract

the market to not go out of Canlaon City, but instead do their

banking transactions where it is near.

2. Interest Rates

High interest rates on savings and low interest rates

on loans would entice the market in patronizing the business.

3. Management of the Business

Good management would lead to excellent operations.

And excellent operations lead to give quality service.

4. Employees

Motivated and well-trained employees could help the

bank in giving quality service to its clients. Employees with good

communication skills would have the ability to welcome the clients

and make them feel comfortable when doing their transactions.

EXTERNAL FACTORS

1. Competitors

The competitors are the most significant external

factor that could affect the market of the bank because more or

less these pawnshops and credit cooperatives provide similar

products and services. The people of Canlaon City do their banking

transactions in San Carlos City, although this is outside of

 Canlaon City. It still poses a threat to the new branch of DCDB

because the depositors have already established the trust and

security of their deposits with these banks. It is noted that there

are eight banks in San Carlos namely: Bank Victorias, BPI, DBP,

PNB, Landbank, RCBC, Equitable PCI and Metrobank.

Guihulngan has three banks namely: Landbank, PNB and the

Rural Bank of Guihulngan City.

2. Security

Because of the previous experience with RB Canlaon City,

the market may now be hesitant to open an account with DCDB.

The security of their deposits will be questioned.

To illustrate and summarize the factors, refer to the model below:

Porter’s Five Forces

THREAT OF NEW ENTRY

Competitiv
e
Rivalry
SUPPPLIER POWER
THREAT OF SUBSTITUTION
Threat of New Entry:
• Expensive to enter except for an
established bank
• Knowledge not readily available
except for established banks
• No economies of scale to favor the
initial entrant
• Low barriers of entry
• New entrants not necessarily
banks to compete
Supplier Power:
• The suppliers would be the
depositors
• In the case of the government
agencies they are important to the
branch, but once there is a MOA
(Board Resolution) this should
capture them
• There is no one else in the location
who they can switch to deposit
their money
Threat of Substitution:
• Substitution is hard because
substitutes are either or more
expensive or need more
requirements (collateral)
SWOT ANALYSIS
BUYER POWER
Competitive Rivalry:
• Few competitors in area at present
• No competitors who can offer the
same quality of service
• No competitors that can offer all
the services needed
• Competitor banks are at least 1
hour away by car
Buyer Power:
• Low buyer power
• In the case of the government
agencies they are important to the
branch but once there is a MOA
(Board Resolution) this should
capture them
• There is no one else in the location
who they can switch to
• The government comprises few
powerful buyers on price
 STRENGTHS
First bank in Canlaon ergo Captive
Market
-Wide range of financial services
-The bank is reputable and is
trusted by the community
-Deposits are PDIC Insured
-Expertise in banking
WEAKNESSES
Newly established branch
-Not everyone is aware of the
bank’s services
-Market has low trust in banks
because of previous bank closure
-Market appears to have a growth
limit because of the lack of
customers passing through the
area

OPPORTUNITIES THREATS
-All loans of small & medium -Security
enterprises -Entry of other banks
-Government patronage -Fortuitous events, i.e, eruption of
-Captive market Mt. Canlaon
-Private sector patronage
An analysis of the two tools illustrated above reveal certain aspects

of the industry that the marketing program will have to address.

An important aspect evident is the fact that the main

advantage of putting up a bank branch in Canlaon City at this

moment is that there is no other equivalent bank (in terms of range

of financial services) in the immediate area. By being the first, the

branch hopes to be able to capture a large portion of the market

before competitors try to enter the area.

In Porter’s model we also see that it will be relatively easy for

a competing bank to enter the area, as there are low barriers to

entry and little to protect the market originally captured by the

initial entrant. Should an equivalent competitor enter the market

many of Porter’s forces would change and there would be a higher

 level of threat of substitution, thereby giving the buyers and

suppliers a higher level of bargaining power.

The marketing program may address these two aspects by

vigilant attention to their product mix and the demands of the

market.

H. MARKETING PROGRAM

Before the start of the operations of the bank, an advertising

campaign must be formulated and put into motion. As the government

is foreseen to be a major client, advertising should include this sector

and future products and services should reflect their needs.

Signage should be placed in a few visible areas around the city.

Printed material should also be disseminated showing the bank’s

products and services and its location.

We suggest constructing two billboards announcing the

establishment of DCDB, Canlaon City branch. A suggested site would be

the junction in the Municipality of Vallehermosa to San Carlos and

Canlaon City. Another site to be considered is at the corner of the

national highway and Aquino Avenue, Canlaon City.

Local print and media advertising will be utilized during the last

four months of the construction. The media will always be informed of

any event concerning the bank’s development.

On the City’s charter day or fiesta, the bank should already make

its presence known through sponsorships of various activities.

Various promotional schemes will be utilized to attract customers

to bank with DCDB Canlaon City.

First 100 depositors

Type of Account Initial Deposit Giveaways
Savings Account P500-P5,000.00 Ball pen
P5,001-20,000.00 T-shirt
P20,001 above Ball pen & T-shirt
Demand Deposit P5,000-20,000.00 T-shirt
P20,001 above Ball pen & T-shirt
Preferred Accounts P50,000 above Ball pen, T-shirt, Bag
Loan Release Ball pen, T-shirt, Bag

Suggested promotional activities for the subsequent years:

• For new accounts with initial deposit of P50,000.00 above,
giveaways should be given like ball pens, bag, t-shirt, umbrella etc
(discretion of the manager)
• DCDB must be involved in major activities in the city such as city
fiesta, celebration commemorating the founding of the city, etc.
Give out brochures and fliers.
• “Summer Extravaganza” Promo – this is between the months of
March to May. Those who will open an account during this time
will get giveaways such as sun visors, summer cap, fans, and shirt
or other summer wear. The freebies would depend on their initial
deposit.
• “Savings for the Rainy days” Promo – this is between the months of
June to August. Same details will be undertaken with the promo
during summer but the giveaways would differ. The freebies would
be something they could use during the rainy season like
umbrellas, jacket, cap etc.
• For the month of December, calendars and diaries will be given to
the clients.
TECHNICAL
FEASIBILITY
A. PRODUCT/SERVICES DESCRIPTION

Types of Account Ownership

Individual or Personal Account

The most common type of a bank account is the single-name

individual or personal account in which a single individual transacts

with the bank under his own name. Since the bank deposit is a

contract, only those with legal capacity to enter into contracts may make

bank deposits. Under general contract principles, insane or demented

persons and deaf mutes that do not know how to read or write, cannot

give consent and therefore, cannot enter into contracts, including bank

deposits. The legal presumption that follows when money is deposited in

the individual name of a person is that the money is his property, and

the Bank does not question ownership of funds deposited. In the

absence of fraud, or commission of some other crime or irregularity, the

bank may accept funds for deposit regardless of its source.

