Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF

BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE

ECONOMY

Learning Objectives

The student should be able to:

1. Describe the necessary information about establishing a bank,

including pertinent laws, rules, and regulations.
2. Differentiate the types of banks as to ownership, place of
incorporation, structure, function, and management.
3. Create a timeline on the history, nature, and development of
banking.

Icons
The following icons will use throughout the module. This icon will serve as an
indicator of what type of activity the students will going to do.

Learning Flip Chart

Objectives
Document students'
Objectives set for comments or write
learning. essential points for
students to remember.

Activity Assessment

An activity to Direct students to take a

support their short test.
learning.

Discussion Ask a Question

Discussion about a Present a problem or

topic. question for discussion.

College of Business – Business Administration Page |1

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY
Let's begin!

Write down your expectations on the topics.

_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________

Self-assessment: Which is which

Below is a simple question that will determine if you have a

simple background on the banking history of the Philippines.
As we progress the module, you will able to determine whether
your answer in every question is correct.

Read each sentence. Place an ✓ on your selected answer.

1. The oldest savings bank in the country that was inaugurated on

August 2, 1882.

Monte de Piedad

Obras Pias

2. It is the former name of Bank of the Philippine Islands?

Banco Español

Banco Peninsula Ultramarino of Madrid

3. It facilitates trade between the Philippines and Europe.

Suez Canal

Panama River

College of Business – Business Administration Page |2

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

4. A bank acted as a fiscal agent of the Japanese government in the

Philippines.

Bank of Taiwan

Southern Development Bank

5. What is a Presidential Directive that invalidated all Japanese

occupation deposits?

New Central Bank Act of 1993

Executive Order 96

College of Business – Business Administration Page |3

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

Lesson 1: BANKING HISTORY

Introduction
In this lesson, students will learn the evolution of the
financial system in the Philippines, along with the significant
political milestones of the country during the Spanish period,
the American period, the Japanese occupation, the post-war
independence period, and the New Society period.

Philippine Banking History

Spanish Period

In 1854, Obras Pias was inaugurated and

was the first organized institution in the
Philippines. These financial institutions
were religious functions that drew their
capitalization from the legacies of wealthy
individuals who made wills before going
out on dangerous expeditions, donating
their estates to the church, or to lay confraternities. Most of the funds went to traders
who used them to finance the galleon trade with Acapulco, Mexico.

The first prominent bank in the Far East

established in the economy was the "Banco
Español-Filipino de Isabel II which is now
the Bank of the Philippine Islands. A
Spanish royal decree initially authorized the
chartered of the bank in 1828, and it was
only in 1851 when the institution
commenced operations. The banks engaged
in general banking functions and financed,
in a limited way, the country's foreign trade
and were granted the privilege of note issue by a royal decree on October 17, 1854.

College of Business – Business Administration Page |4

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

The trading of Philippine-European

greatly expands when the Suez Canal
opened in 1869.

A bank put up an agency in the

Philippines in 1873 is the Chartered Bank
of India, Australia, and China, with
headquarters in London.

Then in 1875, another British owned

bank, the Hong Kong and Shanghai
Banking Corporation, established a
branch in the Philippines. Both banks
engaged in the general banking business,
but they were more of an exchange bank
than commercial banks since they
confined most of their activities to buying
and selling drafts and bills of exchange.

Establishing of Monte de Piedad y Caja

de Ahorros de Manila on August 2, 1882,
founded by Father Felix Huertas and the
first savings bank in the country

College of Business – Business Administration Page |5

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

A branch of Banco Peninsula Ultramarino of Madrid was also opened only

within a short span of 4 years. Thus, at the end of the Spanish regime in 1898, four
banks, three commercial and one saving, were doing business in the Philippines.

The American Period

These banks established during the

Spanish regime continued to operate.
They were joining with them by the
branches of International Banking
Corporation and the Guaranty Trust
Company.

Another bank established during the

American period is the American Bank in
1901, which operated for four years. The
Wai Hung Bank and the Abrue,
Newberry, and Reyes Bank, both founded
in 1902, are similarly short-lived. The S.
Misaka Bank opened in 1906 to serve the
local Japanese community.

