money, savings and investment

Module 1 of 3

Submitted to:
Ms. Genevieve L. Sagandoy
Basic Finance Instructor

Submitted by: Kryzal Gansowen

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MONEY, SAVINGS, AND INVESTMENT
MODULE 1OF 3

PRE-TEST
1. C. medium of exchange
2. C. Store of value
3. B. Bangko Sentral ng Pilipinas
4. C. Interest on loans
5. B. It is easily converted into cash.
6. C. Portable
7. B. Market Risk
8. A. Antiques
9. D. Savings in a bank
10.D. Principals

SELF-TEST
DENOMINATION UNIQUE FEATURE/S SIMILARITIES
1000-piso -optically variable ink -optical variable device patch (only
with the 500-piso and 1000-piso
-each bill has its own serial only)
number
Enhanced value panel (only with
-has a different public the 500-piso and 1000-piso only)
figure/s
-concealed value
500-piso -each bill has its own serial
number -embossed prints

-has a different public -security thread

figure/s
-asymmetrical serial number
200-piso -each bill has its own serial
-watermark
-has a different public
figure/s -security fibers

100-piso -each bill has its own serial -see-through mark

number

-has a different public

figure/s

50-piso -each bill has its own serial

number

-has a different public

figure/s

-the security thread can

only be seen against the
light

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QUIZ
1. In the move by the Bangko Sentral ng Pilipinas to continuously update the
security features of the Philippine bank notes, do you think the problem
on counterfeiting be eradicated? Support your answer.
The continuous update of the security features of the Philippine bank notes has
been a consistent approach of the Bangko Sentral ng Pilipinas (BSP) on
counterfeiting problems ever since I can remember.

According to the report by bworldonline.com, in connection to the reopening of

the Philippine economy in 2021 from the COVID-19 pandemic,

“With renewed economic activities following the vaccination program and more
relaxed community quarantine guidelines, the number of documented counterfeit
banknotes rose by 7% from a year-ago,” the Bangko Sentral ng Pilipinas (BSP)
said in its annual report.

Going back to the question at hand, experience has proven the positive effects
of the move in question. According to https://www.bworldonline.com/banking-
finance/2022/04/11/441423/more-counterfeit-banknotes-documented-in-
2021/,

Amid the rise in counterfeit money, the BSP noted the improved capacity of
banks’ cash handlers to detect fake bills and coins.
Correctly classified counterfeit bank notes surrendered to the BSP for
investigation rose 14.8%, while number of undetected counterfeit
banknotes in banks’ deposits with the central bank dropped by 21.3%.
Throughout the year, the BSP conducted 11 law enforcement operations
that resulted in the arrest of 19 individuals and the filing of 15 criminal
charges.
“By the end of 2021, the BSP was able to secure a 100% conviction rate,
with the conclusion of the three counterfeiting cases and conviction of the
accused in criminal cases for counterfeiting or possession, or both, of
counterfeit currencies,” it said.

From this, it can be concluded that despite the increase of counterfeits, through
the improved security features of the Philippine note (accessible on
https://secret-ph.com/the-security-features-of-philippine-currency-6-ways-to-
spot-counterfeits/) and by BSP’s efforts on public awareness, people are ever
more cooperative in the mitigation of its production and circulation.
In the article of https://mb.com.ph/2021/12/08/why-bsp-is-shifting-to-
polymer-banknotes/ entitled, “Why is BSP Shifting to Polymer Banknotes”, it
was mentioned that one of the reasons is to improve the notes’ difficulty of
being counterfeited. Along with the change of the notes’ material composition
are the improved security features. Although there are counterfeits of the
polymer already in circulation amidst the ongoing release, BSP data shows 7.9
banknotes out of a million are counterfeits, or in central bank parlance “parts
per million (ppm)”, which is way below the 50 ppm red flag used internationally,
as was reported on
https://www.cnnphilippines.com/business/2022/6/10/BSP-warns-
counterfeits.html. This is an improvement as compared to the previous year
(2021).
So, did it really eradicate counterfeiting? Well, in my point of view, it largely
contributed to the obliteration of counterfeit money, but on a bigger picture,
other factors should also be acknowledged in the process. By other factors, I am

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 pertaining to the active participation of the law enforcements, the responsible
cash handlers of banks and the proper cash management of the different
commercial participants, and of course, the ever-smart consumers who keep
themselves updated on how to identify the real from the fake notes. The more
improvements the BSP makes, the harder it is to replicate the banknotes.

