Advanced Financial Management Student Portfolio

Advanced Financial Management Student Portfolio
A Student Portfolio
Presented to
Rizal Technological University
Graduate School
Boni Avenue, Mandaluyong city
In Partial Fulfillment
Of the Requirements for the
Advanced Financial Management
Master in Business Adminitration
To
Dr. Edgar M. Moreno, Sr., DBA
Professor
April 2016
RIZAL TECHNOLOGICAL UNIVERSITY

Boni Ave., Mandaluyong City
Certificate of Originality
This is to certify that this Student Portfolio is an original work of BA 232
ADVANCED FINANCIAL MANAGEMENT class and being submitted in partial
fulfillment for the award of the Masters Degree in Business Administration of
Rizal Technological University. The portfolio has not been submitted earlier to
the University of elsewhere for the fulfillment of the requirement of any course.
Aking, Janaeva Joy
Amores, April Joy
Angara, Reynaldo
Brias, Zandra
Cara, Leslie Ann
Encontro, Dianne Faye
Gelera, Reynan
Materum, Mary Joy
Ramos, Mae Chloe
Resurreccion, Imee
Santos, Ma. Cristina
MESSAGES
ii
ACKNOWLEGDEMENT
iii
TABLE OF CONTENTS
iv
ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

MBA: Second Semester- SY 2015-2016
Page 1
Materum, Marie Joy

FINANCIAL MANAGEMENT
Managerial activities which deals with planning and controlling of firms

and financial sources.
Financial management is an area of financial decision making, harmonsing

individual motives and enterprise goals.
By: Weston Brigham
Objectives of financial management

The term objective refers to a goal or decision for taking financial decisions.
1. Profit Maximization
- The term profit maximization is deep rooted in the economic theory.
- It is need that when firms pursue the policy of maximizing profits.
- Societys resources are efficiently utilized.
- The firm should undertake those actions that would profits and drop those actions that
would decrease profit.
- The financial decisions should be oriented to the maximization of profits.
- Profit provides the yardstick for measuring performance of firms.
- It makes allocation of resources to profitable and desirable areas.
- It also ensures maximum social welfare.
2. Wealth Maximization
- Wealth maximization or net present value maximization provides an appropriate and
operationally feasible decision criterion for financial management decisions.
Sources of Financial
Capital required for a business can be classified under two main categories, viz.,
- Fixed Capital, and
- Working Capital.
Every business needs funds for two purposes.
For its establishment and to carry out its day-to-day operations.

Page 2
Long term funds are required to create production facilities through purchase of
fixed assets such as
- plant,
- machinery,
- land,
- building,
- furniture, etc.
- Investment in these assets represents that part of
firms capital which is blocked on
permanent or fixed basis and is called fixed capital.

- Funds are also needed for short-term purposes for the purchase of raw materials,
payment of wages and other day to day expenses, etc. These funds are known as working
capital.
- In our present day economy, finance is defined as the provision of money at the time
when it is required.
- Every enterprise, whether big or medium or small, needs finance to carry on its
operations and to achieve its targets.
- In fact finance is so indispensable today that is rightly said that it is the life blood of
enterprise.
- Without adequate finance, no enterprise can possibly accomplish its objectives.
- In every concern there are two methods of raising finance, viz.,
-
Raising of owned capital,
Rising of borrowed capital
Scope of financial management

The scope and functions of financial management is classified in two categories.
-
Traditional approach
Modern approach
Traditional Approach
According to this approach, the scope of the finance function is restricted to
procurement of funds by corporate enterprise to meet their financial needs. The
Page 3
term procurement refers to raising of funds externally as well as the inter related
aspects of raising funds.
The inter related aspects are the institutional arrangement for finance, financial
instruments through which funds are raised and legal and accounting aspects
between the firm and its sources of funds. In traditional approach the resources
could be raised from the combination of the available sources.
In traditional approach the resources could be raised from the combination of the
available sources.
Limitations of traditional approach
This approach is confirmed to procurement of funds only.
It fails to consider an important aspects i.e. allocation of funds.
It deals with only outside I.e. investors, investment bankers.
The internal decision making is completely ignored in this approach.
The traditional approach fails to consider the problems involved in working

capital management.
The traditional approach neglected the issues relating to the allocation and
management of funds and failed to make financial decisions.
Modern Approach
The modern approach is an analytical way of looking into financial problems of

the firm.
According to this approach, the finance function covers both acquisition of funds
as well as the allocation of funds to various uses.
Financial management is concerned with the issues involved in raising of funds

and efficient and wise allocation of funds.
Functions of Finance
There are three finance functions:
Investment decision
Financing decision
Page 4
Dividend decision
Investment Decision
Investment decision relates to selections of asset in which funds will be invested
by a firm.
The asset that can be acquired by a firm may be long term asset and short term
asset.
Decision with regard to long term assets is called capital budgeting.
Decision with regard to short term or current assets is called working capital
management.
Capital Budgeting
Capital budgeting relates to selection of an asset or investment proposal which
would yield benefit in future. It involves three elements.
The measurement of the worth of the proposal.
Evaluation of the investment proposal in terms of risk associated with it and
evaluation of the worth of the investment proposal against certain norms or
standard. The standard is broadly known as cost of capital.
Financing Decision
Determination of the proportion of equity and depth is the main issue in financing
decision.
Once the best combination of debt and equity is determined, the next step is
raising appropriate amount through available sources.
Working Capital Management
Working capital management or current asset management is an important part of
investment decision.
Proper management of working capital ensures firms liquidity and solvency.
A conflict exists between profitability and liquidity while managing current asset.
If a firm does not invest sufficient funds in current assets it may become illiquid
and may not meet its current obligations.

Page 5
If the financial manager should develop proper techniques of managing current

assets so that neither insufficient nor unnecessary funds are invested in current
assets. Current asset are large, the firm would lose its profitability and liquidity.
Dividend Decision
Dividend decision has a strong influence on the market prize of the share.
So the dividend policy is to be determined in terms of its impact on
shareholders value.
The optimum dividend policy is one which maximizes the value of shares and
wealth of the shareholders.
The financial manager should determine the optimum pay-out ratio I.e. the
proportions of net profit to be paid out to the shareholders.
The above three decisions are inter related. To have an optimum financial
decision the three should be taken jointly.
Interest Rate
An interest rate is the cost of borrowing money.
A borrower pays interest for the ability to spend money now, rather than wait
until he's saved the same amount.
So if interest rates are so important, how do they work?
In this lesson, will help you to understand why interest rates exist, how they're
calculated and why they change over time.
For example, if you borrow `100 at an annual interest rate of five percent, at the
end of the year you'll owe `105.
With every loan, there's a risk that the borrower won't be able to pay it back.
The higher the risk that the borrower will default (or fail to repay the loan), the
higher the interest rate.
That's why maintaining a good credit score will help lower the interest rates
offered to you by lenders.
But interest rates aren't just random punishments for borrowing money. The
interest a lender receives is his compensation for taking a risk.
Page 6
Level of interest rates:

1. Classical Theory this theory is associated with the names of Ricardo, Fisher and
some others.
It is a static theory, and according to it, the rate of interest, is a real
phenomenon in the sense that it is determined by the real factors.
It is the supply of savings and the demand for the investment that
determine the equilibrium rate of interest.
The aggregate saving is the different between the total national income
and the total consumption expenditure.
The savings may be affected by individuals, households, business and
Government.
2. Loanable fund Theory- the loanable funds theory of interest rate determination
makes certain importance modification in classical theory.
through interest is paid in money term on money loans and assets the level
of interest is nothing to do with the levels of money and prices.
The commercial banks are mere conduit for the more efficient channelling
of saving into the best investment outlets.
3. Keynesian.
Structure of Interest Rates

-
The term structure of interest rate, or yield curve, as it is called or maybe defined
as the relationship between yields and maturities of bonds in given default risk
classes.
In addition to changes in the level of interest rate

Changes in the rate of inflation
Unusual risk premiums
Changing credit
There are changes in conditions

Page 7
Types of interest rates

-
The prime raise is the best known of the various interest rates that are utilized.
This non-fluctuating rate is the one usually employed by the banks when it makes
a short term to large borrowers such as corporations.
Other important interest rates that are used in making caoital investments decisions
include.
Discount Rate
Treasury Bill Rate
Treasury Bond Rate
Corporate Bond Rate
Reasons for the interest change
-
Political short-term gain;
Deferred consumption
Inflationary expectations
Alternative investments
Risks of investments
Liquidity preference
Taxes
Factor affecting market interest rate:

Three other factors that can be important are:
1. Saving by individuals
2. International capital flows: and
3. Amount of premium required by investors to compensate for interest rate risk.
If interest rates didn't exist, lenders would have no reason to let you borrow
money.
And if you couldn't borrow money, you could never buy a house or a car, or enjoy
many of the other advantages of life with credit, like buying air tickets and paying
bills online with a credit card.
That's why interest rates are actually calculated as two different values: the
nominal rate and the real rate.
Page 8
The nominal rate is the interest rate set by the lending institution.
The real rate is the nominal rate minus the rate of inflation.
For example, if you take out a home loan with a nominal interest rate of 10
percent, but the annual rate of inflation is four percent, then the bank is only really
collecting six percent on the loan.
So how do interest rates affect the rise and fall of inflation?
Well, lower interest rates put more borrowing power in the hands of consumers.
And when consumers spend more, the economy grows, naturally creating
inflation. If the RBI decides that the economy is growing too fast-that demand
will greatly outpace supply-then it can raise interest rates, slowing the amount of
cash entering the economy.
So there must be enough economic growth to keep wages up and unemployment

low, but not too much growth that it leads to dangerously high inflation.
The nice thing is that interest rates work both ways. Banks, governments and
other large financial institutions need cash too, and they're willing to pay for it. If
you put money into a savings account at a bank, the bank will pay you interest for
the temporary use of that money. Governments sell bonds and other securities for
the same reason. In this case, you're the lender to the government and the interest
rate is your compensation for temporarily giving up the ability to spend your case.
But remember, savings accounts and government-issued bonds pay relatively low
interest rates because the risk of their defaulting is close to zero.
You should also know that interest rates for unsecured credit will always be
higher than secured credit. Secured credit is backed by collateral. A home loan is

Page 9
a classic example of secured credit, because if the borrower defaults on the loan,
the bank can always take the house.
Credit cards are unsecured credit, because there's no collateral backing the loan,
only the cardholder's credit score.
Long-term loans also carry higher interest rates than short-term loans, because the
more time a borrower has to pay back a loan, the more time there is for things to
possibly go bad financially, causing the borrower to default. Another factor that
makes long-term loans less attractive to lenders -- and therefore raises long-term
interest rates -- is inflation.
In a healthy economy, inflation almost always rises, meaning the same rupee
amount today is worth less five years from now.
Lenders know that the longer it takes the borrower to pay back a loan, the less that
money is going to be worth.
Hope you have now got an understanding of how interest rates work at a
conceptual level.

Page 10
Cara, Leslie Ann

Financial Market Defined:
-
A financial market is a broad term describing any marketplace where buyers and
sellers participate in the trade of assets such as equities, bonds, currencies and
derivatives. Financial markets are typically defined by having transparent pricing,
basic regulations on trading, costs and fees, and market forces determining the prices
of securities that trade.
Types of Financial Markets and their Roles
Capital Markets
A capital market is one in which individuals and institutions trade financial

securities. Organizations and institutions in the public and private sectors also
often sell securities on the capital markets in order to raise funds. Thus, this type
of market is composed of both the primary and secondary markets.
Stock Markets
Stock markets allow investors to buy and sell shares in publicly traded companies.
They are one of the most vital areas of a market economy as they provide companies
with access to capital and investors with a slice of ownership in the company and the
potential of gains based on the company's future performance.
Bond Markets
A bond is a debt investment in which an investor loans money to an entity (corporate

or governmental), which borrows the funds for a defined period of time at a fixed
Page 11
interest rate. Bonds can be bought and sold by investors on credit markets around the
world.
Money Market
The money market is a segment of the financial market in which financial instruments
with high liquidity and very short maturities are traded. The money market is used by
participants as a means for borrowing and lending in the short term, from several days
to just under a year.
Cash or Spot Market
Investing in the cash or "spot" market is highly sophisticated, with opportunities for
both big losses and big gains. In the cash market, goods are sold for cash and are
delivered immediately. By the same token, contracts bought and sold on the spot
market are immediately effective. Prices are settled in cash "on the spot" at current
market prices. This is notably different from other markets, in which trades are
determined at forward prices.
Derivatives Markets
The derivative is named so for a reason: its value is derived from its underlying asset
or assets. A derivative is a contract, but in this case the contract price is determined
by the market price of the core asset. If that sounds complicated, it's because it is. The
derivatives market adds yet another layer of complexity and is therefore not ideal for
inexperienced traders looking to speculate. However, it can be used quite effectively
as part of a risk management program.
Forex and the Interbank Market
The interbank market is the financial system and trading of currencies among banks
Page 12
and financial institutions, excluding retail investors and smaller trading parties. While
some interbank trading is performed by banks on behalf of large customers, most
interbank trading takes place from the banks' own accounts.
The OTC Market
The over-the-counter (OTC) market is a type of secondary market also referred to as a

dealer market. This generally means that the stock trades either on the over-thecounter bulletin board(OTCBB) or the pink sheets.
Third and Fourth Markets
You might also hear the terms "third" and "fourth markets." These don't concern
individual investors because they involve significant volumes of shares to be
transacted per trade. These markets deal with transactions between broker-dealers and
large institutions through over-the-counter electronic networks. The third
market comprises OTC transactions between broker-dealers and large institutions.
The fourth market is made up of transactions that take place between large
institutions.

Page 13
Gelera, Reynan
Interest
Simple Interest
Future Value and Present Value
Compound Interest
Effective Annual Yield
Inflation
Interest
If we borrow an amount of money today, we will repay a larger amount later. The
increase in value is known as interest.
The amount of a loan or a deposit is called the principal. The interest is usually
computed as a percent of the principal.
This percent is called the rate of interest (or the interest rate, or simply the rate
Interest calculated only on principal is called simple interest.
Interest calculated on principal plus any previously earned interest is called

compound interest.
Simple Interest
If P = principal, r = annual interest rate, and t = time (in years), then the simple
interest I is given by
I = Prt.
Example: Finding Simple Interest
Find the simple interest paid to borrow $4800 for 6 months at 7%.
Solution:
I = Prt = $4800(.07)(6/12) = $168.
Page 14
6 months is 6/12 of a year

Future and Present Value
In the last example, the borrower would have to repay $4800 + $168 = $4968.
The total amount repaid is called the maturity value (or the value) of the loan. We will
refer to it as the future value, or future amount. The original principal, denoted P, can
also be thought of as present value.
Future Value for Simple Interest
If a principal P is borrowed at simple interest for t years at an annual interest rate of r,
then the future value of the loan, denoted A, is given by
A = P(1 + rt).
Example: Future Value for Simple Interest
Find the future value of $460 in 8 months, if the annual interest rate is 12%.
Solution
8
A P 1 rt $460 1 .12 $496.80.
12
Example: Present Value for Simple Interest

If you can earn 6% interest, what lump sum must be deposited now so that its value
will be $3500 after 9 months?
Solution
A P 1 rt
9
3500 P 1 .06
12
$3500
P
$3349.28
1.045
Compound Interest
Interest paid on principal plus interest is called compound interest.
After a certain period, the interest earned so far is credited (added) to the
account, and the sum (principal plus interest) then earns interest during the
next period.

Page 15
Compounding Period
Interest can be credited to an account at time intervals other than 1 year. For example, it
can be done semiannually, quarterly, monthly, or daily. This time interval is called the
compounding period (or the period).
Future Value for Compound Interest
If P dollars are deposited at an annual interest rate of r, compounded m times per year,
and the money is left on deposit for a total of n periods, then the future value, A (the final
amount on deposit), is given by
n
A P 1 .
m
Example: Future Value for Compound Interest
Find the future value of $8560 at 4% compounded quarterly for 8 years.
Solution
P = $8560, r = 4% = .04, m = 4. Over 8 years
n
n = 8m = 8(4) = 32.
32
.04
A P 1 $8560 1
4
m
$11,769.49.
Example: Present Value for Compound Interest

What amount must be deposited today, at 5% compounded monthly, so that it will
be $18,000 in 20 years?
Solution
.05
$18000 P 1
12
P
$18000
.05
1
12
240
240
$6635.60

Savings institutions often give two quantities when advertising the rates.
The first, the actual annualized interest rate, is the nominal rate (the stated rate).
The second quantity is the equivalent rate that would produce the same final
amount, or future value, at the end of 1 year if the interest being paid were simple

Page 16
rather than compound. This is called the effective rate, or the effective annual
yield.

A nominal interest rate of r, compounded m times per year, is equivalent to an effective
annual yield of
m
Y 1 1.
m
Example: Effective Annual Yield
What is the effective annual yield of an account paying a nominal rate of 4.2%,
compounded monthly?
Solution
12
.042
Y 1
1 .0428 4.28%
12
Inflation
In terms of the equivalent number of goods or services that a given amount of money will
buy, it is normally more today than it will be later. In this sense, the money loses value
over time. This periodic increase in the cost of living is called inflation.
Future Value for Continuous Compounding
If an initial deposit of P dollars earns continuously compounded interest at an annual rate
r for a period of t years, then the future value, A is given by
A Pert .
Example:
Suppose that a cup of your favorite coffee is $1.25. If the inflation rate persists at 2%
over time, find the approximate cost of the coffee in 25 years.
Solution
A Pert $2.25e(.02)(25) $3.71

The coffee will cost about $3.71.
Inflation Proportion
For a consumer product or service subject to average inflation,
Price in year A CPI in year A
Price in year B CPI in year B

Page 17
Example: Inflation
If your mother paid $3,000 in tuition in 1980 at the same college that you will be
attending and paying $9,300 in 2005, compare the schools tuition increase to inflation
over that same period of time.
Solution
Let x represent what we expect the tuition to be in 2005 if it had increased at the
average rate since 1980.
Price in year 2005 CPI in year 2005
Price in year 1980 CPI in year 1980
x $7110.44.
x
195.3
$3000 82.4
Now compare with the actual 2005 tuition.
$9300
1.30
$7128.64
Tuition at the school increased approximately 30% more than the average CPI-U rate.
Rule of 70
An estimation of the years to double, which is the number of years it takes for the
general level of prices to double for a given annual rate of inflation, is given by
years to double
70
.
annual inflation rate
Example:
Estimate the number of years to double for an annual inflation rate of 2.1%
Solution
Years to double
70
33.33
2.1
With an inflation rate of 2.1%, prices would double in about 34 years.

Page 18
Ramos, Mae Chloe
INTRODUCTION
When it comes to financial matters, we all know what risk is -- the possibility of losing
your hard-earned cash. And most of us understand that a return is what you make on an
investment. What many people don't understand, though, is the relationship between the
two.
OBJECTIVES:
1. Understand the relationship (or trade-off) between risk and return.
2. Define risk and return and show how to measure them.
3. Discuss the different types of investor attitudes toward risk.
4. Distinguish between avoidable (unsystematic) risk and unavoidable (systematic)
risk
5. Explain what is meant by an efficient financial market and describe the three
levels (or forms) to market efficiency.
DISCUSSION TOPICS:
Defining Risk and Return
Attitudes Toward Risk
Risk and Return in a Portfolio Context
Efficient Financial Markets

Page 19
RETURN
Income received on an investment plus any change in market price, usually expressed as
a percent of the beginning market price of the investment.
EXAMPLE
The stock price for Stock A was $10 per share 1 year ago. The stock is currently trading
at $9.50 per share and shareholders just received a $1 dividend. What return was earned
over the past year?
The variability of returns from those that are expected.

What rate of return do you expect on your investment (savings) this year?
What rate will you actually earn?
Does it matter if it is a bank CD or a share of stock?
Risk Attitudes
Certainty Equivalent (CE) is the amount of cash someone would require with certainty at
a point in time to make the individual indifferent between that certain amount and an
amount expected to be received with risk at the same point in time.
Risk Preference
-
Certainty equivalent > Expected value
Risk Indifference
-
Certainty equivalent = Expected value
Risk Aversion
-
Certainty equivalent < Expected value
Most individuals are Risk Averse.

Page 20
EXAMPLE
You have the choice between (1) a guaranteed dollar reward or (2) a coin-flip gamble of
$100,000 (50% chance) or $0 (50% chance). The expected value of the gamble is
$50,000.
Mary requires a guaranteed $25,000, or more, to call off the gamble.
Raleigh is just as happy to take $50,000 or take the risky gamble.
Shannon requires at least $52,000 to call off the gamble.
What are the Risk Attitude tendencies of each?
Mary shows risk aversion because her certainty equivalent < the expected value of
the gamble.
Raleigh exhibits risk indifference because her certainty equivalent equals the
expected value of the gamble.
Shannon reveals a risk preference because her certainty equivalent > the expected
value of the gamble.
Total Risk
Total Risk = Systematic Risk + Unsystematic Risk
Systematic Risk is the variability of return on stocks or portfolios associated with changes
in return on the market as a whole.
Unsystematic Risk is the variability of return on stocks or portfolios not explained by
general market movements. It is avoidable through diversification.

Page 21
Security Market Line

Rj = Rf + bj(RM - Rf)
Rj is the required rate of return for stock j,
Rf is the risk-free rate of return,
bj is the beta of stock j (measures systematic risk of stock j),
RM is the expected return for the market portfolio.
Determination of the Required Rate of Return
Lisa Miller at Basket Wonders is attempting to determine the rate of return required by
their stock investors. Lisa is using a 6% Rf and a long-term market expected rate of
return of 10%. A stock analyst following the firm has calculated that the firm beta is 1.2.
What is the required rate of return on the stock of Basket Wonders?
RBW = Rf + bj(RM - Rf)

RBW = 6% + 1.2(10% - 6%)
RBW = 10.8%
The required rate of return exceeds the market rate of return as BWs beta exceeds the
market beta (1.0).
Determination of the Intrinsic Value of BW

Lisa Miller at BW is also attempting to determine the intrinsic value of the stock. She is
using the constant growth model. Lisa estimates that the dividend next period will be
$0.50 and that BW will grow at a constant rate of 5.8%. The stock is currently selling for
$15.
What is the intrinsic value of the stock? Is the stock over or underpriced?
The stock is OVERVALUED as the market price ($15) exceeds the intrinsic value ($10).

Page 22
Angara, Reynaldo
1.
Definitions
A.
Stock is a share of a company that:

-
represents partial ownership of the corporation, and
can be bought and sold
Technically, stock refers to the equity (the value of ownership interest in a

corporation), and pieces of stock are called shares. It is not uncommon, though,
for the word stocks to be used in exchange for shares.
B. Bond is another tradable security that is built on debt instead of equity. A bond:
- represents an obligation to repay borrowed money, and
- makes the owner a lender instead of an owner
Bonds are essentially loans. When a corporation or a government entity (like a

city) issues a bond, it raises money from investors, who then become lenders. In
exchange for giving the corporation money, investors receive a promise that they
will receive their initial investment at a certain time in the future, plus any
interest that has accumulated on the bond.
2.
Valuation Fundamentals
The greater the uncertainty about an assets future benefits, the higher the
discount rate investors will apply when discounting those benefits to the
present.
The valuation process links an assets risk and return to determine its
price.

Page 23
3.
How are Stocks and Bonds Valued?

The price of a stock is determined by what buyers and sellers on the exchange
are willing to pay/accept on any given day. In general, the value of a company
is determined by the value of its assets (minus liabilities), along with the net
present value of all future earnings. A key factor in determining value is the
expectation of growth. If investors expect a company to grow very fast in the
future, they may value the company highly even if it is currently a loss-making
enterprise. Companies like Twitter and Amazon are examples of cases where
the current earnings may be small or even negative, i.e., losses but the
value of the company's assets (such as intellectual property, its customer base,
brand, goodwill, and other intangibles) and the expectation of future growth is
so high that the company is valued at billions of dollars.
Every investor has her own opinion of the value of the company. Share price
reflects a sort of consensus opinion of the market.
With bonds, prices are determined based on how ratings companies, like S&P
and Fitch, rate the creditworthiness of the issuer of the bond. For example, a
corporate bond issued by Apple is rated AAA, which means the ratings agency
has very high confidence in the ability of Apple to repay its loan, the bond debt
that the bondholders own. The likelihood that Apple will default on its loans is
very low, so the company can borrow at very low interest rates (say, 2%).
4.
Stock Valuation
When trying to figure out which valuation method to use to value a stock most
investors will quickly discover the overwhelming number of valuation techniques
available today. There are the simple-to-use ones, such as the comparables
method, and there are the more involved methods, such as the discounted cash
flow
model.
Which
one
should
you
use?
Unfortunately, there is no one method that is best suited for every situation. Each
stock is different, and each industry sector has unique properties that may require
varying valuation approaches.
Page 24
The four most commonly used techniques are:
Dividend Discount Model
Comparable transactions method
Multiples method
Market valuation
Dividend Discount Model

A procedure for valuing the price of a stock by using predicted dividends
and discounting them back to present value. The idea is that if the value obtained from
the DDM is higher than what the shares are currently trading at, then the stock is
undervalued.
Comparable Transaction Method

With this technique of valuing a company for a merger or acquisition, you look at
transactions that have taken place in the industry that are similar to the transaction under
consideration. With the comparable transactions method, you are looking for a key
valuation parameter.
That is, are the companies in those transactions being valued as a multiple of EBIT,
EBITDA, revenue, or some other parameter? If you figure out what the key valuation
parameter is, you can examine at what multiples of those parameters the companies are
being valued in a series of transactions. You can then value the company similarly.
Multiples method
Quite often, there is not enough information to be able to determine the valuation using
the comparable transactions method. In these cases, you can value a company based on
market valuation multiples. Examples of these valuation multiples include price/earning
multiples (also known as P/E ratios, this method, which compares a company's market
capitalization to its annual income, is the most commonly used multiple) EBITDA
multiples, and others. When using this method, you look at what multiples are used for
other companies in the industry.
Market Valuation

Page 25
The origin of the market approach of business valuation is established in the economic
rationale of competition. It states that in case of a free market, the demand and supply
effects direct the value of business properties to a particular balance. The purchasers are
not ready to pay higher amounts for the business and the vendors are not ready to receive
any amount, which is lower in comparison to the value of a corresponding commercial
entity.
The market approach of business valuation ascertains the value of a firm by performing a
comparison between the firms concerned with organizations in the similar location, of
equal volume or operating in the similar sector. It has a large number of resemblances
with the comparable sales technique, which is generally utilized in case of real estate
estimation. The market value of shares of companies that are traded publicly and are
involved in identical commercial activities may be a logical signal of the value of
commercial operation. In this case the company shares are bought and sold in an open
and free market. This process allows purposeful comparison of the market value of
shares.
There are a number of ways to calculate a stock's value, but one of the most elegant and
relatively simple ways continues to be via the dividend discount model (DDM) individual
investors can estimate the price they should be willing to pay for a stock or determine
whether a given stock is undervalued or overvalued.
5.
Bond Valuation
The valuation of bonds refers to the process by which you determine the value of a bond.
This information is then used, in conjunction with your personal estimates of what youre
willing to pay or your other options, to determine what is considered a fair price.
For investors, these valuation methods are the manner in which the investor will figure
out what theyre willing to pay, what they can expect in returns, and what their
investment portfolio is worth at any given point in time.
For the issuing organizations, these valuation methods allow them to determine how
much capital they can raise using debt, and the interest rates they will have to offer in
order to attract investors. You will do this using math!

Page 26
r stands for rate, which is the annual interest rate, and t is the number of years that the
single cash flow, so all this equation says is that you need to add up the present values of
all the coupons, then also add the present value of the end principal payment, and that
gives you the total present value of the bond.
That thing at the front that looks like a giant E is called a sigma. All it means is that
youre adding the values of different things together; in this case, the different present
values of future coupon cash flows for each year.
The comforting part of understanding this equation is that even the more complicated
equations are really just variations that build on this same theme using additional
variables and information to refine it and make it more accurate.
Zero-coupon bonds, principal STRIPS, and other bonds that dont make periodic interest
payments dont have this sort of calculation. Instead, because they generate all their cash
flows at maturity, the bond value is equal to the present value of the single future cash
flow after accounting for accumulated interest. Just look at them with the present value of
its maturity date, rather than including any coupon payments.
If youre not holding a bond to maturity, or you want to calculate your percentage return
on bond investment, you can do so by calculating the holding period yield. This is the
amount of yield that a bond will provide while a person is holding it, which pretty much
assumes that the person is selling the bond before maturity but some people just really
like math.
Holding period yield = {[Coupon + (Net gain/Loss)]/Purchase price} x 100
In this case, the net gain or loss is the price of selling the bond minus the price of
purchasing the bond, meaning that its the profits generated from buying and reselling the
bond. Add any coupon payments you received during the holding period, and youve just
calculated what the bond is worth over a holding period rather than to maturity.
Of course, this does assume you can accurately estimate the price you can sell the bond
for, which is a pretty big assumption for some people. Take the value of that bond and
divide it by your purchase price to show your return on investment as a proportion;
multiply it by 100 to calculate it as a percentage
Page 27
Aking, Janaeva Joy
Capital Budgeting Techniques and Processes
Any investment decision depends upon the decision rule that is applied under
circumstances. However, the decision rule itself considers following inputs: Cash
flows,Project Life and Discounting Factor.
The effectiveness of the decision rule depends on how these three factors have been
properly assessed. Estimation of cash flows require immense understanding of the project
before it is implemented; particularly macro and micro view of the economy, polity and
the company. Project life is very important, otherwise it will change the entire
perspective of the project. So great care is required to be observed for estimating the
project life. Cost of capital is being considered as discounting factor which has undergone
a change over the years. Cost of capital has different connotations in different economic
philosophies.
The following are the general virtues in each capital budgeting technique:
1. It should consider all cash flows to determine the true profitability of the project.
2. It should provide for an objective and unambiguous way of separating good projects
from bad projects.
3. It should help ranking of projects according to its true profitability.
4. It should recognize the fact that bigger cash flows are preferable to smaller ones and
early cash flows are preferable to later ones.

