BUSINESS LOGIC REVIEWER

SECURITY FEATURES (PHP 100)

HISTORY OF MONEY 1. Embossed prints 5. See-through mark (“Pilipino”
(republic) spelled in Baybayin)
FINANCIAL MANAGEMENT 2. Serial number (in 6. Concealed value
- Managerial activities which deals with planning and variable sized 7. Security thread
controlling of cooperative financial resources. figures) 8. Optically variable device (only
- Comprises the forecasting, planning, organizing, 3. Security fibers on 500 and 1000 peso)
coordinating and controlling of all activities relating to 4. Watermark
acquisition and application of financial resources. SECURITY FEATURES (PHP 1000)
HISTORY OF MONEY FEEL LOOK TILT
- Comes from the latin word “MONETA” surname of the -Security -Watermark -Security Thread
Romand Goddess “JUNO” Paper -Security -Concealed Value
- MONETA -Embossed Fiber -Optically Variable Ink (1000
 Refers to a mint or a place for coining money. Prints -Asymmetric peso and 500 peso)
 Guardian of the finances of the Roman Empire -Tactile Marks Serial -Optically Variable Device Path
 Latin word “Monere” meaning advice or warn. Number (1000 peso)
 Ancient Greece – moneta means advisor -See-through -Enhanced Valued Panel (1000
- Monoie - Old French word Mark peso and 500 peso)
- Monnaie -Modern French word
Note: Monoie & Monnaie means money, coin, currency, or
change.
HISTORY OF MONEY
1. Barter-Trade 4. Paper Money PLASTIC MONEY
2. Cowrie Shells 5. Polymer Money - Comes in various classifications as credit card, debit card,
3. Coins 6. Plastic Money cash card, prepaid cash card, and store card.
BARTER - Moneyless/cashless
- Exchange of goods & services without using money. - Credit card allows owners to buy products on credit from
COWRIE SHELLS different stores and establishments.
- Had only agreed upon or symbolic worth, but no intrinsic MONEY
value. - Generally accepted as a medium of exchange, a measure of
- 1st used in China around BCE-1766-1027 value, or a means of payment.
- During Shang Dynasty CHECK
- The used of cowrie shells extended until the middle of 20th - A written, dated, and signed instrument that directs a bank
century in some parts of Africa. to pay a specific sum of money to the bearer.
- Most widely and longest used currency in history. BSP – BANKO SENTRAL NG PILIPINAS
COINS - Only government body that has the authority to mint coins
- Coinage – the mining of metals into coins. and print bills.
- Nickel, copper, gold, silver, etc. POS- POINT OF SALE LBP- LAND BANK OF THE
PAPER MONEY BDO- BANCO DE ORO PHILIPPINES
- Tang Dynasty (618-906 AD) MBTC -METROPOLITAN DBP- DEVELOPMENT BANK OF THE
 The Chinese paper money and used it during this era. BANK & TRUST PHILIPPINES
- Song/Sang Dynasty (960-1279AD) COMPANY RBDI- RURAL BANK OF DIGOS, INC.
 Used paper money alongside coins.
- Yuan Dynasty (1271-1358 AD) ROLE OF BSP
 1st dynasty to circulate currency completely as the 3 PILLARS OF CENTRAL BANKING
medium of exchange. 1. Price Stability
- Ming Dynasty (1368-1644AD) 2. Financial Stability
 Chinese placed the emperor seal and his signature if the 3. Efficient payments and settlements systems
treasure on a crude paper made from mulberry bark PRICE STABILITY
- Mongolia was the second country to begin using paper - BSP’s primary mandate
money in the 11th century. - Refers to low and stable inflation
- In the 12th century that the Moors established the 1st paper - Preserves purchasing power
mill in Europe in what is now known as Spaon. How prices measure?
1. Consumer Price Index
POYLMER MONEY - Represents the average price of a standard basket of goods
- Inventor – Australian 1988 and services.
Advantages: Disadvantages: 2. Inflation
1. More Durable 1. When it comes to contact with - Sustained increased in the average prices of goods and
2. Portable any liquid, they tend to stick services typically purchased by consumers.
3. Hard to together. 3. Inflation Rate
counterfeit 2. Not suitable for folding - Annual percentage change in consumer price index
4. Environmental 3. The problem of bulkiness of - Formula: [{Current yr- Prev yr} / prev yr] x 100
friendly creased polymer notes, and the
5. Recyclable print durability are the
disadvantage.
 EFFICIENT PAYMENTS AND SETTLEMENTS SYSTEM
- Through operation of real-time gross settlement system.
- Includes the country’s entire matrix of institutional and
infrastructure arrangements and processes through
which money is transferred from one party to another.
- Makes the transfer of funds between two parties easier.
ROLE OF BSP
- The owner and operator of the Philippine Payments
and Settlements System (PhilPaSS)
- The settlement is done through the member-bank’s
demand deposit account maintained by the BSP.
- Formulate implementing rules on credit
delivery/guarantee to BMBEs as well as incentive
programs, and monitor implementation of the law.
- Consider loans granted to BMBEs under RA 9178 as
BSP’S MONETARY POLICY FRAMEWORK alternative compliance with RA 9501 (Magna Carta for
Micro, Small and Medium Enterprises)
Inflation Targeting
- Involves publicly announcing as inflation target which
the BSP promises to achieve over a certain period.
Adopting Inflation Targeting
- Simple framework
- Allows greater focus on price stability
- Forward-looking
- Enables comprehensive approach to monetary policy
- Increases accountability of BSP and helps build
credibility
- Promotes transparency in monetary policy
FINANCIAL STABILITY
- The financial system is able to effectively distribute and
manage FUNDS between surplus (savers) and deficit
(spenders) and RISKS attendant to the movement of
funds and provision of services.

