NAME: PERALTA, APRIL JOY A.

BSTM-1

PHILIPPINE FINANCIAL SYSTEM

CENTRAL BANK OF THE PHILIPPINES

PURPOSE: As prescribed by the New Central Bank Act, the main functions of the Bangko Sentral are:
Liquidity management, by formulating and implementing monetary policy aimed at influencing money
supply, consistent with its primary objective to maintain price stability, Currency issue.

EXAMPLE: Central Bank of the Philippines

DESCRIPTION: Bangko Sentral ng Pilipinas. The Bangko Sentral ng Pilipinas ( lit. Central Bank of the
Philippines; commonly abbreviated as BSP in both Filipino and English) is the central bank of the
Philippines. It was established on July 3, 1993, pursuant to the provision of Republic Act 7653 or the
New Central Bank Act of 1993.

PRIVATE NON-BANK

PURPOSE: Non-bank financial companies (NBFCs) offer most sorts of banking services, such as loans
and credit facilities, private education funding, retirement planning, trading in money markets,
underwriting stocks and shares, TFCs (Term Finance Certificate) and other obligations.
EXAMPLE: Examples of these include insurance firms, pawn shops, cashier's check issuers, check
cashing locations, payday lending, currency exchanges, and microloan organizations.
DESCRIPTION: A non-bank financial institution (NBFI) is a financial institution that does not have a full
banking license or is not supervised by a national or international banking regulatory agency. NBFIs
facilitate bank-related financial services, such as investment, risk pooling, contractual savings, and
market brokering.

FINANCE COMPANY

PURPOSE: The goal of any finance function is to achieve three benefits: business support service,
lowest costs and effective control of the environment. Money is the lifeblood of a business and finance
is the nerve center. Finance is required to promote or create a business, gain assets, develop products,
run market surveys, advertise. The conventional view of finances focuses on being reactive, efficient,
quantitative and risk averse. New innovative views focus on being vision-oriented, opportunity and
growth focused, intuitive and risk-taking.
EXAMPLE: Bank of the Philippines Island (BPI), China Banking Corporation (CHINABANK)

DESCRIPTION: an institution engaged in such specialized forms of financing as purchasing accounts

receivable, extending credit to retailers and manufacturers, discounting installment contracts, and
granting loans with goods as security.

GOVERNMENT SPECIALIZED NON-BANK FINANCIAL INTERMEDIARIES

PURPOSE: Non-Bank Financial Intermediaries (NBFIs) is a heterogeneous group of financial institutions
other than commercial and co-operative banks. They include a wide variety of financial institutions,
which raise funds from the public, directly or indirectly, to lend them to ultimate spenders. The
development banks (such as the IDBI, IFCI, IGICI, SFCs, land development banks, etc.). They specialize
in making term loans to their borrowers. Three other all-India big term-lending institutions are the LIC,
the GIC and its subsidiaries, and the UTI. Of these, only the UTI is a pure NBFI, the others raise funds
as premia from the sale of insurance. Then, there are provident funds and post offices that mobilize
public savings in a big way for onward transmission to ultimate spenders.

EXAMPLE: Social Security System (SSS), Government Secure Insurance System (GSIS)
DESCRIPTION: an institution engaged in such specialized forms of financing as purchasing accounts
receivable, extending credit to retailers and manufacturers, discounting installment contracts, and
granting loans with goods as security. Many non-bank financial intermediaries participate in securities
exchanges and employ a long-term strategy to grow the funds that they manage. The activity of
financial intermediaries is a good indicator of the overall health of the economy and the growth of the
financial services sector. Non-bank financial intermediaries complement banks in that they help invest
savings. They also provide a wider variety of services in comparison to banks.

RURAL BANKS

PURPOSE: The main objective of RRBs is to provide credit and other facilities particularly to the small
and marginal farmers, agricultural laborers, artisians and small entrepreneurs and develop agriculture,
trade, commerce, industry and other productive activities in the rural areas.
EXAMPLE: Zambales Rural Bank (ZAMBANK)
DESCRIPTION: The area of operation of RRBs is limited to the area as notified by Government of India
covering one or more districts in the State. RRBs also perform a variety of different functions. RRBs
perform various functions in following heads. Providing banking facilities to rural and semi-urban areas.
Government-sponsored/assisted banks which are privately managed and largely privately owned that
provide credit facilities to farmers and merchants, or to cooperatives of such farmers or merchants at
reasonable terms and in general, to the people of the rural community. Micro, Small and Medium
Enterprises(MSMEs). It is the process of conducting banking transactions out in the country where bank
branches are too far away to be of use.

