Presented to the Department of Mathematics

De La Salle University – Manila

Term 2, A.Y. 2018-2019

In partial fulfilment

Of the course

In General Mathematics in the Modern World (N02)

FINAL FINANCIAL PLAN

Submitted by:

Hou, Justin Matthew C.

Submitted to:

Dr. Sonia Tan, Ph.D.

February 19, 2019

 TABLE OF CONTENTS

INTRODUCTION

Background and Objectives ……………………………………………………………………… 4

Statement of the Problem ……………………………………………………………………....... 4

Significance ……………………………………………………………………………………… 4

Definition of Terms ……………………………………………………………………………… 5

FINANCIAL SCENARIO (Table 101) …………………………………………………………………... 6

PLANS OF ACTIONS …………………………………………………………………………………… 7

Savings …………………………………………………………………………………………... 7

Bank of the Philippine Islands (BPI) ……………………………………………………. 7

Regular Savings ………………………………………………………………… 7

Time Deposits ………………………………………………………………….. 8

Money Market ………………………………………………………………….. 8

Banco de Oro (BDO) ……………………………………………………………………. 8

Regular …………………………………………………………………………. 9

Time Deposits ………………………………………………………………….. 9

Money Market …………………………………………………………………. 9

Rizal Commercial Banking Corporation (RCBC) ……………………………………... 10

Regular Savings ………………………………………………………………...10

Time Deposits …………………………………………………………………..10

Money Market …………………………………………………………………. 11

Investments ……………………………………………………………………………...……… 11

Stocks and Bonds ………………………………………………………………………. 11

Bank Loans …………………………………………………………………………………….. 13

Bank of the Philippine Islands, Banco de Oro, Rizal Commercial Banking Corporation.13

DATA ANALYSIS AND DISCUSSIONS …………………………………………………………….. 16

SUMMARY AND CONCLUSION ……………………………………………………………………... 19

BIBLIOGRAPHY ……………………………………………………………………………………….. 20
 LIST OF TABLES

Table 1. Projected Cash Allocation .............................................................................................................. 6

Table 2.1. Rates for Regular Savings (Bank of the Philippine Islands) ....................................................... 7

Table 2.2. Time Deposits (Bank of the Philippine Islands) ......................................................................... 8

Table 2.3. Money Market Fund (Bank of the Philippine Islands) ............................................................... 8

Table 3.1. Rates for Regular Savings (Banco de Oro) ................................................................................. 9

Table 3.2. Time Deposits (Banco de Oro) ……………………………....................................................... 9

Table 3.3. Money Market Fund (Banco de Oro) ………………………….................................................. 9

Table 4.1. Rates for Regular Savings (Rizal Commercial Banking Corporation) ..................................... 10

Table 4.2.1. Time Deposits (Rizal Commercial Banking Corporation) .................................................... 10

Table 4.2.2. Time Deposits (Rizal Commercial Banking Corporation) .................................................... 10

Table 4.3. Money Market Fund (Rizal Commercial Banking Corporation) ............................................. 11

Table 5.1. Stock Data (Premium Horizon Alliance Corporation) .............................................................. 12

Table 5.2. Stock Data (Jollibee Foods Corporation) .................................................................................. 12

Table 5.3. Stock Data (Ayala Land, Inc.) .................................................................................................. 13

Table 6. Personal Loan Offers ................................................................................................................... 13

Table 7.1. Net Interest Computation (Bank of the Philippine Islands) ...................................................... 16

Table 7.2. Net Interest Computation (Banco de Oro) ................................................................................ 16

Table 7.3. Net Interest Computation (Rizal Commercial Banking Corporation) ...................................... 17

Table 8.1 Bank Loans (Bank of the Philippine Islands) ............................................................................ 18

Table 8.2 Bank Loans (Banco de Oro) ...................................................................................................... 18

Table 8.3 Bank Loans (Rizal Commercial Banking Corporation) ............................................................ 18

 INTRODUTION

Background and Objectives

The proponent, who plans to makeshift to financial planning, aims to produce an amount of
Php670,000.00 in a span of seven years. The money will be spent on a one-week Antarctic voyage which
will be very expensive considering that how remote the place is. Given that the proponent is still a student
in the first year of college, and assumed to have a proper job as a Civil Engineer after five years. The
proponent will only have 2 years to save Php 670,000.00. Currently studying Physics with a minor in
Finance, the proponent has a basic knowledge in strategic planning.