Postal Savings was created to promote the

habit of thrift among the people and to
bring banking to the rural areas in 1906.

College of Business – Business Administration Page |6

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

Foreign interests dominated banking

business in the Philippines during the
period until the passage of Act No. 2612
in 1916, which called for the
establishment of the Philippine National
Bank. In addition to its privilege to issue
notes, is to grant and extend long-term
credit to agriculture and industry.

Other foreign and domestic banks operated in Manila after World War I

● Yokohama Specie Bank (1918)

● Asia Banking Corporation (1919)
● Chinese-American Bank of Commerce of
Peking and the China Corporation (1920)
● The opening of People's Bank and Trust
Company and the Mercantile Bank of China
(1926)
● National City Bank of New York (1930).

Establishment of the Commonwealth in 1935

The Bank of Taiwan was granted authority to

put up a branch in Manila in 1937, and in the
same year, the Netherlands Indische Handles
Bank branch opened in Manila. Thus, before
the outbreak of World War II, 17 Banks (eleven
domestics and six foreign) were operating in
the country with 17 offices in Manila, 22
branches in the provinces, and 54 provincial
agencies.

College of Business – Business Administration Page |7

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

Japanese Period

The Japenese Imperial forces entry in

Manila n January 2, 1942, placed the
operation of the 17 existing banks at a
standstill. Due to the pivotal role of the
banks in business transactions, the Japanese
Military Government called for the
resumption of banking on January 3, 1942.
Still, it was limited to only Filipino-owned
and Japanese banks. Domestic banks
owned by foreign nationals and branches of
foreign banks were treated as enemy property and placed under liquidation by the
ruling military government.
Southern Development Bank (Nampo Kaihatsu Kindo) opened a branch in
Manila in 1942 and acted as a fiscal agent of the Japanese government in the
Philippines. It also performed some of the functions of the central bank, issuing
military notes, talking custody of the clearing branches of the banks, and receiving
deposits from the banks.

Postwar Era
Immediately after the Second World War II, the Philippine Government
commenced rehabilitation work on the banking system, which was ravaged by the
war.
• Executive Order No. 49 issued on June 6, 1945, which discharged banks
from its obligation from the deposits made during the Japanese occupation
and made them liable only for preoccupation deposit balances less
voluntary withdrawals. Recovery of the banking system was made
possible.
• Presidential Directive, Executive Order 96, invalidated all Japanese
occupation deposits.
• Executive Order 48 paved the way for the reopening of the pre-war banks.
• Rehabilitation Finance Corporation was created by the Republic Act 85 on
January 2, 1947, which took over the duties and responsibilities of the
Agricultural Industrial Bank.
• In 1948 General Banking Act passed into law. It provided the definitive
rules of conduct of all banking institutions.
• In 1949 Republic Act No. 265, known as the Central bank Act, was passed.
• In 1972, Presidential Decree no. 72 was issued amending Republic Act No.
265 in attuned to changing economics.

College of Business – Business Administration Page |8

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

• In 1973 Constitution, Presidential decree no. 1801 designated central Bank

of the Philippines as the central monetary authority which was adopted
aimed by the 1987 Constitution.

Philippine Banking Today

Republic Act No. 7653, governs Philippine banking today. An act for the
establishment of an independent monetary authority to be known as Bangko Sentral ng
Pilipinas (BSP).

The business of banking has changed irreversibly. Developments in technology

have more contributions to these irreversible changes in the banking system.
Technology has brought us E-Banking, the provision of banking services. The devices
used to provide e-banking services are called E-money, which can be divided into
three groups.

• Access devices- these allow

people to withdraw or deposit cash,
transfer funds, and pay bills from their
bank accounts without physically going
to the banks or writing a check.

• Card-based products – these are

prepaid cards in which storing funds in
electronic form on a computer chip
embedded in plastic cards.

College of Business – Business Administration Page |9

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

• Prepaid software products or

network money – Storing funds in
electronic form and transfer over
communication networks among
participants in the system.

Republic Act No. 8791, known as General Banking Law of 2000, institutionalized a
certain mass of banking reforms in the Philippines. It provides regulation of the
organization and operation of banks, quasi-banks, and trust entities.

Republic Act No. 9160, known as the Anti-Money Laundering Act of 2001, was passed
into law on September 29, 2001.

