GROUP 2

CHAPTER 6
THE PHILIPPINE FINANCIAL SYSTEM
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BANGKO SENTRAL NG PILIPINAS

 INTRODUCTION

• Well-functioning financial system is crucial to a country’s

economic health.
• Financial markets and financial intermediaries
• General structure and operation
 STRUCTURE OF THE PHILIPPINE
FINANCIAL SYSTEM

I. Bangko Sentral ng Pilipinas

II. Banking Institutions
A. Private Banking Institutions
B. Government Banking Institutions
III. Non-Bank Financial Institutions
A. Private Non-Bank Financial Institutions
B. Government Non-Bank Financial Institutions
 STRUCTURE OF THE PHILIPPINE
FINANCIAL SYSTEM

I. Bangko Sentral ng Pilipinas

- responsible in maintaining the stability of the Philippine peso.
II. Banking Institution
A. Private Banking Institution
1. Universal Bank or Exapanded Commercial Bank – which performs the investment house function.
2. Commercial Bank or Domestic Bank – bank that is confined only to commercial bank functions.
3. Thrift Banks – their function is to accumulate the savings of depositors and invest them together
with their capital. It includes the following:
a. Stock Savings and Mortgage Bank (SSMB)
b. Private Development Bank (PDB)
c. Stock Savings and Loan Association (SLA)
4. Rural Bank – authorized by Central Bank to accept deposits and make credit available to farmers,
businessman, cottage industries in the rural areas.
5. Cooperative Banks – assist various cooperatives by lending funds at reasonable interest rate.
 STRUCTURE OF THE PHILIPPINE
FINANCIAL SYSTEM

B. Government Banks or Specialized Government Banking Institution

1. Development Bank of the Philippines – provides loans for developmental purposes.
2. Land Bank of the Philippines – provides financial support in the implementation of Agrarian
Reform Program of the government.
3. Al-Amanah Islamic Investment Bank – the Republic Act No. 6048 that provides for its charter.
III. Non-Bank Financial Institution
A. Private Non-Bank Financial Institution
1. Investment House 7. Pawnshop
2. Investment Banks 8. Lending Investor
3. Financing Company 9. Pension Funds
4. Securities Dealer 10. Insurance Companies
5. Savings and Loan Association 11. Credit Unions
6. Mutual Funds
 STRUCTURE OF THE PHILIPPINE
FINANCIAL SYSTEM

III. Non-Bank Financial Institution

B. Government Non-Bank Financial Institution
1. Government Service Insurance System (GSIS) – provides benefits and loans to
government employees
2. Social Security System (SSS) - provides benefits and loans to employees working
in private companies and offers.
3. Pag-Ibig – provides housing loans to both government and private employees.
 THE EVOLVING PHILIPPINE
FINANCIAL SYSTEM

• The Philippine financial system continues to experience growth against a

backdrop of strengthening domestic economy.
• The domestic economy also seen to gain from the momentum of global economic
recovery.
Four Regulatory Agencies:
1. Bangko Sentral ng Pilipinas (BSP)
2. Securities and Exchange Commission (SEC)
3. Insurance Commission (IC)
4. Philippine Deposit Insurance Commission (PDIC)
 SIGNS OF GROWTH IN THE
DOMESTIC MARKET
In the recent years, growth in financial
intermediation is observed in the three major
segments of the Philippine financial system.

REGULATORY LANSCAPE

A. Alignment with global standards

B. Deepening capital markets
C. Strengthening surveillance
 FINANCIAL STABILITY ASSESSMENT

• Financial stability is preemptive in nature.

• Financial stability is understood to reflect a “well-functioning” financial
market, addressing the financial needs of stakeholders and avoiding
distortions.
• Market landscape is a useful baseline, the focus is on risks and
vulnerabilities.
• The section on current risk shows how the outstanding debt level has
grown rapidly, particularly in the post-GFC period.
• Financial stability risks are limited, but this also premised on the
understanding that fintech remains a small portion of market activity.
• Regulatory sandboxes and constant dialogues among stakeholders are
critical.
 CURRENT RISK IN THE PHILIPPINE
FINANCIAL SYSTEM

A. Repricing, refinancing and repayment risks

B. Developments in the credit market
C. Continuous demand for credit by corporate
enterprises and households is evident in the
domestic economy
Thank
you for