Feasibility Study of a bank in Canlaon City

INTRODUCTION

It is time time to pict pictur ure e the the Canl Canlao aon n City City of toda today y in its its prop proper er perspective, by viewing it according to its noble goals and objectives,  which are formulated formulated towards attaining a transformatio transformation n from what she has has done done in the the past past,, towa toward rds s what what she she can can do at the the pres presen ent, t, in garnering a dependable socio-economic image specifically geared towards development. With the inclusion of Canlaon City in the third batch of  CDS (city development strategy) cities, its envisioned plan is to craft a  well formulated tool for planning and development which will be truly responsive to the demands of the future.

As local local governm government ent gains gains experi experienc ence e in managin managing g growth growth and change, its institutio institutional nal capability capability improves consider considerably. ably. The present present investments from both public and private sectors have greatly improved the quality of service and utilities made available to the constituents.   This is expected to raise the level of the public’s well being, and foster social change and development.

It has been noted, however, that a city without a bank is not complete. complete. After the closure closure of the Rural Rural Bank of Canlaon Canlaon in September 1986, most financial transactions have ended up being made outside of  Canlao Canlaon, n, thereb thereby y pulling pulling out cash for circula circulatio tion n and putting putting it into into

near nearby by citi cities es with with banki banking ng insti institu tuti tions ons,, inste instead ad of circu circula lati ting ng the the resources within the area. It is evident that Canlaon is generating income but other municipalities/cities are gaining from the proceeds of it.

Based on an analysis of the interviews conducted, mismanagement could be pinpointed as one of the reasons why RB Canlaon closed after approximately 5 years of operation. Unsecured loans to farmers without prop proper er asse assess ssme ment nt or appr apprais aisal al of the the area area,, with withou outt follo follow w ups ups and and assistance, led to a majority of loans defaulted upon and giving rise to the sentiment occasionally voiced that “the people didn’t like to pay back their loans.” No other banks wanted to buy Rural Bank of Canlaon since the CB required that any sale would also have to include assuming the Rural Bank’s previous accountability accountability with Central Central Bank which amounts amounts to approximately P80 million.

We recommend that in order to avoid repeating the mistakes of RB Canlaon, Canlaon, DCDB Canlaon Canlaon branch should: should: maintain maintain a high liquidity ratio ratio especially during its first 3 years of operation, carefully screen all loan applicants to ensure their capability to pay, monitor its loan portfolio cons consta tant ntly ly with with rega regard rd to non non perf perfor ormi ming ng loans loans,, inves investt in a vari varied ed portfolio such as t-bills and other government securities, and only grant loans which are backed up by sufficient collateral.

In order to foster the goals of the city towards development for a larg larger er swat swathe he of the the comm commun unit ity, y, it is impe impera rati tive ve that that a fina financ ncia iall institution with integrity, supply much needed financial services to the local population from within the locality. This fits right in with the vision of Dumaguete City Development Bank which in its 26 years of operation has remained a responsible partner in serving the local and neighboring Visayas and Mindanao business communities and has also attained the highest public trust.

In the CDS plan for the year 2007, one of the strategies of Canlaon City is the “development of commercial and industrial growth centers outside the present city center.”

As the the stud study y team team prop propos oses es a suit suitab able le loca locati tion on that that is in the the Upto Uptown wn area area,, this this will will furt furthe herr coin coinci cide de with with the the City City’s ’s plan plans s for for develo developme pment. nt.

The propos proposed ed locatio location n is in the Uptown Uptown area, which which is

outside outside the city center. center. The land is beside beside the City Mayor’s Mayor’s residence, residence, fronting the market for the region’s high-value crops, such as lettuce, cabbage, cauliflower, and others. However, worth noting is the statement of the landowner explaining that this was an excellent location due to the proxim proximity ity to the Mayor’s Mayor’s reside residence nce and the securi security ty provid provided ed at that that location.

OBJECTIVE OF THE STUDY

  This This stud study y aims aims to dete determ rmine ine the the feas feasib ibili ility ty of esta establ blish ishing ing a branch of Dumaguete City Development Bank in Canlaon City.  This study also aims to identify which products and services of a bank the prospective market would like to avail of. It also seeks to determine the size of the prospective market and aspects related to the success of the bank.

SCOPE AND LIMITATIONS

  The The main main focu focus s of this this proj projec ectt stud study y is the the feas feasib ibil ilit ity y of the the prop propos osed ed bran branch ch of DCDB DCDB in Canl Canlao aon n City City..

Like Like most most busi busine ness ss

prop propos osal als, s, feas feasib ibil ilit ity y crit criter eria ia have have majo majorr aspe aspect cts s that that need need to be considered considered in arriving arriving at final conclusions conclusions and and recommendati recommendations. ons.

The

aspe aspect cts s that that need need to be fact factor ored ed into into this this stud study y are are divi divide ded d into into marketing, organization and management; the technical, financial, socioeconomic aspects, and legal aspects.

Responses to the questionnaire were limited to employed residents of Canlaon City, both government and non-government, non-government, as well as small and medium business establishments. These were considered the target market as they are the most likely users of the banks services both as

depositors and loan makers as they possess sufficient income to save and also have the capability to repay loans taken. Only those who were identified as part of the target market were considered and given the chance to answer the questionnaires regarding the establishment of the bank.

SIGNIFICANCE OF THE STUDY

  The The int intenti ention on of this this stud study y is to aid, aid, guide uide,, and and assi assist st the proponent in determining determining whether or not to establish the business. This stud study y woul would d help help the the DCDB DCDB Boar Board d of Dire Direct ctor ors s in dete determ rmini ining ng the the viability of establishing a branch in Canlaon City.

METHODOLOGY A market survey was conducted to determine the market demand for the proposed project. An anal analys ysis is of the the mark market et dema demand nd is impo import rtan antt in orde orderr to determine if the target market will patronize the proposed project.  To draw a conclusion for its market demand, the researchers first determined determined who the target target markets markets were. The target target markets identified identified   were the employed residents of Canlaon City and small and medium business establishments.

Empl Emplo oyed resi reside dent nts s refe referr to the the City ity’s lab labor forc force e and and are cate categ goriz orized ed

as

foll follo ows: ws:

gove govern rnme ment nt,,

priv privat ate e

and and

self self-e -emp mplo loye yed d

individ individuals uals..

In order order to define define the populat population ion of these market markets, s, the

rese resear arch cher ers s requ reques este ted d assis assista tanc nce e from from the the City City Plan Plannin ning g Offi Office ce of  Canlaon, obtaining and reviewing documents showing the total number of employed residents of that city.

  The The

samp sample le

siz size

was was

dete determ rmin ined ed

usin using g

Slov Slovin in’s ’s

Form Formul ula. a.

Questionnaires were distributed to respondents based on the computed sample sample size.

After After retrievin retrieving g the questio questionnai nnaires res,, the response responses s were were

tallied and graphed. graphed. These were then analyzed and interpreted.

SLOVIN’S FORMULA: n

=

N 1 + N (e)

2

where: n = sample size N = total population, male and female of the employed sector if  Canlaon City e = sampling error of 5%

Permanent Government Employees Permanent Private Employees Self Employed Total Figures based on Population Distribution by Status

343 4,618 4,838 9, 7 9 9 of Employment 2003

NSO Census 2003

n=

9,799 1 + 9,799 (5%)

=

2

384 sample size

 The researchers also conducted interviews with key people whose inputs were were essential essential to the feasibility feasibility study. study. Please see see the section section on Market Feasibility regarding the highlights of the interviews.

FEASIBILITY CRITERIA  There are several factors considered from the different aspects of  the study:  The demand for a bank and the willingness of the respondents to patronize the products and services of the proposed project were the factors used in determining the feasibility of the market study.   The factors considered in determining the technical feasibility of  the project were the location of the building, accessibility to the target market market,, layout layout and human human resour resources ces require required, d, equipme equipment nt costs, costs, and cost of land.

  The evaluation of the financial feasibility was done through the financial projections.  The socio-economic aspect of the project considered its economic contributions and other benefits to the City and the society as a whole.

PROJECT SUMMARY

A. NAME OF THE PROJECT

 The name of the proposed project is Dumaguete City Development Bank (DCDB), Canlaon Branch, Negros Oriental.

B. LOCATION

 The DCDB Canlaon Branch will be located in Uptown Barangay Mabigo, Mabigo, Canlao Canlaon n City.

Its main office office or head office office is located located at the

corner of Dr. V. Locsin Street and Cervantes Street, Dumaguete City.

Canlaon City, situated on the eastern side of Mt. Kanlaon, in the province of Negros Oriental, is politically bound on the north by San Carlos, Carlos, Provin Province ce of Negros Negros Occide Occidenta ntal; l; on the east east by Vallehe Vallehermo rmoso, so, Prov Provinc ince e of Negr Negros os Orie Orient ntal al;; on the the west west by the the Munic Municipa ipalit litie ies s of La Castellana and Pontevedra, Province of Negros Occidental; and on the south by the Municipality of Guihulngan, Province of Negros Oriental.

  The city is strategically situated nine-and-a-half (9.5) kilometers from the foot of Mount Kanlaon – an active volcano in Negros Island, bearing bearing geograph geographic ic locati location on at 10° 24.7’ 24.7’ North North Latitu Latitude, de, 23° 7’ East East Longitude.

  The City is geographically divided into three sectors: Downtown, Midtow Midtown/C n/City ity Center Center,, and Uptown Uptown.. The City City Center Center is 38 kilomet kilometers ers away away from from San Carl Carlos os City City,, Negr Negros os Occid Occiden enta tal; l; 50 kilo kilome mete ters rs from from Guihulngan City; 20 kilometers from Vallehermoso; 102 kilometers from Bacolod City, the capital of Negros Occidental (taking the cross-island coun countr try y road road trav traver ersin sing g Negr Negros os Occi Occide dent ntal al and and Negr Negros os Orie Orient ntal al via via Canlaon City) and 166 kilometers from Dumaguete City, the capital of  Negros Oriental.

It takes three hours to Dumaguete City; two-and-a-half hours from Bacolod City via La Castellana; and a four- to five-hour trip from Cebu City by land and sea transport via San Carlos City.   The main industries of Canlaon city are Rice production with a total of 3,289 hectares, and sugarcane production with a total of 3,238 hectares out of a total area devoted to Agriculture of 9,783 hectares. The remaining area produces a mix of corn, vegetables, and livestock. These figures are cited from the Canlaon City CDS 2007. Furt Further her infor informa mati tion on was was gath gather ered ed from from an inter intervie view w with with Mr. Mr. Roderick Roderick Schon. He volunteered volunteered that there there are 4 major and traditional traditional sugarcane planters in the area. He mentioned the Schon farm, Valmayor Herm Herman anos os,, Jala Jalando ndoni ni farm farm,, and the Amador Amador farm. farm.

Anoth Another er majo majorr

property holder especially around the mabigo barrangay is the Bautista family.

 These major planters planters each have total total land areas of between 120 to 130 planted hectares.   The rice growers on the other hand are composed of numerous smaller lot holders each holding between 20 to 30 hectares. Apar Apartt from from thes these e plan plante ters rs and and farm farmer ers s ther there e are are also also a few few businessmen in the community who run hardware shops, a mini grocery and restaurant as well as branches of known motorcycle distributors such as RUSI RUSI and Du Ek Sam. Some of the the more prominent prominent business business men/women are: Cecil Canada, Julius Amador, and the Jalandonis.

PROPOSED SITE

 The lot under consideration for the proposed DCDB bank branch site is located on Aquino Street, beside the present mayor’s residence, fronting the Uptown market complex. The added security is an extra feature of this location. location. Other advantages of this location are: the lot is offered at market value price, the lot has good drainage and a first class

cement barrangay road connecting the lot to the city, the Uptown market complex which faces it is the trading area for vegetables and livestock and is a bustling commercial hub, and this location is identified in the CDS CDS stra strate tegi gies es for for econ econom omic ic deve develo lopm pmen entt as an area area targ target eted ed for for economic growth. C. DESCRI DESCRIPTIV PTIVE E DEFINIT DEFINITION ION OF THE THE PROJECT PROJECT

Incorporated July 1980 by Julio 0. Sy, Lourdes M. Calumpang,  Tita R. Sung, Jose E. Romero, Jr. and Gregorio E. Uymatiao, Sr., the Dumaguete City Development Bank was registered with the Securities and Exchange Commission. on October 17, 1980. The Central Bank of  the the Phil Philip ippi pine nes s gran grante ted d DCDB DCDB auth author orit ity y to oper operat ate e as a priv privat ate e development bank and formally started operations in Dumaguete City, Negros Oriental. In July 1990, DCBD established its first branch in the Municipality of Valencia, Bukidnon Province.

On August 8, 1992, the bank acquired the Rural Bank of Sibulan (Neg (Negro ros s Orie Orient ntal) al),, Inc. Inc. On Augu August st 27, 27, 1993 1993,, a seco second nd branc branch h in the the Municipality of Quezon, Bukidnon Province formally started operations. On October 16, 1993, the Lapu-Lapu City branch was its third branch. November 10, 1993, the Bangko Sentral ng Pilipinas granted the bank auth author orit ity y

to

acce accept pt

dema demand nd

depos eposit its. s.

On

Novem ovembe berr

16, 16,

1994, 994,

computerization of branches’ Current Account/Savings Account began.

  Today Today DCDB DCDB Canlao Canlaon n City City branch branch Negros Negros Oriental Oriental is the next target of DCDB incorporators for the expansion of the bank. The mission of Canlaon city today is to … “Sustain Canlaon City's position as a special growth center of  Northern Northern Negros Negros through through the protection protection of its environmental environmentally ly critical critical area area syst system, em, maximi maximize ze the the outp output ut of its its agric agricul ultu tura ral, l, comm commer ercia cial, l, infrastructure, transport, agro-industrial and eco-tourism resources and promote massive livelihood initiatives in the rural areas for sustainable development.”

 The proponent recognizes the potential of Canlaon City in terms of  its resources and the need for a bank in that area. The project would fulfill, in part, DCDB’s mission to the community to be “a responsible partner in the countryside economic growth and development,” benefiting the community and contributing to the development of the city as well.

C. PROJEC PROJECT’S T’S LONG-R LONG-RANG ANGE E OBJECTI OBJECTIVES VES

Establishing a DCDB branch in Canlaon, a city rich in agricultural reso resour urce ces, s, will will prov provide ide the the comm commun unit ity y with with the the bank banking ing and othe otherr financ financial ial serv service ices s the the comm commun unit ity y need needs. s. Acco Accomp mplis lishin hing g this this woul would d contribute to the proponent’s vision to become the leading development bank in the Visayas-Mindanao region. A development bank’s objectives may be organized as follows:

(1) Accumu Accumulat lating ing the savings savings of deposi depositor tors s and investi investing ng them, 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 secu secure red d or unse unsecu cure red, d, or in finan financin cing g for for home homebu build ildin ing g and home home development; in readily marketable and debt securities; in commercial papers and accounts receivables, drafts, bills of exchange, acceptances or note notes s arisi arising ng out out of comme commerc rcial ial trans transac acti tions ons;; and in such such othe otherr investm investment ents s and loans loans which which the Moneta Monetary ry Board Board may determ determine ine as necessary in the furtherance of national economic objectives; (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 especially for small and medium enterprises and individuals.