2. “Money is the root of all evil.” Do you agree or disagree with the
statement? Justify your answer.
Since time immemorial, people have been fighting over riches; whether they are
in form of real assets, precious minerals, or simply, money. For some, it also
doesn’t matter if they are fighting against their friends or family. Numerous
relationships have been broken, misdeeds done, indescribable behaviors all for
the sake of money. But is it really money that causes such mishaps? First, let
us define and describe money to give us a clear view of what it really is. Defined
by Merriam-Webster Dictionary, money is “something generally accepted as a
medium of exchange, a measure of value, or a means of payment”. Highlight the
word “something”, money is not a person, it is an object. Therefore, money
cannot think nor does it have feelings. According to Module 1 of 3: Money,
Savings, and Investment on the subject Basic Finance, prepared by the
Business Administration Department of Mountain Province State Polytechnic
College, money’s dynamic role or its reason for existence is to serve as a
uniform medium of exchange to promote national unity when people use the
same currency of exchange. Well, according to this, there was no mentioning of
the intention of its invention as a medium of evil influence as to how humans
should behave in its use in society.

With money’s reason for existence now cleared up, it can be concluded that
money, in its bare form and purpose, does not have any power to affect nor
control one’s behavior just because of one’s desire to possess money. In the
end, it is the humans who have the minds and feelings which they themselves
are responsible of and can control. These affect their perception of money which
will then influence their way of acquiring them. It is up to an individual if his or
her purpose of acquiring or utilizing money is for the good or bad. In the end, it
is the object and intention which is in question and not the non-emotional and
non-reasoning money.

ACTIVITY 3
1. What is investment, speculation, and gambling? Define each and
differentiate from each other.
a. Investment- An investment refers to the acquisition of any asset with the
primary intention of earning profit in the future either through its use,
development and use, resale, or development and resale. An example of an
asset acquired for profit through usage is copyright, wherein the owner has the
exclusive advantage of earning profit from his own work and also the right to
legally impede others from financially earning profit from said work within the
lifespan of the copyright. A lessor acquiring a building then renovates it with
the determined intention of renting it for profit is an example for development
and use. A trading company engaged in buying and selling of products is under
resale. For development and resale, a real estate business man acquiring land
and constructing a house on it intended for selling is also a good example.
Although the objective of investment is for return on investment, a hundred
percent on this is not guaranteed as risks are still involved.

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 b. Speculation- This is also an act of acquiring assets with the expectation of
returns but riskier and is on a short-term. It is riskier in a sense that a
speculator doesn’t do much research nor acquire information as thoroughly as
an investor would on the asset being speculated. Speculation depends more on
the hopes that the asset bought shall be sold off quickly in the near future at a
higher price than that of the purchase price. An example of this is the buying of
foreign currency and selling it when the exchange value appreciates.

c. Gambling- This pertains to an act of taking up chances or betting. It is the

riskiest among the three. The gambler depends on guesses or on some random
information, regardless of its credibility. A common example of this is the game
of Tong-its that involves betting, wherein a player (gambler) places his bet (any
asset acceptable to all players: e.g., cash, property, etc.) with his chance of
winning dependent on his skills at playing the game and the cards he will be
dealt with.

2. Explain one feature of good investment.

Saleable Investment- An investment being saleable means its ability to be
converted into cash in the earliest possible time. It refers to the liquidity of an
investment. The more liquid an investment is, the easier it shall be converted
into cash. A highly liquid investment is highly appreciated by investors as it
means that the probability of realizing gains is higher. The quicker an
investment is profited from, the higher the asset turnover. Meaning, the more
investment transactions an investor can have within a span of time, the more
chances of earning profit. For example, a laptop is easier and quicker to sell as
compared to a building; therefore, the laptop is more liquid than the building.

3. What are demand loans? Describe in your own words.

A demand loan is a short-term loan offered by financial institutions and are
usually availed for working capital needs like purchase of inventory, payrolls,
etc. This type of loan requires a collateral from the borrower and also has
interest. It is very beneficial to the creditor since it doesn’t have a specific term
or schedule of payment, but rather depends on when the creditor demands
payment, thus the name. Some examples are rights to bank overdrafts, cash
credit, business or personal lines of credit, etc.

POST ASSESSMENT
1. C. medium of exchange, store of value, and unit of account
2. C. responsible for the conduct of a country’s monetary policy
3. B. Demand Loans
4. B. Financial market
5. B. PW & ED bonds
6. A. Anticipation bills
7. B. Bonds
8. D. RA 7653
9. A. P50,000.00
10. No answer from the choices given. The restriction on currency import/export
for Philippine peso notes and coins is P50,000.00.

-End of Module 1-

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