Republic of the Philippines

MAILA ROSARIO COLLEGE

Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

COLLEGE OF BUSINESS ADMINISTRATION

MAJOR IN FINANCIAL MANAGEMENT
1st SEMESTER, S.Y. 2021 – 2022
MID-TERM COVERAGE

Module in
MONETARY POLICY AND CENTRAL BANKING

MODULE NO.: 05

NAME OF STUDENT: ___________________________________________________

YEAR / SECTION: ______________________________________________________
DATE RECEIVED: ______________________________________________________

INSTRUCTOR: ELEINE T. ALVAREZ

NOTE: Please be cautious in following the given instructions in each activity. Correspondingly, observe
punctuality in accomplishing this module. God bless and happy learning! – INSTRUCTOR
 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

I. OVERVIEW
This module focus is to develop the learner’s skills in understanding, analyzing,
evaluating and applying the concepts, underlying principles, and processes about the
Stock and Bonds and the Credit System.

II. LEARNING OBJECTIVES

In this learning module, the learner is expected to:
a. Explain the Philippine Stock Exchange, Inc., its background, mission and vision.
b. Define stocks
c. Describe bubbles bursting.
d. Explain what a bond is.
e. Discuss how Philippine bond gets B1 rating from Moody’s
f. Illustrate the development of credit from pre-Spanish time.
g. List the basic elements of credit.
h. Define the foundation of credit and credit contract.
i. Identify the characteristics of a credit contract.
j. Identify lending rates of the BSP

III. GUIDE QUESTIONS

1.What does stock mean?
2. How does bonds affect the Philippines economy?
3. How does the credit system affect the one’s economy?

IV. LESSON PROPER

INTRODUCTION: PHILIPPINE STOCK EXCHANGE

The Philippine Stock Exchange, Inc. is at the forefront of promoting corporate governance
in order to develop the capital markets through well-governed companies, ensure
protection of shareholder rights and interests, and increase confidence in both issuers
and the securities brokerage industry.
As a regulator of listed companies and trading participants, the PSE takes on the role of
leading by example through the faithful observance of corporate governance best
practices.

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

The Philippine Stock Exchange, Inc. (PSE) is a self-regulatory organization that

provides and ensures a fair, efficient, transparent and orderly market for the buying and
selling of securities. The Exchange also offers a convenient and efficient venue in
raising capital to support the growth of businesses.

Considered one of the oldest bourses in Asia, the PSE traces its roots back to the
country’s two former bourses – the Manila Stock Exchange (formed in 1927) and the
Makati Stock Exchange (formed in 1963). The Manila and Makati bourses were unified
on December 23, 1992, to form the PSE.

The Philippine Stock Exchange, Inc. (PSE) was incorporated on July 14, 1992 as a non-
stock corporation with the primary objective of providing and maintaining a convenient
and suitable market for the exchange, purchase and sale of all types of securities and
other instruments. The Company eventually became a stock corporation on August 3,
2001.

On December 15, 2003, pursuant to the demutualization mandate of Republic Act No.
8799 or the Securities Regulation Code, PSE's capital stock was listed by way of
introduction. The following year, PSE sold 6,077,505 shares from its unissued stock to
five strategic investors by way of private placement. These strategic investors were the
PLDT Beneficial Trust Fund, SMC Retirement Fund, Government Service Insurance
System, Kim Eng Investment Ltd., and KE Strategic Pte. Ltd.

The PSE has two wholly-owned subsidiaries, the Securities Clearing Corporation of the
Philippines, which was primarily organized as a clearing, and settlement agency for
trades executed through the facilities of the Company; and the Capital Markets Integrity
Corporation, which functions as the PSE's independent audit, surveillance and
compliance unit over the trading activities of brokers.

The Company likewise owns 20.98% of the Philippine Dealing System Holdings
Corporation, the holding company of the country's fixed income exchange operator, and
80% of Premier Software Enterprise, Inc.