E. HIGLIG HIGLIGHTS HTS OF OF THE PROJEC PROJECT T

1. PROJECT

A project feasibility study about the proposed project was conducted. After determining the viability of the project, the proposal  will be forwarded to the Board of Directors of DCDB for review and

approval. Land acquisition and the construction of the building will follow after compliance with the necessary requirements requirements (please refer to Appendix F). Bangko Sentral ng Pilipinas prerequisites necessary in establishing a branch should be complied with at this time. After all the the lega legall requ requir ireme ement nts s have have been been met, met, and after after the the auth author orit ity y to establish a branch has been given, the branch shall be opened within six months from the date of approval. The target date date the researchers are suggesting is August 8, 2008 for the obvious reason that round numbers for the Chinese origin is believed to be a lucky number that could bring good fortune and good luck.

2. MODE MODE OF FINA FINANC NCIN ING G

  The The esta establ blish ishme ment nt of the the prop propos osed ed bran branch ch of DCDB DCDB in Canlaon City will be financed solely from the capital funds of the Dumaguete City Development Bank. On the basis of the information supplied by the Vice President, the amount for the purchase of the lot and the construc constructio tion n of the building building shall shall be taken taken from from existi existing ng funds of the bank that have been earmarked for this purpose. The DCDB Board of Directors has the intention of purchasing the land and and cons constr truc ucti ting ng a build building ing that that the the DCDB DCDB Canla Canlaon on branc branch h will will occupy.

F.

MAJOR

ASSU SSUMPTIONS,

SUMMARY

OF

FINDING INGS

AND

group,

was

CONCLUSIONS OF THE FOLLOWING:

1. MARK MARKET ET FEAS FEASIB IBIL ILIT ITY Y In

the

survey

conducted

by

the

it

asce ascert rtain ained ed that that one one of the the reas reasons ons that that ther there e is a need for a banking institution in Canlaon City is due to the absence of certain financia financiall servic services es in the city such such as:

savings savings deposi deposits, ts, checkin checking g

accounts, commercial loans and other services that a bank normally provides. The residents and the members of the local government of  the city have expressed their desire for a bank and emphasized the importance importance and role of a bank in their their city. It was also determine determined d that that ther there e are are a numbe numberr of prob probab able le clien clients, ts, 99 perc percent ent of the the resp respon onde dent nts s to be exac exact, t, who who woul would d be will willin ing g to avai availl of the the products and services that the DCDB Canlaon branch will offer.

City City Trea Treasu sure rerr Ma. Ma. Luis Luisa a L. Luza Luza,, info inform rmed ed us of the the possibility of using the bank as a depository for all the financial tran transa sact ctio ions ns of the the gove govern rnme ment nt,, both both loca locall and and nati nation onal al.. The The quarterly Internal Revenue Allotment, or IRA of Canlaon City for 2007 is P44,574,756.00. The monthly operating expense of the local government is P6,458,090.00.

According to City Financial Analyst Rowena F. Oralde, if a bank would be established, she would recommend that all salary trans transac acti tion ons s go thro throug ugh h the the bank bank inste instead ad of her her prep prepar arin ing g the the necessary documents in order to withdraw the amount from San Carlos and transporting the said amount back to Canlaon. The total monthly salary transactions for regular government employees of the city is P3,107,628.76.

An interview was also conducted with Ms. Doris Flores, the City Administra Administrator tor of Canlaon. Canlaon. Ms. Flores Flores described described the people people of Canlaon Canlaon as hardwork hardworking ing and resilien resilient. t.

When When asked asked about about the

state of the City’s peace and order, she stated that said aspect was  well maintained. The internal revenue allotment (IRA) of Canlaon as mandated by law is deposited with the Development Bank of the Phil Philip ippi pine nes s (DBP (DBP)) in San San Carl Carlos os City City and and othe otherr acco accoun unts ts are are maintained maintained with Landbank Landbank and the Philippine National National Bank (PNB).   The The requ requir irem emen entt that that the the Gove Govern rnme ment nt depo deposi sitt its its mone money y in a government bank presupposes that there is a government bank in the immediate area but in the absence of such the government may deposit its IRA in any private bank in the locality for convenience as mentioned in Chapter four of R.A. 7906.

Accord According ing to Ms. Flores, Flores, attempts attempts had been been made made to attract banks to establish branches in Canlaon City. A resolution to this end had previously been passed. However, no bank responded, it was believed, because of security reasons.

If the proponent decides to open a branch in Canlaon, Ms. Flores said that the City would provide the security services needed by the bank branch and that she will talk with the Mayor regard regarding ing this. this.

She added added that the City City has continuit continuity y of plans,

negating any concern regarding a change in the administration. She said, “We really need a bank, we would be very happy if this would push push thro throug ugh, h, we will ill supp suppor ortt them them if they hey need eed equi equitty for for cons constr truc ucti tion on..

We will place place our our local local revenu revenues es and incom income e in

DCDB.”

Aside from security concerns, former Councilor Hernani Blanco, who is now part of the Mayor’s policy determining body, stated that the road conditions were the main problem banks did not want to open a branch in Canlaon. Canlaon. This problem is no longer of  concern as the city government has embarked on an infrastructure improvement program and as a result many farm-to-market roads have been concretized and the national national highway connecting connecting the city has also been improved.

Regard Regarding ing the securi security ty concer concerns ns Blanco Blanco opined opined “They “They don’ don’tt need need to worr worry… y…we we have have two two batt battal alio ions: ns: the the 11th and and 12th Infantry Infantry Brigade Brigade assigned in Canlaon. Canlaon. Peace and order order situation situation is ok now.” now.” This This is backed up by a city crime crime rate of .05 perce percent nt as seen in the CDS of 2007.

2. TECH TECHNI NICA CAL L FEASI FEASIBI BILI LITY TY

 The technical aspect of the study shows that the project is feasible because of certain factors.

 The accessibility of the location is convenient to residents and customers of the bank as it is within a 2 kilometers of the city center. There is ample parking as the lot fronts the Uptown market and also the lot is of a substantial size that a parking lot may be incorporated into the design.

It is also feasible considering that the branch structure is based on an existing DCDB branch (Valencia branch) and initial human resource requirements are minimal.

 The building and lot will be purchased by the bank and will be owned owned by the bank. The cost cost of the lot is priced priced competit competitivel ively y based on comparisons with the other prospective sites that were identified. The lot is priced priced at 1,500 pesos per square meter and the recommendation is to buy a 500 square meter lot. lot. The building will cover 150 square meters initially with the capacity to add a second story, and will cost approximately 2,000,000 pesos.

  The project is deemed viable because of the availability of  appropriate material and human resources of DCDB.

  The The desc descri ript ptio ion n of prod produc ucts ts and and serv service ices s was was based based on existi existing ng produc products ts and servic services es offere offered d by DCDB DCDB head head office office and other branches. Based on the Agri Agra Law (PD 717), 25 percent of  the banks loanable funds shall be allocated for agricultural credit.

Anothe Anotherr consid considera eratio tion n is the establi establishe shed d bank operat operations ions policies and procedures which are applicable to the Canlaon branch  without further modification.

3. FINA FINANC NCIA IAL L FEAS FEASIBI IBILI LITY TY

  The The finan financia ciall stud study y was was made made base based d on the the follo followin wing g assumptions: Operational Assumptions  a) The branch branch will start its operatio operation n on August August 8, 2008 b) Bank Bank hours hours will be be from 9:00 9:00am am to 3:00 3:00pm pm c) Emplo Employe yees es will work work till till 8:00am 8:00am to 5:00pm 5:00pm with with 1 hour hour lunch lunch break. d) The bank bank will be open open on weekdays weekdays and be close closed d on all public public and special holidays. e) CutCut- off for clear clearanc ance e of chequ cheques es will be 11:30a 11:30am m to allow allow for travel time to BPI San Carlos whose cut off time is 1:00pm. f) Excess Excess funds funds will will be deposi deposited ted with with BPIBPI- San Carlos Carlos or loaned loaned to DCDB head office at a rate of 9 percent. A portion may be invested in government securities depending upon the approval of the board of directors and in accordance with the rules and regulations of the monetary board regarding investments. g) Maximum Maximum of 10 percent percent curren current/s t/savin aving g deposits deposits will be kept kept as cash in vault h) Company Company will procur procure e a motorcy motorcycle cle for bank use. use.

i) Main Main offic office e will will provid provide e a serv service ice vehic vehicle le for branch branch manag manager er’s ’s use.  j) There There will will be a prov provisi ision on of an an ATM mach machine ine in the the bank bank layout layout but it will not be installed in the first year of operation, until the bank will be financially stable to purchase one. k) All polici policies es and and regu regulat latio ions ns of the Depa Depart rtme ment nt of Labor Labor and Employment (DOLE) will be complied with. l) All polici policies, es, rules rules and and regula regulatio tions ns of the the DCDB DCDB main offic office e will apply to the branch office. m) The first first branch manager manager will be an officer officer from DCDB main office. n) Rank Rank and file staff will be recruite recruited d from qualified qualified reside residents nts of  Canlaon. Revenue Assumptions  a) Agricultural Agricultural loans loans will have have an interest interest rate rate of 15-18 15-18 percent, percent, as prescribed by DCDB bank policy and the Agri-Agra Law. b) Commer Commercia ciall loans loans will have an interest interest rate of 15-18 perce percent, nt, prescribed by DCDB bank policy and the BSP. c.) Excess funds will be loaned to DCDB main branch at the rate of  9 percent per annum.

Expense Assumptions 

a) The salary of the bank branch employees will have a three percent merit increase every year. b) The utility expense will increase according to current market statistics. c) Bank premises, furniture, fixtures and equipment are carried at acquisition cost or construction cost less depreciation and

impairment losses. Depr Deprec eciat iatio ion n is comp comput uted ed on the the stra straig ight ht-li -line ne basi basis s over over the the

estimated useful lives of the assets as follows: Buildings

40 years

Furniture, fixtures and equipment

1-10 years

Leas Leaseho ehold ld impr improv ovem emen ents ts are are amort amortize ized d over over the the term terms s of the the relat related ed leas leases es or the the usef useful ul live lives s of the the impr improv ovem emen ents ts whic whichev hever er is shorter. 4. SOCIO-ECONOMIC FEASIBILITY

The The proj projec ectt will will be consi consist sten entt with with Canla Canlaon’ on’s s econ econom omic ic exp expansi ansio on

and and

growt rowth h

sinc since e

DCDB CDB

supp suppo orts rts

the

Phil Philip ippi pine ne

Countryside Development Program wherein the bank strives to be known as a “Responsible Partner for Growth” in the local business community.

  The branch should focus on getting the local government unit as a main customer; the City Administrator stated the City’s  willingness to assist in this regard with a board resolution. The city treasury and accounting office have also expressed their anticipation for the establishment of a bank in the City. This would eliminate the time required and the safety concerns inherent in traveling to and from San Carlos and other banking institutions to conduct the City’s banking business. The local government employees and the teachers and employees of the various schools in the area would be able to use these banking services, forgoing the inconvenience of having to cash a check within the city or going to San Carlos to do the same.   The presence of a bank in Canlaon will also have a ripple effect on the economy of the area because by providing loans for agricultural improvement or post harvest facilities, or commercial loans for the start up of new businesses such as a supermarket or a department store the standard of living of the residents will improve. More jobs will be made available and more services will also be accessible to the residents of Canlaon.

5. MANAGE MANAGEME MENT NT FEASIB FEASIBILI ILITY TY

 The management structure adopted by the project is based on the existing management structure of existing DCDB branch offices.   This provides for a bank manager, a cashier, an accountant, an

accounting

assist istant,

a

loan

processor,

one

teller,

and

a

messenger/janitor.

PROJECT STATUS AND TIMETABLE

  The The rese resear arch ch proj projec ectt

star starte ted d

with with the the

iden identi tifi fica cati tion on of the the

proponent and the prospect study. On July 26, 2007, soon after the propon proponent ent,, Dumagu Dumaguete ete City City Develo Developme pment nt Bank, Bank, and the study study to be under underta take ken n was was ident identifi ified ed,, the the grou group p bega began n form formul ulat ating ing the the surv survey ey questi questionna onnaire ire.. This took took one week. week. The formal formal distri distribut bution ion of survey survey

questionnaires began on the first week of August, and lasted for three   weeks. The researchers then tallied the results during the second and third weeks. After tallying the results, the group commenced analyzing the collect collected ed data data and drafti drafting ng the feasibi feasibility lity study. study. The resear researche chers rs collected the information necessary to accomplish the project during the fourth and fifth weeks. The period from August 13 to September 3 was used used to focu focus s on the the Tech Technic nical al and Finan Financi cial al Stud Study y of the the proj projec ect. t. Finally, the last week of the study was spent on encoding and reviewing of the completed draft. The study ended on September 7, 2007.

PROJECT TIMETABLE A. Projec Projectt Feas Feasibil ibility ity Study Study B. Ocular Ocular/Sit /Site e Inspec Inspectio tion n C. Purc Purcha hase se of Land Land D. Proces Processing sing of of Busines Business s Permit Permit

• • • • • •

Building Permit Fencing Permit Fire Safety Sanitary Permit Occupancy Permit Mayor’s Permit

E. Construction of Building F. Application for Authority to Establish a Branch (Form 1) •

“Agreement to Organize a Bank” (Form 2)

•

•

• • •

•

•

•

• •

•

•

Bio-data sheet of each of the incorporators, proposed directors and officers, and subscribers (Form 3) Copy of Board Resolution authorizing the corporation to invest in such branch; and designating the person who will represent the corporation in connection therewith Copy of the latest Articles of Incorporation and By-Laws List of directors and principal officers List List of majo majorr stoc stockh khol olde ders rs,, indic indicat atin ing g the the citi citize zensh nship ip and the the numbe number, r, amou amount nt and perc percen enta tage ge of the the voti voting ng and and non-v non-vot otin ing g shares held by them A copy of the corporation’s audited financial statements for the last two (2) years prior to the filing of application A copy of the corporation’s annual report to the stockholders for the year immediately preceding the date of filing of application Cert Certif ifie ied d phot photoc ocop opie ies s of Inco Income me Tax Tax Retu Return rns s for for the the last last (2) (2) calendar years BIR clearance Deta Detail iled ed Plan Plan of Oper Operat atio ion n and and Econ Econom omic ic Just Justif ific icat atio ion n for for Establishing the branch Projected monthly financial statements for the first three (3) years of operations, together with reasonable assumptions. Certificate of Compliance signed by the president stating required capital for the branch

G. Hiring and Training of Officers and Staff  H. Issuance of authority to operate requirements Receipt of advice of approval by the Monetary Board/Governor of  the application for authority to establish the branch Complete Complete constructio construction n and furnishing of the bank building, building, which shall be equipped with vault and appropriate security devices such as lighting system, time delay device, tamper-resistant locks, alarm systems, etc. and provided with furniture, fixtures, equipment and bank forms; Effect Effect and comple complete te the recruitme recruitment nt and hiring hiring of officer officers s and employees of the bank Submit the following documentary requirements at least thirty (30) days before the scheduled start of operations: -Proof of registration of Articles of Incorporation and By Laws -Certification of compliance with the conditions of approval duly signed by the incorporators -List of officers and their respective designation and salaries; •

•

•

•

-Bio-d -Bio-data ata sheet, sheet, evidenc evidence e of citize citizenshi nship p and NBI NBI and BIR clearances of each of the officers (who have not had the previous previous approval approval of the Monetary Board/Gove Board/Governor) rnor) which are are need needed ed for for the the evalu evaluat atio ion n of thei theirr qual qualifi ificat catio ion n as officers -Chart of Organization -Manual of Operations embodying the policies and operating procedures of each department/unit/office. -Plantilla showing the positions with corresponding salaries -Two (2) sets of specimens of principal bank accounting and other forms -Bond policy of officers and custodial employees -Insurance policy on bank properties required to be insured -Blueprint of floor layout of bank premises

I.