Assuming that the proponent will be given a stable job as a civil engineer with a starting salary of
Php 60,000.00 monthly, the proponent needs to raise Php 106,000.00. If the proponent will be budgeting
its money properly, the proponent will be able to raise Php 564,000.00.

This paper aims to help the proponent achieve its goal in saving money. The paper contains
different ways and different banks offering investments, savings account and time deposits.

Problem

Based on the information above, the expected monthly income of Php 60,000.00, will only be
earned after 5 years from now or the last two years of the total period. The expense of the one-week
Antarctic voyage is expected to reach Php 670,000.00, which includes airfare, cruise ticket, tours,
accommodation, daily food and other expenses. In order to achieve this goal, the proponent must be
responsible and should be strict in dealing with money. The proponent should also be smart in choosing the
best way in earning money.

Significance

This paper will give an insight on different choices in investing your money which will help achieve
your goal. This paper will also show you which is the best choice for your problem. This paper will also
help in monitoring cash flow. Moreover, this report will allow the proponent to examine different options
in different banks and will help the proponent choose the best option.

Definition of Terms

The following are the terms often used in this financial report are defined below:

1. Money Market – a transaction or trade made by banks and other financial institutions in short-term
loans.
2. Withholding tax – is an income tax to be paid to the government by the payer of the income rather
than by the recipient of the income.
3. Time Deposit – is a deposit in a bank account that cannot be withdrawn before a set date or for
which notice of withdrawal is required.
4. Income – is the money received, especially on a regular basis, for work or through investments.
5. Invest – to put money into something to make a profit or achieve a result.
6. Stocks – shares or portion of ownership in a certain corporation.
7. Bonds – form of long-term debt, wherein the issuing corporation promises to return the initial
amount at a specific date.
8. Philippine Stock Exchange Index (PSEI) – national stock exchange of the Philippines; a
capitalization-weighted index that provide information regarding stocks representative.
 FINANCIAL SCENARIO

The table blow shows the monthly budgeting of the proponent’s income, five years from now.
This includes the itemized monthly expenses, monthly savings, total savings in two years, financial goal
and the amount of money needed.

Table 1. Projected Cash Allocation

Monthly Income Php60,000.00

Itemized Monthly Expenses Food Php22,500
(Php750 per day for 30 days)
Transportation (Gas) Php4,000
(Php2000 every 2 weeks)
Other expenses Php10,000
Monthly Total Expenses Php36,500
Monthly Savings Php23,500
Total Savings in Two Years Php564,000
Financial Goal One-week Antarctic Voyage Php670,000
(2 years from today)
AMOUNT OF MONEY TO RAISE Php106,000
 PLANS OF ACTION

Employing banks for their time deposits, money market and/or savings offers is a smart solution,
since it has a guaranteed return, in order to help us raise the amount of money needed to achieve our
financial goal. Investing your money through stocks is also another option if you know well how to
exchange stocks.

A research from three different banks is made to be able to differentiate and decide easily whether
which bank can help us reach our goal. The following information below are gathered from Bank of the
Philippine Islands, Banco de Oro and Rizal Commercial Banking Corporation.

I. Savings

Saving money has really been uncommon especially for teenagers without any financial goal
ahead of them. As for other teenagers, it is the other way around. Saving money is
something that should be done to have a secure future and also to limit ourselves from
buying things that is not really needed. Moreover, earning interest from our savings can be
achieved through the utilization of banks. The tables below show the rates from different
banks of regular savings, time deposits, and money market funds:

A. Bank of the Philippine Islands (BPI)

a. Regular Savings

Table 2.1 Rates for Regular Savings (Bank of the Philippine Islands)

Passbook Savings Kaya Savings Jumpstart Savings

Required Initial Php 10,000 Php 200 Php 100
Deposit
Required Minimum Php 10,000 N.A. Php 1,000 (Waived
Monthly ADB for one year)
 Required Daily Php 25,000 Php 1,000 Php2,000
Balance to Earn
Interest
Interest Rate (Per 0.25% 0.25% 0.25%
Annum)

b. Time Deposit

Table 2.1 Time deposit (Bank of the Philippine Islands)

