What if the foreigner may not have at least US$200k
or bring the same here in the PH, pwede pa ba
1st Meeting: Feb 1, 2023
If you dare to put up a business, you look at
profitability as a motive. What to consider?
1. Costs of electricity
2. Labor costs
China offered cheap labor and also cheap electricity. In
the PH, our labor was also relatively cheap but
increasing throughout the years. Kaya nangyare, mga
investors nag-move out. Nagpunta sa China, Thailand.
Why did the factory move to Thailand?
Lahat ng negosyante concern - profitability.
FIA
Rule #1: Foreigners may own 100% of any business for
as long as it is not covered by negative list A and
negative list B.
● NL A/B - only for PH nationals
Who is considered PH national per FIA?
1. Filipino citizens/individuals
2. Domestic partnerships
3. Domestic corporations owned by at least 60%
Filipinos
● Dean: Before, 4 yan. Kasama foreign
corporations owned by 100% Filipinos. Kaya
lang tinanggal na nila kasi wala naman ganyan.
What is a negative list a and b?
Negative List A - refer to areas/activities reserved by the
Constitution or by special law for Filipinos
● Example: Advertising, Retail Trade
● Relaxed Rules: Public Service,
Telecommunications
Negative List B - list in the FIA itself
● Example: Manufacture/Service of Firearms
unless with the consent of the Secretary of
National Defense; Beerhouses; Massage
Parlors; Activities which may increase risk to
public health
● Kung gusto gumawa ng baril dito ng foreigner,
dapat may consent ng SND.
● Foreigner may own 100% of any export-oriented
enterprise
○ Export-oriented Enterprise - pwedeng
manufacturing, pwede ring mamimili ng
PH products and i-eexport at least 60%
of its local purchase so it can enjoy
incentives under the FIA.
○ Inward remittance of at least US$200k
Ano equivalent ng US$200k sa PH peso?
When the FIA was passed, 10 million pesos
magnegosyo dito?
Yes, but with additional conditions:
1. It must bring to the PH advanced technology as
determined by the DOST
2. NEW LAW: Must hire on a permanent basis no
less than 15 Filipino workers na lang
a. OLD LAW: 50 Filipino workers
The foreign enterprise must register with the Board of
Investments.
Kung kulang sa US$200k ang maipapasok ng
foreigner, ano minimum capitalization?
No less than US$100k
Retail trade nationalization law has been liberalized.
● Foreigners, mostly Chinese, have been engaged
in the retail trade. Nagreklamo ang Filipino
retailers.
● Kaya nangyare, nagging exclusive to Filipinos
● Later, nagkaroon ng liberalization. So pwede na
sa foreigners but capital no less than US$2.5
million.
● Later on again, the legislators further amended
the law.
What is the present rule about retail trade?
Pwede na foreigners and hindi na ganun kalaki ang
capitalization = no less than PHP25 million
Kung ikaw foreigner, how many outlets/branches
may you put up?
Any number basta ang bawat branch should be
capitalized by no less than PHP10 million
Opposite of Retail Trade?
Wholesale - pwede ang foreigner na mag-wholesale
walang problema
Retail Trade
Selling goods directly to the consumer
Foreigner - pwede ba mag-operate ng restaurant?
Yes.
Dun sa community ninyo, there are entrepreneurs
may dalang pick-up na may lamang merchandise.
May pinakakawalang salesmen yun. Pwede bang
foreigners magoperate yun?
No, FIA does not allow mobile salesmen. They must
have a fixed establishment capitalized at no less than
PHP10 million
Pwede ba mag-tiangge ang foreigners?
No, expressly prohibited by law.
INNOVATIVE STARTUP / BUSINESS ACT
Additional incentive to anybody who puts up an
innovative, startup business
● Register with the DTI

Next Meeting: New Central Bank Act as amended

 Regular term
Governor and full-time directors - 6 years ang regular
2nd Meeting: Feb 16, 2023
term
● Regular term - di ka naman nakatitiyak
1993 - year BSP was created matatapos mo to, maaring makamatayan mo.