Joint Accounts

A joint account is a joint undertaking between two or more

individuals to open and maintain a deposit account with the bank. It

may take the following form:

a. Joint “and” Account – when an account is opened and

maintained in the name of two persons bound together by the

conjunctive “and”, a co-ownership is created by virtue of which the

ownership on an undivided thing of right belongs to both of them.

b. Joint “and/or” Account – When two depositors open an

account with the use of the disjunctive “and/or”, either one of

them may deposit and withdraw from the account without the

knowledge, consent and signature of the other.

Business Name/Sole Proprietorship Account

The submission of the application and certificate of registration

issued by the Department of Trade and Industry must first be required

before an account in a business name may be opened. This is especially

true in the case of sole proprietorship in order to ascertain the true name
and real identity of the depositor. Only the registered owner of the

business name may deal with the account, and checks payable to either

the true name or business name may be accepted for deposit to the

account after proper endorsement.

Partnership Account

By the contract of partnership, two or more persons bind

themselves to contribute money, property or industry to a common fund,

with the intention of dividing the profits among themselves.

Corporate Account

A corporation is an artificial being created by operation of law,

having the right of succession and the powers, attributes and properties

expressly authorized by law or incident to its existence. A corporate

account may be opened in the name of the corporation. It is improper

and irregular to open and maintain a corporate account in the individual

name of an officer or any person because funds in a corporate account

belong to the corporation, with the officers acting merely as agents

Accounts of Unregistered or Unincorporated Association

Social clubs, associations, parish or religious organizations and

other unregistered or unincorporated groups may apply for deposit

accounts. In such cases the bank should require a copy of the articles of

association or constitution and by-laws of the organization, which should

contain provisions on the treatment of funds and designation of officers

authorized to deal with bank deposits. A certificate of Authorized

Officers must likewise be required.

Treasurer-In-Trust Account

A temporary account pending the Securities and Exchange

Commission (SEC) approval of a new entity’s Article of Incorporation.

The treasurer should hold the money used in opening the account in

trust for the new corporation. Treasurer’s affidavit must be submitted.

This account is opened with a set of temporary cards only, to be replaced

by set of permanent cards upon SEC’s approval. No checkbook should

be issued at this point. Usually the client will request for a Bank’s

certification regarding its cash balance addressed to SEC. This

certification should bear the signature of a Bank officer and duly

notarized before presentation.

TYPES OF DEPOSIT ACCOUNTS

Passbook Savings Accounts

Initial deposit P500.00

ADB to earn interest P1,000.00 1.5%

Is a deposit of client’s funds commonly evidenced by a passbook

issued by the bank to the depositor. The funds are withdrawable

anytime upon presentation of the passbook and withdrawal slip duly

accomplished and signed by the depositor, subject to verification of

identity, authority, validity of signature and adequacy of balance.

Current/Demand Deposits Accounts

Initial deposit P5,000.00

Maintaining Balance P2,000.00

ADB to earn interest P50,000.00 1.5%

Is a deposit wherein funds may be withdrawn through the

issuance of checks. Checking accounts provide its users the safety and

convenience of paying business and personal transactions without

carrying cash. It is withdrawable anytime upon presentation of a duly

endorsed check, subject to verification of:

a. Identity and authority of drawer and person presenting

the check

b. Adequacy of balance.
 Clients may open a checking account as long as the proper

identification papers and documents are presented and the requirements

complied with. Current account depositors may pre-order personal or

commercial checkbooks with the branch.

Preferred/Time deposits

Minimum deposit P50,000.00

Interest Rate 2.25%-3%

These represent funds deposited with the Bank by clients for a

fixed period of time, thus earning interest higher than that given to

savings accounts. Unlike current and savings account, time deposits are

not subject to check or cash withdrawal upon demand. These deposits

are evidenced by certificates issued by the Bank, which bear details such

as the name of the person to whom the certificate is payable, the date of

issue, amount, interest rate and maturity date.

OTHER SERVICES

Loans (rate:15-18% pa)

Servicing the financial needs of the clients thru borrowing of funds

from the bank either for commercial, industrial, agricultural or for

personal purposes.
Manager’s/Gift Checks

These are checks issued to customers in exchange for cash, check,

or an amount debited against their account. Payment of these checks

and by the bank so much so that they are more acceptable than ordinary

check. Gift checks are issued in different denominations and serve as

gifts for different occasions.

B. BANK POLICIES

The new DCDB Canlaon City branch will follow the bank policies of

that of the Main Branch and other branches as seen in the Bank’s

Operations Policies and Procedures Manual.

Just to cite some of these policies: a branch teller will only have

P25, 000.00 in his/her cashbox possession, as is prescribed in the

manual of operations. The teller will immediately turn over all excess

amounts to the cashier with proper standard documentation of such

transaction. Deposit to other bank transactions releases the amount

from what is available in the cash in vault. Deposit pick-up between the

bank and the client shall follow agreed banking procedures with

professionalism and utmost security.

 The cashier and bank accountant will verify cash in vault at the

end of the day. The main cash vault will be in the dual control of two

authorized employees designated by the executive vice president of the

bank. Bank policy states that the vault shall be regularly opened fifteen

minutes before the start of the day and closed at the earliest possible

time.

Amount of the cash in vault follows strictly the reserve requirement

for the day after considering bank’s deposits with which the Bangko

Sentral ng Pilipinas, or BSP, has available for its reserve cover.