Source: SEC Form 17-A (2020)

In 2018, the PSE moved its headquarters to Bonifacio Global City (BGC) in Taguig. The
fast paced environment in the Taguig business district is well-suited for the Exchange
as it aims to fast track the introduction of new products and services to boost investor
participation and liquidity in the Philippine stock market.

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Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

Page 4 of 21
 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

PHILIPPINE STOCK EXCHANGE (PSE) HISTORY

The Philippine Stock Exchange was formed from the country’s two former stock
exchanges, the Manila Stock Exchange (MSE), established on August 8, 1927, and the
Makati Stock Exchange (MkSE), which was established on May 27, 1963.

Although both the MSE and the MkSE traded the same stocks of the same companies,
the bourses were separate stock exchanges for nearly 30 years until December 23, 1992,
when both exchanges were unified to become the present-day Philippine Stock
Exchange.

 1927
The Manila Stock Exchange, Inc. (MSE) was established on August 8 by five
businessmen, namely, W.Eric Little, Gordon W. Mackay, John Russell, Frank W.
Wakefield and W.P.G. Elliot.

 1936
Commonwealth Act No. 83 or the Securities Act of 1936 was enacted on October
26. It created the Securities and Exchange Commission (SEC) in response to the need
for an agency that would safeguard public interest brought about by the local stock market
boom in 1936.
The SEC started operations on November 11 under the executive supervision of
the Department of Justice.

 1937
The MSE introduced the ticker transmitting service for better and faster
communication system for the expanding volume of transactions as well as for
transmitting news reports on business and industry from all parts of the world as brought
in by news services in Manila.

 1940
The MSE suspended operations during the Japanese Occupation. The SEC was
also abolished by the Philippine Executive Commission and later reactivated in 1945.

 1946
The MSE resumed trading operations.

 1958
The Industrial Share Average was initiated in order to provide the members with
an index to measure the movement of industrial issues. It was launched on January 2
and was drawn from select active commercial and industrial shares. A Mining-Oil Index
was also introduced due to the flourishing oil industry.

 1963
The Makati Stock Exchange, Inc. (MkSE) was organized by Hermenegildo B.
Reyes, Bernard Gaberman, Eduardo Ortigas, Aristeo Lat and Miguel Campos on May 27.

 1965
The MkSE started operations on November 16.
 1969
The MSE implemented separate indices for mining and oil.

 1973
Presidential Decree (PD) No. 167 dated April12, which requires automatic listing
in all stock exchanges of securities that have been approved for listing and trading was
passed.

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

 1975
The SEC, through Order No. 153 dated February 4, implemented the uniformity of
price fluctuations, board lots and trading symbols for all existing stock exchanges.

 1979
The Securities Protection Fund, Inc. was formally established on October 2.

 1987
The MSE introduced the MSE Composite Index using the variable multiplier
method (fixed weights and base date), which was different from the variable divisor
method the MkSE used.

 1989
MSE installed a computerized real-time price reporting system that provided
members with essential market information.

 1990
The computation of the indices was changed from price-weighted to full market
capitalization-weighted, a methodology that measures the relative changes in market
capitalization of common stocks.

 1992
The Philippine-SEC Institute Foundation, Inc. (Phil-SEC) was incorporated on May 25.
The Philippine Stock Exchange, Inc. (PSE) was incorporated on July 14 by the following
incorporators: Robert Coyiuto, Jr., Victor Say Hipek, Eduardo C. Lim, Juan B. Francisco
and Cesar E.A. Virata.

 1993
Trading at the MSE through its fully computerized match trading system, the
Stratus Trading System with Equicom started on January 4.
The first general membership meeting of PSE took place on March 20.
The MkSE launched its automated trading system referred to as Mask Trade on
June 15.
The SEC approved the PSE’s By-Laws.

