FINANCIAL MARKETS AND ‘A BALATBAT CABRERAPhilippine Conyvight, 2020 by V BRERA MA. EEDA GILBERT, NY'B. CABRERA. ‘any copy of this book not being the Slants ofthe autor) sal be 0s ts proceeding rm an egal source _ ‘ne rr tres ede me mn in of bien The a i eae come th arr Fens ager say ones race ALL RIGHTS KESERVED sen: 978-621-4160860 Publ & Pind GIC ENTERPRISES & CO, INC. ‘Nl ad Deeb Board Reiee SOVVCM. Reco Avane Nai Philippine About the Authors Ma, Blenita B. Cabrera hmm MA. CPA CMA pcm Lu fob ny fe a 9 ca i Sa bem meson pen Hurt nO eee ues CPA ean Boa Ermrien re ees Het a rain oar Neragere fom be Ure rae ery Soconane Daan ste Une oe cee fee Mnaanet etary Yo ese of Cee ttoapenet cart era Basa bear aera weed we SCV & Co. Sf ude te tag Franca Ko. Perl enacret Vern karan Stas, hg ray Pic ‘estrtase umes ot aioe be nese Sect Se ev (io poston df Oana te Clee tunes samnataon a he sunt te ribose ‘omer on Charan tn Posen Roun Bout tic, wat $c80\ eps bite Fron epg Sarre Camel FRSC) uge ‘ets Conn Cand hg an sears Santas Covel ASC) ‘See of San ol PRC CPE Cel ez an cranran ct the cD acne! Connon Rutany Eston Se as 8 We Bak opt conn on emt Sorry Ose a he PGES Sew aeen eb Php tae of anes Pale Azur PCA) Snows Ousndey ck Seaman, Hora Lie Maou, 29320 ‘una aber oe 2°8Rsztarey Pao Fore Gilbert Anthony B. Cabrera IN MBA. CPA Get seth tes gen tng om ey et fim tne soe Sone Risen age ah ‘Scr dena Fann cag ne Ueno ar, Colege Patt, Robert H, Smith Schoo of Busness. : Ata ae mz hn ple sing exter wh SV 800 Cento fay eee ce fea oe Ea tie trey tuned et Sa Ss ces Py es ‘ee at nc Geb ee epson Ue terete aan 6 ipsa ae Clr es ot Serbowd rts hese ts Cabra gat HagPreface his 2020 elton of Fguncal Markets and Tastaton is snd 0 provide racial inrodcion to the workings of today's farcal mthts and Esti sn an the i may ht Pe enceps and principles in acer, conse wy that mot hep olen tnd ening the tudes interest Thi i chord y proving auboaie Infra ts regud wo sje mater Covered and imgrtng fel word amples adaption ch chuptr esurs essential concep, pipes and examples tht ing finance note wes" realm of experience and andestandig. Imprtant ‘races! tol Sch as how to ss and ade facial secures wl arm ‘ders with the silences ound abd nage Fania markl wad Into sks nhs nami evroament. Descriptive consents, 59 inporant 19 financial management (¢, Faani! mask, scunts,repulaton industry vende indy chara ee) ae inlet inthe book Ample analytical tesgues as ls cluded to help steers understand the operation of mode fan muhes and inion Wile topics covered inthis book are fund in more advanced textbooks on Sani ares ad inttations the expaations and sans ae snd a ee wih ie 90 pri er aafemic experience beyond Ie ier level inane courses ‘The set of amignnent materi include quesions tit review concept and nce as walls problems of varying iia that rau aplication of thee concepts in ret depth ‘god par ofthe burden of proj ofthis map i stared by out ales ‘on wearer pence lve, spp ant entree BEBE GBC.Contents in Brief rofoce UNIT 1 FOUNDATIONS 1 RATIONALE INSTUDYING FINANCIAL Chater MARKETS AND INSTITUTIONS 2 INTRODUCING MONEY |5-THE PAYMENTS SYSTEM: AN OVERVIEW {FINANCIAL INSTRUMENTS. UNIT _FINANGIAL SYSTEM Cchaer §- OVERVIEW OF THE FINANCIAL SYSTEM 6 THE PHILIPPINE FINANCIAL SYSTEM LUNTT FINANCIAL MARKETS “Chaper 7 FINANCIAL MARKETS: AN OVERVIEW {5 MONEY MARKETS AND CAPITAL MARKETS 4 FOREIGN EXCHANGE MARKET 16 THE MORTGAGE MARKETS AND DERIVATIVES 11 INTERNATIONALIZATION OF FINANCIAL, MARKETS. ry ry so no uo bs LUMI IV FINANCIAL RNSTITUTIONS AND INTERMEDIARIES 18. BASICS OF COMMERCIAL RANKING [EXPANDING THE BOUNDARIES OF BANKING 1s. AN UPDATE ON THE PaLIPPINE BANKING INDUSTINY UNIT) REGULATION OF THE FINANCIAL ‘SYSTEM CChyrer 16 FINANCIAL SYSTEM REGULATORS “PART 1 FINANCIAL SYSTEM REGULATORS - PART I APPENDICES |AFPENDIN A ~CODE OF ETHICS GOVERNING EINANCTAL ARE ACHIVITICS INTHE PHILIPPINES [APPENDIX B-FUBLICLY LISTED COMPANIES ‘ASSPieB AcCORDING TO INDUSTRIES APPENDIN €- DIRECTORY OF BANKS. [APPENDIX D-LISTOF INSURANCE, PRE-NEED AND. TIEALIH MAINTENANCE. ORGANIZATIONS ‘GLOSSARY OF KEY TERMS [REFERENCES ive 205 a 6 aa 354Contents Pretoce UMT 1 Fowpanions (hope RATIONALE IY STUDYING FINANCIAL MARKETS AND INSTITUTIONS Expected Learning Outcomes The hd to Say Facial rks The edt Say Fnac ation ipgroshinSahng Fnac Market ond Review Questions CChepter 2 INTRODUCING MONEY Expected Learning Outcomes ole of Money inthe Econom ‘Charmer and Pontos of Money The Baton of Moy ics of Momey Th Eos of toy gg ne Hany of Money he Pippines ‘The Supply an Demand or Mo The hone Sup The Demand for Mey he Ips of Money The Quant Thay of Money The Time Vac of Money rset Ve ‘How Inert Rates are Determined The Nominal or Noy Rae Vor th Real ar of mere Ie is FA a ‘her Inert re Lonred Revlon Queens “THE PAYMENTS SYSTEM: AN OVERVIEW pected Letra Oatomes bared "rtm rom Commodity Money Fit Thelnpertnc of Checks Review Questions FINANCIAL INSTRUMENTS. Expected Learning Outcomes ‘Nate of Pun ramen Fine dee Finca ish ‘aut ramet Deven Fnac Isramens ramps of eran Sampled Species of Fan raments Review Questionsuo Chapter chapter 6 FINANCAAL SYSTEM OVERVIEW OF THE FINANCIALSYSTEM Expect Leneing Outcomes oration Nau and Objective of maa Stet op Conponn ofthe Final Se Rooney Fade ection and Moral se Pere onan ad formton ion Fnac berms Rose "ude Skee Mert Haan Prolene Review Questions "THe PHILIPPINE FINANCIAL SYSTEM. spect Learning Otcomes ration ‘Sarco te Philippine Enancial Ste rey Desrpn of Foca ations Tontng ators Now inane Istintons ‘he Boling Philippine Parca Stem “Sm of row he Dest Maret ego Cambie Finan Say Asvemet of he Plc ‘ince Sem Cent ak the Paepve Finacial Ste Review Questions UNIT FINANOINL MARKETS, Chapter Chapter 7 FINANCIAL MARKETS: AN OVERVIEW. pected Learning Onteomes Inara Frm rein Acton Fimction of Poanclel Monkey ‘Who anc Mores Do Siac of inca ares ei and Eu Mares Prim Maret Some Moret Sock Echos Ting of Serer on Stok Exchange The Pippin Sock Exchange Snap of PSE Misr The Ove eCourant Da Train he Rs ofthe Formal Markets Dre Force of Chore Cae of es Goering Marke dries the Phitpmes Review Questions | MONEY MARKETS AND CAPITAL. MARKETS Expected Leurning Oteomes Maney Mates “hiaducton How t Works Fn User he Money Marker "ha Maney Matte Do Type of Mane Marks aspannts Copit! Makes Capa re Participants Copia Mara Drang % %% > tor ror ta toa Ios "06 106 i) 1060, 1088 m m 7 ny ne ne = ®Trading Proes fr Corpse Bondy Adsotages Dinan of Ul Bods fo ase Pan Bond Feature and Prices ‘Crea Quay Rsk Cred Reig Types of Bon Ordinary Common) Ey Shares Feanres of Odin Equity Shares, Patan Prefered Sr Preferred Share Fates Prefered Share Valuation Compare Fea of Odin Eyuiy ‘Share: Prefered Shares ond Bone Review Questions (Chapier 9 FOREIGN EXCHANGE MARKET Expected Lerraag Osteomes Ineston Recent Historical Pept of Exchange tes The Foreign Curoney Exchange Mike, Exchange fate hy are Exchange Rates Important Factrsnfuencig Exchange Res “How s Foreign Exchange Traded Iteration in Foreign Coren Markets Fled Exchonge Ree Managed Foot ‘DheoryofPrchaing Power Party Wa arth Foreign Cirency Exchange Rate Trasatont Sot change Rater ‘Dire and Iniret Ovo Cron ater Arbivage Fonerd Rate 0 1B be 6 3 he 1 6 M9 1s is 183 10 Caper 10 actors ha Aft ean ates he Lang i ‘cag ash Sr an aging Fore cng Rk ‘Avoca at ks Fen Review Qusins ‘TIE MORTGAGE MARKETS AND DERIVATIVES. Expected Leating Outs Part & Mage Mares ution Charset ofthe Reise Martone “Arian Mesos Laon Tipe Mogae ans MrogeLenis haces ‘Stertaton of Merge ‘nace Meron Meroe Wh ben aesredrom Seceried Menge Part 8 Beran erate Fanci ames ‘Charset Doras How wont Tipe Branple of Dersatnes Tunes Conract FancardCanrats Option Foreign Chreny Fares Ieret Rts See Muse Caves Dratves Review Questions 'st ts 6 8Char 11 IXTERNATIONALIZATION OF FINANCIAL ur ow Chapter 2 MARKETS pected Learing Outcomes Tarai honk drown he World ok Src ar Sevofte Mark ru er Misr ‘ermal Bad Mark. Bobo od actos feng he La a Tro of Ines "Final Mr Ph Categories of ests “nad enna newts ‘ype of atonal esr Iermatoal Money an Cpl Markers cra! Cre Moke onan ers Sods eo ead Review Questions FINANCIAL INSTITUTIONS AND INTERMEDIARIES FINANCIAL INSTITUTIONS AND TNTERMEDIARIFS: AN OVERVIEW spect Tearing Oseomes Irtcon ering Pads Tha te Fnncel Ste ‘nant erm "tse acre of Poi sans ‘terres Dapay ins Comer Sot sto ‘Pray ies an roy ibe Paid biemaeres Review Questions ‘a0 ie 1 he is i 9 193 7 i58 ms hapten [DASICS OF COMMFRCIAL BANKING Pk Capt Ae Cahted Balance Sheet of ‘ot Operatos ofa Commer Bank Manaement fan abies Management of Bak Capi Monk id ot Bare Prat apne Bark Bik Magi api Risk Monagng Cre Bk Meni res ate Rik Review Questions EXPANDING THE ROUNDARIES OF Expected Lenening Outcomes Irani Of lace Sit Attn Investments Tol of reine Bers Teper of Firms Engaged resent Boing Ars Busnes (oe tncinet Barks Moke Mons o Lose Mons Revien Questions m an 23 28 zo 206Chapter 18 oper 6 ANUPDATE OV HEP RANKING INDUSTRY wrINe apect Learning Ostomes breton Fina Soins of he Pine ‘Bank Secon The BSP Fn Sands dears Cop Ades Ras pa eet Bt ofthe Pipe ong Stem Ae Perming Ls (NPL Ratio the Pape Boies NPLCerge Rt of te Pippine Banking ten Loony Econom Str of be Plppine anking Sem Frcgn Cen Dp it Trot Operations enig Bon Branches an Susans (8 and Sts) Review Qu REGULATION OF THE FNANCIAL SYSTEM [FINANCIAL SYSTEM REGULATORS - PART spate Learsng Ostemes roa (Objective f Front! Reglaion Part A ~The Rl of Berle Seale Par ‘Sty n Fn Rgaaion Primary Objet ofthe BSP Repos ‘Bong Sear are Fal Aen! Governance of te Bago Senna Papas devon be a Ey 20 0 26 26 0 Fr 23 3 Fo 3 Bs chapter 16 Inert of Cr Bak Aco 26 (nr Mc Police ofthe BSP Stabe tig Operate 0 at The ke of Pipe Dost arnce apron POI Paci Regn ‘even es on Dep Berane Review Quesine 28 FINANCIAL SYSTEM REGULATORS — apecte Learning Outcomes x0 le ote Scie and Exchange Commision (SHC) in Finacial Repation (Orgonsatonl Chart Monae ‘ae ofthe inane Commision 1) i ‘Fail eguaton 2 Monte, eines ond Functions 5] Replat Ems hs Orgensatonal Strato rane Commision A of pri 43018 26 ele Nows on Depo once 26s Review Quon: PyAPPENDNCES, as APPENDIX A ~ CODE OF ETHICS GOVERNING FINANCIAL MARKET ACTIVITIESIN THE PATCIPPINES 293 APPENDIX B- PUBLICLY LISTED COMPANIES (CLASSIFIED ACCORDING TO INDUSTRIES [APPENDIX C - DIRECTORY OF BANKS, APPENDIX D~LIST OF INSURANCE, PRE-NEED AND HEALTH MAINTENANCE DRCANIZATIONS m6 GLOSSARY OF KEY TERMS sa REFERENCES. ase UNIT FOUNDATIONS Chapter 1 Rationale in Studying Financial Markets and Institutions Introducing Money and Interest Rates The Payments System Financial InstrumentsRATIONALE IN STUDYING FINANCIAL MARKETS AND INSTITUTIONS ee Expected Learning Outcomes Aer statying he cape, you sould be able 1. Understand te imporarce ot tayng 4 Fnacal Marks Fanci instars 2. Exlan bef ne roe of he 2, Fania Marets Franc intutons 5: Know the efctve approachin stung