Claro M. Recto H-way, Clark Special Economic Zone, Pampanga Co.reg.no.CN200618309 Co.

TIN 006-532-105

Diliman Extension Program in Pampanga

University of the Philippines

Type of Financial Institution: Commercial Bank

10Y dela Pena, Ivy Gaille S. I. Business Profile 24Y Punzalan, Janne Kazel F.

Group 12Y

Company Name Branch Location

: :

Bank of Commerce Victoria Bldg. Poblacion, Baliuag, Bulacan

With a new partnership between Bank of Commerce and the San Miguel group, the institution gained strength and stability that comes to change the Banks corporate identity. Its continuing dynamism is now presented by the four-leaf logo and the Escudo.
Research Report #2

Bank of Commerce has been one of the Philippines progressive of: The Structure, Functions, and Operations commercial banks since 1991. It offers a wide range Bank of Commerce (Baliuag products and services that include of banking and other financial Branch) traditional deposit products, corporate banking, Development Cooperative, Inc management, Greater Bulacan Livelihood consumer banking, treasury, asset
Laura trust services, trade, and credit card services.Amba Pawnshop

Mission Our business is professional banking. We are committed to serve and satisfy the needs and best interest of the public: our clients, our co-workers, our stockholders, and our community. As banking is based on trust, we will do business with the highest standards of personal integrity and service quality. We believe strongly in human resources, in their inherent dignity and well-being, and in their capability for growth. These being the key elements of our banks success, we fully dedicate ourselves to their enhancement. We will grow to be among the top performing banks in terms of profitability, efficiency, and product delivery reaching out to all our market. Finally, we will make ourselves worthy members of society contributing to the upliftment of our fellowmen and to the promotion of national development.

II.

Business Structure

UPPER EXECUTIVE MANAGEMENT Bank of Commerce is owned by stock holders that elect Board of Directors. The Board is responsible for the sound governance of the Bank. Corollary to setting the policies for accomplishing its corporate objectives, it provides an independent check on management.

Directors The membership of the Board is a combination of executive and nonexecutive directors, and no director or small group of directors dominates the decision making process. The non-executive directors possess such qualifications and stature that enable them to effectively participate in the deliberations of the Board. (See Appendix 1.1 for the list of Directors)

Board Committees The Board constituted the following committees to assist it in good corporate governance: Executive committee, Audit Committee, Board Risk Oversight Committee, Corporate Governance Committee, Anti-Money Laundering Committee, Nominations, Compensation, and Remuneration Committee, and Trust and Investment Committee.

The Corporate Secretary Is responsible for the safekeeping and preservation of the integrity of the minutes of the meetings of the Board and its committees, as well as other official records of the bank.

The Compliance Officer reports to the Boards of Directors through the corporate governance committee. He monitors the banks compliance with banking laws and the rules and regulations of the regulatory agencies.

UPPER EXECUTIVE MANAGEMENT Department managers are appointed by the bank officers, who head up each banking division. Operations Support Group Retail banking Group Services Support Group Strategic Planning and Business System Client Coverage and Management Division Strategic Support Group Treasury Management Group Risk Management Division

(See Appendix 1.2 for the list of the Upper Executive management) RETAIL DIVISION The retail division interfaces the most with the public. It helps consumers open and manage accounts, apply for loans and provide other banking services. Job functions for the branch office are discussed below:

Business Manager Or the Branch Manager administers the efficient daily operation of a full service branch office. She/he develops new deposit and loan business; is also

responsible for achieving individual and branch sales goals through new business sales, referrals and retention of account relationships.

Associate Business Manager for Service Assists the Business Manager BMO The Marketing Officer is responsible for the coordination of all marketing and social media and networking activities of the Bank. It also makes sure that the marketing activities are in compliance with BSP.

SO A sales officer is in-charge for new business development in the bank, investment or bond sales setting.

CRA-5(GAB) Responsible for frontline service and perform general administrative support duties.

CRA-5(N/ATELLER) CRA-4(OA/TELLER) responsible for performing routine and intermediate branch and customer services duties.

CRA-3(TELLER) is responsible for performing routine branch and customer services duties. It accepts retail and commercial checking and savings deposits; processes loan payments; cashes checks and savings withdrawals; promotes business for the Bank by maintaining good customer relations and referring customers to appropriate staff for new services.