New Central Bank Act as amended Pag nagexpire term nung nakapwesto? May he be
reappointed?
*Ano yung mga amendments? Yes. but only once. SO the maximum number of years
may serve, 12 years. kasi 1 reappointment pwede diba.
1. Originally capitalization was 50 B Pesos. Ngayon
yung nairaise ng government as capitalization, 10 Billion Pag naexpire na term mo out ka na, very attractive
lamang. kaya yung capitalization dati na 50B that sa private sector. lalo na mga bangko ngayon ano
became irrelevant. ang prohibition ng batas?
- working within the next 2 years in a corporation under
Kumikita ba ang BSP? the supervision of the Bangko Sentral. pwede kang
unang una, pag sinabing Central Bank, kahit anong magtrabaho sa ibang kumpanya (insurance,
central bank, ang reference jan ay bank of banks. manufacturing)
Bakit? Kasi kapag kailangan ng bangko ng money to
lend, kay aang mga bangko para tuluy tuloy ang Ano yung mga corporations that are supervised by
negosyo, pag naubos na yung loanable funds, umuutang BSP?
sa central bank. reason is whenever the bank needs 1. Banks
money, the bank borrows from the central bank 2. quasi-banks (parang bank)
3. mga investment houses, parang bangko tong
Isa pa, punta ka HK mamimili ka, san mo kukunin yung mga to kaya lang hindi bangko kasi hindi
pera mo? edi bibili ka ng foreign currency, san kukunin tumatanggap ng deposits, pinagbabawal.
ng bangko mo yung foreign currency? bibilhin yun sa 4. trust companies
central bank. kaya kung ano naipon ng central bank, 5. remittance centers
bebenta sa bangko, tapos may tubo yon, edi yung tubo 6. Pawnshops
earnings ng central bank. kaya ang earnings nito ay 7. foreign exchange dealers
billions of pesos.
Functions of Bangko Sentral
Fundamentals of BSP - to issue currency
BSP has a corporate existence, its affairs are managed - to manage money supply
by a board. - supervise the banking system
- Kapag stock diba board of directors, pag non - represent the Philippines in its international
stock. board of trustees. monetary dealings
diba pag walang pera nangungutang, nangutang sa
Pero yung sa bangko sentral, monetary board. world bank sa IMF, ang nakipagusap ay Bangko Sentral,
hindi president nor vice president, represented by the
Monetary Board Composition Governor
1. Governor
2. Cabinet members - natural born filipino citizen Fundamentals
(thru legislation hindi kasama) both for gov and What is money?
cab Any medium of exchange
3. 5 Full Time directors from the private sector -
hindi pwedeng gawin as a member yung mga ● definition of Dean Abella - it is something he
political namedrop. hindi necessarily from the does not have much of
privately owned private corps, pwede rin
manggaling sa GOCC or Government financing Units of a peso is called centavos (c) c lang walang
institutions. slash kasi cents yun