franca markets and irentone boos CHAPTER 1 RATIONALE IN STUDYING FINANCIAL MARKETS ‘AND INSTITUTIONS “tp NEED TO STUDY FIVANCTAL MARKETS Ina mar st, ies of al yes fc ks, al many businesses fi ‘noma andpoley rakes are partly cxncemed abot the rk and tcl eat ar alesis bak nd or bak} face cane hey lye inte octal sem Financia mashts an nits no ony ieflonce your evry life but ao involve hogs flows of finds» tllons of dlls ~ sought the world vu ahch om afc: bigs prof Be production of gods and ‘Srrce ante sonic wll go he coutis woud the wo The say of anil markets ad itis will esa you with Unstig of mary etetng ics sch as haw fonds we tafeed from ops who hve secs of mala fad a pepe havea Shrage Fetes welenoning franc marets ae hey coe proding high ep ot a ry ian es a ‘Say cunts nthe world remain espertely poor Acti ia ani reso nee cfc ose ete bert si and meer athe sei peracetic. deme i fond i tke bcsa ste fers yo ta et SS eS ‘ae et aats Retin ee nace hone sch ps ivan seer os ees oat Ce ae ee soe wa ite hast Read's eke le prt a La Seibert ype eee ee oe ‘was implemented by the BSP in early May, 2019, will occur. iaDoe this meant interes ats wil fil 0 iti oo 16 ace he pee Bnew compu yt fr Sou stall ti fuss? WA the Fac tre he eS ha god ne tw ve fs TST TEs tic one you oe? Should 90 19 rai Fd ty Sing a nua got te tak fora fa Ifo won goods rom ‘Sou shuld yoube were hte WHT Noe mE ENS Alt hse evens are cuales of Fiat Maks at wack That makes A te ae ver ode Ie ene st news, Dat bog St nerd pk pb sal Ste etch make” ad he pk around vo ctng tn tach oes ine-wor pases rt reer nda “This took explains se prpses tat dient Sani aes sere and Tr ra ri ork cnr you whether pour vesment porio ae Pei ala. may lp YU vert bow vale is ieee he dfn sci oF ancl suerte ‘sete srk “Tis book provides ansnes fo he Brine sts by examining HOw Bis tok rit hse ssh, Don and eign cree exchange) Semi mat ie ohm as, sane compe, mat fs nd thro) wor “The word “ik” wally conju p a age of the bina, sperstewn Tether York tek Exchange ad of Pipi tsk Exchange an of at ing uty in te “ties” caies of Chiesgo, The n0gss We sgtamos all be ding se sow ane ample 10 compu, ‘hen wih nal taro veto, Finacial Mares ave een and eer since mathind eed downto roving Cm dng thn with obs The nepeacent dios fal of those fine conted tsa mrt, Un ast ais my Be the ‘Sine puoses ian mares do: Final Makes re compebeniely dics Ui soe i Sing Fan! Marks sition “THE NEED TO STUDY FINANCIAL INSTITUTIONS. Dies ands trarfrs ar common among invita and sal usineses 20 commis nie fnmetl mart a stuns are fess developed. it st talncnesn developed conomes grey fil more ficient ei (hetecer of nl nan mene tin somes tase cat Financial nian ae what make facil market work. Without them, Fal kath would ot be ale to move fons Tom peopl who se 10 Joop wh have podksne investmes opparunis. Thx they alo ave Kapaa fet othe performance of he eseomy sa wink Finca insttons ar fans nemediain that acquire funds by ising Fibs and mare se ads sie ste byprcasing secre making eon They ley on inporant ole inthe Fanci sytem because they reduce anton cou aw sharingan solve problems creed by averse relation nd mor hear Ava es, financial rttton allow sll savers and ‘rer bot frm he exitence of finial markets thereby inressng Abc efisency ofthe con “The fif Fnil make and inttain indeed neni one. Nt cay ‘nl ove em mera ta ext the Heo the lion ety bot alo gai Tokar understnding of eves in final markets and iatteions at we thar tour n Be news ed. Understanding how fnaeal netaons are imaged is inporatbesrse there wil be mary times i one's ie as 38 individ an emplgee othe omer o basins, when you wilt wih them. Cases proved ths textook wich provide Specie amy ols ae ‘etl fone makes she carer racial inten a ao ave hier ‘Telefe ajo ar a manga of fsa tiation labo Another reason fr studying facia nttations is that he r i ht they reaming the ast ele te cnt an uy pn vy Hh as Hee site of Yo he & Ney pac reno fr hing ae tins tay Help you get © good fb in he fianclSecor Even Jour res le ‘sewer, you ston il sre ou ow fan nstoioneae r Besa ‘here nll be may nes your ie, dl, am employee, cr he ner ‘fa bainesn when yon il nrc wih these intone, Knowing how al insta ae managed may el ou et Deter deal when you need ‘orrow fom ham rij eid supply thr nih dscet 2 [APPROACH IN STUDYING FINANCIAL MARKETS AND iNstiTcTIONS “The frmenesh using lisesi iste an te eves mey, 2) Underanting ‘Sedo ta undead sna ars tat sede develop Reese aon they aslo osze compan es Bong Sidon ear to vate cre develope and he ae nes, ‘Stu lear fe Prana ct a enc amas think ‘sal abot ow hey nlp ewe vet 4 Prebiing Stolen er fo we economic ana ordi ely changes inthe onan aed ie tem, ‘This book suse wing anti Famework to sufi ahs and inion The fewor ues 2 few tai concepts o hep onze Jour inking shat th determin of ase prices, the sie of Tai raves fa mangemert an he ole of money ply in teeta, The ise comet ae equim, bas suply and cerand asi to explain havin the fan markt he serch fr pois, and a apse 10 frm sac based on asain css and eymmeteinenan ‘The fernork alo provides ihe tals seeded o understand wens inte Fnac le sd ables sich ae rest as exchange as Thr exe ao eps the etercton af hue aa ard expel hendrerit an 6, ‘An ation beter in te el wera the caso, seconded hit one mu sto the kong habit of ular Flowing the ania es "ht ape in lain Fal platine rend the acl! buses, ‘ecin fhe revppe. Lay, the Wor Wie Webs Hace a