Inaugur Inaugurati ation/ on/Ope Opening ning of the branch branch for busines business s (Target (Target Date is August 8, 2008)

 J. Requirement Requirements s within 30 days after after first first day of operat operations ions •

•

Inform BSP of the first day of operation and the banking hours and days Submit a Statement of Condition as of the first day of operation

GANNT CHART

ORGANIZATION AND MANAGEMENT ASPECT

A. ORGANI ORGANIZAT ZATION ION AND AND MANAG MANAGEME EMENT NT

A thri thrift ft bank bank shal shalll be orga organi nize zed d in the the form form of a stoc stock k corporation. The Monetary Board shall fix the minimum paid-up capital

of thrift banks in such amount as the Board may consider necessary necessary for the safe and sound operation of thrift banks taking into account the deve develo lopm pmen entt thru thrust sts s of this this Act Act and due due prot protec ecti tion on of the the gene genera rall public. No thrift bank shall be organized without a certificate of authority from the Monetary Board.

Republic Act 8791, The General Banking Law, Section 15, “Boa “Board rd of Dire Direct ctor ors”. s”. The The prov provis ision ions s of the the Corp Corpor orat atio ion n Code Code to the the contrary notwithstanding, there shall be at least five (5), and a maximum of fifteen (15) members of the board or directors of a bank, two (2) of    whom shall be independent directors. An "independent director" shall mean mean a pers person on other ther than than an offi office cerr or empl employ oyee ee of the the bank bank,, its its subsidiaries or affiliates or related interests.

NonNon-Fi Fili lipi pino no citi citize zens ns may may beco become me memb member ers s of the the boar board d of  directors of a bank to the extent of the foreign participation in the equity of said bank.

 The meetings of the board of directors may be conducted through modern technologies such as, but not limited to, teleconferencing and video-conferencing. Sec. 16. Fit and Proper Rule, To maintain the quality of bank management and afford better protection to depositors and the public in general the Monetary Board shall prescribe, pass upon and

review the qualifications and disqualifications of individuals elected or appointed bank directors or officers and disqualify those found unfit.

After due notice to the board of directors of the bank, the Monetary Board may disqualify, suspend or remove any bank director or officer  who commits or omits an act which render him unfit for the position.

In determining whether an individual is fit and proper to hold the position of a director or officer of a bank, regard shall be given to his integrity, experience, education, training, and competence.”

Repu Republ blic ic Act Act 7906 7906,, Thri Thrift ft Bank Bank Act, Act, Sect Sectio ion n 7, “Dir “Direc ecto tors rs and Officers”, states, “At least a majority of the members of the board of  directors of any thrift bank which may be established after the effectivity of this Act shall be citizens of the Philippines: Provided, however, That no appointive or elective official, whether full-time or part-time, shall at the same time serve as officer of any thrift bank, except in cases where such service is incident to financial assistance provided by the government or a govern governmen ment-o t-owne wned d or contro controlled lled corpor corporati ation on to the bank: bank: Provid Provided, ed, further, That in the case of merger or consolidation duly approved by the Mone Moneta tary ry Board oard,, the the limi limittatio ation n on the numb number er of dir direct ectors ors in a corporation, as provided in Section 14 of Republic Act 7906 ,shall not be applied so that membership in the new board may include up to the total

numb umber

of

directors

provided

for for

in

the

respective

articl icles

of 

incorporation of the merging or consolidating banks.”

DCDB SENIOR MANAGEMENT  Executive Committee Gregorio L. Uymatiao, Jr. Susano O. Sy Nicholas S. Ramas-Uypitching Silvestre H. Sung Ma. Vivian Joyce V. Sastrillo

C h ai r ma n Vice-Chairman Member Member Member

Corporate Management and Officers Julio O. Sy President Gregorio E. Uymatiao, Sr. Treasurer Ma. Vi Vivian Jo Joyce V. Sastrillo Executive Vi Vice President Sinfronio C. Viloro Vice President/Area Manager Margarito E. Credo Assistant Vice President Rowena I. Buling Comptroller Billiam G. Sy Internal Auditor Head Office Consolacion Gilda F. Elli Walden E. Justalero

Assistant Manager-HRD Loan Officer

Dumaguete Branch Floranita U. Calaurian Ma. Rosario I. Espina Ma. Elvie J. Teves

Manager Cashier Accountant

Assets and Liabilities Committee Ma. Vivian Joyce V. Sastrillo Gregorio L. Uymatiao, Jr. Silvestre H. Sung Jocelyn S. Limkaichong Rowena I. Buling Floranita U. Calaurian Consolacion Gilda F. Elli Walden E. Justalero

C ha i r ma n Vice-Chairman Member Member Member Member Member Member

Compliance, Audit and Examination Committee Nicholas S. S. Ra Ramas-Uypitching C h a i r ma n

Miguel A. Diaz Julio O. Sy

Vice-Chairman Member

B. FORM OF OWNERSHIP

Ownersh Ownership ip of thrift thrift banks, “At least least forty forty percen percentt (40%) (40%) of the voting stock of a thrift bank which may be established after the approval of this Act shall be owned by citizens of the Philippines, except where a new bank may be established as a result of a merger or consolidation of  existing thrift banks with foreign holdings in which case, the resulting foreign holdings shall not be increased but may be reduced and, once reduced, shall not be increased thereafter beyond sixty percent (60%) of  the voting voting stock stock of thrift thrift banks. banks. The percent percentage age of the foreig foreign-o n-owne wned d voti voting ng stoc stocks ks shall shall be dete determ rmine ined d by the the citi citize zensh nship ip of indiv individ idua uall stoc stockh khol olde ders rs and and in case case of corp corpor orat atio ions ns owni owning ng shar shares es,, by the the citizenship of each stockholder in the said corporations.”

C. ORGANI ORGANIZAT ZATION IONAL AL CHART CHART

ORGANIZATIONAL CHART OF PROPOSED DCDB CANLAON BRANCH

Branch Manager 

Messenger/Janitor 

Branch Cashier

Branch Accountant

Branch Teller 

Accounting Assistant Loans book keeper 

D. JOB DESCRI DESCRIPTI PTION ON

Position Title: 

BRANCH MANAGER 

Loan Processor 

BASIC RESPONSIBILITIES: Respon Responsibl sible e for the overall overall superv supervisio ision n of the Cash, Cash, Accoun Accountin ting g and Account Services Sections to ensure achievement of deposit targets, maintain good client relations as well as the proper implementation of  bank policie policies s and proced procedure ures s includin including g submiss submission ion of accura accurate te and timely reports required by the Head Office.

SPECIFIC RESPONSIBILITIES: 1. Deve Develo lops ps mark market eting ing stra strate tegi gies es,, plans plans and prog progra rams ms need needed ed to ensure ensure achieve achievemen mentt of perfor performanc mance e target targets s in terms terms of deposi depositt levels. 2. Review Reviews s daily daily call call report reports s of Accounts Accounts Services Services Repres Represent entati atives; ves; monitors significant accomplishments; provides marketing support  whenever necessary to capture available opportunities. 3. Monitor Monitors s daily daily perfor performanc mance e of Accoun Accounts ts Service Services s Repres Represent entativ atives es and Account Accounts s Servic Services es Assist Assistant ant;; provid provides es trainin training g to enhance enhance marketing skills. 4. Monitors Monitors quality quality of service service rendered rendered by field field and office office personnel personnel to maintain good client relations. Ensures fast, timely and reliable serv servic icing ing of acco accoun unts ts;; rend render ers s corr correc ecti tive ve meas measur ures es to reme remedy dy custome customerr compla complaints ints,, answers answers inquiri inquiries es or addres addresses ses concer concerns ns raised by clients.

5. Monitors Monitors movements movements of accounts; accounts; studies studies the peculiarit peculiarities ies of each account to identify business potentials. 6. Super Supervis vises es the the Cashi Cashier ering ing and Acco Accoun unti ting ng funct functio ions ns to comp comply ly  with the bank’s policies, procedures and reporting requirements. 7. Supervi Supervises ses the preparat preparation ion and distri distribut bution ion of the monthly monthly bank statements. 8. Performs Performs other other tasks as as may be assigne assigned d from time time to time. time.

Position Title: 

CASHIER 

BASIC RESPONSIBILITIES: Responsible for the custodianship of items of value such as cash, manager managers s checks, checks, time time deposi depositt certif certificat icates, es, passbo passbooks oks,, checkbo checkbooks oks,, security/investment papers, unused DCDB checks of other banks and accountable forms. Also responsible for ensuring that Tellers and other fron frontl tline iners rs under under the the Cash Cash Secti Section on rend render er quali quality ty serv service ice and and are are customer oriented at all times.

SPECIFIC RESPONSIBILITIES:

1. Moni Monito tors rs the the dail daily y flow flow of cash cash to ensu ensurre adeq adequa uacy cy of cash cash reserve/cash in vault; maintains the Cashier’s Accountability Book reflecting daily cash movements; 2. Ensures Ensures that actual actual cash in vault vault balances balances off with with records records all the time time and that that bills bills have have been been care carefu fully lly coun counte ted d and bund bundle led d preventing shortages or overages. 3. Assists Assists in monitori monitoring ng daily cash transac transactio tions ns of Main Branch Branch and other branches to ensure adequacy of bank reserve in compliance  with Central Bank requirement. 4. Coordi Coordinat nates es fund transfer transfers s to and from from branche branches s with with the Fund Management Unit and depository bank. 5. Verifi ifies

and

app approves

over

the

count unter

withdrawals

a nd

encashment to authenticate signatures and check the identity of  payees as well as validate sufficiency of account balance. 6. Monitors Monitors amount amount of cash handled handled by each Teller; Teller; replenishes replenishes cash cash upon upon reques request; t; verifie verifies s and receiv receives es surren surrender dered ed excess excess cash cash to maintain safe levels in Teller’s box. 7. Assists Assists Tellers Tellers in review reviewing ing the day’s transac transactio tions ns to trace trace errors errors resulting to shortages, overages or incorrect proof sheet balances. 8. Revi Review ews s

chec checks ks

depo deposi site ted; d;

supe superv rvis ises es

tran transm smit itta tal/ l/de depo posi sitt

of 

checks to depository bank for clearing; notifies clients of returned checks.

9. Calls on current current account account clients in case of insufficie insufficiency ncy of funds funds to avoid nonpayment or non-clearing of issued checks. 10.Le 10.Lead ads s and and train trains s the the front front liner liners s in rend render erin ing g good good serv service ice and and maintaining professional client relations. 11.Reviews the Teller’s proof sheet before submission to Accounting. 12.C 12.Clo lose sely ly

coor coordi dina nate tes s

with with

corp corpor orat ate e

clie client nts s

rega regard rdin ing g

payr payrol olll

arrangements for continued satisfactory service. 13.Acts as custodian of all accountable forms of the bank and monitors its usage and inventory level. Safe keeps signature cards, unreleased checks to clients (TD interest, loan proceeds, loan rebates, etc.) and unused Time Deposit certificates. 14.Countersigns for IOAs, checks and withdrawals from other banks, investments and borrowings. 15.As 15.Assis sists ts Telle Tellers rs in the the deli delive very ry of cash cash to value valued d acco accoun unts ts upon upon request. 16.Performs other tasks as may be assigned from time to time.

Position Title: 

 ACCOUNTANT 

BASIC RESPONSIBILITIES: Responsible for the over-all supervision of Main Branch accounting  work mainly the recording, recording, checking of computatio computations ns and verification verification of  time deposit and loan transactions. Also responsible for overseeing the

preparation of daily accounting and cash reports and the disbursement functions.

SPECIFIC RESPONSIBILITIES: 1. Checks and and verifies verifies computatio computation n of time deposit deposit transactio transactions ns such as placements, terminations, pre-terminations and renewals. 2. Supe Superv rvis ises es the the Acco Accoun unti ting ng Staf Stafff and and Book Bookke keep eper ers s in area areas s of  receiving ing

loan

disb isbursements,

payments nts

and

time imekeeping, ing,

time updating

deposit

place acements nts,

accounts,

loans ans

bookkeeping and general accounting. 3. Verifie Verifies s entries entries in the trial balance balance against against source source documen documents ts to chec check k

corr correc ectn tnes ess s

of

acco accoun unti ting ng

clas classi sifi fica cati tion on

and and

figu figure res s

recorded. 4. Checks and verifies verifies computation computation of interest interest in loans. 5. Checks and and verifies verifies list of back account accounting ing transactions transactions to to ensure correctness of entries and figures. 6. Appr Approv oves es

over ver-the -the-c -cou oun nter ter

tran transa sac ction tions s

inde indepe pend nden enttly

for for

 withdrawals of P20,000.00 and below; co-signs with Cashier for  withdrawals of more than P20,000.00. 7. Review Reviews s ticket tickets s prepar prepared ed by Accoun Accountin ting g Staff such as payment payment of  expenses and deposits to other banks. 8. Checks monthly monthly reports reports prepared prepared by Bookkee Bookkeepers pers of time time deposit, deposit, loans and general accounting.

9. Verifies Verifies bank reconcilia reconciliation tion statemen statements ts on a monthly monthly basis. basis. 10.Countersigns for/recommends approval of IOAs, cash advances and DCDB checks issued. 11.Performs other tasks as may be assigned from time to time.

Position Title: 

TELLER 

BASIC RESPONSIBILITIES: Respon Responsibl sible e for the efficie efficient nt handling handling of transa transacti ctions ons involvin involving g receipt and payment of cash and checks. Also responsible for rendering quality service to maintain good client relations and promote the bank’s services.

