FAR EASTERN UNIVERSITY

INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

Department of Business Administration

Course Code : FIN 1

Course Title : Principles of Money, Banking and Credit

Course Prerequisite : None

Course Credit : Three (3 units)

Course Description : This course deals with the concept of money, its nature, development, characteristics, function and uses. Included is the
history of the currency system in the Philippines, the role of Bangko Sentral ng Pilipinas in the issuance circulation and
control of notes and coins. Factors affecting the economic phenomena of inflation, deflation, and evaluation of currency,
increase and decrease in the purchasing power of money are discussed. The birth and growth of the banking institutions and
other financial intermediaries are traced and explored. The students are likewise introduced to the concept of credit, credit
instruments and transactions relative to banking.

General Course Objectives : At the end of the course, the students are expected to:

1. Discuss the Evolution of money giving emphasis on the stages of exchange.

2. Explain the nature, characteristics and important functions of money
3. Develop an understanding of the role of money in our country
4. Discuss the history of the Philippine currency
5. Be familiar with the role of Banko Sentral ng Pilipinas in the issuance, circulation and control of notes and coins
6. Explain the different modern measures of money
7. Know the concept of credit, its characteristics and functions.
8. Identify and illustrate the different credit instruments.
9. Trace the birth and growth of the Banking system in the Philippines.

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Course Content:

Evaluation
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Strategies

Week  Unit 1 : At the end of the chapter, the  Chapter 1 – MONEY, IT’S  Full  Lecture  The student  Recitation
1-2 student is expected to : EVOLUTION AND knowledge is
SIGNIFICANCE  Of the knowledgea
 Know the Development of the Money  History of the Development of history of  Recitation ble enough
 Describe the transition from Barter the Monetary System the about the
economy to money economy  BARTER developme evolution of  quizzes
 Enumerate the shortcomings of the  Definition nt of the money
Barter system  Shortcomings monetary  Visit the
 Explain the significance, attributes and  Money system money
functions of money  Definition museum
 Enumerate and describe each of the  Functions
general kinds of Money  Significance
 Define coinage, giving its significance  Attributes
and objectives  COINAGE  Show early
 Explain the kind of coinage, the  Important role of Merchants in
forms of
expenses incurred in minting of coins money
coinage process
and reason why coinage is the  Kinds
monopoly of the government.  Charges met in minting coins
 To know the history of the Philippine  Objectives
mint.  Significance
 The Philippine mint
 Designs and Legal Features of
the Philippine Legal tender
currency
 Counterfeit Vs. Genuine Money

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 Evaluation
Week Learning Objectives Focal Points/Topics Competencies Teaching Values
Measure
Strategies

Week  Unit 2 : At the end of this chapter, the  Chapter 2 : THE PHILIPPINE  Full  Class  Appreciation  Graded
3-4 student is expected to : MONETARY SYSTEM knowledge discussion of the Recitation
of the money in
 Know the different periods in the history  History of the Philippine different  Recitation different
of the Philippine currency currency periods and colonial  Quizzes
 Familiarize the students with the  Pre-Spanish period the kind of  Lecture Periods
different currencies used in the  Spanish Period money
Philippines.  1st Philippine Republic used.  Show sample
 American Regime of early money
 Japanese Occupation in the different
 Post war Period periods in the
 New Issues history of Phil,
 Pilipino Series currency

Week  Unit 3 : At the end of this chapter, the  Chapter 3: Monetary Standards  Knowing  Lecture  Admiration  Recitation
5 student is expected to : and SYSTEMS the of the
Distinctions different
 Classify the different kinds of monetary  Nature of the standards  Quizzes
standards  Classifications different
 Explain the objectives and significance  Monometallic Standard standards.
for the adoption of the monetary  Gold coin standard
standards  Gold bullion standard
 Differentiate monetary standard from  Gold exchange standard
monetary system  Bimetallic standard
 Discuss the operation of the Gresham’s  Characteristics
Law on bimetallic standards  Advantages
 Disadvantages
 The Greshams Law

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 Evaluation
Week Learning Objectives Focal Points/Topics Competencies Teaching Values
Measure
Strategies
 Managed currency Standard
 Objectives
 Characteristics
 Advantages
 Disadvantages
 The Philippine mint

Week  PRELIMINARY EXAMINATION WEEK

6
Week      
7-8  Unit 4 : At the end of this chapter, the  Chapter IV : MODERN
student is expected to : MEASURES OF MONEY