Page 28
5. It should help to choose among mutually exclusive projects that project which
maximizes the shareholders wealth.
6. It should be a criterion which is applicable to any conceivable investment project
independent of others.
What is capital Budgeting?
The process of identifying, analyzing, and selecting investment projects whose

returns (cash flows) are expected to extend beyond one year.
The Capital Budgeting Decision Process:
Identifying potential investments
Reviewing, analyzing, and selecting from the proposals that have been generated
Implementing and monitoring the proposals that have been selected
Capital Budgeting Decision Techniques:
Payback period: most commonly used
Accounting rate of return (ARR): focuses on projects impact on accounting

profits
Net present value (NPV): best technique theoretically
Internal rate of return (IRR): widely used with strong intuitive appeal
Profitability index (PI): related to NPV
Independent versus Mutually Exclusive Projects:

Independent projects accepting/rejecting one project has no impact on the
accept/reject decision for the other project
Mutually exclusive projects accepting one project implies rejecting another
If demand is high enough, projects may be independent
If demand warrants only one investment, projects are mutually exclusive
When ranking mutually exclusive projects, choose the project with highest NPV
Payback Period
The payback period is the amount of time required for the firm to recover its initial
investment
If the projects payback period is less than the maximum acceptable payback
period, accept the project
Page 29
If the projects payback period is greater than the maximum acceptable payback
period, reject the project
For
example,
if
an
investment
of
Rs.
100000
in
machine
is
expected to generate cash inflow of Rs. 20,000 p.a. for 10 years. Its PBP will be
calculated using following formula:
Discounted Payback Period

Discounted payback accounts for time value
Apply discount rate to cash flows during payback period
Still ignores cash flows after payback period
For example, one project requires investment of Rs. 80,000 and it generates cash flow for
5 years as follows:
The simple pay back of the project is 2.7 years while discounted pay back is 4.03 years
which is higher than simple pay back because the discounted payback is using cash flow
after discounting it with the cost of capital.

Page 30
Accounting Rate Of Return (ARR)

Need only profits after taxes and depreciation
Accounting ROR = Average profits after taxes Average investment
Average profits after taxes are estimated by subtracting average annual
depreciation from the average annual operating cash inflows
ARR uses accounting numbers, not cash flows; no time value of money
For example, A project requires an investment of Rs. 10,00,000. The plant & machinery
required under the project will have a scrap value of Rs. 80,000 at the end of its useful
life of 5 years. The profits after tax and depreciation are estimated to be as follows:
Decision Rule:
The ARR can be used as a decision criterion to select investment proposal.
If the ARR is higher than the minimum rate established by the management, accept the
project.
If the ARR is less than the minimum rate established by the management,
reject the project.
Net Present Value

Page 31
A key input in NPV analysis is the discount rate. r represents the minimum return that the
project must earn to satisfy investors. r varies with the risk of the firm and/or the risk of
the project
Accept projects if NPV > 0
For example, calculate NPV for a Project X initially costing Rs. 250000. It has 10% cost
of capital.It generates following cash flows:
As the project has positive NPV, i.e. present value of cash inflows is greater than the
cash outlays, it should be accepted.
Internal Rate of Return
IRR found by computer/calculator or manually by trial and error

The IRR decision rule is:
If
IRR
is
greater
than
the
cost
of
capital,
accept
the
project
If IRR is less than the cost of capital, reject the project

Page 32
For example, an investment requires an initial investment of Rs. 6,000. The annual cash
flow is estimated at Rs. 2000 for 5 years. Calculate the IRR.
The rate which gives a PVAIF of 3 for 5 years is the projects IRR approximately. While
referring PVAIF table across the 5 years row, we find it approximately under 20%
(2.991) column. Thus 20% (approximately) is the projects IRR which equates the
present value of the initial cash outlay (Rs. 6000) with the constant annual cash flows
(Rs. 2000 p.a.) for 5 years.
Decision Rule:
When IRR is used to make accept-reject decisions, the decision criteria are as follows:
If the IRR is greater than the cost of capital, accept the project. (r >k)
If the IRR is less than the cost of capital, reject the project. (r<k)
Profitability Index
Calculated by dividing the PV of a projects cash inflows by the PV of its outflows
Decision rule: Accept projects with PI > 1.0, equal to NPV > 0

Page 33
April Joy A. Amores

Amores, April Joy
1.
Definitions
A. Cost of capital is the cost of using the funds of creditors and owners.
Creating value requires investing in capital projects that provide a return
greater than the projects cost of capital.When we view the firm as a
whole, the firm creates value when it provides a return greater than its cost
of capital.Estimating the cost of capital is challenging.We must estimate it
because it cannot be observed.We must make a number of
assumptions.For a given project, a firms financial manager must estimate
its cost of capital.
B.
The cost of capital is the rate of return that the suppliers of capitalbondholders
and ownersrequire as compensation for their contributions of capital. This cost
reflects the opportunity costs of the suppliers of capital.The cost of capital is a
marginal cost: the cost of raising additional capital.The weighted average cost of
capital (WACC) is the cost of raising additional capital, with the weights
representing the proportion of each source of financing that is used.Also known as
the marginal cost of capital (MCC).
2. Taxes and the Cost of Capital

Interest on debt is tax deductible; therefore, the cost of debt must be adjusted to
reflect this deductibility.
We multiple the before-tax cost of debt (rd) by the factor (1 t), with t as
the marginal tax rate.
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Thus, rd (1 t) is the after-tax cost of debt.

Payments to owners are not tax deductible, so the required rate of return on equity
(whether preferred or common) is the cost of capital.
3. Weights of the Weighted Average
The weights should reflect how the company will raise additional capital.
Ideally, we would like to know the companys target capital structure, which is
the capital structure that is the companys goal, but we cannot observe this goal.
Alternatives
Assess
the
market
value
of
the
companys
capital
structure
components.Examine trends in the companys capital structure. Use capital

structures of comparable companies (e.g., weighted average of comparables
capital structure).
4. Applying the Cost of Capital to Capital Budgeting and Security Valuation

The investment opportunity schedule (IOS) is a representation of the returns on
investments.
We assume that the IOS is downward sloping: the more a company invests, the
lower the additional opportunities.
That is, the company will invest in the highest-returning

investments first, followed by lower-yielding investments as more
capital is available to invest.
The marginal cost of capital (MCC) schedule is the representation of the costs
of raising additional capital.
We generally assume that the MCC is upward sloping: the more

funds a company raises, the greater the cost.
5. Using the MCC in Capital Budgeting and Analysis

Capital budgeting issues:

Page 35
If the project has risk that is similar to that of the firm as a whole,
then using the WACC in discounting project cash flows to
calculate the NPV is appropriate.
What if the project is not of average risk? Without adjustment,

profitable projects with below-average risk would likely be
rejected and unprofitable projects with higher-than-average risk
may be accepted.
Security valuation issues:
When discounting cash flows of the entire company (e.g., free cash flows
to the firm), use the WACC.
When discounting equity cash flows (e.g., dividends or free cash flows to
equity), use the cost of equity.
6. Cost of the Different source of capital

Costs of
Capital
Cost of Debt
Cost of Preferred
Equity
Cost of Common
Equity
Yield to Maturity
Return on
Preferred Stock
Capital Asset
Pricing Model
Debt Rating
Variations
because of
Callability, etc.
Dividend Discount
Model
Bond Yield plus

Risk Premium
7. The Cost of Debt

Yield-to-maturity approach: Calculate the yield to maturity on existing debt.
Debt-rating approach: Estimate the yield based on similarly rated debt and the
average yield in that debt class.

Page 36
8. Issues in Estimating the Cost of debt

The cost of floating-rate debt is difficult because the cost depends not only on
current rates but also on future rates.
Possible approach: Use current term structure to estimate future rates.
Option-like features affect the cost of debt.
If the company already has debt with embedded options similar to what it
may issue, then we can use the yield on current debt.
If the company is expected to alter the embedded options, then we would
need to estimate the yield on the debt with embedded options.
Nonrated debt makes it difficult to determine the yield on similarly
yielding debt if the companys debt is not traded.
Possible remedy: Estimate rating by using financial ratios.
Leases are a form of debt, but there is no yield to maturity.
Estimate by using the yield on other debt of the company.
9. The Cost of Preferred Stock
Noncallable bond - a bond containing a provision that the holder cannot redeem
the security before a specific date (usually at maturity)bond certificate, bond - a
certificate of debt (usually interest-bearing or discounted) that is issued by a
government or corporation in order to raise money; the issuer is required to pay a
fixed sum annually until maturity and then a fixed sum to repay the principal
10. The Cost of Equity
Methods of estimating the cost of equity:
1. Capital asset pricing model
2. Dividend discount model
3. Bond yield plus risk premium
11. Using thr CAPM to estimate the Cost of Equity
The capital asset pricing model (CAPM) states that the expected return on equity,
E(Ri) , is the sum of the risk-free rate of interest, RF, and a premium for bearing
market risk, bi [E(RM) RF]:
E(Ri) = RF+ bi [E(RM) RF]
(3-4)
where
Page 37
bi
is the return sensitivity of stock i to changes in the market return
E(RM) is the expected return on the market

E(RM) RF
is the expected market risk premium or equity risk premium
(ERP)
Alternatives to the CAPM
The factor models may include macroeconomic factors (e.g., arbitrage pricing
theory models), company-specific factors (e.g., FamaFrench models), or indices
in addition to the market (e.g., industry index).
The historical equity premium approach requires the estimation of the mean
return over a period of time.
Preferred: geometric mean return
Issues:
The level of the stock market risk may change over time.
The risk aversion of investors may change over time.

Using the Dividend Valuation Model to Estimate the Cost of Equity

Page 38

Page 39
Using the Bond Yield Plus Risk Premium Approach to Estimate the Cost of Equity
The bond yield plus risk premium approach requires adding a premium to a
companys
yield
on
its
debt:
Required rate of return on equity = Before-tax cost of debt + Risk premium
The bond yield plus risk premium approach assumes that the spread between a
companys bond yield and its required rate of return is constant.
12. Project Betas

Issues in estimating a beta:
Judgment is applied in estimating a companys beta regarding the estimation
period, the periodicity of the return interval, the appropriate market index, the use
of a smoothing technique, and adjustments for small company stocks.
If a company is not publicly traded or if we are estimating a projects beta, then
we need to look at the risk of the company or project and use comparables.
When selecting a comparable for the estimation of a project beta, we ideally
would like to find a company with a single line of business, and that line of
business matches that of the project.
This ideal comparable is a pure play.
We use the beta of the comparable company to estimate an asset beta
(beta reflecting only business risk) and then use it for the subject project or
company.
Using Comparables to Estimate Beta
The process:
1. Select comparables.
2. Estimate the beta for comparables.
3. Unlever the comparables beta to estimate the asset beta.
4. Lever the beta for the projects financial risk.
Levered- Invest in a company with a lot of debt
Unlevered-Invest in a company with little zero debt, which instead has a lot of the
owners money equity.
Page 40
Levering and Unlevering Beta

1. Levered Firm(debt) has a higher Beta (higher risk) vs Unlevered
2. Corporate taxes lower Beta risk in a levered firm, but have no impact on the Beta
of unlevered firms.
Summary
The weighted average cost of capital is a weighted average of the after-tax

marginal costs of each source of capital.
An analyst uses the WACC in valuation. For example, the WACC is used to value
a project using the net present value method.
The before-tax cost of debt is generally estimated by means of one of two
methods: yield to maturity or bond rating.
The yield-to-maturity method of estimating the before-tax cost of debt uses the
familiar bond valuation equation.
Because interest payments are generally tax deductible, the after-tax cost is the
true, effective cost of debt to the company.
The cost of preferred stock is the preferred stock dividend divided by the current
preferred stock price.
The cost of equity is the rate of return required by a companys common
stockholders. We estimate this cost using the CAPM (or its variants) or the
dividend discount method.

Page 41
Santos, Ma. Cristina

Dividend represent a source of cash flow to stockholders and provide information
about the firms performance. Some stockholders expect to receive dividends. Others are
content to see an increase in stock price and no dividends. We have different types of pay
out. Cash dividend pay-out is a cash payment made to the shareholder of a corporation.
Generally cash dividends are reported in currency per share when discussing common
stock. When discussing preferred stock, dividends are often quoted as a percentage of the
par value of the stock. For example Jheycob has a 500 share in APMC Company. At the
end of the quarter APMC have computed his expenses against its income and declares a
P10.00 dividend per share for the quarter. This means that Jheycob will have a 10.00 X
500 = 5,000.00 at the end of the quarter. Second type of pay-out is Stock Dividend or
Split. Stock Dividends does not involve cash. Rather, it is the distribution of more shares
of the corporations stock. Stock split is a method commonly used to lower the market
price of a firms stock by increasing the number of shares belonging to each shareholder.
A stock split has no effect on the firms capital structure. For instance if a company has a
50,000 shares outstanding, a 2-for-1 stock split will result in 100,000 shares outstanding.
Sins the companys assets, liabilities and stockholders equity are the same as before the
stock split, doubling the number of shares should bring the market value per share down
to approximately half of its pre-split value. Third type is the stock repurchase which
include obtaining shares to be used in acquisitions, having shares available for employee
stock option plans and retiring shares. Stock repurchase enhance stockholders value by
reducing the number of shares outstanding and thereby raising earnings per share and
sending a positive signal to investors in the marketplace that management believes that
the stock is under-valued and lastly it provides a temporary floor for the stock price,
which may have been declining. The use of repurchase is to discourage unfriendly

Page 42
takeovers is predicated on the belief that a corporate raised is less likely to gain control of
the firm if there are fewer publicly traded shares available.
When the directors of the firm declare a dividend, they also typically issue a
statement indicating the dividend decision, the record date and the payment date. All
persons whose names are recorded as stockholders on the date of record set by the
directors receive a declared dividend at a specified future time. These stockholders are
often referred to as holders of record. Payment date, also set by the directors, is the actual
dated on which the firm mails the dividend payment to the holders of record. It is
generally a few weeks after the record date.
There are kind of Dividend Policies we have the fixed payout percentage of profit
earned to the stockholders. For instance Jheycob ha a share at APMC Corporation.
APMC dividend policy state that every share will earn a 5% dividends every quarter on
its income. So if APMC earned 50,000 pesos in a quarter Jheycob will have a P2, 500.00
per quarter and if the income of the company continues like this Jheycob will earn P10,
000.00 in a year. Second policy is the zero pay-out which means no dividends paid or the
company is reinvesting all its earning. Third type is constant or steadily increasing, this
not based on the percentage but on value. It remains constant and steady even the
company has an earning or none, For example, APMC has a dividend policy that every
quarter stockholders will receive a P10 dividend per share. So if Jheycob has a 200 shares
he will be having a quarterly income of P2, 000.00 or P8, 000.00 per year even the
company has no income.

Page 43
Short-term financial planning is critical for the survival of a company. They must know
what to do with excess money and how to deal with cash shortfalls. Handling either
scenario correctly can fortify the business for years to come.
Forecasting Short-Term Financing Needs
The first step in short-term planning is to forecast the future cash flows (FCF) of
the company. Doing so tells the company two things: 1. it determines whether it
will have a surplus or deficit in cash for each period, and 2. They need to decide
whether the surplus or deficit is temporary or permanent. A permanent surplus or
deficit may affect the firms long-term financial decisions. Overall, short-term
planning focuses on the cash surplus/deficits that are temporary. Short-term
analysis is usually done on quarterly intervals.
o Seasonalities
Seasonality is when sales and revenues are concentrated during a few
months. A firm with seasonality will usually experience cash surplus
during the high sales volume months and cash deficits sometime after the
volume falls. However, there are some businesses that generate so much
cash in those few months that it is able to carry them during the offseason. There are two main issues that seasonality brings up: 1. although
cost of goods sold fluctuate proportionally with sales, other costs do not,
and 2. Net working capital changes are more pronounced. Tracing
seasonalities in the firm can bring to light patterns of occurrence giving
the firm ample time to secure financial help during a deficit period.

Page 44
o Negative cash flow shocks

A negative cash flow shock occurs when a company encounters
circumstances in which cash flows are temporarily negative for an
unexpected reason. These can be similar to seasonalities in that they
can create short-term financing needs. A common industry example of
a negative cash flow shock is if a piece of machinery breaks and must
be replaced.
o Positive cash flow shocks
Although a positive cash flow is always a good thing, it still creates the
need for short-term financial planning. A new expansion can create
increased revenues but may create deficits beforehand due to increases
in marketing expenses and capital expenditures.
TYPES OF SHORT TERM PLANNING:
1. Short-Term Financing with Bank Loans

Bank loans are one of the primary sources of short-term financing,
especially for small businesses. These bank loans are usually initiated with
a promissory note, which is a written statement that indicates the amount
of the loan, the date of payment, and the interest rate.
a. Single, end-of-period payment loan
This is the most straightforward type of bank loan. This type of
loan requires that the firm pay interest on the loan and pay back the
principal in one lump sum at the end of the loan period. The
interest stated can be either a fixed or variable rate. A variable
rate is usually compared against the prime rate. The prime rate is
the rate banks charge their most creditworthy customers.
b. Line of credit
This is another common bank loan arrangement. A line of credit is
Page 45
where a bank agrees to lend a firm any amount up to a stated

maximum. This allows the firm to draw upon the line of credit
whenever it chooses. Firms use lines of credit to finance season
needs. An uncommitted line of credit is an informal agreement that
does not legally bind the bank to provide the funds. A committed
line of credit consists of a legally binding written agreement that
obligates the bank to provide funds to a firm regardless of the
financial condition of the firm as long as the firm satisfies any
restrictions in the agreement. This policy ensures that the firm does
not use the short-term financing to finance its long-term
obligations. A revolving line of credit is a committed line of credit,
which a company can use as needed, that is a solid commitment for
a longer period of time. A revolving line of credit with no fixed
maturity is called evergreen credit.
c. Bridge loan
A bridge loan is a short-term bank loan that is often used to
bridge the gap until a firm can arrange for long-term financing.
These are often quoted as discount loans with fixed interest rates.
In a discount loan, the borrower is required to pay the interest at
the beginning of the loan period.
d. Common loan stipulations and fees
i. Commitment fees
Commitment fees associated with a committed line of
credit increase the effective cost of the loan to the firm.
This fee is basically another interest charge hiding behind
a different name.

Page 46
ii. Loan origination fee

A loan origination fee is what a bank charges to cover
credit checks and legal fees that a borrower much pay to
initiate a loan. The firm pays this fee when the loan is
initiated; similar to a discount loan, it reduces the amount
of usable proceeds that he firm receives. This makes it
essentially an additional interest charge.
e. Compensate balance requirements

This is a separate component that the bank may include in the loan
agreement. A compensating balance requirement reduces the
usable loan proceeds. This is because the compensating balance
requirement means that the firm must hold a certain percentage of
the principle of the loan in an account at the bank. Most banks
require that this balance be held in a non-interest baring account,
but others allow the balance to be held in an account that pays a
small amount of interest to offset pay of the interest expense of the
loan.
2. Short-Term Financing with Commercial Paper

Commercial paper is short-term, unsecured debt used by large
corporations that is usually a cheaper source of funds than a short-term
bank loan. This is rated by credit rating agencies. The interest is typically
paid by selling it at an initial discount. The average maturity period is 30
days and the maximum period is 270 days. Any amount of time after 270
days requires the registration with the SEC, which increases issue costs
and creates a time delay in the sale of the issue. There are two types of
paper; direct and dealer. With direct paper, the firm sells the security
directly to investors. With dealer paper, sealers sell the paper to investors
in exchange for a spread (fee) for their services. This spread decreases the
proceeds that the issuing firm receives, this increases the effective cost of
Page 47
the paper.
3. Short-Term Financing with Secured Financing

Business can get short-term financing with a secured-loan, a type of
corporate loan in which specific assets are pledged as collateral.
a. Accounts receivable of collateral
i. Pledging of accounts receivable

In a pledging of accounts receivable agreement, the lender
reviews the invoices that represent the credit sales of the
borrowing firm and decides which credit accounts it will
accept as collateral for the loan. The lender typically lends
some percentage of the value of the accepted invoices. If
the borrowing firms customers default on their bills, the
firm is still in debt to the lender.
ii. Factoring of accounts receivable

In a factoring of accounts receivable arrangement, the firm
sells receivables to the lender, and the lender agrees to pay
the firm the amount due from its customers at the end of the
firms payment period. The customers of the firms are
usually instructed to make payments directly to the lender.
Financing arrangements may be with recourse or without
recourse. With recourse means that the lender can seek
payment from the borrower should the customers default on
their bills. Without recourse is a case in which the lenders
claim on the borrowers assets in the event of a default is
limited to only explicitly pledged collateral.
b. Inventory as collateral

Page 48
i. Floating lien
A floating lien uses the firms entire inventory to secure the
loan. This is the riskiest setup form the lenders standpoint
because the value of the collateral used to secure the loan
falls as inventory is sold. This type of loan bears a higher
interest rate than the next two discussed.
ii. Trust receipt

A trust receipt loan has distinguishable inventory that are
held as collateral for the loan. When these items are sold,
the firm gives the proceeds to the lender in repayment of
the loan.
iii. Warehouse arrangement

In a warehouse arrangement, the inventory held as
collateral is sorted in an actual warehouse. This is the least
risky arrangement for the lender. There are two different
ways this can be set up: public and field warehouses.
A public warehouse is where a business exists for the sole
purpose of storing and tracking the inflow and outflow of
the inventory. This means that as inventory is sold, the firm
must go to the inventory to the warehouse to get it. This
arrangement provides the lender with the tightest control
over the inventory. A field warehouse is operated by a third
party set up on the borrowers premises in a separate area
so the inventory is kept apart from the main plant. This is
more convenient for the borrower but still gives the lender
the added security of having the inventory that serves as
collateral controlled by a third party. This type of
arrangement is expensive. The method of collateralization
will affect the ultimate cost of the loan.
Page 49
Resurreccion, Imee
Working capital management involves the relationship between a firm's short-term
assets and its short-term liabilities. The goal of working capital management is to ensure
that a firm is able to continue its operations and that it has sufficient ability to satisfy both
maturing short-term debt and upcoming operational expenses. The management of
working capital involves managing inventories, accounts receivable and payable, and
cash.
Working capital encompasses both a firms current assets and current liabilities.
Net working Capital the difference between current assets and current liabilities.
Managing Assets and Liabilities

Investment in current assets
current assets tend to grow as sales increases a firm should increase current assets
until the marginal benefit from investment equals marginal costs of carrying the
additional assets
The use of short-term liabilities
Firms may draw on short-term liabilities to finance their operations for reasons:
1. funds may be needed only temporarily this is common for seasonal
businesses/seasonal expansion in inventories
2. debt with shorter maturities is often cheaper and easier to obtain than longterm debt
Risks in financing with short-term debt include:
short-term debt has to rolled over continually
unpredictable future interest rates
availability of funds can change

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International consideration - foreign exchange exposure and the effect on current

assets and liabilities must be considered for firms operating internationally.
The various sources of short-term liabilities

Unsecured credit trade credit, lines of credit, unsecured transaction loans from
commercial banks and commercial paper.
Secured credit use of accounts receivables and inventories.
Conclusion:
Working Capital Management
Efficient management of working capital is vital to the success of the firm
Different industries require different levels of working capital
Factors important to the management of corporate liquidity include:
good cash flow management
maintaining adequate earnings
good relations with bankers
proper management of receivables, payables, inventories, and capital
expenditures
Warning signs indicating potential liquidity problems:
a buildup of inventories and declining inventory turnover
increases in debt and debt ratios
increases in accounts receivables and collection periods
a decline in net working capital and daily cash flows

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Brias, Zandra
Finance is the study of how individuals, institutions, governments and businesses

acquire, spend and manage financial resource, thus finance work in the financial
environment that is encompasses with Institutions and markets, investments and financial
management.
Global or International Monetary System
A system of institutions and mechanisms to foster world trade, manage the flow of
financial capital and determine currency exchange rates.
Development of International Finance
International finance began about 5,000 years ago when the Babylonian cities rose
to importance as center of trading between Mediterranean Sea and civilizations in
the east.
Gold was used for transactions and as a store of value beginning 3000 B.C
Before World War the international monetary system operated mostly a gold
standard
Gold Standard- currencies of countries are
convertible into gold at fixed
exchange rates.
Example:
1 ounce of Gold = 20$ in US 1/20 = .05$

1 ounce of Gold = 5 FF in France 1/5 = .20FF
So the exchange rate will be 4-1
1972 First US monetary act was enacted and provided for bimetallic standard
based on both gold and silver. 1879 Standard based solely on Gold was adopted.
Full bodied money- the metal content was worth the same as their face value.
Paper money.
World War I most countries went off the Gold standard.

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Federal Reserved Act of 1913- provided for the issuance of Federal Reserve notes
called fiat money.
(Not backed up by gold or silver)
The government decreed the notes to be legal tender for the purpose of making
payments and discharging public and private debt. (Solely base on confident)
World War II 1920 -an attempt to go back to gold. 1930- Go off again due to
financial crises, bank failures and continued outflow of gold.
Bretton Woods Fixed exchange rate system- authorities from all major nations
met in Breton Woods, New Hampshire to formulate a post-world war II
international monetary system.
International Monetary Fund (IMF) - created to promote world trade through

monitoring and maintaining fixed exchange rates and by making loans to
countries facing balance of trade and payments problems.
World bank- the international bank for reconstruction and development was
created to help economic growth in developing countries.
Bretton Woodss System-individual currencies would be tied to gold through the

US dollar via fixed or pegged exchange rate.
Flexible Exchange Rate System (1973 present) a system in which the currency
exchange rates are determined by supply and demand.
European Unification
European Union- Organization established to promote trade and economic development
among European Country.
European Monetary Union- Organization among European Countries that agreed to have
a common overall monetary policy and the Euro as their common currency.
Currency Exchange Rates
Currency exchange markets/foreign exchange markets electronic markets where

banks and institutional traders buy and sell currencies on behalf of businesses and
other clients and themselves.
Currency exchange rate- value of one currency relative to another currency.

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Direct and Indirect quotation

Direct quotation method- indicates the amount of a home countrys currency
needed to purchase one unit of a foreign currency.
Indirect quotation method- indicates the amount of foreign currency needed to
purchase one unit of the home countrys currency.
Spot exchange rate rate being quoted for a current delivery of a currency
Factors that Affect Currency Exchange Rates

Supply and demand
Prices of goods, commodities and exchange rates are determined on open markets under
the control of two forces, supply and demand.
The laws of supply and demand show that:
High supply causes low prices, and high demand causes high prices.
When there is an abundant supply of a given commodity then the price should
fall.
When there is a scarce supply of a given commodity then the price should
increase.

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Therefore, an increase in the demand for a commodity would cause it to appreciate in

value, whereas an increase in supply would cause it to depreciate.
Inflation, interest rates and others
Purchasing power parity- currency of a country with a relatively higher inflation rate
will depreciate relative to the currency of a country with a relatively lower inflation rate.
Its simply comparing the income levels in different countries.
Interest rates parity a country with a relatively higher nominal interest rate will
have its currency depreciate relative to a country with a relative lower nominal
interest rate
Political risk these are risk on the actions by a sovereign nation to interrupt or
change the value of cash flows accruing to foreign investor.
Economic risk- risk associated with possible slow or negative economic growth, as
well as with the likelihood of variability.
Exchange rate developments for the US dollar
Arbitrage
Is the simultaneous purchasing of commodities, securities or bills of exchange in one
market and selling then in another where the price is higher.
Exchange rate developments for the US dollar
The dollar continues to be an important currency for international commercial and
financial transactions. Because of this, both the United States and the rest of the world
benefit from a strong and stable U.S dollar. Its strength and stability depend directly on
the ability of the United State to pursue noninflationary economic policies.
Why Conducting Business Internationally?
Increase sales
Improve profits
Increase innovation -Extending your customer base internationally can help you finance
new product development.
Exclusivity -Your Companys management may have exclusive market information
about foreign customers/prospects, marketplaces or market situations that are not known
to others.
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Economies of scale -Exporting is an excellent way to expand your business with

products that are more widely accepted around the world.
Education
Competitive Strike -Market entry can prompt not by the positive characteristics of the
country identified in a market assessment project, but as a reaction to competitors moves
Government Incentives
Financing International Trade
There is a distinction between trade credit and trade finance. Trade credit is an agreement
whereby a customer can purchase goods on account (without paying cash), paying the
supplier at a later date. Usually when the goods are delivered, a trade credit is given for a
specific number of days30, 60 or 90and it is recorded in the accounts receivable
section of the firm's balance sheet. Several firms record trade credit but are not engaged
in international trade. Trade finance generally refers to formal borrowing by firms from
financial institutions and governments to facilitate international trade activities.
Financing By Exporter- if the exporter has confidence in foreign customers and is

in a financial position to sell to them on open-book account, then sales
arrangement should operate very much as in domestic trade, subject of course, to
the complex nature of any international transaction.
Draft Or Bill Of Exchange- is an unconditional
by the party drawing it,
written order, signed
requiring the party to whom it is addressed to pay a
certain sum of money to order or to bearer.

Sight Draft- draft requiring immediate payment.
Time draft- draft that is payable at a specified future date.
Documentary Draft- Draft that is accompanied by an order bill of lading and other
documents like insurance, certificate of sanitation.
Order bill of lading- document given by a transportation company that lists goods
to be transported and terms of the shipping agreement.
Clean draft- a draft that is not accompanied by any special documents.
Bank Assistance in the Collection of Drafts
Financing through the exporters bank.

