STRUCTURE OF THE

PHILIPPINE
FINANCIAL SYSTEM
 STRUCTURE OF THE PHILIPPINE FINANCIAL
SYSTEM
I. BANGKO SENTRAL NG PILIPINAS (BSP)
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 Institution
I. BANGKO SENTRAL
NG PILIPINAS
(BSP)
 I. BANGKO SENTRAL NG PILIPINAS (BSP)
• The Bangko Sentral ng Pilipinas (BSP) is the central
bank of the Philippines
• The BSP provides directions in the areas money,
banking, and credit. It supervises operations of banks
and exercises regulatory powers over non-bank
financial institutions with quasi-banking functions.
 FUNCTIONS OF BSP
• Liquidity Management
• Currency Issues
• Lender of Last Resort
• Financial Supervision
• Determination of exchange rate policy
• Other Functions
 II. BANKING
INSTITUTIONS
 A. PRIVATE BANKING INSTITUTIONS
1. Commercial Bank
• It is any commercial bank that is confined only to
commercial bank functions.
2. Universal Bank/Expanded Commercial Bank
• It is any commercial bank, which performs the
investment house function in addition to its
commercial banking authority.
 A. PRIVATE BANKING INSTITUTIONS
3. Thrift Banks
• Its function is to accumulate the savings of
depositors and invest them together with their
capital, loans secured by bonds, mortgages in real
estate and insured improvement, etc.
a) Stock Saving and Mortgage Bank
b) Private Development Bank
c) Stock Savings and Loan Associations
 A. PRIVATE BANKING INSTITUTIONS
4. Rural Banks
• Under the rules, regulation and supervision of the
Central Bank of the Philippines, continuously
provide credit and other banking services to
farmers, fisher folks and rural business people to
improve the quality of life in the countryside.
 A. PRIVATE BANKING INSTITUTIONS
5. Cooperative Banks
• Banks established to assist the various
cooperatives by lending those funds at reasonable
interests rates.
 B. GOVERNMENT BANKING INSTITUTIONS
1. Development Bank of the Philippines
• Provides loans for developmental purposes, gives
loans to the agricultural sectors, commercial sectors,
and industrial sectors.
 B. GOVERNMENT BANKING INSTITUTIONS
2. Land Bank of the Philippines
• An implementing agency of Agrarian Reform Program
(CARP) involved in land evaluation, compensation to
owners of private agricultural lands, and collection of
amortizations from CARP farmer-beneficiaries.
• Provision of credit assistance to small farmers and fisherfolks
• An official depository of government funds.
• A government bank with a social mandate to spur
countryside development.
 B. GOVERNMENT BANKING INSTITUTIONS
3. Al-Amanah Islamic Investment Bank
• Republic Act No. 6048 is an act that authorizes the bank
to promote and accelerate the socio-economic
development of the Autonomous Region of Muslim
Mindanao by performing banking, financing and
investment operations, and establish and participate in
agriculture, commercial and industrial ventures based
on the Islamic Concept of Banking.
III. NON-BANK
FINANCIAL
INSTITUTIONS
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
1. Investment House
• It works primarily for corporations and governments.
• Is any Enterprise, which engages in underwriting
securities of other corporations. It also generates
income from sales of investment in securities.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
2. Investment Bank
• They provide advice to firms issuing stocks and
bonds or considering mergers with other firms
• They also engages in underwriting, in which they
guarantee a price to firm issuing stocks or bonds
and then make profit by selling the stocks or bonds
at a higher price.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
3. Financing Company
• Is any enterprises where the primary purpose is to
extend credit facilities to consumers and to industrial,
commercial or agricultural entities.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
4. Securities Dealer
• Is any person or entity engaged in the business of
buying and selling securities for his own or its client’s
account thereby making a profit from the difference
between the purchase prices and selling prices of
securities.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
5. Savings and Loan Associations
• Traditionally served individual and residential and
commercial mortgage borrowers
• Collecting savings from the public and using
these savings by lending the money to individuals
by way of mortgage loans in housing.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
6. Mutual Funds
• The main function of mutual fund is
accumulating funds from investors, pool them
together and invest them wisely.
Professional fund managers use their knowledge
and expertise to find good stocks, create a
portfolio of all the stocks and invest your money
there.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
7. Pawnshops
• Refer to persons or entities engaged in the business of
lending money with personal property and other durable
goods as collateral for the loans given

8. Lending Investors
• Investor is any person or entity engaged in the business of
effecting securities transactions giving loans and earns interest
from them.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
9. 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 real estate.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
10.Insurance Companies
• Provide protection from adverse events.
The insurance companies accept premium
payments in exchange for compensation in the
event that certain specified, but undesirable,
events occur.
 A. PRIVATE NON-BANK FINANCIAL
INSTITUTIONS
11.Credit Unions
• Cooperative associations whose members have a
common bond, such as being employees of the
same firm. Members' savings are loaned only to
other members, generally for auto purchases,
home improvement loans and even home
mortgages, credit unions often are the cheapest
source of funds available to individual borrowers.
 B. GOVERNMENT NON-BANK FINANCIAL
INSTITUTIONS
1. Government Service Insurance System (GSIS)
• Provides retirement benefits, housing loans,
personal loans, emergency and calamity loans to
government employees.
 B. GOVERNMENT NON-BANK FINANCIAL
INSTITUTIONS
2. Social Security System (SSS)
• Provides retirement benefits, funeral benefits,
housing loans, personal loans, and calamity loans
to employees who are working in private
companies and offers.
 B. GOVERNMENT NON-BANK FINANCIAL
INSTITUTIONS
3. Pagtutulungan Sa Kinabukasan: Ikaw, Bangko,
Industria At Gobyerno (Pag-Ibig)
• Provides Housing loans to both government and private
employees