CRA-4(Pool) Responsible for the accurate and efficient handling of receipts and funds (deposits and withrawals) as well as other miscellaneous transactions.

CRA-4 Roving Teller receives and pay out money. They also keep records of money and negotiable instruments involved in a financial institution's various transactions.

I.

Operations

1. Planning Operation strategies are planned and forecasting of events and possible problems are done every January. This is to prepare the bank for upcoming incidents so that they could handle situations systematically. 2. Organizing The Human Resource Management department assigns the best fitted design for every job. The operations standards/work measurements are also given by the HR department. 3. Inputs Just like any other firms, Bank of Commerce conducts market research to determine the needs and wants of the consumers. After doing so, they will know the right products and services suited for every branch (Listed under the part IV are the services offered by BOC Baliuag Branch). The bank uses equipment, software, and other related technologies in its transactions in order to promote efficient operations. 4. Process The branch opens at 8:30 am and closes at 5:30 pm. Clients are asked to give personal identification and verification before processing further the transaction the client wish to

be made. After the bank closes, branch personnel balance accounting forms and clear every transaction needed to be worked on. The branch is open from Monday to Saturday. 5. Outputs Listed in Part IV are the products and services offered by BOC.

6. Controlling BOC conducts periodic analysis and control in order to monitor efficiency and effectiveness in its operations. Also, the bank asks for feedback from its customers in order to continuously find areas for improvement. Loan Operations and Procedures

i. Negotiation Negotiation involves calling on customers and interviewing loan applicants. Requirements are discussed and evaluated based on financial conditions, management quality, market position, and credit risk. After which, suitable loan support and the pricing of credit facility is determined.

ii. Reporting Reporting involves the preparation of the proposed credit facility which is suitable to the bank. Credit facility is concerned with revolving credit, term loans, committed facilities, and letters of credit. iii. Implementation

Implementation is the servicing of accounts (particularly credits). Credit applications are individually reviewed and accepted depending upon customer rapport. iv. Control Control is the use of credit facility in line with credit terms. IV. Function Bank of Commerce, just like any other commercial banks, performs certain functions related to financial needs. Such functions include accepting deposits and issuing loans and credit creation. Furthermore, Bank of Commerce offers:

Deposit products Savings Account Passbook Savings Account ATM Savings Account Plus Checking Account Complete Checking Account Euro Savings Account Dollar Savings Account Premium Savings Account Premium Money Market Peso Time Deposit Account

Five-Year Peso Fixed Monthly

Time Deposit Five-Year Peso Fixed

Compounded Time Deposit One-Year Time Deposit USD Time Deposit Account Euro Time Deposit Account

Treasury Products Treasury Bills (T-Bills) Fixed Rate Treasury Notes

(FXTNs) Retail Treasury Bonds (RTBs)

Republic

of

the

Philippines

Loan

Bills or Receivables Discounting

Bonds (ROPs) Corporate Notes Fixed Income Foreign Exchange Spot FX Conversion Forward FX Conversion

Domestic Bills Purchase Medium Term Loans Export Bills Purchase

Consumer Loans Management Home Loan Car Loan Personal Loan Salary Loan Credit Cards

Trust products and services Personal Trust Retirement Fund Escrow Investment

Cash Management Services Value Payroll Payroll Plus CheckWriter Plus Deposit Pick-up Bills Payment Pass 5 or Customs Duties Tax

Account (IMA) (UITF) Loan Agency Collateral Trusteeship Safekeeping Unit Investment Trust und

Business Loans Loan Secured Documentary Credit Export Packing Credit Direct Advance Loan Foreign Currency Denominated

Payment o o o BancNet Point of Sale (POS) Bills Payment E-merchant

BIR-EFPS (Electronic Filing

(ATM)

Automated

Teller

Machines

and Tax Payment System) Non-Branch Delivery Channels o o B-Commerce Internet Banking Retail Corporate

Mobile

Banking

Through

BancNet

V. Financial Aspects Comparing the 2009 and 2010 performance of Bank of Commerce, there has been respectable progress on financial strength basing on the key measure:

Net Income* after Tax increased by 2% (from Php617.34 mln to Php629.17 mln) Income from Banking Operations was a record Php2.15 bln. It increased 22% from the stated income in 2009.