eae valuable nd convenient route fr ail eseueh. Ths ses contin son infra sae SF uth Vit ee tele est te nds of sininay oneview ofthe Fsciaing stab of Fania ein cre to meee ted eaten! of the This he oles fal markets ao nso te inves ml ints ‘Tota sce and evan of Fa ‘Seeding pes [REVIEW QUESTIONS (Questions 1. Why isthe a ee ouedersand howe one piy scone by eal ans wii? 2. What rc ole do banks an ter nancial nsttatos play? 31 Why is understanding hw Snail sions ae managed important oye? 4 Give tres imporantreacns why & thre a pend 0 ty Fina What isthe mot infant oe tht nasi ast lay? {Expo the tvs level ofthe meek hat under the study finial markets an ntitoneINTRODUCING MONEY AND INTEREST RATES ‘Expected Learning Outcomes ‘Aer stutng he cope, you should be abet +. planter of money ina raton's esnomy 2. Enumerate and describe the characters and key functions otmorey 4. Enlai how money evolves from the barter sytem tothe present 4. Be ari with he tory of money nthe Phiosnes '5 Krom the relatonshp between suply and demand for money 6. Esplin the impact fmanay onthe ronth of he econamy 7, Describe the quantity hoor of money 28 well a value of money over tre 8, Expan the nar and dteminaton finest ats 8, Understand he reaionsip between intrest les andi 10. Espn the tcf chargein interest rates onthe economy waa CHAPTER 2 INTRODUCING MONEY AND INTEREST RATES ROLE OF MONEY INTHE ECONOMY si yen ce, et ney, mea 9 men fo ds rp eve, ey cope of he is 2 a ee ean rm ye Naa Goverment hee a ei ih are oe yas nde the ods sored selene nik Sones checkin conta sins ety backed by nis valor Tnaneal ese works 0 a8 idence nthe esabsed Bese mony in a afer economy nt (epee crs night ldo sve) ie (Sy cry fas, rebing on Be puns con ferme of nary xcaree Moet i hat eps the machinery of ou word ting By ing woods tnd eves. an sui mene sae, mone) facies the Blbors of Irmo abe ae every sy. Wibot th nds and ae ta fore the bus of moder eonois woul! pind to a Bl and the lw of wet tan he word wold ese. Morey as fll this itl ole for thousands of yer. Before is iveton Peon barre, swaping gonds ty produced hemsess for things hey eed omar are set fr spe wasations, but at when he insta refering vale, or ot aval atthe sae tine, Mone, By ona, ha espid ron vale adi wel) accep At best & Simple coset, over mary thangs of years # as become ve copex Ate san ofthe moder ag, individuals nd governs began eablish Banks, ar ferns instante orm. Eva, edu) people ‘oul dest tr oy a uk cure eam ner, Brew money and bey propery, ies ht mages in Baines, rsa sompnis theses [nk cnl al iste api the sr of elie thar might devastate ‘ames or rae neooapng sk he pus of POR1 chamer2 olny iti the o's goverment and cna tank fat con! a coy Teatas Th let Reeve om a8 The Fe) th cera ak the US"Thy Fe lames coneney, dines how mich o i sn csi, and feces how mah re tw carge banks aw fs MEE In the Pipes te cea fk tht stl the oun’ eon is the Shane sleet‘ Pips’, Whe goverment sil pri and arn TS sw to ene eds exits pysea ein ot at nb od ce a fom, (CHARACTERISTICS AND KEY FUNCTIONS OF MONEY sit hasal of he following dein carci ae ttle be date, poral, uniform, dvs in nied Mery abe nable us = mea of exchange. Unieriying ail ofthese Retna pet mat be codes tht they seep money, Bey ane fr gods Mey i et ey anes Siro vue Money ate ma meats by which peopl cn store tir elt re ne Fine nt ttre be ese, nits 7 of race ‘ic den sad nd espn ey. tom ator st nocy righ a nin vale sch st of ie eios ‘neal at sel to ake te com Ths i Fol ated 0 some [Parnes he cn nl be scape. Meansofechane mst be pobleoexchange money ely ad widely fr gods, an irae sl be nse psi Ths i at vale i sil {sabe and if oe av sce denominations 50 change cn be oiof secant ory cate we 1 rd we psn, ted or spent fers nary holon gs! tty ns [ins anal cui then rt wo See ee eer eee Srna offered Pare ony is sho wel bene of abil wo seve a8 standard of Money cn cia eachmge at genotyping medion of Nchnge ei oF xo. “TH FYOLUTION OF MONEY rope rg aed pus commodies with each ter in a proces kon TR the ne of exh god todd culé be debut, tower, nd chad x rea slont the complexities f bartering ne SRE ming, Over eeu, mone as appeared in many or is seep utes, wher ay san ante, sre on» gt ‘ony ins vie ned valent which ary tem ean Be compar Barer (0-30) Ince fens fling specifics nce exshanged or ers aged by be eget of rsa, tert Sst chang of youd formed sisal or toads of dears Adu S18 ahr of The el of Nations, nas nef the stolen as peur oman Boner in practice "sey, baer ives he exchange of an tem sh 281 cow) far ce mor ofa persed eu! "alue"(orexampt ba of he. Forte mos pr othe wo pacing the gues wh them and hand tiem ovr al thei of eansacon Somes, ne ofthe pais wil tect an "owe you” or 1OU, een sok, hat ts agreed can beee “Advanagesand Doadranagsof Baer Advantages + Dring eaoship ose son ks bene pastas, wr cachanged = Baebes ey ott ta vey ei te. Didvantge 1 Marketed eth tes us wa she tees, see eeatoh et vue 98 ens = T80 goat ay fave rt taney oe), bl 2 Wer a See rb ey dale - For exe,» Tving nial Cette ined ie memsctons on be Meal - Transporting oe psi fame wowing 10001 0 ie of rae recon 0c) Ficus fons were wel ord te exchanges becoming mor comple vane cubed nd oooreted nage Mer 1D) Defued ids of pout mele aed by some merchants nee ier femal sein wee al sed by sites un es (100200) ues begin ose ak nes sing per OU ht were trade scarey, sald be exchanged cole a ane Dig mony 200 ord) ‘ey ow eit "ity," on