How many centavos are there in a peso? 100 centavos

in a peso (ganto raw mga tinatanong nya sa exam)
 4. there must be no sign of intentional defacement
(it is an illegal act to damage intentionally a note
3rd Meeting: Feb 23, 2023
or a coin)
Legal Tender - notes and coins in such quantity
prescribed by law and regulation to be acceptable in Yung 1000 peso bill hatiin ko kaya sa gitna, kasi nga
payment of all obligations raw walang panukli, ang tnaong may halaga pa raw
ba to?
Pambayad daw puro 20 pesos worth 10 million Wala na kasi hindi tatanggapin ng bangko for deposit,
pesos, valid? diba dapat meron at least ⅗ of the note
You cannot validly refuse
Ilang sets ng serial number meron?
● Lahat ng notes lahat ng perang papel, they are 2 sets. there are 2 sets of serial numbers, lower left,
legal tender for all obligations, pang lahatan. same number din sa upper right. so iisa lang yung serial
valid tender kasi to. number pero dalawa nakalagay sa note
● emphasis - lahat ng perang papel natin ay legal
tender for all obligations Replacement for a damaged coin
1. There’s no sign of filing, clipping, perforation
Denominations if meron signs, di na madedeposit or mapapalitan ng
Ano ang denominations ng coins natin? BSP Circular bangko. theoretically kasi kung anong kahalaga ng coin,
1c = up to 200 pesos worth yun ang halaga ng minting of coin
5c = up to 200 pesos worth
10c = up to 200 pesos worth BSP Functions:
25c = up to 200 pesos worth 1. Issuance of currency
2. Management of money supply
● Yung mga centavo coins, it’s legal tender up to *Money supply - all monies in the Philippines, so hindi
200 pesos worth lang ito PHP, kasama dollars, yen. In short lahat ng pera
sa Pilipinas, in private hands, yun ang tinatawag na
So all in all pwede mo pangbayad lahat to worth 800 money supply
pesos.
Why is there a need to manage money supply?
1 peso = up to 2,000 Kasi pag napakaraming pera ng Pilipino, tendency of
5 pesos = up to 2,000 prices will be to go up. Basic principles in Economics. If
10 pesos = up to 2,000 there would be too much money, tendency of prices is to
20 pesos (bagong labas lang to nung December lang) = go up.
up to 2,000
Why?
So all in all pwede mo pambayad to ng 8,800 pesos Halimbawa minimum wage earner ka raw, you have to
content yourself with the daily minimum wage. Don sa
● Kayo ba natitigan niyo na yung notes natin minimum wage mo hindi mo inuubos on one item, in
yung mga perang papel? short you buy only what you need. Kunwari parehas tayo
workers, binigyan tayo ng Senate ng 50,000 isang
What are the requirements for replacement of bigayan. ang tanong dahil andami mong pera, sigurado
damage coins/notes? hindi na per kilo ng kanin, kalahating kaban na bibilhin
Pag napunit ba o nasunog tatanggapin ba to ng bank or mo. tapos nagsasawa ka na diba makabili na nga ng
pwede ba tong papalitan sa bangko for a better note or isang dosena. In short, if everybody would have a lot of
better coin? money, tendency is you buy more than what they need.
the manufacturer will be producing more. kaya lang
Replacement for a damaged note syempre may limitation si manufacturer depende sa
1. there must be at least ⅗ of the note puhunan at raw materials available. halimbawa lahat
2. Serial numbers kami maramihan bibilhan. So si manufacture to produce
3. one of the signatures must still be present (BSP more, edi hindi na nya mameet yung demand. law of
Governor and Philippine President) supply and demand, since big demand supply is low,
tendency of prices is to go up. yan yung prinsipyo. kaya
BSP is mandated to manage money supply. kay ang bsp
ang partner niya ay DTI.
so if prices are going up, BSP is to withdraw money from
circulation (isang remedy lang to ha hindi ito lang ang
only remedy)
How may the BSP withdraw money from circulation?