 ………2015
The PSE was recognized as the Best Stock Exchange in Asia by institutional
investment magazine Alpha Southeast Asia.
The PSE shifted to a new trading system, the PSEtrade XTS which utilizes
NASDAQ’s X-stream Technology. The PSEtrade XTS, which replaced the NSC trading
platform provided by NYSE Euronext Technologies SAS, is equipped to handle large
trading volume. It is also capable of supporting the future requirements of the PSE,
including providing more products and services.

 2016
The PSE was named BEST Stock Exchange in Asia by institutional investment
magazine Alpha Southeast Asia. This is the third time in four years that the PSE bagged
the award,
The Exchange received regulatory approval to introduce new products in the stock
market- the Dollar Denominated Securities and the Listing of PPP Companies.

 2017
PSE linked a memorandum of agreement with the Public-Private Partnership
(PPP) Center of the Philippines in February to formalized its partnership for information
sharing to facilitate the processing of PPP listing applications.

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

PSE had its first Dolar-Denominated Securities listing in April. There were three
(3) DDS offerings recorded for the year, which raised a total of USD367 million.
PSE recognized two domestic listed companies, SM Prime Holdings, Inc. and SM
Investments Corporation, whose market capitalization broke past the one-trillion-peso
mark on June 9 and August 16 respectively.
The PSE was once again named the Best Stock Exchange in Southeast Asia by
institutional investment magazine, Alpha Southeast Asia. In giving the recognition, the
award-giving body cited the technology developments, product launches, and investment
literacy initiatives of the PSE.

 2018
In February, the PSE moved its corporate offices to PSE Tower in Bonifacio Global
City, Taguig City. The Exchange also merged the two trading floors it used to maintain in
the cities of Makati and Pasig to the same building.
The company conducted a stock rights offering and raised P2.90 billion from the
exercise. The rights issue raised fresh capital fund the Exchange’s product and
technology development initiatives, and also brought the PSE closer to complying with
the industry ownership limit of stock exchanges required under the law. The shares were
listed in March.
In June, PSE received approval from the SEC on the implementing guidelines for
short selling.
Officials of PSE and its wholly-owned subsidiaries, CMIC and SCCP, visited the
Shenzhen Stock Exchange to learn more about the regulations, systems, products, and
services.

 2019
The PSE became a member of the Sustainable Stock Exchange Initiative in May.
A major initiative to support the PSE’s commitment to promote sustainability is its
announcement that the Exchange will use the global and more comprehensive standards
of Environmental, Social and Governance (ESG) as the central framework and
benchmark for its prestigious Bell Awards.
After collating end-2018 data provided by trading participants, the PSE reported
that the number of stock market investors breached the one million mark. As of 2018,
total stock market accounts reached 1,089,443.
The Exchange started publishing the PSEi Total Return Index (TRI) data in
February to provide investors a picture of the overall index return, including capital gains
and dividend if these were reinvested into the index.
In June, the PSE Electronic Allocation System (PSE EASy) website was launched
in June. PSE EASy is an online shares subscription platform for retail investors. The
mobile application of PSE EASy was made availbale in November.

Source: The Philippine Stock Exchange, Inc. — PSE Page 7 of 21

Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

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Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

V. EVALUATION

Problem Solving:
Suppose I = P70; C = Rs. 60 + 0.80 Y.
(a) Find the equilibrium level of income
(b) Find the equilibrium level of income when there is a P10 increases in autonomous
planned investment (planned investment increases from P70 to P80)
(c) Establish the multiplier effect of the P10 increase in autonomous spending.

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Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

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Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

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Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

WHAT IS CREDIT?
How do you define credit? This term has many meanings in the financial world, but credit
is generally defined as a contract agreement in which a borrower receives a sum of money
or something of value and repays the lender at a later date, generally with interest.

Credit also may refer to the creditworthiness or credit history of an individual or a

company. To an accountant, it refers to a bookkeeping entry that either decreases assets
or increases liabilities and equity on a company's balance sheet.

A credit, sometimes abbreviated CR, is an accounting term for an entry made on the right
side of an account, whereas a debit refers to an entry on the left side of an account. The
modern double entry accounting system is based on the concept that the total credits in
the system must always equal the total debits.

