PRIVATE BANKING INSTITUTIONS Privately-owned banks catering to rural communities, Member-owned, democratically controlled financial

An enhanced offering for the Consists of personalized Clients typically receive Range of products and providing credit and financial services. institutions. Focus on rural communities, agricultural
high-net-worth individual financial and investment discounts or preferential investment expertise sectors, and small borrowers
(HNWI) clients of a financial services and products from a pricing on financial products. offered may be limited Established under the Rural Banks Act of 1992 (RA 7353). Governed by Republic Act No. 9520
institution. dedicated personal banker compared to other Supervision: By the Central Bank of the Philippines (BSP).
providers. Structure and Purpose
Ownership: Principles:
EXPANDED AND COMMERCIAL COMMERCIAL BANKS Typically owned by private individuals or families. Democratic governance (one member, one vote) Equitable
BANKS/UNIVERSAL BANKS profit distribution
Any commercial bank which performs the investment house Any commercial bank that is confined only to commercial Target Market:
function in addition to its commercial banking authority. It may bank functions. Farmers, small businesses, rural entrepreneurs. Primary Functions:
invest in the equities of allied and non-allied enterprises ✓ Financial inclusion
Primary Functions: ✓ Credit provision for small- scale enterprises and
THRIFT BANKS ✓ Provide credit for agriculture and rural businesses farmers
Also known as Savings and Loan Association is a corporation that include saving and mortgage banks, stock savings and ✓ Facilitate savings and financial intermediation ✓ Savings mobilization and capital formation
loan associations and private development banks. ✓ Enhance financial access in underserved rural areas ✓ Economic empowerment at the community level

1. Savings and Mortgage Banks Rural Banks and Financial Markets Cooperative Banks and Financial Markets
Any corporation organized for the purpose of accumulating the savings of depositors and investing them in readily Credit Provision for Rural Economies: Capital Market Role:
marketable bonds and debt securities; checks, bills of exchange, acceptances or notes arising out of commercial Source of affordable credit for farmers, fishers, and SMEs. Support local capital formation through savings
transactions or in loans secured by bonds, mortgages or real estate and insured improvements thereon and other forms Key player in financing rural economic activities and boosting Enable investments in SMEs and local development
of security or in loans for personal or household finances whether secured or unsecured, and financing for home agricultural productivity.
building and home development Liquidity Provision:
Savings Mobilization: Convert savings into productive loans, boosting rural
A savings bank is a type of financial institution that focuses on helping people save money and earn interest on their Collects rural savings and converts them into productive loans, economies
savings. It offers basic banking services, such as savings accounts, where customers can deposit their money, keep it aiding capital formation.
safe, and grow it over time through interest. Impact on Interest Rates:
Ex. BPI, RACBC savings bank, PNB, LBP, etc. Impact on Local Financial Markets: Foster competition by offering lower interest rates
Rural banks enhance liquidity and provide capital to areas often Influence rural financial sector dynamics
A mortgage bank is a financial institution that specializes in providing loans for people to buy homes, called underserved by commercial banks.
mortgages.
Ex. EastWest Banking Corporation, RCBC savings bank, China Bank Challenges Faced by Rural Banks Challenges Faced by Cooperative Banks
Limited Access to Capital: Limited Capital:
2. Private Development Banks Restricted capacity for expansion and scaling operations. Difficulty in scaling up and expanding services
A bank that exercises all the powers and assume all the obligations of the savings and mortgage bank as provided in
the General Banking Act except as otherwise stated. The private development bank helps construct, expand and Financial Viability: Governance Issues:
rehabilitate agricultural and industrial sectors. Many rural banks face financial challenges, including Lack of technical capacity in managing risks
delinquent loans and high default risks.
3. Stock Savings and Loans Associations Regulatory Compliance:
Any corporation engage in the business of accumulating the savings of its members or shareholders and using such Regulatory Burden: Challenges in meeting BSP requirements
accumulated funds together with its capital for loans and investment in securities of productive enterprises, or in Compliance with BSP regulations can be difficult for smaller
securities of the government and its instrumentalities, provided that they are primarily engaged in servicing the needs rural banks. Competition:
of households by providing personal finance and long-term financing for home building and development. Pressure from larger commercial banks
Technology Gap:
Key Features: Many rural banks lack advanced financial technology and
✓ Lower Fees and Competitive Interest Rates digital banking infrastructure.
✓ Focuses on individual and community banking rather than corporate finance. Opportunities for Growth
✓ Accessible banking for Small Businesses. Government Programs and Incentives: Financial Inclusion:
✓ Home Loans ✓ Access to credit from programs such as the Agricultural ✓ Government support for rural development
Credit Policy Council (ACPC) and Land Bank of the initiatives
RURAL BANKS COOPERATIVE BANKS Philippines. ✓ Programs from Land Bank, Agricultural Credit
Any bank authorized by the Central Bank to accept deposits and Banks established to assist the various cooperatives by ✓ Support for financial inclusion initiatives and rural Policy Council
make credit available to farmers, businessmen and cottage lending those funds at reasonable interest rates. development projects.
industries in the rural areas.
Digitalization and Fintech Integration: Digitalization and Fintech Integration: Al-Amanah Islamic Bank
✓ Opportunity to adopt digital banking platforms to Use of digital banking to reach more client Potential to Republic Act No. 6048 provides for the charter of the Al-Amanah Islamic Investment Bank. The Act Authorizes the bank to
improve service delivery and reach. modernize operations and increase efficiency promote and accelerate the socio-economic development of the Autonomous Region of Muslim Mindanao by performing
✓ Partnerships with fintech firms to modernize banking banking, financing, and investment operations, and to establish and participate in agriculture, commercial and industrial
services in rural areas. ventures based on the Islamic concept of banking.

