Chapter 1

Introduction to
Financial
Management

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McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
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Component of Financial System

Financial system – refer to a system
which enables the transfer of money
between investor and borrowers.
Term “system” in “Financial System”
indicates a group of complex and closely
linked institutions, agents, procedures,
markets, transactions, claims and
liabilities within a economy.

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Components of Philippine
Financial System
• Financial Institutions
• Financial Markets
• Financial Instruments (Assets or
Securities)
• Financial Services
• Money

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Components of Philippine Financial
System

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Philippine Financial System

• Gross Domestic Product (GDP) –is the
monetary value of all the finished goods
and services produced within a
country’s borders in a specific time
period.

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Components of Philippine Financial System

Financial Institutions
•Facilitate smooth working of the financial system
by making investors and borrowers meet
•Mobilize the savings of investors either directly or
indirectly via financial markets, by making use of
different financial instruments as well as in the
process using the services of numerous financial
services providers.
•Intermediaries that mobilize savings and facilitate
the allocations of funds in an efficient manner

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Financial Institutions
A. CENTRAL BANK
BANKO SENTRAL NG PILIPINAS
(BSP) is the central bank of the
Republic of the Philippines.
Esblished on July 3, 1993 pursuant
to the 1987 Philippine Constitutions
and the New Central bank Act of
1993.
Central Bank of the Philippines
establihsed on Juanary 3, 1949 as
the country’s monetary authority.
Enjoys fiscal and administrative
autonomous from the National
Government

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Financial Institutions
A. Banking Institutions
Private Banking
COMMERCIAL BANKS
An institutions which accepts deposits, makes business loans,
and offer related services.
Commercial bank allows for a variety of deposit accounts,
such as checking, savings and time deposits.
Runs to make profit and owned by a group of individuals, yet
some may be members of the Federal reserve system
Primary concerned with receiving deposits and lending to
businesses.

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Financial Institutions
COMMERCIAL BANKS
1.Bangkok Bank Public Co Ltd.
2.Bank of Amercia
3.Bank of China Limited - Manila Branch 
4.Bank of Commerce
5.The Bank of Tokyo-Mitsubishi UFJ, Ltd.
6.BDO Private Bank, Inc. 
7.Cathay United Bank Co., Ltd. - Manila Branch
8.Citibank, N.A
9.CTBC Bank (Philippines) Corporation - formerly
Chinatrust Philippines – taiwanbased based bank
10.CTBC Bank (Philippines) Corporation 
11.Hua Nan Commercial Bank, Ltd. - Manila Branch

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Financial Institutions
COMMERCIAL BANKS
12. Industrial Bank of Korea - Manila Branch
13. P Morgan Chase Bank, N.A. 
14. KEB Hana Bank - Manila Branch
15. Maybank Philippines, Inc.
16. Mega International Commercial Bank Co., Ltd. 
17. Philippine Bank of Communications 
18. Philippine Veterans Bank 
19. Robinsons Bank Corporation 
20. Shinhan Bank - Manila Branch 
21. Sumitomo Mitsui Banking Corporation - Manila
Branch
22. United Overseas Bank Limited, Manila Branch

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Financial Institutions
Ranking of 22 COMMERCIAL BANKS based on assets as of Setpt 2017
• 1.    Citibank, N.A.
2.    Bank of Commerce
3.    Maybank Philippines, Inc.
4.    Robinsons Bank Corporation
5.    Philippine Bank of Communications
6.    The Bank of Tokyo-Mitsubishi UFJ, Ltd.
7.    BDO Private Bank, Inc.
8.    Philippine Veterans Bank
9.    CTBC Bank (Philippines) Corporation
10.  JP Morgan Chase Bank, N.A.
11.  Sumitomo Mitsui Banking Corporation - Manila Branch
12.  Bank of America, N.A.
13.  Mega International Commercial Bank Co., Ltd.
14.  Bank of China Limited - Manila Branch
15.  KEB Hana Bank -- Manila Branch
16.  Bangkok Bank Public Co. Ltd.
17.  Cathay United Bank Co., Ltd. - Manila Branch
18.  Industrial Bank of Korea - Manila Branch
19.  United Overseas Bank Limited, Manila Branch
20.  Shinhan Bank - Manila Branch
• 21.  First Commercial Bank, Ltd., Manila Branch
• 22.  Hua Nan Commercial Bank, Ltd. - Manila Branch