Many people get confused about the true meaning of a credit. It doesn’t mean an increase
or decrease in an account. Lots of entry-level accounting students make this mistake. A
credit actually means an entry on the right side of an account. Depending on the account,
a credit could be an increase or decrease for the account. For example, a credit always
increases accounts with a credit balance like liabilities, revenue, and equity accounts.
This means that a credit recorded in a liability account would increase the liability account.

Conversely, asset and expense accounts have debit or left balances. A credit recorded
in an asset account would decrease the asset balance. This is true about any account
with a debit balance.

In some basic meaning, the term loan actually comes from the Latin, yatiu credere, which
means 'trust'. Meanwhile, according to Big Indonesian Dictionary, credit means a loan up
to a certain limit to the amount allowed by a bank or other entity. According to the origin
he said, the credit means 'trust'. Therefore, the trust became one of the most important
factors in a credit process.

Generally, it is the ability to obtain a thing of value in exchange for a promise to pay
definite sum of money, on demand or future determinable time. This creates
OBLIGATIONS and rights to both debtor and creditor.

HOW CREDIT WORKS

In its first and most common-used definition, credit refers to an agreement to purchase a
product or service with the express promise to pay for it later. This is known as buying on
credit.

The most common form of buying on credit today is via the use of credit cards. This
introduces a middleperson to the credit agreement: the bank that issued the card repays
the merchant in full and extends credit to the buyer, who may repay the bank over time.

The amount of money a consumer or business has available to borrow—or their

creditworthiness—is also called credit. For example, someone may say, "They have great
credit, so they are not worried about the bank rejecting their mortgage application."

Finally, in accounting, credit is an entry that records a decrease in assets or an increase

in liability as well as a decrease in expenses or an increase in revenue. So, a credit

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

increases net income on the company's income statement, while a debit reduces net
income.

Besides having a goal, credit has the following functions.

- Enhances the usability of the money.

- Increasing the amount of money in circulation and traffic of money.
- Increasing the value or usability of the goods.
- Increasing the circulation or distribution of goods.
- As a means of supporting economic stability.
- Activate and enhance the usefulness or the existing economic potential.
- As one of the bridges increase the national income distribution.
- As one means to establish international relations.

WHAT IS A ‘CREDIT HISTORY’ ANYWAY?

A credit history is an account of how you’ve used your credit over the years that shows
your responsibility in repaying your debts. Banks use this history to determine whether
you’ll be likely to make payments on time or not.

There’s still no centralized credit reporting in the Philippines like there is in the US, where
300 is a bad credit score and 850 is the best. Because of this, “most big banks either rely
on an internal database (record of past and existing clients’ handling of both lending and
deposit accounts) or external sources,” says Alex Ilagan, executive director and
spokesperson of the Credit Card Association of the Philippines (CCAP), in an email
interview with iMoney Philippines. The most common external sources are the Bankers
Association of the Philippines Credit Bureau or the CCAP C4 (Consolidated Cancelled
Credit Cards) negative file.

Back in September 2013, the Inquirer reported that the Credit Information Corporation
(CIC), a centralized national credit bureau, was expected to start operating in December
2014. Jaime Garchitorena, president and CEO of CIC, said in an interview with ANC’s On
the Money that the bureau should be up and running by the end of 2015/early 2016.

Until then, there’s TransUnion, one of largest credit reporting agencies, which has been
operating in the Philippines since 2011. They’re partnered with BPI, Banco de Oro,
Metrobank, HSBC, and Citibank. The partnership created a centralized credit-information
system that collects credit data. However, according to Ilagan, “the cost is very prohibitive,
and access is limited to member banks only,” meaning that banks who have not partnered
with TransUnion don’t have access to the reports they provide.

ELEMENTS OF CREDIT
The following are the elements contained in the credit.