Cost efficiency ratio improved by 4%; from 77% to 73%.

Due to the highly competitive banking industries, BOC faced high credit costs in 2010 to provide for the Php861 mln loan-related losses. * Net Income could have more than doubled if the bank had not taken a charge against earnings amounting to approximately Php861 mln which represent credit reserves to cover potential reserves

TIME VALUE OF MONEY

The time value of money is the idea that the presently available money today is worth more than the same amount in the future. This is due to the potential earning capacity of money it can earn interest. To know more about Bank of Commerces interest earning products/services, read below: LOAN PRODUCTS

Direct Adv. Loan (DAL)

Term: 30 to 360 days Interest: In arrears Credit Docs. Needed: PN Booking Unit: DOD &/or Trust Purpose: Working capital

Bills/Receivable Disc. Loan

Term: 30 to 360 days or maturity of LC, PO, or PDC Interest: In advance Credit Docs. Needed: PN, PDC, Deed of Assignment of Receivables Booking Unit: DOD Purpose: Working capital

Term Loan

Term: 2 to 5 years Interest: In arrears/advance Credit Docs. Needed: PN, TL Agreement

Booking Unit: DOD Purpose: To finance fixed asset acquisition/Capital expenditure

FCDU Loan

Term: 30 to 360 days Interest: In arrears Credit Docs. Needed: PN Booking Unit: DOD Purpose: Working Capital

LC / TR

Term: 30 to 360 days Interest: In arrears Credit Docs. Needed: L/C, TR Booking Unit: IOD Purpose: To finance importation of raw materials and/or Capital goods

Export Packing Credit

Term: 30 to 360 days or maturity of Export LC w/c ever is shorter Interest: In arrears or advance Credit Docs. Needed: PN, Cert. True copy of export LC, DA of LC, rediscounting doc if rediscounted with BSP

Booking Unit: DOD Purpose: To finance pre-packaging activities of exporter clients

Export Bills Purchase Loan

Term: Upon payment or purchase of export letter of credit Interest: In arrears Credit Docs. Needed: Export Docs.; Export Processors Report Booking Unit: IOD - Exports Purpose: To finance post-shipment activities of exporter clients

Dom. Bills Purchase Loan

Term: upon clearing of check Interest: In arrears Credit Docs. Needed: Bills Purchase agreement Booking Unit: BOC - Branches Purpose: Working Capital

Fast Value Loan Terms of Offer

1. Amount: Php 5.0 MM (Maximum); Php 500 M (Minimum) 2. Total Available: Php 1.0 B 3. Rate: 16.5% P.A. + VAT 4. Term: 1 year amortized or line facility 5. Availability: BOC branches

Interest rates are as follows:

Savings Account (Passbook and ATM) Amount 0 4,999 5,000 up Rate 0.00% 0.25%

Savings Account Plus Amount 0 24,999 25,000 99,999 100,000 499,999 500,000 up Rate 0.00% 0.25% 0.75% 1.00%

Complete Checking Account Amount 0 24,999 25,000 up Rate 0.00% 0.25%

Sample Computation:

Loan Principal Amount Php 1,000,000.00 Interest Rate: 20.0% Tenor : 180days / 30days repricing

Formula: Interest = P x R x T Interest = Php 1,000,000.00 X 20% X 30/360

Interest : Php 16,666.67 Note: To come up with a Grossed up Interest (inclusive of GRT) divide the interest by .95 Grossed-up Int = 20/95 = 21.05%

Interest in Advanced/Bill Discounted To compute for the proceeds:

Principal Amount Less: Adv. Interest Doc. Stamps

- Php 1,000,000.00 (Php 17.541.67) (Php 2,500.00) (Php 150.00) 982,458.33

To compute for the Doc stamps Principal divided by 200 x 1.00 x Tenor/360 Php 1,000,000.00/200 x 1 x 180/360 = Php 2,500.00 Thus, Principal = Php 1,000,000.00 Grossed-up Int Rate = 20/95 = 21.05% Tenor = 180days/30days repricing Doc. Stamps = Php 2,500.00 Notarial Fee = Php 150.00 Grossed-up Int = Php 17,541.67

Notarial Fee Total Proceeds

Interest in Arrears: To compute for proceeds:

Principal Amount Less: Doc. Stamps Notarial Fee Total Proceeds

- Php 1,000,000.00 (Php 2,500.00) (Php 150.00) 997,350.00

GREATER BULACAN LIVELIHOOD DEVELOPMENT COOPERATIVE, INC.