COMMERCIAL BANKS

PURPOSE: Commercial banks are financial institutions that provide services for both savers and
borrowers. Their role in the financial system is critical to keeping money available and liquid. By
definition, commercial banks operate in pursuit of a profit, according to the Federal Reserve System's
National Information Center.

EXAMPLE: CTBC Bank Philippines Corporation, Maybank Philippines Incorporation, Citibank

DESCRIPTION: A commercial bank is a financial institution that provides various financial service, such
as accepting deposits and issuing loans. Commercial bank customers can take advantage of a range of
investment products that commercial banks offer like savings accounts and certificates of deposit. The
loans a commercial bank issues can vary from business loans and auto loans to mortgages.

PRIVATE FOREIGN

PURPOSE: Banks often open a foreign branch in order to provide more services to their multinational
corporation customers. However, operating a foreign branch bank may be considerably complicated
because of the dual banking regulations that the foreign branch needs to follow.
EXAMPLE: Bank of America, Mega International Commercial Bank Co.Ltd.
DESCRIPTION: A foreign branch bank is a type of foreign bank that is obligated to follow the regulations
of both the home and host countries. Because the foreign branch banks' loan limits are based on the
parent bank's capital, foreign banks can provide more loans than subsidiary banks.

SPECIALIZED GOVERNMENT BANKS

PURPOSE: These are completely government-owned institutions established mainly to provide medium
and long-term credits to the industrial, agricultural and real estate sectors of the economy.
EXAMPLE: Land Bank of the Philippines, Development Bank of the Philippines
DESCRIPTION: Development Bank of the Phils. services various sectors of Philippine society, from
farmers to businessmen. Although the Philippines has an economy largely dependent on agriculture
(something that Landbank addresses), DBP aims for national development through financing the various
businesses and economic sectors that keep the Philippine economy afloat. Like Landbank, it provides
the services of a regular universal bank; however, it is officially classified as a "specialized government
bank" with a universal banking license.

LAND BANK OF THE PHILIPPINES

PURPOSE: The Land Bank of the Philippines is a government financial institution that strikes a balance
in fulfilling its social mandate of promoting countryside development while remaining financially
viable. This dual function makes LANDBANK unique.
EXAMPLES: Land Bank of the Philippines
DESCRIPTION: a banking association that engages in the financing of transactions in real property,
especially in agricultural land a parcel or parcels of land or real estate held in trust, as for future
development.

THRIFT BANKS

PURPOSE: a thrift bank is to provide their customers and users with mortgages, and to take deposits
for banking conventions such as savings accounts. They also function in order to relieve the monopoly
of national or international banks on the mortgage and lending market, giving local communities and
alternative to brand-name banks.
EXAMPLES: Philippines Savings Bank (PSBANK), RCBC Saving Bank Incorporation
DESCRIPTION: A thrift bank is a bank which aims to provide low-cost mortgages and high-interest rate
savings and checking accounts. Thrift banks, unlike national or international banking chains and
companies, are known to carry out extensive work in the local community, in order to benefit the local
people. They usually have a great deal of knowledge about the local economy, and as a result can
provide accounts and mortgages which benefit the local people the most. Thrift banks originally
provided mortgages and deposit facilities alone. However, they now tend to provide other basic
banking services, such as personal loans, checking accounts and accounts for certain populations, such
as those over the age of 50.