1. Trust
Confidence the bank as lender of accomplishment given to debtors to repay the mortgage
according to a predetermined time period.

2. Period
The time-scale has been agreed regarding the provision of credit by banks and credit
repayment by the debtors.

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

3. Achievement
Achievement may be regarded as an object of interest or fee agreed upon banks and
debtors.

4. Risk
To avoid bad risks in the credit agreement, was held binding angunan or warranties are
charged to the debtors or borrowers.

CHARACTERISTICS OF CREDIT
1. it is a bipartite contract
2. the contract is personal in nature
3. the contract has a pecuniary nature
4. there is the presence of trust and confidence
5. credit is risk
6. futurity
7. creation of legal obligation
8. the transfer of ownership or title

THE 5 C’S OF CREDIT

CHARACTER
Character is the most comprehensive aspect of the evaluation of creditworthiness. The
premise is that an individual’s track record of managing credit and making payments
indicates their “character” as relevant to the lender, i.e., their propensity for repaying a
loan on time. Past defaults imply negligence or irresponsibility, which are undesirable
character traits.

Owing to the degree of specialization required in compiling a detailed list of an individual’s

credit history, financial intermediaries such as credit rating agencies or banks provide
rating services. There may be a certain degree of variance in reports compiled by different
organizations. They include the names of past lenders, type of credit extended, payment
timeline, outstanding liabilities, and so on.

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

In some cases, credit scores may be assigned to express one’s creditworthiness

numerically. A common standard is a FICO Score – which consolidates data from credit
reporting bureaus, i.e., Experian, Equifax, and TransUnion – and calculates an
individual’s credit score. A high score signifies less risk for the lender.

CAPACITY
A borrower’s capacity to repay the loan is a necessary factor for determining the risk
exposure for the lender. One’s income amount, history of employment, and current job
stability indicate the ability to repay outstanding debt. For example, small business
owners with unsteady cash flows may be considered “low capacity” borrowers. Other
responsibilities, such as college-bound children or terminally ill family members, are also
factored in to evaluate one’s future payment obligations.

An entity’s Debt-to-Income (DTI) Ratio, the ratio of its current debt to current income
(before taxation), may be evaluated. Collateral is not considered a fair metric for
quantifying one’s capacity because it is only liquidated when the borrower fails to repay
the principal amount of a loan, i.e., in the worst-case scenario of a credit transaction.
Moreover, no collateral is declared in cases of unsecured loans such as credit cards.

COLLATERAL
When being assessed for a secured product such as a car loan or a home loan, borrowers
are required to pledge certain assets under their name as collateral. They may include
fixed assets such as the title of a parcel of land or financial assets and securities such as
bonds.

The value of the collateral is evaluated by deducting the value of current loans secured
through the same asset. The remaining equity indicates the true value of collateral for the
borrower. The evaluation of the liquidity of collateral is also dependent on the type of
asset, its location, and potential marketability.

CAPITAl
Capital represents the overall pool of assets under the name of the borrower. It represents
one’s investments, savings, and assets such as land, jewelry, etc. Loans are primarily
repaid using overall household income; capital is additional security in case of unforeseen
circumstances or setbacks such as unemployment.

CONDITIONS
Conditions refer to the specifics of any credit transaction, such as the principal amount or
interest rate. Lenders assess risk based on how the borrower plans to use the money,
should they receive it.

Other external features, such as state of the economy, prevailing federal interest rates,
industry-specific legislation, and political change are also considered. The features are
not individualistic as they cannot be influenced by the borrower. Nevertheless, they
indicate the level of risk associated with a certain investment. For example, during a
recession, even borrowers with a 700+ FICO score may not be able to access credit.

PHILIPPINE CREDIT SYSTEM

REPUBLIC ACT No. 9510 AN ACT ESTABLISHING THE CREDIT INFORMATION
SYSTEM AND FOR OTHER PURPOSES

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

Section 1. Title. - This Act shall be known as the "Credit Information System Act".
Section 2. Declaration of Policy. - The State recognizes the need to establish a
comprehensive and centralized credit information system for the collection and
dissemination of fair and accurate information relevant to, or arising from, credit and
credit-related activities of all entities participating in the financial system. A credit
information system will directly address the need for reliable credit information concerning
the credit standing and track record of borrowers.

