The World of Financial Markets and Institutions

Learning Activities

Directions: Read and answer the following activity as required. See the Rubric in the
appendix. Submit your work in the pigeon boxes which are provided in your
department/college, or to google class on or before the date as reflected in your study
schedule

Activity 1

Among the most heavily regulated sectors of the nation’s economy is the financial system.
The principal regulatory agencies of the Philippine Financial System are the following: (1)
Bangko Sentral ng Pilipinas (BSP), (2) Philippine Deposit Insurance Corporation (PDIC),
(3) Securities and Exchange Commission (SEC) (4) Insurance Commission (IC)

Required:

Illustrate the objectives functions, nature, and the subject of regulation of each agency of
the Philippine Financial System. Used the pro forma provided below to answer the activity.

BSP All depository institution Commercial banks, mutual saving banks,

PDIC savings, and loan association

Examine the books of commercial banks that are members Provides insurance of up to 500,000 for each depositor at a bank, examine the
of the system, sets reserve requirements for all banks books of insurance banks and imposes restrictions on assets they can hold

The primary objective is to The primary responsibility is to Their role is to stabilize the
They exist to protect depositors by
maintain price stability formulate and implement policy in financial systems in the event of
providing deposit insurance
conducive to balanced and the areas of money, banking, and bank failures by assuring
coverage for the depositing public
sustainable growth of the credit with the primary objective depositors they will have
and to help promote financial
of preserving price stability Immediate access to their insured
economy and employment stability.
funds even if their bank fails.

SEC Organize exchange and financial markets Insurance companies, brokers

IC

Requires disclosure of information, restricts insider trading Chapter and examine the books insurance companies, impose
restrictions on branching

To protect investors, maintain Charged with supervision over the

corporate sector, the capital market The main function of insurance is
fair, orderly, and efficient It aims to reduce financial
participants, the securities and that eliminates the uncertainty of
markets and facilitate capital uncertainty and make accidental
investment instruments market, the unexpected and sudden
loss manageable.
formation. and the investing public. financial loss

“Not intended for publication. For classroom instruction purposes only”.

The World of Financial Markets and Institutions

Name: Evangelyn Joy S. Galgo

Class Schedule: M-W ( 7;00-8:30)

Learning Activities

Determination of Insured and Uninsured Deposit.

Directions: Using the information given, solve the following questions and encircle the
correct answer. Submit your solution/work in the pigeon boxes which are provided in your
department/college, or to google class on or before the date as reflected in your study
schedule.

Note: Items without any solutions are INVALID (3 points each)

Requirement A:

Name of the Depositor/ Beneficial Owner Type of Deposit Account Balance

No.

Mark Dela Cruz (Maintained in the H.O.) Savings Deposit 1 100,000

Mark Dela Cruz (Maintained in the H.O.) Time deposit 2 500,000
Mark Dela Cruz (Maintained in the Branch 1) Demand Deposit 3 100,000
Mark Dela Cruz (Maintained in the Branch 2) Time deposit 4 200,000
Total 900,000

1. How much is the covered Insured deposit of Mark Dela Cruz?

Solution:

Computation Computation Computation of

Computation of Insured of Insured and of Insured and Insured and Insured
and Uninsured Amounts: Uninsured Uninsured Uninsured
Amounts: Amounts: Amounts:
Mark Dela Cruz Savings
(Maintained in the Deposit 1 100,000 100,000
H.O.)
Mark Dela Cruz Time deposit
(Maintained in the 2 500,000 400,000
H.O.)
Mark Dela Cruz Demand
(Maintained in the Deposit 3 100,000 -
Branch 1)
Mark Dela Cruz Time deposit
(Maintained in the 4 200,000 -
Branch 2)
Total P 900,000 P 500,000
Explanation:

-The total amount of insured deposits cannot exceed P500,000.00, the Maximum
Deposit Insurance Coverage (MDIC).

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The World of Financial Markets and Institutions

2. How much is the Uninsured deposit of Mark Dela Cruz?

Solution:

Computation Computation
Computation of
Computation of of Insured of Insured
Insured and
Insured and and and Insured Uninsured
Uninsured
Uninsured Amounts: Uninsured Uninsured
Amounts:
Amounts: Amounts:
Mark Dela Cruz Savings
(Maintained in the Deposit 1 100,000 100,000 -
H.O.)
Mark Dela Cruz Time
(Maintained in the deposit 2 500,000 400,000 100,000
H.O.)
Mark Dela Cruz Demand
(Maintained in the Deposit 3 100,000 - 100,000
Branch 1)
Mark Dela Cruz Time
(Maintained in the deposit 4 200,000 - 200,000
Branch 2)
Total P 900,000 P 500,000 P 400,000

Explanation:
- Simply subtract the total insured deposit of 500,000 from the total balance of
900,000 to get the uninsured deposit of 400,000.

Requirement B:

Account Name per Bank Type of Deposits Account Balance

No.
Mark Dela Cruz Demand Deposit 1 200,000
Mark Dela Cruz ITF Michael Dela Cruz Savings Deposit 2 400,000
Mark Dela Cruz by Mary Dela Cruz Time Deposit 3 500,000
Mark Dela Cruz by Mary Dela Cruz or Time Deposit 4 500,000
Michael Dela Cruz
Total 1,600,000

Solutions to all problems are below:

Account Type of Account No. Balance Share in the insured portion of

Name per Deposits the Deposit
Bank Juan Antonio
Mark Dela Demand 1 200,000 200,000 -
Cruz Deposit
Mark Dela Savings
Cruz ITF Deposit 2 400,000 - 400,000
Michael Dela
Cruz

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The World of Financial Markets and Institutions

Mark Dela
Cruz by Mary Time Deposit 3 500,000 500,000 -
Dela Cruz

Mark Dela
Cruz by Mary Time Deposit 4 500,000 500,000
Dela Cruz or
Michael Dela
Cruz
Total 1,600,000 1,200,000 400,000
Insured
Deposit 500,000 400,000
Uninsured
Deposits 700,000 0

3. How much is the covered Insured Deposit of Mark Dela Cruz?

- Mark Dela Cruz's covered insurance is P500,000.