OTHER FUNCTION OF BSP

 - Issuer of money 5. The Central Bank
- Official depository and financial advisor of the  The BSP and all the other central banks of the
government. different countries are mandated to assure
- Bank of banks and lender of last resort that their respective countries have a stable
- Custodian of official reserves and healthy financial system.
FINANCIAL INCLUSION PROGRAMS OF BSP  They oversee the operations of the entire
1. Microfinance financial system.
2. Economic and Financial Learning Program (EFLP)  They mandate the rules, regulations, and
3. National Strategy for Financial Inclusion (NSFI) monetary policies.
Republic Act No. 9178 6. Foreign Participants
- Brgy Micro Business Enterprises (BMBE) Act of 2002  refer to the participants from the rest of the
 To mainstream BMBEs in the economy world – households, governments, financial
 To grant incentives and other benefits to BMBEs and non-financial firms, and central banks.
Note:
- To preserve purchasing power, the BSP’s main objective is to
maintain price stability. It uses inflation targeting as a
framework for conducting monetary policy. Consumers
directly benefit.
- To help promote financial stability, the BSP supervises and
regulates banks and other financial institutions. Depositors
and borrowers directly benefit.
- To ensure safe and efficient payments and settlements of
financial transactions, the BSP owns and operates the
PhilPaSS. Transacting parties directly benefit.

THE PHILIPPINE FINANCIAL SYSTEM

FINANCIAL SYSTEM
- Describes collectively the financial markets, the
participants, and the instruments and securities that are
traded in the said markets.
 Channel the funds from the savings units
(lenders) to the deficit units (borrowers)
 Medium of exchange
 Provide a mechanism for risk sharing
 Provide channel through which the central
bank can influence the economy
FINANCIAL SYSTEM PARTICIPANTS
1. Household or consumers
 That group receiving income, majority of
which typically come from wages and salaries.
 Income that is spent on goods and services
and a part is saved (if there’s enough to save)
 Gross Saving
 Equal to current income less current
expenditures.
 What is spent is termed as consumption.
 Non-durable consumer goods
 Goods that are consumed within a current
period.
 Durable Goods (durables)
 Goods that will last for more than a year

2. Financial institutions/intermediaries
 firms that bridge the gap between the surplus
units (SUS) or investors/lenders and the
deficit units (DUs) or borrowers.
 Channel fund from lenders to borrowers.
3. Non-financial firms
 The businesses other than the financial
institutions or intermediaries.
 Include the trading, manufacturing, extractive
industries construction, genetic industries, and
all firms other than the financial ones.
4. The government
 The government is meant the national,
provincial, city and barangays or towns
comprising the Philippines as a whole.