The operations and services of a credit information system can be expected to: greatly
improve the overall availability of credit especially to micro, small and medium-scale
enterprises; provide mechanisms to make credit more cost-effective; and reduce the
excessive dependence on collateral to secure credit facilities.

The State shall endeavor to have credit information provided at the least cost to all
participants and shall ensure the protection of consumer rights and the existence of fair
competition in the industry at all times.

An efficient credit information system will also enable financial institutions to reduce their
over-all credit risk, contributing to a healthier and more stable financial system.

Section 3. Definition of Terms. - For purposes of this Act:

(a) "Accessing Entity" refers to any submitting entity or any other entity authorized by the
Corporation to access basic credit data from the Corporation.

(b) "Basic Credit Data" refers to positive and negative information provided by a borrower
to a submitting entity in connection with the application for and availment of a credit facility
and any information on the borrower’s creditworthiness in the possession of the
submitting entity and other factual and objective information related or relevant thereto in
the submitting entity’s data files or that of other sources of information: Provided, that in
the absence of a written waiver duly accomplished by the borrower, basic credit data shall
exclude confidential information on bank deposits and/or clients funds under Republic Act
No. 1405 (Law on Secrecy of Bank Deposits), Republic Act No. 6426 (The Foreign
Currency Deposit Act), Republic Act No. 8791 (The General Banking Law of 2000),
Republic Act No. 9160 (Anti-Money Laundering Law) and their amendatory laws.

(c) "Borrower" refers to a natural or juridical person, including any local government unit
(LGU), its subsidiaries and affiliates, that applies for and/or avails of a credit facility.

(d) "BSP" refers to the Bangko Sentral ng Pilipinas, created under Republic Act No.7653.

(e) "Corporation" refers to the Credit Information Corporation established under Section
5 of this Act.

(f) "Credit facility" refers to any loan, credit line, guarantee or any other form of financial
accommodation from a submitting entity: Provided, That for purposes of this Act, deposits
in banks shall not be considered a credit facility extended by the depositor in favor of the
bank.

(g) "Credit Rating" refers to an opinion regarding the creditworthiness of a borrower or of

an issuer of debt security, using an established and defined ranking system.

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MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

(h) "Credit Report" refers to a summary of consolidated and evaluated information on

creditworthiness, credit standing, credit capacity, character and general reputation of a
borrower.

(i) "Government Lending Institutions" refers to existing and future government (GFIs),
government-owned and controlled corporations (GOCCs) primarilly engaged in lending
activities.

(j) "Negative Credit Information" refers to information/data concerning the poor credit
performance of borrowers such as, but not limited to, defaults on loans, adverse court
judgments relating to debts and reports on bankruptcy, insolvency, petitions or orders on
suspension of payments and corporate rehabilitation.

(k) "Non-Accessing Entity" refers to an entity other than a Submitting Entity, Special
Accessing Entity or Borrower that is authorized by the Corporation to access credit
information from a Special Accessing Entity.

(l) "Outsource entity" refers to any accredited third party provider to whom the Corporation
may outsource the processing and consolidation of basic credit data pertaining to a
borrower or issuer of debt or convertible securities under such qualifications, criteria and
strict confidentiality guidelines that the Corporation shall prescribe and duly publish.

(m) "Positive credit information" refers to information/data concerning the credit

performance of a borrower such as, but not limited to, information on timely repayments
or non-delinquency.

(n) "Relevant Government Agencies" refers to the Department of Finance, Department of

Trade and Industry, Bangko Sentral ng Pilipinas, Insurance Commission and the
Cooperative Development Authority.

(o) "SEC" refers to the Securities and Exchange Commission.