Microfinance Integration: The business model for Islamic banking seeks to provide financial services but with features consistent with the principle of
Expanding microfinance programs to enhance access for rural Shari’ah that emphasized fair dealings, justice and risk sharing.
entrepreneurs.
Rural banks are vital in driving rural development and financial Cooperative banks are crucial to inclusive financial growth Two Fundamental Principle
inclusion in the Philippines. They provide necessary financial in the Philippines. It plays a unique role in liquidity 1. Sharing of profit and risk
services such as credit and savings mobilization in rural areas. creation, rural development, and credit access. Overcoming 2. Prohibition of interest
Overcoming challenges in capital access, regulatory structural challenges can unlock their potential for broader
compliance, and technology can position rural banks for financial market integration Shari’ah Principles
sustainable growth and deeper integration into the financial 1. Partnership ( Mudarabah Contact)
market. 2. Trade ( Murabahah Contract)
GOVERNMENT BANKING INSTITUTIONS 3. Rent/Lease ( Ijarah Contract)
Development Bank of the Philippines
✓ purpose to provide financial support for development projects that contribute to the socio-economic growth of the Philippines. Islamic Banking promote broad and convenient access to high quality financial services for all Filipinos.
✓ mission includes promoting sustainable development, enhancing financial inclusion, and supporting the government’s PRIVATE NON-BANK FINANCIAL INSTITUTIONS
infrastructure and social service initiatives PRIVATE NON-BANK FINANCIAL INSTITUTIONS are companies that provide financial services but are not banks.
✓ recognized as the country’s infrastructure bank, focusing on financing projects that improve the nation’s infrastructure. (e.g.,
investments in transportation, utilities, and other essential services that are critical for economic growth and competitiveness.)
INVESTMENT HOUSE
contributes to the development of infrastructure and logistics by providing loans, focusing on sustainability, and comprehensive planning, Any enterprise which underwriting securities engages of in other corporations. It also generates income from sale of
which helps the economy grow and improves the quality of life for people in the Philippines. investment in securities.

social services: offers different programs to improve the living conditions of every Filipino and support the overall well-being of FUNCTIONS OF INVESTMENT HOUSES
communities. 1. Arranging Finance
Bond Financing: Investment houses plan and price bond issuances and help sell bonds to generate demand.
contributes to the development of micro, small, and medium enterprises by providing loans and financial assistance, and it also has Equity Financing: Helps businesses raise funds without fixed loan payments.
programs that offer financial products and services that cater to the unique needs of MSMEs.