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Financing by Importer
Through importers bank
Bankers acceptance- a draft drawn on and accepted by the bank rather than
the importing firm.
commercial letter of creditFacilitate the bankers acceptance, statement by the bank guaranteeing
acceptance and payment of a draft up to a stated amount.
Trust receipt- an instrument through which a bank retains title to goods
until they are paid off.
Bankers acceptance- a promise of future payment issued by a firm and
guaranteed by bank.
Other aids to international trade:
Export-import bank established to aid in financing and facilitating trade
between the US and other countries.
Travellers letter of credit- is issued by a bank in one country and
addressed to a list of foreign banks.
International Financial Equilibrium
The nations of the world attempt to achieve international financial equilibrium by
maintaining a balance in their exchange goods and services.
Balance of Payments Accounts
Balance of payments- summary of all economic transaction between one country

and the rest of the world
Balance of trade- the net value of a countrys exports of goods and services
compared to its a imports
Merchandise trade balance- the net difference between a countrys import and
export of goods
Current account balance- the flow of income into and out of United States during
a specified period.
Capital account balance- foreign government and private investment in the United
States netted against similar U.S investment in foreign countries.
Why it Matters?
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The Balance of Payments helps the economists and analysts understand the strength
of a countrys economy in relation to other countries. For example, a country with a
large trade deficit is essentially borrowing money to purchase goods and services, but
a country with a large trade surplus is doing the opposite.

Page 58
Brias, Zandra
Philosophy
Meaning love of wisdom
Philosophy of Business
It considers the fundamental principles that underline the formation and operation of a
business enterprise; the nature and purpose of a business and the moral obligations
that pertains to it. The subject is important to business and management, and closely
related to business ethics and political economy. It is influenced significantly by
philosophy, ethics, and economic theory.
Economic of business is different from business philosophy. Business philosophy
denotes a way of doing business or a business outlook.
The 4 Philosophy of Business
Machiavellianism
Niccolo Machiavelli, was sceptical about ideals based on the religious thinking of
the middle ages. Involved in politics in Italy during a period of upheaval, he
supported a republican government that took power for a short period of time, booting
out the Medicis, a wealthy and powerful family. When the Medicis regained control,
Machiavelli was thrown into prison and tortured. After he got out of prison, he
wanted to get back into politics, but first he has to regain favour with the Medicis. He
tried to do this by writing a book on how to rule called The Prince.
The Prince
Is a notorious for recommending that rules resort to extreme measures in governing.
These include both the use of force and the use of manipulation through lying and
playing on peoples beliefs and their ideals of goodness. At the same time, rulers
should not hesitate to make people fear them.
It states that a business firm is self-contained organism with its own natural laws
which can be bent but not broken. It describes someone who is cold blooded and
conniving in using others with total disregard for human dignity.
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Objectivism
Leonard Peikoff, a professional philosopher and Rand's designated intellectual heir,
later gave it a more formal structure. Peikoff characterizes Objectivism as a "closed
system" that is not subject to change.
Rands objectivism is rational self-interest. Morality is the ability to be faithful to the
real world by avoiding ethical judgement based on feelings. It protects the natural
right of individuals, freedom becomes the right to defy fate by making rational
decisions which lead to productivity and happiness.
Objectivism has been a significant influence
Laissez-faire
Is an economic system in which transactions between private parties are free
from government interference such as regulation, privileges, tariffs and subsidies.
Social Darwinism
Is a name given to various theories of society which emerged in the United Kingdom,
North America, and Western Europe in the 1870s, and which claim to apply
biological concepts of natural selection and survival of the fittest to sociology and
politics
Economically, social Darwinists argue that the strong should see their wealth
and power increase while the weak should see their wealth and power decrease.
Ethical relativism
Is the theory that holds that morality is relative to the norms of one's culture. That is,
whether an action is right or wrong depends on the moral norms of the society in
which it is practiced. The same action may be morally right in one society but be
morally wrong in another.
Universalism
Is a religious, theological, and philosophical concept with universal application or
applicability. Universalist doctrines consider all people in their formation. In terms
of religion, in a broad sense, universalism claims that religion is a universal human
quality.

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Page 61
Cara, Leslie Ann | Materum, Marie Joy

Page 62

Page 63

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VIEWPOINT
Emil Duran, President of Mars Drug Stores Company Inc., acknowledged the fact that the
recession hurt their industry, their business particularly, and stretched the capital
resources of their company plus the existence of tight competition.
TIME CONTEXT
1993.
I.
PROBLEM STATEMENT
How the company needed to prepare for the impending recovery in the industry after the
recession?
II.
STATEMENT OF THE OBJECTIVES
To determine how to finance the future investments of the company after the recession.
III.
AREAS OF CONSIDERATION
The following capturing the strength and weakness within the company, and describes
the opportunity in business.
Strength
A unique, current business-environment-appropriate business model.

Excellent staff who are highly trained and very customer attentive.
Weakness
Lack of visibility and brand equity of a start-up business.

Lack of true experience running a mail order outfit
Government intervention/regulation into medicine is possible.
Opportunities
Outside pressure on consumers to purchase medicine delivery order.

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The constant growth number of people taking medication.
Threat
IV.
The entry into delivery order market by an established company.

Regulatory legislation that curtails the mail order medicine industry
Some event that cripples interstate commerce in regards to shipping
ASSUMPTION
Although Mars Drug Store is already all over the metro, it may still be up for competition
with other companies that see opportunities in the industry. Also, with the birth of generic
drug stores, this may be one of the better options for the consumers who are finding an
affordable alternative for their medicines and other related needs
V.
ALTERNATIVE COURCES OF ACTIO (ACA)

- a. Set a meeting with Alex Penno of Oriental Bank regarding the application for a
term loan that could finance the plans on preparing for the recovery of the industry
from recession.
b. Identify and clarify the following: a realistic amount to be loaned from Oriental
Bank, their terms and conditions and requirements e.g. a real estate collateral,
modes of payment and interest rates that will still make the company achieve its
profitability margins, and lastly, the capability of the company to avail such loans
and still be able to sustain its operations
VI.
ANALYSIS
a. Oriental Bank already granted a PhP 45.8 million loan with an interest rate of
2% above the prime rate of about 14% at that time that Mars Drug Store used for
major renovations done with all its stores which increased their inventories and
sales. The said loan went on without any issue. It was noted by Oriental Bank
which was why it decided to extend a sizable credit to the company.

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b. Regarding the collateral needed, the family would willingly lend their assets:
real estate holdings with a total value that exceeded PhP 150 million. This will
serve as collateral if there was little risk that the company would default on its
loans.
VII.
CONCLUSION
If everything will go as planned, the said loan will be used over the next three
years to finance the further growth of the business. The sales could possibly grow
by at least 15% annually for the next five years. All expenses other than cost of
goods could be controlled and allowed to increase by a maximum of 10% per year
from current levels. Furthermore, Emil Duran already made a forecast that if the
company could raise its price, consequently, their sales will also increase
achieving a gross margin of 30%. Lastly, through this initiative, the attitude of the
family towards debt will hopefully change therefore making their money work for
them and not the other way around.
VIII. PLAN OF ACTION

a. A meeting will be set with Alex Penno of Oriental bank and all information
will be relayed such us the prospects of the pharmaceutical industry and of course,
the companys plans will also be discussed in the said meeting.
b. The company must prove their capability in paying for the loan and present
proofs of their collateral; the real estate holdings. A presentation must be prepared
with details such as the sales and growth forecast and the detailed allocation of the
loan. All documents must be prepared and requirements must be complied with.

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Angara, Reynaldo | Gelera, Reynan | Ramos, Mae Chloe

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Page 69
Viewpoint taken: Francisco Ang, Head of Research Department Asia Pacific Securities
Time Context: 1994-1995
INTRODUCTION:
Francisco Ang, head of the research department of Asia Pacific Securities, a stockbroker
at the Philippine Stock Exchange, was requested by company president Allan Co to
determine whether stock dividends increased the value of a company or not. Co asked
Ang to demonstrate his arguments through actual stock dividends paid by companies in
the PSE. Ang realized that Co wanted simple arguments so he selected two companies as
a basis for his report --- Manila Electric Co. (Meralco) and Metropolitan Bank and Trust
Co. (Metrobank).
I. STATEMENT OF THE PROBLEM

Do stock dividend affect the value of a company?
II. OBJECTIVES
To give guidelines to Asia Pacific Securities brokers when advising their customers
on whether to buy or sell the shares of a company that had just declared a stock
dividend.
III. AREAS OF CONSIDERATION

1.
THREATS
a.
Stock Market Volatility

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b. Economic Instability / Economic Recession

c. Customers trust and satisfaction
d. Company stock share value
e. Volume of traders and investors
2.
OPPORTUNITIES
a.
Securities and Exchange Commission (SEC)
b. Wide range of potential cross-marketing opportunities

c. Asia Pacific Securities Technical Analysis
IV.
ALTERNATIVE COURSES OF ACTIONS
ACA1: Purchase a share before the stock dividend

ACA2: Purchase a share after the stock dividend
V.
ANALYSIS
ACA1:
1.
Advantage:
If a sales is before the ex-dividend date, the dividend belongs to the new
owner
2. Disadvantage:
1) If on or after the ex-dividend rate, the seller is entitled to the dividend
2) If you purchased stock before the ex-dividend date you would get the cash
dividend, but this would be offset by the simultaneous drop in the stock
price
3) Buying a stock before a dividend is paid and selling after it is received has
absolutely no value except a partial return of the capital invested in the
stock
4) Dividends create a tax liability, meaning you'll have to claim the dividends
as taxable income on the following year's income tax return

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ACA2:
1.
Advantage:
1) Allows you to purchase the stock at a lower price without incurring taxes
2) The shareholder can either keep the shares and hope that the company will
be able to use the money not paid out in a cash dividend to earn a better
rate of return, or the shareholder could also sell some of the new shares to
create his or her own cash dividend
3) The biggest benefit of a stock dividend is that shareholders do not
generally have to pay taxes on the value. Taxes do need to be paid
2.
Disadvantage:
1) After the stock dividend, the value will remain the same, but the share
price will decrease to adjust for the dividend payout
VI.
CONCLUSION
A company that pays dividends regularly means that they are stable and profitable.
Therefore, while a stock dividend may not necessarily increase the value of a company
financially, it is, however, an indication that the company is doing well and thus worthy
to invest with. As we have seen, purchasing a share after a stock dividend has been
declared has many advantages.
VII.
1.
PLAN OF ACTION
Advise customers to buy stocks of companies that offers stock dividends

regularly
2. Advise customers to buy or sell the shares of a company that had just declared a
stock dividend

Page 72
Aking, Janaeva Joy | Amores, April Joy

Page 73

Page 74
Background of the Case

Smart Communications, Inc. is a wholly owned mobile phone and Internet service
subsidiary of PLDT. It is also known for introducing the world's first electronic prepaid
reloading service.
As part of the liberalization policies of the administration of President Fidel V. Ramos,
the telecommunications industry was opened up to new participants. In the past, the
industry operated under one company, the Philippine Long Distance Telephone
Company. The National Telecommunications Commission (NTC) allowed two
backbone facilities to operate: that of PLDT and another to be set up by a consortium
called NDTN.
Due to the large capital requirements of a new backbone facility, the NDTN
consortium consisted of many companies. A total investment of $130 million was
estimated for the alternative backbone facility.The members of the consortium are
shown in table 8-1.
Table 8.1
Members of the NDTN Consortium
Company
International
Percent Share
Communication 28.91
Corp.
NTC
Capitol Wireless, Inc.
19.72
Isla Communications, Inc.
17.04
Globe Telecom GMCR, Inc.
10.92
Smart Communications, Inc.
8.03
set
Phil. Global Communications, 12.50

Inc.
Express Telecommunication
2.30
Eastern telecommunication
.16
Pilipino Telephone Corp.
.42

Page 75
deadline for NDTN to incorporate on March 13, 1995 with an initial authorized capital of
P100 million and paid-up capital of P6.25 million.
One of the members of the NDTN consortium, Smart Communications
(SmartCom), operated a cellular phone network with 13 cell sites installed in Metro
Manila. SmartCom, a subsidiary of Metro Pacific Corporation, planned to expand its area
coverage to the provinces to meet its target of 30 to 40 cells sites by 1995. Its estimated
financing requirement for the expansion was placed at $2billion.
To finance its expansion, SmartCom was to make a US dollar-denominated
convertible bond offering, a private offer of preferred shares, and an initial public
offering of its common stocks.
The US dollar-denominated convertible bonds were for P1.47 billion to be issued
to Nippon Telegraph and Telephone Corporation (P1.24 billion), Asia Link B.V (P153.2
million) and its parent company, Metro Pacific Corporation (P80 million). The bonds
were to be unsecured obligations of SmartCom convertible at any time at the option of
the holder to common or preferred shares after due notice.
SmartCom issued P250 million preferred stocks of which P62.5 million had
already been paid for by existing shareholders. Subscribers were led by Asia Link B.V.
with P117.5 million, MPC with P100 million, MPC President Ricardo Pascua with P
17.5 million, Rafael Morales with P12.5 million, and SmartCom president Orlando Vea
with P 2.5 million.
Finally, SmartCom wanted to raise P 1.89 in an initial public offering of 30
percent of its common stocks, or 3 million shares. The price range being considered was
P126 to P360 per share. Proceeds of the offering would be used to meet the requirements
for a three-year expansion of its cellular mobile telephone system the establishment of
land lines and setting up of international gateway and paging facilities. A portion of the
proceeds would had used to pay off loans amounting to P150 million and for its work
capital.

Page 76
I-
Viewpoint
Orlando Vea, President

II-
Time Context
1995
III-
Statement of the Problem
Main Problem: How to meet the financing requirement for the large expansion of cell
sites?
IV-
Objectives
To be able to identify the different sources of financing which will be available for the
expansion program.
V-
Areas of Consideration
A. SWOT Analysis
1.Strengths
- Member of the National Digital Transmission Network ( NDTN) Consortium
- Operated 13 cell sites in Metro Manila alone.
- Subsidiary of Metro Pacific Corporation
2. Weakness
- Lack of funds for large expansion.
3. Opportunities
- With existing shareholders and subscribers of which 250 million preferred stocks
have been issued.

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-SmartCom was to make a US dollar-denominated convertible bond offering, a

private offer of preferred shares, and an initial public offering of its common stocks.
4.Threats
- Increasing demands of a competitive market
- Low percentage share at the NDTN Consortium as shown in Table 8.1.
B. Assumptions
Private offer of preferred shares
P250 million -issued preferred stocks

-
P 62.5 million paid by existing shareholders
P187.5million unpaid preferred stocks

P117.5 million-Asia Link B.V
P100 million MPC
P17.5 million MPC President Ricardo Pascua
P12.5 million- Rafael Morales
P2.5 million SmartCom President Orlando Vea
P250 million Subscribed stocks
-
Initial public offering of its common stocks
3million shares
Minimum -P378 million =P126per share multiply by
3million shares
Maximum-P1.080billion= P360per share multiply by 3million shares

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P150million- portion of proceeds would had used to pay off loans.

V-
Alternative Courses of Action (ACA)
ACA#1-SmartCom will use a private offer of preferred shares to raise funds for the
expansions of cell sites.
ACA#2- SmartCom will use (IPO) Initial Public Offering of its Common Stocks to raise
funds for the expansions of cell sites.
VI-
Analysis
ACA#1-SmartCom will use a private offer of preferred shares to raise funds for
the expansions of cell sites.
ADVANTAGES
- No Obligation for dividends
- No interference
- Trading on equity
- No charge on assets
-Variety
DISADVANTAGES
-Costly Source of Finance
-Skipping Dividend Disregard Market Image
-Preference in Claims
ACA#2- SmartCom will use (IPO) Initial Public Offering of its Common Stocks
to raise funds for the expansions of cell sites.
ADVANTAGES
-
Access to capital.
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Does not involve in interest charge.
Easier to obtain capital for future needs through ne stock offerings or public debt
offering.
Provides small businesss founders and venture capitalists.
Increase public awareness.
Better management talent.
Easier for the company to enter into mergers and acquisitions
DISADVANTAGES
Costly and time involved.
Reduces management's flexibility.
VII-
Conclusion
After thorough analysis, the group therefore prefers ACA # 2 though the general public in
contrasts to institutional investors of SMART Communications Inc. The efficient
functioning of financial markets requires a number of financial institutions. One of these
institutions, the investment banking firm, acts as middleman in the distribution of new
securities to the public. Its principal function is to buy the securities from the company
and then resell them to investors.
For this service, investment bankers receive the difference, or spread, between the price
they pay for the security and the price at which the securities are resold to the public.
Because most companies make only occasional trips to the capital market, they are not
specialists in the distribution of securities. On the other hand, investment banking firms
have the expertise, the contacts, and the sales organization necessary to do an efficient
job of marketing securities to investors.

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VIII- Action Plan
TASKS
PERSON
RESPONSIBLE
TIME
IMPLEMENTATION
Gathering of data for

fund raising using IPO
Financial Analyst
1st Quarter
Shelf Registration
Financial Analyst/Top
Management
2nd Quarter
Assessment of ACA #2
Top Manage
ment
3rd to 4th Quarter

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Encontro, Dianne Faye | Resurreccion, Imee | Santos, Ma. Cristina

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Page 87
Overview
In 1988, Chairman and CEO of Avon Products, Hicks B. Waldron, was scheduled to
propose three topics to Avons board of directors. These three topics included:
The public announcement that Avon would plan to sell off two of
its businesses that were previously acquired, which would result
in an overall book-value loss
A reduction of the common stock dividend
An announcement of an exchange offer that Avons financial
advisor proposed in which preferred stock for 25% of common
shares would be implemented.
Viewpoint
HICKS B WALDRON-chairman and chief executive officer of Avon products.
Time Context
1987-1988
I. Problem Statement
To decide if the company will reduce its dividend or to implement preferred equityredemption cumulative stock (PERCS)
II. Statement objective

1. To present analysis (advantages and disadvantages) of possible decisions to
further support recommendation.
2. To provide best recommendation that will benefit the company.

Page 88
III. Areas to Consider

Internal Environment
Strengths
Avons Beauty Group has a wide variety of business subsidiary and
one of the largest manufacturers of beauty products.
Weakness
Sufficient capital would be needed to invest in the company to expand
the beauty product business.
Reduction of dividends is necessary to conserve cash flow.
Opportunities
The ongoing changes in market conditions - The increase in demand.
They can double their commitment to its core beauty products business
and they can continue to invest significant additional capital on its
healthcare business.
Threats
The consequences of cutting Avons dividend.
A sudden cut of the dividend would be disastrous for Avon, as most of
the major shareholders would sell their shares.
IV. Assumption
The decision as to whether or not to take the PERCS shares or keep the common
stock depends on the expectation of future stock prices.
Since the shares can be redeemed for cash according to a declining schedule, if
the investor expects the price to rise above $31.50, it would be wise to keep the CS shares
ever with the lower dividend payments.

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If the stock price is above $31.50, the holder would receive $31.50 worth of CS
for each PERCs share.
V. Alternative Course of Action

To consider the recommendation of the company financial advisor Morgan
Stanleys to offer new type of Preferred Stock: PERCS (Preferred equityredemption cumulative stock)
To decrease the dividend to be given to shareholders
VI. Analysis
Shareholders wanting cash yield will convert to PERCS
Receive higher dividend
Other shareholders will be contented to hold (lower dividend yielding) Avon

common
VII. Conclusion
DESCRIPTION
TOTAL SHARES
Dividend
Dividend Paid per Year (in

mill)
$ 2.00
$ 143.40
2.00
35.85
(In mill)
Regular:
Based on Regular
dividend:
71.7
Common Stock
Proposed:
18
Separated based on 54
composition
53.78
89.63
Preferred
(25%)
stock

Page 90
Common
(75%)
Stock
Total Proposed
Potential Cash Flow
Saving
53.78
With the expected recommendation, Avon could save $ 53.78 million.
VIII. Plan of Action
Objectives
Strategy
1.
To
provide -to offer PERCS
sufficient financial
resources
on
capitalization
of
beauty
products
business expansion
Persons involved
Key Indicator
-Chairman
and Attracted investors
Chief Executive
Maintained dividend
-The
Board
of
Directors
-Financial Advisor
2. To reorganize -review
and -The Budget officer
financial policies
evaluate the existing
-The
Board
of
policies
Directors
-review the possible
implications of new -Financial advisor
-good cash flow

-established
capitalization
-good
valuation
stock
Policies

Page 91
Actas, Anne Lauren | Brias, Zandra

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Page 98
Viewpoint
Andre Hills, an assistant to the President at the Walt Disney Co. was informed
about the acquisition of Sony Corporation of the Columbia Pictures
Entertainment, Inc.
Time Context
September 28, 1989
I.
Problem Statement
Would the acquisition of Sony Corporation of the Columbia Pictures
Entertainment
Will have a tremendous effect in the industry of Entertainment?
II.
Statement objective
To be able to come up a reliable analysis in the acquisition of Sony Corporation
of the Columbia Pictures Entertainment, Inc.
III.
Areas to Consider
Strengths
High possibility for innovation.
Increase revenue
Availability of resources
High ratio of operating margin
Weakness
Lack of direction due to different division

Page 99
Lacking of marketing strategy
Opportunities
Competitiveness of market
High return of investment due to high leverage ratio
Consumer preferences
Popular movies like star wars
Threats
Highly segmented industry
Fluctuations of the market
High risk- the shareholders will take the burden in acquiring the Columbia
Pictures.
Low stock price
IV.
Assumption
Entertainment which is part of a tertiary sector of the economy (service industry)
can be fast changing industry that deals on amusing audience. This is the industry
that value much creativity and fun with a large target market but with a strong
competition. The Entertainment industry is involved in providing entertainment
radio and television and films and theatre. Entertainment is highly segmented
compose of print media, television, advertising, video games, radio, internet based
media, filmed entertainments.
V.
Alternative Course of Action

1. The first we do is to analyse the balance sheet of Columbia Pictures
Entertainment to find out the changes and movement of the assets.
2. Study the industry through SWOT analysis and IE, EFE, IFE matrix to be able to
create a suitable conclusion on the strategic plan of Sony Company.

Page 100
IX.
Conclusion
The vertical analysis on Columbia Pictures Balance sheet shows that the current
assets decreases while the inventory and net property equipment increases over all
the total assets increases from 1988 to 1989 approximately 100,000. The total
liabilities and deferred revenue increases from 1988 to 1989 while the
stockholders equity is stable.
Based on the SWOT analysis, the respond of the Columbia Pictures
Entertainment Inc. on their external factors is above average of 3.21 total
weighted score while on their internal factors is average of 2.6 total weighted
score it means that the company is much more responsive to the external factors
rather than to the internal factors.
Combining the external and internal factors by using the IE matrix, we can
conclude to Grow and Build strategy in which the decision of the firm
synchronise on this strategy.
Based on the market value analysis, the P/B ratio (Price-to-book value ratio) is
13.55 which are lower than the stock selling price, on the other hand the P/E ratio
(Price earnings ratio) is 28.57. While Disney has 15.58 P/E ratios, the difference
P/E ratio of Columbia and Disney is favorable to Disney.
X.
Plan of Action
1. The reliable analysis is the market value analysis because it shows the risk
involved in the merging of Sony Corp and the Columbia Picture.

Page 101

Page 102
http://www.investopedia.com/walkthrough/corporate-finance/1/financial-markets.aspx
2008 Pearson Addison-Wesley
Philippine Bond Market Guide, www.waseda.jp
Difference Between Stock and Bond Valuation, www.wisegeek.com
Facility Location by Piyush Sharma (slideshare)
2007 Thomson South-Western

Jain P K & Khan M Y, Financial Management
(Gitman Lawrence J., Principles of Managerial Finance
Tata McGraw-Hill Publishing Company Ltd
http://people.stern.nyu.edu/adamodar.com
Financial Structure Definition |
Investopedia http://www.investopedia.com/terms/f/financialstructure.asp#ixzz3yWWcrnwU
LONDON SCHOOL OF BUSINESS AND FINANCE GLOBAL
http://www.accountingcoach.com/stockholders-equity/explanation/5
http://www.investinganswers.com/financial-dictionary/income-dividends/cash-dividend-1031
http://www.accountingcoach.com/stockholders-equity/explanation/5
http://su3finance.wikispaces.com/ are licensed under a Creative Commons Attribution

Share-Alike 3.0 License.
Keown, A. (2011). Foundations of finance. New York Jersey: Person Educ. Inc.
Page 103

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Page 107
Aking, Janaeva Joy

1.
Why should a company concentrate primarily on wealth maximization

instead of profit maximization? Explain and cite concrete example.
A company should concentrate primarily on wealth maximization instead of profit

maximization considering its long-term benefits to the company as it aims at accelerating
the worth of the entity and achieving long term objectives. While profit maximizations
main objective of a concern is to earn a larger amount of profit and emphasizes on
achieving short term objectives.
Therefore, it can be said that for day to day decision making, Profit Maximization can be
taken into consideration as a sole parameter but when it comes to decisions which will
directly affect the interest of the shareholders, then Wealth Maximization should be
exclusively considered.
The best example is the existing companies like SM Prime Holdings. They own
businesses in different segments and maintains one of the most profitable and stable
group of companies in the country. The small beginnings of the company does not
guarantee big profits, but their wealth has just grown over the years their long term
goals for profit, wealth, and success have lead them to what and where they are now.
2.
Beta-Max Corporation is considering two investment proposals. One involves

the development of 10 discounts records store in Chicago. Each store is
expected to provide an annual after-tax profit of $35,000 for 8 years, after
which the lease will expire and store will terminate. The other proposal
involves a classical record of the month club. Here, the company will devote
much effort to teaching the public to appreciate classical music. The
management estimates that after-tax profits will be zero for 2 years, after
which they will grow by $40,000 a year through year 10 and remain level
thereafter. The life of the second project is 15 years. On the basis
information, which project do you prefer? Why?
Page 108
Based on the information given above, the worth investing proposal is the second
one which will grow by $ 40,000 a year through year 10 and remain level thereafter.
Though the first proposal offers an immediate pay back, but when the lease expires, the
store will also terminate which means that the business will only have an 8 years life.
While the second proposal has the potential to grow over the years and has a longer
business life.
Project life is very important; otherwise it will change the entire perspective of the
project. So great care is required to be observed for estimating the project life. Cost of
capital is being considered as discounting factor which has undergone a change over the
years. Cost of capital has different connotations in different economic philosophies.
Particularly, India has undergone a change in its economic ideology from a closed
economy to open-economy. Hence determination of cost of capital would carry greatest
impact on the investment evaluation.
3.
Should the managers of the company own sizable amount of stock in the
company? What are the pros and cons?
The pros: Theres nothing wrong about owning sizable stocks of managers in the
company as long as everything undergoes the right process. One of the best reasons for
investing in your company's stock is that it gives you some sense of control over your
own financial future. When you feel you have a personal investment in a company, you'll
work harder to ensure its success, and you'll feel a greater loyalty to it. If your efforts pay
off and the stock rises, your financial stability rises with it, especially if you purchased
the stock at a reduced rate. There are benefits for employers as well. Offering stock
options helps companies recruit better-qualified candidates, and motivates current
employees to perform at the top of their game. Employers who offer stock options also
find less turnover and better morale among their work forces,

Page 109
The cons: On the flip side, owning too much company stock can have its
drawbacks. By investing heavily in company stock and depending on the same company
for your salary and benefits, you're essentially staking your financial security on a single
firm. Should the company hit a shaky spot, your financial future can start to tremble as
well.
4.
As an investor, do you believe that some managers are paid too much? Do
not their rewards come at your expense?
Honestly speaking, yes, I believe there are managers who are overpaid but I dont
think the management will allow him to do things not worth compensating. He/she is
being paid of such rate because of her/his capacity to perform even beyond what is
expected. A company even needs to spend money for adequate training of all
management employees since they are responsible for everything in the operations of a
business. Yes, their compensation is of the investors expense, but they have to deal with
it as the output of the managers work is for the benefit of their investment. If they might
be paid too much and were not able to provide the required output, then its the
companys duty to evaluate and assess the performance per their terms of reference, and
provide necessary actions.
I am citing as an example one of the managers in the company where I am

working now- a manager who is being paid double than the other one from other
department. But he was not able to perform well based on expectations, thus, the
management has to decide whether to retain him in the company but will be offered with
other position base on his capacity, or will no longer renew his contract. The management
has yet to decide after the performance appraisal and evaluation.

Page 110
5.
How does the notion of risk and reward govern the behavior of financial
managers?
In completive and efficient marks, greater rewards can only be achieved with
greater risk. The financial manager is constantly involved in decisions involving a tradeoff between the two. For a company, it is important that it does well what it knows well.
If it gets into a new area where it has no expertise there is little reason to believe that the
rewards will be commensurate with the risk that is involved.
Example, financial managers of financing institution has to double their time end effort
just to hit the target sales, hence the reward.
6.
A basic rationale for the objective of maximizing the wealth positon of the
stockholder as a primary business goal is that such an objective may reflect
the most efficient use of societys economic resources and thus lead for a
maximization of societys economic wealth. Briefly evaluate this observation.
Companies have been taking step towards wealth maximization through societys
economic resources and thereby leading to societys wealth maximization. They have
started giving increased emphasis on passing some benefits to the society because profits
are ultimately dependent on the society.
Firms invest in local workforce which is cheaper and readily available. It creates a
good rapport between the two. As companies get readily available labor, on the other
hand societys wealth increases through employment.
The most important theme is that the objective of the firm is to maximize the
wealth of its stockholders, which translates into maximizing the wealth of the society.

