Course Description: This course is designed to discuss the basic principles and concepts, policies and

programs of money, credit and banking. It also covers the role and functions of the financial institutions, the
importance of the financial intermediaries as the key planner towards the development of economy.
Course Objectives: At the end of the semester, the students should have:
1. Eplained the core concepts, principles and policies of money, credit and banking.
!. "ited the significance of money, credit and banking in the #hilippine business activities.
$. %escribed the development of money, credit and banking and the activities of the country&s financial
system.
'. %eveloped an appreciation of government activities in building the nation&s financial system.
(. %emonstrated skills in handling financial transactions through class activities.
Course Outline:
Date Topic Activity/Requirement Materials
Needed/References
)une 1' *rientation
#resentation of +chool #hilosophy, ,ission and
-ision
#resentation of "ourse *b.ectives and
/e0uirements
1etting to know each
other
*verview
"ourse *utline
)une 12 ,oney, Its Evolution and +ignificance
A. %evelopment of ,onetary +ystem
3. Evolution of ,oney
". +ignificance of ,oney
%. 4unctions of ,oney
E. Attributes of 1ood ,oney
4. 5inds of ,oney
1. "oinage
6. 5inds of "oinage
I. %etecting "ounterfeited 3ills
%iscussion
Introductory 7ui8
Tetbook
)une !1 ,onetary +tandards and +ystem
A. 9ature of ,onetary +tandards
3. "lassification of ,onetary +tandards
". 1old "oin +tandard
%. 1old 3ullion +tandard
E. Advantages of 1old 3ullion +tandard
4. %isadvantages of 1old 3ullion +tandard
1. 1old Echange +tandard
6. "lassification of 1old Echange +tandard
I. Important "haracteristics of 1old
Echange +tandard
). Advantages of 1old Echange +tandard
5. %isadvantages of 1old Echange +tandard
:. 3imetallic +tandard
,. "haracteristics of 3imetallic +tandard
9. 9on;"ommodity or 4iat +tandard
*. Essential "haracteristics of the 4iat
+tandard
#. Types of 4iat +tandard
Introductory 7ui8
%iscussion
Assignment
Tetbook
7. 1eneral "haracteristics of the ,anaged
"urrency +tandard
/. *b.ectives of the ,anaged "urrency
+tandard
+. Advantages of the ,anaged "urrency
+tandard
T. %isadvantages of the ,anaged "urrency
+tandard
)une !$ 6istory of the #hilippine "urrency ,onetary
+ystem
A. #re;+panish Time
3. +panish /egime
". 4irst #hilippine /epublic
%. American /egime
E. %ollar Echange +tandard
4. #hilippine 3ank 9otes
1. )apanese /egime
6. #ost <ar #eriod
I. *utline of the 6istory of the #hilippine
,onetary +tandard
). 6awala
Introductory 7ui8
%iscussion
#rinted "ollection of
#hilippine ,oney from
#re;+panish Era up to
the #resent
Tetbook
)une != 4ilm -iewing
7ui8
+hort 4ilm
7ui8 on #revious
"hapters
+hort 4ilm: The
9ew 1eneration
#hilippine
3anknotes
)une $> ,odern ,easures of ,oney
A. The 9arrow %efinition of ,oney
3. 3roader ,easures of ,oney
". <eighted ,easures of ,oney
%. Inflation and %eflation
E. "riteria for Inflation
4. %isadvantage of Inflation
1. %isadvantage of %eflation
6. The Aggregate %emand ? Aggregate
+upply ,odel
I. The Aggregate %emand ? Aggregates
+upply 4ramework
). The Aggregate %emand "urve
5. The Aggregate +upply "urve
:. E0uilibrium *utput and E0uilibrium #rice
:evel
,. 4actors that +hift the Aggregate %emand
"urve
9. Application of the Aggregate %emand ?
Aggregate +upply 4ramework
*. 4actors that +hift the Aggregate +upply
"urve
#. E0uilibrium *utput versus the 4ull
Employment *utput :evel
7. The %ilemma #osed by Adverse Aggregate
+upply +hocks
Introductory 7ui8
%iscussion
Assignment
Tetbook
/. The Theory of the -alue of ,oney: The
%emand for ,oney and -elocity of ,oney
+. Institutional 4actors that @nderlie the
+ynchroni8ation 3etween /eceipt and
Ependiture
T. The +tate of 4inancial Technology
@. Interest /ate :evels
-. Economic @ncertainty
<. Inflation Epectations
A. Income :evel
%iscussion
+eat <ork
Tetbook
)uly ( 7ui8
)uly B #relim Eamination
)uly 1! ,odern ,oney ,easures
A. The Income -elocity of ,oney