SPECIFIC RESPONSIBILITIES: 1. Rece Receiv ives es cash cash and checks checks for for such such trans transac acti tions ons as savin savings gs and and current account deposit, time deposit placement, loan payments, SSS payments and others. 2. Checks quality quality of bills and and verifies verifies cash count. count. 3. Sorts Sorts cash according according to quality quality and bundles bundles them them accord according ingly ly to facilitate counting. 4. Pays

cash

for

such

encashment and others’.

transactions

as

withdrawals,

check

5. Verif Verifie ies s valid validit ity y of order order to pay; pay; check checks s date date,, name name of payee payee as against identity of presentor, amount in words and figures and authenticity of signatures. 6. Chec Checks ks acco accoun untt bala balanc nces es and secu secure res s the the appr approv oval al of assig assigned ned authorities prior to any payment. 7. Updates Updates passbooks passbooks after after completi completion on of each each transaction. transaction. 8. Maintains Maintains adequate adequate amount of of cash to serve serve transactio transactions; ns; requests requests additional additional cash or surrenders surrenders excess cash whenever whenever necessary for security reasons. 9. Prepar Prepares es proof proof sheet to summar summarize ize transacti transactions ons processe processed d during during the day and counter check totals with other sections. 10. Verifies cash count of withdrawals from depository bank. 11. Acts a Roving Teller; picks-up deposits. 12. Performs other tasks as may be assigned from time to time.

Position Title: LOAN PROCESSOR 

BASIC RESPONSIBILITIES: Resp Respon onsi sibl ble e

for for

effe effect ctiv ivel ely y

iden identi tify fyin ing g

busi busine ness ss

pros prospe pect cts, s,

prepar preparing ing suitab suitable le loan loan packag packages es that that meet meet clients clients’’ needs, needs, proces processing sing and monitoring of loan accounts.

SPECIFIC RESPONSIBILITIES: 1. Identifies Identifies potential potential loan borrowers borrowers;; visits prospective prospective accounts accounts and offers the bank’s loan facilities and discusses how the bank can assist in the growth of the business. 2. Studies and and analyzes analyzes the business business prospects, prospects, its its viability viability as well as the credit worthiness of the borrower and the project. This would involve interviews with prospects, ocular inspection of project sites, review of feasibility feasibility study and analysis analysis of financial projections and other other relate related d activit activities ies that that can furthe furtherr streng strengthe then n the positiv positive e prospects of the business. 3. Ensures

timely

submission

of

complete

lo a n

requirements/documents. 4. Prepar Prepares es loan loan report reports s that that provid provide e accura accurate te figures figures and reliable reliable data/information that can be used by the Credit Committee in endorsing loan applications for approval of the Board of Directors. 5. Foll Follow owss-up up

the the

docu docume ment ntat atio ion n

proc proces ess; s;

prep prepar ares es

the the

cred credit it

implementation ticket to ensure prompt release of loan proceeds. 6. Comp Comput utes es for for net net loan loan proc procee eeds ds and veri verifie fies s corr correc ectn tnes ess s from from Accounting. 7. Pers Person onall ally y atte attend nds s to clien clients ts for for sign signing ing of loan loan docu docume ment nts s and and actual release of loan proceeds. 8. Visit Visits s proj projec ects ts and monit monitor ors s busin busines ess s prog progre ress ss and and colle collect ctio ion n performance.

9. Prepares Prepares post-relea post-release se documents documents of refinanc refinanced ed accounts. accounts. 10.Regularly updates loan documents of existing loan accounts. 11.Coordinates with Collection Unit regarding problem accounts; offers solutions to problems encountered by borrowers. 12.Perform other tasks as may be assigned from time to time.

Position Title: 

GENERAL BOOKKEEPER 

BASIC RESPONSIBILITIES: Resp Respon onsib sible le for for the the prep prepar arat atio ion n of the the daily daily tria triall balan balance ce and countercheck counterchecking ing T-accounts T-accounts of other Sections to validate validate consolidated consolidated report. Also responsible for the maintenance of the general ledger and subsidiary ledgers of the Main Branch.

SPECIFIC RESPONSIBILITIES: 1. Prep Prepar ares es the the daily daily tria triall balan balance ce and and count counter erch check ecks s entr entrie ies s with with proofsheet of other sections. 2. Manually Manually balances balances CA/SA transacti transactions ons and counte counterch rcheck ecks s with with computer print-out on a daily basis; balances computer print-out of accounts by subtype and size against trial balance. 3. Post Posts s dail daily y tran transa sact ctio ions ns in the the gene genera rall ledg ledger er and and subs subsid idia iary ry ledgers.

4. Comput Computes es for the month-end month-end accrual accruals s of expense expenses s payabl payables es and amortization of prepaid expenses and deferred expenses to prepare the month-end proofsheet. 5. Files transacti transaction on tickets tickets according according to account title. title. 6. Prepar Prepares es Main Branch Branch accoun accounting ting report reports s for submiss submission ion to the Controllership Unit. 7. Prepares Prepares SSS collectio collection n remittance remittance for all all branch collect collections. ions. 8. Prep Prepar ares es mont monthh-en end d and and quar quarte terrly repo report rts s

such such as inco income me

statement and various schedules of the Main Branch. Performs other tasks as may be assigned from time to time

Position Title: 

MESSENGER/JANITOR 

BASIC RESPONSIBILITIES: Responsible for the prompt and efficient delivery of letters, bank statements, reports and other communication materials to clients, other banks and other private and government agencies. Also responsible for maintaining maintaining cleanliness cleanliness of office premises which includes includes work stations, executive rooms, reception areas, toilets, the conference room, etc. as maybe assigned.

SPECIFIC RESPONSIBILITIES: 1. Plans daily daily itinerary itinerary and daily daily work priorit priorities ies to maximize maximize time time and effort as well as ensure prompt delivery of outgoing documents. 2. Regular Regularly ly cleans cleans service service vehic vehicle. le. 3. Regular Regularly ly cleans cleans assigned assigned areas. areas. Collec Collects ts and dispose disposes s garbag garbage e at the end of the day. Washes dishes at the end of the day. 4. Assists in the repair repair and maintenanc maintenance e of office office facilities, facilities, plumbing plumbing and electrical works, office equipment and furniture. 5. Assists in in the purchasing purchasing functions functions of immediate immediate superv supervisor. isor. 6. Performs Performs other other tasks as as may be assigne assigned d from time time to time. time.

E. JOB SPECIFIC SPECIFICATI ATION ON

MINIMUM QUALIFICATION REQUIREMENTS  MANAGER •

Must be a graduate of a business course

•

At least 5 years work experience in marketing or client relations

•

With very good communications and interpersonal skills

•

He must must be fit fit and and prop proper er for for the the posi positi tion on he is bein being g proposed/appointed to. In determining whether a person is fit and proper for a particular position, the following matters must be considered:

- integrity/probity; - competence; - education; - diligence; and - experience/training.

CASHIER •

Must Must be a gradu raduat ate e of a busi busine ness ss cour cours se pref prefer erab ably ly accounting

•

At least five years work experience in bank operations in a supervisory capacity

ACCOUNTANT •

Must be a Certified Public Accountant

•

At least five years bank accounting work in a supervisory capacity

LOAN PROCESSOR •

Graduate of a four-year course

•

At least 2 years experience in a related field

•

Must have working knowledge on credit investigation, appraisal, financial analysis

•

Must be aggressive and a self-starter; able to work with minimum supervision

•

Must be an effective communicator (oral & written communication skills)

GENERAL BOOKKEEPER •

Must be an accounting graduate

•

At least one year accounting work experience

•

Must be a graduate of a business course

•

With good communications and interpersonal skills

TELLER

MESSENGER/JANITOR •

At least college level

•

Has ability to drive a motorcycle and car

•

Hardworking

MARKETING ASPECT

A. PROJECT DESCRIPTION

  The name of the project is Dumaguete City Development Bank, Canlaon Canlaon City Branch, Branch, Negros Negros Oriental. Oriental.

As defined defined in Republic Act No. No.

8791 The General Banking Law of 2000, banks shall refer to entities engaged engaged in the lending of funds obtained obtained in the form of deposits. deposits. There are are many many classi classific ficat atio ions ns of bank banks, s, most most comm common on of which which are are the the universal banks, commercial banks, rural banks, cooperative banks and thrift banks.

Republic Act No. 7906 also known as the “Thrift Banks Act of  1995” refers thrift banks to include savings and mortgage banks, private development development banks, and stock savings and loans associations associations organized organized under existing laws.

“In addition to powers granted it by this Act and existing laws, any thrift bank may: (1) Accept savings and time deposits (2) Open current or checking accounts: Provided, That the thrift bank bank has net net asse assets ts of at leas leastt Twent Twenty y milli million on pesos pesos (P20 (P20,0 ,000 00,0 ,000 00)) subject to such guidelines as may be established by the Monetary Board;

and shall be allowed to directly clear its demand deposit operations with the Bangko Sentral and the Philippine Clearing House Corporation (3) Act as correspondent for other financial institutions (4) Act as collection agent for government entities, including but not limited to, the Bureau of Internal Revenue, Social Security System, and the Bureau of Customs (5) Act as official official depository of national agencies and of municipal, city or provincial funds in the municipality, city or province where the thrift bank is located, subject to such guidelines as may be established by the Monetary Board (6) Rediscount paper with the Philippine National Bank, the Land Bank of the Philippines, the Development Bank of the Philippines, and other other govern government ment-ow -owned ned or contro controlle lled d corpor corporati ations. ons. Said institu institutio tions ns shall specify the nature of paper deemed acceptable for rediscount, as  well as rediscounting rate to be charged by any of these institutions (7) Issue mortgage and chattel mortgage certificates, buy and sell them for its own account or for the account of others, or accept and receive them in payment or as amortization of its loan. Such mortgage and chattel mortgage certificates shall be issued exclus exclusive ively ly in nation national al curren currency cy and exclus exclusive ively ly for the financin financing g of  equipment loans, mortgage loans for the acquisition of machinery and other fixed installations, conservation, enlargement or improvement of  prod produc ucti tive ve prop proper erti ties es and and real real esta estate te mort mortga gage ge loan loans s for: for: (a) (a) the the

constructio construction, n, acquisition, acquisition, expansion or improvement improvement of rural and urban properties; (b) the refinancing of similar loans and mortgages; and (c) such other purposes as may be authorized by the Monetary Board. A thrift bank shall coordinate the amounts and maturities of its certificates with those of its loans, so as to ensure adequate cash receipts for the payment of principal and interest at the time they become due.  The bank shall accept its own certificates at least at the actual price of  issue, in any prepayment of loans which mortgage or chattel mortgage debtors may wish to make: Provided, That the date of maturity of the cert certifi ifica cate tes s is not not late laterr than than the the date date on which which the the paym paymen entt woul would d otherwise become due, in the absence of the aforesaid prepayment (8) (8) Purc Purcha hase se,,

hold hold and and conv convey ey real eal

est estate ate

unde underr the the sam same

conditions as those governing commercial banks (9) Engage in quasi-banking and money market operations (10) Open domestic letters of credit (11) Extend credit facilities to private and government employees: Provided, That in the case of a borrower who is a permanent employee or  wage earner, the treasurer, cashier or paymaster of the office employing him is authorized, notwithstanding the provisions of any existing law, rule rules s and and regu regulat latio ions ns to the the cont contra rary ry,, to make make dedu deduct ctio ions ns from from his salar salary, y, wage wage or incom income e purs pursuan uantt to the the term terms s of his loan, loan, to remi remitt deductions to the thrift bank concerned, and collect such reasonable fee for his services

(12) Extend credit against the security of jewelry, precious stones and articles of similar nature, subject to such rules and regulations as the Monetary Board may prescribe

B. DESCRIPTION OF TARGET MARKET

  The The targe argett

mark market ets s

of

the prop propo osed sed

pro project ject are are

the loca locall

government of Canlaon City, the employed residents of Canlaon City and nearby

municipalities

and

the

s ma l l

an d

medium

business

establishment establishments. s. Employed Employed residents residents refer to the labor labor force of the city and and

are are

cat categor egoriz ized ed

as: as:

govern vernme ment nt,,

priv privat ate e

and and

self self-e -emp mplo loye yed d

individuals. Other Target Markets identified are the large scale planters and different businessmen in the community who would most likely avail of  loans.

C. DEMAND FOR BANKING SERVICES

  The survey showed that 60 percent of the respondents have an existing existing bank account. account. Thirty-six Thirty-six percent percent do not patronize patronize any banking institution. Four percent did not answer the question. To determine the demand for the business, the data gathered, as shown in Figure 12 shows 99 percent in favor of DCDB opening a branch in Canlaon City

and 99 percent ready to avail of its products and services. One percent do not favor the project.

Canla Canlaon on City City is a thir third d class class city in the the province of  Negros Oriental, Oriental, Philippines. Philippines. According to the 2000 census, it has a population of 46,548 people in 9,302 households.

 The financial resources of the local government of Canlaon for the  year 2007 are broken down as follows:

Revenue per Month Taxes, Licenses, Permits

P14,224,342.32

National Government Subsidiaries

P 14,858,252.00

Other Sources

P 1,233,522.76

In Negros Oriental, the government plans to concentrate on the develo developme pment nt of the provinc province’s e’s geothe geotherma rmall resour resources. ces. It is buildin building g an additional 20-megawatt power plant at Palinpinon II, and another 40megawatt power facility in Northern Negros near Canlaon City.

As mentioned in the project description, the additional powers of a thrift bank is to act as an official depository of national agencies and of 

municipal, city or provincial funds in the municipality, city or province   where the thrift bank is located, subject to such guidelines as may be established by the Monetary Board. The government sector would be the major client of the prospective bank. The list of clients would include teachers of the various schools in the area, employees of privately-owned businesses, and small and medium enterprises.

For the government clients and other businesses, payroll can be facilitated facilitated through the bank, negating the need for transacting transacting business in San Carlos or or elsewhere. Currently, Canlaon employees have to travel travel to San Carlos City, Negros Occidental, to collect their salary, cash their cheques, or have them cashed at certain establishments in Canlaon for a fee.

At pres present ent,, thes these e reso resour urce ces s are are not not put put to use use prod produc ucti tive vely ly in Canlaon City; the employees tend to do their shopping in San Carlos City since since they are already already there. there.

The market market opport opportuni unitie ties s create created d by a

bank branch in Canlaon City for small to medium businesses make this project viable.

D. SUPPLY

Althou Although gh there there are no existi existing ng banking banking instituti institutions ons in Canlao Canlaon n City, City, there there are other other financia financiall institu institutio tions ns that that more more or less less provid provide e simil similar ar serv servic ices es..

Ther There e are are thre three e pawns pawnsho hops ps:: Pala Palawa wan n Pawn Pawnsho shop, p,

Cham Chamar ar Pawn Pawnsho shop, p, and Cebu Cebuana ana Lhulli Lhullier er which which also also prov provid ides es the the servic service e of   of    pera pera padala  padala  , and and Weste Western rn Union Union..

