Presented to the Department of Mathematics

De La Salle University - Manila

Term 2, A.Y. 2018-2019

In partial fulfillment
of the course
In General Mathematics in the Modern World (S11)

FINAL FINANCIAL PLAN

Submitted by:
Dionisio, Geryco Eugynn T.

Submitted to:
Mrs. Clarence Gatchalian

February 14, 2019

 Table of Contents

Introduction ..................................................................................................................................... 3

Background and Objectives ........................................................................................................ 3

Problem ....................................................................................................................................... 3

Table 101 ........................................................................................................................................ 4

Plans of Action................................................................................................................................ 5

Savings Account .......................................................................................................................... 5

1. BDO ................................................................................................................................. 5

2. BPI.................................................................................................................................... 6

Time Deposit ............................................................................................................................... 6

1. BDO ................................................................................................................................. 6

2. BPI.................................................................................................................................... 7

Loans ........................................................................................................................................... 8

1. BDO ................................................................................................................................. 8

2. BPI.................................................................................................................................... 9

Money Market Funds...........................................................................................................9

1. BPI.................................................................................................................................... 9

Summary of Financial Products.....................................................................................................11

Data Analysis and Discussion....................................................................................................... 12

Choice of Action: Time Deposit ............................................................................................... 12

1. BDO ............................................................................................................................... 12

2. BPI.................................................................................................................................. 13

Choice of Action: Loan ............................................................................................................. 14

1. BDO ............................................................................................................................... 14

2. BPI.................................................................................................................................. 15

1
 Other Discussions ...................................................................................................................... 16

Summary and Conclusion ............................................................................................................. 17

Summary ................................................................................................................................... 17

Conclusion................................................................................................................................. 17

References ..................................................................................................................................... 18

Appendices.................................................................................................................................... 19

Appendix A: Full Payment of Loan .......................................................................................... 19

List of Tables

Table 1: Financial Goal...........................…………………………………………………………4

Table 2.1: BDO Savings Account………………………………………………………………...5

Table 2.2: BPI Savings Account………………………………………………………………….6

Table 3.1: BDO Time Deposit……………………………………………………………………6

Table 3.2: BPI Time Deposit……………………………………………………………………..7

Table 4.1: BDO Loans…………………………………………………………..........................8

Table 4.2: BPI Loans………………………………………………………………………….......9

Table 5.1: BPI Money Market Fund……………………………………………………………...9

Table 6.1: BDO Loan Payment………………………………………………………………….14

Table 6.2: BPI Loan Payment…………………………………………………………………...15

Table 7.1: Full Payment of Loan.....……………………………………………………………..19

2
 Introduction

Background and Objectives

Financial plans are plans that people make to create ways for them to be able to reach a
certain goal, and that goal is called a financial goal. This is a financial plan that is to be used by
the author after five years, assuming that the prices of each of the financial products are the same
rate as now. This financial plan will show the people who will read this how the author will
invest money to be able to reach a goal, which is a brand-new car. The author must raise around
Php250,000 to be able to reach his goal. The amount of money to be raised is different from the
money that the author will save, it is just an additional income.

The purpose of this financial plan is to show readers how the author creates ways in
invest his money in order to reach his goal.

Problem

The author needs to earn around Php250,000, which is not a small amount especially for
people who are still starting to work, and in just a short span of two years. Inspired by the goal,
the author seeks different ways to invest his money to reach that extra Php250,000.

3
 Table 101

The table below shows the monthly income of the author. It also shows the approximate
expenses of the author monthly and how much he is able to save after deducting his monthly
income from the monthly expenses. The financial goal is also stated below and it is basically
because of the goal that this whole financial plan was made.

Table 1 : Financial Goal

Monthly Income Php 40,000.00

Itemized Monthly Expenses Food 6,600.00

(Php 300 per day for 22 days)
Transportation 2,200.00
(Php 100 per day for 22 days)
Other Expenses (Helping pay 16,500.00
rent, electricity bill, water bill,
internet bill)
Monthly Total Expenses Php 25,300.00

Monthly Savings Php 14,700.00

Total Savings in Two Years Php 352,800.00

Financial Goal Buying a brand new car Php 600,000.00

Amount of Money to Raise Php 247,200.00

4
 Plans of Action

There are several ways on how you can raise your money. The best examples are savings
account, stocks, loans, and etc. The author researched different banks and the different rates that
each of the financial products they offer. Below are the financial products that the author chose
for him to be able to reach the financial goal.

Savings Account
Savings is the safest and simplest way to earn money. It is known to return only a small
amount of interest, but it is guaranteed to be safe as compared to other ways to earn money. The
tables below show the offer of the two banks (BDO and BPI) in their savings account.

