MAJOR TYPES OF

FINANCIAL INSTITUTIONS

COMMERCIAL BANKS
A BANK THAT OFFERS SERVICES TO
THE GENERAL PUBLIC AND TO
COMPANIES
SERVICES: ACCEPTING DEPOSITS,
GIVING BUSINESS LOANS AND AUTO
LOANS, MORTGAGE, AND BASIC
INVESTMENT PRODUCTS LIKE SA,
AND CERTIFICATES OF DEPOSIT

Bank of the Philippine Islands

Citibank Philippines
Equitable Bank
Far East Bank & Trust Company
International Exchange Bank
Land Bank of the Philippines
Metropolitan Bank and Trust
Company (Metrobank)
Philippine Banking Corporation
(PhilBank)
Philippine Commercial
International Bank (PCI Bank)
Philippine National Bank
Solidbank Corporation
Standard Chartered
Unionbank of the Philippines
United Coconut Planters Bank
Urban Bank

RURAL BANKS
"Rural Act of 1992. Cory Aquino
Designed to make needed credit
available and readily accessible in
the rural areas on reasonable terms.
For underprivileged
Accept saving and time deposit;

THRIFT BANKS
RA 7906
"Thrift banks" shall include savings
and mortgage banks, private
development banks, and stock
savings and loans associations
organized under existing laws, and
any banking corporation that may be
organized for the following purposes:

 (1) Accumulating the savings of depositors and

investing them, together with capital loans
secured by bonds, mortgages in real estate and
insured improvements thereon, chattel mortgage,
bonds and other forms of security or in loans for
personal or household finance, whether secured
or unsecured, or in financing for homebuilding
and home development; in readily marketable
and debt securities; in commercial papers and
accounts receivables, drafts, bills of exchange,
acceptances or notes arising out of commercial
transactions;

 (2) Providing short-term working

capital, medium- and long-term
financing, to businesses engaged in
agriculture, services, industry and
housing; and
(3) Providing diversified financial and
allied services for its chosen market
and constituencies specially for small
and medium enterprises and
individuals.

SPECIALIZED GOVT FINANCIAL

INSTITUTIONS
these are completely governmentowned institutions established mainly
to provide medium and long-term
credits to the industrial, agricultural
and real estate sectors of the
economy.

OFFSHORE BANKS
is abanklocated outside the country
of residence of the depositor.
Typically, an individual or company
will use anoffshore bankin a lowtax jurisdiction (or tax haven) that
provides financial and legal
advantages.

INSURANCE COMPANIES
Abusinessthatprovidescoverage, in the
formof compensation resulting fromloss,
damages,injury, treatment orhardshipin
exchangeforpremiumpayments. The
companycalculatestheriskof occurrence
then determines thecostto replace (pay
for) the loss to determine the premium
amount.
Premium- the price of insurance; amount
paid for insurance

NON-BANK FINANCIAL INSTITUTION

persons or entities whose principal
functions include the lending, investing, or
placement of funds or evidences of equity
deposited with them, or otherwise coursed
through them, either for their own account
or for the account of others.
is afinancial institutionthat does not
have a fullbankinglicense or is not
supervised by a national or international
banking regulatory agency.

COMMERCIAL BANKS
RURAL BANKS
THRIFT BANKS
SPECIALIZED GOVT FINANCIAL INST.

OFFSHORE BANKS
INSURANCE COMPANIES
NON-BANK FINANCIAL INSTITUTION

TAKE
DEPOSI
TS
FROM
PUBLIC

INTERMEDIARI
ES WITH NONDEPOSIT
SOURCES OF
FUNDS
Anintermediaryis someone who acts as a go-between or a
mediator between two other people.

TAXATION
GENERAL PRINCIPLES
POWER OF TAXATION
TAXATION power by which the
sovereign through its law-making
body raises revenue to defray the
necessary expenses of government
from among those who in some
measure are privileged to enjoy its
benefits and must bear its burdens.

 TAXES enforced proportional

contributions from the persons and
property levied by the law-making
body of the State by virtue of its
sovereignty in support of
government and for public needs.

CHARACTERISTICS OF TAXES

forced charge;
pecuniary burden payable in money;
levied by the legislature;
assessed with some reasonable rule
of apportionment; (see theoretical
justice)
imposed by the State within its
jurisdiction;
levied for a public purpose.

REQUISITES OF A VALID TAX

should be for a public purpose
the rule of taxation shall be uniform
that either the person or property taxed be
within the jurisdiction of the taxing authority
that the assessment and collection of certain
kinds of taxes guarantees against injustice to
individuals, especially by way of notice and
opportunity for hearing be provided
the tax must not impinge on the inherent and
Constitutional limitations on the power of
taxation

THEORIES AND BASES OF

TAXATION
Lifeblood Theory
Taxes are what we pay for civilized
society. Without taxes, the government
would be paralyzed for lack of the
motive power to activate and operate it.
Hence, despite the natural reluctance to
surrender part of one's hard-earned
income to the taxing authorities, every
person who is able to must contribute
his share in the running of the
government. (CIR v. Algue, Inc.)

THEORIES AND BASES OF

TAXATION
Necessity Theory
The power to tax is an attribute of sovereignty
emanating from necessity. It is a necessary
burden to preserve the State's sovereignty and a
means to give the citizenry an army to resist an
aggression, a navy to defend its shores from
invasion, a corps of civil servants to serve,
public improvements designed for the
enjoyment of the citizenry and those which
come within the State's territory, and facilities
and protection which a government is supposed
to provide. (Phil. Guaranty Co., Inc. v. CIR)

THEORIES AND BASES OF

TAXATION
Benefits-Protection / Reciprocity Theory
Taxation is described as a symbiotic
relationship whereby in exchange of the
benefits and protection that the citizens get
from the Government, taxes are paid. (CIR v.
Algue, Inc.)
Note: While taxes are intended for general
benefits, special benefits to taxpayers are not
required. The Government renders no special
or commensurate benefit to any particular
person or property.