Ther There e is one one lend lendin ing g

inve invest stor or,, AAA AAA Agen Agency cy,, whic which h is base based d in San San Carl Carlos os City City.. Cred Credit it cooperatives also accommodate loans, and among the three biggest in Canlaon are the Bucalan Multipurpose Credit Cooperative, Canlaon City Government

Emplo mploy yees

Credit

Cooperative ive

and and

Canl anlaon aon

Ci t y

Multipurpose Multipurpose Developm Development ent Credit Credit Cooperative. Cooperative. As shown in Figure Figure 15, 47.9 percent of the respondents avail their loans from SSS/GSIS, 22.9 percen percentt from from Credit Credit Cooper Cooperati atives ves,, 20.2 20.2 percent percent from from pawnsho pawnshops, ps, 7.3 percent from informal lending and 1.7 percent from other institutions. And as shown in Figure 8, 60 percent of the respondents have existing bank accounts. Base Based d on the the surv survey ey cond conduc ucte ted, d, the the resp respon onde dent nts s avail avail of the the services of the institutions mentioned above.

E. DEMAND-SUPPLY ANALYSIS

In determining the demand and the supply for financial services of  the propos proposed ed projec project, t, the researcher researchers s conclud concluded ed that that there there is a high high demand for for a bank in Canlaon Canlaon City. City. The lack of of a bank in the city city has resulted in the respondents turning to other financial institutions like

credit cooperatives and pawnshops. Aside from that they use the services of bank banks s outsi utside de the cit city regar egardl dles ess s of dist distan ance ce,, cost cost and and time ime considerations. This shows that there is demand demand and a lack of supply of  financial services which a local bank could provide.

F. PRICE STUDY Bank charges: Bank certification Purchase of a Manager’s check, MC Documentary stamp on MC Inter-branch transfer Below minimum balances (current and savings, or C&S) Dormant C&S accounts Overnight checks: if funded or deposited after closing time or a late deposit if funded on the next banking day before clearing or cut-off time if not funded or returned Demand deposits: Minimum initial deposit Minimum maintaining balance Ave Average age da daily ily ba balan lance to to ea earn in interest Savings deposits: Minimum initial deposit Ave Average age da daily ily ba balan lance to to ea earn in interest

P50.00 P20.00 P1.50 P50.00 regardless of amount P25.00 per month P30.00 per month

P100.00

P600.00 P1,100.00 P 5,000.00 P 2,000.00 P50 P50,00 ,000.00 .00

P 500.00 P1, P1,000.00 .00

Preferred savings deposit: Minimum deposit of P50,000.00 for one month (renewable)   The The inter interes est, t, amou amount nt earn earned ed on time time depo deposi sits ts,, are are subj subjec ectt to twenty percent withholding tax, as prescribed by the BSP policy. Deposits are covered under PDIC maximum of P250,000.00

DCDB offers these rates for the following deposit products: - Super Privileged Time Deposit gives 6.5% per annum with a term of five years; interest payable monthly and will be credited to your current or savings account. - Interest rates on Time Deposits and Preferred Savings Deposit: AMOUNT (Pesos)

Interest Rates (%)

5,000.00- 99,999.99

2 . 25

100,000.00- 499.99.99

2 . 50

500,000.00- 999,999.99

2 . 75

1,000,000.00- 4,999,999.99

3 . 00

On 5M and above, a special rate may be given. - Savings Deposit accumulates 1.5% per annum, which requires a monthly minimum balance. - As for the loans, the rates range from 15% - 18% per annum, explains DCDB Loans Department.

G. MARKET ANALYSIS

  There There are basicall basically y two factors factors affect affecting ing the market market;; these these are internal and external factors.

INTERNAL FACTORS

1. Location 

Most if not all of the respondents do their banking in San Carlos City, Guihulngan City, Dumaguete or outside the City of Canlaon. Accessibility of the business or the bank would attract attract the market to not go out of Canlaon City, but instead do their banking transactions where it is near. 2. Interest Rates  High interest rates on savings and low interest rates on loans would entice the market in patronizing the business. 3. Management of of the Business  Good management would lead to excellent operations. operations. And excellent operations lead to give quality service. 4. Employees  Motivated and well-trained employees could help the bank in giving giving quality service service to its its clients. Employees Employees with with good communication skills would have the ability to welcome the clients and make them feel comfortable when doing their transactions. EXTERNAL FACTORS 1. Competitors    The The comp compet etit itor ors s are are the the most most sign signifi ifica cant nt exte extern rnal al factor that could affect the market of the bank because more or less less thes these e pawns pawnsho hops ps and and cred credit it coop cooper erat ativ ives es prov provid ide e simil similar ar products and services. The people of Canlaon City do their banking tran transa sact ctio ions ns in San San Carl Carlos os City City,, alth althou ough gh this this is outs outsid ide e of 

Canlaon City. It still poses a threat to the new branch of DCDB because because the deposi depositor tors s have have alread already y establi established shed the trust trust and security security of their deposits deposits with these these banks. It is noted that that there are eight banks in San Carlos namely: Bank Victorias, BPI, DBP, PNB,

Landbank,

RCBC,

Equitable

PCI

an d

Metrobank.

Guihu Guihulng lngan an has has thre three e bank banks s namel namely: y: Landb Landbank ank,, PNB PNB and and the the Rural Bank of Guihulngan City.

2. Security  Because of the previous experience with RB Canlaon City, the market may now be hesitant to open an account with DCDB.  The security of their deposits will be questioned.

 To illustrate and summarize the factors, refer to the model below:

Porter’s Five Forces

THREAT OF NEW ENTRY

Competitiv e Rivalry

SUPPPLIER POWER

BUYER POWER  

THREAT OF SUBSTITUTION

Threat of New Entry: Expensive to enter except for an established bank Knowledge not readily available except for established banks No economies of scale to favor the initial entrant Low barriers of entry New entrants not necessarily banks to compete Supplier Power:  The suppliers would be the depositors In the case of the government agencies they are important to the branch, but once there is a MOA (Board Resolution) this should capture them  There is no one else in the location  who they can switch to deposit their money •

•

•

•

Competitive Rivalry: Few competitors in area at present No competitors who can offer the same quality of service No competitors that can offer all the services needed Competitor banks are at least 1 hour away by car • •

•

•

•

•

•

•

Buyer Power: Low buyer power In the case of the government agencies they are important to the branch but once there is a MOA (Board Resolution) this should capture them  There is no one else in the location  who they can switch to  The government comprises few powerful buyers on price • •

•

•

Threat of Substitution: Substitution is hard because substitutes are either or more expensive or need more requirements (collateral) •

SWOT ANALYSIS

STRENGTHS First bank in Canlaon ergo Captive Market -Wide range of financial services -The bank ank is reputable and is trusted by the community -Deposits are PDIC Insured -Expertise in banking

WEAKNESSES Newly established branch -Not everyone is aware of the bank’s services -Mar -Marke kett has has low low trus trustt in bank banks s because of previous bank closure -Market appears to have a growth limit because of the lack of   cust custom omer ers s pass passin ing g thro throug ugh h the the area

OPPORTUNITIES THREATS -All loans of small & medium -Security enterprises -Entry of other banks -Government patronage -Fortuitous events, i.e, eruption of  -Captive market Mt. Canlaon -Private sector patronage An analysis of the two tools illustrated above reveal certain aspects of the industry that the marketing program will have to address. An impo import rtan antt aspe aspect ct evid eviden entt is the the fact fact that that the the main main advantage of putting up a bank branch in Canlaon City at this moment is that there is no other equivalent bank (in terms of range of financial services services)) in the immediate area. area. By being the first, first, the branch hopes to be able to capture a large portion of the market before competitors try to enter the area. In Porter’s model we also see that it will be relatively easy for a competing bank to enter the area, as there are low barriers to entry and little to protect the market originally captured by the initial entrant. entrant. Should an equivalent equivalent competito competitorr enter the market market many of Porter’s forces would change and there would be a higher

level level of thre threat at of subs substi titu tuti tion on,, ther thereb eby y givi giving ng the the buye buyers rs and and suppliers a higher level of bargaining power.   The marketing program may address these two aspects by vigilant attention to their product mix and the demands of the market.

H. MARKE MARKETIN TING G PROGRAM PROGRAM

Befo Before re the the star startt of the the oper operat atio ions ns of the the bank, bank, an adve advert rtisi ising ng campaign campaign must be formulated formulated and put put into motion. motion. As the government government is foreseen to be a major client, advertising should include this sector and future products and services should reflect their needs.

Signage should be placed in a few visible areas around the city. Print Printed ed mate materi rial al shou should ld also also be disse dissemin minat ated ed showin showing g the the bank’ bank’s s products and services and its location.

We

suggest

const nstruct ucting ing

two

billb llboard ards

ann announcing ing

the

establishment of DCDB, Canlaon City branch. A suggested site would be

the the junct junctio ion n in the the Munic Municipa ipalit lity y of Valle Valleher hermo mosa sa to San San Carl Carlos os and and Canl Canlao aon n City City.. Anot Anothe herr site site to be consi conside dere red d is at the the corn corner er of the the national highway and Aquino Avenue, Canlaon City.

Local print and media advertising will be utilized during the last four months of the construction. The media will always be informed of  any event concerning the bank’s development.

On the City’s charter day or fiesta, the bank should already make its presence known through sponsorships of various activities.

Various promotional schemes will be utilized to attract customers to bank with DCDB Canlaon City.

First 100 depositors Type of Account Savings Account

Initial Deposit P500-P5,000.00 P5,001-20,000.00

Demand Deposit Preferred Accounts Loan Release

P20,001 above P5,000-20,000.00 P20,001 above P50,000 above

Giveaways Ball pen  T-shirt Ball pen & T-shirt T-shirt Ball pen & T-shirt Ball pen, T-shirt, Bag Ball pen, T-shirt, Bag

Suggested promotional activities for the subsequent years: •

For For new new acco accoun unts ts with with init initia iall depo deposi sitt of P50, P50,00 000. 0.00 00 abov above, e, giveaways should be given like ball pens, bag, t-shirt, umbrella etc (discretion of the manager)

•

DCDB must be involved in major activities in the city such as city fiesta, fiesta, celebr celebratio ation n commem commemora oratin ting g the foundi founding ng of the city, city, etc. etc. Give out brochures and fliers.

•

“Summer Extravaganza” Promo – this is between the months of  March to May. May. Those who who will open open an account account during during this time time  will get giveaways such as sun visors, summer cap, fans, and shirt or other summer wear. The freebies would depend on their initial deposit.

•

“Savings for the Rainy days” Promo – this is between the months of   June to August. Same details will be undertaken with the promo during summer but the giveaways would would differ. The freebies would be som somethi ething ng they hey coul could d use use duri during ng the rain rainy y seas season on lik like umbrellas, jacket, cap etc.

•

For the month of December, calendars and diaries will be given to the clients.

TECHNICAL  FEASIBILITY

A. PRODUCT/S PRODUCT/SERV ERVICES ICES DESCRIPTIO DESCRIPTION N

Types of Account Ownership

Individual or Personal Account 

  The The most most comm common on type type of a bank bank acco account unt is the the singl singlee-nam name e individ individual ual or person personal al accoun accountt in which which a single single individ individual ual transac transacts ts   wit with h the the bank bank under under his own name. name.

Sinc Since e the the bank bank depos deposit it is a

contract, only those with legal capacity to enter into contracts may make bank deposits. deposits. Under general general contract contract principles, principles, insane insane or demented demented persons and deaf mutes that do not know how to read or write, cannot give consent and therefore, cannot enter into contracts, including bank deposits. The legal presumption that that follows when money is deposited in the individual name of a person is that the money is his property, and the the Bank Bank does not questi question on owner ownershi ship p of funds funds depo deposi site ted. d.

In the

absence of fraud, or commission of some other crime or irregularity, the bank may accept funds for deposit regardless of its source.

Joint Accounts 

A join jointt acco accoun untt is a join jointt unde undert rtak akin ing g betw betwee een n two two or more more individ individuals uals to open open and maintain maintain a deposi depositt account account with the bank. bank.

It

may take the following form: a.

Joint Joint “and” “and” Account Account – when when an account account is opened opened and

maintained in the name of two persons bound together by the conjunctive “and”, a co-ownership is created by virtue of which the ownership on an undivided thing of right belongs to both of them. b. Joint “and/or” “and/or” Account Account – When two deposit depositors ors open open an account account with the use of the disjuncti disjunctive ve “and/or “and/or”, ”, either either one of  them them may deposit deposit and withdraw withdraw from from the account account withou withoutt the knowledge, consent and signature of the other.

Business Name/Sole Proprietorship Account 

 The submission of the application and certificate of registration issued by the Department of Trade and Industry must first be required before an account in a business name may be opened. This is especially true in the case of sole proprietorship in order to ascertain the true name

and real real ident identit ity y of the depo deposi sito tor. r.

Only Only the the regi regist ster ered ed owne ownerr of the

business name may deal with the account, and checks payable to either the true name or business name may be accepted for deposit to the account after proper endorsement.

Partnership Account  By the the cont contra ract ct of part partne ners rshi hip, p, two or mor more perso ersons ns bind bind themselves to contribute money, property or industry to a common fund,  with the intention of dividing the profits among themselves.

Corporate Account 

A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expres expressly sly authori authorized zed by law or incident incident to its existence existence..

A corporat corporate e

account account may be opened opened in the name of the the corporation. corporation. It is improper improper and irregular to open and maintain a corporate account in the individual name of an officer or any person because funds in a corporate account belong to the corporation, with the officers acting merely as agents

Accounts of Unregistered or Unincorporated Association 

Social clubs, associations, parish or religious organizations and other other unreg unregis iste tere red d or uninc unincor orpo pora rate ted d grou groups ps may may appl apply y for for depo deposit sit accounts. In such cases the bank should require a copy of the articles of  association or constitution and by-laws of the organization, which should contain provisions on the treatment of funds and designation of officers auth author oriz ized ed to deal with bank deposit deposits. s.

A cert certif ifica icate te of Author Authorize ized d

Officers must likewise be required.

Treasurer-In-Trust Account 

A temp tempor orar ary y acco accoun untt pend pendin ing g the the Secu Securi riti ties es and and Exch Exchan ange ge Commission (SEC) approval of a new entity’s Article of Incorporation.   The treasurer should hold the money used in opening the account in trust for the new corporatio corporation. n. Treasurer’s Treasurer’s affidavit affidavit must be submitted. submitted.  This account is opened with a set of temporary cards only, to be replaced by set of permanent permanent cards upon upon SEC’s approval approval.. No checkbook checkbook should should be issued issued at this this point. point.

Usua Usually lly the client client will reques requestt for for a Bank Bank’s ’s

cert certif ific icat atio ion n rega regard rdin ing g its its cash cash bala balanc nce e addr addres esse sed d to SEC. SEC.