 Explain how money is measured  Narrow Measures  Complete  Recitation  Recitation

 Understand the meanings of inflation  Broader Measures knowledge  Realization
and deflation, their criteria and  Weighted Measures on the  Lecture of the true
disadvantages  different value of  Quizzes
 Discuss the different theories on the  Inflation  measures  Reporting money
value of money focusing on the  Definition of money
demand for money and the velocity of  Criteria  Group
money  Disadvantages Discussion

 Theories on the value of

money

 Income Theory
 Assumptions
 Savings
 Investment

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 Evaluation
Week Learning Objectives Focal Points/Topics Competencies Teaching Values
Measure
Strategies
 Capital
 Consumption
 Production
 Prices
 Money Supply
 Money income
 Real income
 Value of Money
 Profit / Income
 Transaction Theory
 Inflation
 Deflation
 Velocity of Money
 Cash – Balance Theory
 Effects of Monetary Instability

Week  Unit 5 : At the end of this chapter, the  Chapter V : CREDIT AND ITS  Full  Lecture  The  Recitation
9 student is expected to : USES information perception
 Know the concept of Credit, its  Credit on credit  Recitation of the  Quizzes
characteristics and functions.  Definition transaction important
 Explain the significance of credit in our  Functions s.  Group use of
economy  Characteristics Discussion credit.
 Discuss how business cycle affects the  Significance
volume of credit transaction  Parties in credit
 Discuss the criteria in granting credit  Truth in Lending Act
 Understand how the C’s of credit will  Criteria / Bases in
help in making a decision on credit o Granting Credit
extension.  General types of Credit

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 Evaluation
Week Learning Objectives Focal Points/Topics Competencies Teaching Values
Measure
Strategies

Week  Unit 6 : At the end of this chapter, the  Chapter VI : CLASSIFICATION  Full  Recitation  Wise use of  Recitation
10 student is expected to : OF CREDIT AND THEIR information credit
SOURCES on credit  Discussion sources
 Enumerate and describe each transaction
classification of credit  Classification of Credit s.  Lecture  Quizzes
 Be familiar with the different sources of  Sources of Credit
credit

Week  Unit 7 : At the end of this chapter, the  Chapter VII – CREDIT RISK  Full  Recitation  Wise use of  Recitation
11 student is expected to : information the check :
 Explain credit check  Credit Risk, defined on credit  Discussion
 Describe the hazards in the use of  Hazards in the Use of Credit transaction  Personal
credit  Sources of Credit Information s.  Lecture and  Quizzes
 Enumerate and explain each of the Business.
sources of credit information
Week
12  MIDTERM EXAMINATION WEEK
Week
13-14  Unit 8 : At the end of this chapter, the  Chapter VIII – CREDIT  Recitation  Clearer  Recitation
student is expected to : INSTRUMENTS  Full understandi
 Definition information ng of the
 Discuss the nature and importance of  Classification on credit  Discussion importance
credit instruments.  Credit instruments with general transaction of credit  Quizzes
 Identify and illustrate the different credit acceptability s.  Show sample intruments
instruments  Credit instruments with limited of Different
 Distinguish between promise to pay acceptability credit
instrument and order to pay instrument  Credit instrument for investment instruments
 Be familiar with the classes of check. purposes

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 Evaluation
Week Learning Objectives Focal Points/Topics Competencies Teaching Values
Measure
Strategies
 Know the advantages and  Credit instruments for  Show sample
disadvantages of using checks commercial purposes of check
 Be familiar with the ways of crossing  i ) Promise to pay instrument
checks  ii ) Order to pay instrument

 Check
 Definition
 Classes / Types
 Advantages and Disadvantages
in using checks
 Crossing checks
 Ways of crossing checks

Week  Unit 9 : At the end of this chapter, the  Chapter IX – HOW CREDIT  Full  Illustration  The proper  Recitation
15 student is expected to : INTRUMENTS ARE information use of credit
NEGOTIATED on credit  Recitation instruments.
 Be familiar with the different legal terms instruments  Quizzes
used in a credit transaction  Requisites for negotiability : use and  Discussion
 Understand the requisites for the  Kinds of endorsements functions
negotiability of an instruments  Endorsement in blank
 Know the distinctions between an order  Special endorsement
to pay instruments and a pay to  Qualified endorsement
instruments  Facultative endorsement
 Discuss the rules on endorsement  Restrictive endorsement
 Rules on endorsement

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 Evaluation
Week Learning Objectives Focal Points/Topics Competencies Teaching Values
Measure
Strategies

Week  Unit 10 : At the end of the semester,  Chapter X – BANKING  Knowledge  Recitation  Relevance  Recitation
16 the student is expected to : HISTORY, BANKING of the of Banking:
INSTITUTIONS, history and  Discussion Personal
 Explain the roles, functions and CLASSIFICATIONS AND developme and  Quizzes
services rendered by banking KINDS nt of the Business
institutions.  BANK banking
 Understand the types of Loans granted  Definition system
by banks1  Role
 Identify the different classes of banks.  Classifications
 Commercial
 Thrift
 Rural
 Function
 Services Rendered
 Types of Loan Granted