4. How much is the Uninsured Deposit of Mark Dela Cruz?

- Simply subtract the total insured deposit of 500,000 from the total balance of
1,200,000 to get the uninsured deposit of 700,000

5. How much is the covered Insured Deposit of Michael Dela Cruz?

- The covered insurance deposit of Michel is 400,000.

6. How much is the Uninsured deposit of Michael Dela Cruz?

- Simply subtract the total insured deposit of 400,000 from the total balance of
400,000 to get the uninsured deposit of 0.

Requirement C:

Name of the Depositor/ Beneficial Type of Deposit Account Balance

Owner No.

Mark Dela Cruz or Mary Dela Cruz Savings Deposit 1 500,000

LAB Corporation Savings Deposit 2 500,000
Mark Dela Cruz and ABC Corporation Demand Deposit 3 500,000
Total 1,500,000

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The World of Financial Markets and Institutions

Solutions to all problems are below:

Name of the Type of Account Balance Share in the Insured Portion of the Deposit
Depositor/ Deposit No.
Beneficial Mark Maria LAB Corp ABC Corp
Owner
Mark Dela Savings
Cruz or Mary Deposit 1 500,000 250,000 250,000
Dela Cruz
LAB Savings 500,000
Corporation Deposit 2 500,000
Mark Dela
Cruz and Demand 3 500,000 500,000
ABC Deposit
Corporation
Total P 1,500,000 250,000 250,000 500,000 500,000
Insured 250,000 250,000 500,000 500,000
Deposit

7. How much is the covered Insured Deposit of Mark Dela Cruz?

- The deposit insurance for Savings Deposit is to be shared equally between Mark and
Maria Dela Cruz. Hence, each of them is entitled to P 250,000.00 deposit insurance.

8. How much is the covered Insured Deposit of Mary Dela Cruz?

- The deposit insurance for Savings Deposit is to be shared equally between Mark and
Maria Dela Cruz. Hence, each of them is entitled to P 250,000.00 deposit insurance.

9. How much is the covered Insured Deposit of LAB Corporation?

- XYZ Corporation is entitled to P500,000.00 deposit insurance for its Time Deposit.

10. How much is the covered Insured Deposit of ABC Corporation?

- The Demand Deposit held in the names of Mark Dela Cruz and ABC Corporation
is considered to be completely owned by ABC Corporation. As a result, ABC
Corporation is entitled to the P 500,000 deposit insurance.
Requirement D:

Name of the Depositor/ Beneficial Type of Deposit Account Balance

Owner No.
Mark Dela Cruz Savings Deposit 1 500,000
Mark Dela Cruz or Mary Dela Cruz Savings Deposit 2 600,000
Mark Dela Cruz and Michael Dela Cruz Time Deposit 3 500,000
Mark Dela Cruz, Mary Dela Cruz Time Deposit 4 450,000
Michael Dela Cruz
Total 2,050,000

Solutions to all problems below:

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 The World of Financial Markets and Institutions

Name of the Share in the insured Portion of Share in the uninsured

Depositor/ Type of Account Balance the deposit Portion of the deposit
Beneficial Deposit No.
Owner

Mark Mary Michael Mark Mary Michael

Mark Dela Savings 1 500,000 500,000
Cruz Deposit
Mark Dela 2
Cruz or Savings 2 600,000 250,000 50,000 50,000 50,000
Mary Dela Deposit
Cruz
Mark Dela
Cruz and Time 3 500,000 250,000 250,000
Michael Dela Deposit
Cruz
Mark Dela
Cruz, Mary Time 4 450,000 150,000 150,000 150,000
Dela Cruz Deposit
Michael Dela
Cruz

Total 2,050,000 1,000,000 400,000 400,000 200,000 50,000

Mark Mary Michael Mark Mary Michael

Insured Deposit
For Single Account 500,000
For Joint Account 500,000 400,000 400,000
Uninsured deposit
For Single Account
For Joint Account 200,000 50,000

11. How much is the covered Insured Deposit of Mark Dela Cruz for his single account?
- The individually owned deposit or single deposit of Mark Dela Cruz is entitled to
separate deposit insurance of P500,000.00.

12. How much is the covered Insured deposit of Mark Dela Cruz for his joint account?

- Account No. 2= P 600,000+ 2= 300,000

Account No. 3= P 500,000 + 2= 250,000
Account No. 4= P 450,000 + 3 = 150,000
700,000 – 200,000= P 500,000

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The World of Financial Markets and Institutions

13. How much is the covered Insured deposit of Mary Dela Cruz for his joint account?

- Account No. 2= P 600,000+ 2= 300,000

Account No. 4= P 450,000 + 3 = 150,000
450,000
(50,000)
P 400,000

14. How much is the covered Insured deposit of Michael Dela Cruz for his joint account?

- Account No. 2= P 500,000 + 2= 250,000

Account No. 4= P 450,000 + 3 = 150,000
P 400,000

15. How much is the Uninsured deposit of Mary Dela Cruz for his joint account?
- Account No. 2= P 600,000 + 2= 300,000
Account No. 4= P 450,000 + 3 = 150,000
450,000
(400,000)
P50,000

“Not intended for publication. For classroom instruction purposes only”.