This This

cert certifi ifica cati tion on shou should ld bear bear the the signa signatu ture re of a Bank Bank offic officer er and and duly duly notarized before presentation.

TYPES OF DEPOSIT ACCOUNTS

Passbook Savings Accounts  Initial deposit

P500.00

ADB ADB to earn arn int inte erest

P1,000.00 .00 1.5%

Is a deposit of client’s funds commonly evidenced by a passbook issue issued d by the bank to the the depo deposi sito tor. r.

The The funds funds are withd withdra rawa wabl ble e

anytime anytime upon upon presen presentat tation ion of the passbo passbook ok and withdr withdrawa awall slip duly accomp accomplish lished ed and signed signed by the deposi depositor tor,, subject subject to verific verificati ation on of  identity, authority, validity of signature and adequacy of balance.

Current/Demand Deposits Accounts  Initial deposit

P5,000.00

Maintaining Bal Balance

P2,000.00

ADB to earn in interest

P50,000.00 1.5%

Is a depos eposit it wher wherei ein n fund funds s may may be wit withdr hdrawn awn thro throug ugh h the the issuance issuance of checks. Checking Checking accounts accounts provide its its users the safety safety and conv conven enien ience ce of payi paying ng busin busines ess s and and pers person onal al trans transac acti tions ons with withou outt carrying carrying cash. It is withdrawable withdrawable anytime anytime upon presenta presentation tion of a duly endorsed check, subject to verification of: a.

Ident Identit ity y and autho authori rity ty of drawe drawerr and person person pres presen enti ting ng the check

b.

Ade Adequac quacy y of of bal balan ance ce..

Clie Client nts s may may open open a chec checki king ng acco accoun untt as long long as the the prop proper er identification papers and documents are presented and the requirements complied complied with.

Current Current account deposit depositors ors may pre-order pre-order personal personal or

commercial checkbooks with the branch.

Preferred/Time deposits  Minimum deposit

P50,000.00

Interest Rate

2.25%-3%

  These represent funds deposited with the Bank by clients for a fixed fixed perio period d of time time,, thus thus earni earning ng inter interes estt high higher er than than that that give given n to savings accounts. Unlike current and savings account, time deposits are not subject subject to check or or cash withdrawal withdrawal upon demand. demand. These deposits deposits are evidenced by certificates issued by the Bank, which bear details such as the name of the person to whom the certificate certificate is payable, the date of  issue, amount, interest rate and maturity date.

OTHER SERVICES

Loans

(rat e:15-18% pa)   Servicing the financial needs of the clients thru borrowing of funds

from from the the bank bank eithe eitherr for for comm commer ercia cial, l, indus industr trial ial,, agri agricul cultu tura rall or for for personal purposes.

Manager’s/Gift Checks 

 These are checks issued to customers in exchange for cash, check, or an amount debited debited against against their account. account. Payment Payment of these checks checks and by the bank so much so that they are more acceptable than ordinary check. Gift checks checks are issued issued in different different denominations denominations and serve serve as gifts for different occasions. B. BANK POLICIES

 The new DCDB Canlaon City branch will follow the bank policies of  that that of the the Main Main Branc Branch h and and othe otherr branc branche hes s as seen seen in the the Bank Bank’s ’s Operations Policies and Procedures Manual.

 Just to cite some of these policies: a branch teller will only have P25, P25, 000. 000.00 00 in his/h his/her er cashb cashbox ox poss posses essi sion on,, as is presc prescri ribe bed d in the the manual of operations. The teller will immediately turn over all excess amount amounts s to the cashier cashier with with proper proper standa standard rd docume documenta ntatio tion n of such such transa transacti ction. on. Deposi Depositt to other other bank transa transacti ctions ons releas releases es the amount amount from what is available in the cash in vault. Deposit pick-up between the bank bank and and the the clie client nt shal shalll foll follow ow agre agreed ed bank bankin ing g proc proced edur ures es with with professionalism and utmost security.

 The cashier and bank accountant will verify cash in vault at the end of the day. The main cash vault will be in the dual control of two authorized employees designated by the executive vice president of the bank. Bank policy states that the vault shall be regularly opened fifteen minutes before the start of the day and closed at the earliest possible time.

Amount of the cash in vault follows strictly the reserve requirement for the day after after consid considerin ering g bank’s bank’s deposi deposits ts with with which which the Bangko Sentral ng Pilipinas, or BSP, has available for its reserve cover.

Depo Deposit sits s over over one one milli million on peso pesos s will will be under under the the antianti-mo mone ney y laundering policy, Republic Act 9160, and its mandatory plan of actions to handle such transaction. For existing accounts, the deposit considered large and unusual are those that are ten times the regular average daily transaction for the immediate preceding six months and will be subject to such policy also.

Paym ayment

of

“on

us”

checks

under

a

savin aving gs

account

 withdrawals over the counter require: Amount

approving authority

P500.00 and below

tellers

P501.00- 20,000.00

any one of the bank officers

for

P20, 001.00 and above

any two of the bank officers

Dormant accounts are those that don’t show any transaction or movement for a period of time; current accounts require one year and savings accounts require two years. Fund transfers require written authority or a BOD resolution.

Loans and other credit accommodations A customer’s confidential information sheet contains the following|: 1. Name Name of clie client nt 2. Addr Addres ess s of the the clie client nt 3. Purp Purpos ose e of the the loan loan 4. Deposi Deposit/l t/loan oan accoun accounts ts 5. If client is a corporatio corporation, n, it must indicate indicate the following: following: - Ownership/ management/ officers or BOD - History of the corporation - Significant highlights/ products of the corporation - Financial standing which is current to the last two to three  years - The suppliers and credit dealings - Competitors and affiliate companies.

Offering Ticket and Credit Approval Memorandum

1. The The head headin ing g cont contai ains ns a deta detail iled ed expl explan anat atio ion n of the the subj subjec ect/ t/s s concerning the loan application, the type of credit facility to be issued, and amount of the loan and the date of preparation of the memorandum. 2. The terms terms and condition conditions s for the the payment payment of the loan loan applied applied for. 3. The client’s client’s confidential confidential information information sheet. sheet. 4. The client’s client’s financia financiall statem statement ents s for the current current past two to three  years. 5. Proof of securit security y and/or collater collateral al support support for the loan loan application. application. 6. Credit Credit invest investigat igation. ion. 7. Reco Recomm mmen enda dati tion on of loan loan proc proces esso sorr/

acco accoun untt

offic fficer er to

the the

approving body/ officer of the bank.

Credit Credit Author Authority ity Struct Structure ure of the loan approv approval/ al/ levels levels of approv approving ing authority 1. Boar Board d of Dir Direc ecto tors rs 2. Execut Executive ive Commit Committee tee 3. Pres Presid iden entt 4. Executive Executive Vice Vice Preside President/ nt/ Vice Vice Presiden Presidentt 5. Assista Assistant nt Vice Vice Pres Presiden identt

Designated “approving officers” are empowered to execute and sign for and in behalf of the bank as long as the loan agreement is governed by

the bank’s policy on extension of credit, prevailing credit memorandums/ policies issued by the bank from time to time and pertinent laws, rules and regulat regulation ions s issued issued by the bank compli compliance ance officer, officer, the BSP and some government authority.

General Approving and Signing Authority Levels of Authority - Broad, strategic and long-term credit

Approving body/ officer Board of Directors

policies and directions - New and/ or amendments in existing

Board of Directors

credit programs and necessary guidelines - Operating policies, plans, guidelines,

President/ EVP/ VP

rules and regulations, to effectively implement the approved credit policies and programs

Secured loans

Approving body

- up to single borrower’s limit

Board of Directors

- up to P5.0 M

EXECOM

- up to P500 T

President/ EVP/ VP

- up to P100 T

AVP

Unsecured loans

- up to single borrower’s limit

Board of Directors

- up to P1.0 M

EXECOM

- up to P500 T

President/ EVP/ VP

In the signing of bank business documents, deed of real estate, mortgage/ mortgage/ mortgage mortgage agreements, agreements, cancellation cancellation of mortgage, mortgage, disclosure disclosure and release of statements, a branch manager is empowered to perform such such

dut duties. ies.

But

all all

memor emoran andu dums ms

of

agr agreeme eement nts s

conc concer erni ning ng

refinancing programs and/ or special projects are the responsibility of  the President/ Executive Vice President/ Vice President..

Collection of Accounts  1. A first notice notice is prepared prepared by the branch branch bank loan loan processor processor and is mailed through the ordinary post office mail fifteen days before the loan’s due date. 2. A second notice notice is mailed throug through h registere registered d post office office mail one   week after the loan’s due date. Enclosed is a statement of the account. 3. A mail inconveni inconvenience ence letter letter is mailed mailed fifteen fifteen days after the receipt receipt of the second notice. 4. A lawyer’s lawyer’s letter will will follow, giving giving the subject subject fifteen fifteen days to settle settle the account’s business before instituting judicial or extrajudicial proceedings.

5. If there is no payment/ payment/ settleme settlement nt after after fifteen fifteen days days of the receip receiptt of the lawyer’s lawyer’s letter, judicial and extrajudicial extrajudicial proceedings proceedings will be instituted.

Loan processors/account officers are advised to exhaust all means to collect all past due accounts and try to apply all mitigating measures to help the account account get back to its current current status. status. Foreclosur Foreclosure e proceedings proceedings shall apply only as the last recourse of the bank. “In “In case case of nonnon-pa paym ymen entt of the the amou amount nt of this this note note by any any amortization on demand when due, or any other amount or amounts due on the the acco account unt of this this note note,, the the enti entire re oblig obligat atio ion n plus plus inter interes estt and penalty and whatever advances made by the bank shall become due and demandable at the option of the bank.”

All of these products and services will be offered by DCDB Canlaon City ity Branc ranch. h.

Spe Special cial thoug hought ht sho should uld also also be give given n to spec specif ific ic

Agri Agricu cult ltura urall loan loans s and progra programs ms desig designed ned to:

impro improve ve irrig irrigat atio ion n

infrastructur infrastructure, e, provide provide post harvest facilities such as mechanical mechanical dryers dryers and rice rice mills, mills, seed seed bank bank progra programs, ms, livelih livelihood ood progra programs, ms, agricul agricultur tural al mechanization, and micro-financing and other entrepreneurship based loans.

C.BANK LAYOUT

BANK LANDSCAPE

D.EQUIPMENT/SUPPLIES

Security Devices

Price

Cash vault

P60,000.00

Vault Doors

68,000.00

Time Locks

1,363.00

Combination Locks

14,575.00

Burglar Alarm

23,200.00

Hold up Alarm (3 @ 2,440)

7,320.00

Records Vault

38,000.00

Cash Steel Safe

10,956.00

Total

Equipment Adding Machine Bill/Money Counter Coin Counter Check Writer Doc Stamps Machine Typewriter Computer 6 @ 28,550.00 Printer 5 @ 2,495.00 Generator Fax Machine Filing Cabinets 2 @ 4,000  Tables and Chairs

P223, 414.00

Price P2,750.00 40,000.00 30,000.00 4,494.82 18,160.90 2,185.50 171,300.00 12,475.00 42,800.00 6,995.00 8,000.00 20, 000.00

ATM Machine 24 hours Total Stationary and Supplies Scissor 6@ [email protected] Push Pin Clip paper Foldback clips

272,187.00 631, 348.22 Price 252.00 26.00 24.75 19.00

Fastener Cutter Eraser Sharpener Ring Files Clear tape [email protected] Masking tape [email protected] Glue Long Folder [email protected] Short Folder [email protected] Lond Bond paper 1 rim Short Bond paper 1 rim Record Book Stap Stapller 6@16 6@169. 9.25 25 Puncher [email protected] Staple Wire [email protected] Journal Book [email protected] Ledger [email protected] Total

10.50 33.00 6.25 20.25 138.50 234.00 121.50 47.75 96.00 51.00 224.25 202.75 106.50 1,01 1,015. 5.5 50 568.50 432.00 144.00 174.00 3, 948.00

E. BUILDING PLAN

As to be determined by the Board of Directors as of the moment. Our recommendation is to purchase a bigger piece of land and deve develo lop p a comm commer erci cial al comp comple lex x cont contain aining ing reta retail, il, serv servic ice, e, and othe otherr busi busine ness ss incl includ udin ing g the the bank bank.. Offe Offerr this this as a star startt for for the the smal smalll to medium entrepreneurs of the city. Suggested types of business are a grocery store and a restaurant or service providers.

FINANCIAL  FEASIBILITY

A. GENER GENERAL AL ASSUMPT ASSUMPTION IONS S

 The first general assumption is that through a passed city board resolution, the DCDB Canlaon City branch is made the government’s depository for the city and region. All government financial transactions includin including g the payrol payrolll of the gover governme nment nt employ employees ees and public public school school teachers will avail of the bank’s services.

Quarterly Inte nternal Revenue nue All Allo otment (nationa ionall)

P44,574,75 ,756.00

Monthly local collections (taxes, permit, etc.)

P14,224,342.32

TOTAL

P58,799,098.32

 The group makes a general assumption that excess cash will be loaned out to DCDB main branch at the rate of 9 percent per annum.

Operational Assumptions  a) Bank Bank hours hours will be be from 9:00 9:00am am to 3:00 3:00pm pm b) Employ Employees ees will work work till 8:00am 8:00am to 5:00pm 5:00pm with with 1-hour lunch lunch break. c) The bank bank will will be open open on weekday weekdays s and be close closed d on all public public and special holidays. d) CutCut- off for for clear clearanc ance e of cheque cheques s will will be 9:30 9:30am am to allo allow w for for travel time to BPI San Carlos whose cut-off time is 11:00am. e) Excess Excess funds funds will be deposi deposited ted with with BPI- San Carlos. Carlos. A portion portion may may

be inv investe ested d

in gove govern rnme ment nt secu securi ritties ies

at mana manag ger’s er’s

discretion subject to restrictions. f) Maximum Maximum of of 10 percent percent curr current ent/sa /saving ving depo deposit sits s will be kept kept as cash in the vault g) Company Company will procure procure a motorcycle motorcycle for bank bank use. use. h) Main Main offic ffice e will will pro provide vide a serv servic ice e vehi vehicl cle e for for the bran branch ch manager’s use. i) There There will will be a provi provisio sion n for an ATM mach machine ine in the the bank layo layout ut but it will not be installed in the first year of operation, until the bank will be financially stable to purchase one.

  j) j) All All poli polici cies es and and regu regula lati tion ons s of the the depa depart rtme ment nt of labor labor and and employment (DOLE) will be complied with. k) All policies policies,, rules and regulat regulation ions s of the DCDB main office office will will apply to the branch office. l) The The first first branch branch mana manage gerr will be an offic officer er from from DCDB DCDB main main office. m) Rank and file staff will be recruited recruited from qualified qualified residents residents of  Canlaon City.