3. -elocity and the %emand for ,oney
%iscussion Tetbook
)uly 1' ,odern ,easures of ,oney
A. ,otives for 6olding ,oney
3. Transactions %emand
". #recautious %emand
%. +peculative %emand
E. The /ole of Interest /ates in the
%emand for ,oney: "onclusion
4. Interest /ates and the Transaction
%emand
1. Interest /ates and the #recautionary
%emand
6. Interest /ates and the +peculative
%emand
%iscussion
7ui8
Tetbook
)uly 1C "redit and Its @ses
A. 4unctions of "redit
3. "haracteristics of "redit
". +ignificance of "redit
%. "redit and the 3usiness "ycle
"lassification of "redit and Their +ources
A. #ersonal and "onsumers "redit
3. "riteria for 1ranting #ersonal "redit
". :ending Act
%. "ommercial or ,ercantile "redit
E. 3ank "redit or 3ank :oans
4. Eport and Import "redit
1. Investment "redit
6. Agricultural "redit
I. Industrial and /eal Estate "redit
). 1overnment or #ublic "redit
5. +ecured and @nsecured "redit
:. +hort Term, ,edium Term and :ong Term
:oans
,. %irect :oans, %iscount :oans and "redit
:ines
9. +ources of "redit
Introductory 7ui8
%iscussion
*. *ther +ources of "redit
)uly !1 "redit /isk
A. "redit /isk
3. "haracter
". "apacity
%. "apital
E. "ollateral
4. "ondition
1. 6a8ards in the @se of "redit
6. "redit Information
I. +ources of "redit Information
). "ompilation of "redit /eports
Introductory 7ui8
%iscussion
Tetbook
)uly !2 "redit Instruments
A. "redit Instruments %efined
3. "lassification of "redit Instruments
". +tock "ertificates
%. 3ond "ertificates
E. 5inds of 3onds
4. ,oney ,arket 3ills
1. 5inds of ,oney ,arket Instruments
6. %ealers Intermediating in ,oney ,arket
I. Investors in the ,oney ,arket
). "redit Instrument for "ommercial
#urposes
%iscussion
Topic +ynthesis
#rinted "ollection of
%ifferent
"lassifications of
"redit Instruments
Assignment
Tetbook
)uly != "redit Instruments
A. #romise to #ay Instruments
3. *rders to #ay
". "hecks
%. Advantages of "hecks
E. %isadvantages of "hecks
4. The 1iro +ystem
1. %ifference between %rafts and "hecks
6. 5inds of %rafts
I. ,oney *rders
6ow "redit Instruments are 9egotiated
A. 6ow "redit Instruments are 9egotiated
3. /e0uisites for 9egotiability
". 5inds of Endorsement
%. 6ow to "hange 3lank Endorsement to
+pecial Endorsement
E. *ther /ules of Endorsement
Introductory 7ui8
%iscussion
Tetbook
)uly $1 ?
August (
,idterm Eamination
August C The 4inancial +ystem
A. 4inancial Intermediation
3. Economic /ole of 4inancial Intermediaries
". /isk and "ost without 4inancial
Intermediation
%. @ses and +ources of 4inancial
Intermediaries
Introductory 7ui8
%iscussion
:ist of 3anks in the
#hilippine 4inancial
+ystem
,imic Trading of
+tocks
Tetbook
3+# #rimer
%ata from
www.pse.com.ph
E. The #hilippine 4inancial +ystem
4. +tructure of the #hilippine 4inancial
+ystem
1. 3angko +entral ng #ilipinas
6. 3anking Institutions and 9on;3ank
4inancial Institutions
I. :ist of "ommercial 3anks
August
11
3anking 6istory and %evelopment
A. 3rief 6istory of 3anking
3. 3anking in the #hilippines
". 9ew "entral 3ank D3+#E
%. Advantages of the Establishment of the
9ew "entral 3ank D3+#E
3anking Institutions, "lassifications and 5inds
A. 3anks %efined
3. /ole of 3anks
". "lassification of 3anks
%. "ommercial 3anks
E. Thrift 3anks
4. /ural 3anks
1. +ervices #erformed by /ural 3anks
6. +peciali8ed 1overnment 3anks of the
#hilippines
I. *ffshore 3anking @nit D*3@E
). 4unctions of *3@
5. "lassification According to 4orm of
*rgani8ation
:. Traditional "lassification of 3anks
Introductory 7ui8
%iscussion
,imic Trading of
+tocks
/eport on Investment
Tetbook
%ata from
www.pse.com.ph
August
12
,. 4unctions of a 3ank
9. "lassification of %eposits
*. Automated Teller ,achine DAT,E
#. 6ow AT, <orks
7. Types of 3ank Accounts
/. Inactive %eposit Account D%ormant
AccountsE
+. Insurance on %eposits
T. +afe %eposit 3oes
@. Types of :oans 1ranted by 3anks
-. *ther "lassification of 3ank :oans
%iscussion
,imic Trading of
+tocks
Tetbook
%ata from
www.pse.com.ph
August
1=
7ui8
August
!$
4ield Trip 4ield Trip: 3angko
+entral ng #ilipinas ?