compet, ge nso ca se Plc maton hyicalenhagagleds See egue Gadus echt masRuEmeemenmeenseussensntl voting Moy nb ire Rts 13 ARTIFACTS OF MONEY Since te ely tempt wefing ves rtrd ood, "mary ht come ane a am Iso tone. Coms sels and precious mets hve al Been ed Bore (5004) tay de inoed diay exchanged ens — often persons sch as» Sanerian amcor ables (802) ‘iter eee vans only ables, which cul ab scree Corie thes (1.000) Used ax carey aco Inn and he South Pit, hey appeared in many ‘clea sae pion oon (00) in Lyi 2 mite of gold ander was formed int i, coins, amped hiro Athen drach (0) ‘The Athans wed she fom Lacon omit 3 carey aed sight across the Han érast ct 20) en a on x aps ty Ch sui ad espana tr Raman coin hes) Bevin ie ed of hopes sce gn te Raman ie Bjeaine cin 7.) Ey Beanie ins ee are cn ie haar? Anglos oi 2) ‘Tus 10 cer siher pom san into ating tha King hx Mer Arabic dirham (90%) Many sive coi from the lene ene war cried 40 Scania by Vis. ‘THE ECONOMICS OF MONEY From the 16" cet, unfenaning of th nate of moey Hane mere Sophie, Feneomic ss» dip emerged, in pat belpexin be ‘nfm eats in Europe y the rg inpoatono sive lo He neay ) Pinca Mares an Financia Ititons (Gscese fom Chapter 01) ©) The Cerra Banks Oe Fnac Re Jncrs (Gscrsed fom Chapter 0), row Spnces rere_ caateecaeecoremenunneteaul -uncrtons oF" ss vancrals yn sectors that ee i rye to a sates a ne Fai i, Ret aes es tenes fearon el Te = pean eri Matin Foon ee eam tad rma Ha Seer mes IN et MS er, Se tm He eve ian tiatorones a Rakhi 8 Laity 2 eomson Deeson rset ce ti raha eT ah se Stee Sta se eeu pe sy recat ste vie ik nig lowing er 0 old ay Te fc eof te fl se provi ok Se te eg tay set ad te enc aan enc mote iy of Crowes 0 ae SEE OAT tue ue, Fel eres ave develope Secs Sang deed port Of vate pets ick ‘incl n'poones neat fe gonh ethrcng nova emi oft Fn Som 88 guia Avs hey servic tat he aa stelle ser al rowers tay City ve eur mh wh oes Som be exchanged oe tay abich ser view ma bene Genel ats cet by the Trac yen ich sticks tons cheng aso ae ae gi thn pa a such can chy eee Franc mares mitre lp ae nna aes moe iu Invests ean eval al their lds veromentsecaries and the stocks an bands alge cpr, aking hone et ey gu Te ancl ten has ered the Lui of many assets tesiles stocks ané ts ough te pose of seizton Thi process tat made it psble to by and sll series bated on ane Av rl Iressa te ots ve tecome moe dentable ses for avers hols Ser te ling to acopt intrest rts on Sse wih gee itty whch ete css of toning i ry Rosh a Ijormation Ath sevice of the osc sstem fhe clacton and csnmuniction of ifrmaron o fs about rovers a expanses naa sits, Banks eoetisfomation oa brtomers to Rees heir elood of epaying las. Bese te Bask seins in clesting nd bocesingifomation, eos for information gating are lower than Yous wou be you red to ahr iafrmation abot 2 pool 9 tore ‘The fhe ask exns on tase aly compensa rhe ecu 'ind Une bank employers pend pater and refrain. Financial masks comey infoonaton to both stvers and borouers by bering the ces of socks, bonds and aber secure, Ths information can tip one decide wheter Yo cominve investing in he Secuitiespesiosy puedo foal more stk or bons fo fiance a Hamed expansion The ineoreratn of abi inform no asset Feces an npr enue of welfurtoning fin marketsome sat petvron. Sten pact ronal rane ini re rans as en gt ges FE BS maya Sarl 8 er cing ‘asin coco ad OMIM soc tot 2 ce Aha a ee th sve ad Bene ‘sa rt een 7 so Taal ene man eS odes he symmetries mts beeen ces mari scam com yay vorowe ete oem se sition ia-wbih OM PIEY 10 a han dows the other pay. infermation ha dos nmin on tn "nee a Shing aries inte ble ies experienc ining that 2 Mora tard. Tis 2 er sie Moonee Senos a eer wi set cs, wing om smi Sra es tat been wile ony Bone who ae one aa aoe. goverment. HOMEY. mae ron acl claims te probes of syne err aan foci pats fil increta ove he ot ‘Fin ds rae ees ‘The foci sem fe overcome an infomation asymm bes none snd ne. A nfo stam cn cca Before Gr afer & ancl ect be apd eee Adverse Seton The informatica syicy Before the conta i rec pon ase twecase barowertporaly How more et vent posts than lenders rowers mst ego fo eng ina Yamsaton we the mot Tey one to prague suerte out Tore Ten rms cole! dake avant cms ele an Mora Hazard ven afl lender ne tere nfraton on wheter a oro fod tersner rr lenan broth lenders fm. fave ended Ther ila ost ater ene 1a wl appt tobe = good bower, the borrower il no 0 Tans» lende Tis saan, komma moral hard mre ly ‘bocca he the baoner haan anne acne norton oe {ein ay at does not soni wih the lender’ tess. Moral ‘tar wes bate of aprons norton. The boro kaos ‘het hee ds at me roe sy Se [NATURE AND IMPACT OF TRANSACTION AND INFORMATION COSTS ‘Tramacton Cost ‘The com ofa mde or fama aston; for example te brokerage ‘ammision rgd for baying a sling sail ae formation Cost The cous tht ess incur 19 determine the crediwontiaes of lrrowes nd o monitor how th se he du. cane of tamaon cts and infants, sa ete 4 ter eam oe veces nr mt ay ot fr Be fens thy brow: en ne ut seh ea an sets ‘ean tod er eer owed a Atop cans Coa at trmaon cof oft ancl 9m, they alo ere rit porn ris ans hat Sacre nyse ae= ee! scans ees tg evant ‘ ane occ 1, Regi il est rent have te steps —— ps onde I ratets. The Se Fant metre tn 2 sma in fa st ne eT eo iy sia oe fee Dey SEP i, 2 i esa aM Oa amd oi Fis ag 1 ogg ibs I ai stp woe x se Sac oration Hay ioaeie Gonpowste encase reguire borrowers jedge some of their > nmi ee feb telaatPabe al dps y apt ce erode Ts wil ae ‘oe patent elem formation oi Tan formation so esrg How Financia aera Fiennes can ee ‘Mage oe ising te oT rovers snd developing eleng 1 in oie Seine as, ed er WSSiperte ese date ands try aan ee pore. 2 span erie Covent Resi covents may ie pling liittions om the se of finds Inrowed er guage Drovers pay ofT the Jkt evn Sc macy he trees wah ip Slow 9 et Now Financial ntermediares Roce Transastion costs Trasetion cstsmay be edd yang the allowing ecbiques imei intrmediis tke adstage of como of sa, which ‘efesto the ection n average rt at ev Fe ah increase the folie of goad or ei raced, Fr example the ees del it Tremry bods chrge mre to prcace PIO milion worth of ams sth ir hn to hy he pas 1 ion ‘orth nds By baying F500 worth af hres na bd mua fend {ht poche mils of poe woth of nde n val vestor an ake hate fears o Fini interme can abo tak advantage of esc fsa in ‘ther nays For example acne bnks ke mat Tos hey rely on Sind les cnt ao the costo” wing he conta ae Sead over any lows, iit, bank en fem Severe the ine {0 evaluating and pocening lat ad Boot hs sein they beset prose an fcr, dina he time rele ~ a therefore theo pe oon, Financial itemeives alo take abanage of technolo 1 prove Facil series, ah thos that orate cer machine twos posite ini ising) eo pit ore0nd questions uc stem Fo 4 sou ren ail yy oto 2 2. waateanrises eine s087 ce ne in jon fs hop ie ously. weft sacl stem. 3 xpi 4, Exptinte! J anil ste tare ey components of fi fami spe, mame mt iis te sete rm Rar & Liga 1 fan gkeg sai 1. Es tune infration Desibe he to pablens ing fom aSYMMELHE invonntin Adve seeion Bo Mera 9. Wataru iformaton cos? 10. pin how ancl intemedies 1 Relic "Adee Sec” Morte Pl 6 Relics" sal Infomation Coss" THE PHILIPPINE FINANCIAL SYSTEM ‘Expected Leaming Outcomes ‘fer suing te chapter, you shoul be ede to 1 Explain tbe structure of he Philippine Franca System 2. Descrie th nate and bai unctons of 1 Banking instetons 8 Phvate Banking nstutons . Goverment Banks 1. Non-Bank Financia inttions 2 Pivate Nov Sane Financ istutions 3B. Goverment Nen-anknetuions ‘3 Understand he evohing Philpine Financ! System + Slans of growth in the domestic market Regulatory andecape 4. Lean the Fnanca! Stabilly Assessment of the Phapine Franca’ System as ofthe end of Second Semester 2018 prepared by tne BSP ‘5 Be familar wth the curent risks inthe Philbpne Finance Syston auaep08 : — cw con's Non Heth crererg rectangle ica anata water ort ete TRS oe : veo te wi fc mas nr “The facial stem, toh paving finds rr ose Who have oe we echoes set van fice iri o Tasty he fle of et omang of eter Sag Toc wie = ‘penton SYSTEM STRUCTURE OF THE PATLIFPINE FINANCIAL 1. Bag Sentra Ng ins 1, Basking saint ‘A, rite Bashing sans 1 apn Coomera Bkflsives Banks (EXBIUB) 2 Gamma Boss KB) 3 Tegan) 4. Swing and Mea Bak (SMB) 1. Prt Devine Barks (PDB) Sok Sigs Ln Axion (SSLA) 4 a aks (8) 5 Cover Bus '. Govermeat uhig isis |. Delopnee Ba fhe Pilpyins (DP) 2 Lind Bk of Pipi 3) 3. Pipe Ab Amarante Bank IL Nom Bank Fists fntiations A. Private soak an 1. testes tues Invest tis Series Sneek, Saving andor teins Pesto Peso fis Insure companies ret uion 'B. Goverament Now-bank faa iasutions 1. Goverment Serie insane Sytem (GSI) 2 Sec Sen Stem (98) i Panag [BRIEF DESCRIPTION OF THE FINANCIAL INSTITUTIONS 1. Bangho Sentral ng Pilipinas (ses Capt 16) 1. Univers Bank (UB) panded Commercial Bank (EKB) is ‘ay commercial bank, whet errs the tvesmen howe ‘enson i alton to it commer rking eu. ny investi Be egies of ail sad nomad eri. Ali ‘coterie may eb ani or ian 2. Commercial Bank or Domes Bank (KB) i 99 conrecia ‘ak that is confine only to commercial tank nto ch a sccutng drs and sting lets of cre, docoung and eget pros mates das a le of enchane,end her eves of i acspting or erening demand deposits "Recbing ter per of depot and depo aati ying ta seling rig exchange an gol oie lie ing. thee bons sd er et seston exteing eet ‘bjt ech aes hth Monty Bad sy promiPmrerreeeeeeistest tert 6 cnet ia i nn org st ie oe ae etl rp Bes an 58 Te ning ol ton suse tl ear ee sre eg ay la frp re a eto OS Fe RN ed SEE Mh, foe ce a racing I eres: ceneial BPCS Mt EC mate ae nto cheer ncaa aan itemipe as veces ate Money a ae, yen fa Set sent gg Bt (SSB) 89 Sr te a be cee Seiya wee oom a ei wd de scitis eck, Bills of resp mel ng 0 of comme) ‘cae dy mr al ‘vancactons 8 wens teweon acd oer forms of set are on total oer chr serge sg fo Be ung nd owe develope ee re et ‘enact nA ser i See esa ot Sic Sings ul Lau Aston (SLA) any corporation ‘pine nthe bios of wring the stings iS enters xsi sing ssh ascumulied fu, Spt wh capi os ad invest in sees of pce ens, neues of the govemme sd is omen, povided tha they axe primal? B. Government Danks or Spaced Govern ‘sae i ring the ace of omebols by proving sal france and lng tor rancing for he ul 44 Rare Bonk (RB any bank dred by he Cel Bask 0 cept depts ad me ee ale fame sesh extagen th lars, Los may be wre By thera nk wt scr flan wibout Toes te whee the omnia rope ca show fe (5) yo eof eset ommuus ad unimtruped passes he athe once of onnenhin Ths wil aloe potions of iar nd fst her nc danced y te Bea Land tate overly sl conte md peruse pit as Te (8) year inset theron, whet the ees Of por penal se sane ofthe Es of Lane or otis fhe ‘Sts nde the seminar of the Dapainest of Agrarian etn SS Gonperve Baas re bhs eabsted 0 ait te ais Testor 1. Development Bank ofthe