Module 1 Additional Info

AMERICAN PERIOD

It was also during the American period when definite steps were taken to supervise and regulate the
business of banking in order to provide a measure of safety to bank depositors and creditors as well as
the bank themselves.

The BUREAU OF THE TREASURY provides the regular examination and inspection for all the banks to
measure safety of all depositors and creditors as well as the bank themselves.

POST MARCOS ERA

After Corazon Aquino assumed presidency in 1986, she found it necessary to offset P130billion in bad
loans granted by the governments two major financial institutions, the Philippine National Bank and the
Development Bank of the Philippines to those who held positions of power conflicting interest under
Marcos.

Post Marcos Era lead to the formulation of the asset privatization trust whose primary goal was to
dispose of government owned and government controlled properties.

PRIVATE NONBANK FINANCIAL INTERMEDIARIES

Investment houses – consti tute the largest group in terms of fi nancial resources, among
the private nonbank fi nancial intermediaries. They have been exclusively vested with the
guaranteed underwriti ng functi on and also off er a wide array of fi nancial services such as
planning and consultancy, portf olio management, raising of equity and loan capital and
obtaining funds from external sources.

1. Investment companies – are primarily engaged in investing, reinvesting or trading in securities

are of two types: open-end and close-end companies.

Open-end companies because there is no fixed amount of paid-in capital, since their
outstanding shares vary daily, depending on the flaws of sales and redemptions.

Close-end companies have relatively fixed amounts of outstanding capital, since there are no
provisions for the issuance or redemption of shares on a day to day basis.

2. Finance companies – are either partnership or corporations which are organized to extend
credit lines to consumers and to industrial, commercial, or agricultural enterprises by
discounting and factoring commercial papers and accounts receivables or by buying or selling
contracts, bases, chattel mortgages and other evidences of indebtedness or by lending motor
vehicles, heavy equipment and industrial machinery, office machines, appliances and the like.
3. Securities dealers – are companies which buy and sell securities of others of which acquire
securities to resell or offer them for sale to public.
They buy and sell securities for their own account and do not receive commission but derive
income or loss from trading which is the differential in buying and selling prices of the securities.

4. Securities brokers – those engaged in the business of effecting transactions in securities for the
account of others. They earn their income from commissions received.

5. Private Insurance Companies- are under the direct supervision and regulation of the office of
Insurance commissioner and are authorized to conduct life, fire, and accident insurance.

6. Pawnshops or pawnbrokers – are business establishments engaged in lending money on

personal property delivered as pledge, security or collateral.

7. Non stock savings and loan associations – are associations which primarily provide short term
loans to members and whose main source of income are savings and time deposits.

8. Mutual and building loan associations – are mutually owned stock companies that specialized in
extending loan term mortgage loans to members.

9. Credit Unions – are cooperatives composed of small producers and consumers who voluntarily
join together to form their business enterprises that they themselves own, control and
patronize.

10. Trust and pension fund managers – are institutional and personal administrators of funds
created or constituted for the benefit of others.

Such fund provide income for beneficiaries during the life of the grantor or after his death,
benefit a charitable organization or increase the value of a property by placing it in the hands of
a competent trustee.