Page 111
7.
What are the major functions of the financial manager? What do these
functions have in common?
As a company grows, the responsibilities of the finance manager expand, with

more outsourced functions coming in-house and more long-term strategic planning added
to the finance manager's plate. Their functions are summarized to achieve the following
major activities. All of below functions has one common goal- to ensure stability and
survival of the company for the welfare of its employees.
For example, requirements and procedures in a banking institution are very hustle that it
requires enough time and effort but clients have nothing to do but to follow and comply.
Finance Managers do not decide base on your physical compliance of documents, but
instead focuses on the legitimacy of the clients documents in compliance to the generally
accepted accounting and auditing principle.
Planning
Unlike a bookkeeper or accountant, a financial manager, often known as a chief financial
officer, plans long-term financial strategy for a company, delegating bookkeeping work
to lower-level staff. The financial planning aspect of the job includes setting goals for
achieving specific revenues, profit margins and gross profits.
Cost Containment
A key responsibility of a financial manager is to control the companys expenses. This
requires more than simply setting spending levels and cutting costs.
Cash Flow Management
One of the most important functions of a financial manager is to project and manage the
companys cash flow. Cash flow refers to the actual receipt of money and payment of
bills, as opposed to the companys budgeted income and expenses.
Legal Compliance
The corporate financial manager ensures the business meets all of its legal obligations,
such as sales and income tax payments; employee benefits contributions; state and federal
labor wage requirements; and Securities and Exchange Commission reporting, if the
company is a public corporation. At small and medium-sized businesses, the financial

Page 112
manager often works with tax experts and CPAs who guide the company regarding its
legal obligations.
8.
In recent years, there have been a number of environmental, pollution,

hiring, and other regulations imposed on businesses. In view of these
changes, is maximization of shareholder wealth still a realistic objective?
The imposition of government regulations on business in many cases has resulted

in the substantial increase in the firms total cost both directly and indirectly. These costs
have taken the form of increased cost of material, labor, and equipment on one hand and
lost productivity and market competition on the other. These adverse effects on business
have been in direct conflict with the cardinal management objective of maximization of
shareholder wealth realistically measured in terms of market value of shareholder equity.
Proponent for government regulations to business have argued that shareholder wealth
maximization is not realistic and that there should be a balanced attention to all what they
call stakeholders interest in which also the providers of risk capital are part. Nevertheless
it is true that one cannot maximize interests of all stakeholders simultaneously. There is a
need of prioritizing, and it would be in the best interest of all stakeholders to start with
maximization of shareholder wealth since it is all-inclusive with positive spread effects to
the
society
as

whole.
Page 113
Amores, April Joy
1.

instead of profit maximization? Refer to the literature* in your answer, and
use concrete examples to support your answer.
Wealth Maximization is considered as a better approach than profit Maximization

because Wealth maximization objective is a widely recognized criterion with which the
performance a business enterprise is evaluated. It has also some advantages such as;
wealth maximization is a clear term. Here, the present value of cash flow is taken into
consideration. The net effect of investment and benefits can be measured clearly. It
considers the concept of time value of money. The present value of cash inflows and
outflows helps the management to achieve the overall objectives of a company. The
concept of wealth maximization is universally accepted, because, it takes care of interests
of financial institution, owners, employees and society at large. Wealth maximization
guides the management in framing consistent strong dividend policy, to earn maximum
returns to the equity holders. The concept of wealth maximization considers the impact of
risk factor, while calculating the Net Present Value at a particular discount rate;
adjustment is made to cover the risk that is associated with the investments.
2.

Page 114
information, which project do you prefer? Why? Refer to the literature* in

your answer, and use concrete examples to support your answer.
The first project is expected to provide $350,000 in annual profit over 8 years or
$2.8 million in total. The second project is expected to have the following after-tax
profits:
Year
Profits
$40,000
80,000
120,000
160,000
200,000
240,000
280,000
10
320,000
11
320,000
12
320,000
13
320,000
14
320,000
15
320,000
Total
$3,040,000
While the second project is expected to provide greater total profits, these profits are
received further in the future than are the profits for the first project. Also, there may be
more uncertainty associated with the second project. Because of these factors, most
people prefer the first proposal. So, my final answer is the second project, because based
on my experienced the longer the period of the project last the better business in our
society.

Page 115
3.
company? What are the pros and cons? Refer to the literature* in your
answer, and use concrete examples to support your answer.
It must have their own sizable amount of stock in the company. Based on what I
heard to some of my friends that work in the big company, if the managers have sizeable
stock positions in the company, they will have a greater understanding for the valuation
of the company. Moreover, they may have incentive to maximize shareholder wealth than
they would be in the absence of stock holding. However, to the extent persons have not
only there human capital but, also most of their financial capital tied up in the company,
they may be more risk averse than is desirable. If the company deteriorates because a
risky decision proves bad, they stand to lose not only their jobs but, also have a drop in
the value of their assets. Excessive risk aversion can work to determine of maximizing
shareholder wealth as can excessive risk seeking if the manager is particularly a risk
prone.
4.
not their rewards come at your expense? Refer to the literature* in your
If I am an investor, it must depend how the managers well manage his or her job
done, but as in other thing, there is a completive market for good managers. A company
must pay them their opportunity cost, and indeed this is the interest of the stockholders.
To the extent managers are paid in excess of their economic contribution, the returns
available to investor will be less. However, the stock holders can sell their stock and
invest elsewhere. Therefore, there is a balancing force that works in the direction of
equilibrating managers pay across business firms for a given level of economic
contribution.

Page 116
5.
managers? Refer to the literature* in your answer, and use concrete examples
to support your answer.
6.
Refer to the literature* in your answer, and use concrete examples to support
your answer.
If capital is allocated on a risk adjusted return basis; it will flow to the most
productive investment opportunities. In this way, the economic growth of the society will
be maximized as the most efficient investment projects are undertaken. As the
shareholder wealth is determined by the risk-return nature of the company, only a wealth
maximization objective will result in savings in our society being efficiently allocated to
productive investment opportunities.
7.
functions have in common? Refer to the literature* in your answer, and use
concrete examples to support your answer.
The major functions of the financial manager are the investment decision, the
financing decision, and the dividend decision. The subsets under each are given in the

Page 117
chapter. These decisions share the common thread that they affect the value of the
companys stock. Together they determine the stocks value.
8.

your answer.
Regulation imposed by the government constitutes constraints against which

shareholder wealth can still be maximized. It is important that wealth maximization
remain the principal goal of the firms if economic efficiency is to be achieved in society
and people are expected to have increasing real standards of livings. The benefits of
regulations to society must be evaluated relative to the costs imposed on economic
efficiency. Where benefits are small relative to the costs, businesses need to make this
known through political process so that the regulations can be modified. Presently there is
considerable attention being given to deregulations. Many things have been done to make
regulations less onerous and to allow competitive markets to work more effectively.

Page 118
Angara, Reynaldo
1.
Why should a financial manager concentrate primarily on wealth

maximization instead of profit maximization as a goal of the corporation?
Use concrete examples to support your answer.
.
performance a business enterprise is evaluated. It has also some advantages such as:
Wealth maximization is a clear term. Here, the present value of cash flow is
taken into consideration. The net effect of investment and benefits can be
measured clearly. (Quantitatively)
It considers the concept of time value of money. The present values of cash
inflows and outflows helps the management to achieve the overall objectives of a
company.
The concept of wealth maximization is universally accepted, because, it takes care

of interests of financial institution, owners, employees and society at large.
Wealth maximization guide the management in framing consistent strong

dividend policy, to earn maximum returns to the equity holders.
The concept of wealth maximization considers the impact of risk factor, while
calculating the Net Present Value at a particular discount rate, adjustment is made
to cover the risk that is associated with the investments.
2.

the development of 10 discount record stores in Chicago. Each store is
expected to provide an annual after tax profit of $35,000 for 8 years, after
which the lease will expire and the store will terminate. The other proposal
many efforts to teaching the public to appreciate classical music.
Page 119
Management estimates that the after-tax profits will be zero for 2 years, after
which they will grow by $40,000 a years through year 10 and remain level
thereafter. The life of the second project is 15 years. On the basis of this
information, which project would you prefer?
profits:
Year
Profits
16
17
18
$40,000
19
80,000
20
120,000
21
160,000
22
200,000
23
240,000
24
280,000
25
320,000
26
320,000
27
320,000
28
320,000
29
320,000
30
320,000
Total
$3,040,000
people prefer the first proposal.

Page 120
3.
Should the managers of a company own sizeable amounts of stock in the

If the managers have sizeable stock positions in the company, they will have a
greater understanding for the valuation of the company. Moreover, they may have
incentive to maximize shareholder wealth than they would be in the absence of stock
holding. However, to the extent persons have not only there human capital but, also most
of their financial capital tied up in the company, they may be more risk averse than is
desirable. If the company deteriorates because a risky decision proves bad, they stand to
lose not only their jobs but, also have a drop in the value of their assets. Excessive risk
aversion can work to determine of maximizing shareholder wealth as can excessive risk
seeking if the manager is particularly a risk prone.
4.
As an investor do you believe that some managers are paid too much? Do not
their rewards come at your expense?
As in other thing, there is a completive market for good managers. A company

contribution.
5.
How the notion of risk and reward does governs the behaviour of the
financial managers?

Page 121
6.
A basic rationale for the objective of maximizing the wealth position of the
the most efficient use of societys economic resources and thus, leads to a
maximization
of
societys
economic
wealth.
Briefly
evaluate
this
observation.
7.
8.
In recent years, there have been number of environmental, pollution, hiring

and other regulations imposed on businesses. In view of these changes, is
maximization of shareholder wealth still a realistic objective?

Page 122

Page 123
Brias, Zandra

Wealth maximization is a long term approach that focuses more on the

sustainability of the business while the profit maximization approach is a short term that
focuses on the increase of profit of the firm. We can meet the quota of sales to support on
the increase of profit thus add value to the firm, so, we can conclude that profit
maximization is sub-part of wealth maximization. Another variance between the two is
the profit maximization focus on cash or income of the firm while the wealth
maximization goes after with the cash flow and so therefore proper evaluation in wealth
maximization thus proper decision is made by the managers. Just like the other company,
coca-cola and jonhson&jonhson in which they focus on the firm value rather than profit
thus the firms still exist until now. Wealth maximization creates legacy and believes on
the time value of money.

Page 124
I prefer for the longer term, since then it is proven that long term investment has
historically paid-off. Relative to volatility and time, investments held for longer periods
tend to exhibit lower volatility than those held for shorter periods. The longer you invest,
the more likely you will be able to withstand low market periods. Assets with higher
short-term volatility risk (such as stocks) tend to have higher returns over the long term
than less volatile assets such as money markets.
It would be a privilege for the manager to own a companys stocks. Owning
companys stock simply accompanied with advantage and disadvantage. Having larger
amount of stock does not guarantee a high return because being a part-owner of the
company you will burden the expenses of discounts given to all investors and as a partowner as well, we cannot say that you can control the company because for sure there are
other managers and executives who owned larger stocks than the other managers.
I believe so that there are some over paid managers yet it is failed to recognize
because it is undeclared, most likely the hedge-fund which is the limited partnership of
the investors that uses high risk methods, such as investing barrowed money in hopes of
realizing of capital gains. A major example for this scenario is John Paulson who made a
fortune out of the subprime-mortgage crisis.

Page 125
A trade off exists between risk and expected return in all types of investment
both and securities. Risk is the uncertainty about the outcome or payoff of an investment
in the future. For example, you may invest PHP1, 000 today and after a year you might
lose it or increase it to PHP4, 000. This variability is a risk involve. Rational investors
would consider the business venture investment to be riskier and would choose this
investment if the possible return is high. Investors and business manager do this
analization to make economic decision.
your answer.
There is no evidence regarding this assumption that maximizing wealth of the

stockholder will reflect the most efficient use of societys economic resources however,
the article of Thomas M. Jones from University of Washington and Will Felps from
University of New South Wales argued that wealth maximization is closely to social
welfare thus contrary to the objective of maximizing profit. For a conclusion, wealth
maximization cannot be applied to all kind of economic system because there are pros
and cons in using the objective. Like for example the 2008 US economic crisis where in
it start because of the ultimate goal of providing quality living among low income earner
thus they offer housing loan even though they do not have the capacity to pay.

Page 126
Financial Manager is the person in charge of the following functions:

1. Creating Money for the Firm what is finance without Money. Money is the
medium of exchange being use in financial system or rather financial
environment.
2. Transferring Money 3. Accumulating savings
4. Lending and Investing Savings
5. Marketing Financial Assets
6. Transferring Financial Assets
All of these are financial function being regulated or manage by financial
managers working in financial institutions like banks, lending & savings firms,
stock markets and others. The commonality among these functions is the medium
of exchange it used, the money.

your answer.
Some factors like new government regulation has a huge impact to the wealth
maximization of investor or stockholder because the cost will be affected, thus the
moment that government reinforce a new regulations the company objective of
maximizing stockholders equity will be unrealistic or will create conflict. A business
company is profit oriented thus it increase revenue by increasing value to the
stakeholders.

Page 127
Cara, Leslie Ann
1.

instead of profit maximization?
The financial management has come a long way by shifting its focus from
traditional approach to modern approach. The modern approach focuses on wealth
maximization rather than profit maximization. This gives a longer term horizon for
assessment, making way for sustainable performance by businesses. A short term horizon
can fulfil objective of earning profit but may not help in creating wealth. It is because
wealth creation needs a longer term horizon Therefore, financial management emphasizes
on wealth maximization rather than profit maximization. For a business, it is not
necessary that profit should be the only objective; it may concentrate on various other
aspects like increasing sales, capturing more market share etc, which will take care of
profitability. So, we can say that profit maximization is a subset of wealth and being a
subset, it will facilitate wealth creation.
2.
Beta-Max Corporation is considering two investment proposals. One

involves the development of 10 discounts records store in Chicago. Each store
is expected to provide an annual after-tax profit of $35,000 for 8 years, after

Page 128
Capital investment is the allocation of capital to investment proposals whose

benefits are to be realized in the future. Because the future benefits are not known with
certainty, investment proposals necessarily involve risk. Consequently, they should be
evaluated in relation to their expected return and risks, for these are the factors that affect
the firm's valuation in the marketplace. Included also under the investment decision is the
decision to relocate capital when an asset no longer economically justifies the capital
committed to it. The investment decision, then, determines the total amount of assets held
by the firm, the composition of these assets, and the business-risk complexion of the firm
as perceived by suppliers of capital. Because of the paramount and integrative importance
of this issue, we shall pay considerable attention to determining the appropriate required
rate of return for an investment project, for a division of a company, for the company as a
whole, and for a prospective acquisition. On the basis of this information, the first
proposal might be the better option for the company.
3.
Stock options mean additional compensation in the form of discounted stock

purchases, which can be redeemed either now or later at an instant profit. In many cases,
the options themselves come to have tangible value, particularly if the employee is able
to exercise the option at a price far below where it is currently trading. Workers can also
benefit from knowing that their efforts are at least indirectly contributing to the rise in the
value of their investment. However, if the value of the companys stock declines, then so
do the values of the options or shares. Those who have accumulated substantial amounts
of stock or options can see their net worth decline sharply in very short periods of time in
some cases, such as during severe market downturns and corporate upheaval. Also, the
immediate sale of a large number of shares purchased with stock options will lead to
substantial short-term capital gains, which can drastically increase the employees tax bill
for that year.

Page 129
4.
Many employees are motivated by two goals: earning a paycheck and doing work
that makes them proud. The offer of an additional reward gives an employee that extra
motivation to go above and beyond. Some rewards may cost money, whereas others are
investments in time and effort. All can contribute to a more pleasant work environment.
Employees are motivated by a workplace atmosphere of mutual respect. A reward
emphasizes your respect for your employee and encourages fellow employees to show
respect to each other. When the team is united, the lines of communication are open, and
employees are likely to share good ideas and put forth additional effort in the interest of
the company's success. A good manager can encourage an employee to work harder and
better from time to time, but a reward can go a long way toward building employee selfmotivation.
5.
managers?
In the world of financial management, a common principle is that great reward

cannot be achieved without great risk. The balance between these two extremes governs
the behavior of financial managers. Their job is to reap the highest returns on investments
while limiting the amount of risk placed in each investment. The financial manager is
constantly involved in decisions involving a trade-off between the two. For a company, it
is important that it does well what it knows well. If it gets into a new area where it has no
expertise there is little reason to believe that the rewards will be commensurate with the
risk that is involved.

Page 130
6.
maximization of societys economic wealth. Briefly evaluate this
observation.
The shareholder wealth maximization goal states that management should

endeavor to maximize the net present value of the future expected cash flows to the
shareholder of the firm. With a view of stakeholders as creditors, employees, customers,
suppliers, communities in which a company operates, their value maximization is
essential in keeping a firm running smoothly. Value creation occurs when we maximize
the share price for current stakeholders. The efficiency of Financial Management of any
firm is judged by the success in achieving the firms goal. The most important theme is
that the objective of the firm is to maximize the wealth of its stockholders, which
translates into maximizing the wealth of the society.
7.
Financial managers perform data analysis and advise senior managers on profitmaximizing ideas. Financial managers are responsible for the financial health of an
organization. They produce financial reports, direct investment activities, and develop
strategies and plans for the long-term financial goals of their organization. The role of the
financial manager, particularly in business, is changing in response to technological
advances that have significantly reduced the amount of time it takes to produce financial
reports. Financial managers' main responsibility used to be monitoring a company's
finances, but they now do more data analysis and advise senior managers on ideas to
maximize profits. They often work on teams, acting as business advisors to top
executives.
Page 131
8.

Organizations should be more concerned with corporate social responsibility

rather than focusing on wealth maximization only. The objectives of an organization are
the leading justifications for its existence. Commercial objectives exist to make the
maximum possible profits for the shareholders. Wealth accumulation can be termed as
the leading motivation for business practice. However, business does not take place in a
vacuum. There are concerns of the public who relate with the business that needs to be
addressed by the organization. The existence of an organization should have positive
impacts on its host society. Its negative effects should be minimal and mitigated. This
reduction of the negative effects while ensuring positive impacts both directly and
indirectly is described as the concept of social responsibility.

Page 132
1.
Why should a company primarily concentrate on wealth maximization

Maximizing wealth takes into account all factors which influence the market price
of the stock. Maximizing earning is not all inclusive because it does not take account of
the timing of the earning, of the business and financial risk of the firm and of dividend
policy. While shareholder wealth and corporate profitability tend to be correlated over
times, the two will deviate for the reasons cited above. As the shareholder wealth is more
inclusive, we should use it.
performance a business enterprise is evaluated. It has also some advantages such as,//
Wealth maximization is a clear term. Here, the present value of cash flow
is taken into consideration. The net effect of investment and benefits can
be measured clearly.
It considers the concept of time value of money. The present values of

cash inflows and outflows help the management to achieve the overall
objectives of a company.
The concept of wealth maximization is universally accepted, because, it

takes care of interests of financial institution, owners, employees and
society at large.
Wealth maximization guide the management in framing consistent strong

dividend policy, to earn maximum returns to the equity holders.

Page 173
The concept of wealth maximization considers the impact of risk factor,

while calculating the Net Present Value at a particular discount rate,
adjustment is made to cover the risk that is associated with
the investments.
2.
maximization
of
societys
economic
wealth.
Briefly
evaluate
this
observation.
3.
Beta-Max Corporation is considering two investment proposals. One

involves the development of 10 discount record stores in Chicago. Each store
is expected to provide an annual after tax profit of $35,000 for 8 years, after

Page 134
profits:
Year
Profits
1
$40,000
80,000
120,000
160,000
200,000
240,000
280,000
10
320,000
11
320,000
12
320,000
13
320,000
14
320,000
15
320,000
Total
$3,040,000
4.

Page 135
5.

6.



Page 136
7.

contribution.
8.
How does the notion of risk and reward governs the behaviour of the
financial managers?

Page 137
Gelera, Reynan
1.


performance a business enterprise is evaluated. It has also some advantages such as:
a. Wealth maximization is a clear term. Here, the present value of cash flow is taken into
consideration. The net effect of investment and benefits can be measured clearly.
(Quantitatively)
b. It considers the concept of time value of money. The present values of cash inflows
and outflows help the management to achieve the overall objectives of a company.
c. The concept of wealth maximization is universally accepted, because, it takes care of
interests of financial institution, owners, employees and society at large.
d. Wealth maximization guides the management in framing consistent strong dividend
policy, to earn maximum returns to the equity holders.
e. The concept of wealth maximization considers the impact of risk factor, while
calculating the Net Present Value at a particular discount rate; adjustment is made to
cover the risk that is associated with the investments.
2.


Page 138
profits:
Year
Profits
9
10 0
11 $40,000
12
80,000
13 120,000
14 160,000
15 200,000
16 240,000
17 280,000
18 320,000
19 320,000
20 320,000
21 320,000
22 320,000
23 320,000
Total
$3,040,000

Page 139
3.

I think managers should own sizeable amounts of common stock because owning
a stake in the company - their performance is tied up to their pay! If the managers are
working properly, the company will be doing well and manager's shares will increase in
value of the company.
4.
As an investor, do you think that some managers are paid too much? Do
I think it depends on the job they are doing for the company. If they are a stellar
performer and are producing for the company then they are worth the money they are
paid, but if they are incompetent to lead a company they should be fired and no more
money should be wasted on them.
5.
financial managers?
6.
maximization
of
societys
economic
wealth.
Briefly
evaluate
this
observation.

Page 140
7.
The role of the financial manager, particularly in business, is changing in response

to technological advances that have significantly reduced the amount of time it takes to
produce financial reports. Financial managers main responsibility used to be monitoring
a companys finances, but they now do more data analysis and advise senior managers on
ideas to maximize profits. They often work on teams, acting as business advisors to top
executives. Financial managers typically do the following:
Prepare financial statements, business activity reports, and forecasts
Monitor financial details to ensure that legal requirements are met
Supervise employees who do financial reporting and budgeting
Review company financial reports and seek ways to reduce costs
Analyze market trends to find opportunities for expansion or for acquiring other
companies
Help management make financial decisions

Financial managers also do tasks that are specific to their organization or industry. For
example, government financial managers must be experts on government appropriations
and budgeting processes, and healthcare financial managers must know about issues in
healthcare finance. Moreover, financial managers must be aware of special tax laws and
regulations that affect their industry.

Page 141
8.

It is the duty of the finance manager to see that the shareholders get good returns on the
shares. Hence, the value of the share should increase in the share market. The share value
is affected by many things. If a company is able to make good sales and build a good
name for itself, in the industry, the companys share value goes up. If the company makes
a risky investment, people may lose confidence in the company and the share value will
come down. So, this means that the finance manager has the power to influence decisions
regarding finances of the company. The decisions should be such that the share value
does not decrease. Thus, wealth or value maximization is the most important goal of
financial management. However an enterprise has other considerations like the
obligations to various interests of workers, consumers, society, as well as ethical trade
practices.
Many companies have several other goals for the welfare of the society, like improving
community life, supporting education and research, solving societal problems, etc. But
wealth maximisation means that the company is using its resources in a good manner. If
the share value is to stay high, the company has to reduce its costs and use the resources
properly. Hence the enterprise has to strike a balance between various social and other
considerations
while
maximizing

its
wealth.
Page 142
Materum , Marie Joy
1.

Maximizing wealth takes into account all factors which influence the market price
of the stock. Maximizing earning is not all inclusive because it does not take account of
the timing of the earning, of the business and financial risk of the firm and of dividend
policy. While shareholder wealth and corporate profitability tend to be correlated over
times, the two will deviate for the reasons cited above. As the shareholder wealth is more
inclusive, we should use it.
2.

profits:
Year
Profits
24 0
25 0
26 $40,000
27
80,000

Page 143
28 120,000
29 160,000
30 200,000
31 240,000
32 280,000
33 320,000
34 320,000
35 320,000
36 320,000
37 320,000
38 320,000
Total
$3,040,000
3.


Page 144
4.

contribution.
5.
financial managers?
6.
maximization
of
societys
economic
wealth.
Briefly
evaluate
this
observation.
If capital is allocated on a risk adjusted returnbasis; it will flow to the most


Page 145
7.
8.



Page 146
Ramos, Mae Chloe
1.

Wealth creation needs a longer term horizon. Therefore, financial management

emphasizes on wealth maximization rather than profit maximization. For a business, it is
not necessary that profit should be the only objective; it may concentrate on various other
aspects like increasing sales, capturing more market share etc, which will take care of
profitability. Profit maximization is a subset of wealth and being a subset, it will facilitate
wealth creation.
Manager / Owner should align his/her objective to broad objective of organization and
achieve a trade-off between risk and return while making decision; keeping in mind the
ultimate goal of financial management i.e. to maximize the wealth of its current
shareholders.
2.


Page 147
Long term investments never goes out of style but short term goals prevails the
best income generating strategies. The first project is expected to provide $35,000 in
annual profit over 8 years or $280,000. The second project is expected to have a total of
$304,000 after-tax profits. While the second project is expected to provide greater total
profits, these profits are received further in the future than are the profits for the first
project. Also, there may be more uncertainty associated with the second project. Because
of these factors, as an investor who considers time, I prefer the first project proposal.
3.
There is a major advantage to managers owning a stake in the company. Their

performance is tied up to their pay. If the managers are working properly, the company
will be doing well and manager's shares will increase in value - the company is happy,
the manager is happy and the general shareholder is happy. However, if the companys
value depreciates because a risky decision fails, they will be terminated and the value of
their assets will decrease. Dual jeopardy will happen on the shareholders wealth if the
manager is a risk prone.
4.
Rule of the game, you dont get what you deserve, you get what you negotiate.
Whether you are a manager or a simple employee, the range of your salary depends how
you bargain your service value. In the same way, as an investor, Id rather trust and
reward my manager if the performance is competitive and the value of my investment
increases. Fund managers are like teammates, mentors, or coaches who can help you win
the game. They know the rules, they study the strategies and give you techniques you
should not be taking advantage unless you want your capital their training ground only.
Page 148
5.
When it comes to financial matters, we all know what risk is -- the possibility of
losing your hard-earned cash. And most of us understand that a return is what you make
on an investment. Financial Managers should define the owners investment plan and
categorized on what risk and return goals he wants to achieve. Certainty Equivalent (CE)
is the amount of cash someone would require with certainty at a point in time to make the
individual indifferent between that certain amount and an amount expected to be received
with risk at the same point in time. Example: You have the choice between (1) a
guaranteed dollar reward or (2) a coin-flip gamble of $100,000 (50% chance) or $0 (50%
chance). The expected value of the gamble is $50,000. What are the Risk Attitude
tendencies of each?
1. Investor 1 requires a guaranteed $25,000, or more, to call off the gamble. He
shows risk aversion because his certainty equivalent < the expected value of
the gamble.
2. Investor 2 is just as happy to take $50,000 or take the risky gamble. He exhibits
risk indifference because his certainty equivalent equals the expected value of
the gamble.
3. Investor 3 requires at least $52,000 to call off the gamble. He reveals a risk
preference because his certainty equivalent > the expected value of the
gamble.
6.
your answer.

Page 149
7.
Financial Manager is the chief on producing return for the shareholders capital, a
person-in-charge for your financial assets and dealing with different investments and
business partners to meet the goals of the investor.
8.

your answer.
Environmental, pollution, hiring, and other regulations imposed on businesses by

the government are created to protect the individuals and guidelines for a good business
transactions. Regulation imposed by the government constitutes constraints against which
and people are expected to have increasing real standards of livings.

Page 150
Resurreccion , Imee
I.
Why should a financial manager concentrate primarily on wealth

maximization instead of profit maximization as a goal of the corporation?
Use concrete examples to support your answer.
The financial manager concentrate primarily on wealth maximization, it is

because wealth creation needs a longer term horizon. For a business, it is not necessary
that profit should be the only objective; it may concentrate on various other aspects like
increasing sales, capturing more market share etc, which will take care of profitability.
So, we can say that profit maximization is a subset of wealth and being a subset, it will
facilitate wealth creation. This leads to better and true evaluation of business. For e.g.,
under wealth maximization, more importance is given to cash flows rather than
profitability.
In wealth maximization, major emphasizes is on cash flows rather than profit. So, to
evaluate various alternatives for decision making, cash flows are taken under
consideration. For e.g. to measure the worth of a project, criteria like: present value of
its cash inflow present value of cash outflows (net present value) is taken. This
approach considers cash flows rather than profits into consideration and also use
discounting technique to find out worth of a project. Thus, maximization of wealth
approach believes that money has time value.
2.


Page 151
$2.8 million in total. The second project is expected to have a total of $3,040,000 profit in
15 years.
While the second project is expected to provide greater total profits, these profits
are received further in the future than are the profits for the first project. Also, there may
be more uncertainty associated with the second project. Because of these factors, most
3.

Pros: If the managers have sizeable stock positions in the company, they will have a
holding.
Cons: However, to the extent persons have not only there human capital but, also most of
their financial capital tied up in the company, they may be more risk averse than is

Page 152
4.
As an investor do you believe that some managers are paid too much? Do

contribution.
5.
financial managers?
In the world of financial management, a common principle is that great reward

cannot be achieved without great risk. The balance between these two extremes governs
the behaviour of financial managers. Their job is to reap the highest returns on
investments while limiting the amount of risk placed in each investment.
6.
maximization
of
societys
economic
wealth.
Briefly
evaluate
this
observation.
The stockholder wealth maximization goal states that management should

stockholder of the firm. Net present value refers to the discounted value of future cash
flows at the expected rate of return. Wealth maximization can be achieved only with the
most efficient use of societys economic resource. Efficiency means utilization economic
resources in such a way that value-human satisfaction as measured by aggregate
Page 153
willingness to pay for goods and services is maximized. Companies have been putting
efforts to maintain an efficient asset- liability match in order to remain protected from
market fluctuation with least impact on their wealth.
7.
A financial manager is a person who takes care of all the important financial
functions of an organization. The person in charge should maintain a far sightedness in
order to ensure that the funds are utilized in the most efficient manner. His actions
directly affect the Profitability, growth and goodwill of the firm.
8.

The imposition of government regulations on business in many cases has resulted

in the substantial increase in the firms total cost both directly and indirectly. These costs
have taken the form of increased cost of material, labor and equipment on one hand and
lost productivity and market competition on the other. These adverse effects on business
have been in direct conflict with the cardinal management objective of maximization of
shareholder wealth realistically measured in terms of market value of shareholder equity.
Proponent for government regulations to business have argued that shareholder wealth
maximization is not realistic and that there should be a balanced attention to all what they
call stakeholders interest in which also the providers of risk capital are part. Nevertheless
it is true that one cannot maximize interests of all stakeholders simultaneously. There is a
need of prioritizing, and it would be in the best interest of all stakeholders to start with
maximization of shareholder wealth since it is all-inclusive with positive spread effects to
the society as a whole.