Philipines (DBP) ries nes fx ‘evelpmentl paps, hes ane tthe aga se. ome set anh nds esto. 2 Lan Bak ofthe Pipes (LBP ia sverset ban, which fv ams! spr nthe plemesnion of the Arar Reform Progam (CARP) ofthe goverment. AbAmanah Iie lnvesonent Bank Republic Act No. 6088 provider foc the char ofthe AT-Amnah Isami Invests Bask Ths Act ahora he bank to rome abd sce the soaioecnomie development of te" Aonowous Region of Msn Miho by performing. toning, nasing and Invent opemtoes and io" stable apd poricipe ele, commercial and ins sees ted an the ‘sami concept of banking_ 6 cant = esi ova i ows? Patera ge, viol ete ig Lh is ai ae sae er ee, ei Ane aaa aks, sch a8 Gold Sachs eis et Taki hl hey do ng ‘ect dein nt rg ‘a sa Ph rosa mes te aig MES re # ie 10 Tm sy ‘ior ey le ee =e i auch ee passat en eines cdr bY dlscounting lo eat Seah bo ae Seer ee nt ed ten nd ok em See arenas Sees ater pein ty ne i eis SF ilttng ene i ova os ces ase Shc eng apt on he eee betwen the pace prt eet cae. Sings ad Lon Assit (4), hich have wadtonaly ‘vel cn re an en dca ote Soroves mae he fds of ey sll avers and et lel hs oy Home hes andar types of baroves sue te shen ohana dag of ui tht wool stat oy bom he ats e ote secures det, Ftp he ost pian ammo of the SL i ae Ain de Sts Nae more eae ie SID ol ete ns snd making colecns an "ee ont nd ae the avaailyof rea estate loans, = ‘he Pippin Prana Sim Mata font ae corpo mich ep mone fom ares thet uno by cs gtr band o term deters ved by bsneses or goverment eis These rpmictons, pol fade and thas rede TORS BY Ahenifeaon The ln chee ecules eal, which ower The can of seleng scien, mamepng poli, wd bing td sling scan Dee fande re deine 10 rel the thyctvesofaifect pes of se Hee, there we bd Finds Forts no ese sey sok fads for savers wo te wling to ep sip skein the Rope of ibe eas and till tr st ae od seeing ebeckna accounts he tron) mane finds) Thee re Ieraly Hance of feet fms th cacs diferent sal and arses, Peenahps ero parsons oes egal in bse of (eine mony with penal propery wy and her dbl (potrecleal he bs gen. Lending netr a eso oy engage ine snes oF ‘fein sees eats, ging ues aR ears interes, femthen ‘Person fans ore eee sas fndet by corporations or [pcrmen sper fore wecers an aint pear fy the nt depts af comme ks y ie erase ‘Sparen Pasion finds invest pinay in bond. aoe, mage, and el ete, Insurance companies ike savings in the fon of anna enon then ve these inf tks, ba el een ‘mong and aly make pyrene bene of the tured pres neta year, ie nsrance companies hae ao fred vanity of teTered sags lars desi a pode beoeis tothe pra when the ie, reunions ae cooperative asnisions whose embers have & ‘ameon bond, suchas ting enpleyecs of the same. fe Mabe svings a amed ol oer members, generally fn tuto cass, hone inpovement Ions ané_ eves, hone ‘mre. Crit uns ote ae the cheap source of fonds ‘alien eoramessvie sen 8. ig, 1 cavernmet SOK ay pest ENS, meen yt einen Dene nt emplonees ‘slang ms 5. Provide EME beng sev scat, S00 Sl os ad clay ge Sh et econ te see = BENHAM eg, i sr panANCIAL SYSTEM iss expres FON eenin 5 seni poll ree, ie href, ‘rar evoLvING PIPPIN ‘ne pineal st ei Cie ein le rcs cob en nc pi 7S ye pce sh ce outs been He oer ain fhe EMU oy a eeo er ead fi Palen Seas ine dam ite ast a ee eee ee re te rt ria ec \ mogeSonte a8 Se 1 onan 1 patyeiet he om} SIGNS OF ROWTHLIN THE DOMESTIC MARKET "fc yeu, own facial neediaion cbaave ahe de mjor ‘Sgn othe Pippne fancies ‘The itp banking sym bat been coir posing double inh ave gow sce fay able Later ae Sow ta th "ours the banking system smut PHP. ion a of en Murch 2018, an 113 perenne om the pines yeas eel af FHPLS won That pow ends mired y The gost Meanie, ttl ass ofthe ints indy mae thn doubled frm 2008 to 2016 oe Figure B) Alou thre as a woe slowdown ser 2015, he pth funded in 2016, posing oy 2 Pere insese. Mateover, tre Ie ben 4 eady cee lathe Indsin’s revere rele GDP afer the GFC, wh rea i the dese pecan typhoon Von in 2013 The le insane spe cote foe the sve othe rane compan revenue, The scutes mae has a exhibited prow. The bond mate, a Fare comprised mostly of peso-enominaed soseent id ‘oie 0 wich ousting amet of eo Mach 018 grew fp 11 percent te reach USDITT2 ballon (ee Figue C). The eq imuskt on he ter hind reine 12 anal sompanis nah PSE inthe ps tice seas, ging thet etd compan o 26h quate PHPI73T oe matt capsiatino f nd Ober REGULATORY LANDSCAPE. ‘A. Alignment wth oblsandards 1 The BSP hs eased Citar No. 975 ia Oetser 2017 0 scm the “requirements ca the iets of binky ad ommeral apes by tanks a quanta Cela Nos, 8 nd 985 In Dcebe 2017 fren of Uberti the in xchange FX) reply er has laste age OT September 2018 for tens Yo comply with the reise uk lity rik management anchored en the Prins for Seam Liguiy Rist Managemen and Sapesion und oe. Bel Ii reform spend,a0 nti some come ei toe ae rae S| Abe ei es SS cl Be cou aches tb 2 sors tit se tt eee regres Me gil a, nde From i Sarena oe fone nel 55H con ee oe nr lw ig and the Corpor ‘Schemes to enhance sR) Pe vest, SE acces. Cons re emai Samet ae teh ‘dea! repltory wean For iter et rosetta he anal ers = sa eats Sreeicnn cette peri He FI nD Wi CM Sok Se Meo at THe MOU en ms Pom cence gare, efiive on fr exchange of be eign he ge a Se emit y each oun’ res epi - — he Phin Fai B. Derpening apt martes Various nancial products ave been intodced 10 the iret segments fhe dometic mae ned providing alent options fot easing funds ofr vesting ery, These nl (1) dol denominated sects, (2) exchingetad ni (0) geen ends upcoming, (4) Peron Egy and Rent Ascot, (5) PLP governed forward, (© pana pati ahs nt (0) fests iscsnert a Funermore the SEC hat inated reforms onium pole ‘omertig. repurchase agteoments snd shel? epstaton tha undecore the need fo proved gut) nthe markt and he Ingen of pice discovery. The SEC i alo Finalizing res ering th cowed Tasing mht, Meili, he BSP, Hares ofthe Tren’ and SEC, wit the ‘sport ofthe DOF, roll ot in August 2017 the radrap 10 ccf th eelopmert of Ue Pippin debt mare. The tree fuses, which compre the Capi Mariet Working Croup, Aged to pintne deepening ofthe ks bond mac: testing "sable ean berchmarks sg aleon of anc sure {nd existing an ep frail market infrericice (MI. ©. Stenghening surelance 4 The BSP fas rently compte the eguiemers of beso [lsepring county. Tir il alow ses to eta information ‘on couse exgeures of eer count the Plippnes. The BSP tough te FSCC hat also itt! calaortny withthe Housing and Land Use Reply Boul wo develop 4 maiden epi tempat rel nate compen, “To fare is cant of surveilance and undenanding of the ndeyng develope in the surance indy the Cn the roses of bling» cas from he gun eps raua be Ge ovo : ces 2 iF hy _ en corp St onmn inc ee ec ane al ee = tres he WU Sy te SE HE we ee of be AML ran Recap tenon om eg be conte SUC recuemcs ‘mean so usage coms Seri ncn ann cen AO sytem Tecercneet ‘8382998955 PRA PPP PPP: e [veretts) "rn ioe PESOS SSSI SSS se ovteeneg nas) ror owe ms ‘Source: An ond One|a rencra san seo FINARcLAL STEM anes ames Ai cn ico sl ae weve nt coor ane SEG rae oa en af concice tied chao gua ne eta fa i con Se Sdn ama a Eo ieee fox i ofl, sin st le ‘egiom mena ale bt ta i *wellfcionina” finan This view of 0 SERTIENE ofthe sical tm OS a matte eae Bae ote appease og, feet pre ol sm Se ul see oH Bonet ti pic. While Fst oases mr Tis she eon my nis and valerate sau a ss ha) potently have Spon eins . “he scion hws oe eb op of de sei atte ere rh mc ee eagle eo ta icing is now at. alee sa ea ae ‘The open 1 des teh nd Asociion of Southeast Asn Nations {SEA fmacelnepson en. Thee sm outta fic provides (res oer apts fee er ensctis Ths gun espe of ‘oro comny sah wf Flips wich 5 epee bh Teapaly and by domgapie to. Nevertcless, the asesmet fr Fick ths has few on mse rye creda ieiity, among ters The pevaing Yi tha nc ably ks ae Limited, ba ‘sale seni on te veins Gosh enans. a small goin of sca * Sar: Sab tn ou grins Drcenber 3208 = ce ‘The intention is 10 allow fintech a deep fate: One sll he mind of 3 ey lesion fom te GEC tat stem has my ree fem cegly amet shocks bras acting fr se fr harping eft of harass 38 sealed. Relishes and os sos ng tka silos tore res vii ofthe downside ik fo the ‘disci si fates “ oe Simi inch th snes ce i comping forthe inegaion of the fans makes ang member sc ft ASEAN, Tere conn? sabe ltl gow mcs athe ee of nr ane as oe. onli rohnert. With sh of ASEAN’ sings actual depaed at of th en, fe inet shat provide «bt nd tee sone pt ft Wa ‘scanners oh vee Ye ahr etc csr ines wl ae prove tte yosile ven coon Moe any be peo was of Di Redrkad Dv Scmnnaer rope gee et eyo ede eteen vein palin, ai ey ma Frc aly Ts scone uson he as tcl 8 caret ‘ovbofvaus oemiten ASEAN ages ‘CURRENT RISKS IN THE PHILIPPINE FINANCTAL SYSTEM A. Reorcing refinancing and repayment rks RS) Sew ion fave ued vas cs of is at ees imancial stability coocerns. These are ° (1) The omaaton of US mos pay rats hice orga cepts whe decd towards he US, eng met cee) fetes abog te i (2) A slowsown in lta growth and dsl of iat ade wil ‘dein te gowth many ono (2) Higher det ees aos cous wll cane fo ave esonomies ‘rable tte changes he roth ok se (coating sete fot that capers et HO he inthe The aks ase Teese Srey xa) SHH as Ta ie ane ae Be Tea and et. Thee ae age I oe set er Bae 8 Pocy (LCY) tha continue, pe mo ee et a sing fet Ses anagem Scere es shes eer sa ened bat wth 0 Supp ect teredinion coins MPEG tl fat porto ft vectaure TO e y ee 3) ing spe send SN ih pot and forward aes reruns et nl oe et fe cumeny and test ae mE oy in US doll instrament. Ye, Ne connate ad FY de See i ey eee eesti tt Donnie Ts an a US eprng isons ve a 7 se on sony nean ht Philpin bang Sara ne a is Pile want oman te Dees of OA rss ike ‘Sos mae cers rear fo FY ate Continous dan feet by carat enters and hows ‘ede in the domestics “This feting ste cr pie vt fer lol esonamie atv, SS ve psn (FH) ad rls cur Se se atte mer wm proved y the big Sytem As tar it fs din te PSELS exhibited rising debt ‘Seu sf shw 45 pret 208 to more than 86 percent ao ‘ns Moreh 208 (gue 3). Aan fo ak ars, NFS ee i esto the bond make or thr financing wets. Fp 35 shows acreing levels of corporate det ‘suc btn LY andi US dl, The lel of corporate debt ise Daa iin pens an ace asso sé dL AS 2 10; Fg 3 hos ning se 220 oh ay See rs alsin nl ron le han Reve Soja he ee eam are cms stm {pa be tier hoscl eae fee fom comme’ Yaa 10 HS Contr Ponce Sry CP aes aha rece of te mass woe aang. ey tke fo face te Fc eet el etn re hc pane (Fe 1)"Thb ony cs we heal get ber de of hoch dab ete he fr saci ow Arie 4 pos aise eyo etig a ae age Te insme on Een Sure ES The contnoas demand for cai is welcomed as i epee fue “facia depéning ofthe ecomomy. Howe oe his 0 apres the ihe de eves puns the pte risk fom rng terete the peso deprecation. Thi dt seve urease ad heen of ‘shat ireferedtoas he so reprising efiancing nd ene ak, Figure 31: Ttaioanportfao InP eons