Type of Financial Institution: Multi-Purpose Cooperative I. Business Profile

Greater Bulacan Livelihood Development Cooperative, Inc. is a cooperative established by the Knights of Columbus Rosarian Council 10104, registered with Cooperative Development Authority (CDA) on August 1, 1995. It is a cooperative composed of civic and religious organization, traders, manufacturers, professionals, farmers, fishermen, government and private employees, laborers, skilled workers, OFWs/OCWs, small and medium entrepreneurs, self-employed persons, students, housewives. GBLDCI is open to all. GBLDCI aims to: To encourage thrift and saving among members. To generate funds and give credit to members for business, trade, manufacturing, or providential purposes. To develop livelihood projects among members belonging to the low-income group. To acquire land and provide housing benefits for members. To establish, own lease or operate cooperative wholesale and retail complexes. To undertake any and all other activities for the effective and efficient implementation of R.A. 6938.

I.

Business Structure BOARD OF DIRECTORS 2008-2010

CHAIRMAN OF THE BOARD: Dr. Rodrigo D. Catindig, DVM BOARD MEMBERS:

Zenaida Manalaysay Leonardo Fernando Carmen Taglag Emigdio Manuel Cesario Sikat Violeta Santiago

BOARD SECRETARY: Elizabeth Pineda TREASURER: Emigdio Manuel REGULAR COMITTTEES: Audit & Inventory

Leonila Del Rosario Leo Sikat Allan Sanchez

Election

Olive Ramos Mario Sayo Epifanio Mariano

Credit & Collection

Illuminada Caacbay Carmen Tagalag

Education & Training

Elizabeth Pineda Dr. Zenaida Fernando. PhD

SPECIAL COMITTEES

1. MEMBERSHIP RECRUITMENT (All Sectors)

A. Agri-Livestock Sectors i.

Agri-Piggery Sector

ii. Agri-Poultry Sector iii. Agri-Fisheries & Tropical Fish Sector & Other Related Sector B. Agri-Crops Sector i.

Agri-Rice & Corn Farmers Sector

ii. Agri-Vegetable, Fruit & Other Related Sector iii. Agri-Other Sector (Ornamental Plants, etc.) C. Non-Agri (Govt, Professional, Services, SME, Labor-Domestic & Overseas, Industrial,

Youth & Young Prof., Promotional & Entertainment Sector & Other Related Sectors)
D. Non-Agri other Sector

E. Livelihood Development Program 2. PLANNING, RESEARCH, &DEVELOPMENT 3. TECHNICAL, LEGAL, & FINANCIAL MANAGEMENT

ADVISORY NOMINEES 1. Spiritual Affairs 2. Governmental Affairs 3. Non-Governmental Affairs

MANAGEMENT & STAFF

FEDERICO M. PINEDA, JR General Manager

Account Officer: EMIGDIO A. MANUEL Accountant: CARLOS S. DELA CRUZ Accounting Assistant: MANUELA R. CRUZ Credit Assistant: ALFREN D. TOLENTINO HRD Assistant: ELIZABETH N. PINEDA Messenger/Collector/Utility Man: LEONARDO M. PINEDA Special Projects Assistant to the General Manager: VHON JOSEPH C. SOLOMON

ATTY. PETE S. PRINCIPE Chief Legal Counsel

I.