Deposits over one million pesos will be under the anti-money

laundering policy, Republic Act 9160, and its mandatory plan of actions

to handle such transaction. For existing accounts, the deposit considered

large and unusual are those that are ten times the regular average daily

transaction for the immediate preceding six months and will be subject

to such policy also.

Payment of “on us” checks under a savings account for

withdrawals over the counter require:

Amount approving authority

P500.00 and below tellers

P501.00- 20,000.00 any one of the bank officers

 P20, 001.00 and above any two of the bank officers

Dormant accounts are those that don’t show any transaction or

movement for a period of time; current accounts require one year and

savings accounts require two years.

Fund transfers require written authority or a BOD resolution.

Loans and other credit accommodations

A customer’s confidential information sheet contains the following|:

1. Name of client

2. Address of the client

3. Purpose of the loan

4. Deposit/loan accounts

5. If client is a corporation, it must indicate the following:

- Ownership/ management/ officers or BOD

- History of the corporation

- Significant highlights/ products of the corporation

- Financial standing which is current to the last two to three

years

- The suppliers and credit dealings

- Competitors and affiliate companies.

Offering Ticket and Credit Approval Memorandum

 1. The heading contains a detailed explanation of the subject/s

concerning the loan application, the type of credit facility to be

issued, and amount of the loan and the date of preparation of the

memorandum.

2. The terms and conditions for the payment of the loan applied for.

3. The client’s confidential information sheet.

4. The client’s financial statements for the current past two to three

years.

5. Proof of security and/or collateral support for the loan application.

6. Credit investigation.

7. Recommendation of loan processor/ account officer to the

approving body/ officer of the bank.

Credit Authority Structure of the loan approval/ levels of approving

authority

1. Board of Directors

2. Executive Committee

3. President

4. Executive Vice President/ Vice President

5. Assistant Vice President

Designated “approving officers” are empowered to execute and sign for

and in behalf of the bank as long as the loan agreement is governed by

the bank’s policy on extension of credit, prevailing credit memorandums/

policies issued by the bank from time to time and pertinent laws, rules

and regulations issued by the bank compliance officer, the BSP and

some government authority.

General Approving and Signing Authority

Levels of Authority Approving body/ officer

- Broad, strategic and long-term credit Board of Directors

policies and directions

- New and/ or amendments in existing Board of Directors

credit programs and necessary guidelines

- Operating policies, plans, guidelines, President/ EVP/ VP

rules and regulations, to effectively implement the

approved credit policies and programs

Secured loans Approving body

- up to single borrower’s limit Board of Directors

- up to P5.0 M EXECOM

- up to P500 T President/ EVP/ VP

- up to P100 T AVP

Unsecured loans
- up to single borrower’s limit Board of Directors

- up to P1.0 M EXECOM

- up to P500 T President/ EVP/ VP

In the signing of bank business documents, deed of real estate,

mortgage/ mortgage agreements, cancellation of mortgage, disclosure

and release of statements, a branch manager is empowered to perform

such duties. But all memorandums of agreements concerning

refinancing programs and/ or special projects are the responsibility of

the President/ Executive Vice President/ Vice President..

Collection of Accounts

1. A first notice is prepared by the branch bank loan processor and is

mailed through the ordinary post office mail fifteen days before the

loan’s due date.

2. A second notice is mailed through registered post office mail one

week after the loan’s due date. Enclosed is a statement of the

account.

3. A mail inconvenience letter is mailed fifteen days after the receipt

of the second notice.

4. A lawyer’s letter will follow, giving the subject fifteen days to settle

the account’s business before instituting judicial or extrajudicial

proceedings.
 5. If there is no payment/ settlement after fifteen days of the receipt

of the lawyer’s letter, judicial and extrajudicial proceedings will be

instituted.

Loan processors/account officers are advised to exhaust all means to

collect all past due accounts and try to apply all mitigating measures to

help the account get back to its current status. Foreclosure proceedings

shall apply only as the last recourse of the bank.

“In case of non-payment of the amount of this note by any

amortization on demand when due, or any other amount or amounts due

on the account of this note, the entire obligation plus interest and

penalty and whatever advances made by the bank shall become due and

demandable at the option of the bank.”

All of these products and services will be offered by DCDB Canlaon

City Branch. Special thought should also be given to specific

Agricultural loans and programs designed to: improve irrigation

infrastructure, provide post harvest facilities such as mechanical dryers

and rice mills, seed bank programs, livelihood programs, agricultural

mechanization, and micro-financing and other entrepreneurship based

loans.
C.BANK LAYOUT
BANK LANDSCAPE
D.EQUIPMENT/SUPPLIES
Security Devices Price
Cash vault P60,000.00
Vault Doors 68,000.00
Time Locks 1,363.00
Combination Locks 14,575.00
Burglar Alarm 23,200.00
Hold up Alarm (3 @ 2,440) 7,320.00
Records Vault 38,000.00
Cash Steel Safe 10,956.00
Total P223, 414.00

Equipment Price
Adding Machine P2,750.00
Bill/Money Counter 40,000.00
Coin Counter 30,000.00
Check Writer 4,494.82
Doc Stamps Machine 18,160.90
Typewriter 2,185.50
Computer 6 @ 28,550.00 171,300.00
Printer 5 @ 2,495.00 12,475.00
Generator 42,800.00
Fax Machine 6,995.00
Filing Cabinets 2 @ 4,000 8,000.00
Tables and Chairs 20, 000.00
ATM Machine 24 hours 272,187.00
Total 631, 348.22

Stationary and Supplies Price

Scissor 6@42.00 252.00
Push Pin 26.00
Clip paper 24.75
Foldback clips 19.00
Fastener 10.50
Cutter 33.00
Eraser 6.25
Sharpener 20.25
Ring Files 138.50
Clear tape 12@19.50 234.00
Masking tape 6@20.25 121.50
Glue 47.75
Long Folder 12@8.00 96.00
Short Folder 12@4.25 51.00
Lond Bond paper 1 rim 224.25
Short Bond paper 1 rim 202.75
Record Book 106.50
Stapler 6@169.25 1,015.50
Puncher 3@189.50 568.50
Staple Wire 12@36.00 432.00
Journal Book 6@24.00 144.00
Ledger 6@29.00 174.00
Total 3, 948.00

E. BUILDING PLAN

As to be determined by the Board of Directors as of the

moment. Our recommendation is to purchase a bigger piece of land and

develop a commercial complex containing retail, service, and other

business including the bank. Offer this as a start for the small to

medium entrepreneurs of the city. Suggested types of business are a

grocery store and a restaurant or service providers.