On April 19, 2000, Cirscular No. 237 issued and approved by the Monetary Board,
stating the consolidation and clarification of all existing rules and regulations on
mergers and acquisitions. Bank mergers and consolidations are distinguished as
follows:

● Merger- is the absorption of one or more corporations by another existing

corporation but still has its possession of its identity and takes over the rights,
privileges, franchises, and properties and assumes all liabilities and obligations
of the incorporated.

● Consolidation-the union of two or more corporations into a single new

corporation called the consolidated corporation.

Assessment

Activity 1

Discuss the importance of electronic banking devices when

the Pandemic occurs.

__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
College of Business – Business Administration P a g e | 10
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

Activity 2

Compare and contrast the banking procedure used during

the colonial time and the modern era.

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____

Rubrics
No Needs Adequate Quality Exemplary
Answer Improvement 6 pts 8 pts 10 pts
0 pts 4 pts

Answers are Answers are not Answers are Answers are

partial or comprehensive accurate and complete,
Did not
incomplete. or ultimately complete. comprehensive,
answer
The key points stated. Key Key points andaccurate.
the
are not clear. points are not are stated Key ideas are
Content question.
Question not well supported and clearly stated,
10 pts adequately but addressed supported. explained, and
answered. propery. well supported.

Organization Inadequate The The content is

and structure organization or organization well organized,
Did not
detract from development. is mostly coherently
answer
Organization the answer. The structure of clear and developed, and
the
10 pts the answer is not easy to easy to follow.
question.
easy to follow. follow.

College of Business – Business Administration P a g e | 11

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

Reflection

What are your insights on the lesson?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

College of Business – Business Administration P a g e | 12

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

LESSON 2: BANKS ORGANIZATION, MANAGEMENT, AND ORGANIZATION

Introduction
In this lesson, students will learn the banks'
classification, powers, and scope of authorities, including why
the Bangko Sentral ng Pilipinas conduct an examination.

What Do You Know?

Before we start, we will see what you know about
banking and financial institutions.

Take a few minutes to accomplish the Pre-Assessment.

It will not be scored, and you will be able to determine
whether you answered each question correctly as we progress
through the lesson.

Pre-Assessment: Which is which

1. Banks are classified into how many kinds or classes?

Five classes

Six classes

2. This bank has the power to invest in non-allied enterprises.

Universal Banks

Commercial Banks

3. The Bangko Sentral ng Pilipinas conduct their examination

every __________ in a year.

Twice

Once

4. This kind of bank that extends loans and advances

primarily to meet the regular credit needs of farmers,
fishers, or farm families as well as cooperatives, merchants,
private and public employees.
Thrift Banks
Rural Banks

College of Business – Business Administration P a g e | 13

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY
5. This certificate shall not be issued unless the Monetary
Board is satisfied with the evidence submitted to them.

Certificate of authorization

Certificate of authority to register

College of Business – Business Administration P a g e | 14

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY

Overview of Banks

What do banks do?

A bank is a business that caters you a safe place to save

your money and utilizes your deposits to create loans. This
industry is also called a financial institution.

Nature of Banking Business

"Banks make money out of other people's money."

The following are the principle of banking business

● A certain amount deposited will support several times as

much in credit, known as the partial reserve system.
● A more significant portion of deposits in commercial banks
arises out of the proceeds of loans.

Discussion
For further reading, you may click the link below.
Manual of Regulations for Banks

Enabling Activities
Top 10 richest Bank in the Philippines
Top 10 Banks in the Philippines

What is on your mind?

College of Business – Business Administration P a g e | 15

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY
Assessment:
Make a timeline on the banking history of the Philippines.