Week  At the end of the semester the student  Chapter 11 – CENTRAL  Full  Recitation  The  Recitation
17 is expected to: BANKING BANGKO SENTRAL knowledge relevance of
 Know the present composition of the NG PILIPINAS and  Discussion BSP in
monetary board.  -functions understand economic  Quizzes
 know the qualifications of the members  -instruments used ing of the growth of
of the monetary board  -legal reserves Requirements functions of the country
 3.know the functions of the BSP as the  -Monetary Board composition the BSP.
central monetary authority  -functions
 be aware of the the legal provisions of
the banks legal reserve
Week FINAL EXAMINATION WEEK
18

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Computation of Grades:

COMPUTATION OF PERIODIC GRADES

Class Standing
 Average Quizzes (AQ) 30 %
 Class Participation (CP) 20 %
 Major Examination (PEx/MEx/FDex) 50 %
Total 100 %

Passing Grade is 70% with an equivalent point of 3.00

A. COMPUTATION OF 1ST PRELIMINARY GRADE (1st PG)

1st PG = AQ (30%) + CP (20%) + PEx (50%)

B. COMPUTATION OF 2ND PRELIMINARY GRADE (2nd PG) AND MIDTERM GRADE (MG)

2nd PG = AQ (30%) + CP (20%) + MEx (50%)

MG = 1ST PG (50%) + 2nd PG (50%)

C. COMPUTATION OF 3RD PRELIMINARY GRADE (3RD PG) AND FINAL GRADE (FG)

3rd PG = AQ (30%) + CP (20%) + FDEx (50%)

FG = MG (50%) + 3rd PG (50%)

D. TRANSMUTATION OF FINAL GRADE

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 Descriptive
Grade Point System Equivalent
95.00% 100.00% 1.00
92.00% 94.00% 1.25 Superior
89.00% 91.00% 1.50
86.00% 88.00% 1.75 Very Good
83.00% 85.00% 2.00
80.00% 82.00% 2.25 Good
77.00% 79.00% 2.50
74.00% 76.00% 2.75 Fair
70.00% 73.00% 3.00 Barely Satisfactory
Below 70.00% 5.00 Failure

Textbook:Ruby A. Mutya 2010 Introduction to Philippine Money Credit and Banking National Bookstore,

Reference : Megginson, William L. c2006. Introduction to financial management. Mason, Ohio : Thomson Higher Education,

Gitman, Lawrence J. c2006. Essentials of managerial finance. Boston : Pearson Addison-Wesley,

Gitman, Lawrence J. c2006 Introduction to managerial finance. 23-25 First Lok Yang Road, Jurong, Singapore : Pearson Education South Asia,.

Leach, J. Chris. c2006.Entrepreneurial finance. 5 Shenton Way #01-01 UIC Building, Singapore : Thomson Learning,

Medina, Roberto G. c2007. Business finance. Manila : Rex Book Store,

Revised as of May, 2010

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Moyer, R. Charles. c2007Fundamentals of contemporary financial management. Mason, Ohio : Thomson Higher Education,.

Dlabay, Les R. c2008.Business finance. Mason, Ohio : South-Western,

Smart, Scott B. c2009. Financial management : an introduction. 5 Shenton Way #01-01 UIC Building Singapore : Cengage Learning Asia,

Smart, Scott B c2009.Introduction to financial management. Mason, Ohio : South-Western Cengage Learning,

Vernimmen, Pierre. c2009.Corporate finance : theory and practice. Hoboken, NJ : Wiley,

Leach, J. Chris. c2009. Entrepreneurial finance. Mason, OH : South-Western Cengage Learning,

JOURNALS: For on-line journals and magazines: http://search.epnet.com (EBSCO)

Foreign:

Harvard Business Review

Journal of Management Education
Journal of Money Credit & Banking
Journal of Policy Analysis & Management
Management Today
Office Pro
Office Solution
Public Personnel Management
Local:
Amcham Business Journal

Revised as of May, 2010

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 Journal of Business Education & Law

MAGAZINES:
Business Week
Fortune
American Chamber of Commerce’s Business Journal

WEBSITES: Online / URL:

REVIEWED BY: APPROVED BY:

DR. MARIA TERESA A. MARTINEZ MR. EARL JOSEPH M. BORGOÑA

Program Head , Business Administration OIC Dean, IABF

Revised as of May, 2010

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