FINANCIAL

INSTRUMENT
TRIXIE JEAN J. REQUINTO BSA II
MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
 CASH MANAGEMENT BILL
 Government-issued securities with maturities of less than
91 days. (35 days or 42 days)

 Affords security and liquidity to the investors

 MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
 TREASURY BILLS (T-BILLS)
 Short-term government securities maturing in a year or
less
 Zero coupon securities - no coupon payments only have
face values
 Government securities (GS) are unconditional obligation of
the government issuing them
 Generally sold to Government Securities Eligible Dealers
(GSEDs)
 TREASURY BILLS (T-BILLS)
 3 types of T-bills
1. 91-day T-bills
2. 182 day T-bills
3. 364-day T-bills

*yield – increment or interest on an investment in government securities

 WHY INVEST IN TREASURY
BILLS?
• You get the interest in advance.
• With a minimum of Php 200,000 you can already
enjoy high yields.
• Investing in Tbills is practically risk free since there
is a low probability that the Philippine government
will default on its own local currency debt.
 MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
 COMMERCIAL PAPERS (CP)
 An instrument issued by financial or commercial company
through underwriter financial institutions
 IOU’s issued by companies that need money in the short
term to finance AR, inventories, or other short-term needs
 Low risk of default and can have a maturities ranging
from 30 to 270 days with usual min. value of P25,000.
COMMERCIAL PAPERS (CP)
MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
 BANKERS’ ACCEPTANCES

 Bank drafts issued by Banks

 Short-term (time) drafts drawn on and accepted by banks

*time drafts mean they mature on a certain date.

*They are credit instrument that gives the borrower access to the funds in the
banking system as well as funds outside the banking system.
BANKERS’ ACCEPTANCES
 BANKERS’ ACCEPTANCES

Financed:
 Imports and exports;
 Shipments of goods (within country and between countries);
 Storage of readily marketable goods, etc.
MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
 NEGOTIABLE CERTIFICATES OF
DEPOSIT
 Certificate of deposit (CD) is a receipt issued by a
commercial Bank for the deposit of money. (Maturity date
up to one year)
 The bearer is entitled to receive annual interest payments
at the rate indicated in the certificate together with
principal
NEGOTIABLE CERTIFICATES OF
DEPOSIT
MONEY MARKET
INSTRUMENTS
1. Cash management bill
2. Treasury bills ( T-bills)
3. Commercial papers (CPs)
4. Banker’s Acceptances
5. Negotiable certificates of deposit
6. Repurchase agreements
 REPURCHASE AGREEMENTS
 Also known as repos or RPs.
 Created by brokerage houses .
 RPs are legal contracts that involve the actual sale of
securities by a borrower to the lender with a commitment on
the part of the borrower to repurchase the securities at the
contract price plus a stated interest charge.
REPURCHASE AGREEMENTS
THANK YOU 