Rubrics
Timeline Rubrics
Content 4 3 2 1
Quality of Included events Most of the Some events in Many major events
content are included the timeline are excluded, and too
relevant and events are important included are trivial many trivial events
exciting. No or interesting. One and major are included.
significant or events are
details are two major events missing.
excluded. maybe missing.
Quantity of The timeline The timeline The timeline The timeline contains
facts contains contains contains fewer than five
at least 8–10 at least 6–7 events at least five events events.
events related to the topic related to the topic
related to the topic being studied. being studied.
being studied.
Accuracy of Facts are accurate Facts are accurate Facts are accurate Facts are often
content for for for inaccurate for events
all events reported almost all events most (~75%) of reported on the
on reported on the the timeline.
the timeline. timeline. events reported on
the timeline.
Sequence of Events are placed Almost all events Most (~75%) of Most events are
content in are the incorrectly placed on
proper order. placed in proper events are placed the timeline.
order. in
proper order.
Dates An accurate, An accurate, An accurate date Dates are inaccurate
complete date has complete date has has or missing for several
been included for been included for been included for events.
each event. almost every event. almost every
event.
Sentence Events are clearly Events are described Events are not Events are described
fluency described using well, but the described well and using vague language
accurate and vivid language is language is often or inaccurate
language. sometimes vague or vague or information.
inaccurate. inaccurate.
Reference: International Reading Association

College of Business – Business Administration P a g e | 16

 Module 1: TRACE THE HISTORY, NATURE, AND DEVELOPMENT OF
BANKING AND ITS IMPORTANCE TO THE GROWTH OF THE
ECONOMY
Reflection

What are your insights on the lesson?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

College of Business – Business Administration P a g e | 17

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

Learning Objectives

The Student would be able to:

1. Open an online savings account.

2. Simulate online banking transactions.
3. Compile online banking transaction
4. Reflect on the importance of online banking transactions.

Icons
The following icons will use throughout the module. This icon will serve as an
indicator of what type of activity the students will going to do.

Learning Objectives Flip Chart

Objectives set for Document students'

learning. comments or write
essential points for
students to remember.

Activity Assessment

An activity to support Direct students to take a

their learning. short test.

Discussion Ask a Question

Discussion about a Present a problem or

topic. question for discussion.

College of Business – Business Administration Page | 18

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

What do you know?

Write down what are the documents needed when opening a
savings account.

_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________

Self-assessment: Which is which

Take a few minutes to complete the Self-Assessment. It

will not be scored and you will be able to determine
whether you answered each question correctly as we
progress through the module.
Read each sentence. Place an ✓ on your selected answer.

1. What do you call a check that has without sufficient funds/with

stop payment orders?

Returned Checks

Checks dishonored due to technical reasons

2. In banking transactions, these terms refer to interest or non-

interest bearing accounts to promote financial inclusion.

Basic deposit account

Checking account

3. Banking terms that refer to the maturity of a time deposit.

Manner of Issuance

Term

4. A term that refers to all forms of obtaining or raising funds.

Borrowing

Investing

College of Business – Business Administration Page | 19

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

5. Does the deposits should be insured by the PDIC.

Yes

No

College of Business – Business Administration Page | 20

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

Introduction
This module will facilitate the students to learn the
importance of banks, Classes, or kinds of financial institutions,
the definition of deposit and its type, kinds of depositors,
deposit functions, motives of depositors, deposit function, open
an online savings account and its requirements.

Why keep money in a Bank?

There are several reasons why to keep money in a bank.

1. Safety – the depositors place their excess funds in the bank

because they are aware that modern banks have fireproof
and burglarproof safes and vaults to keep money in.
2. Convenience- when the depositor engages by the
convenience offered through depositing, he opens a current
account that is serviced by the use of checks.
3. Earnings or Income – A person places his money as time
deposits if he is after earnings or income.
4. Accommodation–Business deposit their money because of the
special favors they want from banks.

Types of Financial Institutions

There are two major types of insured depository financial

institutions:

• Banks and Thrifts

Banks and thrifts are financial institutions that operate
under state laws and regulations. Banks and thrifts make
loans, paychecks, accept deposits, and provide other
financial services.
• Credit Unions
Credit Unions are non-profit financial institutions owned
by people who have something in common. Credit unions
offer many of the same services as banks and thrifts. You
have to become a member of the credit union to keep your
money there.

College of Business – Business Administration Page | 21

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

For further reading, click the link below.

https://morb.bsp.gov.ph/ or go-to manual of regulations
for banks at bsp.gov.ph

Choosing a Bank and a Bank Account Checklist

When looking for a bank and a bank account, take the Choosing a
Bank and a Bank Account Checklist with you. The questions can
help you choose the bank and accounts that are right for you.

