pre 1

Question 1

It is a network of various financial institutions which creates, circulates and controls money and credit.

It interplays the supply and use of money

Answer 1

financial system

Question 2

Elements of FS

Answer 2

• Financial Claims
• Financial Institutions
• Financial Markets
• Government Agencies
• Laws and Policies

Question 3

Functions of Financial Institutions

Answer 3

• Investigation and Credit Analysis
• Matching the Supply and Demand for Funds
• Provision for Liquidity

Question 4

Functions and Operations

Answer 4

• Liquidity Management.
• Currency issue.
• Lender of last resort.
• Financial Supervision
• Management of foreign currency reserves.
• Determination of exchange rate policy.
• Other activities.

Question 5

The BSP formulates and implements monetary policy aimed at influencing money supply consistent with its primary objective to maintain price stability.

Answer 5

Liquidity Managemen

Question 6

The BSP has the exclusive power to issue the national currency. All notes and coins issued by the BSP are fully guaranteed by the Government and are considered legal tender for all private and public debts.

Answer 6

Currency issue

Question 7

The BSP extends discounts, loans and advances to banking institutions for liquidity purposes.

Answer 7

Lender of last resort

Question 8

The BSP supervises banks and exercises regulatory powers over non-bank institutions performing quasi-banking functions.

Answer 8

Financial Supervision

Question 9

The BSP seeks to maintain sufficient international reserves to meet any foreseeable net demands for foreign currencies in order to preserve the international stability and convertibility of the Philippine peso.

Answer 9

Management of foreign currency reserves

Question 10

The BSP determines the exchange rate policy of the Philippines. Currently, the BSP adheres to a market-oriented foreign exchange rate policy such that the role of BangkoSentral is principally to ensure orderly conditions in the market.

Answer 10

Determination of exchange rate policy

Question 11

The BSP functions as the banker, financial advisor and official depository of the Government, its political subdivisions and instrumentalities and government-owned and -controlled corporations.

Answer 11

Other Activities

Question 12

mainly responsible for the operations/activities related to monetary policy formulation and implementation

Answer 12

Monetary Stability Sector

Question 13

mainly responsible for the regulation of banks and other BSP-supervised financial institutions

Answer 13

Supervision and Examination Sector

Question 14

mainly responsible for the management of human, financial, and physical resources of the Bank

Answer 14

Resource Management Sector

Question 15

responsible for the production of Philippine currency, security documents, and commemorative medals and medallions

Answer 15

Security Plant Complex

Question 16

financial institutions owned by private individuals or corporations. They aim to generate profit by offering various financial services, such as accepting deposits, providing loans, and facilitating investments.

Answer 16

Private Banks

Question 17

Large financial institutions that provide a broad range of services to individuals, businesses, and the government.

F:
* Accept deposits
* issue loans
* facilitate payments
* offter foreign exchange and investment services

Answer 17

Commercial Banks

Question 18

Smaller financial institutions that focus on serving individual consumers and small businesses.

F:
* Accept savings and time deposits
* Provide small business loans, housing loans, and personal loans
* Promote savings and home financing

Answer 18

Thrift Banks

Question 19

Banks that serve rural and agricultural areas to promote countryside development.

F:
* Provide agricultural loans for farmers and small businesses
* Accept small deposits
* Support rural economic growth

Answer 19

Rural Banks

Question 20

Banks owned and operated by cooperative organizations to serve their members’ financial needs.

F:
* Provide loans and credit to cooperative members
* Accept deposits from members
* Support community-based businesses

Answer 20

Cooperative Banks (coop Banks)

Question 21

financial institutions owned and operated by the Philippine government. Their primary goal is to support public welfare, economic development, and national priorities.

Answer 21

Government Banks

Question 22

A government-owned bank focusing on agricultural and rural development.

F:
* Provide financial services to farmers and fisherfolk
* Support agrarian reform and rural development
* Offer loans to local government units (LGUs) and state agencies

Answer 22

Land Bank of the Philippines (LBP)

Question 23

A government bank that finances infrastructure, industries, and developmental projects.

F:
* Fund large-scale projects (transportation, energy, water supply)
* Support small and medium enterprises (SMEs)
* Provide development financing for public services

Answer 23

Development Bank of the Philippines (DBP)

Question 24

The only bank in the Philippines authorized to offer Islamic banking services.

F:
* Provide Shari’ah-compliant financial products (no interest-based transactions)
* Support Muslim communities through financial inclusion
* Facilitate trade and investments aligned with Islamic principles

Answer 24

Al-Amanah Islamic Investment Bank of the Philippines

Question 25

financial institutions that provide specialized financial services but do not hold a banking license. They cannot accept traditional deposits like banks but play a crucial role in the financial system by offering credit, investment, and insurance services.

Answer 25

Non-banks

Question 26

Companies that provide financial protection against specific risks (e.g., life, health, property). F: * Offer life, health, property, and casualty insurance * Collect premiums and pay out claims * Manage long-term investments for policyholders

Answer 26

Insurance Companies

Question 27

Firms that engage in underwriting and selling securities to help businesses raise capital. F: * Underwrite new stocks and bonds * Provide corporate advisory services * Facilitate mergers, acquisitions, and public offerings

Answer 27

Investment Houses

Question 28

Institutions that provide credit facilities for consumer and business needs without accepting public deposits. F; * Offer consumer loans (e.g., auto loans, personal loans) * Provide business financing for equipment or capital * Facilitate installment payment plans

Answer 28

Financing Companies

Question 29

Businesses that offer secured loans where personal property is used as collateral. F: * Provide short-term loans secured by jewelry or electronics * Offer remittance and money transfer services * Sell unclaimed pawned items

Answer 29

Pawnshops

Question 30

Entities that buy, sell, and trade stocks and other securities on behalf of clients. F: * Facilitate stock and bond trading for clients * Offer investment advice and market analysis * Manage portfolios for individual and corporate investors

Answer 30

Stock Dealers & Brokers

Question 31

Member-based organizations providing financial services, mainly to their members. F: Offer savings and loan services to members Provide credit for housing, education, and emergencies Focus on community welfare and financial inclusion

Answer 31

Non-Stock Savings & Loan Associations (NSSLAs)

Question 32

non-bank financial institutions operated by the Philippine government to provide social protection and financial security.

Answer 32

Government Non-Banks

Question 33

A government agency providing social security benefits to public sector employees. F: * Offer retirement, disability, and life insurance benefits * Provide housing and emergency loans for government workers * Manage the pension fund for public employees

Answer 33

Government Service Insurance System (GSIS)

Question 34

A government agency providing social security benefits to private sector employees and self-employed individuals. F: * Provide retirement, disability, maternity, and death benefits * Offer salary and calamity loans * Manage contributions for private employees’ social security

Answer 34

Social Security System (SSS)

Question 35

A government agency that helps Filipinos save for housing and access affordable home financing. F: * Provide affordable housing loans * Offer multi-purpose and calamity loans * Manage members’ savings for housing needs

Answer 35

Home Development Mutual Fund (HDMF or Pag-IBIG Fund)

Question 36

A government agency that protects bank depositors by insuring their deposits. F: * Insure bank deposits up to ₱500,000 per depositor * Assist in the resolution of failing banks * Protect public trust in the banking system

Answer 36

Philippine Deposit Insurance Corporation (PDIC)