integrates environmental considerations such as green financing, promotion of eco-friendly projects, and environmental risk assessment. 1. Underwriting Deals
Investment houses buy securities and sell them at a profit or act as intermediaries, earning commission based on the
Landbank sale.
plays a crucial role in financing the acquisition of agricultural lands under CARP. It provides loans to farmers for land purchase, 2. Mergers and Acquisitions
Agricultural inputs, and development projects, facilitating the transition of beneficiaries from tenants to landowners. The connection Provide advisory services on pricing and strategy for company mergers or acquisitions, helping to value target
between CARP and Landbank is foundational for promoting agrarian reform, supporting rural development, and improving the livelihoods companies
of farmers in the Philippines.
PURPOSES OF INVESTMENT HOUSES
It is the leading government financial institution because it has a strong Government Support, it is focus on Agricultural Development, 1. To meet the needs of businesses for fixed and working capital.
because of its Innovation and Technology and etc. 2. To fund large-scale economic projects by governments that exceed their current revenues.
3. To finance the purchase and improvement of real estate.
Largely contributes to advancing the socioeconomic development Agenda of the National Government (NG) because it supports the
Government Programs and financial inclusions
INVESTMENT BANKS
Its role as a catalyst of sustainable development, responding to the financing requirements not only of small farmers and fishers, but also Provide advice to firms issuing stocks and bonds or considering mergers with other firms. They also engage in underwriting
of local government units, micro, small and medium enterprises, private corporations in strategically important industries, government- in which they guarantee a price to a firm issuing stocks or bonds and then make a profit by selling the shares or bonds at a
owned and controlled corporations, financial institutions, and other sectors that create employment and propel robust economic growth. higher price.

Provides communities with infrastructure and social services that improve people’s quality of life. It has an Assisted projects include the KEY FUNCTIONS OF INVESTMENT BANKS
construction of farm-to-market roads, hospitals, schools, and housing projects; communication; transportation; provision and connection 1. Underwriting and Issuance of Securities
of households to potable water; and electrification. 2. Mergers and Acquisitions (M&A)
3. Advisory Services
Consistent in incorporating environmental and social commitments toward sustainability and aggressive in accelerating financial inclusion
by bringing the previously unbanked into the formal banking system, thereby promoting a more equitable participation of Filipinos in the 4. Trading and Brokerage
growth of the nation. 5. Asset Management
6. Research and Analysis
SIGNIFICANCE IN THE PHILIPPINE FINANCIAL SYSTEM SECURITIES DEALERS AND BROKERS
1. Capital Market Development Securities dealers and brokers do business of sale and purchase of securities for self or for its customers. They provide services
Provides alternatives to traditional bank financing, crucial for large-scale projects that require more sophisticated to individuals and institutional customers. They have different compensation models based on the services provided by them.
financial solutions.
Dealer
2. Supporting National Infrastructure Any person engaged in the business of buying or selling securities, but for their own account.
Facilitate the government's infrastructure plans by ensuring that private companies can raise capital efficiently and
manage complex financial transactions. This leads to faster project implementation and improved public services. Broker
Any person engaged in the business of buying or selling securities for the account of others.
3. Fostering Corporate Growth
Help large corporations and conglomerates diversify their capital sources, access foreign markets, and expand their Broker-Dealer
operations, ultimately strengthening the private sector’s contribution to economic development. These are people or firms who buy and sell securities independently or on behalf of their clients.