FINANCIAL
FEASIBILITY
 A. GENERAL ASSUMPTIONS

The first general assumption is that through a passed city board

resolution, the DCDB Canlaon City branch is made the government’s

depository for the city and region. All government financial transactions

including the payroll of the government employees and public school

teachers will avail of the bank’s services.

Quarterly Internal Revenue Allotment (national) P44,574,756.00

Monthly local collections (taxes, permit, etc.) P14,224,342.32

TOTAL P58,799,098.32
 The group makes a general assumption that excess cash will be

loaned out to DCDB main branch at the rate of 9 percent per annum.

Operational Assumptions

a) Bank hours will be from 9:00am to 3:00pm

b) Employees will work till 8:00am to 5:00pm with 1-hour lunch

break.

c) The bank will be open on weekdays and be closed on all public

and special holidays.

d) Cut- off for clearance of cheques will be 9:30am to allow for

travel time to BPI San Carlos whose cut-off time is 11:00am.

e) Excess funds will be deposited with BPI- San Carlos. A portion

may be invested in government securities at manager’s

discretion subject to restrictions.

f) Maximum of 10 percent current/saving deposits will be kept as

cash in the vault

g) Company will procure a motorcycle for bank use.

h) Main office will provide a service vehicle for the branch

manager’s use.

i) There will be a provision for an ATM machine in the bank layout

but it will not be installed in the first year of operation, until the

bank will be financially stable to purchase one.

 j) All policies and regulations of the department of labor and

employment (DOLE) will be complied with.

k) All policies, rules and regulations of the DCDB main office will

apply to the branch office.

l) The first branch manager will be an officer from DCDB main

office.

m) Rank and file staff will be recruited from qualified residents of

Canlaon City.

Revenue Assumptions

a) One percent service charge will apply to all government

transactions.

b) Two percent service charge will apply to all payroll transactions.

c) Agricultural loans will have an interest rate of 15 percent

d) Commercial loans will have an interest rate of 15 percent.

Expense Assumptions

a) The salary of the bank branch employees will have a three

percent merit increase every year after having rendered a minimum of 1

year of efficient service.

b) The utility expense will increase according to current market

statistics.
 c) Bank premises, furniture, fixtures and equipment are carried at

acquisition cost or construction cost less depreciation and impairment

losses.

Depreciation is computed on the straight-line basis over the

estimated useful lives of the assets as follows:

Buildings 40 years

Furniture, fixtures and equipment 1-10 years

Leasehold improvements are amortized over the terms of the

related leases or the useful lives of the improvements whichever is

shorter.
 SOCIO-
ECONOMIC
FEASIBILITY
A. ECONOMIC ASPECT

We foresee the bank branch having an economic impact on the

community. Services offered by the bank will most probably affect certain

prevalent social behaviors.

For instance, people will no longer have to purchase unnecessary

items in order to have their checks cashed locally. Trips to and from San

Carlos City or elsewhere for the purpose of cashing checques and

obtaining money will be minimized. Following this line of thought, people

may travel less and demand that local establishments upgrade their

products and services which are otherwise found in San Carlos City,

Bacolod, or Guihulngan.
 More convenient access to financing may encourage more people

and establishments to avail of loans for home or business improvements.

Industrial loans will promote the growth of businesses in the

community. This in turn could lead to more employment opportunities.

Agricultural loans could lead to higher productivity through

improvements in farming practices.

B. SOCIAL DESIRABILITY

Having the services of a bank brings quite a confidence boost to a

young city like Canlaon City. Once again it is given the opportunity to

present itself’ “as a special growth center of Northern Negros” with the

capacity of a financial banking institution. The entrepreneurs will have

the financial confidence, as well as convenience and security, to establish

them in the local and even international business markets.

Having the knowledge, and the assistance, to decide how to invest

and use a loan wisely bring confidence in all working people. The

agricultural sector should be given an opportunity to avail of services

that will save for the future, at the same time increase their power as

consumers.
C. JOB OPPORTUNITY

As for the bank, there will be a staff of at 6 persons, not including

the security guards. The tellers, bookkeepers, clerks and messenger can

be locally hired if qualified.

As for the city, the bank provides the ability, for small to medium

business entrepreneurs through loans, to put up the business, which in

turn creates jobs.

As for the agriculture sector, through education and

communication, will develop the consumer confidence that can fuel the

city’s economy thus creating more jobs. The agricultural community will

also benefit from having the capital to utilize more efficient means of

production such as mechanization, improved storage and handling

facilities.
LEGAL ASPECT
 When starting a business, it’s crucial that the owner must be

familiar with the basics of business law. Most businesses legal

troubles are the result of unclear documents. Whether one deals with

employees, contractors, or the services that offered, there are certain

legalities that one should consider.

In applying for a Mayor’s permit, the bank must submit a copy of

the SEC registration. Zoning and Locational clearance and certificate of

building inspection must be obtained from the Engineering department.

And then proceed to the Bureau of Fire Protection for the Fire Safety

Inspection clearance. The officer-in-charge will then assess the

building for architectural presentability, structural stability, sanitary

inspection and signage. Assessment and Payment must be made and

after that is the issuance of Business/Mayor’s Permit.

 Since the project is to establish a bank, legalities with the

Bangko Sentral must also be accomplished. The application for

authority to establish a bank should be completed before the

requirements for the issuance of authority to operate is complied with.

After the inauguration of the bank, within 30 days from the date

of opening, another set of requirements must also be submitted to the

Central Bank.

For the bank operations, as mentioned in Republic Act 8791, The

General Banking Law, Section 21, “Banking Days and Hours” are,

“Unless otherwise authorized by the Bangko Sentral in the interest of the

banking public, all banks including their branches and offices shall

transact business on all working days for at least six (6) hours a day. In

addition, banks or any of their branches or offices may open for business

on Saturdays, Sundays or holidays for at least three (3) hours a day:

Provided, That banks which opt to open on days other than working days

shall report to the Bangko Sentral the additional days during which they

or their branches or offices shall transact business.

