HOLY BFI

regulate the flow of funds or money for financial system provide different financial services

Banks

Importance of Banks

• Backbone of financial activities

• Provide safe and secure environment

• Risk management and assessment

• Resource mobilization

• Financial inclusion

Is concerned with the functioning and activity of certain components, the most important being- money, credit and finance.

Financial system

Banks or any intermediaries that provide different financial services.

Financial Institutions

Place where two parties exchange securities

Financial Market

ELEMENTS OF FINANCIAL SYSTEM

• Savers And Users of Funds (Household, Government, Business)

• Financial Markets

• Financial Institution

• Financial Instruments

Organized forums in which savers and users of funds can transact directly in what we call trading activities

Financial Markets

an intermediary that channels investment and savings of businesses and governments into loans and other investment

Financial Institution

Contracts that give rise to the formation of financial assets of one entity and creation of financial liability or equity instrument of another entity.

Financial Instrument

a group or network of institution that provides financial services for us. These institutions are responsible for operating a payment system, providing loans, taking deposits, and helping investments.

Banking System

FUNCTIONS OF BANKING SYSTEM

Primary functions:
- Depositing function
- Disbursements of Loan

Secondary functions:
- Agency Function
- General Utility Function

offers full range of services and has a lot of branches all over the Philippines

Commercial Banking Institution

small banking institution, they offer limited services such as savings and deposit.

Thrift Banks

is a Central Securities Depository (CSD)

Philippine Depository & Trust Corporation (PDTC)

Aspects Of Depository Services first 5:

a. Transfer and Settlement
b. Investor Protection
c. Immobilization and Dematerialization
d. Investor Services
e. Investor Education and Outreach Program

Aspects Of Depository Services last 5:

f. Accessibility and Efficiency
g. Risk Management and Contingency Planning h. Investors Protection Mechanism – dispute resolution
i. Investors Services and Support – provides transparency
j. Technology update

play a crucial role in the financial landscape of the Philippines. They provide individuals and businesses with access to capital, enabling them to meet their financial needs and pursue economic opportunities.

Lending and Credit Services

TYPE OF LENDERS

a. Banks
b. Microfinance institutions (MFIs)
c. Cooperatives
d. Online Lenders

CREDIT PRODUCTS

a. Personal Loans
b. Business Loans
c. Housing Loans
d. Credit Cards
e. Microcredit

It is a complex, well integrated set of subsystems of financial institutions, markets, instruments, and services which facilitates savings, transfer, and allocation of funds efficiently and effectively.

Financial system

2 categories of financial institutions

A. Private banks
B. Government banks

CHALLENGES AND RISKS IN CREDIT SERVICES

a. High Interest Rates
b. Limited Access in Rural Areas
c. Informal Lending Practices
d. Overborrowing and Indebtedness
e. Lack of Financial Literacy

are fundamental functions of banks, facilitating the smooth transfer of money between parties and ensuring that financial transactions are completed efficiently and securely.

Payment and Settlement Services

Key players in payment and settlement services

Commercial banks
Non-bank electronic money issuer
Payment system operators
Fintech companies

Payment and settlement services regulatory framework:

BSP
NRPS

Launched in 2015 to promote interoperability, accessibility, and efficiency of retail payment system.

National Retail Payment System (NRPS)

TYPES OF INVESTMENT AND WEALTH MNGT

a. Portfolio Management
b. Financial Planning
c. Mutual Funds and Unit Investment Trust Funds (UITFs)
d. Trust and Estate Services
e. Investment Advisory

Investment firms manage investment portfolios for clients, customizing a mix of stocks, bonds, and other assets to align with their financial goals and risk tolerance.

Portfolio Management

Wealth managers help clients plan their finances by evaluating their current situation, setting goals, and creating strategies for investment, retirement, estate planning, and tax optimization.