Amount 35 days 63 days 91 days 182 days 364 days

1K to less
than 10K
10K to less
than 50K
50K to less 0.625 0.625 0.625 0.875 0.875
than 500K
500K to less 0.625 0.625 0.625 0.875 0.875
than 1M
1M to less 0.75 0.75 0.75 1.00 1.00
than 5M
5M and 0.875 0.875 0.875 1.125 1.125
above

c. Money Market Fund

Table 2.3 Money Market Fund (Bank of the Philippine Islands)

Diversity Money Market Fund

Minimum Initial Investment Php 10,000
Minimum Transaction Amount Php 1,000
Minimum Holding Period NONE
 Trust Fee 0.25% p.a.
Valuation of the Fund Marked-to-Market Daily

B. Banco de Oro (BDO)

a. Regular Savings

Table 3.1. Rates for Regular Savings (Banco de Oro)

Passbook Savings
Minimum Initial Deposit Php 5,000
Minimum MADB Requirement Php 10,000
Minimum Balance to Earn Interest Php 10,000
Gross Interest Rate Per Annum 0.25%

b. Time Deposit

Table 3.2. Time Deposit (Banco de Oro)

Product Minimum Terms of Pretermination Withholding ta

Name Initial Placement on interest
Placement earned
Peso Time Php 100,000 30, 60, 90, Subject to 20%
Deposit 180, 360 Days pretermination
penalty
Premium Php 10,000 5 years Subject to Tax exempted
Flexi Earner pretermination if the
penalty placement is
held until
maturity.

c. Market Money Fund

 Table 3.3. Money Market Fund (Banco de Oro)

Minimum Investment Php 100,000

Minimum Additional/Maintaining Php 100,000
Participation
Minimum Holding Period NONE
Early Redemption Fee NONE
Management Fee 0.50% p.a.

C. Rizal Commercial Banking Corporation

a. Regular Savings

Table 4.1. Rates for Regular Savings (Rizal Commercial Banking Corporation)

Passbook Account ATM Account

Minimum Initial Deposit Php 10,000 Php 3,000
Minimum ADB Php 10,000 Php 3,000
Requirement
Minimum ADM to Earn Php 10,000 Php 10,000
Interest
Interest Rate 0.15% 0.15%

b. Time Deposit

Table 4.2.1. Time Deposit (Rizal Commercial Banking Corporation)

Minimum ADB Php 5,000

Minimum Term 30 days
Interest Rate Tiered
Fund Access Over-the-Counter
Transaction Record Time Deposit Placement Confirmation

Table 4.2.2. Time Deposit (Rizal Commercial Banking Corporation)

 Tenor Days
Amount 30-45 46-60 611-90 91-180 181-364 1 Year
5K to less 0.5% 0.625% 0.750% 0.875% 0.875% 1.625%
than 10K
10K to 0.625% 0.750% 0.875% 1.000% 1.125% 1.750%
less than
40K
40K to 1.500% 1.500% 1.625% 1.750% 2.000% 2.375%
less than
500K
500K to 1.750% 1.875% 2.000% 2.125% 2.250% 2.500%
less than
1M
1M to 1.875% 2.000% 2.125% 2.375% 2.500% 2.625%
less than
5M
Over 5M 2.125% 2.125% 2.250% 2.375% 2.500% 2.625%
Over 10M 2.25% 2.250% 2.375% 2.375% 2.500% 2.625%

c. Market Money Fund

Table 4.3. Money Market Fund (Rizal Commercial Banking Corporation)

Minimum Initial Investment Php 25,000

Minimum Additional Investment Php 5,000
Minimum Maintaining Balance Php 25,000
Minimum Holding Period 30 Calendar Days
Early Redemption Charge 0.125% of redemption proceeds
Management Fee 0.50% p.a.
Redemption Settle Date Next banking day from redemption date
Transaction Cut-off Time 11:30am of any banking day
II. Investments
A. Stocks and Bonds

Another option, aside from bank loans or savings, that will help you earn money is
through investing stocks.

a. Premiere Horizon Alliance Corporation (PHA)

Premiere Horizon Alliance Corporation, an investment holding company,

engages in real estate and mining activities. The company operates in three
segments: Contract Mining, Real Estate, and Service Contract. The Contract
Mining segment is involved in the contract mining and construction works for
mining, real estate development, environmental protection and remediation,
dams, dikes, flood control, and reclamation, including quarrying, hauling,
earthmoving and heavy equipment rentals, and other earthmoving works. The
Real Estate segment develops residential and commercial condominiums,
including student dormitories. The Service Contract segment offers refrigeration
to establish cold storage facilities.

