MONEY

MARKETS
LEARNING OBJECTIVES
To Define Money Markets
To Determine the Importance of Money Markets
To Identify the Characteristics of Money Markets
To Identify the Structures of a Developed Money Market
To Discuss the Development of Money Market over the
years
To Give Examples of Money Market Globally and in the
Philippines
 MONEY MARKET
A place for trading in money and short term financial
assets that are close substitutes of money.

They provide means for lenders and borrowers to

satisfy their short-term financial needs.

These markets are described as “money markets”

because the assets that are bought and sold are
short term.
MONEY MARKET
Money market is not a place but an activity.

The center for dealings, mainly short term

character, in monetary assets; it meets the
short term requirements of borrowers and
provides liquidity and cash to the lenders.

Money market is an unregulated and

informal market and not structured by
capital markets, where things are organized
in a formal way.
IMPORTANCE
OF MONEY
MARKET
 DEVELOPMENT OF DEVELOPMENT OF
TRADE & INDUSTRY CAPITAL MARKET
Financing Trade Profitable Investment
Financing Industry Parking place for short term
funds
SMOOTH FUNCTIONING EFFECTIVE CENTRAL
OF COMMERCIAL BANK CONTROL
BANKS
Self-sufficiency of commercial bank Help to central bank

FORMULATION OF SOURCE OF FINANCE TO

SUITABLE MONETARY THE GOVERNMENT
POLICY
 CHARACTERISTICS
OF MONEY MARKET
It is a market purely for short-terms funds or financial assets
called near money.
The money market instruments carry a maturity period of less
than a year.
These instruments are used to fund the short-term needs of the
borrower.
It has instruments like T-bills, certificate of deposits, inter-bank
call money, etc.
Transactions can not take place formally like a stock exchange
 CHARACTERISTICS
OF MONEY MARKET
Transactions have to be conducted without the help of
brokers.
Risk is comparatively lower due to the short-term maturity
period
Composed of commercial banks, acceptance houses & NBFC
(Non-banking financial companies
It is not a single homogeneous market, it comprises several
submarkets like call money market, acceptance & bill market.
 WHAT ARE Developed commercial
banking system
THE Presence of a central

STRUCTURES bank
Availability of ample
OF A resources

DEVELOPED Near money assets

Existence of sub markets
MONEY Existence of secondary

MARKET? markets
Demand and supply
fund
 ICE BREAKER PT.1

GUESS
THE
ICONS
 MECHANICS

Guess the icons shown in the screen, hints of the answer will
be given.
A set of icon is equivalent to 1 word.
Type your answers on the chat box portion.
Answers should be CAPITALIZED.
First student who got the correct answer will be recognized as
the winner of the round.
As soon as the icons are flashed, the game will start.
 M_N__ _A_K__
HINT!
A PLACE FOR TRADING IN MONEY AND
SHORT TERM FINANCIAL ASSETS THAT ARE
CLOSE SUBSTITUTES OF MONEY

ANSWER:
F__A_C_NG I_D_S__Y
HINT! IT IS UNDER THE DEVELOPMENT
OF TRADE AND INDUSTRY

ANSWER:
C_mM__Ci_l __n_
MONEY MARKET HELPED IT TO
HINT! FUNCTION SMOOTHLY AND BECOME
SELF-SUFFICIENT.
ANSWER:
 T__a__rY _I__S
HINT! MONEY MARKET INSTRUMENT THAT HAS
ZERO RISK
ANSWER:
 c_Nt__L __nk
ITS PRESENCE IS ONE OF THE
HINT! CHARACTERISTICS OF A DEVELOPED
MONEY MARKET.

ANSWER:
DEVELOPMENT
OF MONEY
MARKET OVER
THE YEARS
Money market funds were designed and launched during
the early 1970s in the U.S.

Previously, money market funds held only government

bonds.

The Securities and Exchange Commission implemented

some fundamental structural changes to the way they
regulate money market funds in 2016.

Today, money market funds have become one of the core

pillars of the present-day capital markets.
During the decade spanning from
2000 to 2010, the monetary
policies of the Federal Reserve
Bank led to short-term interest
rates.

Another economic policy in recent

years that has had an adverse
impact on money market funds is
quantitative easing (QE).
This migration of funds led to interest
rates remaining low for a long
duration, and the diminishing of
returns from money market funds.
EXAMPLES OF
MONEY MARKETS
GLOBALLY AND
IN THE
PHILIPPINES
 MONEY MARKETS GLOBALLY
U.S. MONEY MARKET
permits trading in an unusually wide variety of
money substitutes
less centralized geographically

BRITISH MONEY MARKET

the discount houses have the longest history as
money market institutions
major assets: commercial bills, treasury bills and
short-date government bonds
 MONEY MARKETS IN THE
PHILIPPINES
LAND BANK MONEY MARKET FUND
Minimum investment amount: PHP 5,000
Minimum subsequent: PHP 1,000
Minimum holding period: 7 days
Fee: 0.104% p.a.
Early redemption fee: 25% but not less than PHP
500
 MONEY MARKETS IN THE
PHILIPPINES
BPI INVEST MONEY MARKET FUND
Minimum investment amount: PHP 10,000
Minimum subsequent: PHP 1,000
Minimum holding period: None
Fee: 0.25% p.a.
Early redemption fee: None
 ICE BREAKER PT.2

GUESS
THE
ICONS
 M__E_ _A__ET F_N_S
WERE DESIGNED AND
HINT! LAUNCHED DURING THE
EARLY 1970S IN THE U.S.
ANSWER:
 S__UR_ti_s A_D
_Xc_a__e C_M__SS_oN

HINT!
IMPLEMENTED SOME FUNDAMENTAL
STRUCTURAL CHANGES TO THE WAY THEY
REGULATE MONEY MARKET FUNDS IN 2016.

ANSWER:
 G_V__nm__T B_nD_
PREVIOUSLY, MONEY MARKET
HINT! FUNDS HELD ONLY THESE
ANSWER:
 .
U._. M__E_ ___K_T
HINT! EXAMPLE OF MONEY
MARKET GLOBALLY
ANSWER:
 -
l___ _an_ _on__ M__K__ FU__

HINT! EXAMPLE OF MONEY MARKET

IN THE PHILIPPINES
ANSWER:
THANK YOU!
MONEY MARKETS
Group 6
Abella, Glyvie D.
Ade, Rica Ayelle
Cayanga, Sean Lleizly S.
Puntuan, Norjannah Fatrheya