FINANCING COMPANIES Structure of Securities Dealers and Brokers

Any business enterprise where the primary purpose is to extend credit facilities to consumers and to industrial, commercial, Dealers often function as part of investment banks or independent trading firms, holding inventory to facilitate transactions.
or agricultural entities either by discounting or factoring commercial papers or accounts, or by buying installment contracts, Brokers typically operate within brokerage firms, which can be full-service or discount, offering various services from trading
leases, chattel mortgages, or other evidences of indebtedness, or by leasing motor vehicles, heavy equipment and industrial to investment advice.
machineries and business and office equipment, appliance and other movable properties. Most firms' investors would act as both brokers and dealers, and are therefore referred to as broker-dealer by industry
regulators.
TYPES OF FINANCING COMPANIES
1. Consumer Finance Companies Full-service Discount
Offer personal loans and installment loans for individuals. Brokers provide one-on-one personal service. A full-service Brokers provide trade execution. Online brokers exemplify
2. Commercial Finance Companies broker advises, helps you research, and places the trades for this model perfectly, allowing investors to effortlessly log in,
Focus on business loans, including lines of credit, equipment financing, and working capital loans for small and large you, as well as offers advice on manners such as tax- choose a security, and complete their purchase
businesses. advantaged strategies and alternative investments. They independently, without the need for any human interaction.
3. Captive Finance Companies charge a much higher fee than discount brokers.
Subsidiaries of larger parent companies (like car manufacturers) that offer financing specifically for customers purchasing
the parent company’s products. Top Brokers in the Philippines Licensed Broker/Dealer in Securities
4. Specialty Finance Companies 1. CLSA Philippines, Inc. 1. BPI Securities Corporation
Provide niche financing, such as invoice factoring, leasing, or project-specific loans. 2. UBS Securities Philippines Inc. 2. BDO Securities Corporation
3. Regis Partners, Inc. 3. PNB Securities, Inc.
KEY SERVICES PROVIDED
1. Personal Loans SAVING AND LOAN ASSOCIATIONS
Unsecured or secured loans used by individuals for various purposes like home improvement, debt consolidation, or Saving and loan association (S&L) is a financial institution that primarily focuses on accepting savings deposits and making
education. mortgage loans.
2. Business Loans
Loans to businesses for expansion, equipment purchase, or cash flow management. Benefits of Savings and Loan Associations (S&Ls)
3. Auto Loans
✓ Higher Interest Rates
Financing for purchasing vehicles, either new or used.
Typically offer better rates on savings accounts than traditional banks.
4. Equipment Financing
✓ Home Loan Focus
Funding for purchasing or leasing equipment, particularly in industries that require heavy machinery.
Specialize in mortgage lending, often providing competitive rates and terms for homebuyers.
5. Invoice Financing ✓ Community Orientation
A form of financing where companies can borrow money against unpaid invoices to improve cash flow.
Often have a strong focus on local communities, fostering personalized customer service.
✓ Lower Fees
ADVANTAGE
May charge fewer and lower fees compared to larger financial institutions.
1. Specialization ✓ Flexible Loan Options
2. Flexible Lending Criteria Often provide flexible terms for loans, making them accessible to first-time homebuyers.
3. Faster Approval
Pag-IBIG Fund
DISADVANTAGE
A government-run savings program that offers housing loans to members.
1. Higher Interest Rates
2. Risk of Overborrowing
ProFriends
3. Regulatory Scrutiny
Provides savings and financing options, particularly for housing.
Cebuana Lhuillier Advantages Disadvantages
While primarily a pawnshop, it also offers savings and loan products.  Assured Returns  Limited Access
MUTUAL FUNDS  Flexibility  Limited Control
 Tax exemptions  Limited Growth
One of the most popular investment vehicles for individuals looking to grow their wealth over time. They are corporations  Financial Independence
that accept money from savers and use these funds to buy shares, bonds, or short-term debt instruments issued by businesses  Growth
or government units. The pooling of funds enables mutual funds to diversify investments, reducing risks for individual
investors. INSURANCE COMPANIES
Insurance companies are companies that offer risk management in the form of insurance contracts. The basic concept of insurance is that
Risks of Mutual Funds one party, the insurer, will guarantee payment for an uncertain future event. Meanwhile, another party, the insured or the policyholder,
While mutual funds offer numerous benefits, they are not without risks. The value of the investments can fluctuate based on pays a smaller premium to the insurer in exchange for that protection on that uncertain future occurrence.
market conditions, and there is no guarantee of profit. Investors should carefully choose the type of mutual fund that aligns
with their risk tolerance and financial goals. Float occurs when one party extends money to another party and does not expect repayment until after a circumstantial event.

