Ayumi P.

Fajardo
BSBA III - FM

Assignment No. 1 (Prof. Sub. 3)

Discuss briefly. Give at least four (4) of the earliest banking institutions that were
established in the Philippines covering the Spanish times to the post-World War II eras,
and point out their respective contributions to the development of the banking industry
today.

Obras Pias

Obras Pias is the first organized credit institution established on the 3rd day of February,
year 1827, Spanish era. It serves as a charitable foundation that donors specified for the funds to
be used as support for hospitals, convents, missions, and schools– making the name suitable as it
means “works of piety or pious works” in Spanish. Most funds came from the Galleon Trade in
which it is used by the public. Later on, it introduced insurance and providing funds for
entrepreneurs as the organization expanded its activities but subsequently went bankrupt due to
lack of proper auditing.

Monte de Piedad

Monte de Piedad y Caja de Ahorros, known as Monte de Piedad is considered the first
mutual savings bank in the Philippines. It was formally inaugurated on the 20th day of July, 1882
and operated on the 2nd day of August, 1882.  It is concentrated in banking and a pawnshop
operations that as its main objective is providing collateral-backed loans to people who are under
or below the social class.

El Banco Español Filipino de Isabel II (Bank of Philippine Islands)

El Banco Español Filipino de Isabel II or now known as Bank of Philippine Islands (BPI)
was established on the 1st day of August, year 1851, Spanish era and served as the first
government bank of the Philippines and third bank during the Spanish era. It is named after the
queen of Spain, Isabel II. This institution was given the sole mandate to issue bank notes called
“Pesos Fuertes or Philippine Peso Fuerte” by the Spanish Royal Decree of 1854. The picture
shown is the first paper currency as it was co-circulated with gold and silver coins during the
Spanish colonial era.

Philippine National Bank

The Philippine National Bank was established on the 22nd of July 1916, American era.
Majority of the stockholders are part of the Philippine Government and it later on became the
first universal bank of the Philippines. Its primary function is to provide financial assistance to
Philippine industry and agriculture, as well as support the government’s economic development
effort. This served as the breaking point of the Philippines from using foreign banking monopoly
and treating the country’s lack of credit facilities. The bank serves as a government enterprise
that widens the variety of banking services as it has the authority to issue bank notes and act as a

depository of government funds.