1. BDO Savings Account

Table 2.1 : BDO Savings Account

Minimum Initial Deposit Minimum Balance to Earn Gross Interest Rate per
Interest Annum

P5,000.00 P10,000.00 0.25%

Fees and Charges

Account Closure Falling Below Minimum Withholding Tax for Interest

Balance Earned

P300.00 P300.00 20%

5
2. BPI Savings Account
Table 2.2 : BPI Savings Account

Type of Deposit Minimum Balance to Interest Rate Required Initial Required Monthly
Account Earn Interest Deposit ADB

BPInoy Savings P500.00 0.500% N.A. N.A. (Remittance

transaction once
every three
months)

BPI Direct Express P500.00 0.500% P500.00 P500.00

Teller Savings

Maxi-Saver P25,000.00 P25,000 - P499,999 P25,000.00 P25,000.00

Savings with ATM 0.500%
(0.500% p.a bonus
in interest rate if P500,000 - P999,999
no withdrawal 0.625%
within a month) P1,000,000 and
above
1.000%

Time Deposit
Time deposit is a lot like a regular savings account, but time deposit requires a higher
initial placement and has different rates depending on the amount of the money a person deposits
and how long the money stays in the bank. The tables below show the time deposit offers of the
two banks (BDO and BPI).

1. BDO Time Deposit

Table 3.1 : BDO Time Deposit

Minimum Initial Placement : P1000.00

Amount Time frame Interest rate per annum

P10,000 to P49,999 1 month 0.25%

2-3 months 0.25%

6-12 months 0.5%

6
 P50,000 to P99,999 1 month 0.375%

2-3 months 0.375%

6-12 months 0.625%

P100,000 to P499,999 1 month 0.500%

2-3 months 0.500%

6-12 months 0.750%

P500,000 to P1,000,000 1 month 0.625%

2-3 months 0.625%

6-12 months 0.875%

P1,000,000 to P4,999,999 1 month 0.750%

2-3 months 0.750%

6-12 months 1.000%

2. BPI Time Deposit

Table 3.2 : BPI Time Deposit

B. Regular Time Deposit

Amount Time frame Interest

P10,000-P49,999 1-12 months N/A

P50,000 - 1-3 months 0.625%

P999,999

6-12 months 0.875%

P1,000,000 to 1-3 months 0.750%

P4,999,999
6

6-12 months 1.000%

7
Loans
Due to the short span of time needed for the money to be big enough for the author to
reach the financial goal, loan might be the last resort of the author. Loans allow people to borrow
money from the bank, but borrowing from the bank is not simple, because one has to pay the
bank with an interest charged depending on how long it takes before one is able to pay the full
amount of the money borrowed. The following tables will show the different rates and
requirements of the two banks (BDO and BPI).

1. BDO Loan
Table 4.1 : BDO Personal Loan

Loan Range Tenor Monthly Add-on Factor Rate Effective Rate /

Rate Annum
Php 10,000 6 1.30% 0.179667192 26.27%
-
Php 3,000,000 12 1.25% 0.095836960 26.63%
18 1.25% 0.068058532 26.76%
24 1.25% 0.054167533 26.58%
36 1.25% 0.040279967 25.98%

Basic Requirements for BDO Loans

 Filipino citizen or foreigner residing in the Philippines for more than two (2) years
 Must be 21 years old at time of application but no more than 70 years old upon maturity
 Minimum Gross Annual income
o P120,000 for Salaried Employees
o P400,000 for Self-Employed / Professionals
 Additional application requirement for Salaried Employees
o Must be at least one (1) year tenure with the company
 Additional application requirement for Self-Employed
o Must be a sole proprietor or majority part-owner of a company operating for at
least two (2) years.
 Additional application requirement for Professionals
o Must be in private practice for at least one (1) year

8
2. BPI Loan

Table 4.2 : BPI Personal Loan

Loan Range Tenor Monthly Add-on

Rate
Php 20,000 12 1.20%
–
Php 1,000,000 18 1.20%
24 1.20%
36 1.20%

Basic Requirements for BPI Loans

 Government-issued photo-bearing ID
 3 months original pay slip and/or Latest Income Tax Return with BIR or Bank stamp
(BIR Form 2316)

Money Market Funds

Investing money in a money market fund is not as safe as compared to investing in a
savings account and time deposit, but it can also make one earn more in a shorter amount of
time. It is riskier because the change of the rate might turn out to be a loss. The tables below
show the money market fund of BPI.