"agayan de *ro
3ranch
August
!(
"entral 3anking
A. The *ld ,onetary 3oard
3. The 9ew "entral 3ank
". "omposition of the 9ew ,onetary 3oard
%. 7ualification of the 9ew ,onetary 3oard
Introductory 7ui8
%iscussion
+eatwork
,imic Trading of
+tocks
Tetbook
%ata from
www.pse.com.ph
E. 3angko +entral as 3ank of Issue
4. 3angko +entral as :ender of :ast /esort
1. %omestic ,oney +tabili8ation
6. Instruments of "entral 3ank Actions
I. :egal 3ank /eserve /e0uirement
). #urpose of Imposing :egal 3ank /eserve
5. :aws "overing :egal 3ank /eserves D/.A.
B2($ +ec. C2;1>!E
:. 3ank :egal /eserve /e0uirement and its
Effect on Ecess /eserves and ,oney
+upply
,. "hanging /eserve /e0uirements
August
$>
9. "ontrol of /ediscount and %iscount /ates
on :oans
*. Interest and /ediscount /ates
#. "hanging %iscount /ates and its Effect on
3ank Ecess /eserve and ,oney +upply
7. *pen ,arket *peration in 1overnment
+ecurities
/. #urchases and +ales of 1overnment
+ecurities
+. Issue and 9egotiation of 3angko +entral
*bligations
T. *pen ,arket *peration and its Effects on
3ankFs Ecess /eserve and ,oney +upply
@. "ontrol of "ollaterals /e0uired on 3ank
:oans
-. /e0uired +ecurity Against 3ank :oans
<. Imposition of #ortfolio "eilings
A. ,inimum "apital /atio
G. ,argin /e0uirements Against :etters of
"redit
H. ,oral +uasion
AA. *ther ,onetary #olicies to +tabili8e
3anking *peration
33. 3angko +entral as 4iscal Agent
%iscussion
+eatwork
,imic Trading of
+tocks
Tetbook
%ata from
www.pse.com.ph
+ept. 1 7ui8 7ui8
,imic Trading of
+tocks
%ata from
www.pse.com.ph
+ept. 2 +emi;4inal Eamination
+ept. = International Trade
A. 6ow Importers #ay Eporters
3. 4inancing of 4oreign Trade
". Eport credit #rocedures
%. +ales Against :etter, *pened by *rder and
for Account of the 3uyer in 4avor of the
+eller
E. "ontents of a "ommercial :I"
4. Eport +ales #rocedure @nder "ommercial
:I"
1. #arties to a "ommercial :I"
Introductory 7ui8
%iscussion
,imic Trading of
+tocks
Assignment
Tetbook
%ata from
www.pse.com.ph
6. <hy Eporters #refer to /eceive #ayment
Through "ommercial :I"
I. Advantages of the :I" from the 3uyerFs
#oint of -iew
). +ales Against Authority to #ay or
Authorities to #urchase
5. +ales Against %ollar %rafts "overing
Eports
:. +ales Against "ash %eposit in Advance of
+hipments
,. +ales on *pen Accounts DaIcE
9. +ales on "onsignment 3asis
*. 4oreign Echange
#. #urchase and +ales of 4oreign Echange
7. 4oreign Echange 6oldings of 3ank
/. /egulation on 9on;+pot Echange
Transactions
+. Information on Echange *perations
T. 4oreign Echange /ates
@. +ignificance of Echange /ates
-. Types of Echange /ates on the 3asis of
,onetary #olicies
<. 3alance of Trade
A. 3alance of #ayments
G. +ections in the 3alance of #ayments
H. "onditions in the 3alance of #ayments
AA. @nfavorable Effects of a "ontinuing
+urplus in the 3alance of #ayments
33. %isadvantages of %eficit "onditions
"". -isible and Invisible Items
%%. 6ard and +oft "urrencies
+ept. 1$ EE.3uying and +elling of 4oreign "urrencies
in the 4oreign Echange ,arket
44. Establishment of *fficial #arity of
%omestic "urrency with a +pecific
"urrency
11. The $ ,a.or #articipants in the 4oreign
Echange ,arket
66. 4actors Affecting 4oreign Echange
,arket and the 4oreign Echange /ates
II. International ,onetary +tabili8ation
)). International /eserves
55. International ,onetary %evices for
"ontrolling our Economy
::. "omposition of International /eserve
,,. %evaluation
99. 4actors That Influence the #rocess of
%evaluation as /emedial ,easure
**. /easons <hy "ountries 6ave %evalued
Their "urrencies and Their Effects
##. /evaluation
77. 4oreign Echange "ontrol
%iscussion
,imic Trading of
+tocks
Tetbook
