Introduction to the Philippine

Financial System
 16th Century
Banking in the Philippines began with the
establishment of Obras Pias (Pious Works) by
laymen associated with religious orders.

Obras Pias was funded from the legacies

and donations of wealthy individuals and was
the sole source of commercial credit
 Rodriguez Bank
the first bank in the Philippines was
established which was more than a loan
association than a regular bank.
 Establishment of the First State Bank in
Manila

 Banco Espanol-Filipino de Isabelle II

 British-Orient Banks opened branches in the
country as a result of the expanded
Philippine-European trade
 The Chartered Bank of India, Australia and
China opened in Manila and later in Ilo-Ilo and
Cebu
 The Hongkong and Shanghai Banking
Corporation was established its Manila
branch
 The first mutual savings in the country was
established, Monte de Piedad y Caja de Ahorros- a
combination of savings bank and pawnshop and later
change its name to Monte de Piedad and Savings
Bank
 Bank for the poor
 Felix Huertas- Spanish Franciscan Friar
 1994 – closed and re-open as Keppel Bank
 2005- bought and renamed as GE
 Banco Espanol-Filipino de Isabelle II changed
its name to Bank of the Philippine Island
(BPI) and it’s the oldest existing bank in the
Philippines
 
 The Postal Savings Bank was put up
 The first agricultural bank was established
 The assets and Liabilities of the first
agricultural bank was transferred

 Philippine National Bank was organized

also functioned as the de facto Central
Bank of the Philippines until 1949

the first universal bank in the Philippines

(1980)
 Central Bank of the Philippines which was
given the sole authority to issue republic’s
new paper money, regulate and supervise the
country’s banking system was created.
 The service performed by the financial
institution known as bank, which primarily
concerned with the safekeeping of funds
through the acceptance of deposits of money
and the provision of credit through lending of
money
 Commercial Banks
Covers the wide range of functions among all
financial intermediaries
 Thrift Banks
They cannot engage in international banking
operations
 
 Rural Banks
Regional Banks operating primarily to serve
the needs of people in the rural areas 
 Specialized Government Banks
Banks that are created by the government
for specific purposes under special charters.
 
 Development Bank of the Philippines
Established in 1946 as Rehabilitation Finance
Corporation to attend to the requirements of
rehabilitation and development after WWII
 Land Bank of the Philippines
Established in 1963 to provide timely and
adequate financial support to Agrarian
Reform Program

Its lending activities are geared primarily

towards helping farmers acquire land under
the agrarian reform program as well as
finance the cultivation of these lands and
marketing of the product.
 Philippine Amanah Bank
Established in 1974 to promote and
accelerate the socio-economic development of
Mindanao, development and savings banking
facilities at reasonable terms to residents of
Mindanao including Palawan.

It is based on the Islamic concepts of Banking

following the no-interest and partnership
principles.
 Demand Deposits
Also known as current or checking accounts
 Time Deposits
Accounts with a maturity date at higher interest
rate.
Pre-termination is permissible
 Ordinary Savings Account
It has no maturity date and has a lower interest
rate than time deposits
.
Referred to as a person’s callable account