Page 154
Santos , Ma Cristina
1.

Modern approach of financial management focuses on wealth maximization

rather than profit maximization. A simple person or business man mostly concerned on
making a profit which is considered as a short term benefits however it does not help in
creating a wealth. Wealth creation needs a longer time horizon.
A business concentrate to too many other factors like sales increase, increasing
market share and many other factors that will take care of profitability. So profit
maximization is a subset of wealth and being a subset, it will facilitate wealth creation.
Wealth maximization emphasizes more on the companys cash flow rather than
profit. Maximization of wealth approach believes that money has time value.
Wealth maximization is considered as a better approach than profit maximization
because wealth maximization objective is a widely recognized criterion with which the
performance a business enterprise is evaluated. The present value of cash is taken into
consideration. The net effect of investment and benefits can be measured clearly. It
considers the concept of time value of money. Present values of cash inflows and
outflows help the management to achieve the overall objectives of a company. It
considers the impact of risk factor, while calculating the Net Present Value at a particular
discount rate, adjustment is made to cover the risk that is associated with the investments.
Finally it is universally accepted because it takes care the interest of owners and
employees as well as the market.
As an example company A has the option to invest one million pesos
(1,000,000.00) in a new system to improve its service and collection. If the investment is
made now, the current profit levels will reduced to almost 40%, because some system
will not work on its regular routine due to maintenance and trial and some receivables
will suffer due to transition. However once the investment is made now, the system of his
company will worked more effective and efficient. System in collecting current
Page 155
receivables, monitoring delivery and payables will increase its efficiency to 80%.
Receivables and payables will be monitored much easier, delivery will be centralized and
align to all stores.
2.

expected to provide an annual after-tax profit of 35,000dollar for 8 years,
after which the lease will expire and store will terminate. The other proposal
involves a classical record of the month club. Here the company will devote
management estimates that after tax profits will be zero for two years, after
which they will grow by 40,000 dollar a year through year 10 and remain
level thereafter. The life of the second project is 15 years. On the basis
If will be the manager Ill be choosing endorsing a classical proposal. It shows a
long term benefit. Weighing wealth against profit maximization, I prefer the latter. I will
cost me a loss for certain year however its long term effect will gives me a great benefit
and will sustain the business profitably. Its existence and visibility in the market will
grow and sustain.
3.
The managers of the company should own a sizable amount of stock in the
company. If the manager owns a share in the company he will focus on how the company
will be more profitable. He will exert more effort to achieve the target sales. They will
have the passion and concern on the companys liquidity. They will be keener in making
decision making. Disadvantage of it maybe managers will want to be more involve in
decision making and some of them may not agree on making a big risk decision because
their shares will also be at stake.
Page 156
4.
I dont think some managers are overpaid. Managers are paid according to their
expertise and achievement. They are battled tested people, they are capable in what they
do and what they are ask to do. They are involve in the operation 24 hours mentally.
Their reward and incentive are given to them as an exchange of their hard work and effort
in achieving their goal and targets. To sum it up most they deserve what they have.
5.
managers?
Financial management is an integrated decision making process concerned with

acquiring, financing, and managing assets to accomplish some overall goal within a
business entity. Making financial decisions is an integral part of all forms and sizes of
business organizations from small privately held firms to large publicly traded
corporation. Duties and responsibilities of the financial manager are far reaching such as
acquiring and allocating funds to firms activities.
Businesses face a wide variety of risk as well as Financial Managers because
decision making depends on their judgment. Some risk comes within the organization
and others from the outside parties. Some risks are predictable and some are not.
Example of predictable risk is a taxi company; it is given to owners that their drivers and
vehicle may experience several road traffic accidents in a month. Because of this
assumption they can put a budget on insurance to lessen expenses. Also there are risk that
are unpredictable, like what happen in Divisoria Mall, wherein the whole site was burn
out of fire and theres nothing left. The small business located in there is not expecting
and not prepared and some still has no insurance to recover some their loss.
Most of the financial decisions is concern about risk and return. According to the
concept of risk aversion, investors should expect a higher return for taking on higher
level of risk.
Page 157
It follows that companies should weigh risk against reward. If a risk is worth
taking if the expectation of reward is greater than the expectation of loss. Where the gain
multiplied by the probability of that gain is greater than the impact of loss multiplied by
the probability of that loss. In many organization risk are managed with little
consideration of gain and decisions are taken with scant regard to risk. For instance a
major decision to make either to enter new markets or make acquisition- financial
managers weighs their judgment carefully. Some financial managers choose the easiest
way and that is on how to have their investment in no time. However some managers will
tend to choose the way that will give them a long term benefit. Whatever financial
managers way in decision making it is clearly they are weighing or balancing risk with
the reward it may result.
6.
The shareholder wealth maximization goal states that management should

shareholder of the firm. In view of stockholders as creditors, employees, customers,
suppliers, communities in which a company operates, their value maximization is
essential in keeping a firm running smoothly. The efficiency of Financial Management of
any firm is judged by the success in achieving the firms goal. Firms are integrated as
part of the society and the community as a whole. It is the duty of the firm to look after
and protect the interest of all the components of the firm and society.
7.
One function of financial managers is to estimate the amount of capital required.

How much to invest in purchasing a fixed assets. Fixed assets are really needed for the
Page 158
operation. What is the needed requirement in modernization and expansion of a business

and on how they will meet their working capital requirement that the company set.
Also they have a function of determining capital structure. This is to decide

the kind of proportion to various funds that are needs to be taken.
Choice of sources of funds in which managers has to decide the source s from
which the funds are to be raised.
Procurement of funds, require negotiation with the creditors and financial

institutions, issue of prosperous.
Utilization of funds on how they are going to use the funds they have to
maximize it.
Disposal of profits is the decision to decide on how much to retain for

ploughing back and how much to distribute as dividend to shareholders out of
the profits.
Management of cash involves forecasting the cash inflows and outflows to

ensure that there is neither shortage nor surplus of cash with the firm.
Sufficient funds must be available for purchase of materials, payments of
wages and meeting day to day expenses of the company.
Financial control includes budgetary control, cost control, internal audit and
break-even analysis and ratio analysis.
All this functions of financial managers states that they need to know how to
make the firm liquid. They have to make sure that every decision they make
will benefit the company either in a short term or long term basis. They have
to manage the companys resources well. Firms success depends on their
sound judgement.
8.
In recent years, there have been a number of environmental, pollution, hiring

and regulations imposed on businesses. In view of these changes, is

Page 159
Many sectors of the business world have long complained about government
regulations and their restrictive nature. Often cited as an impediment to corporate and
small business profits, and a waste of precious time and effort.
Some additional Government requirements are environmental protection agency.
The disposal of waste material, restriction on greenhouse emissions and others. SEC has
imposed strict regulations on initial public offerings of corporate stock, on the full
disclosure requirements of a stock prospectus and on buying and selling of equities on
various stock exchanges under its oversight.
Bottom line is that the Government is certainly a friend of business, providing
financial, advisory and other forms of service to the business community.
Simultaneously, the government is also a friend of the public and the American
consumer, and acts in what it perceives as their best interests with protective laws, rules
and regulations. While businesses may oppose some aspects of restrictive laws, taxes and
regulations, they may also endorse other such requirements if they help their own specific
business

goals.
Page 160

Page 161

Page 162

Page 163
Aking , Janaeva Joy

I-
Background
A group of Filipinos had conceptualized a central bank for the Philippines as early
as 1933. It came up with the principles of a bill for the establishment of a central bank for
the country after a careful study of the economic provisions of the Hare-Hawes Cutting
bill, the Philippine independence bill approved by the US Congress.
The BSP has a Security Plant Complex where coins are minted, banknotes are
printed and gold is refined. There are three (3) regional offices located in La Union, Cebu
City, and Davao City as well as 18 branches in key cities and municipalities.
Within the complex of the Bangko Sentral ng Pilipinas, the nation's central
monetary authority, resides the Museo ng Bangko Sentral ng Pilipinas. As repository and
custodian of the country's numismatic heritage, the Museo collects, studies and preserves
coins, paper notes, medals, artifacts and monetary items found in the Philippines during
its different historical periods. These collections have been placed on permanent display
at the Museo.
Source: Brochure given at BSP and video presented
II-
Opinion and Point of View
The staff at the museum were very accommodating. We were introduced through
a number of galleries, individually dedicated to a specific historical period of the country,
the Museo visually narrates the development of the Philippine economy, parallel to the
evolution of its currency. Complementary paintings from the BSP art collection, together
with chosen artifacts, enhance each gallery.
In the museum, visitors can have a grasp of the way money has evolved from the
earliest trading times in the Philippines, when primitive money was used and barter was
practiced, to the creation of modern coins and banknotes. The galleries show the
currencies used during the different periods of the country's history.

Page 164
Personally, I learned to appreciate the evolution of money- how it is being

designed and produced. Through the BSPs efforts, we are able to purchase, pay bills and
comply other responsibilities with in an efficient and effective way. Hence, people should
not just take advantage (writing anything on the paper bills) so that it will be circulated
from one to another and need not to print more, thus lessens materials and operational
expenses in the part of BSP, and ofcourse,at the expense of Filipinos.
III-
New Things Learned
The BSPs primary objective is to maintain price stability conducive to a balanced

and sustainable economic growth. The BSP also aims to promote and preserve monetary
stability and the convertibility of the national currency.
The BSP provides policy directions in the areas of money, banking and credit. It
supervises operations of banks and exercises regulatory powers over non-bank financial
institutions with quasi-banking functions.

Page 165
Amores , April Joy

On February 09, 2016, The Advanced Financial Management Students in
Masters Degree of Rizal Technological University held on educational tour in
BangkoSentral ng Pilipinasfor the purpose of to learn new things and mainly to see
firsthand the process of making money. We went to BangkoSentral ng Pilipinas. When
we enter the BSP, I noticed that the building is highly secured. We are restricted to bring
cellphones, cameras, gadgets and our bags and we're only allowed to bring personal
belongings. First our tour guide shows us the different series of banknotes like the
BagongLipunan series banknotes, new design series banknotes, New Generation
banknotes and some various overprints. Then our tour guide takes us to a briefing room
where he shows us different videos about the Evolution of Philippine Money and the
process of how to make banknotes and making coins. I learned a lot and also the videos
were useful since it includes the security features in the new generation banknotes so now
I know what to look for in the new generation banknotes to define if it is real or fake.
Next is he takes us to a floor where we can see the BSP employees do their job as they
work on their workplace making the e-passports. Our tour guide explains that it is called
electronic passports because it has a silicon chip where all the personal information is
put. We're also showed the different facilities making the banknotes from the start to the
sheet-cutting and ending at the counting process. It is a relief to know that even the
machines that are used to make money are also being modernized. I observed that the
Museocollects studies and preserves coins, paper notes, medals, artefacts and monetary
items found in the Philippines during its different historical periods. These collections
have been placed on permanent display at the Museo.Designed to "walk" the visitor
through a number of galleries, individually dedicated to a specific historical period of the
country, the Museo visually narrates the development of the Philippine economy, parallel
to the evolution of its currency. Complementary paintings from the BSP art collection,
together with chosen artefacts, enhance each gallery.
The BankoSentral ng Pilipinas their main objective is to maintain price stability
conducive to a balanced and sustainable economic growth. The BSP also aims to promote
and preserve monetary stability and the convertibility of the national currency. The BSP
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provides policy directions in the areas of money, banking and credit. It supervises
operations of banks and exercises regulatory powers over non-bank financial institutions
with quasi-banking functions.The BSP aims to be a world-class monetary authority and a
catalyst for a globally competitive economy and financial system that delivers a high
quality of life for all Filipinos.
I observed that the Museocollects studies and preserves coins, paper notes,
medals, artefacts and monetary items found in the Philippines during its different
historical periods. These collections have been placed on permanent display at the
Museo.Designed to "walk" the visitor through a number of galleries, individually
dedicated to a specific historical period of the country, the Museo visually narrates the
development of the Philippine economy, parallel to the evolution of its currency.
Complementary paintings from the BSP art collection, together with chosen artifacts,
enhance each gallery.
Therefore, our Philippine Money was made so difficulty and long process in order
to finish. Philippine Money must use in an appropriate ways. We do not write or reshape
our different Banknotes. We need to value our Philippines Money as we valued our
Philippine History. Money acts as a standard measure and common denomination of
trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing
efficient accounting systems. We will teach also ourselves and young generations to save
money in the bank, so that we can help some of our investors to build a new business
here in the Philippines. We must use our Money into a legal way. Although Money is the
most important today and to our next generations in our lives, we must put in our mind
that Money existed, because of our democracy of our country, and its part of our
Philippine history.

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Angara, Reynaldo
Our class went to the Money Museum which is within the complex of Bangko
Sentral ng Pilipinas last February 9, 2016.
The museum is definitely a numismatists
haven. It was inaugurated on January 3, 1999, as part of the celebration of the 50 years
of central banking in the Philippines. The Museum showcases the Banks collection of
currencies. As repository and custodian of the country's numismatic heritage, the Museo
collects, studies and preserves coins, paper notes, medals, artifacts and monetary items
found in the Philippines during its different historical periods. These collections have
been placed on permanent display at the Museo.
At the start, we were given a briefing by the amiable staff of the Money Museum,
Ms. Bonito Mahalia. After the briefing, she invited us to watch a 7 minute video on how
our currency are made. Afterwards, we went around the museum to look at the artifacts
they have. The museum featured historical ornaments such as golden rings and pieces
that were used as a form of money to barter with goods. We also saw how money
evolved, from the first coins and the first paper bill, to the current one. We witnessed the
different changes our money went through the different periods in history. They even
had rare artifcats like the notes we had throughout the Japanese invasion during the
World War II (which is usually known or called as the Mickey Mouse Money because
it has no value at all) and the P100,000 centennial note, measuring 81/2 x 14,
accredited by the Guinness Book of World Records as the worlds biggest legal tender
note.
Not only did the museum feature Philippine money, they also had foreign
currencies like ancient Greek and Roman coins and other European coins.
The museum was designed to "walk" the visitor through a number of galleries,
individually dedicated to a specific historical period of the country, the Museo visually
narrates the development of the Philippine economy, parallel to the evolution of its
currency. Complementary paintings from the BSP art collection, together with chosen
artifacts, enhance each gallery.
A panoramic memorabilia of 50 years of central banking in the Philippines,
showcases the strides made in bringing about price stability, to sustain economic growth

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in the country. The exhibition hall also carries the busts of the governors of the Central
Bank/ Bangko Sentral.
The tour gave me a glimpse of how our ancestors transacted with others, made
business, and valued resources. It made me appreciate the value of money and marvel at
the artistry of those involved in the design of the currencies. Understanding and knowing
the history of our currency emphasizes a knowledge that money was a leap forward in the
history of civilization and in mans economic progress.

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Cara, Leslie Ann
The Money Museum; an Introduction.
Within the complex of the Bangko Sentral ng Pilipinas, the nation's central monetary
authority, resides a numismatist's haven - the Museo ng Bangko Sentral ng Pilipinas. Inaugurated
on January 3, 1999, as part of the celebration of the 50 years of central banking in the
Philippines, the Museo showcases the Bank's collection of currencies.
As repository and custodian of the country's numismatic heritage, the Museo collects,
studies and preserves coins, paper notes, medals, artifacts and monetary items found in the
Philippines during its different historical periods. These collections have been placed on
permanent display at the Museo.
Designed to "walk" the visitor through a number of galleries, individually dedicated to a

specific historical period of the country, the Museo visually narrates the development of the
Philippine economy, parallel to the evolution of its currency. Complementary paintings from the
BSP art collection, together with chosen artifacts, enhance each gallery.
A panoramic memorabilia of 50 years of central banking in the Philippines, showcases

the strides made in bringing about price stability, to sustain economic growth in the country. The
exhibition hall also carries the busts of the governors of the Central Bank/ Bangko Sentral.
The Money Museum Tour; the Reflection.
Last February 9, 2016, our Advanced Financial Management class under Dr. Moreno
were tasked to have a plant tour in a company or an institution related to our subject thus
together with my classmates, weve agreed upon choosing The Money Museum at the Bangko
Sentral ng Pilipinas. It was a good choice indeed because the whole tour went well and I may say

Page 170
that weve learned more about how our money is being made, its value, and most especially its
history and contribution to the identity of our country.
We started the tour at almost 9:00 in the morning and then proceeded to have a short
briefing conducted by a staff from the museum. Weve watched a short video showing the
organizational structure of the BSP through the years and the history of it too. After that we
continued roaming around the museum, seeing the entire evolution and development of money
from the earliest forms up to the present which we are using now, the Philippine Peso. Then Dr.
Moreno came and saw our delighted faces because of the successful tour plus we managed to
grab some mementos from the museum and from Bangko Sentral itself and thats great bonus.
It is really fascinating for me to see such things that somehow contributed to who and
where we are now and I am quite sure that the entire class enjoyed the tour as much as I enjoyed
it.

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Encontro , Dianne Faye
As a repository and custodian of the countrys numismatic heritage, the BSP Museum
collects, studies, and preserves coins, paper notes, medals, tokens, and other numismatic items to
show the nations rich legacy.
The numismatic exhibition has different galleries, four of which are arranged according
to the countrys different historical periods: Pre-Spanish, Spanish, and Revolutionary. American,
Japanese, and the Republic. Another gallery is dedicated to a special exhibition Layon: Money
as Vision featuring the nations vision as reflected in proposed designs for money in the 1950s
up to the 1980s. These collections are significant since they mirror the aspirations of Filipinos
during those times.
The museum is designed to walk the visitor through the different pesos of the country
history, each gallery is dedicated to a specific period and the evolution of the Philippine currency
is traced alongside the development of the economy.
The story of money is told from the earliest trading times in the Philippines when
primitive money was used and barter was practiced to the creation of modern coins and
banknotes. First period is the Pre-Hispanic Period wherein small seafaring communities existed
throughout the Philippine Archipelago for at least 2000 years before the arrival of the Spaniards.
The early Filipinos traded with neighboring countries, and the chief means of trading was barter.
Chinese merchants brought in porcelain, silk and metal ware in exchange for gold, pearls,
beeswax and medicinal plants. Gold barter rings and piloncitos, the first recognized form of
coinage in the country, were also used as medium of exchange. And on Spanish Era, The
Galleon Trade started during the colonization of the Philippines in 1565 and lasted for 250 years.
It was responsible for transforming Manila into a trade center for oriental goods that were
brought across the Pacific in exchange for old-shapedd silver coins called "cobs" or macuquinas.
Other coins that followed were the dos mundos or pillar dollars, the counter stamped coins and
the portrait series, all in silver. The royalty of Spain in this era was authorized the production of
copper coins by the Ayuntamiento or Municipality of Manila to serve the need for fractional
coins. These were called barillas, and first appeared in 1728. The first banknotes called fuertes
were issued in 1852. The Casa de Moneda de Manila minted the first gold coins inscribed with
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the word Filipinas. These called Isabellinas and later Alfonsinos. For Revolutionary Period, the
Cry of Balintawak led by the AdresBonifaciosignaled the start of the Philippine Revolution.
After the proclamation of General Emilio Aguinaldo as President of the First PhilippineRepublic,
two years of 2-centavo copper coins were struck in the army arsenal of Malolos because their
mintage was so few, they are considered extremely rare. Paper notes were also issued, but the
circulation was limited because the organization was short-lived. When the American took over
the Philippines, the US Congress passed the Philippine Coinage Act, which authorized the
mintage of silver coins from 1903 to 1912. Silver Certificates were issued until 1918. These were
replaced with Treasury Certificates that circulated until 1935. To save on cost of minting silver
coins in America, the Manila Mint was reopened in 1920. It produced coins until the
Commonwealth Period. And During the Japanese occupation, two kinds of notes circulated the
Japanese Invasion Money issued by the Japanese Government, and the Guerrilla Notes or
Resistance Currencies issued by Filipino guerrillas. Under Republic Period, Republic Act No.
265 created the Central Bank of the Philippines on January 3, 1949 which was vested with the
power of administering the banking and credit system of the country. The Central Bank initially
issued the Victory Notes with the overprint Central Bank of the Philippines in 1949. 1951, it
issued its first official banknotes, the English Series. This was followed by the Pilipino Series in
1967, the AngBagongLipunan Series in 1973, and the New Design Series in 1985. The Central
Bank issued coins of the English Series in 1959, followed by the Pilipino Series in 1967, and the
AngBagongLipunan Series in 1975. It introduced the Flora and Fauna Series in 1983. All of the
series were demonetized in 1997. On 1993, the BangkoSentralngPilipias (BSP Series) was
created pursuant to Republic Act No. 7653, establishing an independent centra; ,pmetary
authority. The new logo of the BangkoSentral was carried in both its banknotes and coins
1995.BSP is replacing our banknotes. Due that currencies in the world are demonetized because
this is one way of safeguarding the integrity of the currency to protect it against counterfeiters.
As a matter of practice, central banks around the world change the design of their currencies that
have been in circulation for over 10 years. In the case of the Philippines, the old banknotes
series, introduced in 1985 or 30 years ago, is being replaced by the New Generation Currency
(NGC) series which was launched in 2010. An banking institution universal banks, commercial
banks, thrift banks (savings bank and private development banks) and rural banks, which are
under the supervision of BSP, are considered authorized agent banks.
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Gelera , Reynan
I. Introduction
As a repository and custodian of the countrys numismatic heritage, the BSP Museum
collects studies and preserves coins, paper notes, medals, tokens and other numismatic items to
show the nations rich legacy.
The numismatic exhibition has different galleries, four of which are arranged according
to the countrys different historical periods Pre-Spanish, Revolutionary, American, Japanese and
the Republic. Another gallery is dedicated to a special exhibition Layon: Money as Vision
featuring the nations vision as reflected in proposed designs for money in the 1950s up to the
1980s.These collections are significant since they mirror the aspirations of Filipinos during those
times.
II. The Museum

The museum is clean and well maintained. Before entering the BSP vicinity, we have
first check in their lobby to fill up forms and surrender our ID. Walk in visitor area allowed with
less than 50 people and if 50 or more people it must schedule. At the entrance of the museum we
need to surrender our bags to the security guard and he will give keys to the locker. We are being
usher upon entering by one of the BSP staff. She gave us brief introduction and how to tour
around the museum. She was very nice and good accommodating. The display and writings are
very informative. Lightings in the museum is good but the glass display have poor lighting
inside. The categories of the display are well order and arrange. Overall experience is good and
very informative.
III. Learning
We have learned much information about the history of transactions before in our
country. Periods like Spanish, Americans and Japanese. Early Filipinos from 9th to the 13th
century traded with neighbouring countries. They used gold barter rings and piloncitos, the first
from of coinage in the Philippines, to trade and buy goods they needed. Colonization and

Page 174
occupation such different countries such as Spain, the US, and Japan resulted in various
currencies circulating in the country.
In December 2010, the BSP released the New Generation Currency NGC to replace the
previous BSP design series which the country used for 25 years. The new BSP logo and mores
security feature were added.

Page 175
Materum , Marie Joy
Introduction
Within the complex of the BangkoSentralngPilipinas, the nation's central monetary
authority, resides a numismatist's haven - the MuseongBangkoSentralngPilipinas. Inaugurated on
January 3, 1999, as part of the celebration of the 50 years of central banking in the Philippines,
the Museo showcases the Bank's collection of currencies.
As repository and custodian of the country's numismatic heritage, the Museo collects,
studies and preserves coins, paper notes, medals, artifacts and monetary items found in the
Philippines during its different historical periods. These collections have been placed on
permanent display at the Museo.
Designed to "walk" the visitor through a number of galleries, individually dedicated to a
specific historical period of the country, the Museo visually narrates the development of the
Philippine economy, parallel to the evolution of its currency. Complementary paintings from the
BSP art collection, together with chosen artifacts, enhance each gallery.
A panoramic memorabilia of 50 years of central banking in the Philippines, showcases the
strides made in bringing about price stability, to sustain economic growth in the country. The
exhibition hall also carries the busts of the governors of the Central Bank/ BangkoSentral.
Background
On February 9, 2016 I visited the Money Museum of BankoSentralngPilipinas with some
of my fellow Graduate Students. At least one plan visit is required for Advanced Financial
Management subject. I have only visited this museum as a college student, so I thought it would
be interesting to visit again as my years of schooling have enabled me to understand and
appreciate the history of our trading system. By really reading the plaques and signs I could now
relate the concepts displayed in the museum to broader topics, rather than simply browsing
through exhibit and axed by extremely real figures.
This collection of the museum traces the history of changes in the countrys money, from
its primitive means of commercial exchange up to the examples of contemporary coins and

Page 176
banknotes. The collection is divided into several periods, which were the most significant in the
Philippines development.
Coins of the pre-colonial period (pre-Spanish era)

The first Philippine coin the Golden Ring of exchange or Tumbaga, was a circular
tube earring made of red gold. First appeared in the first century BC and was in use until the
XVI century.
Philippines coin collectors consider the so-called Piloncitos as the earliest coins tiny
beadlike beads of gold in different sizes, which had circulated in the country in the IX-XXII
centuries during the pre-colonial kingdom of Ma-yi (Ma-yi). There is not many left, since most
of the coins were melted down into jewelry.
Money of the colonial period.

Spanish colonization of the Philippines began in 1565 and lasted for 250 years. During
this period, the Spanish fleet actively exported the values from the countries of the Caribbean
Sea, and the location of the Philippines made it a shopping center of navigation. Spanish money
Reales (Dos mundos), a series of stamped coins and portraits of silver, as well as Mexican
Macuiquina (Cob) Silver Dos mundos, sometimes called Pillar dollars were used as the currency
of the country from 1732 to 1772. Today these coins are considered as one of the most beautiful
and rare coins in the world.
Due to the acute shortage of coins, Spanish royalty allowed Manila to mint their own
coins, and in 1728 the first Filipino Barrillas appeared. There are sources that mention the
existence of another coin minted at the Philippines Calderillo. Made from an alloy of bronze
or copper, the coin was in the shape of a parallelogram with jagged edges. There is a registry of
its release by the Spanish governor of the naval base in Kative dated 1766 However, the other
documents confirming its existence has not been preserved, as well as the coin itself.
In 1852 the first banknotes called Peso fuertes were released in the Philippines, and in 1861
Manila minted the first golden coins with the inscription Filipinas, that were called Isabelinas
and Alfonsinos.

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Money of the revolutionary period.
August 23, 1896 the revolution took place at the Philippines and the country was declared
the first Philippine Republic. In honor of this event the Army arsenal Malolos minted two types
of copper coins two centavos each. But the release was very limited, and now they are rare. The
banknotes were released at the same period. The new money had a short life as the
revolutionary movement was suppressed.
Money of the American period.
In 1901 the Philippines were occupied by the United States. Soon, the U.S. Congress
passed the Coinage Act of the Philippines, allowing the U.S. to release silver coins of the
Philippines from 1903 to 1912. Later until 1918, paper Silver certificates were released into
circulation and from 1918 to 1935 they were replaced with Treasury Certificates.
In 1920 Manila Mint once again began its work, producing silver coins of the country.
World War II.
During the Japanese occupation in 1941 1944 two kinds of banknotes were used in the
Philippines the Japanese invasion money issued by the Government of Japan, and the
banknotes of the Resistance (Guerrilla Notes), which were the money of Filipino guerrillas.
Money of the Republican period.

January 3, 1949 the Law of the Republic 265 came into force, the Central Bank of
the Philippines (BSP) was founded. The release of the Victory Notes coin with the stamp The
Central Bank of the Philippines was dedicated to this event. The first official banknotes
released by the Central Bank in 1951, had an inscription in English, the inscription in Philippine
was added in 1967. The series of AngBegongaLipunena was released in 1973, and in 1985 the
series of new design.
The coins of the British series of the Central Bank were also released in 1959, with
Philippine language in 1967, and the coins of the series of AngBegongaLipunena in 1975.

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The Flora and Fauna series was introduced into circulation in 1983, its improved version in 1992
to 1998, this series was demonetized.
Conclusion
The Money Museum- BSP does excellent job at presenting such diversity of information
relating to the evolution of Philippine Monetary History. From such recreations of bills, coins
and minting of money, it is intellectual and entertaining place that is most anyone can enjoy.
Aside from displaying simply the information relevant to its field of anthropology, this museum
takes it a step beyond to convey even large-scale phenomena. With knowledge similar to the
used to determine the history from barter to present monetary system will made Filipinos shorten
and ease the trading and importation system.
The exhibition Gallery of the museum is located in the premises of the Central Bank of the
Philippines. The entire collection of the museum is owned by the state.

