Deals with the principles, institutions, instruments,
and procedures involved in making payments of all types in our economy. A broad term that describes activities associated with banking, leverage or debt, credit, capital markets, money, and investments. Encompasses the oversight, creation, and study of money, banking, credit, investments, assets, and liabilities that make up financial systems. Financial System a network of financial institutions, financial markets, financial instruments and financial services to facilitate the transfer of funds a set of institutions, such as banks, insurance companies, and stock exchanges, that permit the exchange of funds provides channels to transfer funds from individual and groups who have saved money to individuals and group who want to borrow money Requirements of an Effective Financial System 1. Must provide an efficient medium for exchanging goods and services. 2. Must it possible for creation of capital on a scale large enough to meet the demands of the economy 3. Should provide markets and procedures for the transfer of claims to wealth, such as promissory notes and shares of ownership in a business, and for the conversion of claims into cash Effective Financial System help create new jobs, increase production and productivity, and contribute t o boosting people’s real income. It makes desirable long-range economic development projects possible. Four Elements of Financial System Financial Claims Financial Institutions Financial Markets Government Agency Financial Claims This includes the right to receive money under certain condition. It may be debt claims or equity claims.
Debt-claims - is the right to pay principal loan and
interest. Equity claim- is right to dividends or interest for stocks or investments Financial Institutions An organization through which funds in the form of money or claims in money are assembled and transferred from those individuals and firms having a surplus of economic goods to other individuals and firms whose needs for funds exceed their existing supply. Commercial banks, savings and loan associations and finance companies. Act as intermediaries between suppliers and users of money. Also extend financial loans. List of BSP Supervised Financial Institutions with Trust Authority A. Universal and Commercial Banks 1. Asia United Bank Corporation 2. Bank of Commerce 3. BDO Private Bank, Inc. 4. BDO Unibank, Inc. 5. China Banking Corporation 6. CTBC Bank (Philippines) Corp. 7. Development Bank of the Philippines 8. East West Banking Corporation 9. Land Bank of the Philippines 10. Maybank Philippines, Incorporated 11. Metropolitan Bank and Trust Company 12. Philippine Bank of Communications 13. Philippine National Bank 14. Philippine Trust Company 15. Philippine Veterans Bank 16. Rizal Commercial Banking Corporation 17. Robinsons Bank Corporation 18. Security Bank Corporation 19. The Hongkong and Shanghai Banking Corporation 20. Union Bank of the Philippines 21. Unites Coconut Planters Bank B. Thrift Banks 1. City state Savings Bank, Inc. 2. Philippines Business Bank, Inc., A Saving Bank 3. Philippine Savings Bank 4. Sterling Bank Asia, Inc. (A Savings Bank) C. Trust Corporation 1. ATRAM Trust Corporation 2. BPI Asset Management and Trust Corporation 3. Manulife Asset Management and Trust Corporation D. Other Non-Bank Financial Intermediaries 1. AB Capital and Investment Corporation 2. Philippine Commercial Capital. Inc. Financial Markets They serve as a means of bringing forces for demand and supply of financial claims under Philippine Stock exchange. Anywhere where buyers and sellers trade goods and services in exchange for money Financial Markets is a market where buyers and sellers trade in: Commodities Financial securities government bonds corporate bonds Certificates of deposit Stocks and shares Foreign exchange Derivatives – a financial security with a value that is reliant upon, or derived from, on underlying asset or group of asset Other freely exchange items Government Agency This is the Bangko Sentral ng Pilipinas and its Monetary Board The Philippine Financial System The Philippine financial system consist of: 1. Banks 2. Non- bank financial Intermediaries Structure of the Philippine Financial System I. Central Bank of the Philippines II. Banking Institutions 1. Private Banking Institutions a. Commercial Banks – Expanded Commercial banking/universal banking -ordinary commercial banking b. Thrift Banks – savings and mortgage banks - Private development banks - Stock savings and loan association c. Rural Banks 2. Government Banking Institutions a. Philippine National Bank b. Development Bank of the Philippines c. Land Bank of the Philippines d. Philippine Amanah Bank Non- Bank Financial Institutions 1. Private non-bank Financial Institutions a. Investment houses b. Investment Companies c. Financing companies d. Securities dealers/brokers e. Non-Stock savings and loan associations f. Building and Loan Associations g. Pawnshops h. Lending Investors i. Retirement/provident/pension fund managers j. Trust companies/departments k. Insurance Companies l. Credit Cooperatives 2. Government Non- Bank Financial Institutions a. Government Services Insurance System (GSIS) b. Social Security System (SSS)