Choosing a Bank and a Bank Account Checklist

Bank Name/ Bank Name/ Bank Name/
Account Type Account Type Account Type
Bank Information
_________ _________ __________

Does the bank offer the services I need?

Branches and ATMs?

Banking hours?

Do employees speak my language?

Is it insured by PDIC?

Accounts

Requirements for opening account

Checking Accounts

• Minimum opening balance?

• Minimum monthly balance?

• Fees?

• Fee waivers available?

• A number of withdrawals per month

without a fee?

• Earns interest?

Savings accounts

College of Business – Business Administration Page | 22

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

Bank Name/ Bank Name/ Bank Name/

Account Type Account Type Account Type
Bank Information
_________ _________ __________

• Minimum opening balance?

• Minimum monthly balance?

• Annual percentage yield (APY)?

• Fees?

• Fee waivers available?

• Withdrawal limits per month?

• Services available?

ATM Cards

• Fees?

• Location/number of ATMs?

Debit Cards

• Fees?

• Location/number of ATMs?

• Debit card transaction requirements or

limits?
Mobile/online banking

• Is it available?

• Transaction types and limits?

• Fees?

• Online bill pay?

Other Information?

Total Monthly Costs

Total Annual Costs

College of Business – Business Administration Page | 23

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

Opening and Maintaining a Bank Account

There are four basic things you would consider in opening and
maintaining a savings account.

1. Open the account

2. Make deposits and withdrawals
3. Record interest and fees
4. Keep track on your outstanding balance

Account Verification

The first step you need to do when opening a bank account is to

go through a process called account verification. Two reasons
for verifying an account: First, the bank needs your
identification, and you were able to understand as to the terms
and conditions when opening a bank account. Second, the bank
may want to make sure you will be a responsible bank
customer. Other banks will not allow opening a new account for
someone who has a history of mismanaging their bank account.

The bank will request your:

• Name
• Address
• Date of birth
• Social Security Number (SSN) or Taxpayer Identification
Number (TIN)
• Government-issued identification (ID) (e.g., school ID,
UMID ID card, driver’s license, passport).

College of Business – Business Administration Page | 24

 Module 2: APPLY THE PROCESS OF ONLINE BANKING

Assessment:
Open an online savings account. The following transactions
must be reflected in your bank statement:
1. Cash deposit
2. Cash withdrawal
3. Cash Transfer
4. Online transactions like payments.

Rubrics
Savings Deposit Rubrics
20 15 10 5 0
The Student The Student The Student follows The Student The Student did not
follow follows the the instruction, but follow instruction, follow instructions.
instructions and instruction, but two transactions are but three
one transaction is
made the missing. transactions are
missing.
required missing
transactions

Reflection

What are your insights on the lesson?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

College of Business – Business Administration Page | 25

 Module 3: ANALYZE THE OPERATIONS AND MANAGEMENT OF
BANKS AND OTHER FINANCIAL INSTITUTIONS

Learning Objectives

The student would be able to:

1. Identify the different functions of the commercial bank.

2. Apply computational skills of average daily bank balances.
3. Describe the role of PDIC, its board of directors, its bank's
functions, and the importance of bank reserves.

Icons
The following icons will use throughout the module. This icon will serve as an
indicator of what type of activity the students will going to do.

Learning Objectives Flip Chart

Objectives set for Document students'

learning. comments or write
essential points for
students to remember.

Activity Assessment

An activity to support Direct students to take a

their learning. short test.

Discussion Ask a Question

Discussion about a Present a problem or

topic. question for discussion.

College of Business – Business Administration Page | 26

 Module 3: ANALYZE THE OPERATIONS AND MANAGEMENT OF
BANKS AND OTHER FINANCIAL INSTITUTIONS

What do you know?

What is the difference between Commercial banks to other
banking institutions?

_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________

Self-assessment: Which is which

Take a few minutes to complete the Self-Assessment. It

will not be scored and you will be able to determine
whether you answered each question correctly as we
progress through the module.
Read each sentence. Place an ✓ on your selected answer.

1. A classification of a bank in which they have the power to

invest in non-allied enterprises.

