Danica Jane B.

Ramos
BSAC 2-2

1.Why is it important for you to learn and understand the financial system of our country?

Financial system plays a crucial part in every country. It allows money to go between

those in need of finance and those who have excess funds. It allocates the supply of savings in

the economy to the users of those savings in a safe and efficient manner.

As an accounting student who studies mostly about finance, it is important for me to

learn and understand the financial system of our country. Knowing and understanding the

financial system of the Philippines will help me comprehend the flow of funds and finances in

the country. With that, I can also grasp how the Philippine financial system can help in building

a strong economy. Aside from that, it can help me broaden my learnings as I learn more complex

topics in finance and accounting.

2.Why and how is a well-functioning financial system helps the economy of every country?

A well-functioning financial system plays an important role in contributing to an

economy's health and efficiency. There is a strong relation between these two.

Financial system facilitates the allocation and deployment of economic resources, both

across borders and across time, in an uncertain environment.

Additionally, it provides ways of clearing and settling payments to facilitate the exchange

of goods, services, and assets; provides mechanism for the pooling of funds to undertake large-

scale indivisible enterprise or for the subdividing of shares in enterprises to facilitate

diversification; transfer resources across time and space; manage risks, provides information; and

deals with incentives problems.

 However, without the constituents of financial system, it would be nothing. As a matter

of fact, these constituents can create a healthy financial system, which in turn builds a strong

economy.