Financial Planning

These are pooled investment vehicles where money from various investors is invested in a diversified portfolio managed by professionals. Investors choose based on their risk tolerance and goals

Mutual Funds and Unit Investment Trust Funds (UITFs)

Trust companies manage trusts and assist with estate planning and administration, helping individuals safeguard and transfer their assets efficiently to future generations.

Trust and Estate Services

offer professional advice on investments, analyzing market trends and providing personalized strategies based on clients' financial goals and risk preferences.

Investment Advisory

is the main regulator for investment and wealth management services, overseeing investment companies, mutual funds, and related products to ensure investor protection and market integrity.

Securities and Exchange Commission (SEC)

is responsible for regulating trust services.

Bangko Sentral ng Pilipinas (BSP)

Investment and wealth management key players

a. Banks and Trust Companies
b. Investment houses
c. Mutual fund companies and asset management firms
d. Independent financial advisor

Major banks in the Philippines offer investment and wealth management services through their trust and asset management divisions, utilizing their expertise and resources to provide diverse investment products.

Banks and Trust Companies

These firms cater to individuals, corporations, and institutional investors by offering services like portfolio management, advisory, and research to meet investment goals.

Investment Houses

These entities manage mutual funds and UITFS, employing professional fund managers to make investment decisions and handle risk management on behalf of investors.

Mutual Fund Companies and Asset Management Firms

provide personalized investment and financial planning services without affiliation to specific financial institutions, offering unbiased advice and customized solutions to help clients meet their financial goals.

Independent Financial Advisors

________ in the Philippines use Al and algorithms to provide automated investment advice and portfolio management at lower costs than traditional methods. They are popular among tech-savvy and budget conscious investors and support financial inclusivity.

Rise of Robo-Advisors

Interest in sustainable and responsible investing is growing in the Philippines, with investors seeking opportunities that reflect their values, such as ESG considerations.

Sustainable and Responsible Investing

Asset management firms are responding by offering ESG-focused products and integrating sustainability into their strategies.

Sustainable and Responsible Investing

The investment and wealth management sector in the Philippines is embracing digital transformation, enhancing client experiences through mobile apps and online portals. These technologies streamline processes and provide convenient access to investment information and transactions.

Digital transformation

Investment firms in the Philippines are utilizing Al and big data analytics to improve portfolio management, risk assessment, and market analysis. These technologies enable more advanced and effective investment decision- making.

Integration of Artificial Intelligence and Big Data

is the process of identifying, assessing, and mitigating potential risks to minimize the impact on individuals, businesses, and the overall economy.

Risk Management

is a mechanism through which individuals and businesses transfer their risks to insurance companies in exchange for a premium.

Insurance Services

Government Initiatives in insurance

• Climate Change Act of 2009

• Agricultural Insurance Program (AIP) and the Philippine Crop Insurance Corporation (PCIC)

refers to the use of innovative technologies to improve and automate the traditional insurance industry.

Insurtech “insurance technology”

pays out based on predefined triggers, such as the intensity of a typhoon or earthquake.

Parametric Insurance

help organizations mitigate financial losses and reputational damage resulting from cyberattacks and data breaches.

Cyber Risk Insurance

Often referred to as “insurance for insurance companies”, is a company that provides financial protection to insurance companies.

Reinsurance Market

Vital to the Philippines' economy, providing a wide range of financial services to individuals, businesses, and the government.

Commercial Banks

They mobilize public savings and channel funds into productive activities, supporting key sectors like agriculture, manufacturing, and services.

Commercial Banks

Functions of Commercial banks

• Accepting deposits

• Lending and credit facilities

• Payment and settlement services

• Investment and wealth management

• Foreign exchange services

Commercial banks in the Philippines are regulated by the ___________.

Bangko Sentral ng Pilipinas (BSP)

The BSP sets rules to ensure the banking system's stability, focusing on areas like ____________, _______, ________. and __________.

capital adequacy, liquidity, risk governance, and corporate management

are pivotal in the financial sector of the Philippines, offering a variety of specialized financial solutions to businesses, government bodies, and affluent individuals.