(p) "Special Accessing Entity" refers to a duly accredited private corporation engaged
primarily in the business of providing credit reports, ratings and other similar credit
information products and services.

(q) "Submitting Entity" refers to any entity that provides credit facilities such as, but not
limited to, banks, quasi-banks, trust entities, investment houses, financing companies,
cooperatives, nongovernmental, micro-financing organizations, credit card companies,
insurance companies and government lending institutions.

Section 5. Establishment of the Central Credit Information Corporation. - There is

hereby created a Corporation which shall be known as the Credit Information Corporation,
whose primary purpose shall be to receive and consolidate basic credit data, to act as a
central registry or central repository of credit information, and to provide access to reliable,
standardized information on credit history and financial condition of borrowers.

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 Republic of the Philippines
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Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

Mandate, Vision, Mission and

Core Values

Mandate
Under Republic Act No. 9510, the Credit Information Corporation has the powers and
functions to receive and consolidate basic credit data, to act as a central registry or central
repository of credit information, and to provide access to reliable, standardized
information on credit history and financial condition of borrowers.

Vision
By 2025, CIC will be a profitable organization providing internationally accepted credit
data, while protecting consumer rights.

Mission
To efficiently and effectively collect and provide accurate credit data through a reliable
and comprehensive centralized credit information system, using state-of-the-art
technology and facilities thereby contributing to improved access to credit.

Core Values
In carrying out this mission, we shall be guided by the values of Accountability,
Excellence and Dedication.

VI. EVALUATION

TASK
ACTIVITY 1 Restricted Essay: In 5 sentences each explain and give
necessary example.

1. Why do individuals/companies buy stocks?

2. If you had the money, would you buy stocks or
government bonds?

RUBRIC
Validity of Answer 3pts
Content Structure (spelling, grammar, punctuations) 1pts
Related Examples 1pts
TOTAL: 5pts

https://forms.gle/27BKn9zppW6SRDsd8

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 Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249

VII. REFERENCE/S
- Texbook
❖ Cristobal M. Pagoso, 2014, Money, Credit and Banking, 856 Nicanor Reyes, Sr.
St., Sampaloc, Manila, Rex Book Store, Inc.
❖ Feliciano R. Fajardo, Manuel M. Manansala, 2008, Money, Credit and Banking,
Quad Alpha Centrum Bldg. 125 Pioneer Street Mandaluyong City 1550, National
Book Store, Inc.

- Online resources
❖ (PDF) The Economics of Money Banking and Financial Markets 7th20190515
79756 3jbzpu | Thuỷ Nguyễn - Academia.edu
❖ Download PSE Data | Philippine Stock Exchange Inc. Price Data | MarketWatch
❖ Company Information (pse.com.ph)
❖ The Philippine Stock Exchange, Inc. — PSE
❖ What Are the 5 C's of Credit? (investopedia.com)
❖ Credit Definition (investopedia.com)
❖ PRESS RELEASE: CIC issues guidelines for reaccreditation of private credit
bureaus | Credit Information Corporation
❖ R.A. 9510 (lawphil.net)
❖ Republic Act No. 9510 | Official Gazette of the Republic of the Philippines
❖ Philippine Credit System by Arielle Tumanut (prezi.com)
❖ Credit Reports In The Philippines — What You Need To Know (imoney.ph)
❖ Elements, Objectives, and Function of Credit (blog-
businessandeconomy.blogspot.com)
❖ Master the 5 C’s of Credit - NerdWallet
❖ 5 Cs of Credit - Overview, Factors, and Importance
(corporatefinanceinstitute.com)
❖ Mandate, Vision, Mission and Core Values | Credit Information Corporation

COMPILED BY: CHECKED BY:

ELEINE T. ALVAREZ ____________________

BA Instructor BSBA Dean / Coordinator

General Education Coordinator

APPROVED BY:

ROMEO M. PASCUA, Ph.D.

Vice-President of Academic Affairs

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