Types of Mutual Fund Advantages of Mutual Funds Importance of Insurance Company in Financial Stability
1. Risk Management
1. Equity Funds ✓ Diversification
2. Large Investors
These funds invest in stocks of various companies. Mutual funds spread investments across different 3. Links with Banks
They offer higher potential returns but come with asset classes, which reduces the risk compared to 4. Reinsurer’s Role
higher risks. investing in a single stock or bond. 5. Stability in Crisis

2. Bond Funds ✓ Professional Management Ownership Captive Insurance Company

These focus on fixed-income securities like Experienced fund managers handle the investments, Companies may be mutual (owned by a group of policyholders) or A company that insures the liabilities of its owner. The insured is
government or corporate bonds, making them less making decisions based on market research and proprietary (owned by shareholders). (Also known as insurer or usually the sole shareholder and the only customer of the company.
volatile than equity funds. analysis. provider).

3. Money Market Funds ✓ Accessibility Mixed Insurance Company Stock Insurance Company
These invest in short-term debt instruments and are Investors can start with a relatively small amount of An insurance company that has characteristics of both stock and An insurance company operated as a private corporation and
considered the safest, although they also offer lower money, making mutual funds an accessible option mutual companies. It distributes part of the profits to stockholders owned by stockholders who share in the company's profits and
and also makes distributions to the insureds losses.
returns. for all types of investors.
Stock Life-Insurance Company Kinds of Insurance
PAWNSHOPS
A stock insurance company that does life-insurance business. 1. Health Insurance
to persons or entities engaged in the business of lending money with personal property, jewelry, and other durable goods as collateral for 2. Life Insurance
the loans given. 3. Child’s Plan
4. Auto Insurance
Pawnshops specialize in providing consumer credit secured by a pledge of movable property, based on operations of customer's values 5. Home Insurance
storage and sale of mortgaged property on a commission basis 6. Liability Insurance

