De Guzman, Ericka P.

BFI
BSBA FM 2- 5 ADDITIONAL ACTIVITIES

ACTIVITY 1.
1. It exercises the powers and functions of the BSP.
- Monetary Board
2. The Chief Executive Officer of the BSP
- Governor
3. Act as intermediaries between saver and borrowers and are differentiated by
the way they obtain and invest their funds.
- Financial Institutions
4. Any group that includes commercial banks, savings and loan associations,
mutual savings bank, and credit unions.
- Depository financial institutions
5. Mainly responsible for the effective management of corporate strategy,
communications, and risks.
- Corporate Services Sector
6. Mainly responsible for the operations/activities related to monetary policy
formulation, implementation, and assessment.
- Monetary and Economics Sector
7. Mainly responsible for the forecasting, production, distribution, and retirement
of Philippine Currency.
- Currency Management Sector
8. The BSP extends discounts, loans, and advances to banking institutions for
liquidity purposes.
- Lender of last resort
9. First governor of BSP.
- Miguel Cuaderno Sr.
10. The current governor of the Central Bank of the Philippines.
- Benjamin E. Diokno

EXERCISE #2
1. List down the different Private Banking Institution in the Philippines (6).
- Asian Development Bank
- Bank of the Philippine Island (BPI)
- Claveria Rural Bank
- Equicom Savings Bank
- First Consolidated Bank
- Metropolitan Bank and Trust Company

2. Government Banking Institutions (4)

- Al-Amanah Islamic Investment Bank of the Philippines
- Development Bank of the Philippines
- Landbank of the Philippines
- Philippine National Bank

3. List down the Non-banking Financial Institutions (10)

- Armed Forces and Police Savings and Loan Association, Inc. (AFPSLAI)
- BIR Savings & Loan Association, Inc.
- Cavite Naval Base Savings and Loan Association, Inc. (CNBSLAI)
- DBP Leasing Corporation
- East West Leasing and Finance Corporation
- Maybank Atr Kim Eng Cap Partners inc
- METRO GOLDBRILL PAWNSHOP
- PBC Capital investment Corporation
- RD Pawnshop, Incorporated
- SOLIDTRUST PAWNSHOP
4. Government Non-Financial Institutions (3)
- Government Service Insurance System (GSIS)
- National Home Mortgage Finance Corporation
- Social Security System (SSS)

EXERCISE #3

1. List down the Primary Functions of Commercial Banks. (6).

- Acceptance of deposits.
- Advancing loans.
- Creation of credit.
- Clearing of cheques.
- Financing foreign trade.
- Remittance of funds.

2. Give examples for each primary functions of commercial banks.

- Acceptance of deposits.
In banks, people who have a surplus of income and investors save their
money. It gains popularity over time. The higher the interest that
individuals are involved in depositing money into the bank. Mobilizing and
handling the acceptance of deposits from bank customers is one of the
most important practices in banking. The bank can prevent any challenges
and problems in the future by handling it properly.
Example:
1. Eden deposits P125,000 in time deposit on January 1, 2019 with 2%
interest per annum. Eden initially opted for the 1-year maturity, but
emergency happen, and Eden need money. She withdraws it after 75
days. Eden will get P525 interest which the withdraw amount total is
P125,525.
2. Kenneth deposits P190,000 in time deposits on February 12, 2020
with a 4% interest per annum. She initially opted for the annum
 maturity, but she needs money. Kenneth withdraw the money 60 days
after depositing. P191. 216 the total amount she withdraws.

- Advancing loans.
The principal source of banks’ revenue is the interest they charge. Bank lent
money to clients especially a business or corporation. Interest is paid and
penalties and charged may occur when deadline of payment by clients don’t
occur.
Example:
1. ABC Company needs fund as they product is not selling in the market
because of the pandemic. Unless they want to be bankrupt and not make any
profit, they need innovative ideas and products to be produced to gain profit.
They borrowed money to the bank by cash credit loan with a credit limit.
2. XYZ Company need an urgent funds for their company to pay finances so
they apply for short term loan in the bank that is due within 9 months.

- Creation of credit.

Through this bank able to supply finances through out different sectors of
economy.

Example:

1. An initial amount of P10,000 is deposited in bank, the Legal Reserve

Requirement of bank is 30% means 70% can be distributed as loans and the
like or be remain as balanced.

Deposit Loan LRR (30%)

10, 000 3, 000 3,000
7, 000 4, 900 2,100
4, 900 3, 430 1, 470
Total: 21, 900 11, 330 6, 570
 2. An initial amount of P5,000 is deposited in bank, the Legal Reserve
Requirement of bank is 25% means 75% can be distributed and be borrowed.

Deposit Loan LRR (25%)

5, 000 3, 750 1, 250
3, 750 2, 812.50 937.50
2, 812.50 2, 109.375 703.125
Total: 11, 562.5 8, 671. 875 2, 890.625

Based on the two tables above it stated that the bank makes more credit than the
initial deposits. Means all sectors of economy maybe funded by the bank.

- Clearing of cheques.

Means moving of funds from one account to another to fulfill the cheques payment.

Example:

1. Loren pays her outstanding electric bill through cheques. Meralco the electricity
provider sends the cheques to its bank to receive payment. After the thoroughly
checking cheques process. The payment of Loren is now on the account of
Meralco and she has a debit account for the cheque this means the cheque is
cleared.
2. Businessman pays its supplier through cheque. The supplier sends the cheque
to its bank in order to get the payment. After the process of checking and
validating the cheque supplier account gets the payment while businessman
account has a debit account if this happen the check is cleared.

- Financing foreign trade.

The financial instruments and goods that businesses use to promote foreign trade

and trade finance. Trade financing make business deals by trade possible and simpler
for importers and exporters. Umbrella word that encompasses many financial

instruments used by bank.

Example:

1. A Philippine based company have a deal with an international company. But the

risk of the Philippines Company to produce the agreed total of produce might not

be meet so through exporting finance from bank they proceed and got the profit.

In short, they make business as well as the bank.

2. In order to reduce the delay of shipment and payment both parties agree on letter

of credit. International company ensures the payment while the Philippine

company ensure the produce to be shipped.

- Remittance of funds.
Bank transfer funds from one account to another on behalf of their customers.
Example:
1. Maya sends e-money to her friend amounting P500 through e-bank. Her bank
remits the said amount to Maya’s friend account.
2. Jayson sends his partial payment for her house through his bank account to
the housing group. The bank transfer the partial payment from Jayson
account to the housing group account.