Non-Deposit

Intermediaries
GROUP 7
Rea Mariehazza Solero
Ava M. Villanueva
Christian G. Sigalat
Alaina T. Laurente
 It is referred as the SHADOW BANKING
SYSTEM and commonly known as the NON-
BANK FINANCIAL INSTITUTION.

 It is the function of an institution where they

facilitate and possess knowledge about the
product and relationships with borrowings and
lending for a fee which constitutes valuable
services that serves as their primary income.
Rea
 They are not bank in the real sense. They make
contractual arrangement and investment in
securities to satisfy the needs and preferences of
investors

 They cannot accept deposits but do pool the

payments in the form of premiums or
contributions of many people and either invest it
or provide credit to others.
Rea
Lists of NON-BANK FINANCIAL INSTITUTIONS /
NON-DEPOSITORY INTERMEDIARIES

 National Home Mortgage Finance Corporation

 Philippine Export and Foreign Loan Guarantee Corporation
 Professional Regulation Commission Savings & Loan Association
Inc.
 Pawnshops

Rea
Long-term Insurers

It covers life-changing events in life, such as death, retirement

and disability. The purpose of long term insurance is to provide
you with an income in the long term (retirement) or a lump sum
of money in the event that you become permanently disabled or
pass away.

Ava
DIFFERENCE BETWEEN LONG TERM AND SHORT TERM INSURANCE

As what was defined above, long term insurance is for the life-
changing events while the short term is an insurance you take
out on your assets such as car, house and household contents.
Top 10 Life Insurance Companies in the Philippines
Retirement Funds
It is a special fund which people pay money into, so that when they retire from their job, they
will receive money regularly as a PENSION.

RETIREMENT FUND METHODS IN THE PHILIPPINES

1. PENSION PLANS - provide you with monthly allowances or a whole lump sum amounting to your total
contributions.

2. PERSONAL EQUITY RETIREMENT ACCOUNT (PERA) – It is a type of retirement investment plan that
can only be availed through banks, insurance companies, or any other administrator accredited by the BSP, the
insurance commission and securities exchange commission.

3. INSURANCE PLANS – the contributions lead to compensation. Aside from the financial protection it can
provide your family after your death, and it can also be your source of income after retiring.

Ava
HOW DOES SSS PENSION COMPUTED?

* Php 300 + 20% of average monthly salary credit + 2% of AMSC for each credited years of
service in excess of 10 years.
* 40% of the AMSC
* ₱ 1,200 if the credited years of service is at least 10 but less than 20 or ₱ 2,400 if the CYS
is 20 or more.

Amount of retirement pay

Exchange Traded Funds
 An ETF is an investment fund traded on stock exchange,
much like stocks.

 Holds assets such as stocks, commodities, or bonds and

generally operates with an arbitrage mechanism
designed to keep in trading close to its net asset value.

Christian
 At present, only one ETF available in the
Philippines. This is the First Metro Philippine
Equity Exchange Traded Fund ( FMETF )
offered and managed by First Metro Asset
Management, Inc. ( FAMI ).

Christian
What are the benefits of ETFs?

 Diversification
 Transparency
 Lower costs
 Less risk

Christian
 Top 5 holdings of FMETF

Security Stock Code FMETF Weight Php/share Min. No. of Total

Name (%) (Sept 01, Shares Investment
2019) (in Php)
Sm Investment SM 10.40 887 10 8,870.00
Corporation

Ayala Land, ALI 8.55 36.65 100 3,665.00

Inc.
PLDT TEL 8.32 2,446 5 12,230.00

Ayala AC 6.04 755 10 7,550.00

Corporation
Universal URC 5.77 192 10 1,920.00
Robina
Corporation
34,235.00
Christian
 What are the disadvantages of ETFs?

 Fewer Potential Gain

 Limited opportunity to learn serious investing
 Unlikely to outperform the market

Christian
Securities Unit Trusts
 The most popular investment vehicle for individuals.

 The SUT issues Pls (units) (say 100 000) to investors at

a price (say LCC 100 per unit) and with the fund
purchases the listed shares, bank deposits etc to the value
of the total funds available (LCC 10 000 000).

Christian
Hedge Funds
 Hedge funds are not considered a type of mutual fund
but are similar to mutual funds in that they accept money
from investors and use the funds to buy portfolio of
assets. They are private, actively managed investment
funds, which invest, in a diverse range of markets,
investments and strategies. Hedge funds are often open-
ended and allow withdrawals by their investors.

Alaina
 The aim of a hedge fund is to provide the highest
investment returns as quickly as possible. To achieve to
achieve this goal, hedge fund investments are primarily
in highly liquid assets, enabling the fund to take profits
quickly on one investment and then shift funds into
another investment that is more immediately promising.

Alaina
 Hedge funds tend to use borrowed money to increase
their returns. It is also notoriously less regulated than
mutual funds and other investment vehicle.

 The focus of hedge funds is on maximum short-term

profits.

Alaina
Private Liquidity Funds
 The SEC defines private liquidity funds as “pooled
investment vehicles” that are excluded from the
definition of investment company. The term private fund
generally includes funds commonly known as hedge
funds and private equity funds. Private funds are not
registered with the SEC, but their investment advisors
may be subject to oversight.

Alaina
 The SEC defines liquidity funds as any private funds that seeks
to generate income by investing in a portfolio of short term
obligation in order to maintain a stable net asset value per unit
or minimize principal volatility for investors.

Alaina