Chapter 7 of Republic Act 7906, or An Act Providing for the

Regulation of the Organization and Operations of Thrift Banks, And for

Other Purposes, states exemptions which a thrift bank is legally entitled

to. Briefly, the exemptions are: 1) tax emptions; 2) exemption from

publication requirement; 3) exemption from notarial charges; 4)

exemption from registration fees.

For the proposed project, it shall be opened from Monday thru

Fridays, 9:00am to 3:00pm. However, employees are set to work from

8:00am to 5:00pm with a 1-hour lunch period.

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

Figure 1. Age Bracket of Respondents

Below 20
12% 5% 14% 21-30
6%
12% 25% 31-40
26% 41-50
51-60
above 60
No Answer

Figure 1 shows the age bracket of respondents. Twenty-six

percent of the respondents are aged between 41-50 followed by 31-40

years old, 25 percent. A total of 77 percent of the respondents can be

considered to be in the wage earner age.

 Figure2. Gender of Respondents

13%
29%
Male
Female
NO Answer

58%

Figure 2 shows that 58 percent of those who answered the

questionnaires are female and 29 percent are male. Thirteen percent did

not specify their gender

Figrue 3. Civil Status of Respondents

23%
13%
Single
7%
Married
Widow
No Answ er

57%
Figure 3 shows the civil status of the respondents. Fifty-seven percent of

those who responded are married and 23 percent are single. Seven

percent are widowed and 13 percent did not specify their status.

Figure 4. Members in the Family

22%

1 to 5
6 to 10
58%
20% No answer

Figure 4 shows the bracket for the number of members in the

respondent’s family, 58 percent, 1-5 members; 20 percent, 6-10

members, and 22 percent did not specify.

Figure 5. Monthly Income of Respondents

No Answer 7

Above 40,001 11

20,001-40,000 32

15,001-20,000 45 Series1

10,001-15,000 71

5,001-10,000 114

Below 5,000 104

0 20 40 60 80 100 120
Figure 5 shows the range for the monthly income of the respondents. Out

of the 384 respondents 114 of the respondents earn between P5,001 to

P10,000. This is followed by 104 respondents, earn below P5,000. The

researchers sought to determine if the respondents belonged to the

income generating body of Canlaon City. According to this data 56

percent of the respondents belonged to the 10,000 and below monthly

income bracket. Even if a large portion of the sample size earn 10,000 or

below we can see from the succeeding graph that 44 percent of the

sample population spend below 5,000 pesos a month. This would mean

that at least some if not most of the 10,000 peso and below income

earners will also only expend 5,000 pesos per month. We can imply from

this that even though a large percentage of the sample population earn a

relatively low monthly income their monthly expenses are still low and

this is encouraging as it may be an indicator that even the lower income

earning individuals may still have the capacity to save. This

presupposes that the lower income earners are also the ones who have a

lower monthly expenditure, which it is logical to assume.

 Figure 6. Monthly Expenses of Respondents

8% 3%
Below 5,000
5,001-10,000
18%
44% 10,001-15,000
Above 15,000
No Answ er

27%

Figure 6 shows the monthly expenses of the respondents. The

researchers wanted to know the spending power of the residents of

Canlaon. Forty-four percent of the employed sector spend below 5,000,

twenty seven percent spend P5,001-P10,000, eighteen percent spend

P10,001-15,000 and 8 percent of the respondents spend P15,000 and

above.

Figure 7. Monthly Savings of Respondents

250 227

200

150
Series1
100 79

50 23 28
18 9
0
None Below 1,000 1,001-5,000 5,001-10,000 Above No Answ er
10,000

Figure 7 shows the monthly savings of the respondents. From their

monthly income, 227 respondents answered that they save below 1,000.
79 respondents save between 1,001-5,000. And 23 respondents save

between 5,001-10,000. There were 18 who answered none and 28

respondents did not specify their savings. The researchers sought to

establish that people still save money. This question also served to

determine the amount of savings of the sample population.

Figure 8. Exsisting Bank Account

4%

yes
36%
no
60% no answ er

Figure 8 shows that 60 percent of the respondents already have an

existing bank account with other banking institutions outside Canlaon

City and thirty six percent don’t have bank deposits. The researchers

wanted to determine the percentage of those who avail of the services of a

bank and those who don’t.

 Figure 9. Existing Banks

RB Tanjay

Allied Bank

UCPB

Victoria's Bank

Union Bank

RCBC

BPI

EPCIB

RB Guihulungan

Metrobank
DBP

Land Bank

PNB

0 10 20 30 40 50 60 70 80 90

Figure 9 shows the existing banks that the respondents specified. It

shows that the majority of the respondents who avail of banking

institutions outside Canlaon City go to Landbank San Carlos or

Guihulngan. These banks also pose as competitors to DCDB. Although

located outside of Canlaon City, but still are catering to banking needs of

target market of this study.

 Figure 10. Products and Services of Existing Banks
2% 1%
5%
Savings
5%
Time Deposit
Checking Account
8% Utilities Payment
46% Loans
Credit Card
Remittances
11%
Direct Deposit
Income tax Assistance
4% Wire Transfers
Portfolio Management
8%
7%

Figure 10 shows the products and services of the existing banks

which the respondents avail of. It shows that the bigger portion of

the pie goes to savings accounts deposits (46 percent). Eleven

percent avail of the loan services of their banks.

Figure 11. Current Problems of Existing Bank

Slow Service
9% 2%
7% Long Lines
No Parking
Low Saving intrest Rates
26% 14%
High loan Intrest Rates
Unaccomodating Staff
None
No Answer
5% 18% Long Distance

8% Expensive For Travel

9% 2%
Figure 11 shows the current problems the respondents encountered

with their banks. Twenty-six percent indicated that the main

problem is the low savings interest rates that their current bank

offers. Eighteen percent indicated distance to their banking

institution was a problem.

