The Philippine banking system is almost the same with other
countries. A banking system is a group or network of institutions that provide financial services. Financial
services includes payment system, taking deposits, providing loans, and
investments. The Philippine Banking System is of mainly composed of
universal and commercial banks, thrift banks, rural and cooperative banks.
Universal and commercial banks represent the largest single
group, resource-wise, of financial institutions in the country. They offer the
widest variety of banking services among financial institutions. In addition to
the function of an ordinary commercial bank, universal banks are also
authorized to engage in underwriting and other functions of investment houses,
and to invest in equities of non-allied undertakings.
The thrift banking system is composed of savings and
mortgage banks, private development banks, stock savings and loan associations
and microfinance thrift banks. Thrift banks are engaged in accumulating savings
of depositors and investing them. They also provide short-term working capital
and medium- and long-term financing to businesses engaged in agriculture,
services, industry and housing, and diversified financial and allied services,
and to their chosen markets and constituencies, especially small- and medium-
enterprises and individuals.
Rural and cooperative banks are the more popular type of
banks in the rural communities. Their role is to promote and expand the rural
economy in an orderly and effective manner by providing the people in the rural
communities with basic financial services. Rural and cooperative banks help
farmers through the stages of production, from buying seedlings to marketing of
their produce. Rural banks and cooperative banks are differentiated from each
other by ownership. While rural banks are privately owned and managed,
cooperative banks are organized/owned by cooperatives or federation of
cooperatives.
All of those above-mentioned institutions or banks are authorized,
supervised and regulated by the Bangko Sentral ng Pilipinas (BSP).