Operations

GBLDCI is open Mondays to Saturdays (except holidays), 8:00 12:00 AM and 1:00 to 5:00 PM. To be able to make use of the services offered by GBLDCI you must be a member first. The membership is open to all people who are of legal age and with capacity to contract. The application for membership and investment form (Appendix 2.1) and membership information sheet (Appendix 2.2) must be filled out. It will then be assessed by the committee chairperson/vice chairperson/member and is still subject to further approval by the General

Manager and the treasurer. This is to ensure that all members are qualified and are of good credit standing. Once a certified member, various services could now be availed. A stock subscription agreement (Appendix 2.3) should be filed if a member wants to avail of the stocks. Various forms are needed to be submitted when one would like to avail of the services. i. Planning From time to time, the cooperative hold a meeting to assess the current situation of the cooperative. From this, they will adjust strategies and plans to be able to adapt to the current needs of the members. ii. Organizing Jobs at GBLDCI are designed on the basis of the seven cooperative principles and depend on the qualifications of the members. The cooperative has budgets and targeted volume of transactions as its operations standards. Actual performance of the members will be judged basing upon the target volume of transactions and budget. Poor performance means re-organizing the cooperatives operation process. 2. Inputs Aside from the deposits of the members, majority of the financing is supported by the Land Bank of the Philippines. GBLDCI carefully studies the members needs and makes sure that each of them will abide to the policies of the cooperative. 3. Outputs Listed in Part IV are the products and services offered by GBLDCI. 4. Controlling

GBLDCI conducts periodic analysis and control in order to monitor efficiency and effectiveness in its operations. Each transaction is recorded instantly by the accountant and must be supported with the official documents. LOAN PROCEDURES AND OPERATIONS A checklist of loan requirements (Appendix 2.4 ) will be given to a member who wishes to apply for a loan. After the requirements are completed, the form Tagubilin sa Nangungutang must be filled up. Upon approval, the discount sheet will be given to help track the schedule of payment/amortization.

I.

Functions PRODUCTS AND SERVICES OFFERED

1. 2. ACCEPTS DEPOSITS A. Regular Cooperative Investment Deposit Savings Deposit Account Bulilit Savings Account Junior Savings Account Senior Savings Account A. Special Cooperative Investment Deposit Ordinary Time Deposit Special Time Deposit Cooperative Trust Fund Deposit

A. Share Capital of Stock Common Share Preferred Share 1. GRANTS LOANS A. Productive Loan Agricultural Loan Livelihood Loan Regular/Business Loan Market Retailers Loan Tricycle Loan

Commercial Loan

A. Providential Loan Salary Loan Educational Loan Appliance Loan Grocery Loan Emergency Loan A. Special Loan Subdivision Loan L.O.V.E.M.E. Program Loan Rediscounting Line Trust Loan 1. COOP PALAY TRADING THRU NFA MASTER PASSBOOK 2. COOP LIVELIHOOD & DEVELOPMENT PROJECT 3. REAL ESTATE DEVELOPMENT, PROPERTY ADMINISTRATION & SUBDIVISION MARKETING

4. OTHER SERVICES/INVESTMENT OFFERED A. Services Offered Corporate Account Fund Management Client Servicing Advisory Nominee Account A. Other Investment Offered Investment Mnagement Account Personal Trust Fund Deposit Common Cooperative Trust Fund Deposit Directional Cooperative Trust Fund Deposit A. Business Center Computer Services (encoding) Photocopy (clear) Telefax Service A. Escrow Account

Members will also benefit from: 1. Education and Training 2. Savings services 3. Loan services 4. Mortuary and loan protection insurance
5. Development of livelihood projects among the grassroot level

6. Creation of strong linkage between businessmen and traders-members

7. Providing the member an access to greater financial assistance from the government and other financial sources 8. Starting up assistance for new business 9. Act as a conduit partners to businessmen-member and would-be member 10. Development of management skills for all as they elect the board

I.

Time Value of Money

Policy guidelines on interest rate schedules: A. Regular Cooperative Investment Funds Savings Deposit with a minimum deposit of Php500.00 @ 2% per annum of tax. Ordinary Time Deposits (OTD): Amount of Deposits Php10,000 19,999.99 Php20,000 29,999.99 Php30,000 39,999.99 Php40,000 49,999.99 Number of Days 30 90 days 30 90 days 30 90 days 30 90 days Rates P.A 2.5% 2.75% 3% 3.5%

Special Time Deposits (STD): Number of Days 90 180 days 181 -270 days 271 365 days

Amount of Deposits Php50,000 59,999.99 Php60,000 69,999.99 Php70,000 79,999.99

Rates P.A 4% 4.5% 5%

Php80,000 89,999.99 1 year 1 year Php90,000 99,999.99 1 - 1 year

5.5% 6%

B. Special Investment in Cooperative Trust Funds Cooperative Trust Fund Deposits (CTFD)
Php100,000 199,999.99 Min. 1 year 2 years 6.5%