Figure 12. Respondents in Favor of DCDB Branch

382

400

300
Yes
2 No
200

100

0
Yes No

Figure 12 shows the number of respondents in favor of the

establishment of a DCDB branch in Canlaon City. Only 2

respondents are not in favor. One respondent who answered No

said that the bank would be a future competitor of the office the

respondent is currently working for.

 Figure 13. Ideal Location
Bautista's Estate

Old Ceres Terminal

Near the School

EXODUS Ave.
Along National
Highw ay, 7
Near Police Station
Series1
Anyw here Within
the city
City Hall

Near Public Market

Mabigo Midtow n

City Proper/Centre

0 20 40 60 80 100 120 140 160

Figure 13 shows the sites the respondents prefer as a location for

the bank. The majority said that it would be best if the branch would be

situated in the city proper or the city center. This is actually misleading

as Mabigo Midtown and City Proper are the same place. In effect almost

60 percent of the population prefer the midtown area for the location of

the bank branch. The group are recommending a site outside of that

area due to price considerations. However, the researchers believe that

regardless of where the bank will be located in Canlaon City, it would be

only minutes away from the city center

 Figure 14. Banking products and services the respondents Savings Account
wants to avail Time Deposit
Remittances
2.96%
7.78% Wire Transfers
10.94% 9.66%
6.31% Checking Account
Utilities Payments
35.17%
9.95% Direct Deposits
5.32%
Portfolio Management
3.65% Loans
1.58%
Credit Card
4.24% Income Tax Assistance
0.10% 2.36%
ATM
SSS Pensioner

Figure 14 shows the products and services that the respondents would

like to avail of if the plan for a DCDB branch in Canlaon City

materializes. 35.17 percent for savings deposits, 10.94 percent for time

deposits, and 9.95 percent for loans.

Figure 15. Other Financial Institutions Utilized By

Respondents

7.3% 1.7%

22.9% SSS/GSIS
47.9%
Paw nshops
Credit Coop
Informal Lending
Others

20.2%

Figure 15 shows the other financial institutions utilized by the

respondents. These institutions are also considered as competitors of

the bank because they offer similar products and services such as small
loans and cashing of cheques. The chart shows that 47.9 percent of the

respondents avail of services from SSS/GSIS. 20.2 percent of the

respondents go to pawnshops and 22.9 percent to credit cooperatives.

Others go to informal lending institutions such as the “5-6”, meaning for

every five pesos barrowed, six pesos must be returned.

Figure 16. Respondents who would avail of

DCDB products and services

NO
1%

YES
NO

YES
99%

Figure 16 shows the percentage of the respondents who would avail of

DCDB’s product and services. Out of the 384 respondents, 99 percent

would readily avail of these services and only 1 percent would not

because the bank would be a threat (competition) to the company the

respondent works for.

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

A.FINDINGS

1) There is a demand for a bank in Canlaon City. Only two of 384

respondents did not see a need for a bank in the area. This

makes up .5 percent of respondents not in favor of a bank in

Canlaon.

2) The socio-economic profile of the community indicates that a

significant portion of the community saves. Specifically, the

survey revealed that from their monthly income, the majority

(227 respondents) answered that they save below P1,000. This

comprises 59 percent of the total respondents.

3) A majority of respondents (35.17 percent) are willing to

establish a savings account with the proposed bank. 10.94

percent would put their money in a time deposit account, and

9.95 percent would avail of bank loans.

4) The government’s monthly revenues are as follows:

From taxes, licenses, and permits:

P14,224,342.32

From National Government Subsidiaries:

P44,574,756.00

From other sources:

P1,233,522.76
B. CONCLUSIONS

Based on the above findings, we conclude that the proposed

branch of DCDB cannot rely on revenues generated by non-government

sources such as interest from loans. This is because the income-earning

non-government sector has very little power to save amounts of any

significance. Despite the widespread desire for a formal banking

institution, any revenue generated from savings accounts, loans, and

other fees would be negligible. The general economic level of the city

shows that there are no large enterprises and that the city is

predominantly agricultural.

Despite this deficiency, the large Internal Revenue Allotment (IRA),

revenues generated by fees from taxes, licenses, and permits, and the

government payroll, coupled with the present administration’s

willingness to have the proposed bank act as its official depository offsets

the low saving power of the private sector.

In conclusion, we find it feasible to open a branch in Canlaon, only

if the proposed bank branch can capture the government market and act

as its official depository at the outset.

C. RECOMMENDATIONS

We therefore recommend the following:

1) Obtain a board resolution from the local government

designating the proposed bank as its’ official depository.

2) Obtain approval from the Banko Sentral Monetary Board

allowing the DCDB branch to act as the official local

government depository in the absence of an existing official

depository in the area.

3) Purchase the site of the proposed branch. Later when

feasible, buy the surrounding lots for future expansion

including after business enterprises.

4) To insure the continued support of the local government in

the advent of competitor banks entering the market,

continuously update products and services in order to meet

the government’s evolving needs.

5) In the first three years of operation the bank should:

a) Be conservative with its loan exposure

b) Maintain a level of liquidity at or above the industry

average
APPENDICES
 Appendix A
Survey
Questionnaire
 SILLIMAN UNIVERSITY
DUMAGUETE CITY, 6200
PHILIPPINES

Dear Sir/Madam:

This is a letter of introduction from the students enrolled in BA240

(Feasibility Study) of the Masters Degree Program in Business
Administration of Silliman University.

In partial fulfillment of our academic requirements, we are preparing a

feasibility study to be conducted in your area.

Specifically, the study aims at determining the feasibility of establishing

a branch of the Dumaguete City Development Bank (DCDB) in Canlaon
City, Negros Oriental. While this study is academically driven, this is a
live study, and we have the support of our proponent, the DCDB, as well.

In this regard, we are seeking the cooperation of various entities from the
local government of Canlaon City, and from the public and private
sectors in your area. As representatives of both our school and the
DCDB, be assured that we will conduct ourselves as this study with the
utmost professionalism required of us.

We will be grateful for any assistance that you may extend to us by

answering the attached questionnaire thoroughly. All responses will be
kept strictly confidential. Thank you for your time.