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Resurreccion , Imee
On February 9, 2016 our class went to the Central Bank of the Philippines Money
Museum which is within the complex of Bangko Sentral ng Pilipinas. The Museum was
built on January 3, 1974 with an aim to collect Filipino coins and notes to trace the
monetary history of the Philippines and assemble a fine collection of rare and unusual
coins from all over the world. It was built through the collection in the bank's possession
and from the donations of illustrious collectors and dealers.
We were fortunate to be given a short orientation by the staff and had a short film
viewing about how Philippine money is made. In the museum, visitors can have a grasp
of the way money has evolved from the earliest trading times in the Philippines, when
primitive money was used and barter was practiced to the creation of modern coins and
banknotes. The galleries show the currencies used during the different periods of the
country's history.
Philippines coin collectors consider the so-called Piloncitos as the earliest coins.
These are tiny beadlike beads of gold in different sizes. During the pre-Spanish era, the
first Philippine coin was the Golden Ring of exchange or Tumbaga, a circular tube
earring made of red gold.
During Spanish colonization, the Spanish fleet actively exported the values from
the countries of the Caribbean Sea and the location of the Philippines made it a shopping
center of navigation. Spanish money called Reales (Dos mundos), a series of stamped
coins and portraits of silver, as well as Mexican Macuiquina (Cob) Silver Dos mundos,
sometimes called Pillar dollars were used as the currency of the country. Today these
coins are considered as one of the most beautiful and rare coins in the world.
When the revolution took place at the Philippines and the country was declared the first
Philippine Republic on August 23, 1896, the Army arsenal Malolos minted two types of
copper coins two centavos each. But the release was very limited and now they are rare.
When Philippines were occupied by the United States. The U.S. Congress passed the
Coinage Act of the Philippines, allowing the U.S. to release silver coins of the

Page 180
Philippines from 1903 to 1912. Later until 1918, paper Silver certificates were released
into circulation and from 1918 to 1935 they were replaced with Treasury Certificates.
During the Japanese occupation, two kinds of banknotes were used in the Philippines.
These are the Japanese invasion money issued by the Government of Japan and the
banknotes of the Resistance (Guerrilla Notes), which were the money of Filipino
guerrillas.
On January 3, 1949 the Law of the Republic No. 265 came into force, the Central
Bank of the Philippines (BSP) was founded. The release of the Victory Notes coin with
the stamp The Central Bank of the Philippines was dedicated to this event. The first
official banknotes released by the Central Bank in 1951, had an inscription in English, the
inscription in Philippine was added in 1967. The series of Ang Begonga Lipunena was
released in 1973, and in 1985 the series of new design.
The coins of the British series of the Central Bank were also released in 1959,
with Philippine language in 1967, and the coins of the series of Ang Begonga
Lipunena in 1975. The Flora and Fauna series was introduced into circulation in 1983, its
improved version in 1992. In 1998, this series was demonetized.

Page 181
Santos , Ma Cristina
Its a Tuesday morning February 09, 2016. It is our scheduled tour at BSP with
my colleagues. They discuss a brief history of BSP and shows us the different kinds of
money issued. Here is the short history of BSP:
A group of Filipinos had conceptualized a central bank for the Philippines as early
as 1933. It came up with the rudiments of a bill for the establishment of a central bank for
the country after a careful study of the economic provisions of the Hare-Hawes Cutting
bill, the Philippine independence bill approved by the US Congress. During the
Commonwealth period (1935-1941), the discussion about a Philippine central bank that
would promote price stability and economic growth continued. The countrys monetary
system then was administered by the Department of Finance and the National Treasury.
The Philippines was on the exchange standard using the US dollarwhich was backed
by 100 percent gold reserveas the standard currency.
During World War II in the Philippines, the occupying Japanese government
issued fiat currency in several denominations; this is known as the Japanese governmentissued Philippine fiat peso (see also Japanese invasion money). The puppet
state under Jos P. Laurel outlawed possession of guerrilla currency, and declared
a monopoly on the issuance of money, so that anyone found to possess guerrilla notes
could be arrested.
It is posted that money is an essential component of trade commerce which in turn
are important aspects of human history. Money then, is an important current which runs
through the stream of history. Its story is a reflection of the story of human itself. We also
learned that the earliest Philippine banknote were issued is 1852 by the first bank
established in the Philippines El Banco facsimiles of rare hand signed 1852, 1896 notes
and 1877 treasury notes. The actual pieces are in the Museum collection. One display are
the silver ornaments from southern Philippines which is incorporate as coins. We also
have a 100,000 peso bill that also displayed at the museum. These tours help us
understand how money runs from history to history and kinds of coins and bills used
before. See some pictures included.
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Page 226
Aking , Janaeva Joy
I-
Background
The seminar conducted last March 31, 2016 entitled Personal Finance and Wealth
Management was successfully facilitated by the Advance Financial Management class or

Dr. Moreno. The speakers from Prulife UK were Ms. Jaynielyn Javier and Mr. Voltaire
Rivera who have explained well the pros and cons of Finance and Wealth Management
through citing a concrete example, their product called Variable Unit Link life insurance (
VUL).
The speakers have also shared the Ten Things Young Professionals Need to
Know About Personal Finance and Wealth Accumulation as follows:
1.
Move from your comfort zone to your courage zone.
2.
Create a 6-months emergency fund.
3.
Leave within your means
4. Have ample protection for each family member, e.g. life insurance, disability
insurance, accident insurance and critical illness insurance
5. Pay yourself first
6. Diversify your investment
7. Develop multiple income stream
8. Health is wealth
9. Invest in yourself
10. Wealth conservation & Succession, i.e. Estate Planning
II-
I personally have availed VUL from another insurance provider. I believe that this
product will eventually help me protect my familys future with life insurance and give
me access to professionally managed investments that can help me accumulate money for
my future needs.
Page 227
The important thing about this instrument is that the death benefits and value of
the investments can fluctuate with the market and with the insured's wishes. In some
cases, the policyholder can borrow against the value of the investments in the account. It
is important that investors consider the financial stability of the insurer with which they
do business.
To sum it up, its all about securing yourself and your familys future since
nobody knows what lies ahead.
III-
New Things Learned
Basically, if you feel that you are a smart and careful investor, and don't mind the
extra cost, variable life insurance is probably the most sound choice for a permanent
policy.
Since in a standard whole life policy the insurance company invests very
conservatively, generating small returns, you stand to gain more using your own (or a
financial advisor's) expertise to bring in better returns.
Having an insurance policy with an associated investment portfolio can be very
attractive, especially since the absence of capital gains taxes can make it more profitable
than other type of investment account.

Page 228
Amores, April Joy

On March 31, 2016, conduct a seminar for Money Management or Financial
Wellness Program. The speakers of the Seminar are from PruLife.UK Financial
Consultants. The said seminar was held in Rizal Technological University, Graduates
School building.
The speakers introduced first theyre Company the PrulLife.UK. When it was
started and where it was started? Pru Life UK was established in 1996 as a life insurance
company. It is a subsidiary of United Kingdom-based financial services giant Prudential
plc, with regional headquarters Prudential Corporation Asia based in Hong Kong.
They said a successful person must plan to prioritize the four needs in our life.
The first need was protection benefits, which means that a person must have an insurance
for death benefit, life care benefit, accidental benefit, and others protection benefits. The
second need was Medium to Long-term Savings, which means while you are after having
a protection benefits we need planned how to buy your own tangible assets. Save your
money for your future house and lot, future family cost of living and for the expensive
wedding celebration, while you are financially protect in health. The third priority is
Children Education. To have children you must aware how to support their education
needs and its depend where they study. Finally a successful person must aware for their
retirement plan. Most of us need a comfortable retirement, for this to happen we need
money. We need to save for our future retirement, for our travel activity, for medicines,
and for good food.
The speakers focused also their products Variable Unit Link. Most of my
classmates questioned about their policy. Many of their questioned started with What
If? I learned that once you bought their policy you are not allowed to request the return
of your payment. They said also that once you bought their products your money earn or
increase or in a breakeven point in about 5years to 7years of maturity period.
Therefore, the PruLife.Uk products are for insurance and variable unit link, which
is also good to our life. They help to have a better economy in terms of managing our
financial. A successful person shall know how to manage his or her money for the future
needs. While you are young work hard and invest for your future. Life is short yet it was
meaningful.
Page 229
Angara, Reynaldo S.
We had our seminar last March 31, 2016 at Rm. 504, GS Bldg., Rizal
Technological University. Our Resource Speakers were both from PruLife UK. After a
short prayer led by Ms. April Joy Amores, Ms. Joy Materum introduced both our
speakers, Ms. Jaynielyn Javier and Mr. Voltaire Rivera.
Mr. Rivera first gave a short introduction about their company, PruLife UK.
Afterwards, Ms. Javier talked about Ten Things Young Professionals Need to Know
about Personal Finance and Wealth Accumulation. They are the following:
1.
Move from your comfort zone to your courage zone.
2.
Create a 6-months emergency fund.
3.
Leave within your means
4. Have ample protection for each family member, e.g. life insurance, disability
insurance, accident insurance and critical illness insurance
5. Pay yourself first
6. Diversify your investment
7. Develop multiple income stream
8. Health is wealth
9. Invest in yourself
10. Wealth conservation & Succession, i.e. Estate Planning
Mr. Voltaire Rivera then discussed about Variable Unit Linked (VUL) and other
products offered by PruLife UK. Their products were meant to help us in finance and
wealth accumulation and it caters to everybody. It can be customized also on your type
of personality, whether you are a risk taker or not.
There was open forum afterwards, and some of my classmates asked questions
not only about what was discussed to us but also regarding their experiences on their
investments.
Page 230
The seminar was not only interesting but it also gave me some encouragement on
financial management and investment. It was a reminder to always look at the future of
your family. It gave me the proper mindset in wealth accumulation.
Our resource speakers were very knowledgeable about the subject matter and it is
very apparent that they practice what they preach. They were very accommodating and
even offered their services and knowledge even after the seminar.

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Zandra L Brinas
The seminar goes along well; I just want to put a little critic on the speaker. The
speaker was not prepared and it simply introducing a product.
The seminar is related to financial management and insurance is a common

financial institution that secures life time worries. The Speaker did not elaborate the
importance of insurance as well as the advantage of having one.
The first speaker put a little insight but I am looking for a deeper insight about the
subject. The good insight that retain in my mind was the idea of saving money for six
months allowances. They should elaborate the insurance policy of the Philippines as well
as the rights of the policy holder; it could have been interesting if they did it.
Although I find the seminar less substance or insight, over all, I still enjoy the
seminar.

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Cara, Leslie Ann
On the evening of March 31, 2016, the Advanced Financial Management class of Dr.
Moreno conducted a seminar regarding Managing Your Finances. The guest lecturer was from
Pru Life UK, Mr. Voltaire Rivera, a licensed financial advisor.
About Pru Life UK
Pru Life UK is one of the leading life insurance companies in the Philippines, with 20
years of excellence in providing relevant and innovative life insurance products designed to meet
the specific needs of the public. The pioneer and expert in investment-linked insurance products,
Pru Life UK is driven by its commitment to always listen to and understand the financial
protection and wealth management requirements of the Filipino.
Pru Life UK started its operations in the Philippines in 1996. It is a subsidiary of British
financial services giant Prudential plc. Established in 1848, Prudential plc has an extensive
network of life insurance and mutual funds operations around the world, active in the United
Kingdom (UK), Europe, the United States (US) and 14 markets in Asia. It has 24 million
insurance customers worldwide and manages 509 billion in assets as of 31 December 2015.
Seminar Reflection
Basically, Mr. Rivera gave us important points and advices on how we will manage our
finances properly that there will come a time when well no longer work for money but it will be
the other way around, our money will work for us. He discussed some types of investments that
we may want to venture in. Given that hes from an insurance company, he also introduced us to
some of their products and services. He even offered free financial advising.
He indeed captured our interest and curiosity because some of my classmates were eager
to ask questions and discuss more things about financial management. For me, all of these
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concepts and ventures are really good but we also need to focus more on financial literacy
especially with people who were not fortunate enough to have decent education. They should
also be exposed to these kinds of opportunities and be able to manage their finances well.
Sadly, here in the Philippines, not all Filipinos know how to manage their finances and
make the most out of it. Some are not yet well informed or enlightened on how important it is to
prepare for their future, for emergency situations, for their family, for education, for their health
and for other things that involves spending their hard earned money.
Overall though, the seminar was a success and trues enough, weve learned a lot more
things on how we will be able to manage our finances well and make the most out of what we are
earning now and be prepared for whatever our future might bring.

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The seminar was held last March 31, 2016 at Rm. 504, GS Bldg., Rizal Technological
University for the process of our Outcome Base Education at Advanced Financial Management
subject. The speakers for that night are Ms. Javier and Mr. River that were both from PruLife
UK Mr. Rivera gave a short introduction about their company, PruLife UK.Then Ms. Javier
talked about Ten Things Young Professionals Need to Know About Personal Finance and
Wealth Accumulation. First thing is about the MYTHS ABOUT MONEY it said that high
income does not equal wealth. There was a trivia about that one of every three lottery winners
eventually becomes bankrupt because they dont know how to handle the money. There is also a
saying that 46% of OFW remittances are used to pay debts and 60% of NBA Players end up
broke within 5 years from retirement. It also discuss about the MONEY BELIEFS that there
are two types of mind which are the abundance mind-set and scarcity mind-set. If you have an
abundance mind-set you will have to create your financial future but if scarcity mind-set was
follow you will only say that Life happens to me. You will see the opportunities and take
action if abundance mind-set is in your but if not you always see the obstacle and do nothing.
You will learn from successful people if you had a abundance mind-set and if not you will resent
the successful people. If abundance. An abundance mind-set will associate themselves with
successful people and a scarcity mind-set will surround themselves with negative people. It is
also said that you need to have a clearly written goals that you need to accomplish within specify
date for you to evaluate if you accomplish the set goal. It is also tackle about the money lesson
which is first you need to move from your comfort zone to your courage zone. Second at list
create 6-months emergency fund. Lesson number three is that live within your means, too many
people spend money they dont have, to but things they dont want, to impress people they dont
like. The bible said that owe nothing to anyone- except for your obligation to love one another.
Have ample protection on each family member such as life insurance, disability insurance,
accident insurance and critical illness insurance. Then think how much insurance do you need,
you need to identify the right insurer, right price, right amount, right type and right advisor.
Calculate how much family will survive, need to evaluate how much monthly expense, children
education, children marriage and spouse retirement expense. Money lesson number five that you
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need to pay yourself FIRST from every pay check. Its means that disposable income first then
deduct the savings investing then you have your spending money. Diversify your investment,
there are saying that divide your portion to seven, or even to eight for you do not know what
misfortune may occur on the earth.

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Gelera, Reynan
The seminar was held last March 31, 2016 and the speakers are from Pru Life UK namely
Ms. Jaynielyn Javier and Mr. Voltaire Rivera. The seminar starts around 7:30 PM as we first eat
our dinner in waiting also for the other student to come. Mr Voltaire was the first to talk .He
have the introduction and information about Pru Life UK here in the Philippines. He also
discussed about the importance on insurance in our life. The explanation is clear about the
importance and benefits on having insurance for health or life. The brief introduction about Pru
Life is informative and we just know that here only in the Philippines it is name Pru Life as the
real name prudential life already exists in the Philippines. Ms. Jaynielyn is the second speaker
and her discussion is about the personal financing strategy to have a good personal financial
condition. Her discussion is simple and straight to the point. She gave some examples of
different decision in expending that lead to bad debt. She mentioned the things that we need to
buy and the things that we want to buy only. She discuss about the keeping a 6 month emergency
fund for emergency purpose. This information is helpful in times of trouble we have fund to use.
Overall the seminar was good and informative. The speakers are approachable and easily
to speak to. They have presented the topic well and with a professional looking power point
presentation.

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Materum, Marie Joy

On March 31, 2016, we had seminar regarding Financial Management, one of our
keynote speaker is Mr. Voltaire Rivera, a license financial advisor of Pru Life UK.
A lot of people are hoping to win lottery. People are hopeful they could buy a house, drive their
dream car even travel with their love ones. But sadly, not many people take their hope and put it
into action.
Some people say Money is my best friend, we can repeatedly say that statement all day
long, but if we dont have concrete and specific plans that could spur us to action, all our
wishing, hoping and chanting will never work. During the seminar I remember that at one point
in my life, my mind wandered a lot as I dreamt of becoming rich.
Yet, I realized that all my good intentions to become rich, all my day dreaming and
wandering didnt serve me well because I failed to act upon it. Eventually, that led me to
frustration.
The fulfillment of our dreams starts by asking ourselves the right questions. Instead of
decreasing our dreams, what we need to do is expand our income. Our goal and objectives is to
go to the root of our financial failures or financial successes. We must find the main source of
the problem and resolve it from here.
Sometimes we asked to ourselves that I work very hard. Why do I still not have enough
money? Or some may asked we have substantial income; Why dont I have savings financial
future?
Indeed many todays rich started out with nothing. They did not allow economic status,
social origins and lack of an academic degree or connections in society, to restrict anthem from
achieving their potential in life, Being born poor is not a sin Staying poor.

Page 238
Let us not be deceived into thinking that having all the money in the world or hitting the
jackpot is a guarantee that we can be rich for the rest of our lives. Where how many cars you
drive or where you live. True wealth, in my opinion, is measured by how we are trained to think.
I believed one very important factor that sets a person apart is how he was trained to think at an
early age. It is all about having the right mind-set. Mind-set is powerful. It can alter the way we
think, the way we feel, the way we make choices, and ultimately, the story of our lives.
People without money are afraid of remaining poor, so they work hard to make money.
Once people have money and become rich, they become afraid of losing their hand-earned
wealth. They are afraid when they do not make enough; they are afraid to lose everything when
they finally have more than enough

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Ramos, Mae Chloe

Date:
March 31, 2016
Venue:
Rm. 504, Graduate School Building, Rizal Technological University
Speakers:
Ms. Jaynielyn Javier and Mr. Voltaire Rivera
Company:
PruLife UK
Mr. Voltaire Rivera introduced PruLife UK history and the insurance premium products
like Variable Universal Life (VUL) Insurance.
Ms. Jaynielyn Javier presented the Personal Finance and Wealth Management to
encourage the class to shift from your comfort zone and take the challenge on financial stability,
build your emergency fund of 6 months salary on your savings account, and get protection for
life, disability, accident, and critical illness insurance. She also mentioned the financial wellness
aim to provide individuals a better understanding of your current financial status, various
strategies that can help manage your funds effectively, kept debt under control, and grow wealth
efficiently through investment, i.e., Stock market, Real State and business.
Reactions and Recommendations
I commend Mr. Voltaire Rivera and Ms. Jaynielyn Javier in providing the class a
comprehensive presentation and extending their knowledge with regards to Life Insurance
Policies. They elaborate that the life insurance coverage can be customized per individual risk
and return goals and capability. However, I suggest the Non-Life Insurance should also be
discussed for the business financial management per se.

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Resurreccion, Imee
Last March 31, 2016 our class in Advanced Financial Management held a seminar
entitled Personal Finance and Wealth Management. The guest speakers are Ms. Jaynielyn Javier
and Mr. Voltaire Rivera from Prulife UK. Ms. Javier talked about personal finance and wealth
accumulation. She gave emphasis on how people could attain financial freedom be financially
independent through some tips. She shared that getting out of debt is one important thing to be
achieved. This means that an individual should pay his debts, limit the use of credit card and live
within his means and would spend on what they need rather than what they want. Clearing all
debts will be followed by creating an emergency fund equivalent to 6 month salaries. This is
very important before having an investment. Morever, the speaker also shared that putting your
money into an investment vehicle is important. This would make your money earn more than
your savings deposit account. She also discussed the importance of having insurance as
protection and security.
The second speaker is Mr. Voltaire Rivera. He introduced their insurance product. The
Variable unit linked is basically a combination of insurance as well as investment. A part of the
premium paid is utilized to provide insurance cover to the policy while remaining portion is
invested in various equity and debt schemes. The money collected by the insurance provider is to
form a pool of fund that is used to invest in various markets instruments (debt and equity) in
varying proportions just the way it is done for mutual funds. Policy holders have the option of
selecting the type of funds (debt or equity) or a mix of both based on their investment need and
risk appetite.
For an overall impression, the seminar is good. We have learned a lot from the topics
presented. The speakers delivered their topics clearly and substantially.

Page 241
Santos, Ma Cristina
The seminar held last March 31, 2016 entitled Personal Finance and Wealth Management
was successfully conduct by our class Advance Financial Management class headed by Dr
Moreno. Our guest speakers are Ms Jaynielyn Javier and Mr. Voltaire Rivera who came from
Prulife UK. They have shared the things young professionals need to know about personal
finance and wealth accumulation. First is to move from your comfort zone, second is to create a
6 months emergency fund, third is to leave within your means, fourth is to have ample protection
for each family member, fifth is to pay yourself first, sixth is to diversify your investment,
seventh is to develop multiple income stream, eight is health is wealth having a good health
can give more wealth, ninth is to invest in yourself and the last but not the least is wealth
conservation and succession.
Mainly, the sharing is on how to trust and invest in yourself. You have to spread your
wings in order for you to see what is in the other side of the world. Taking risk is a part of
growing up and having a wealthier life. However in taking a risk you have to be smart and
insured no matter if it cost an extra peso. It give the idea of making yourself and your family
insured you will not be bothered in taking a riskier action in life. Also having you insured and
your family is an investment that gives you an assurance in the future.

Page 242

Page 244
Aking, Janaeva Joy
I-
Background
Hackers or insiders (it is not yet clear which) attempted to steal $951 million from
the Bangladesh central bank's account with the Federal Reserve Bank of New York
sometime between February 45 when Bangladesh Bank's offices were closed. The
perpetrators managed to compromise Bangladesh Bank's system, to observe how
transfers are done, and gained access to the bank's credentials for payment transfers,
which they used to send about three dozen requests to the FedBank to transfer funds to
Sri Lanka and the Philippines. 35 transactions worth $851 million transfer were
prevented by the banking system but five requests were granted; $20 million to Sri Lanka
(later recovered, and $81 million lost to the Philippines, entering the Southeast Asian
country's banking system on February 5, 2016. This money was laundered through
casinos and some later transferred to Hong Kong.
The money transferred to the Philippines was deposited in five separate accounts
with the Rizal Commercial Banking Corporation (RCBC), and later found to be deposited
under fictitious identities. The funds were then transferred to a foreign exchange broker
to be converted to Philippine pesos, returned to the RCBC and consolidated to an account
of a Chinese-Filipino businessperson. The conversion was made from February 5 to 13,
2016. The four U.S. dollar accounts involved were earlier opened with the RCBC in May
15, 2015, which remained untouched until February 4, 2016.
In February 8, 2016, during the Chinese New Year, Bangladesh Bank through
SWIFT informed RCBC to stop the payment, refund the funds and to "freeze and put the
funds on hold" if the funds had been transferred. Chinese New Year is a non-working
holiday in the Philippines, and a SWIFT message from Bangladesh Bank containing a
similar information was received by RCBC a day later. By this time, a withdrawal

Page 245
amounting to about $58.15 million was already processed by RCBC's Jupiter Street
Branch.
The Governor of Bangladesh Bank requested BangkoSentral ng Pilipinas
assistance on February 16 regarding the recovery of its $81 million funds saying that the
SWIFT payment instructions issued in favor of RCBC in February 4, 2016, to be
fraudulent.
II-
Many things have been said, rebutted, and confirmed as the Senate tries to get to
the bottom of one of the biggest money laundering scandals to hit the Philippine banking
industry in recent history.
The entire process which the stolen money went through in the country involves
several people mainly from 3 camps: Rizal Commercial Banking Corporation (RCBC),
PhilRem Service Corporation, and the circle of casino junket operators.
In my own point own view, the banks top officials lack moral indignation. Base
on their statements and actuations, I am more convince that all people involved should be
made liable- , appropriate actions should be taken such as to return the money may it be
in partial or full and to exhaust the investigation to Deguito, RCBC branch manager. I am
confident that she knows everything about the transaction. As the branch manager, she
allowed the opening of the said accounts by the respondents last year based on
documents that were verified to be fictitious, adding that verification on the
employment offices of Cruz, Lagrosas, Vergara and Vasquez showed they were not
connected with the said offices. At the time the withdrawals took place, Deguito already
knew the money was stolen from the Bangladesh Bank as there was already a stop
payment request.
III-
New Things Learned

Page 246
The Philippines released restrictions on gambling industry in 2012, despite

opposition from the Catholic Church. The gambling industry benefited from Chinese
President Xi Jinping's campaign against corruption which drove gamblers further south of
Macau.Casinos in the Philippines had lobbied against the 2012 amendment of the 2001
Anti-Money Laundering Act by the Senate, which would have required them to report
suspicious transactions. Senate President Juan Ponce Enrile lobbied for inclusion of
casinos from the scope of the law. At that time big casino firms in the Philippines such as
the City of Dreams had not yet been established.
This case threatens the reinstatement of the Philippines to the blacklist, by the
Financial Action Task Force on Money Laundering, of countries making insufficient
efforts against money laundering. Attention was given to a potential weakness of
Philippine authorities efforts against money laundering after in 2012 lawmakers managed
to exclude casinos from organizations that are required to report to the Anti-Money
Laundering Council regarding suspicious transactions.
The case also highlights the threat of cyber-attacks to both government and
private institutions where cyber criminals use real bank codes to make orders look
genuine. Bangladesh is reportedly the 20th most-cyber attacked country according to a
cyber threat map developed by Kaspersky Lab which runs in real time.

Page 247
Amores, April Joy
It has been about 7 weeks since the Philippine government started its probe
into the $81-million bank heist in downtown Manhattan.But until now, it is still
unclear who are liable for the heist and where the stolen money is.A lot has happened
since the Anti-Money Laundering Council (AMLC) started its probe on February
19: Bangladesh Bank governor Atiur Rahman and two deputies resigned; criminal
complaints were filed; Rizal Commercial Banking Corporation (RCBC) president and
CEOLorenzo Tan went on leave; and $4.63 million of the stolen fund was returned to
the AMLC.For Bangladesh Ambassador to the Philippines John Gomes, the return of
$4.63 millionfrom casino junket agent Kam Sin "Kim" Wong on Thursday, March 31,
is "a step in the right direction.Bangladesh officials will arrive in the country in the
coming days to help the Philippine government in its probe into the heist and,
hopefully, "recover the rest of the amount.
As the Philippine Senate prepares for its 4th hearing on Tuesday, April 5, here is what
we know about the heist so far:
WHAT WE KNOW
JUSTIFICATION
AMOUNT
1. Everyone knows each
The money trail involved
$81-million stolen funds
other
RCBC, PhilRem Service

Corporation, Solaire Resort
and Casino, Midas Hotel
and Resort, and some
casino junket operators.
2. Stolen funds entered
On February 4, SWIFT
$81-million stolen money
RCBC office twice
Code (MT103) ordered the
from Bangladesh Bank
inward remittance to the

Philippines of $81 million.
It then found its way to
RCBC.
On February 9, RCBC

Page 248
received a SWIFT code

from Bangladesh Bank
requesting for a refund,
putting it on hold if the
funds had been transferred,
or freezing the funds for
proper investigation.
3. About $17 million still
Wong told the Senate that
63 million went to Solaire
missing
about a quarter of the $81
and Midas casinos.
million stolen from
$17 million is said to be
Bangladesh Bank remained
still with PhilRem
unaccounted for. He said

this was still with PhilRem.
Silverio Benny Tan, the
P1.36 billion went through
4. Part of stolen funds
legal chief of Solaire
Sol On March 10, Tan
still in casinos
operator Bloomberry
said Solaire froze Ding's
Resorts Corporation
accounts, yielding a total

of P108.696 million or
$2.34 million Soaire's
gaming tables
5. A portion returned to
Acting as agent for Midas
Wong turned over to
AMLC
Hotel and Casino, Wong
AMLC $4.63 million left
confirmed at the last
under junket operations on
hearing that his company,
Thursday, March 31.
Eastern Hawaii Leisure

Company Limited, got hold
of P1 billion or $21.575
million of the stolen funds.
6. Junket operators act
Wong told the Senate panel
P450-million debt to

Page 249
as facilitators
that casino junket operators
Wong after losing money
Ding Zhize and
in casinos in 2014, he said.
GaoShuhuafaciliated the
Also within the day, Wong
entry of the laundered
said Bautista personally
money into Philippine
delivered P80 million in
casinos.
cash, while Deguito
Gao, who Wong had known brought in about P20

for about 8 years, had a
million.
Wong said that he knew
"The first delivery of P90
Ding through Gao who, he
million was delivered to
said, had "promised" him
Weikang Xu who we met
that he would bring in more
at the casino," Bautista
casino players in the
testified at the Senate
Philippines.
hearing.
Therefore, in my own opinion bank secrecy law seems to protect the corrupt
and make mockery of our legislation. Everyone from them is involved in heist from
Maya of RCBC to the top managemt of RCBC, to Mr. Wong in Solaire, friends of Mr.
Wong, and the Central Bank. Bank heist and money laundering syndicate is a breed of
extremely intelligent criminals. We need to work on the ex-parte proceedings. This is
going to be a disaster for the country. The additional scrutiny is going to hurt the
banking industry, but the ones who are likely to suffer most are the OFWs, whose
remittances would be affected by new anti-money laundering measuresmeasures
that in any case may neither be necessary nor effective.

Page 250
Angara, Reynaldo
Hackers managed to transfer $81 million from the account of the Bangladesh
Bank (central bank) with the Federal Reserve Bank of New York. They moved the sum
electronically to RCBC bank in the Philippines and it eventually ended up in casinos in
Manila -- where most of it has disappeared. The hackers apparently took advantage of
Philippine laws granting strict secrecy to bank depositors as well as exempting casinos
from money-laundering oversight. The complaint, citing testimony of a Senate probe of
the scandal, showed that the accounts of both suspects had received the money. The
justice department has also summoned Maia Deguito, branch manager of the RCBC
bank, to answer questions ahead of possible charges against her as well. RCBC bank,
one of the country's largest, said it had sacked Deguito as well as assistant branch
manager Angela Torres over the scandal. The two were fired for "violating bank policies
and procedures and falsification of commercial documents," and for facilitating the
alleged money-laundering of the $81 million, an RCBC statement said. Other bank
officials will likely face "various sanctions," in the coming days, it added. Deguito had
previously denied any wrongdoing and claimed she is just a mere pawn in a high stake
chess game.
The incident has raised fears that the Philippines will be seen as a haven for
money-laundering despite previous efforts to tighten controls.
Definitely, money-laundering laws in the Philippines needed improvement.

When the $81 million came into the country's banking system, it failed to raise eyebrows
because similar huge amounts were already coming in. Philippines is one of only two
countries that exempted casinos from money-laundering rules. The incident should
require intense and thorough investigation. Foreign as well as local investors who wanted
extreme protection for hard-earned currency might fall prey to this kind of cyber
criminals in the midst of the countrys thrust for development. The government, for its
part, should take a proactive position to protect not only local financial stability but

Page 251
likewise our image in the international financial community. Our bank secrecy law
should be amended because the secrecy suits businesses that want to evade taxes and can
bribe lawmakers to resist legislative change. It also favors corrupt politicians who have
plundered taxpayers money. Our bank deposit secrecy law hampers the prevention of
money laundering.