Through increasing reserve requirements
● Reserve Requirements = it is a percentage of
deposit liabilities of banks, which banks have to
deposit to BSP or invest in government
securities
Hal nagdeposit ka 20,000, time deposit, ngayon lahat
ng dinedeposito natin sa bangko, are treated by the
bank as a deposit liability. How does a law consider
a deposit with the bank?
The relationship between bank and depositor is debtor
and creditor.
- So pag tayo nagdedeposit, legally, pinapautang
natin yung bangko. kaya ngayon ang bangko
nirerecord yung deposit natin as deposit
liabilities. kasi utang yun ng bangko satin.
Starting March, malapit na maglabas ang bangko ng
audited financial statements, pag nasa dyaryo tignan
nyo yung nakarecord na deposit liabilities. yung deposit
liabilities, yan yung mga dineposit natin na total ng
bangko.
Ngayon how does the BSP withdraw money from
circulation in order to control inflation?
Increasing reserve requirements
Kapat nagdeposit ka ng 1m sa bangko. gustuhin
man ng bangko ipautang ng buo yung 1m sa iba
through loan pwede ba ipautang ng bangko?
No. bahagi ng dineposito mo sa bangko kinakailangan
isantabi ng bangko at dapat ideposito ng bangko sa BSP
or invest in govt securities.
- deposit diba ng 1m tapos magibbigay interest
ang bank, pag ikaw nilagay mo yung sa time
deposit in a period of 1 yr sa bank - so yung
dineposito mong 1m, you will earn 40,000
pesos. 4%,
Ngayon ang tanong papano kikita yung bangko sa
dineposito mo?
Syempre ipapautang ng bangko yon para yung interes
na ipinangako sayo maibigay ng bangko.
So yung tanong yung buong 1m na dineposito mo
for which the bank is going to pay interest, lahat ba
to pwede ipautang ng bangko?
No. bahagi lang noon ang pwedeng ipautang ng bangko
kasi bahagi non dapat ideposito ng bangko sa BSP. so
yung 1m mo sa bank diba bayaran ka 4% per annum,
gustuhin man ng bangko buo ipautang, hindi pwede kasi
nga bahagi non dinedeposit sa BSP, at yun ang
tinatawag na RESERVE REQUIREMENT.
Magkano dineposit sa BSP?
Depende sa deposito. may time savings, checking,
current, magkakaiba reserve requirements nya.
pinakamaliit time deposit, pinakamalaki checking
account, midway savings deposit.
Hal pinasok mo sa time deposit na di pwede ilabas for 1
yr, pero nagkaemergency ka, iwiwithdraw mo ngayon
yun diba kahit naka time deposit. maam pasensya na
kayo usapan natin 1 yr, ngayon ipinautang rin namin yan
ng 1 yr kaya wala kaming pambayad ngayon - hindi
pwede isagot to. dapat pwede mo iwithdraw anytime but
you’ll be penalized. maaaring di mo matanggap yung
interes o masingil ka ng service charge.
Iba iba rates kasi pag Time Deposit most likely di agad
wiwithdrawhin yon, kaya lang pag nagdeposit ka sa
checking account, hindi magtatagal magwwithdraw ka
kasi magbababayad ka ng accounts mo kaya yan ang
pinakamalaki.
Ang ipapautang lang ng bangko, 800,000. yung kita ng
bangko umiikot lang sa 800,000, nakareserve yung
200,000
Saan kinukuha ng bangko yung perang
pinapautang?
- Paid-up capital ng investors
- Deposits of depositors up to the extent not
covered by reserve requirements
- Earnings of the bank
- Loans (hindi pwedeng tumigil yung loans ng
bank, so kahit ubos na pera ng bank, umuutang
sa Bangko Sentral, at ang collateral yung mga
promissory notes ng borrowers nila, tawag sa
pagutang ng bank sa BSP, rediscounting of
receivables, meaning yung bangko kinakailngan
ng capital, utang sa BSP at ang promissory
notes ng borrowers ang kanilang collateral
- rediscounting pwede lang pag ang umutang sa
BSP ay banks at quasi-banks, because they are
supervised by Bangko Sentral
Supervision over the banking system (in reality, it’s
controlled)
BSP is empowered by law to issue Rules and
Regulations and to prescribe a penalty for the violation
thereof