Yours truly,
Rene Juntereal Katherine S. Calibat

Maldon Tiempo Sina Pourabrisham

Maricris Joy Tan Bert Riego

Victor Cal

Noted by:
Atty. Gloria G. Futalan
Professor
MBA Program, CBA
Silliman University

THANK YOU FOR THE TIME AND EFFORT YOU SPENT IN ANSWERING
THIS QUESTIONNAIRE. THIS INFORMATION WILL REMAIN
CONFIDENTIAL.

Name (optional):_________________________________________________
Address:_________________________________________________________
Age:_________________________Gender__________Civil Status________
Occupation:______________________________________________________
Place of Work:____________________________________________________
Number of Members in the Family:________________________________

INSTRUCTIONS: Please put a check (/) on the space provided for your
answers:

1. How much is your monthly income?

_____ below P5,000 ______P15,001-P20,000
_____ P5,001-P10,000 ______P20,001-P40,000
_____ P10,001-P15,000 ______ P40,001 and above please
indicate the amount __________

How much are your monthly expenses?

_____ below P5,000 ______ P5,001-P10,000
_____ P10,001-P15,000 ______ above P15,000 please
specify:______________

How much of your monthly income do you usually save?

______ below P1,000 ______ P1,001- P5,000
______ P5,001 – P10,000 ______ above P10,000
2. Do you have an existing bank account?
______ Yes Please specify the bank:______________________
______ No With what financial entity do you bank?_________

3. What kind of services do you avail of from your bank?

____Savings deposit ___ Time Deposit ___Checking Acct
____Utilities Payments ___Loans ___Credit Card(s)
____Remittances ___Direct Deposits ___Income Tax assistance
____Wire Transfer ___Portfolio Management

4. What problems if any, have you encountered with your existing bank?
____slow service ___low savings interest rates
____long queues ___high interest rates for loans
____no parking ___ unaccommodating staff
Others please specify________________

6. Are you in favor of Dumaguete City Development Bank (DCDB)

opening a branch in Canlaon City? _______YES
______ NO

If no please state your reasons__________________________________________

7. What kind of banking services wound you want to avail of?

_____savings accounts _____checking account _____loans
_____time deposit _____utilities payments ____credit card(s)
_____remittances _____direct deposits ____wire transfer
_____income tax assistance _____portfolio management
others______________________________________________

8. What financial institutions have you utilized at this time?

____SSS/GSIS/Pagibig _____Credit cooperatives
____Pawnshops _____informal lending(5-6,etc)
____others please specify___________________________

9. If DCDB opens a branch in Canlaon City, would you readily avail of

its services? _______YES __________NO

10. Please write your comments and suggestions on the proposed

project in the space below:
 Comments and Suggestions Given by Respondents

• I believe that Canlaon City does need a bank in order to augment

our livelihood through its banking services and to provide security

in any amount of money we can save.

• The proposed establishment of DCDB in Canlaon City will be very

beneficial to its residents especially to businessmen and planters

since the city has no existing bank and other financial institutions.

• The proposed project is a big honor for the Canlaonians for it will

not cost them too much for the fare and time in going to San

Carlos to deposit or withdraw their money.

• I want this proposed project to be fulfilled and accomplished

because I want to change the economic situation of the city and life

of the people in Canlaon City. “Kaya dapat lang ipatupad ninyo

ngayon ang plano ng DCDB.”

• There should be low interest rates imposed, fast release of

transactions, and not too many or difficult requirements to

procure.

• I would like to suggest the following:

1. High interest in savings account

2. Accommodating staff

3. Offer quick loans release

4. Must have good location and parking area

• This is a very feasible project for the city to improve its economic

situation and to provide convenience of its residents. People will

learn to save and there will be lesser risk for us to transact

banking business in other places far from the city. We hope that

the project will be implemented this year (2007). More power to the

project!

• Make the project soon. It will provide us convenience, the ability to

manage our finances and improve the economic situation in

Canlaon City.

• Place ATM Facility

• Please hurry.

• It is good and for the welfare of the people in Canlaon City

specifically.

• Good idea but you need to study it further.

• I hope your DCDB branch in Canlaon City will be a success.

• Please respond and just do it!

• Please put up an ATM Machine in Canlaon City for the proposed

DCDB branch.

• Please construct your building as soon as possible.

• I hope that this project will push through.

• The earlier you open the better so we can avail of its services.

• We need to have a bank in Canlaon City.

• We will be very grateful if we will have a bank in Canlaon City.

• Here are my suggestions:

1. Have easy access on any transaction

2. Have accommodating staff and personnel

3. Must be located at the heart of the city

• I am highly in favor of the proposed project.

• We will be very happy if your proposed project will be materialized.

• Please realize this feasibility study. It will be a big help to the

Canlaonians.

• If we will have a bank here in Canlaon City, there will be no need

to go to San Carlos City just to deposit our money.

• Putting a bank in Canlaon City is very necessary considering that

our city is far from San Carlos City and Guihulngan City were

banks are located.

• Happy to have one because not even one bank is available in this

city.

• This proposed project is very good.

• The project proposed is very good especially here in Canlaon City.

We need a bank here so please make it true.

• Here in our place I agree that this city should have a bank in order

that people here can easier deposit their money.

• It is ideal to establish a bank in the city since at the present the

city has no banking institution.

• It is better that we have a bank in the city so that the people of

Canlaon City can deposit their money and can avail of loans for the

development of their business for better living.

• The sooner the better.

• Do it now!

• ASAP.

• Project proposal is very good to us especially there is no existing

bank.

• Do good service.

• It is a good proposal so that we will not be going out of Canlaon

City.

• Very good proposal.

• ASAP.
• If we have DCDB here in Canlaon City, we can easily deposit or

withdraw in our saving account.

SUGGESTION: “It is good if there is ATM in the said bank”

• To improve Canlaon City.

• I suggest that you will open a bank.

• It is good to have a bank in Canlaon City for convenience.

• Hoping you will open your branch here ASAP.

• We would be grateful to have a bank in Canlaon City.

• We would be grateful enough to have a bank at Canlaon City in

order for us to save expenses in going to San Carlos City to get out

money sent sometimes from a distance relative.

• The project of pulling up a branch in Canlaon City is very

beneficial to the constituents considering that as of the moment

there is no available bank at the place.