SAVINGS AND LOAN ASSOCIATION

PURPOSE: A savings and loan association (S&L) is a financial institution that specializes in savings
deposits and mortgage loans, and has become one of the primary sources of mortgage loans for
homebuyers today. It offers mortgage services to people from the savings and deposits received from
private investors. Depositors and borrowers are members with voting rights and have the ability to
direct the financial and managerial goals of the organization.
EXAMPLES: Bank of the Philippines Island (BPI) The Metropolitan Bank and Trust Company
DESCRIPTION: A savings and loan association (S&L), or thrift institution, is a financial institution that
specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or
"thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and
some Commonwealth countries include building societies and trustee savings banks. They are often
mutually held (often called mutual savings banks meaning that the depositors and borrowers are
members with voting rights, and have the ability to direct the financial and managerial goals of the
organization like the members of a credit union or the policyholders of a mutual insurance company.
While it is possible for an S&L to be a joint-stock company, and even publicly traded; in such instances

it is no longer truly a mutual association, and depositors and borrowers no longer have membership
rights and managerial control. By law, thrifts can have no more than 20 percent of their lending in
commercial loans their focus on mortgage and consumer loans makes them particularly vulnerable to
housing downturns such as the deep one the U.S. has experienced since 2007.

EXTERNAL SECTORS

PURPOSE: The external sector of the economy refers to the international transactions that all residents
of the country (private and public sector) conduct with the rest of the world. Such transactions are
systematically recorded in detail within a framework that groups them into accounts, where each
account represents a separate economic process or phenomenon of the external sector. The external
accounts form part of an integrated system of statistics of the economy, and thus all definitions,
classifications and accounting rules must be harmonized so that external sector aggregates can be
compared and summed with other macroeconomic data, such as those of national accounts, monetary
statistics and government statistics.
EXAMPLE: Asian Development Bank
DESCRIPTION: The external sector is the portion of a country's economy that interacts with the
economies of other countries. In the goods market, the external sector involves exports and imports. In
the financial market it involves capital flows. Economic features related to the external sector include:
balance of payments, current account, capital account, foreign direct investment, external debt,
exchange rate, foreign exchange reverse, International investment position.

OFFSHORE BANKING UNITS

PURPOSE: Branch of a foreign bank located in an offshore financial center (OFC). It may accept
deposits from other foreign banks and OBUs and make Eurocurrency loans, but may not accept deposits
from (or make loans to) the residents of the country in which it is located. OBUs are otherwise
unrestricted in their legitimate activities, and are free from the monetary controls of the country of
location.
EXAMPLES: BNP Paribas, J.P Morgan International Finance, Limited, Taiwan Cooperative Bank
DESCRIPTION: An offshore banking unit (OBU) is a shell branch located in an international financial
center. Offshore banking units (OBUs) make loans in the Eurocurrency market when they accept
deposits from foreign banks and other OBUs. OBUs' activities are not restricted by local monetary
authorities or governments, but they are prohibited from accepting domestic deposits.

NON-BANK THRIFT INSTITUTION

PURPOSE: A non-bank financial institution (NBFI) is a financial institution that does not have a full
banking license or is not supervised by a national or international banking regulatory agency. NBFIs
facilitate bank-related financial services, such as investment, risk pooling, contractual savings, and
market brokering.

EXAMPLES: Toyota Financial Services Philippines, Cebu International Finance Corporation

DESCRIPTION: NBFIs supplement banks by providing the infrastructure to allocate surplus resources to
individuals and companies with deficits. Additionally, NBFIs also introduces competition in the provision
of financial services. While banks may offer a set of financial services as a packaged deal, NBFIs
unbundle and tailor these service to meet the needs of specific clients. Additionally, individual NBFIs
may specialize in one particular sector and develop an informational advantage. Through the process of
unbundling, targeting, and specializing, NBFIs enhances competition within the financial services
industry.[7]

MUTUAL BUILDING AND LOAN ASSOCIATION

PURPOSE: A state or federal chartered financial organization that uses customers' deposits and
subscriptions to invest in the residential mortgage loans of members to increase home ownership is a
building and loan association. Both borrowers and depositors are able to guide building and loan
associations that are mutually held.
EXAMPLES: Home Credit Mutual Building and Loan Association
DESCRIPTION: It is a depository financial institution that is federally or state chartered, that specializes
in collecting savings deposits from customers and investing it in residential mortgage loan. Building and
Loan Associations are usually mutually held, meaning that depositors and borrowers have the ability to
direct the financial goals of the organization.