Table 5.1. Stock Data (PHA)

PHA Stock Data

Last Traded Price 1.37
Average Price 1.36
Free Float Level (%) 84.1%
52 Week Range Php 0.3 to Php 1.77

b. Jollibee Foods Corporation (JFC)

Jollibee Foods Corporation (abbreviated as JFC; also known as Jollibee after its
primary fast food brand) is a Filipino multinational company based in Pasig,
Philippines. JFC is the owner of the fast food brand Jollibee. As of 2016, JFC has a
revenue of Php 113.91 billion and a net income of Php3.25 billion (as of 2011).

Table 5.2. Stock Data (JFC)

 JFC Stock Data
Last Traded Price 323.00
Average Price 320.76
Free Float Level (%) 43.62%
52 Week Range Php 243.00 to Php 328.40

c. Ayala Land, Inc. (ALI)

ALI is engaged in the planning and development of large scale, integrated estates
having a mix of use for the sale of residential lots and buildings, office buildings
and commercial and industrial lots, leasing of commercial and office spaces and
the development, operation and management of hotels and resorts. The
Company also develops commercial and industrial parks and is also engaged in
property management, construction and other businesses like retail and
healthcare.

Table 5.3. Stock Data (ALI)

ALI Stock Data

Last Traded Price 45.25
Average Price 45.13
Free Float Level (%) 52.1%
52 Week Range Php 36.05 to Php 46.00

The three mentioned corporations come from different backgrounds and different
business industry. These companies have a great background and portfolio before them. Moreover,
these companies are in the business industry wherein it is really booming such as food industry and
construction industry.

III. Bank Loans

Table 6. Personal Loan Offers

 Bank of the Banco de Oro (BDO) Rizal Commercial
Philippine Islands Banking Corporation
(BPI) (RCBC)
Interest Rate 1.20% per month 17.07% per annum, 1.30 per month add-
add-on 1.25% per month add- on
on, 1.30% per month for
6 month tenure
Minimum to Php 20,000.00 to Php 10,000.00 to Php Php 50,000.00 to
Maximum Php 1,000,000.00 1,000,000.00 Php 1,000,000.00
Amount
Payment 12, 18, 24, 30 and 36 6, 12, 18, 24, 30 and 36 6, 12, 18, 24, 30 and
Terms months months 36 months
Approval Time 8-13 banking days Within 1-2 working 7 to 21 days
weeks
Application 1. At least Php 1. At least Php 1. Minimum
and 25,000 10,000 monthly annual
Documentary monthly salary income of
Requirements income 2. Must be a sole Php 240,000
(if employed) 2. Government- proprietor or 2. At least Php
issued majority part- 20,000
photo- owner of a monthly
bearing ID company income
3. 3 months operating for at 3. Permanent
original pay least two years. Employee
slip and/or (self-employed) for 2 years
Latest 3. Must have at 4. 5 years
Income Tax least one Business
Return with landline at Operations
BIR or Bank either residence for self-
Stamp or office employed
4. Residence or 5. 2 years of
office must be practice for
within BDO professionals
serviceable area 6. Government
5. Must be at least employee
one year tenure for 2 years
with the 7. Should have
company. an existing
(salaried credit card
employees) 8. Original
6. Must be in Certificate of
private practice Employment
for at least one or 2 months
year. (for payslip or
professionals) ITR
7. Photocopy of 9. Copy of one
the latest BIR utility bill
Form 2316 or 10. Copy of
W2 signed by business
employer’s papers (self-
authorized employed)
representative 11. Copy of
and submit any latest 6
of the following: months bank
Original statements
Certificate of (self-
Employment employed)
and Income 12. Copy of two
issued in the last years
three months financial
indicating statements
status, length of with ITR
 service and (self-
breakdown of employed)
compensation
or photocopy of
last full month
pay slip.

*Note that the amount to be loaned should be at most thrice the monthly income of the borrower,
as shown in the proof of income. In case the needed amount exceeds the condition, it will be subjected for
approval.

DATA ANALYSIS AND DISCUSSIONS

Time Deposit (Rizal Commercial Banking Corporation)

Time deposit gives the highest return than other bank offers and it is also less risky than investing
through stocks. Savings account is the most common and convenient way since you can withdraw money
anytime you want. Since time deposit gives the highest return amongst savings account and money
market fund, it is the recommended to apply for it.