• For me it is better to have the proposed project in our city.

• Much better if you open DCDB here so that is easy for us to open

saving accounts.

• It is a good project; if this will be materialized may be most of the

depositors will no longer go to San Carlos City where banking

institutions are.

• I hope that DCDB branch in Canlaon City will be realized ASAP.

• It is a good project if this will be materialized plenty of residents

here will be benefited since we don’t have any banks in here in at

place. I hope this will be materialized soon.

• I suggest that the proposed project must be implemented

immediately, because we need vary badly the bank in Canlaon

City.

• I personally and urgently request for the implementation of the

proposed project for the benefit of the constituents of Canlaon City.

• I suggest that you will open or install an ATM machine so that our

problem in going to San Carlos City will be solved.

• It’s a good opportunity for us to have a banking institution in our

city. It will facilitate the safety of the government funds of the city

of Canlaon City and later the financial transactions of the

constituents of the city and barangays and the neighboring towns

as well.

• Early action for this project.

• I think this is a good decision to open a DCDB branch here in our

place so that we can avail of bank transactions in a short period of

time because mostly we have our transactions in the cities of San

Carlos, Guihulugon and Dumaguete and we need more or less

than 1 day of traveling and transacting.

”needed the soonest possible time”

• Afraid of bankruptcy especially on private banks.

• I want immediate action if ever…..

• Hope it will rise soon.

• This proposed project is really needed in our place.

• As early as possible you can open your branch here in Canlaon

City so that we can avail of your services.

• Hope that this Feasibility Study will be materialized as early as

possible.

• It would be convenient for the people of Canlaon City to do banking

business.

• It would be nice if the said proposed project will push through so it

could be convenient for the people here and have their saving

deposits. They don’t have to travel to San Carlos to deposit so with

the city government as it would be less risky.

• Good project proposal. Salamat!

• I hope this will be materialized.

• Madaliin ang pag-open kasi wala kaming banko rito.

• Easy to deposit.

• This proposed project is really needed here in Canlaon City

because we don’t have any existing bank.

• This will be a great help to our city and to the people of Canlaon

City.
• This proposed project is needed in our locality.

• If in case BSP will grant DCDB an authority to oparate in our area

business will improve their sales, many supply increases and

peoples way of life eases.

• We will be very happy if you will open here in our city because we

really need a bank here.

• Give low interest for loans.

• Hoping that this proposed project will be operating soonest.

• The P300.00 back and forth fare is a lot of money in just

withdrawing or applying loan, if takes time for how many hours we

have to be absent or on leave, whereas if have here in Canlaon

City, it’s a great help and great favor for all employees including

businessmen/women/people.

• Canlaon City has a strong demand for banking institution and if

DCDB will decide to put up a bank, the pros and cons must be

thoroughly considered. There must be a strong tool or procedure to

safeguard the investment, particularly loan and credit.

• Hanep because no bank in Canlaon City.

• It’s nice/good to have a branch here in Canlaon and it’s an

opportunity for the Canlaonians and for me to have an access of

DCDB services especially an agricultural loan, since the area is the

agricultural basket of Negros Oriental.

• This would benefit the residents of Canlaon and safety of keeping

code.

• Can it be as soon as possible? Please!

• I hope and pray that this proposal will come true to this city

because its very hard for us Canlaonians.

• It will be beneficial to the people of Canlaon but it would be a big

thread to the company that I’m working with. It will be a future

competitor of our office.

• As early as possible.

• Canlaon City badly needs a bank to cater to the needs of the

people. We would be vary happy if DCDB decides to open a branch

here. Best regards.

• We are in favor to have a branch here in Canlaon City, Negros

Oriental, so that the people experience and know how to save for

their own good for the future.

• I suggest that the proposed project will be implemented as soon as

possible.

• Canlaon City is the city with no banking institution where in

people are looking forward.

• For immediate implementation of the project.

• We really don’t have fixed income. Last few years I was able to avail

of banking services from DBP and other banks in San Carlos City.
 It is unwise to place your savings in places where you have to

spend and several pesos will be wasted for your fare back and

forth. I realized I was not saving because of the distance from the

bank to our place. I would be vary happy to avail of services from

your bank because this is what is lacking in our place. I hope you

will open the soonest possible time.

• Soon the bank will be open.

• I’m very happy if DCDB will open here in Canlaon City for the

convenience of the people.

• It’s okay to have a bank here in Canlaon so it’s easy, especially for

the students on their allowances.

• Big investors are hesitant to come to Canlaon for no bank is

available and they have no travel an hour to San Carlos City for

banking services. If DCDB opens its branch in Canlaon, it would

be a boost to our local economy and an eye opener for the locals to

save or deposit their money to the bank instead of hiding it in

certain places that might lead to loss or impulse spending.

• It should be at the city center.

• For additional employment of Canlaon people.

1) Additional employment for the people of Canlaon City.

2) Easy to access for any transaction.

 3) A town or city should have a bank for the safety or their

financial transaction.

• The office I’m working is very interested in opening an account for

there is no bank here in Canlaon City.

1) Make this project possible.

2) The strategic location for banking is Mabigo proper.

3) Before starting, advertisement and promotion must be given

for barangays.

• Please make this proposed very soon.

1) Easy access for any transaction.

2) Accommodating personnel and staff.

3) It should be at the heart of the city.

• 1) Must have low interest rates of loan.( credit services)

2) Must have character loans.

3) Must provide social services to the clients.

4) Short time processing.

• It’s very good to have a bank in Canlaon City, so that they can help

Canlaon City in economic progress.

• I’m in favor of DCDB opening a branch in Canlaon City because

there is no existing bank here.

• Include assistance to farmers with affordable interest rate.

• Give agricultural loan assistance to Canlaon City farmers with an

affordable interest rate.

• I want to have a bank in Canlaon City so that I can easily save very

money or deposit, instead of going to San Carlos.

APPENDIX B

Banking Laws
APPENDIX C

BSP Forms
APPENDIX D

Permits,
Clearances,
Licenses
APPENDIX E

Taxation
 APPENDIX F

Map &
CDS of Canlaon
City