Page 252
Brias, Zandra
Money Laundering is a major offense in the Philippines and the World. RCBC
Bank, being involve in the money laundering scam is a big scandal. It seems that The
RCBC bank play a major role in the transferring of money from the Bangladesh central
bank. The Bank officers are knowledgeable on the case and as well they did not follow
the necessary measure in making the transaction.
The scenario shows how accommodating the Filipino, we Filipino loves being
treated special, thus VIPs is a practice in every transactions so what happen to RCBC
probably due to palakasan systems or kakilla systems.
RA 9160 The Anti-Money Laundering Act 2001, Section 4 stated, Money
laundering is a crime whereby the proceeds of an unlawful activity are transacted, and
thereby making them appears to have originated from legitimate sources. Wherein, this
could the offense created by RCBC.
What does RCBC differ from the other banks here in the Philippines; there are so
many banks to choose to open an account why at RCBC? There could be a hidden reason
behind all of these; so far right now it is difficult to judge because the investigation is still
on going. But just like the other case how long will it take to find judgement on this. Who
is going to be responsible on this case?

Page 253
Cara, Leslie Ann
It has been about a couple of months since the Philippine government started its
probe into the $81-million bank heist in downtown Manhattan. But until now, it is still
unclear who are liable for the heist and where the stolen money is.
Brief run through the key events.
All of those allegedly involved in the transactions of coursing the $81-million

stolen funds through the Philippines know each other in one way or another. The money
trail involved RCBC, PhilRem Service Corporation, Solaire Resort and CASINO, Midas
Hotel and Resort, and some casino junket operators.
with the RCBC; the accounts were later found to be under fictitious identities. The funds
were then transferred to a foreign exchange broker to be converted to Philippine pesos,
returned to the RCBC and consolidated to an account of a Chinese-Filipino businessman;
the conversion was made from February 5 to 13, 2016. It was also found that the four
U.S. dollar accounts involved were opened at the RCBC as early as May 15, 2015,
remaining untouched until February 4, 2016, the date the transfer from the Federal
Reserve Bank of New York was made.
The NBI launched a probe and looked into a Chinese-Filipino who allegedly
played a key role in the money laundering of the illicit funds. The NBI is coordinating
with relevant government agencies including the country's Anti-Money Laundering
Council (AMLC). The AMLC started its investigation on February 19, 2016 of bank
accounts linked to a junket operator. AMLC has filed a money laundering complaint

Page 254
before the Department of Justice against a RCBC branch manager and 5 unknown
persons with fictitious names in connection with the case.
A Senate hearing was held on March 15, 2016, led by Senator Teofisto Guingona
III, head of the Blue Ribbon Committee and Congressional Oversight Committee on the
Anti-Money Laundering Act. A closed-door hearing was later held on March 17.
(PAGCOR) has also launched its own investigation.
Reaction and opinion.
This case just clearly shows that the Philippine government still has a lot of work
to do when it comes to the execution of its laws particularly the anti-money laundering
law, and these issues of some politicians and other officials protecting and letting this
kind of shameful things to happen. Now our country has to work harder to redeem our
reputation in the world since they have their watchful eyes focused on us and how will
this case be resolved. We are not just talking about the money which is missing but the
image we are projecting when it comes to handling such issues. On the other hand, our
legislators should be concerned or think further on how will they amend or create and
execute stricter laws so that they may prevent these things from happening or better yet,
totally eradicate it.

Page 255
with the Rizal Commercial Banking Corporation (RCBC); the accounts were later found
to be under fictitious identities. The funds were then transferred to a foreign exchange
broker to be converted to Philippine pesos, returned to the RCBC and consolidated to an
account of a Chinese-Filipino businessman, the conversion was made from February 5 to
13, 2016. It was also found that the four U.S. dollar accounts involved were opened at the
RCBC as early as May 15, 2015, remaining untouched until February 4, 2016, the date
the transfer from the Federal Reserve Bank of New York was made.
In February 8, 2016, during the Chinese New Year, Bangladesh Bank
through SWIFT informed RCBC to stop the payment, refund the funds, and to "freeze
and put the funds on hold" if the funds had already been transferred. Chinese New Year is
a non-working holiday in the Philippines and a SWIFT message from Bangladesh Bank
containing a similar information was received by RCBC only a day later. By this time, a
withdrawal amounting to about $58.15 million had already been processed by RCBC's
Jupiter Street (in Makati City) branch.
On February 16, the Governor of Bangladesh Bank requested Bangko Sentral ng
Pilipinas' assistance in the recovery of its $81 million funds, saying that the SWIFT
payment instructions issued in favour of RCBC on February 4, 2016 were fraudulent.
Initially, Bangladesh Bank was uncertain if its system had been compromised. Cyber
security experts that were brought in to investigate the case, found "footprints" of hackers
which suggested that the system had been breached. The investigators also said that the
hackers were based outside Bangladesh. An internal investigation has been launched by
Bangladesh Bank regarding the case.
The Bangladesh Bank's forensic investigation found out that malware was
installed within the bank's system sometime in January 2016, which gathered information
on the banks operation on international payment and fund transfers.

Page 256
The Philippines' National Bureau of Investigation (NBI) launched a probe and

looked into a Chinese-Filipino who allegedly played a key role in the money laundering
of the illicit funds. The NBI is coordinating with relevant government agencies including
the country's Anti-Money Laundering Council (AMLC). The AMLC started its
investigation on February 19, 2016 of bank accounts linked to a junket operator. AMLC
has filed a money laundering complaint before the Department of Justice against a RCBC
branch manager and 5 unknown persons with fictitious names in connection with the
case.
A Philippine Senate hearing was held on March 15, 2016, led by Senator Teofisto
Guingona III, head of the Blue Ribbon Committee and Congressional Oversight
Committee on the Anti-Money Laundering Act. A closed-door hearing was later held on
March 17. Philippine Amusement and Gaming Corporation (PAGCOR) has also
launched its own investigation.
The Rizal Commercial Banking Corporation said it did not tolerate the illicit
activity in the RCBC branch involved in the case. Lorenzo Tan, RCBC's president, said
that the bank cooperated with the Anti-Money Laundering Council and the Bangko
Sentral ng Pilipinas regarding the matter. Tan's legal counsel has asked the RCBC Jupiter
Street branch manager to explain the alleged fake bank account that was used in the
money laundering scam.
RCBC President Lorenzo Tan also filed an indefinite leave of absence to give
way to the investigation by the authorities on the case and to clear his name in the issue.
RCBC's board committee also launched a separate probe into the money laundering
scam. Helen Yuchengco-Dee, daughter of RCBC founder Alfonso Yuchengco, will take
over the bank's operations. The bank also apologized to the public for its involvement in
the heist.
Bangladesh Bank chief governor Atiur Rahman resigned from his post amid the
current investigation of the heist and money laundering. He submitted his resignation
letter to Prime Minister Sheikh Hasina on March 15, 2016. Before the resignation was
made public, Rahman stated that he would resign for the sake of his country.

Page 257
The case threatens the reinstatement of the Philippines to the blacklist, by

the Financial Action Task Force on Money Laundering, of countries making insufficient
efforts against money laundering. Attention was given to a potential weakness of
Philippine authorities' efforts against money laundering after lawmakers in 2012
managed to exclude casinos from the roster of organizations required to report to
the Anti-Money Laundering Council regarding suspicious transactions.
The case also highlights the threat of cyber-attacks to both government and
private institutions by cyber criminals using real bank codes to make orders look genuine.
Bangladesh is reportedly the 20th most cyber-attacked country, according to a cyberthreat map developed by Kaspersky Lab which runs in real time.

Page 258
Gelera, Reynan
We heard in the news about this big amount of money that is hack from
Bangladesh this March 2016. I have read that Enrico Teodoro Vasquez, Alfred Santos
Vergara, Michael Francisco Cruz and Jessie Christopher Lagrosas open US dollar bank
accounts in RCBC with an initial deposit of $500 each. The accounts were untouched
until Feb. 4, 2016.Some timeline we can see below the flow of the event. Feb. 16. BB
Governor Atiur Rahman sought the assistance of his Philippine counterpart, Governor
Amando Tetangco Jr. of Bangko Sentral ng Pilipinas, regarding the loss of $81 million
from the BB account with the Federal Reserve Bank of New York. The BB said the Feb.
4 Swift payment instructions issued in favor of RCBC were fraudulent.Feb. 19. The
Anti-Money Laundering Council (AMLC) starts probe of bank accounts relating to
Weikang Xu (believed to be a junket operator), Eastern Hawaii Leisure Co. and Solaire
Resorts. Feb. 29. Inquirer business reporter Daxim Lucas reported that financial
regulators were investigating a money-laundering scheme that brought to the country an
estimated $100 million stolen by computer hackers from Bangladesh. March 1. The Court
of Appeals, acting on an urgent petition from the AMLC, ordered four banksRCBC,
East West Bank, Banco de Oro and Philippine National Bankto freeze for six months
the bank accounts of Michael Francisco Cruz, Jessie Christopher Lagrosas, Alfred Santos
Vergara, Enrico Teodoro Vasquez, William So Go, Centurytex Trading, Kam Sin Wong
(aka Kim Wong) and all related accounts.
We can see that many people have planned to get the money from Bangladesh.
The hackers are still unknown and under investigation. The Philippines must have more
strict policy on money transfer coming from outside the country. If this case will continue
the country reputation in banking industry will be in danger and many countries will be
hesitant to transfer money in the country.

Page 259
Materum, Marie Joy

This must have been The Great Train Robbery of the 21st century. Hackers were
suspended to have been responsible for sending SWIFT FIN payment instructions from
Central Bank of Bangladesh to the Federal Reserve Bank NY on February 4 to request
transfers of US $1Billion. The Feds executed 1 payment of US $20MMto a bank in Sri
Lanka and 4 payments of US $81MMto bank in Philippines before they realized
something was wrong and stopped payment.
Background
DATE
May 15, 2015
REMARKS
4 US$ a/cs/opened at RCBC, Jupiter
Branch purportedly by, Michael Francis
Cruz, Jessie Christopher Leprosa, Enriquez
Vasquez and Alfred Santos Vergara
February 1, 2016
US$ a/c, puportedly opened by William Co
4 Feb 2016
US Federal Reserve Bank received 35

SWIFT
payment
Bangladesh
Central
instructions
Bank
from
(BCB)
for
payments totaling US$951mm. The Feds

executed 1 payment (US$20mm) to a Sri
Lanka bank, and 4 payments totaling
US$81mm to RCBC. Then they suspended
payments.
5 Feb 2016
(Friday BCB closed) RCBC saw the

US$81mm inward remittances and applied
the funds accordingly to the 4 beneficiary
a/cs.
8 Feb 2015
(Monday RCBC closed for Chinese New

Year holiday) BCC messaged RCBC to

Page 260
stop payment.
9 Feb 2016
BCB resend messages to RCBC.
11 Feb 2016
BCB called BangkoSentral president, AntiMoney Laundering Commission started

investigation.
19 Feb 2016
NBI, Pangcor start investigation
22 Feb 2016
RCBC
Jupiter
Br
manager
Maria
Deguitoallegedly had meeting with William

Go
29 Feb 2016
PDI broke the news.
1 Mar 2016
Court of Appeals issues orders to RCBC,

East-West Bank, BDO & PNB to freeze
a/cs.
8 Mar 2016
The Daily Star (in Bangladesh) broke the

news
11 Mar 2016
Immigration stopped RCBC Jupiter Branch

Manager departure at airport
15 Mar 2016
Philippines Senate conduct inquiry.
There is no doubt M/s Dequito is in the centre of the storm and a possibility there
are some others in RCBC who are privy to and participated in the misdeeds. In the
scheme of things, the branch manager was designed to take the fall.
We do not know where the US850MM remittances that the Feds stopped were
destined. That the 5 payments that went through arrived in Sri Lanka and Philippines is
no coincidence. Both countries are weak in their anti-money laundering regulations in as
much as casinos are not covered. Both have several casinos operating in land.
All law abiding citizens actually do not need banking secrecy legislation. That is
because all banks have a fiduciary relationship with their customers. Just like a doctor
does not divulge patient info, nor a reporter his source, so too banker his customers info.
Philippine has a banking secrecy act that protects the crook. Many are the times we have

Page 261
witnessed investigative officials rendered inutile by banks that refue to provide critical
information. Banking secrecy is fine, but where it comes to criminal investigations, the
law must be on the side of those who uphold the law. An amendment is long overdue to
override banking secrecy in the event of criminal investigation. This will be a tough act
for a lower and upper house full of legislators who themselves are trained. Blame dwells
on the voters who put them there.
In the Philippines legal process is always the stumbling block. It always
guarantees the crime busters arriving at the stables long after then horses have bolted.
Mayor Jun Juns suspension was affected several months giving him time to shred all
documentary evidences. In this case, AMLC swing into action the moment Tetangco
received the call from the BCB president on the evening of February 11. It was only
Marc 1 that AMLC was able to secure freeze orders from the Court of Appeals. By then,
old Mother Hubbard has discovered the cupboard was bare.
There is fear incident may lead to Philippines being put back on the TAFT gray
list again. Banks all over the world may not want to deal with Philippines remittance
companies if they are not linked with foreign banks. The repercussion is increased cost
for the remittances by OFWs. Strange that this immediate impact possibility is quick to
draw the ire of OFW associations, but voting in the wrong candidates that may damage
Philippines in credit agency ratings with wider implications for the country do not
resonate with the same segment of the population.
Bank heist and money laundering syndicate is a breed of extremely intelligent
criminals. We need to work on the ex-parte proceedings. The war is lost if judges are not
prepared to wake up in the middle of the night in their pajamas to sign search or arrests
warrants or freeze orders, on the basis of the prosecutors judgement and
recommendation that time is of essence, but instead prefer to dwell on legal decorums,
on evidences or other proofs or witnesses or authentic documents or affidavits, or proper
notarization.
Great train robbery will know this is a good place to be,

Page 262
Ramos, Mae Chloe
Feb. 4, 2016, $81 million worth of funds from the account of Bangladesh Bank
(BB), the central bank in Bangladesh, at the Federal Reserve Bank of New York was
ordered transferred to four bank accounts in RCBC. The amounts were credited to the
accounts via straight-through process after the transactions passed internal validation
criteria. Officers in RCBC shall be vigilant in transactions with such amounts and should
consider checking it from the country of origin.
Nowadays, some computer literate uses their talent on computer hacking like the
computer hackers from Bangladesh. Hackers are well informed on the Philippines
financial administration and took advantage on granting strict secrecy to bank depositors
as well as exempting casinos from money-laundering oversight.
Filipino-Chinese businessman William Go, to whom the amount was reportedly
transferred before the money was laundered in local casinos, should be among the
respondents investigation. The fictitious identity documents who opened an account
should also be investigated and track who are the man behind those names. The names, it
bared, did not belong to the four unidentified persons who appeared in the bank for the
opening of the fake accounts.
Philippines policies should be strengthened specifically on the technology
improvement and focus its anti-cybercrime capabilities as cases of online criminal
activate like fraud and theft mount. Philippines need to create awareness among
cyberspace on the adverse economic effects of cybercrime and on how they can protect
themselves from this growing expertise. Remittances from OFWs will be affected once
the complaint has been proven guilty. And worse, Philippines credibility on the banking
industry will be affected, and countries around the world will consider our country that
cant be trusted.

Page 263
Resurreccion, Imee
What we know so far about this controversial:

The $81 million that reached the RCBC bank accounts in the banks Jupiter
branch where the manager is Deguito were sent to remittance firm Philrem owned by
couple Michael and Salud Bautista to be converted from dollars into pesos. Philrem
coursed the convertion thru RCBCs Treasury via its bank account in another branch
(not in Jupiter branch).
This means the illegal funds entered the RCBC system twice: as an inward
remittance from the New York account of Bangladesh central bank, and as a forex
transaction by Philrem, a 3rd party.
Of the $81 million, $63 million went thru Solaire and Midas. Heres a
breakdown based on Wongs account:
> $29 million went to Solaire.
> $21 million went to Midas.
> Php400 million and $5 million via Kim Wong. Of the P400 million, P80
million was delivered by Philrems Salud Bautista to Wong in Solaire; P20 million
was delivered by Deguito to Wong also, and P300 million was picked up by Wong at
the house of the Bautista couple.
The balance of $17 million remains unaccounted for. Wong said Philrem still
has the amount, but the Bautista couple said they delivered everything to the Chinese
group (Xu, Zi and Gao) in Solaire.
Unfortunately, there are no more CCTV footages of this delivery since
Solaire keeps them only for 14 days, as required by Pagcor.
Wong says he has in his possession some $4.63 million due him as the
bangka when his players lose while gambling in the casino. This amount was what
remains from the $5 million Wong received from Philrem. Wong told the senators he
is willing to give this up for safekeeping. The senators were considering returning this
to Bangladesh.
The senate hearing regarding this controversial is still ongoing with the hope
of establishing the truth.
Page 264
The Philippines can better combat money laundering such as the $81-million
cross-border transaction that slipped into the banking system recently by putting more
teeth into the pertinent law and giving the Anti-Money Laundering Council (AMLC)
more powers to run after suspects.

Page 265
Santos, Ma Cristina
The Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is facing an
investigation into possible money laundering involving $81-million worth of stolen funds
allegedly deposited in one of its Makati branches, and said it will cooperate with
government regulators but will continue to be cognizant of its bank secrecy obligations.
The funds were said to be part of more than $100 million reportedly taken by
hackers from an account of the Bangladesh central bank in New York. Further reports
alleged that the money was laundered through deposits to four bank accounts in RCBC
via wire transfers to the banks branch on Jupiter Street in Makati City. RCBC stressed
that it would cooperate with the ongoing investigation into the deposit of the funds and
subsequent transactions, which were also reported to involve several casinos.
Ms Maia Santos the manager of RCBC Jupiter Makati branch involves the
President of RCBC Mr Lorenzo tan and his friend Kim Wong. She said that Kim Wong is
the one who refer the five clients who open a dollar account where the dirty money came
from. That they are given a special treatment because of their connection to the president.
In this case I think everyone is liable in the incident and an appropriate actions must be
given an action. Ms Maia is also liable in the transactions because she knows the
transaction has given a special treatment. Even she knows that the client are given a
special treatment still she must have the proper or the standard process to everyone.
Lessons are learned from this incident. Everything and everyone must process
documents in accordance to the regulations of an institution. Required requirements must
all be accomplish and no special treatment for known people.

Page 266

Page 267
Janaeva Joy A. Aking

No.378, San Rafael St., Brgy. Plainview, Mandaluyong City
0916-503-7266
akingjanaevajoy@yahoo.com.ph
Profile
An accomplished, versatile and results-driven professional with experiences in: strategic
forward-planning; operating within the tight financial disciplines; methodical administration to
deadlines (not to speak of crisis management where necessary); and the application of modern
leadership methods (through staff motivation and involvement in both decision-making and
target-setting, clarity in communication, and easy personal interrelations).
Education
MBA Student
2015- Present
University of Mindanao
By part-time study after work
2005-2010
Bachelor in Business Administration
With concentration in Management Accounting

Page 268
Maryknoll Academy of Cateel

2001-2005
Graduated with Honours
Cateel Central Elementary School

1997-2001
Graduated with Honours
Skills
ports.
systems and processes.
-efficient, systematic working methodology

-solving and new locations

Page 269
Filipino (Mandayan, Visayan,Tagalog,slight of

Muslim)
Windows applications
Work Experience
Finance Officer at Cardno Emerging Markets ( Australia) Pty. Ltd
Basic Education Sector Transformation Program
Jan.05,2016- Present
Grants Officer at World Vision Development Foundation

RoxasCity ,Capiz
July 30,2014- Dec. 30,2014
Grants Financial Assistant for PRIME (Philippines Response to Indigenous Peoples

and Muslim Education Program
GRM Interational-AusAid
DepEd Complex, Meralco Ave. Pasig City
July 09, 2012 to June 30,2014
Regional Accounting Clerk at the Armed Forces and Police Mutual Benefit Assn. Inc.

Page 270
Ecoland, Davao City

January to May 2012 (Contractual)
Activities
provided to Regional and Division offices, schools and communities, on a periodic

basis or as requested by the Accounts Manager.
monthly basis, updated and reconciled with the bank statements.

repares status report , on a monthly basis for the accounts manager.
and Program Director.

Page 271
APRIL JOY ADANTE AMORES

514 Makiling St. unit 3A, Brgy. Malamig, Mandaluyong City
+630936 499 0205 apriljoyamores14@yahoo.com
PERSONAL DETAILS
Birthdate:
March 31, 1986
Sex:
Female
Civil Status:
Single
Religion:
Christian
Citizenship:
Filipino
Weight:
42 kls.
Height:
5 0
Education
June 2015 to Present

MBA Student
March 2011
University of Mindanao
Bachelor of Science in Business Administration
Major in Management Accounting
March 2003
Bernardo D. Carpio National High School

Page 272
Skills
Applications
MS Microsoft, MS Excel, Peach Tree Accounting, and Quickbooks Accounting.
Languages
Cebuano, Tagalog, and English
Work Experience
April 2013- present
Lumaenis Development Assistance, Inc.
Finance Officer
Lumaenis Development Assistance, Inc. is a company providing professional services in

support of a broad range of development projects throughout the Philippines in
collaboration with various international organizations.
o
o
o
o
o
o
o
o
o
o
Checks and approves the company disbursements.

Posting Transaction using Quickbooks Accounting System
Prepare Payables like BIR, SSS, HDMF, Philhealth and other payables.
Prepares financial reports by collecting, analyzing and summarizing account information.
Maintaining Companys record.
Assess the projects budget.
Maintaining Statement of Cash Flows every week.
Assess Admin. Officer for employees need and their questions.
Provide projection of return on investment annually.
Maintain BIR documents and renewal of permits.
February 2011- March 15, 2013

Rodel Couture Shop
Accounting Secretary/ Bookkeeper
o
o
o
o
Checks and approves the company disbursements.

Posting Transaction using Quickbooks Accounting System
Facilitates recruitment of necessary personnel.
Facilitates and entertains clients.

Page 273
o Prepare Payables like BIR, SSS, HDMF, Philhealth and other payables.
o Maintaining Companys record.
o Petty Cash Custodian.
June- November 2011
On the Go Realty
Disbursing Officer
o
o
o
o
o
Prepare Payables of the company.

Petty Cash Custodian.
Maintaining Expense Records.
Prepares Budget Funds.
Facilitates Clients and Agents.
October 2010 to May 2011

Sychar Hotel/Summerland Inn, Inc.
Bookkeeper
o
o
o
o
o
o
Posting transaction by using Quickbooks System.

Prepares financial reports by collecting, analyzing and summarizing account information.
Maintains historical records by filing documents.
Balances subsidiary accounts by reconciling entries.
Checking all entries made by disbursing officer.
Prepares BIR Reports.
November 2009- January 2010

GJ Associates & CPAs
On Job Training (OJT)
The company provides accounting services and engages in the practice of Law.
o
o
o
o
Recording expenses at the Microsoft excel.

Maintaining files and documents of the clients company
Training BIR transaction.
Recording VAT transaction.
Activities
Singles For Christ Member
Attend Annual Seminars for Social Security System, Home Development Mutual Fund,
Philippine Health Insurance Corporation, and Bureau of Internal Revenue.

Page 274
REYNALDO S. ANGARA
Unit 2F JDJ Bldg., 1139 Tanay Street, Rizal Village,
Bgy. Valenzuela, Makati City, Philippines (0922) 8174896 reyangara@yahoo.com
Profile
Knowledgeable in Microsoft Excel, MS
Office Applications
Superlative communication, administrative
and organizational skills with verbal and
written English.
Good background in admin work,
operations and HR
Effective customer service experience.
Excellent presentation skills
Results-oriented, creative, resourceful and
have an eye for detail.
Exceptional versatility and adaptability.

Dedication and drive as a hard-working
individual.
Analytical thinker and a fast-learner.
Excellent planning, troubleshooting, and
problem solving capabilities.
Multi-tasking ability in a challenging
environment and can work independently.
A team player with positive attitude and
good interpersonal skills.
Practices Leadership by Example
Education
Master in Business Administration (MBA)
June 2015 to present
Boni Ave., Mandaluyong City
AB Philosophy
1985-1990
San Carlos Seminary
EDSA, Guadalupe, Makati City
BS Commerce Major in Management
1979 to 1984
San Sebastian College
CM Recto, Manila

Page 275
Skills
Applications
Proficient in Microsoft Word, Microsoft Excel, Microsoft PowerPoint.
Languages
Tagalog, English
Work Experience
Philippine Charity Sweepstakes Office (PCSO), Shaw Blvd., Mandaluyong City
Senior Management Specialist, 2014 - present
Monitors sales and remittances of Lotto Agents Accounts

Attends to all queries, complaints and other related issue of assigned lotto agents
Acts as PCSO representative in other PCSO sponsored games
Royal Cargo Combined Logistics Inc, Baguio Branch

Branch Manager, April 2013 December 2013
Manages, monitors, controls and develops business and operations of the Branch,
Ensures that the branch meets revenue and profitability targets
Powergistix (Al Tasleem Al Saree Delivery Services), Bur Dubai, United Arab Emirates
Operations Manager, 2012-2013
Plan and submits itinerary for delivery boys to ensure customers package is
delivered and picked-up timely and without damage
Assist customers with rate quotes, inquiries, complaints and setting appointments
Perform administrative functions such as monitoring of remittances and delivery

reports
Manages client relationships and develop new businesses with existing clients
Establishes and promotes goodwill with clients
Markets services to target clients through presentations and telesales
Get new sales and accounts for the company
Copylandia Office Systems Corporation, Sgt. Bumatay Street, Mandaluyong City

Fleet Support Manager/Special Projects Manager, 2008 2013
Page 276
Manages a team of service engineers, drivers and operations assistants to ensure

customer satisfaction
Manages the service audit team to monitor compliance of service engineers and
drivers to company procedures in customer relationships
Administers performance review program to ensure effectiveness, compliance and

equity within the organization
Assists HR in recruiting/interviewing and selecting employees to fill vacant positions.

Provide support and direction to project teams.
Plans and conducts new employee orientation to foster positive attitude toward
company goals
Airfreight 2100 Inc., Cargohaus Bldg., Old Mia Road, Paranaque City
Operations Manager, 2005 2008
Responsible for managing station operations
Ensures smooth delivery and pick-up operations
Responsible for managing the World Service Centers in a way that provides
maximum service to customers
Ensure compliance to companys quality system standards
Versoza Ignacio Cargo Inc., Fairview, Quezon City

General Manager, 2002 2005
Oversee all aspects of operations of the company
Ensures all deliveries are on time and in good condition to the consignees.
Goodyear Hi-Performance Center, Alabang-Zapote Road, Las Pias City

Human Resources Head / Management Assistant, 2000 2002
Responsible for overseeing all aspects in HR Operation, building administration and

sales operations.
PLDT Telecommunications Company, Makati Avenue, Makati City

Area Account Planner / Training Coordinator, 1991 1999
Assists with the scheduling of training sessions, and booking / notifying all relevant
parties.
Assess training needs through surveys, interviews with employees, focus groups,
and/or consultation with managers, instructors or customer representatives.

Page 277
Takes responsibility for ensuring all training rooms / venues, equipment, catering
arrangements, and other requirements are booked up or canceled in advance.
Activities
Member, Extraordinary Ministers of the Holy Eucharist, Sacred Heart Chapel, Powerplant
Mall, Makati City
Member, PCSO Chorale, Shaw Blvd., Mandaluyong City

Page 278
Zandra Brias
104B Block 5 Zone Baranggay Fort BonifacioTaguig City
09065077325. Zandra_bl@yahoo.com
Profile
A dedicated professional with 6 years combine work experience as Loan processor/Field
Representative in Financial institution. With a good sense of analytical problem solving
skills as well as demonstrate strong interpersonal skills.
Education
Master in Business Administration - Present
Bachelor of Business Administration 2001 to 2006

Polytechnic University of the Philippines
Skills
Broad-minded proven to work experience as a company representative

to Finance center dealing to other competitive Financial institution.
Practical and systematic by practicing business like attitude in dealing

with competitors.
Efficient
Flexible team player, enrich by experience in working and studying.
Communicatewell
Learn quickly
Work Experience
Field representative/Loan Processor -2014 to Present
Armed Forces and Police Savings Loan Association, Inc.
Field Representative/Loan Processor 2010 to 2014
Composite Wing Savings and Loan Association, Inc.