These must be complied with by the banking system, so

pag nagiissue silang regulation, ang mga bangko dapat
sundin yon. kung hindi susundin ng bangko, the bank
will be penalized. *If you have the power to issue rules
and regulations, you have the power to control, hindi
lang supervision.

Daily Statement of Condition - nagpapass lagi ang

bank nito sa BSP, this is a form prescribed for reporting
by BSP, tapos sa BSP may mga *examiners, ang
ginagawa nun nirereview lagi yung DSC ng banks.

Represents the Philippine Government in its

international financial dealings

Ang nakikipagusap sa international dealings regarding

money ay governor ng Bangko Sentral - sa world bank
etc.
● Demonetization - notes and coins which are no
longer fit for commercial transactions are
withdrawn from circulation and they are
demonetized. demonetized meaning they lose
the character of money. Sinisira na yung pera
kasi hindi na fit for circulation, per pinalitan to
kasi laging kailangan palitan diba

Three-Fold Purpose of Reserve Requirements

1. To service withdrawals
2. Management of money supply
3. Source of funds for the Rediscounting facility of
Bangko Sentral

Yung BSP kinukuha yung mga pinapautang nila sa

reserve requirements, ang interest pag umutang sa bank
maliit lamang. yung interest na sinisingil na interest sa
rediscounting facility mga 1% lang, tapos diba sa bangko
mga 5% pag nagloan ka yung interest, kaya kumikita
yung bangko at the same time naeencourage ang banks
magpaloan.

4th Meeting: Mar 2, 2023
If the banks lend money, whose money is the bank
lending?
1. Paid up capital of stockholders
2. Deposits but not all amounts of because need
may matira sa reserve requirements
3. Retained earnings of the bank
A bank can raise money by having its receivables
rediscounted by the BSP
- Only banks and quasi-banks can rediscount
When a bank will have liquidity problems, with what
government office could it seek help?
Ano yung 2 meanings ng insolvency under the
FRIA?
In the NCC on Sales, a person is considered insolvent
the moment he is unable to pay his debts when it falls
due even if his assets exceed liabilities
Insolvency Act: A person is considered insolvent the
moment his liabilities exceed his assets even if he has
paid his debts on time
FRIA: Combined NCC and Insolvency Act
- Insolvent shall refer to the financial condition of
a debtor that is generally unable to pay its or his
liabilities as they fall due in the ordinary course
of business or has liabilities that are greater than
its or his assets.
NOTE: FRIA does not apply to banks!
Remedies in the FRIA
1. Rehabilitation application from the court -
ordinary debtors
2. BSP - banks
Yung day to day operations ng ordinary banks are
closely monitored by BSP.
- Daily statement of transactions
Ang operation ng banko should follow the manual of
regulations of BSP.
Close Now, Investigate Later Rule
When the BSP receives numerous complaints of
unsound banking practices committed by a bank, BSP
may order the closure of the bank and thereafter
investigate the complaints.
- Is this legal? Yes. there is no violation of DP
because banking is imbued with public interest
and cease and desist order may be a valid
exercise of Police Power
Persons involved when a bank becomes insolvent
1. If a bank intend to ask for rehabilitation, it goes
to the BSP
2. If bank has more liabilities than assets, what
does BSP do? Pag-aaralan if kaya pa irevive.
Pero pag malabo na, it will order its closure.
When a corporation is considered insolvent, what is
the next step?
Winding up where the liabilities of the corporation shall
be paid from its assets.
- Sino sino ang involved?
1. Receiver - to recover assets of the
corporation
2. Liquidator
3. Conservator - appointed by BSP to
conserve the assets of the bank in
which bank has a internal dispute to
prevent dissipation of the issue
● Producers Bank story of sir
Functions of a Central Bank
It represents the PH government in its international
financial dealings.
BANKS
It is a corporation authorized by the Monetary Board to
accept deposits from the public and to grant loans.
Public - more than 19 persons
Bawal tumanggap ang quasi-banks from the public.
Bar Q: How are banks classified?
1. Universal Banks
2. Commercial Banks
3. Thrift Banks
a. Savings and Mortgage Bank – retail banks
catering small deposits; accepts deposits of
small depositors for homebuilding purposes
(Amount is smaller than those of the universal
bank’s e.g. P500 in BPI Family Bank)
b. Private Development Bank – accepts deposits
and grants loans; once the bank runs out of
capital, it can invite the DBP to invest in it and
DBP would require membership in its
BOD;“Development” is in its corporate name
c. Stock Savings and Loan Associations – it can be
non-stock, where it cannot accept deposits from
 the public but only from the restricted groups of
persons.
4. Cooperative Bank
5. Rural Bank
Universal banks may do Islamic Banking but should
maintain separate records of their transactions.
Functions of Universal Bank
Commercial bank + Quasi-Bank = Universal Bank
ISLAMIC BANK
Alamana - main office in the DBP
● If ikaw nagpapautang sa Muslin anong
compensation eh bawal ang interest? Ibang
compensation
Law on Partnership
- Not every agreement about sharing of profits will
create a partnership
- Best example of transaction with Muslim-debtor

