VEGA, LEAH GAYLE
BSA 2-6
FIN 0013-6
Activity 2
1. What are the different types of Philippine Financial System?





Financial Institutions
Financial Markets
Tradable or Financial Instruments
Financial Services
Currency (Money)
2. Define each type of Financial System.

Financial Institutions - Financial institutions act as intermediaries between the lender and the
borrower when providing financial services.

Financial Markets - These are places where the exchange of assets occurs with borrowers and
lenders, such as stocks, bonds, derivatives, and commodities.

Tradable or Financial Instruments - Tradable or financial instruments enable individuals to trade
within the financial markets. These can include cash, shares of stock (representing ownership),
bonds, options, and futures.

Financial Services - Financial services provide investors a way of managing assets and offer
protection against systemic risk. These also ensure individuals have the appropriate amount of
capital in the most efficient investments to promote growth. Banks, insurance companies, and
investment services would be considered financial services.

Currency (Money) - A currency is a form of payment to exchange products, services, and
investments and holds value to society.
3. Define, differentiate, and provide at least 2 example each of the following:
o Universal Banks
o Commercial Banks
o Thrift Banks
o Rural Banks
o Specialized Government Banks
o Investment Houses
o (Quasi & Non-Quasi Banking License)
o
Financing Companies Securities Dealers/ Brokers
VEGA, LEAH GAYLE
BSA 2-6
FIN 0013-6
Investment Companies
Insurance Companies
Lending Investors
Pawnshops
Government Non-Bank Financial Institutions
Venture Capital Corporations
Mutual Building and Loan Associations
Non-Stock Savings and Loans
4. How do you recognize Cooperatives versus the other types of Financial Institution?
o
o
o
o
o
o
o
o
The main difference between financial cooperatives to other institutions is that
cooperatives take interest and into consideration of the financial status of the members and
not in the purpose of gaining interest in profits. As well, the financial products and services the
cooperative offers, can also be sources of financial education for its members and others. The
services that cooperatives make available might include retirement planning for employees etc.
5. Describe the role and scope of BSP versus Insurance Commission versus Securities and
Exchange Commission in governing Financial Institutions.
 The BSP's main responsibility is to formulate and implement policy in the areas of money,
banking, and credit with the primary objective of preserving price stability. Price stability refers
to a condition of low and stable inflation. To help promote financial stability and a secure and
reliable banking system, the BSP manages systemic risks and ensures the safe and sound
operation of banks and other BSFIs. To preserve purchasing power, the BSP's main objective is
to maintain price stability.
 The Insurance Commission is a government agency under the Department of Finance. The
Commission supervises and regulates the operations of life and non-life companies, mutual
benefit associations, and trusts for charitable uses. Insurance companies can be important for
the stability of financial systems mainly because they are large investors in financial markets,
because there are growing links between insurers and banks and because insurers are
safeguarding the financial stability of households and firms by insuring their risks.
 The Securities and Exchange Commission (SEC) or the Commission is the national government
regulatory agency charged with supervision over the corporate sector, the capital market
participants, and the securities and investment instruments market, and the protection of the
investing public.