Table 7.1. Net Interest Computations (Bank of the Philippine Islands)

Table 7.2. Net Interest Computations (Banco de Oro)

 Table 7.3. Net Interest Computations (Rizal Commercial Banking Corporation)

Based on the tables above, Rizal Commercial Banking Corporation came out with the
highest interest of Php 9,067.69 amongst Bank of the Philippine Islands and Banco de Oro. Banco de Oro
and Bank of the Philippines resulted to a really low net interest, almost one-third of Rizal Commercial
Banking Corporation’s.
Bank Loan (Rizal Commercial Banking Corporation)

After the time deposit, to reach the financial goal the proponent must go through bank loaning.
After six years, the proponent will loan a total amount of Php 102,411.43 at the Rizal Commercial
Banking Corporation (RCBC). Loaning is the easiest way to borrow money but with interest.

To get the best offer, the proponent computed the interest from 3 different banks. Based on the
results below, Rizal Commercial Banking Corporation gives the best offer since it only has the least
amount of money to be paid monthly if the proponent chooses Rizal Commercial Banking Corporation
for the time deposit also.

Table 8.1. Bank Loans (Bank of the Philippine Island)

Table 8.2. Bank Loans (Banco de Oro)

Table 8.3. Bank Loans (Rizal Commercial Banking Corporation)

Based on the tables above, Rizal Commercial Banking Corporation has the lowest monthly
instalment of Php 2727.568 for 3 years or 36 months. Meanwhile, Banco de Oro has the highest monthly
instalment of Php 2881.762 which is almost the same as Bank of the Philippine Islands.

Other Discussion

The proponent should choose saving in banks because it is the most convenient way to do so. It is
also less risky than investing through stocks and bonds. It is also risky to start a new business since you
need a big capital and it’s not sure if you get your money back. It is also difficult to run a business if you
are a working professional at the same time. Investing in stocks and bonds can be risky also since you
have to be really familiar with the behaviour of each and every company or else you will not get a
positive result. Also, the Philippine economy is never stable and hard to predict since it will depend on
the government and business which also depends on the people.

That is why, the best way to increase your money is through the banks specifically the time
deposit of Rizal Commercial Banking Corporation.

SUMMARY AND CONCLUSION

Aiming to raise a total amount of Php 670,000.00 to achieve the personal goal which is to go on a
one-week Antarctic Voyage, this paper contains solutions and reasoning to help the proponent decide
properly.

After four years of studying and another 2 years of being a young, working professional, the
following steps will be taken in order to attain the amount of money to be raised:

1. Budget monthly income of Php 60,000.00 and save Php 23,500.00 monthly for two years.
2. Keep the monthly savings in Rizal Commercial Banking Corporation for two years as time
deposit that will earn an interests of Php 9067.69.
3. Loan Php 96,932.31 still in Rizal Commercial Banking Corporation to cover the remaining
amount of money needed. The amount borrowed and the interest from the bank loaning will be
paid using the monthly savings for 36 months.

In conclusion, with proper guidance and proper decision-making, the proponent can raise the exact
amount of money needed to be able to go an a one-week Antarctic Voyage or Php 670,000.00 six
years from now. Given that the proponent maintains a Php 23,500.00 monthly savings and a loan of
Php 96.932.31, the proponent will eventually reach the personal financial goal.
Bibliography

 https://www.bpiexpressonline.com/p/0/87/time-deposit-rates
 https://www.bpiexpressonline.com/p/1/326/deposit-rates-savings-and-checking
 https://www.bpiassetmanagement.com/pages/bpi-money-market-fund
 https://www.bdo.com.ph/mobile/personal/accounts/peso-savings-account/passbook-savings
 https://www.bdo.com.ph/personal/trust-and-investments/peso-denominated-uitfs/bdo-peso-
money-market-fund
 https://www.bdo.com.ph/personal/accounts/time-deposit
 https://www.rcbc.com/Personal/Savings
 https://www.rcbc.com/Personal/Time
 https://www.rcbc.com/Personal/UITFMarketFund
 https://www.imoney.ph/personal-loan/bpi/personal-loan
 https://www.imoney.ph/personal-loan/bdo/personal-loan
 https://www.ecomparemo.com/banks/rcbc/personal-loans/rcbc-mycash-personal-loan