1. BPI Money Market Fund

Table 5.1: BPI Money Market Fund

C. BPI Money Market Fund

Minimum Minimum Transaction Trust Fee Minimum Holding Period
Investment Amount
P10,000.00 P1,000.00 0.25% NONE

Valuation of the Fund NAVpU (January 30, 2019)

Market-to-Market Daily 244.31

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 BPI Investment Funds

Moderately Conservative

Fund Name Fund Type Maintaining Minimum Trust Fee

Balance Transaction
Amount

BPI Short Term Money Market P10,000.00 P1,000.00 0.25%

Fund Fund

BPI Money Money Market P10,000.00 P1,000.00 0.25%

Market Fund Fund

BPI Premium Intermediate Bond P10,000.00 P1,000.00 1.50%

Bond Fund Fund

BPI US Dollar Money Market USD$500.00 USD$200.00 0.50%

Short Term Fund
Fund

Moderately Aggressive

BPI Global Bond Fund-of- USD$500.00 USD$200.00 0.75%

Bond Fund-of- Funds
Funds

ABF Philippines Bond Index Fund P10,000.00 P1,000.00 0.08% (Trust Fee)
Bond Index 0.186% (Mgmt Fee)
Fund

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 Summary of Financial Products
BDO
Savings Account
Minimum Initial Deposit Minimum Balance to Earn Gross Interest Rate per Annum
Interest
0.25%
P5,000.00 P10,000.00
Time Deposit
P100,000 to P499,999 1 month 0.500%
2-3 months 0.500%
6-12 months 0.750%
Personal Loan
Tenor Factor Rate Monthly Add-on Rate Effective Rate / Annum
6 0.179667192 1.30% 26.27%
12 0.095836960 1.25% 26.63%

BPI
Direct Savings Bank

Type of Deposit Minimum Balance Interest Rate Required Initial Required Monthly
Account to Earn Interest Deposit ADB

BPInoy Savings P500.00 0.500% N.A. N.A. (Remittance

transaction once
every three
months)
BPI Direct Express P500.00 0.500% P500.00 P500.00
Teller Savings

Time Deposit
Amount Time frame Interest
P10,000-P49,999 1-12 months N/A
P50,000 - P999,999 1-3 months 0.625%
6-12 months 0.875%
P1,000,000 to P4,999,999
6
1-3 months 0.750%
6-12 months 1.000%
Money Market Fund
Minimum Minimum Trust Fee Minimum Minimum Minimum
Investment Transaction Holding Investment Transaction
Amount Period Amount

P10,000.00 P1,000.00 0.25% NONE P10,000.00 P1,000.00

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 Data Analysis and Discussion

Choice of Action : Time Deposit

Among the choices, the author has decided to invest in time deposit because it is safer
than a money market fund, but also offers a higher interest rate compared to savings account.
The author plans to deposit his monthly savings which is Php14,700.00, to the bank monthly.
Comparing the interest earned among the two banks, the interest that BPI returned is greater than
the interest that BDO returned.

The tables below will be showing the computations of the time deposits for the two banks
above.

1. BDO

Figure 1 : BDO Net Interest Computation

Total Interest Earned after Two Years : Php1,551.29

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2. BPI

Figure 2 : BPI Net Interest Computation

Total Interest Earned after Two Years : Php1,806.30

Comparing the interest earned from BDO and BPI, the one with the higher interest earned
is BPI. The interest earned from BDO is only Php1,551.29, while the interest earned from BPI is
Php1,806.30, which is Php255.01 higher.

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Choice of Action : Loan

As we can see, even after depositing in time deposit for two years, the financial goal of
Php247,200.00 is only deducted by Php1,806.30, which leaves Php245,393.70. The time deposit
only made 0.73% of the financial goal, which leaves 99.27%. There is no faster way to get that
money than loan, especially in a short amount of time. The author decides to just borrow money
from the one of the banks so he can immediately reach his financial goal. The money that needs
to be borrowed is Php245,393.70.

The tables below show the rates of payment that the author plans to pay as he borrows
from the banks.

1. BDO

Table 6.1: BDO Loan Payment

Starting
Balance Php245,393.70

Term (Months) 12 18 24 36

Interest Rate 1.25% 1.25% 1.25% 1.25%

Monthly
Monthly Php23,516 Php16,700 Php 13,292 Php 9,883
Installment
Total Loan Php 282,197 Php 300,600 Php 319,018 Php 355,803
Payment

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2. BPI

Table 6.2: BPI Loan Payment

Starting
Balance Php245,393.70

Term (Months) 12 18 24 36

Interest Rate 1.20% 1.20% 1.20% 1.20%

Monthly
Monthly Php23,394 Php16,578 Php13,170 Php9,761
Installment
Total Loan Php280,728 Php298,404 Php316,080 Php351,396
Payment

Comparing the loan that needs to be paid among the two banks, the rate that the author
must pay is lower in BPI than in BDO. The difference to be paid is among Php2,000 to around
Php4,000, starting from 12 months to 36 months. The author chose BPI because the amount that
he will be able to save is even higher than the amount of interest he earned after investing his
money in time deposit. Also, the interest rate of BDO is 1.25%, while the interest rate of BPI is
1.20% only, that 0.05% is a big difference especially for larger amounts of money.

