The document is a prelim exam for a financial markets course that contains 7 questions about the Philippines financial system. It discusses the objectives of the Banko Sentral ng Pilipinas including maintaining monetary and price stability. It also outlines the three pillars of the central bank: price stability, financial stability, and efficient payment systems. The document then provides examples of private and government banking and non-banking institutions in the Philippines financial system. Finally, it differentiates between money markets and capital markets as well as primary and secondary markets.
The document is a prelim exam for a financial markets course that contains 7 questions about the Philippines financial system. It discusses the objectives of the Banko Sentral ng Pilipinas including maintaining monetary and price stability. It also outlines the three pillars of the central bank: price stability, financial stability, and efficient payment systems. The document then provides examples of private and government banking and non-banking institutions in the Philippines financial system. Finally, it differentiates between money markets and capital markets as well as primary and secondary markets.
The document is a prelim exam for a financial markets course that contains 7 questions about the Philippines financial system. It discusses the objectives of the Banko Sentral ng Pilipinas including maintaining monetary and price stability. It also outlines the three pillars of the central bank: price stability, financial stability, and efficient payment systems. The document then provides examples of private and government banking and non-banking institutions in the Philippines financial system. Finally, it differentiates between money markets and capital markets as well as primary and secondary markets.
The document is a prelim exam for a financial markets course that contains 7 questions about the Philippines financial system. It discusses the objectives of the Banko Sentral ng Pilipinas including maintaining monetary and price stability. It also outlines the three pillars of the central bank: price stability, financial stability, and efficient payment systems. The document then provides examples of private and government banking and non-banking institutions in the Philippines financial system. Finally, it differentiates between money markets and capital markets as well as primary and secondary markets.
1. Explain the objectives of the Banko Sentral ng Pilipinas.
The objectives of Banko Sentral ng Pilipinas is to primarily maintain internal and external monetary stability in the Philippines. To preserve the international value of peso and the convertibility of the peso into other freely convertible currencies. To foster monetary, credit and exchange conditions conducive to a balanced and sustainable growth of the economy and to maintain price stability in the economy.
2. Discuss the roles and responsibilities of the Banko Sentral ng Pilipinas and its three pillars namely Price Stability, Financial Stability, and Efficient Payment and Settlement.
The roles and responsibilities of BSP are liquidity management, currency issue, lender of last resort, financial supervision, management of foreign currency reserves, determination of exchange rate policy and being the banker, financial advisor and official depository of the Government, its political subdivision and instrumentalities and GOCC.s Price stability, the BSP manage inflation at low level to promote economic efficiency and improve the well being of Filipinos. The inflation targeting is an approach policy that involves the use of publicly announced inflation target set by the Government. Price stability issued to attain policy rate, open market operations and reserve requirement. Financial stability attains rediscounting and special deposit account. Efficient payments and settlement system ill enables people to make safe and timely and accurate settlement of financial transactions.
3. Enumerate, discuss and cite examples of Private Banking Institution in the Philippines Financial System.
Private banking institutions in the Philippines are
Universal Bank or Expanded Commercial Bank – which performs the investment house functions function in addition to its commercial banking authority. Examples are BDO, Metrobank and BPI.
Commercial bank or Domestic Bank – this is confined only to commercial bank is confined only to commercial bank functions such as accepting drafts and issuing letters of credit, discounting and negotiating promissory notes, drafts and bills of exchange, accepting or creating demand deposits, buying and selling foreign exchange. Example: Security Bank
Thrift Banks – stock savings and loan association is any corporation engaged in the business of accumulating the savings of its members or stockholders and using such accumulated funds together with its capital for loans and investment. Example: Farmers Savings and Loan Bank, Inc. Rural Banks – is any bank authorized by the Central Bank to accept deposits and make credit available to farmers, businessmen and cottage industries in the rural areas.
Cooperative Bank – are banks established to assist the various cooperative by lending those funds at reasonable interest rates.
4. Enumerate, discuss and cite examples of Government Banking Institution in the Philippines Financial System.
Development bank of the Philippines – provide loans for development purpose, gives loans to the agricultural sector, commercial sector and industrial sector.
Landbank of the Philippines – which provides financial support in the implementation of the Agrarian Reform program of the Government.
AL-Amanah Islamic Investment Bank – authorizes the bank to promote and accelerate the socio-economic development of the ARMM by performing banking and financing and investment operation.
5. Enumerate, discuss and cite examples of Private Non-Banking Institution in the Philippines Financial System. Investment House – is any enterprise, which engages in under writing securities of the other corporations.
Investment Banks – they provide advice to firms issuing stocks and bonds or considering mergers with other firms and also engaged in underwriting.
Financing Company – is any business enterprise here the primary purpose is to extend credit facilities to consumers and to industrial, commercial and agricultural entities.
Securities Dealers – is any person or entity engaged in the business of buying and selling securities for his won or its client account thereby making a profit from the difference between the purchase prices and selling price of the securities.
Savings and Loans Association – which have traditional served individual savers and residential and commercial mortgage borrowers, accumulate the funds of small savers and then lend this money to home buyers and other type.
Mutual Fund – are corporations which accept, money from savers and then use this fund to buy stocks, long term bonds or short-term debt instrument issued by businesses or government units.
Pawnshops – refers to a person or entities engaged in the business of lending money with personal property, jewelry and other durable goods as collateral for the loans given. 6. Differentiate Money Market and Capital Market.
Financial markets are classified into the Money market and the Capital market. The money market is where short-term funds are raised through the buying and selling of short term dept securities such as commercial papers. The capital market is where long-term funds are raised through the bond market, which deals with long-term debt securities such as bonds, the stock market which deals with equity securities or stocks.
7. Differentiate Primary Market and Secondary Market.
In the primary market, new shares are issued and sold to the investing public to the first time. It is where the capital is actually raised by the company selling stock directly to investors typically through an initial public offering. This means that the shares of stocks being offered where previously issued but is being offered to the public for the first time by a large of controlling shareholder. The secondary market is where securities can be bought and sold after they have been issued to the public in the primary market. It is where the original shareholders sell their shares to other investors.