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Financial Institutions
A. Banking Institutions
Private Banking
UNIVERSAL BANKS
Bank that offer a wide range of financial service, beyond
commercial banking and investment banking, insurance etc.
Universal bank is a combination of commercial banking,
inverstment bank and various services

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Top Universal bank in the

Philippines
• BDO Unibank (BDO; largest bank in the
Philippines in terms of assets; 243rd largest
bank globally)
• Metropolitan Bank and Trust Company
(Metrobank)
• Bank of the Philippine Islands (BPI; oldest
bank in Southeast Asia)
• Land Bank of the Philippines (Landbank;
LBP, main government bank)
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Components of Philippine Financial System

Financial Institutions
•Banks
– BDO
– Metrobank
– Land Bank of the Philippine- main government bank
– Bank of Philippine Island (oldest bank in Southeast Asia
– Philippine National Bank
– Security Bank
– China Banking Corporation

•Non-Bank Financial Intermediaries

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Financial Institutions
A. Banking Institutions
ORDINARY COMMERCIAL BANK
THRIFT BANK
Moblization of small savings, provide loans generally longer
and easier terms.

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Components of Philippine Financial System

Financial Institutions
•Non-Bank Financial Intermediaries

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Financial Institutions
A. Banking Institutions
ORDINARY COMMERCIAL BANK
RURAL BANKS
Banks entrenched to ensure sufficient institutional credti for
agricultural and other rural sectors.
Mobilize financial resources from rural/semi urban areas,
grants loans small farmers.

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TOP RURAL BANK IN THE PHILS 2016

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Financial Institutions
A. Banking Institutions
ORDINARY COMMERCIAL BANK
COOPERATIVE BANKS
Business Organizations owned and operated by a group of
individuals for their mutal benefits
As autonomous assocations of persons united voluntarily to
meet their common economic, social and cultural needs and
aspirations through jointly owned and democratically
controlled enterprises

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Cooperative banks in the

Philippines
• Gata Daku Multi-Purpose Cooperative,
• Tago Agro-Industrial Development Cooperative,
• Lagawe Multi-Purpose Development Cooperative,
• Lumad sa Adgawan Farmers Multi-Purpose Cooperative
and Tam-An Banaue Multi-Purpose Cooperative. 
• Southern IloIlo Area Multi-Purpose Cooperative
• , Diffun Saranay and Development Cooperative,
• Ilocandia Seed Growers Multi-Purpose Cooperative,
• Roxas Hybrid Seed Growers Multi-Purpose Cooperative,
• Bukang Liwayway Multi-Purpose Cooperative,

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Cooperative banks in the

Philippines
• Farmers Alternative for Self-Reliance Multi-Purpose
Cooperative,
• Sentrong Ugnayan ng Mamamayang Pilipino Multi-
Purpose Cooperative,
• Sentrong Ugnayan ng Mamamayang Pilipino Multi-
Purpose Cooperative and
• Kaagap Development Multi-Purpose Cooperative.

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Micro Finance Banks

Provide financial service to low-income
clients, including consumers and self-
employed who lack access to banking and
related services.
Provide not just credit but also savings,
insurance and fund transfer
Help to access poor people out of proverty

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Financial Institutions
• External Sector
• Nonbank Thrift Institutions
• Government Specialized Non-bank
financial intermediaries
• Private Non-bank financial
Intermediaries
• Specialized Government bank

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