Function of Commercial Bank

1. To accept deposits in checking/current accounts
or demand deposits
2. Opening of letters of credit
● Code of Commerce - governing law
● Letters of credit - bank service/facility to
enable persons in distant places to have
a commercial transaction where the
seller can assure payment and the
buyer assured of delivery
● Commercial transactions - buying and
selling
● Marginal deposit - amount a customer
deposits with the Bank for the purpose
of enabling the Bank to meet payment
under the Letter of Credit and for
payment of all costs and expense
3. Rental of safety deposits
4. Sell foreign currency and government securities
5. To engage in allied enterprises
6. To exercise the powers of a corporation
7. Granting of loans

What banks accept checking accounts?

1. Commercial banks
2. Universal bank

Bakit ang isang bank na pinagdedepositan mo ng

savings ay tumatanggap din ng checking account?
Meron siyang license/authority from BSP

Pwede ba deposit BPI to BDO?

Yes, and the accepting bank is to follow a procedure
known as CTS clearing

THRIFT BANKS
1. SAVINGS AND MORTGAGE BANK
- Accepts deposits of small depositors for the
purpose of home-building
- Saan pinapautang yung deposits? For housing
loans
 Do we have Islamic Bank in the PH?
5th Meeting: Mar 9, 2023
Yes, pero government corporation
● PH Al-Amana Investment House has a principal
Private Development Bank office in DBP at Buendia pero yung operations
● “Development” is part of the corporate name niya nasa Mindanao talaga
● Ex: Luzon Development Bank

Bakit nagtatayuan ng development bank?

Kasi mataas paid up capital ng ibang banko

Kunin mong investor yung DBP. Paano kung ayaw

mo na siyang partner?
I-pay off mo yung in-advance niya

Stock, Savings and Loan Associations

Pinakamaliit na thrift bank
● Nung namatay si Ninoy Aquino, nagcollapse na
mga ganitong bank

Meron bang non-stock, savings and loan

association?
Yes, but it does not qualify as a bank!

RURAL BANK
Who may own?
Before, it can only be owned 100% by Filipinos
New Law - foreigners can own up to 60% of Rural Banks

COOPERATIVE BANKS
Banko na ang stockholders ay different cooperatives

General Banking Act of 2000, ano ang pinakamaliit

na bank?
Islamic Bank
● Sa ngayon para makapagtayo ka nito,
capitalization is same sa Universal Bank

Bakit mayroong Islamic Bank?

Dahil bawal magbayad ng interest ang Muslims
● It is immoral in their religion to pay interest -
HARAM

Paano nakakautang Muslim then? Ano ang

compensation of the use of the money by them
kapag umuutang kung bawal sila magbayad ng
interest?
Commission
● It may appear like a profit-sharing scheme pero
hindi siya partnership talaga kasi pinagamit sayo
pera dahil need mo, pero di ka makakabayad
interest kasi bawal kaya bibigyan mo siya ng
profit nung pinag-investan mo ng inutang mong
pera