Revenue Assumptions a) One One per percent cent serv servic ice e char charge ge will ill appl apply y to all all gover overnm nmen entt transactions. b) Two percent percent service service charge charge will will apply to to all payroll payroll transactio transactions. ns. c) Agricultural Agricultural loans loans will have an interes interestt rate of 15 percen percentt d) Commercial Commercial loans loans will have have an interest interest rate rate of 15 percent. percent.

Expense Assumptions a) The The sala salary ry of the the bank bank branc branch h empl employ oyee ees s will will have have a thre three e percent merit increase every year after having rendered a minimum of 1  year of efficient service. b) The utility expense will increase according to current market statistics.

c) Bank premises, premises, furniture, furniture, fixtures and equipment equipment are carried carried at acquisition cost or construction cost less depreciation and impairment losses. Depr Deprec eciat iatio ion n is comp comput uted ed on the the stra straig ight ht-li -line ne basi basis s over over the the estimated useful lives of the assets as follows:

Buildings

40 years

Furniture, fixtures and equipment

1-10 years

Leas Leaseho ehold ld impr improv ovem emen ents ts are are amort amortize ized d over over the the term terms s of the the relat related ed leas leases es or the the usef useful ul live lives s of the the impr improv ovem emen ents ts whic whichev hever er is shorter.

SOCIOECONOMIC FEASIBILITY

A. ECON ECONOMI OMIC C ASPECT ASPECT We foresee the bank branch having an economic impact on the community. Services offered by the bank will most probably affect certain prevalent social behaviors.

For instance, people will no longer have to purchase unnecessary items in order to have their checks cashed locally. Trips to and from San Carl Carlos os City City or elsew elsewhe here re for for the the purp purpos ose e of cashi cashing ng chec checqu ques es and obtaining money will be minimized. Following this line of thought, people may travel travel less less and demand demand that that local local establi establishme shments nts upgrad upgrade e their their products and services which are otherwise found in San Carlos City, Bacolod, or Guihulngan.

More convenient access to financing may encourage more people and establishments to avail of loans for home or business improvements.

Indus Industr trial ial loans loans will will prom promot ote e the the grow growth th of busin busines esse ses s in the the community. This in turn could lead to more employment opportunities.

Agric Agricul ultu tura rall loans loans could could lead lead to highe higherr prod produc ucti tivit vity y thro throug ugh h improvements in farming practices.

B. SOCIAL SOCIAL DESI DESIRAB RABILIT ILITY Y

Having the services of a bank brings quite a confidence boost to a   young city like Canlaon City. Once again it is given the opportunity to present itself’ “as a special growth center of Northern Negros” with the capacity of a financial banking institution. The entrepreneurs will have the financial confidence, as well as convenience and security, to establish them in the local and even international business markets.

Having the knowledge, and the assistance, to decide how to invest and and use use a loan loan wise wisely ly brin bring g conf confid iden ence ce in all all work workin ing g peop people le.. The The agricultural sector should be given an opportunity to avail of services that will save for the future, at the same time increase their power as consumers.

C. JOB OPPOR OPPORTUN TUNITY ITY

As for the bank, there will be a staff of at 6 persons, not including the security guards. The tellers, tellers, bookkeeper bookkeepers, s, clerks and messenger messenger can be locally hired if qualified. As for the city, the bank provides the ability, for small to medium business business entrepreneurs entrepreneurs through loans, to put up the business, which in turn creates jobs. As

for

the

agriculture

sector,

through

education

a nd

communication, will develop the consumer confidence that can fuel the city’s economy thus creating more jobs. The agricultural community community will also benefit from having the capital to utilize more efficient means of  prod produc ucti tion on such such as mech mechani anizat zatio ion, n, impro improve ved d stor storag age e and handl handling ing facilities.

LEGAL ASPECT

When starting a business, it’s crucial that the owner must be famili familiar ar with the basics basics of busi busines ness s law. law.

Most Most busi busine ness sses es legal legal

troubles troubles are the result result of unclear documents documents.. Whether Whether one deals with employees, contractors, or the services that offered, there are certain legalities that one should consider.

In applying for a Mayor’s permit, the bank must submit a copy of  the SEC registration. registration. Zoning and Locational clearance and certificate of  building inspection must be obtained from the Engineering department. And then proceed to the Bureau of Fire Protection for the Fire Safety Inspe Inspect ctio ion n clear clearanc ance. e.

The The offic officer er-in -in-ch -char arge ge will will then then asse assess ss the the

building for architectura architecturall presentabilit presentability, y, structural structural stability, stability, sanitary sanitary inspection inspection and signage. signage. Assessment Assessment and Payment Payment must be made made and after that is the issuance of Business/Mayor’s Permit.

Sinc Since e the the proj projec ectt is to esta establ blis ish h a bank bank,, lega legali liti ties es with with the the Bang Bangko ko Sentra Sentrall must must also be acco accomp mplis lishe hed. d.

The The appl applic icat atio ion n for for

aut authori hority ty to est establi ablish sh a bank bank shou should ld be comp comple letted befo before re the the requirements for the issuance of authority to operate is complied with.

After the inauguration of the bank, within 30 days from the date of opening, another set of requirements must also be submitted to the Central Bank. For the bank operations, as mentioned in Republic Act 8791, The Gene Genera rall Bank Banking ing Law, Law, Sect Sectio ion n 21, 21, “Bank “Banking ing Days Days and and Hour Hours” s” are, are, “Unless otherwise authorized by the Bangko Sentral in the interest of the banking banking public, public, all banks banks includin including g their their branch branches es and office offices s shall shall transact business on all working days for at least six (6) hours a day. In addition, banks or any of their branches or offices may open for business on Saturdays, Sundays or holidays for at least three (3) hours a day: Provided, That banks which opt to open on days other than working days shall report to the Bangko Sentral the additional days during which they or their branches or offices shall transact business.

Chap Chapte terr 7 of Repu Republ blic ic Act Act 7906 7906,, or An Act Act Prov Provid idin ing g for for the the Regulation of the Organization and Operations of Thrift Banks, And for Other Purposes, states exemptions which a thrift bank is legally entitled to. to. Brief Briefly, ly, the the exem exempt ptio ions ns are: are: 1) tax tax empt emptio ions ns;; 2) exem exempt ptio ion n from from

publ public icat atio ion n

requ requir irem emen ent; t;

3)

exem exempt ptio ion n

from from

nota notari rial al

char charge ges; s;

4)

exemption from registration fees.

For the proposed project, it shall be opened from Monday thru Fridays, Fridays, 9:00am to 3:00pm. 3:00pm. However, However, employees employees are set to work work from 8:00am to 5:00pm with a 1-hour lunch period.

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

Figure 1. Age Age Bracket of Res Respondents pondents

Below 20 6%

12%

12% 26%

5%

14% 25%

21-30 31-40 41-50 51-60 above 60 No Answer 

Figu Figure re 1 shows shows the age brac bracke kett of respo respond ndent ents. s.

Twent Twentyy-six six

percent of the respondents are aged between 41-50 followed by 31-40   years old, old, 25 percent. percent. A total of 77 percent percent of the responde respondents nts can be considered to be in the wage earner age.

Figure2. Gender Gender of Respondents Respon dents

13% 29%

Male Female NO Answer  58%

Figure

2

shows

that

58

percent

of

those

who

answered

the

questionnaire questionnaires s are female and 29 percent percent are male. Thirteen percent percent did not specify their gender

Figrue 3. Civil Status of Respondents

23% 13% 7%

Single Married Widow No Answ er 

57%

Figure 3 shows the civil status of the respondents. Fifty-seven percent of  thos those e who who resp respon onde ded d are are marr married ied and 23 perc percent ent are are singl single. e. Seven Seven percent are widowed and 13 percent did not specify their status.

Figure 4. Members in the Family

22% 1 to 5 6 to 10 58%

No answer 

20%

Figu Figure re 4 show shows s the brack racke et for for the the numbe umberr of memb member ers s in the the resp respon onde dent nt’s ’s fami family ly,, 58 perc percen ent, t, 1-5 1-5 memb member ers; s; 20 perc percen ent, t, 6-10 6-10 members, and 22 percent did not specify.

Figure 5. Monthly Income of Respondents No Answer 

7

Above 40,001

11

20,001-40,000

32

15,001-20,000

Series1

45

10,001-15,000

71

5,001-10,000

114

Below 5,000

104 104 0

20

40

60

80

100

120

Figure 5 shows the range for the monthly income of the respondents. Out of the 384 respondents 114 of the respondents earn between P5,001 to P10,000. This is followed by 104 respondents, earn below P5,000. The resear researche chers rs sought sought to determ determine ine if the respon responden dents ts belong belonged ed to the incom income e gener generat atin ing g body body of Canla Canlaon on City City.. Acco Accord rding ing to this this data data 56 percent of the respondents belonged to the 10,000 and below monthly income bracket. Even if a large portion of the the sample size earn 10,000 or below we can see from the succeeding graph that 44 percent of the sample population spend below 5,000 pesos a month. This would mean mean that at least some if not most of the 10,000 peso and below income earners will also only expend expend 5,000 pesos per month. We can imply from this that even though a large percentage of the sample population earn a relatively low monthly income their monthly expenses are still low and this is encouraging as it may be an indicator indicator that even the lower income earn earnin ing g

indi indivi vidu dual als s

may may

stil stilll

hav have

the the

capa capaci city ty to

save save..

This This

presupposes that the lower income earners are also the ones who have a lower monthly expenditure, which it is logical to assume.

Figure 6. Monthly Monthly Expenses of Respondents Responde nts

8%

3% Below Below 5,000 5,001-10,000

18%

10,001-15,000

44%

Above 15,000 No Answ er 

27%

Figu Figure re 6

show shows s

the mont monthl hly y

expe expens nses es of the the

resp respo onden ndentts. The The

rese resear arch cher ers s want wanted ed to know know the the spen spendi ding ng powe powerr of the the resi reside dent nts s of  Canlaon. Forty-four percent of the employed sector spend below 5,000, twenty twenty seven seven percen percentt spend spend P5,001 P5,001-P1 -P10,0 0,000, 00, eighte eighteen en percen percentt spend spend P10,001-15,000 and 8 percent of the respondents spend P15,000 and above. Figure 7. Monthly Monthly Savings of Respondents 227

250 200 150

Series1 79

100 50

18

23

9

28

0 None

Below 1, 1,000 1,001-5,000 5,001-10,000

A bo bove

No Answ er 

10,000

Figure Figure 7 shows the monthl monthly y savings savings of the respon responden dents. ts.

From From their

monthly income, 227 respondents answered that they save below 1,000.

79 respon responden dents ts save save betwee between n 1,0011,001-5,0 5,000. 00. And 23 respon responden dents ts save save betw betwee een n 5,00 5,0011-10 10,0 ,000 00..

Ther There e were were 18 who who answe answere red d none none and 28

respon responden dents ts did not specify specify their savings. savings. establi establish sh that people people still still save save money.

The researc researcher hers s sought sought to

This questi question on also served served to

determine the amount of savings of the sample population.

Figure 8. Exsisting Exsisting Bank Account Account 4%

yes

36%

no 60%

no answ answ er 

Figu Figure re 8 shows shows that that 60 perc percen entt of the the resp respond onden ents ts alrea already dy have have an existing bank account with other banking institutions outside Canlaon City and thirty thirty six percent percent don’t have have bank deposits. deposits. The researchers researchers  wanted to determine the percentage of those who avail of the services of a bank and those who don’t.

Figure 9. Existing Existing Banks Banks RB Tanjay Allied Bank UCPB Victoria's Bank Union Bank RCBC BPI EPCIB RB Guihulungan Metrobank DBP Land Bank PNB 0

10

20

30

40

50

60

70

80

90

Figure 9 shows the existing banks that the respondents specified. It shows that the majority of the respondents who avail of banking institutions outside Canlaon City go to Landbank San Carlos or Guihulngan. These banks also pose as competitors to DCDB. Although located outside of Canlaon City, but still are catering to banking needs of  target market of this study.

Figure 10. Products and Services of Existing Banks 2% 1% 5%

Savings

5%

Time Deposit Checking Account

8%

Utilities Payment Payment 46%

Loans Credit Card Remittances

11%

Direct Deposit Income tax Assistance Wire Transfers

4%

Portfolio Management

8%

7%

Figure 10 shows the products and services of the existing banks  which the responde respondents nts avail of. It shows that that the bigger portion portion of  the pie goes goes to savings savings accoun accounts ts deposit deposits s (46 percent) percent)..

Eleven Eleven

percent avail of the loan services of their banks.

Figure 11. Current Curre nt Problems of Existing Bank Slow Service 9%

2%

Long Lines

7%

No Parking 14%

26%

Low Saving intrest Rates High loan Intrest Intrest Rates Unaccomodating Staff  None No Answer 

18%

5%

Long Distance Expensive For Travel

8% 9%

2%

Figure 11 shows the current problems the respondents encountered   wit with h thei theirr banks banks..

Twent Twentyy-six six perce percent nt indica indicate ted d that that the main main

problem is the low savings interest rates that their current bank offe offers rs..

Eigh Eighte teen en perc percen entt indic indicat ated ed dista distance nce to thei theirr banki banking ng

institution was a problem.

Figure 12. Respondents in Favor Favor of DCDB Branch 382 400 300

Yes 2

200

No

100 0 Yes

No

Fig Figure ure 12 show shows s the the numb number er of respo espond nden ents ts in favo favorr of the the esta establ blis ishm hmen entt of a DCDB DCDB bran branch ch in Canla anlao on Cit City. respond respondent ents s are not in favor. favor.

Only Only 2

One respon responden dentt who answered answered No

said that the bank would be a future competitor of the office the respondent is currently working for.

Figure 13. Ideal Location Bautista's Estate Old Ceres Terminal Near the School EXODUS Ave. Along National National Highw ay, 7 Near Police Station

Series1

Anyw here Withi Within n the city City Hall Near Public Market Mabigo Midtow Midtow n City Proper /Centre /Centre 0

20

40

60

80

100

120

140

160

Figure 13 shows the sites the respondents prefer as a location for the bank. The majority said that it would be best if the branch would be situated in the city city proper or or the city center. This is actually misleading as Mabigo Midtown and City Proper Proper are the the same place. In effect almost 60 percent of the population prefer the midtown area for the location of  the bank branch. branch. The group group are recommen recommending ding a site outside outside of that area due to price consider considerations ations.. However, However, the researchers researchers believe believe that regardless of where the bank will be located in Canlaon City, it would be only minutes away from the city center

Figure 14. Banking products and services services the respondents wants to avail 2.96% 10.94%

Savings Account Time Deposit Remittances

7.78%

Wire Transfers

9.66%

Checking Account

6.31%

Utilities Payments

35.17%

9.95%

5.32% 3.65%

1.58%

Portfolio Man Management agement Loans Credit Card

4.24% 0.10%

Direct Deposits

Income Income Tax Assis tance

2.36%

ATM ATM SSS Pensioner 

Figure 14 shows the products and services that the respondents would lik like to avail of if the plan lan for a DCDB branc anch in Canlao laon City materializes. 35.17 percent for savings deposits, 10.94 percent for time deposits, and 9.95 percent for loans.