%ata from
www.pse.com.ph
//. 1eneral 4eatures of /# 1C'C 4oreign
Echange "ontrol #olicy
++. -arious :aws and /egulations
1overning the 3anking +ector of a
"ommercial 3ank
TT. Thrift 3anks and /ural 3anks
+ept. !> 4ilm -iewing 4ilm /eview
,imic +tock Trading
4ilm ? The Ascent
of ,oney: %reams
of AvariceI6uman
3ondage
+ept. !! 4ilm -iewing 4ilm /eview
,imic +tock Trading
4ilm ? The Ascent
of ,oney: 3lowing
3ubblesI/isky
3usiness
+ept. !B 4ilm -iewing 4ilm /eview
,imic +tock Trading
4ilm ? The Ascent
of ,oney: +afe as
6ousesI"himerica
+ept. !C Investment /eporting and Analysis Analysis on ,imic
+tock Investment
Activity
/eport *utput
*ct. ' 1roup Activity and /eview Activity and /eview of
"ourse
*ct. 2 1roup Activity and /eview Activity and /eview of
"ourse
*ct. C ?
1'
4inal Eamination
radin! "ystem:
1. Rubrics: This will be used to assess the report and analysis paper.
!. Carrion Met#od: This will be used to compute the grades.
$% &inal rade Composition:
7ui88es '>J
Eams '>J
AssignmentsI"lass Activities !>J
Total 1>>J
Course Requirements:
Requirements Description Deadline
"ompilation #rinted compilation of #hilippine
,oney, "redit Instruments, :ist of
#hilippine 3anks According to
"lassification and 4oreign
"urrencies
*ctober $, !>11
Investment /eport and Analysis /eport and Analysis of the ,imic
Investment and Trading of +tock
Echange
*ctober $, !>11
+ynthesis A "ourse +ynthesis as Eperienced
by +tudent
*ctober $, !>11
Course 'olicies:
1. All re0uirements should be turned in on the specified time in the class. %o not turn in re0uirements at
the instructorFs house.
!. +et cellphones in silent mode while the class is going on.
$. A student is epected to attend hisIher class promptly and regularly. A student who incurs absences,
whether ecused or unecused, that eceed !>J of the number of hours re0uired for the course will be
given a mark 4AD4ailure in AttendanceE. Three tardinesses will be counted as one absence.
'. Academic honesty shall be observed at all times. A dishonest work cannot be given any credit. The
student will be sub.ected to disciplinary measures.
(. A student who is not wearing the prescribed uniform cannot be accepted to class.
2. Eaminations shall be taken on the scheduled time. *nly for sickness, emergency in the family or
financial reasons can the student be given special eamination at a fee of #$>.>> per unit.
B. The removal policy as stipulated in the Academic ,anual shall be observed.
=. 4or valid reasons, a student may be allowed to complete hisIher grade within si weeks after the last day
of final eamination.
C. +tudents are re0uired to wear business attire during <ednesdays.
Te(tboo):
:aman, /. ,., K 3., :. -. D!>>BE. Money, Credit and Banking. ,anila: 1I" Enterprises and "o., Inc.
References for "u!!ested Readin!s:
Books:
"ecchetti, +. 1. D!>>=E. Money, Banking, and Financial Markets. 9ew Gork: ,c1raw;6illIIrwin.
:euterio, ,. ,., K Estepa, ". 3. D!>>CE. Banking Theory and Practice. #asig "ity: Anvil #ublishing, Inc.
/e Editorial 3oard. D1C=(E. Banking Laws in the Philippines. ,anila: /e 3ook +tore.
The /esearch 4oundation of "4A Institute. D!>>CE. Central Banking and Monetary Policy in Emerging Markets
Nations. @nited +tates of America: The /esearch 4oundation of "4A Institute.
Web:
3angko +entral ng #ilipinas. D!>1>, %ecember $1E. Bangko Sentral ng Pilipinas Primers and F!"s. /etrieved
)une B, !>11, from 3angko +entral ng #ilipinas: #analaping ,atatag. 3ansang #anatag:
http:IIwww.bsp.gov.phIpublicationsIprimers.asp
#hilippine +tock Echange. D!>11, )une BE. The Philippine Stock E#change, $nc. /etrieved )une B, !>11, from
#hilippine +tock Echange <eb +ite: www.pse.com.ph