Universal Bank
Commercial Bank

2. A classification of a bank in which they have the power to

receive in custody funds, documents and valuable objects.

Universal Bank

Commercial Bank

3. A classification of a bank which may perform any services

like grant loans, whether secured and unsecured.

Thrift Bank

Rural Bank

College of Business – Business Administration Page | 27

 Module 3: ANALYZE THE OPERATIONS AND MANAGEMENT OF
BANKS AND OTHER FINANCIAL INSTITUTIONS

4. A Bank that shall primarily provide financial, banking and

credit services to cooperatives and their members, although
it may offer the same benefits to non-members or the general
public.

Cooperative Bank

Islamic Bank

5. A bank which can perform to rediscount paper with the

LBP, DBP or any other bank, including its branches and
agencies. Said banks shall specify the nature of paper
deemed acceptable for rediscount, as well as the rediscount
rate to be charged by any of these banks.

Rural Bank

Islamic Bank

College of Business – Business Administration Page | 28

 Module 3: ANALYZE THE OPERATIONS AND MANAGEMENT OF
BANKS AND OTHER FINANCIAL INSTITUTIONS

Introduction
This module will facilitate the students to learn the
functions of commercial banks, enable them to compute the
required weekly reserve, the vital role of PDIC including
computation on insured deposit both single and joint account,
and the contribution of currencies in the economic system.

Commercial Banks
The Commercial bank is a type of bank that deals in various
functions and services. Bangko Sentral requires P2,400.00 (in a
million pesos) as the minimum level of capitalization.

Its functions include deposit, Loans, Exchange, Trust, and

Advisory. Its services include rental of safety deposit boxes, sale
of drafts and cashier check, collection agent, credit information,
and payrolls.

The Philippines Deposit Insurance Corporation (PDIC)

The PDIC provides adequate depositor protection and

education and the immediate processing and settlement of
depositor's claims. The insurance corporation function includes
receivership and liquidation. The maximum coverage of the
insurance is P 500,000.00 per depositor. Below is an example
computation of deposit insurance of a single and joint account.

BANK RESERVES

The bank reserves consist of the primary and legal reserve. The
primary reserve consists mainly of highly liquid assets of the
bank, and its main objective is to maintain the bank liquidity
and solvency. The reserves may be in the form of cash in vaults,
deposits with the central bank (legal reserve), deposit with other
banks, exchanges or the clearinghouse, and checks for
collection. While the legal reserve is a form part and parcel of
the primary reserve. This reserve is usually a percentage of

College of Business – Business Administration Page | 29

 Module 3: ANALYZE THE OPERATIONS AND MANAGEMENT OF
BANKS AND OTHER FINANCIAL INSTITUTIONS

demand and time deposit, which may either be in cash or a

combination of cash and highly marketable securities.

The reserves are reported to Bangko Sentral ng Pilipinas every

week. This report is called Weekly Report on Required and
Available Reserved (WRRAR).

Example:
How much cash to be transferred from another bank to make a
2:1 against your cash available.
Given: Cash (P100,000.00)
Deposit Liabilities 200,000.00
Answer: P 500,000.00

Assessment:
This is to test your understanding on the different topics that
has been discussed. Attached is a case study on Metro Bank
and Trust company.

Let's Re-enforce

Research on the different deposit functions and Republic Act

7653 (New Central Bank Act of 1993) as embodied in Chapter
IV, Article VII, entitled "Bank Reserves:"

College of Business – Business Administration Page | 30

 Module 3: ANALYZE THE OPERATIONS AND MANAGEMENT OF
BANKS AND OTHER FINANCIAL INSTITUTIONS

Reflection

What are your insights on the lesson?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
______

College of Business – Business Administration Page | 31

 Module 4: Creation of E-portfolio

Learning Objectives

After completing the module, the student should be able to:

1. Compare and contrast banks and other financial institution.

2. Compile bank portfolio.

Icons
The following icons will use throughout the module. This icon will serve as an
indicator of what type of activity the students will going to do.

Learning Objectives Flip Chart

Objectives set for Document students'

learning. comments or write
essential points for
students to remember.

Activity Assessment

An activity to support Direct students to take a

their learning. short test.

Discussion Ask a Question

Discussion about a Present a problem or

topic. question for discussion.