Page 279
LESLIE ANN C. CARA

Lot 9, Block 17, Berlin Street,
Villa Olympia Subdivision,
Phase 1A, San Pedro, Laguna 4023
(+63) 935 741 5969
leslieannc.cara@gmail.com
---------------------------------------------------------------------------------------------------------------Summary of Qualifications:
Entrepreneurship, management, and marketing skills, leadership and teaching roles, events
planning, facilitating, and documentation, proficiency in written and oral communications,
competency in MS Office applications.
Personal Information:
Birth date:
September 2, 1990
Birth place:
San Pedro, Laguna Philippines
Gender:
Female
Civil Status:
Single
Height:
54
Educational Background:
Post-graduate:
Masters Degree in Business Administration (24 units earned)

Rizal Technological University Graduate School
Tertiary:
Bachelor of Science in Business Administration

Major in Entrepreneurial Management
Rizal Technological University, Mandaluyong Campus
Secondary:
United Montessorean School

United Subdivision, San Pedro, Laguna

Page 280
Work Experience:
Assitant
Instructor
College of Business and Entrepreneurial Technology

Boni Ave., Mandaluyong City (02) 534-97-10 loc. 143
November 2015 Present
Part-time
Faculty
College of Business and Entrepreneurial Technology
Member

June 2013 November 2015
Staff
Department of Extension Services

November 2014 November 2015
Corporate
Association of Filipino Franchisers Inc. (AFFI)
Communications
Mezzanine 2, 818 Bldg., 169 Pasig Blvd.,
And Marketing
Brgy. Kapitolyo, Pasig City 1603 (02) 654-03-45
Officer
May 2012 March 2013
Business Ventures:
Business
The One1 Caf, Tea and Restaurant
Consultancy
Mandaluyong City
Incorporator/
Awesome Art
Owner
Mandaluyong City
Page 281
Seminars and Workshops:
Participant
RTU Grand Alumni Association Inc. (GAAI) Team Building and

Planning Workshop, Nicoles Place, Calamba, Laguna, June 29, 2013
Resource Speaker
and Facilitator
Young Entrepreneurs Society Team Building and Planning Workshop,

Rainforest Park, Pasig City, August 2013
Resource Speaker
and Facilitator

Wildlife Park, Quezon City, August 2014
Participant
Department of Extension Services Stakeholders Conference, RTU

Research Auditorium, March 19, 2015
Participant
College of Business and Entrepreneurial Technology OutcomesBased Education Seminar Workshop, CBET Library, March 20&21,
2015
Inspirational
Alumni Relations Office Graduation Orientation (Entrepreneurship
Speaker
Department) RTU Research Auditorium, March 2015
Resource
Commission on Scholarship Program RTU SSC Scholars Annual
Speaker
Team Building, RTU Student Center, April 25, 2015
Participant
Rizal Technological University Staff Development Program Team

Building, Anilao Mabini, Batangas, May 27-29, 2015

Page 282
Resource Speaker
and Facilitator

Wildlife Park, Quezon City, August 2015
Participant
RTU Grand Alumni Association Inc. (GAAI) Team Building and

Planning Workshop, Subic, Zambales, September 5&6, 2015
Affiliations and Achievements:
President
RTU College of Business and Entrepreneurial Technology

Alumni Association, 2015 Present
External
RTU Grand Alumni Association Inc., 2013 Present
Coordinator
Assistant
RTU Young Entrepreneurs Society, 2014 Present
Adviser
Deans Lister
RTU College of Business and Entrepreneurial Technology

2011 2012
President
RTU Young Entrepreneurs Society, 2011 2012
Vice President for
External Affairs

Page 283
Business
Manager
References:
Prof. Kristine Y. Opulencia

Head, RTU CBET Entrepreneurship Department
Contact no: (+63) 916 676 3525
Mr. Rafael G. Canare

Executive Director, Association of Filipino Franchisers Inc. (AFFI)
Contact nos.: (02) 654-03-45 | (+63) 917.518.2334
Engr. Roseann C. Visperas

Specialist, GLOBE Telecomm.
Contact no: (+63) 917-688-0022

Page 284
Encontro, Dianne Faye Peregrin

1704 M Obrero St. Punta Sta. Ana, Manila
E-mail:dpencontro@gmail.com
Contact Number: 09255192029
OBJECTIVES:
To obtain a position that will enhance my career
development.
PROFESSIONAL QUALIFICATION:
Civil Service Eligibility for Honor Graduates, April 29, 2013
WORK EXPERIENCES:
Date:
Company:
Location:
Makati
Position:
July 6, 2015 to present

Century Properties Group Inc.
21st Floor Pacific Star Bldg., Sen Gil Puyat Cor Makati Ave,
Documentation Specialist
Work Description:
Handle sales group/ team
Responsible for communicating sales group/ team
regarding the update status of accounts particularly to the
documents of our client
Conduct credit investigation for those account with reservation,
Local or International
Ensure that all documents are checked and in order before
releasing the contract to sell to the clients
Update database for titling the appropriate status of accoun
ts
Provide weekly report (Absorption) for the Manager to
ensure the updated status of tower assigned to us and
monthly report (Absorption) for Accounting department for
commission of sales group

Page 285
Date:
Company:
Location:
Position:
April 10, 2013 to June 27, 2015

Property Company of Friends Inc. PROFRIENDS
(Real Estate/ Developer)
Profriends Center, 55 Tinio St..Brgy Addition Hills Mandaluyong
Loan Monitoring Assistant (Loans Operation Division)
Report Consolidator
Work Description:
Provide daily, weekly and monthly report (Quantitative
reports)
Ensure accurate and timely completion all reports
Provide the transition, aging, variance of accounts needed
by the management
Analyze the information , resolving discrepancies and
inconsistencies with appropriate department
Responsible for communicating to other operating units
regarding the update status of accounts
Work closely to top management that related to report
update
Perform other related or ad hoc duties and task as assigned
by management from time to time
BDO Bank Coordinator
Work Description:
Represent the company on bank related to the transaction and
negotiation
Update accounts status for daily and monthly reports (Quantitative
Reports)
Coordinating and reconciling to bank to process buyers loan
approval, take loan applications and collect supporting
documentation.
Answering inquiries with regards to accounts under BDO bank
financing
Loans Documents Assistant
Work Description:
Handling Bank financing accounts
Responsible for process of loan documents in accordance wi
th the term and condition on the bank policies and guidelin
es

Page 286
Collate the required documents needed for bank financing

Verifies and update documentary deficiency
Ensure that all legal documents are checked and in order b
efore submitting to bank
Update system and database for titling the appropriate stat
us of accounts
Others
Assist the new employee for the overview of the process flo
w of loans division under bank financing
Performs other task that may be assigned by superior from
time to time
Clerical work such as filing, printing and scanning
On-the-job Training
Date: September 12, 2012 to January 31, 2013
Company: PNI Management Philippines Inc. (Recruitment Firm)
Location: Unit D 6th Floor, Strata 2000 Bldg. Emerald Avenue, Ortigas Center,
Pasig City
Position: Trainee (Recruitment Department)
Work Description:
Sourcing possible applicants
Maintaining 201 files
Encoding active and inactive staff in database
Prepare contracts and ID for newly hired and renewal staff
Clerical work such as encoding, scanning and printing
Date: May 29 to September 7, 2012

Company: Baseline Unlimited Inc (IT Service/ BPO)
Location: Unit 1811, 18F Medical Plaza Ortigas, 25 San Miguel Ave., Ortigas
Center, Pasig City
Position: HRD Intern (HR Assistant)
Work Description:
Recruitment
Head hunting of possible applicant for specific position
Inform job applicants of their acceptance or rejection of employment.
Time Keeping
Monitoring and preparing daily attendance of the staff
Employee Relation
Maintaining the employees files
Labor Relation

Page 287
EDUCATIONAL BACKGROUND:
Master in Business Administrations
Boni Avenue, City of Mandaluyong
2014-Present
Bachelor of Science in Business Administrations major in Management
Cum Laude -1.68 General Weighted Average
Boni Avenue, City of Mandaluyong
2009-2013
ACHIVEMENT AND AWARD:
Academic Scholar
SY 2011-2013
ACTIVITIES/SEMINAR ATTENTED:
Database Management Training

March 21, 2015
PERSONAL INFORMATION:
Single, Born on January 19, 1991, Filipino, Roman Catholic. Can work well both
independently and as a team.
SKILLS AND QUALIFICATION:
Graduate of Bachelor of Science in Business Administration Major in Manageme

nt
Attended seminar for database management training
2 years of experience in monitoring and analysis of accounts for bank loans applic
ation
Consolidating Monthly Reports for management (Quantitative Reports)
Experience with Microsoft excel
Strong computer and analytical skills
With initiative and willingness to learn and explore new things and ideas
Open to changes and challenges
Willing to undergo training
Page 288
REYNAN AURE GELERA

269 J.P Ramoy Street Bgy. 164 Talipapa Novaliches Caloocan City , Philippines
09258304129 , reynan_gelera@yahoo.com
Profile
Registered Electronics Engineer with local and overseas experienced. Certified Project Manager
by the Australia Wide Business Training Institute. Sales and Marketing skills. Expert in design of
electronics security system and project implementation.
Education
Master in Business Administration (MBA)
2014 to Present
Bonifacio Avenue, Mandaluyong City
Bachelor of Science in Electronics & Communication Engineering

1999-2004
Adamson University
Ermita, Manila
Skills
Applications
Proficient in Microsoft Word, Microsoft Excel, Microsoft PowerPoint. Knowledge in AutoCAD
and Cisco network programming.
Languages
Tagalog, English
Work Experience
HMR SOLUTIONS INC.

Page 289
Mandaluyong City, Philippines

Company Profile: Supply, Installation and Service of PABX, Intercom, Access Control, Closed
Circuit Television, Intrusion Detection, Public Address, Perimeter Protection, BMS and Fire alarm
System
Position: Assistant General Manager
Department: Administration & Operation
Period: November 2012 to Present
Responsibilities:
Manage the day to day operation.

Overseeing every department head.
Reports to the General Manager and Directors.
Support the management of all employees performance in line with job descriptions,
giving regular feedback and appraisals
Develop and implement staffing and business plans to achieve business target.
Manage direct reporting to General Manager related to financial, business, and
administration matters
Achievements:
Add more new clients and suppliers.

Increase sales and target have met.
Cooperate with General Manager in recruiting, training, payroll processing, performance
evaluation, promotions, and releasing the employees.
Develop operational strategy and ensure that the operational activities meet the
organizational requirements.
Identify and report equipment repair and maintenance works promptly
CAPITAL TECHNOLOGY
Doha, Qatar
Company Profile: Supply, Installation and Service of Access Control, Closed Circuit Television,
Intrusion Detection, Public Address, Parking Management, Perimeter Protection and Fire alarm
System
Position: Senior Estimation/Pre Sales Engineer
Department: Sales Department
Period: March 2008 to March 2012

Page 290
Responsibilities:
Estimate cost of Projects.
Preparation of Tender Documents and Submittals.
Pre-Sales activity and Sales technical support.
Prepare costing strategically to meet Sales Target.
Achievements:
Preparation, Costing and Design of the following Major Projects:
Alsaad Sports Club (GE Access Control)

QIPCO Compound (Televes SMATV)
Qatar Airways D-Ring Road (GE Access Control/Indigo Vision CCTV/Gunnebo Turnstile)
Ras Laffan Gas Main Gate House (APT Road blocker/PIPS ANPR/BDL CUVSS)
Qatar Foundation School of Foreign Service (Lenel Access Control)
Qatar National Convention Center (Lenel Access Control/APT Road blocker/BDL
CUVSS/PIPS ANPR)
G4S SECURITY SYSTEMS INC.

Pasig City, Philippines
Company Profile: Supply, Installation and Service of Access Control, Closed Circuit Television,
Intrusion Detection, Public Address, BMS and Fire Alarm System
Position: Project Engineer
Department: Engineering Department
Period: Feb. 2006 to Feb 2008
Responsibilities:
Project Management and Coordination.
System Estimate and Design.
Systematic CADD Design.
System Programming.
Achievements:
Project Implementation of the following Major Projects:
Simplex Fire Alarm System (HSBC Fort Bonifacio)

Lenel Access Control System (Texas Instrument Baguio)
(Lenel Access Control System and Pelco CCTV System -Asian Development Bank
Headquarters, Manila Philippines.)
Pelco CCTV System (Lexmark Cebu Philippines)
Page 291
Simplex Fire Alarm System (FR Cement Rizal La Farge Corporation)

Honeywell CCTV System (U.P North Science and Technology Park Quezon City)
TRICOM SYTEMS
Makati City, Philippines
Company Profile: Supply, Installation and Service of Fujitsu, Avaya and Iwatsu PABX System.
Position: Service Engineer
Department: Service Department
Period: Aug. 2005 to Jan. 2006
Responsibilities:
Accept regular and on call client service of Fujitsu and Avaya PABX System.
Installation and Troubleshooting of PABX System.
Achievements:
Provide good service and technical support for clients.
Activities
Member, IECEP - Institute of Electronics & Communications Engineers of the Philippines

Page 292
Marie Joy E. Materum

Email: joymaterum@yahoo.com
Mobile: 0932-4995241/0995-0963394
Highly communicative individual with strong interpersonal skills and an ability to adapt to
working in team environments. Motivated by challenge, an astute and dedicated individual to
the highest of ability and effectively managing the challenges of organization. Full-time
employee working in the non-government organization which demonstrates reliability, honesty,
integrity and ability to collaborate.
KEY SKILLS
Develops/designs new workable schemes that are vital in donor recruitment.

Innovates marketing collaterals to further encourage the corporate donors to be
involved more in the organization
Prepares and submits the annual report of the unit.
Performs extensive research loan programs
Evaluate the credit standing of borrowers
Conducts awareness calling to remind the clients
Software Skills: Microsoft Word ~ Microsoft Excel ~ Power point ~Microsoft Outlook
EDUCATION
Masters in Business Administration

Mandaluyong City
Spanish Lesson
Instituto Cervantes - Malate, Manila

Page 293
University of the East
1999-2003
BS B A Major in Banking and Finance

Recto, Manila.
Secondary
Pio del Pilar Educational Inst.
1995-1999
F. Zobel cor. Morong St. Makati City
Primary
Cembo Elementary School
1989-1995
Cembo, Makati City
PROFESSIONAL SNAPSHOT
Philippine Red Cross
Present
Manager, Corporate & Online Gift Giving
August 2013 -
Security Bank Savings

2013
Asst. Manager, Account Officer
May 2008- July
Citi Financial Corp

May 2008
Relationship Manager
May 2003
PERSONAL ATTRIBUTES
Effective Communication Skills: Articulate communicator with an appreciation

for the different communication styles required when working with other team
members or with customers.

Page 294
Honest and Reliable: Able to take on tasks with a degree of responsibility due to
strong morals and ethics ensuring honesty and reliability.
Flexible: Understands the need to remain flexible to support last-minute
demands and changes. Comfortable with changing environments and situations
ensuring the ability to remain flexible and adaptable.
Time Management: Dedicated to effectively prioritising and managing time by
allocating tasks and activities and keeping track of them in diaries and daily to-do
lists.
PROFESSIONAL WORK EXPERIENCE

PHILIPPINE RED CROSS 2013- PRESENT
CORPORATE &ONLINE GIFT GIVING
Promotes Philippine Red Cross services to encourage partnership with

corporations, associations, organizations and institutions through presentations,
etc.
Develops/designs new workable schemes that are vital in donor recruitment.
Undertakes a continuing research on updates and trends of corporate social
responsibility and link it with Red Cross.
Innovates marketing collaterals to further encourage the corporate donors to be
involved more in Red Cross.
Devises workable system of task scheduling and allocation from an equitable
workload distribution among staff and thus attain maximized results of the office
operations.
Plans Strategies for Product Management and Development and monitors the
proper implementation of the project.
Establishes and maintains rapport to the corporate donors to secure their
continuing support.
Achieves the annual goal of the unit.
Prepares and submit annual report.
Ensures donor recognition and donation acknowledge promptly.
Monitors and evaluates the performance of the staff under the Corporate
Partnership Unit.
Prepares and submits the annual report of the unit.
Supervises all staff and volunteers of the office.
Page 295
Achievements and Contributions

Handling Company Activities - Planning of activities for the employees. Recommend
programs and programs for approval. Implement and administer Donation Programs for
fostering partners/donors management relationships. Designing, planning, and
implementing the organization's employee relations programs, policies, and procedures;
ensuring policies are consistently applied as they relate to employee relations.
Maintains the transparency of the organization- Monitors, receives and analyse fund
raising reports from all chapters, National Headquarters fund generation units and
submits findings recommendations to the Secretary General for information and for
possible actions for improvements.
Evaluates the individual performance of the staff of the fund generation department as
well as the departments performance and provides feedback to ensure that the unit
goals are being achieved.
PROFESSIONAL REFEREE
Leah B. Gueco
Amor C. Coro
Manager, Salary Loan
Branch Manager
Security Bank Corp.
PS Bank
0906-9387248
0932-8910213

Page 296
Mae Chloe Ramos

#3445 San Roque St., Sta Ana, Manila
Contact no.: (639)-985449552
E-mail Address: mae.chloe.ramos@gmail.com
Education:
Master in Business Administration (June 2013 present)

Bonifacio Ave, Mandaluyong City, Philippines
Bachelor of Science in Instrumentation and Control (June 2006 - May 2010)

Bonifacio Ave, Mandaluyong City, Philippines
Professional Licenses / Certifications:

Instrumentation and Control Engineer (0633-2010, Metro Manila)
Personal Information
Birth Date
March 5, 1989
Birth Place
San Carlos City, Pangasinan
Gender
Female
Age
27 yrs. old

Page 297
Civil Status
Single
Citizenship
Filipino
Height
53
Weight
55 kg
Summary:
Instrumentation and Control Engineer with more than 5 years of comprehensive experience in
Engineering and Design.
Involved in FEED and Detailed Phase of Engineering, Design, Procurement and Construction of
Offshore and Petro-Chemical Plant. Engineering works responsibilities doing Instrument Index
and I/O Lists, Instrument Specifications and Selection, Instrument Data Sheets, Material
Requisition for Quotation, Purchase Order, and Vendor Document Review. Commodity Engineer
of Motor Operated On/Off Valves and Flowmeters Packages. Design works responsibilities doing
Instrument Location Plan and PDMS 3D Modelling.
Involved in P&ID development through Flow Diagram Change Notification (FDCN) and Project
Change Notice (PCN) and review with Process, Piping and Client. Assist in developing mechanical
packages from vendor. Main Coordinator in ensuring that all instruments scope in P&ID is
aligned with Cause and Effect, Logic Diagrams and Purchase Ordered instruments.
Equipped knowledge in PDMS 3D modelling and PDMS Clash Manager. Modelled Offline
Instruments, DDP Inline Instruments, and instrument cable tray lay-out.
Proficient to operate standard computer applications like INTools (SPI Admin and User),
AutoCAD, Microsoft Office related softwares, InstruCalc and Orifice Plate Calculation (Flow
Consultant Software).

Page 298
Projects Involvement:
Associate Design Engineer III
Petronas - Refinery and Petrochemicals
Fluor Daniel Inc. - Phil.

Project
Integrated Development (RAPID)
May 2015 present
Pengereng, Johor, Malaysia
Commodity Engineer doing Instrument Data Sheets, Instrument Specifications and Selection,
Material Requisition for Quotation, Purchase Order, and Vendor Document Review of MotorOperated On/Off Valves.
Associate Design Engineer III
Lemongrass Project - Grassroots Plant
BASF Petronas Chemicals
October 2013 May 2015
Kuantan Integrated Chemical Site

Kuantan, Malaysia
Responsible engineer to SPI Index and P&ID development.
Associate Design Engineer II
Depletion Compression Platform and
Shallow Water Platform
December 2011 October 2013
SPEX Malampaya Phase 3

Palawan, Philippines

Page 299
Discipline Application Specialist (DAS) of PDMS and SPI database administrator.
Responsible Designer to DDP & model in-line and offline instruments, Instrument cable trays,
and extract 2D Drawings for Instrument Location Plans.
Commodity Engineer doing Instrument Data Sheets, Instrument Specifications and Selection,
Material Requisition for Quotation, Purchase Order, and Vendor Document Review of V-Cone
Flowmeter.
Associate Design Engineer I
Woodside Energy Ltd.
Browse LNG Development
04/2011 - 12/2011
Perth, Western Australia, Australia
Responsible Designer to model fire and gas detector and prepare Instrument Location Plans.
Calculation Specialist (Flowmeters)
Daniel Measurement and Control (Asia Pacific)
Emerson Process Management
Emerson Electric Asia Ltd. ROHQ
June 2010-April 2011
Flow measurement (orifice plate, fittings and flanges) technical support for Asia Pacific
representatives.
Languages:
Reading Proficiency
Speaking Proficiency
Writing Proficiency
English
Fluent
Fluent
Fluent
Filipino
Fluent
Fluent
Fluent

Page 300
IMEE L. RESURRECCION
Birthdate : September 16, 1979
Nationality : Filipino
Contact No.: 09178760916
E-mail address: maxwave808@rocketmail.com
Educational Background:
2015-present
MBA
2002-2004
Baliuag University
Master in Library and Information Science
1997-2001
Business Management
University of the East
Bachelor of Science in Business Administration Major in
Professional Experience:
Full Time College Instructor I (College of Business & Entrepreneurial Technology)
Rizal Technological University, Boni Avenue, Mandaluyong City, Philippines
November 2010-Present
Teaches core subjects of Management (Principles of Management, Human Resource

Management, Human Behavior in Organization, Business Ethics, Personality
Development)
Instructs classes as they appear on the term schedule in accordance with the approved
course outlines.
Prepares course syllabi and lesson plans to assist in the development of effective
classroom instruction.
Provides academic counseling assistance to students during office hours
Keeps daily attendance and accurate scholastic records

Page 301
Writes and updates course outlines as required by the academic division

Compiles, administers, and grades final examinations
Serves as academic advisor during the school year
Assists the academic division in the registration of students for the academic term
Improves professional competence through attendance at workshops, convocations,
seminars.
Performs student learning outcomes assessment and assists with program learning
outcome assessment.
Performs such other duties as assigned
College Instructor I with designation as Deans Staff (College of Business &

Entrepreneurial Technology)
Rizal Technological University, Boni Avenue, Mandaluyong City, Philippines
February 2007 - November 2010
Teaches core subjects of Management (Principles of Management, Human Resource

Management, Human Behavior in Organization, Business Ethics, Personality
Development)
Assists the College Dean in preparing teaching loads to faculty members.
Creates instructional materials like teaching modules, syllabus, course plans.
Maintains day-to-day activities of the deans office.
Attends meetings to acquire and disseminate information and provide minutes for
various committees.
Responds to inquiries; prioritizes activities; sorts, reviews and edit documents.
Works closely with University administrators to facilitate communications, meetings
and matters related to the dean.
Serves as resource person to faculty for matters relating to University policies and
procedures and the faculty manual
Serves students seeking various types of assistance regarding Universitys policies.
Works with the Dean to write proposals, grants and other reports.
Maintains confidentiality and discretion regarding College business and files.
Performs other related tasks as may be assigned.
Chief Librarian
Central Colleges of the Philippines, Aurora Boulevard, Cubao, Quezon City
January 2006-February 2007

Page 302
Performs with competence and complies with the laws, school policies and standards,
rules and regulations that have been or may hereafter be promulgated for library
concerns.
Directs and supervises the total operations of the five libraries: (Main Library,
Engineering and Architecture Section, Graduate School Library, Nursing Library and
the High School Library).
Implements library policies and procedures.
Works closely with University administrators and other departments to coordinate the
Libraries accreditation process and follow up reports.
Liaises with faculty and staff to ensure appropriate Library material is selected and
ordered.
Evaluates library staff performance and recommends for promotion.
Prepares budget and development programs.
Plans library works schedules and attendance to seminars.
Coordinates with Library Committee, Deans, and Department Heads faculty members
in the selection and evaluation of library materials.
Conducts library staff meeting.
Represents the library in professional library associations.
Prepares and submits annual performance report to the President.
Computer Operator III: June 2004-November 2005

Office of the Ombudsman, Agham Road, Diliman, Quezon City, Philippines
Encodes the entry / input and retrieves all data and information in monitoring the
program / projects of the division.
Provides assistance to all computer users in disk formatting, disk copying, etc., as
assigned by the head of the division or as requested by the users;
Prepares hardcopy of the output;
Prepares reports needed by immediate supervisor and
Performs other related tasks as may be assigned.
Library Assistant: October 2003- May 2004

Rizal Technological University, Boni Ave., Mandaluyong City, Philippines
Provides assistance to clients in using the library.

Assists students in the development of information literacy.
Provides orientation and guidance for students and faculty in the use of library
services, resources and information technologies.
Provides reference and information services to library users.
Compiles records, sorts and shelves books, issues and receives library materials.
Locates library materials for loan and replaces material in shelving area, stacks, or
files according to identification number and title.
Page 303
Catalogues, classifies and indexes library resources.

Promotes library services through displays, talks and community events.
Professional Trainings Participated in:

As Speaker:
August 21, 2011
Title: Keeping up with the times through Excellent client interaction
Venue: Corporate Hall, Marian Medical Arts Bldg.,
Dahlia St., West Fairview, Quezon City, Philippines
February 1, 8 and 15, 2009
Title: Personality Enhancement Training
Venue: Barangay Hall, Barangay Hulo, Mandaluyong City Philippines
As Participant:
June 1-3, 2015

Title: One Team One Direction One RTU
Venue: Eagle Point Beach Resort, Anilao, Batangas
March 20-21, 2015
Title: Outcomes-Based Education Seminar Workshop
Venue: CBET Library, RTU
February 18, 2015

Title: 8th Research Forum
Venue: Research Auditorium, 3rd Flr. RTU
June 2-4, 2014
Title: Faculty Development Program 2014 Setting in Motion A Responsive Education
Venue: Lago De Oro Resort, Calatagan Batangas
November 7, 2014
Title: Sustaining Progress, Stirring Reforms
Venue: RTU Plenary Hall
Page 304
June 13, 2014

Title: Addressing Issues and Concerns of Faculty Members as Public Servants
Venue: RTU
March 21, 2014

Title: Recollection Seminar Life, Love, Relationships
Venue: RTU
March 7, 2014
Title: Go Negosyo 6th Filipino Entrepreneurship Summit 2014
Venue: World Trade Center Manila, Pasay City
June 3-5, 2013
Title: Strategic Performance=Strategic Rewards (RTU SPMS Seminar & Training)
Venue: Sabangan Beach Resort, San Juan, Batangas
July 14, 2012
Title: Internationalization of Librarianship and Information Science: Challenges,
Prospects and Promises
Venue: SM Megatrade Hall Building B, Mandaluyong City
July 13, 2011
Title: Library Service & Teaching Portfolios: Collecting & Creating A Professionals
Best
Venue: Megatrade Hall, SM Megamall, Edsa, Mandaluyong City
Philippines
Professional Affiliations:
Philippine Association of Academic and Research Libraries
Philippine Librarians Association, Inc.
Central Luzon Library Association

Page 305
MA CRISTINA C SANTOS
11J M GONZAGA ST BRGY HB ITAAS MANDALUYONG CITY
CELPHONE NUMBER: 09394400244
EMAIL ADD: apsjrmc@yahoo.com
PROFILE:
I am an enthusiastic, self-motivated, reliable, responsible and hard working person. I am a
mature team worker and adaptable to all challenging situations. I am able to work well both in a
team environment as well as using own imitative. I am able to work well under pressure and
adhere to strict deadlines.
EDUCATIONS:
MASTER OF BUSINESS ADMINISTRATION

From June 2015 to Present
BoniMandaluyong City
BACHELOR OF SCIENCE IN ACCOUNTANCY

From June 2003 to April 12, 2007
Colegio De Dagupan
Arellano stBaniDagupan City
SKILLS
Application
Microsoft Application

Page 306
Language
English, Filipino, Ilokano, Pangasinan and Kapampangan
INDUSTRY EXPERIENCE:
ACCOUNTANT
PIZZA CRAZE FOODS CORPORATION
Metropoint Mall EDSA cor Taft Avenue Pasay City
Validate accuracy of Assistants entry

Prepare employee payroll
Do monthly ending inventory
-Do cash control audit

-Checking that all stores are insured
-Validate the accuracy of month end report of all assistants
-Prepare General Ledger
-Prepare month end adjusting entry
-Prepare final financial report for month end evaluation of stores.
-Reconcile and prepare billing statements of outstanding receivable of stores for the
month
ACCOUNTANT
April 2008 to May 2013
DUT FOODS CORPORATION
NEW DIVISORIA MALL STO CRISTO ST TONDO MANILA
-Prepare voucher for all payable

-Do cash count and ending inventory of the store
-Prepare payroll for employee
-Do General Ledger for financial Statement preparation
-Prepare w/holding taxes and other mandatory contributions
-Prepare Profit and Loss report for the store
OFFICER IN CHARGE

Page 307
April 2007 to March 2008

EMA-WEST CREDIT CORPORATION
Rizal Street San Carlos City Pangasinan
-Communicate with client and convince them to have a loan

-Check and fund custodian
-Daily entry for daily transactions
-Approved loan for qualified client

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RIZAL TECHNOLOGICAL UNIVERSITY

Aking, Janaeva Joy

Amores, April Joy

Cara, Leslie Ann

Encontro, Dianne Faye

Materum, Mary Joy

Ramos, Mae Chloe

Santos, Ma. Cristina

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

Materum, Marie Joy

Managerial activities which deals with planning and controlling of firms

Financial management is an area of financial decision making, harmonsing

By: Weston Brigham

Objectives of financial management

Every business needs funds for two purposes.

For its establishment and to carry out its day-to-day operations.

- Investment in these assets represents that part of

firms capital which is blocked on

permanent or fixed basis and is called fixed capital.

Raising of owned capital,

Rising of borrowed capital

Scope of financial management

Limitations of traditional approach

This approach is confirmed to procurement of funds only.

It fails to consider an important aspects i.e. allocation of funds.

It deals with only outside I.e. investors, investment bankers.

The internal decision making is completely ignored in this approach.

The traditional approach fails to consider the problems involved in working

The modern approach is an analytical way of looking into financial problems of

Financial management is concerned with the issues involved in raising of funds

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

If the financial manager should develop proper techniques of managing current

So if interest rates are so important, how do they work?

Level of interest rates:

Structure of Interest Rates

In addition to changes in the level of interest rate

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

Types of interest rates

Political short-term gain;

Factor affecting market interest rate:

So there must be enough economic growth to keep wages up and unemployment

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

Cara, Leslie Ann

Types of Financial Markets and their Roles

A capital market is one in which individuals and institutions trade financial

A bond is a debt investment in which an investor loans money to an entity (corporate

Cash or Spot Market

Forex and the Interbank Market

The OTC Market

The over-the-counter (OTC) market is a type of secondary market also referred to as a

Third and Fourth Markets

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

Interest calculated only on principal is called simple interest.

Interest calculated on principal plus any previously earned interest is called

6 months is 6/12 of a year

Example: Present Value for Simple Interest

Interest paid on principal plus interest is called compound interest.

ADVANCED FINANCIAL MANAGEMENT STUDENT PORFOLIO

Example: Present Value for Compound Interest

Effective Annual Yield