Directional Cooperative Trust Fund Deposits (DCTFD) Php200,000 above 2 years only 7%

Special Directional Cooperative Trust Fund Deposits (SDCTFD)

Php500,000 - above 3 years and above 12% p.a net of tax + one time 3% incentives

C. Other Investments Directional Cooperative Account Min of 30 days 9% spread against deposit and loan rate

Open amount

Note:
1. Interest on Savings Deposit computation will be based on a minimum deposit of

Php500.00 and with a 2% interest rate per annum net of tax Sample computation: A loan granted to a member for 12 months term at 24% per annum.

Principal Php30,000.00 1 Interest at 24% p.a Php600.00 Processing Fee 600.00 Service Fee 600.00 Collection Fee 600.00 Loan Protection Fund 600.00 CBU/Share Capital 1,500.00 4,500.00 Php34,500.00 GBLDCI use two ways of dealing with interests:
1.

Straight method or the

2.

Add on method.

Given the above computation, if the straight method is used, the borrower will get Php25,500. That is, the fees and interest is deducted from the principal amount. However, when the add on method is used, the principal amount of Php30,000 will be given in full and the additional fee of Php4,500 is added to the computation of monthly amortization. See Appendix 2.6 for more actual computations.

LAURA AMBAS PAWNSHOP

Type of Financial Institution: Pawnshop I. Business Profile
1 Php30,000 x 24% = Php 7200 Php7200 / 12 months = Php600

Laura Ambas Pawnshop, named after its only proprietor, began in 2002 with its shop situated in Jesus st., Angeles City. It aims to provide financial help to its customers with immediate need. II. Business Structure Laura Ambas Pawnshop is basically a sole proprietorship. And as a small starting pawnshop, it has continually employed four workers.

Officer-in-Charge She is responsible for the over-all performance of the pawnshop. Appraiser responsible for determining or estimating the value of to-be-pawned items. Cashier in charge of handling cash, receiving, and recording payments. Security Officer patrols and inspects around the pawnshop to protect for security purposes.

III. Business Function & Operation Similar with the basic functions of a pawnshop, Laura Ambas Pawnshop provides money to the pawning public in exchange for their valuables, particularly their jewelleries. If the borrower pays back the loan including interests within 30 days, he/she can get his valuable back.

Otherwise, the pawnshop is free to auction his/her item. Also, Laura Ambas Pawnshop is offering jewelry & watch repair services. How does the pawnshop operate? The owner and its management know the risk involved in the nature of the business. This is why they have planning for security. Included in the planning are watching over the trend of changes in the value of gold and keeping the management informed about the value of gold. A typical transaction in the pawnshop starts with a potential borrower coming into the pawnshop with his/her valuable item he/she pledges for a loan. The appraiser will then determine how much to loan to the borrower, on the basis of the percentage of its value. Once both parties agreed on the value to be loaned, the appraiser will secure the valuable item and seal it with the borrowers signature. The borrower will now read and sign a pledge loan contract that includes the following: 1. Name of Borrower 2. Amount borrowed 3. Description of the valuable item 4. Interest rate 5. Finance charges 6. Terms of agreement The cashier will now release the loan and provide a pawn ticket for renewal. This is used when the previous pawn ticket has been returned and paid the interest accrued. Laura Ambas Pawnshop primarily earns income from 1. Interest

2. Service charges 3. Sale of unredeemed valuable items NTEREST AND SERVICE CHARGES The monthly interest rate is 4% ( 4% x 12 =48% ) Sample computation: Principal: Php10,000.00 Interest Rate: 4% per month Monthly, the client will be paying Php400.00 and delayed payments will be penalized 2%. In comparison to commercial banks, lending companies, and other financial institutions, they generate their income from interest for every new loan of 4% monthly, and yet they are all liquid.

PROFITS ON SALE OF UNREDEEMED MERCHANDISE AUCTIONED / REMATADO SALE The income earned from this sale is from 70%-100% of mark up from the principal amount loaned out.

GOLD JEWELRIES 75% 100% Mark up per item for 120 days.