College of Business – Business Administration P a g e | 32

 Module 4: Creation of E-portfolio

Let’s begin!

List down the financial institution that is operating in the

Philippines.

_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________

What’s on your Mind

What is an e-portfolio?

An electronic portfolio or e-portfolio is a collection of electronic

evidence assembled and managed by a user, usually on the
Web. Such electronic evidence may include input text,
electronic files, images, multimedia, blog entries, and
hyperlinks. Wikipedia

Before making an e-portfolio, lets compare first the different financial

institution and the things that should be consider in creating an e-
portfolio.
1. Financial Highlights
2. Its corporate objectives, mission, vision, and core values
3. The scope of the business.
4. Business Model used
5. Awards and recognition
6. Capital structure and adequacy
7. Corporate governance
8. Organizational Structure
9. Profiles of the Board of Directors
10.Profile of Management Committee
11.Financial Statement
12.Products and Services
13.Branches and Offices

College of Business – Business Administration P a g e | 33

 Module 4: Creation of E-portfolio

Assessment Activity

Select and compare two financial institution and discuss

their difference.

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Rubrics

No Needs Adequate Quality Exemplary

Answer Improvement 6 pts 8 pts 10 pts
0 pts 4 pts

Answers are Answers are Answers are Answers are

partial or not accurate and comprehensive,
Did not
incomplete. comprehensi complete. Key accurate and
answer
The key points ve or points are complete. Key
the
are not clear. completely stated and ideas are clearly
Content question.
Question not stated. Key supported. stated,
10 pts adequately points are explained, and
answered. addressed, well supported.
but not well
supported.

Organization Inadequate Organization is Well organized,

and structure organization mostly clear coherently
Did not
detract from or and easy to developed, and
answer
Organization the answer. development. follow. easy to follow.
the
10 pts Structure of
question.
the answer is
not easy to
follow.

Let’s Navigate!

Create an e-portfolio on your selected financial institution.

College of Business – Business Administration P a g e | 34

 Module 4: Creation of E-portfolio
Criteria Exemplary
15 pts
Completion of all components are completed:
requirements personal statement, section
key concepts, each required
selected work
Selection of work All work samples are clearly
and directly related to the
purpose of the eportfolio. A
wide variety of artifacts is
included.
Description/analysis/ Information/analysis is well
reflection of work written and all reflections
illustrate deep thought and
provide practical suggestions
for future learning
Writing mechanics no errors in grammar,
capitalization, punctuation, or
spelling
Effort a great deal of effort was put
forth and the student made the
project a priority
Timeliness eportfolio completed on time
College of Business – Business Administration
E-Portfolio Rubrics
Proficient
10 pts
portfolio is missing one
component or one
component is incomplete
Most work samples are
related to the purpose of
the eportfolio. A variety of
artifacts is included.
Information/analysis is
complete but needing some
revision and most
reflections illustrate deep
thought and provide
practical suggestions for
future learning.
few errors in grammar,
capitalization, punctuation,
or spelling
an acceptable effort was put
forth and student showed a
desire to complete the
project successfully
eportfolio is no more than 2
days late
P a g e | 32
Developing
5 pts
portfolio is missing 2
components or 2
components are incomplete
Some of the work samples
are related to the purpose
of the eportfolio. At least
two different types of
artifacts is included.
Information/analysis is
incomplete and needs
revision and some
reflections illustrate deep
thought or provide practical
suggestions for future
learning.
many errors in grammar,
capitalization, punctuation,
or spelling
minimal effort was put forth
and student was not
committed to completing
the project
eportfolio is up to one week
late
Beginning
1 pts
portfolio is missing more than 2
components or the majority of
components are only partially
completed
None of the work samples are
related to the purpose of the
eportfolio. There is no variety
in the type of artifacts
included.
Information is missing or
incomplete and reflections do
not illustrate deep thought or
provide practical suggestions
for future learning.
errors in grammar,
capitalization, punctuation, or
spelling distract the reader
from understanding content
no effort was put forth;
student required a great deal
of peer or teacher support
eportfolio is handed in more
than one week late
 Module 4: Creation of E-portfolio

Reflection

What are your insights on the lesson?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

College of Business – Business Administration P a g e | 32