What is money? Different Currency Barter System Philippine Financial System

1. GROUP 6
BSA 1Y2 - 1

2. What is Money?
Any item or verifiable record that is generally
accepted as payment for goods and services and
repayment of debts, such as taxes, in a
particular country or socio-economic context

4. Different
Currency

10. Money is often defined in terms of
the three functions or services that it
provides. Money serves as a medium
of exchange, as a store of value, and
as a unit of account.

11. Medium of exchange. Money's
most important function is as a
medium of exchange to facilitate
transactions. Without money, all
transactions would have to be
conducted by barter, which involves
direct exchange of one good or
service for another. The difficulty
with a barter system is that in order
to obtain a particular good or
service from a supplier, one has to
possess a good or service of equal
value, which the supplier also
desires. In other words, in a barter
system, exchange can take place
only if there is a double coincidence
of wants between two transacting
parties.

12. The likelihood of a double coincidence of wants,
however, is small and makes the exchange of
goods and services rather difficult. Money
effectively eliminates the double coincidence of
wants problem by serving as a medium of
exchange that is accepted in all transactions, by
all parties, regardless of whether they desire
each others' goods and services.

13. Store of value. In order to be a medium of exchange, money must
hold its value over time; that is, it must be a store of value. If
money could not be stored for some period of time and still remain
valuable in exchange, it would not solve the double coincidence of
wants problem and therefore would not be adopted as a medium
of exchange. As a store of value, money is not unique; many other
stores of value exist, such as land, works of art, and even baseball
cards and stamps. Money may not even be the best store of value
because it depreciates with inflation. However, money is more
liquid than most other stores of value because as a medium of
exchange, it is readily accepted everywhere. Furthermore, money
is an easily transported store of value that is available in a number
of convenient denominations.

14. Unit of account. Money also
functions as a unit of account,
providing a common measure of
the value of goods and services
being exchanged. Knowing the
value or price of a good, in terms
of money, enables both the
supplier and the purchaser of the
good to make decisions about
how much of the good to supply
and how much of the good to
purchase.

15. Standard of Deferred Payment. The standard of
deferred payment can be distinguished from the
medium of exchange function because of how
its value might change over time. If payment is
to be deferred, it should be denominated in a
unit which is expected to maintain its value.
Deferred payments require durability when used
in trade, and a minimum of opportunity to cheat
others — as the diamond or gold examples
illustrate

17. It consist of three major groups of institutions involved
in the mobilization and intermediation of private
savings as well as allocation of financial resources.
• Bangko Sentral ng Pilipinas (BSP)
• Banking System
• Non- Bank Financial Institution

18. • The Bangko Sentral ng Pilipinas (BSP) was created in 1993, replacing the earlier
Central Bank of the Philippines which began operations in 1949.
• The primary mandate of the BSP is to maintain price stability conducive to a
balanced and sustainable economic growth.
• The BSP provides the policy direction in the areas of money, banking and
credit.
• It supervises operations of the bank and exercises regulatory powers over no-
bank financial institutions with quasi-banking functions.

19. The Philippine Banking System consists of duly
licensed and registered banking entities
engaged in the lending of funds obtained in
the form of deposits.
These institutions includes Universal Banks,
Commercial Banks, Thrift Banks, Rural Banks,
Cooperative Banks, and Islamic Banks

20. Refer to all Financial Institution other than banks
engaged principally in the provisions of a wide range of
financial services.
NBFIs are engaged in a variety of financial services, which
include those performed by pawnshops, lending investor,
stock brokers, money brokers, investment houses,
financing companies, insurance companies, and
intermediaries performing quasi banking functions.