15
Other Discussions

As shown in the table above, it is really hard to earn money when one is not willing to
risk much. Stocks would be a really good way to earn money quickly, but it is also really risky.
Even the best companies can have its stocks be in downfall constantly. Stocks are really
unpredictable, which means that if one is not willing to risk, then one should not invest in stocks.
As for bonds, the author thought that it is not advisable to invest in bonds when one needs
to earn a huge amount of money in a short amount of time. Money market fund, in the author's
opinion, is on the same level of risk as stocks, because both financial products could have their
prices change a lot in just a short amount of time.

The author decided to stay in the safe path, that is why he invested in time deposit
although it returns only a small amount of interest.

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 Summary and Conclusion
Summary

All of the researches of the rates of the different financial products of the banks was for
one thing, the financial goal, which is to buy a brand-new car. This paper showed a safe way of
obtaining around Php250,000.00. To earn more, one must risk more, but because of the lack of
experience of the author, he decided to just stay in the safe path to ensure the prevention of net
loss.

Below are the steps that the author will do in order to reach his financial goal, which is to
buy a brand-new car.

1. For two years, limit the expense to helping pay rent in the house and for necessities only.
The monthly savings must amount to at least Php14,500.00.
2. For every month, the savings must be deposited to BPI Time Deposit, which will allow
the author to earn an interest of Php1,806.30 at the end of the two years.
3. Lastly, loaning the amount of Php245,393.70 in BPI in order to reach the financial goal.
The amount of loan will be paid using the monthly savings that the author will earn in his
job five years from now.

Conclusion

To conclude, the author must be able to budget his money correctly, make sure to deposit
in the time deposit monthly, and pay back the loans (Php245,393.70) he borrowed from the bank.
The financial goal is not impossible to achieve as long as the steps above are followed without a
problem.

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 References

Peso Passbook Savings Account | BDO Unibank, Inc. (2019). Retrieved from
https://www.bdo.com.ph/personal/accounts/peso-savings-account/passbook-savings

Peso Time Deposit | BDO Unibank, Inc. (2019). Retrieved from

https://www.bdo.com.ph/personal/accounts/time-deposit/peso-time-deposit

Personal Loan | BDO Unibank, Inc. (2019). Retrieved from

https://www.bdo.com.ph/personal/loans/personal-loan

BPI Money Market Fund. (2019). Retrieved from

https://www.bpiassetmanagement.com/pages/bpi-money-market-fund

BPI INVESTMENT FUNDS. (2019). Retrieved from

https://www.bpiassetmanagement.com/pages/bpi-investment-funds/

Time Deposit Rates | BPI. (2019). Retrieved from

https://www.bpiexpressonline.com/p/0/87/time-deposit-rates

Deposit Rates: Savings and Checking | BPI. (2019). Retrieved from

https://www.bpiexpressonline.com/p/1/326/deposit-rates-savings-and-checking

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 Appendices

Appendix A : Payment of Loan

Borrowing money from a bank (called a loan) requires one to choose a span of time in
which at the end of that time, one will be able to pay back the loan he borrowed with interest
applied already. The author has no choice but to pay the loan back after 24 months, because the
monthly savings he has only allows him to pay up to Php14,700, whereas the loan payment for
18 months requires Php16,578 per month (base this data on Table 6.2 : BPI Loan Payment). The
table below shows how the total loan (Php316,080) is completely paid after 24 months have
passed.

Table 7.1: Full Payment of Loan

Monthly Savings Monthly Installment Total Payment

Month 1 Php14,700 Php13,170 Php13,170

Month 2 Php14,700 Php13,170 Php26,340

Month 3 Php14,700 Php13,170 Php39,510

Month 4 Php14,700 Php13,170 Php52,680

Month 5 Php14,700 Php13,170 Php65,850

Month 6 Php14,700 Php13,170 Php79,020

Month 7 Php14,700 Php13,170 Php92,190

Month 8 Php14,700 Php13,170 Php105,360

Month 9 Php14,700 Php13,170 Php118,530

Month 10 Php14,700 Php13,170 Php131,700

Month 11 Php14,700 Php13,170 Php144,870

Month 12 Php14,700 Php13,170 Php158,040

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Month 13 Php14,700 Php13,170 Php171,210

Month 14 Php14,700 Php13,170 Php184,380

Month 15 Php14,700 Php13,170 Php197,550

Month 16 Php14,700 Php13,170 Php210,720

Month 17 Php14,700 Php13,170 Php223,890

Month 18 Php14,700 Php13,170 Php237,060

Month 19 Php14,700 Php13,170 Php250,230

Month 20 Php14,700 Php13,170 Php263,400

Month 21 Php14,700 Php13,170 Php276,570

Month 22 Php14,700 Php13,170 Php289,740

Month 23 Php14,700 Php13,170 Php302,910

Month 24 Php14,700 Php13,170 Php316,080

20