Investment banks

Their proficiency in securing capital, overseeing mergers and acquisitions, and providing financial counseling aids the advancement of multiple industries, stimulating economic growth and enhancing market dynamics.

Investment banks

Functions of investment banks

• Capital Market Services

• Mergers and Acquisition (M&A)

• Corporate Finance and Advisory

• Underwriting and Securities Distribution

• Research and Analysis

Investment banks in the Philippines are regulated and supervised by _________

Securities and Exchange Commission (SEC) and Bangko Sentral ng Pilipinas (BSP).

SEC is responsible for regulating the _______

securities market

the BSP oversees investment banks' activities related to ____________.

banking and financial stability

It is a nonprofit organization that provide members the same financial services as banks, but without the emphasis on making money.

Credit unions

Members of a credit union share a common bond, also known as the credit union’ s ________.

field of membership

You may be able to join Credit Union based on your:

• Employer

• Family

• Geographic Location

• Membership in a group

Functions and Services

• Savings and Deposits

• Loans and Credits Facilities

• Financial Education and Counseling

• Insurance and Protection

Credit unions in the Philippines are regulated by the __________ and governed by the ________________.

Cooperative Development Authority (CDA), Cooperative Code of the Philippines.

Benefits of credit union

• Member ownership and control

• Customer focused approach

• Cooperative principles and value

These companies provide individuals and businesses with protection against various risks by offering insurance policies that cover potential losses or damages.

INSURANCE COMPANY

The insurance industry in the Philippines is regulated by the___________, which is an agency under the Department of Finance.

Insurance Commission (IC)

The IC is responsible for supervising and regulating _________________, ensuring that they operate in compliance with the laws and regulations.

insurance companies

are a popular investment option in the Philippines, offering individuals the opportunity to invest in a diversified portfolio of securities managed by professional fund managers

MUTUAL FUNDS

Benefits of mutual funds

• Diversification

• Professional Management

• Accessibility

• Liquidity

• Regulatory protection

mutual funds are regulated by the _______________.

Securities and Exchange Commission (SEC).

Popular Mutual Fund Companies in the Philippines

• BPI Asset Management and Trust Corporation

• Philippine Equity Partners, Inc.

• First Metro Asset Management, Inc.

serve as critical pillars of the retirement system, providing financial security to employees and government workers during their retirement years.

PENSION FUNDS

Pension funds are investment vehicles designed to accumulate and manage funds for the purpose of providing retirement benefits. In the Philippines, pension funds are regulated by the _________________ and _________________.

Social Security System (SSS) and the Government Service Insurance System (GSIS)

is a government-managed pension fund that covers employees in the private sector. It provides retirement, disability and death benefits to its members.

Social Security System (SSS)

is a pension fund for government employees. It provides retirement, disability, and life insurance benefits to its members.

Government Service Insurance System (GSIS)

Both SSS and GSIS require regular contributions from employees and employers. The contribution rates and benefits structures may vary depending on factors such as __________, _______________, and ________________.

salary level, length of service, and other eligibility requirements.

play a crucial role in the country’s financial sector by providing a wide range of financial services outside the traditional banking system. These institutions offer diverse products and services that cater to various financial needs of individuals, businesses, and the economy as a whole.

NBFI

refer to financial entities that provide financial services but do not have a full banking license.

Non-Bank Financial Institutions

Registered Entities NBFI

• Insurance Companies

• Microfinance Institutions (MFIs)

• Pawnshops

• Financing Companies

• Credit Cooperatives

• Money Remittance Companies

Services offered NBFI

• Lending and Credit Facilities

• Investment and Wealth Management

• Insurance and Risk Management

• Money Transfer and Remittance Services

• Savings and Deposits

• Financial Advisory and Consultancy