Advantages Disadvantages Insurance Companies Insurance Banks

 Fast Cash  High Interest Rate
Tend to invest the premium money they receive for the long-term Accept short-term deposits and make long-term loans
 No credit check  Lost of item
 Unique items  Low Value Item
Are not part of a centralized clearing and payment system Operate as part of a wider banking system and have access to a
centralized payment and clearing organization that ties them
LENDING INVESTORS
together.
✓ Lending Investor is any person or entity engaged in the business of effecting securities transactions, giving loans and earns
CREDIT UNION
interest from them.
✓ Lending Investors serve as financial intermediaries by providing loans to those who may not quality for traditional bank loans It is a nonprofit organization that offers a variety of banking services and is owned by its members. Like banks, credit unions offer a wide
range of financial services, including making loans and accepting deposits. Credit unions operate to promote the well-being of their
members. Members of a credit union share a common bond, also known as the credit union’s “field of membership.”
Challenges faced by Lending Investors Opportunities for Growth
 Economic Risks  Digital Transformation
 Regulatory Changes  SME Market Expansion Ownership Governance
 Competition  Microfinance Integration Owned by members who join based on a common bond (e.g., A volunteer board of directors is elected by members to manage a
 Operational Risks  Partnerships location, employer, or affiliation). Credit unions are owned and credit union.
controlled by the people, or members, who use their services.
Specific employers, church affiliations, social groups, and regions.
PENSION FUNDS
✓ Are retirement plans funded by corporations or government agencies for their workers and administered primarily by the trust
departments of commercial banks or by life insurance companies. Pension funds invest primarily in bonds, stocks, mortgages, and Not-for-profit model Difference Between a Credit Union and a Bank?
real estate. Earnings are returned to members through lower fees and better a.) Owned by the members
✓ A pension fund is a fund that accumulates capital to be paid out as a pension for employees when they retire at the end of their careers. interest rates. Profits made by credit unions are returned back to b.) Have membership requirements
c.) Offer personalized service
members in the form of reduced fees, higher savings rates, and d.) Offer competitive products Burial Assistance: Provides a lump-sum benefit to help cover the Affordable Financing: SSS offers housing loans to help members
lower loan rates. costs of funeral services for deceased members, easing the financial purchase, build, or improve their homes, with favorable terms and
burden on their families. conditions.
Pros of Credit Union Cons of Credit Union
a.) Lower borrowing rates and higher deposit yields a.) Membership required
b.) More personal service b.) May offer fewer products and services PAGTUTULUNGAN SA KINABUKASAN: IKAW, BANGKO, INDUSTRIYA AT GOBYERNO (PAG-IBIG)
c.) Member-owned c.) Limited accessibility PAG-IBIG, also known as the Home Development Mutual Fund, is a government-owned and controlled corporation in the Philippines
that provides housing and other financial services to its members.
GOVERNMENT NON-BANK FINANCIAL INSTITUTIONS
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) KEY FUNCTION
PAG-IBIG, also known as the Home Development Mutual Fund, is a government-owned and controlled corporation in the Philippines
social insurance institution in the Philippines that provides a defined benefit scheme for government employees. It was established by
that provides housing and other financial services to its members.
Commonwealth Act No. 186 and later amended by Republic Act No. 8291 (GSIS Act of 1997)
BENEFITS
KEY FUNCTIONS
Provides social security and financial assistance to government employees, including retirement, death, disability, and sickness benefits, HOUSING LOANS SAVINGS PROGRAM
as well as housing and calamity loans and educational assistance Affordable Financing: Pag-IBIG offers housing loans with Systematic Savings: The Pag-IBIG savings program encourages
competitive interest rates and flexible payment terms, making it members to save a portion of their income, fostering a culture of
easier for members to purchase, build, or renovate homes. saving for future housing needs.
BENEFITS High Loan Amounts: Members can access significant loan Dividends: Members earn dividends on their savings, providing a
RETIREMENT BENEFITS HOUSING PLANS amounts, enabling them to finance their housing needs effectively. return on their investments and contributing to their financial
Pension Plans: GSIS provides monthly pensions to retired Affordable Financing: GSIS offers housing loans with growth.
government employees based on their years of service and final competitive interest rates, making it easier for members to purchase
salary, ensuring a stable income during retirement. or construct homes. SHORT-TERM LOANS CALAMITY LOANS
Lump-Sum Benefits: For members who prefer, GSIS offers lump- Flexible Payment Terms: Members can choose repayment plans Flexibility: Pag-IBIG provides short-term loan options, such as Emergency Assistance: Members affected by natural disasters can
sum payments upon retirement. that fit their financial situations, promoting homeownership. salary loans, to help members meet immediate financial needs access calamity loans, offering financial support during times of
without having to resort to high-interest loans. crisis to aid in recovery and rebuilding efforts.
PERSONAL LOANS CALAMITY BENEFITS Quick Processing: These loans are often processed quickly, Lower Interest Rates: These loans typically come with lower
Education Loans: Financial assistance for members who wish to Provides social security and financial assistance to government allowing members to access funds when they need them most. interest rates, making it easier for members to repay them
pursue further education or support their children’s education. employees, including retirement, death, disability, and sickness
Emergency Loans: Quick access to funds for unexpected expenses, benefits, as well as housing and calamity loans and educational
helping members navigate financial emergencies. assistance

SOCIAL SECURITY SYSTEM (SSS)

a government agency in the Philippines that provides social insurance programs to Filipinos.] Established by Republic Act No. 1161
(Social Security Act of 1954) and amended by Republic Act No. 8282 in 1997

aims to provide a safety net for workers in the private, professional, and informal sectors

KEY FUNCTIONS
Offers social security for private sector employees, covering retirement, death, disability, sickness, maternity, and funeral benefits, along
with housing and calamity loans.

BENEFITS
CALAMITY LOANS RETIREMENT BENEFITS
Emergency Financial Assistance: Provides quick access to loans Pensions: Offers monthly pensions to members upon reaching
for members affected by natural disasters, helping them recover and retirement age, based on their contributions and the number of
rebuild. years they have paid into the system.

DEATH BENEFITS DISABILITY BENEFITS

Survivor Benefits: Provides financial support to the beneficiaries of Income Support: Offers monthly pensions or lump-sum payments
deceased members, helping cover funeral expenses and providing to members who become permanently disabled and are unable to
ongoing financial assistance. work, ensuring they have a source of income.

SICKNESS BENEFITS MATERNITY BENEFITS

Daily Cash Allowance: Provides financial assistance to members
who are unable to work due to illness, covering a portion of their
daily wages for a specified period.

FUNERAL BENEFITS HOUSING LOANS