Figure 15. Other Financial Institutions Utiliz Utiliz ed By Respondents

7.3%

1.7% SSS/GSIS

22.9%

47.9%

Paw nshops Credit Coop Informal Lending Others

20.2%

Figu Figure re 15 sho shows the other ther fina financ ncia iall inst instit itut utio ions ns utili tilize zed d by the respondents. respondents.

These instituti institutions ons are also considere considered d as competitors competitors of 

the bank because they offer similar products products and services such as small

loans and cashing of cheques. The chart shows that 47.9 percent percent of the resp respon onde dent nts s avail avail of serv service ices s from from SSS/G SSS/GSI SIS. S.

20.2 20.2 percen percentt of the

respondents go to pawnshops and 22.9 percent to credit cooperatives. Others go to informal lending institutions such as the “5-6”, meaning for every five pesos barrowed, six pesos must be returned.

Figure 16. 16. Respondents Respond ents who would avail of  DCDB products and services

NO 1% YES NO YES 99%

Figure 16 shows the percentage of the respondents who would avail of  DCDB’s product product and services. services. Out of the 384 respondents, 99 percent   would readily avail of these services and only 1 percent would not because the bank would be a threat (competition) to the company the respondent works for.

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

A.FINDINGS 1)

Ther There e is is a dem deman and d for for a ban bank k in in Can Canla laon on City City.. Onl Only y two two of 384 384 respondents did not see a need for a bank in the area. This makes up .5 percent of respondents not in favor of a bank in Canlaon.

2)

  The socio-economic profile of the community indicates that a signifi significant cant portio portion n of the communi community ty saves. saves.

Specifi Specifical cally, ly, the

survey revealed that from their monthly income, the majority (227 respondents) answered that they save below P1,000. This comprises 59 percent of the total respondents. 3)

A majority of respondents (35.17 percent) are willing to esta establ blish ish a savi savings ngs acco accoun untt with with the the prop propos osed ed bank. bank. 10.9 10.94 4 percent would put their money in a time deposit account, and 9.95 percent would avail of bank loans.

4)

The The gov gover ernm nmen ent’ t’s s mon month thly ly reve revenu nues es are are as as fol follo lows ws:: From taxes, licenses, and permits: P14,224,342.32 From

National

P44,574,756.00 From other sources: P1,233,522.76

Government

Subsidiaries:

B. CONCLUSIONS

Based on the above findings, we conclude that the proposed branch of DCDB cannot rely on revenues generated by non-government sources such as interest from loans. This is because the income-earning non-government sector has very little power to save amounts of any significance. Despite the widespread desire for a formal banking institution, any revenue generated from savings accounts, loans, and other fees would be negligible. The general economic level of the city shows that there are no large enterprises and that the city is predominantly agricultural. Despite this deficiency, the large Internal Revenue Allotment (IRA), revenues generated by fees from taxes, licenses, and permits, and the government payroll, coupled with the present administration’s  willingness to have the proposed bank act as its official depository offsets the low saving power of the private sector. In conclusion, we find it feasible to open a branch in Canlaon, only if the proposed bank branch can capture the government market and act as its official depository at the outset.

C. RECOMMENDATIONS We therefore recommend the following: 1) Obtain Obtain a board board resolution resolution from the the local local government government designating

the proposed bank as its’ official depository.

2) Obtain Obtain approval approval from the the Banko Banko Sentral Sentral Monetary Monetary Board Board allowing the DCDB branch to act as the official local government depository in the absence of an existing official depository in the area. 3) Purchase Purchase the site of of the propose proposed d branch. branch. Later Later when when feasible, buy the surrounding lots for future expansion including after business enterprises. 4) To insure insure the continued continued support support of the the local govern government ment in the advent of competitor banks entering the market, continuously update products and services in order to meet the government’s evolving needs. 5) In the first three three years years of operation operation the the bank should: a) Be conser conservat vative ive with with its loan loan exposur exposure e b) Maintain a level of liquidity liquidity at or above above the industry industry average

APPENDICES

Appendix A Survey Questionnaire

SILLIMAN UNIVERSITY DUMAGUETE CITY, 6200 PHILIPPINES

Dear Sir/Madam:   This This is a lett letter er of intro introdu duct ctio ion n from from the the stud studen ents ts enro enrolle lled d in BA24 BA240 0 (Fea (Feasi sibi bili litty Stud Study) y) of the the Mast Master ers s Degre egree e Pro Program gram in Busin usines ess s Administration of Silliman University. In partial fulfillment of our academic requirements, we are preparing a feasibility study to be conducted in your area. Specifically, Specifically, the study aims at determining determining the feasibility feasibility of establishing establishing a branch of the Dumaguete City Development Bank (DCDB) in Canlaon City, Negros Negros Oriental. Oriental. While this study study is academically academically driven, driven, this is a live study, live  study, and we have the support of our proponent, the DCDB, as well. In this regard, we are seeking the cooperation of various entities from the loca locall gove govern rnme ment nt of Canla Canlaon on City City,, and from from the the publi public c and and priva private te sector sectors s in your your area. As represe representat ntatives ives of both our our school school and the DCDB, be assured that we will conduct ourselves as this study with the utmost professionalism required of us. We will be grateful for any assistance that you may extend to us by answering answering the attached attached questionnaire questionnaire thoroughly. thoroughly. All responses responses will be kept strictly confidential. Thank you for your time. Yours truly,

Rene Juntereal

Katherine S. Calibat

Maldon Tiempo

Sina Pourabrisham

Maricris Joy Tan

Bert Riego

Victor Cal

Noted by: Atty. Gloria G. Futalan Professor MBA Program, CBA Silliman University  THANK YOU FOR THE TIME AND EFFORT YOU SPENT IN ANSWERING  THIS QUESTIONNAIRE. QUESTIONNAIRE. THIS INFORMATION WILL REMAIN CONFIDENTIAL. Name (optional):_________________________________________________  Address:_________________________________________________________  Age:_________________________Gender__________Civil Status________  Occupation:______________________________________________________  Place of Work:____________________________________________________  Number of Members in the Family:________________________________  INSTRUCTIONS: Please put a check (/) on the space provided for your answers:

1. How much is your monthly income? _____ below P5,000 ______P15,001-P20,000 _____ P5,001-P10,000 ______P20,001-P40,000 _____ P10,001-P15,000 ______ P40,001 and above pl please indicate the amount __________  How much are your monthly expenses? _____ below P5,000 ______ P5,001-P10,000 _____ P10,001-P15,00 ,000 ____ _____ abo above P15, 15,000 please specify:______________  How much of your monthly income do you usually save? ______ below P1,000 ______ P1,001- P5,000 ______ P5,001 – P10,000 ______ above P10,000

2. Do you have an existing bank account? ______ Yes Please specify the bank:____________________ bank:______________________  __  ______ No With what financial entity do you bank?_________  3. What kind of services do you avail of from your bank? ____Savings de deposit ___ Time Deposit ___Checking Acct ____Utilities Payments ___Loans ___Credit Card(s) ____Remittan ____Remittances ces ___Direct ___Direct Deposits Deposits ___Income ___Income Tax assistance assistance ____Wire Transfer ___Portfolio Management 4. What problems if any, have you encountered with your existing bank? ____slow service ___low savings interest rates ____long queues ___high interest rates for loans ____no parking ___ unaccommodating staff   Others please specify________________  6. Are Are you you in favo favorr of Duma Dumagu guet ete e City City Deve Develo lopm pmen entt Bank Bank (DCD (DCDB) B) opening a branch in Canlaon City? _______YES  ______ NO If no please state your reasons__________________________________________  7. What kind of banking services wound wound you want to avail of? of?  ___  _____ __sa savi ving ngs s accou account nts s ____ _____c _che heck ckin ing g accou account nt ____ _____l _loa oans ns _____time de deposit _____utilities payments ____credit card(s) (s) _____remittances _____direct de deposits ____wire tr transfer  _____income tax assistance _____portfolio management others______________________________________________  8. What financial institutions have you utilized at this time? ____SSS/GSIS/Pagibig _____Credit cooperatives ____Pawnshops _____informal lending(5-6,etc)  ____others please specify___________________________  9. If DCDB opens a branch branch in Canlaon Canlaon City, would would you readily readily avail of  of  its se services? __ _______YES __________NO 10. 10. Plea Please se writ write e your your comme comment nts s and sugge suggest stio ions ns on the prop propos osed ed project in the space below:

Comments and Suggestions Given by Respondents •

I believe that Canlaon City does need a bank in order to augment our livelihood through its banking services and to provide security in any amount of money we can save.

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 The proposed establishment of DCDB in Canlaon City will be very beneficial to its residents especially to businessmen and planters since the city has no existing bank and other financial institutions.

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 The proposed project is a big honor for the Canlaonians for it will not cost them too much for the fare and time in going to San Carlos to deposit or withdraw their money.

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I want this proposed project to be fulfilled and accomplished because I want to change the economic situation of the city and life of the people in Canlaon City. “Kaya dapat lang ipatupad ninyo  ngayon ang plano ng DCDB.” 

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 There should be low interest rates imposed, fast release of  transactions, and not too many or difficult requirements to procure.

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I would like to suggest the following: 1. High High intere interest st in savin savings gs accou account nt 2. Acco Accomm mmod odat ating ing staff  staff  3. Offer Offer quick quick loans loans rele release ase 4. Must have have good good location location and parking parking area area

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 This is a very feasible project for the city to improve its economic situation and to provide convenience of its residents. People will learn to save and there will be lesser risk for us to transact banking business in other places far from the city. We hope that the project will be implemented this year (2007). More power to the project!

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Make the project soon. It will provide us convenience, the ability to manage our finances and improve the economic situation in Canlaon City.

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Place ATM Facility

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Please hurry.

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It is good and for the welfare of the people in Canlaon City specifically.

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Good idea but you need to study it further.

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I hope your DCDB branch in Canlaon City will be a success.

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Please respond and just do it!

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Please put up an ATM Machine in Canlaon City for the proposed DCDB branch.

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Please construct your building as soon as possible.

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I hope that this project will push through.

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 The earlier you open the better so we can avail of its services.

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We need to have a bank in Canlaon City.

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We will be very grateful if we will have a bank in Canlaon City.

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Here are my suggestions: 1. Have Have easy acces access s on any transa transacti ction on 2. Have accommodatin accommodating g staff staff and and person personnel nel 3. Must be be located located at the the heart heart of the city city

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I am highly in favor of the proposed project.

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We will be very happy if your proposed project will be materialized.

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Please realize this feasibility study. It will be a big help to the Canlaonians.

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If we will have a bank here in Canlaon City, there will be no need to go to San Carlos City just to deposit our money.

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Putting a bank in Canlaon City is very necessary considering that our city is far from San Carlos City and Guihulngan City were banks are located.

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Happy to have one because not even one bank is available in this city.

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 This proposed project is very good.

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 The project proposed is very good especially here in Canlaon City. We need a bank here so please make it true.

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Here in our place I agree that this city should have a bank in order that people here can easier deposit their money.

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It is ideal to establish a bank in the city since at the present the city has no banking institution.

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It is better that we have a bank in the city so that the people of  Canlaon City can deposit their money and can avail of loans for the development of their business for better living.

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 The sooner the better.

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Do it now!

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ASAP.

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Project proposal is very good to us especially there is no existing bank.

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Do good service.

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It is a good proposal so that we will not be going out of Canlaon City.

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Very good proposal.

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ASAP.

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If we have DCDB here in Canlaon City, we can easily deposit or  withdraw in our saving account. SUGGESTION: “It is good if there is ATM in the said bank”

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 To improve Canlaon City.

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I suggest that you will open a bank.

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It is good to have a bank in Canlaon City for convenience.

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Hoping you will open your branch here ASAP.

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We would be grateful to have a bank in Canlaon City.

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We would be grateful enough to have a bank at Canlaon City in order for us to save expenses in going to San Carlos City to get out money sent sometimes from a distance relative.

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  The The proj projec ectt of pull pullin ing g up a bran branch ch in Canla anlaon on City ity is very very beneficial to the constituents considering that as of the moment there is no available bank at the place.

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For me it is better to have the proposed project in our city.

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Much better if you open DCDB here so that is easy for us to open saving accounts.

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It is a good project; if this will be materialized may be most of the deposi depositor tors s will no longer longer go to San Carlos Carlos City where where banking banking institutions are.

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I hope that DCDB branch in Canlaon City will be realized ASAP.

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It is a good project if this will be materialized plenty of residents here will be benefited since we don’t have any banks in here in at place. I hope this will be materialized soon.

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I

sugg sugges estt

that hat

the propo ropose sed d

proj projec ectt

must must be impl implem emen entted

immedia immediatel tely, y, becaus because e we need need vary vary badly badly the bank in Canlaon Canlaon City. •

I personally and urgently request for the implementation of the proposed project for the benefit of the constituents of Canlaon City.

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I suggest that you will open or install an ATM machine so that our problem in going to San Carlos City will be solved.

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It’s a good opportunity for us to have a banking institution in our city. It will facilitate the safety of the government funds of the city of Canl Canlao aon n City City and and late laterr the the fina financ ncia iall tran transa sact ctio ions ns of the the constituents of the city and barangays and the neighboring towns as well.

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Early action for this project.

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I think this is a good decision to open a DCDB branch here in our place so that we can avail of bank transactions in a short period of  time because mostly we have our transactions in the cities of San Carlos, Carlos, Guihulugo Guihulugon n and Dumaguete Dumaguete and we need need more more or less less than 1 day of traveling and transacting. ”needed the soonest possible time”

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Afraid of bankruptcy especially on private banks.

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I want immediate action if ever…..

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Hope it will rise soon.

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 This proposed project is really needed in our place. As early as possible you can open your branch here in Canlaon City so that we can avail of your services.

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Hope that this Feasibility Study will be materialized as early as possible.

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It would be convenient for the people of Canlaon City to do banking business.

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It would be nice if the said proposed project will push through so it coul could d be conv conven enie ient nt for for the the peop people le here here and and have have thei theirr savin saving g deposits. They don’t have to travel to San Carlos to deposit so with the city government as it would be less risky.

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Good project proposal. Salamat!

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I hope this will be materialized.

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Madaliin ang pag-open kasi w ala kaming banko ri r ito.

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Easy to deposit.

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  Thi This s prop propos osed ed proj projec ectt is real really ly need needed ed here here in Canl Canlao aon n City City because we don’t have any existing bank.

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 This will be a great help to our city and to the people of Canlaon City.

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 This proposed project is needed in our locality. If in case BSP will grant DCDB an authority to oparate in our area busin business ess will will impr improv ove e thei theirr sale sales, s, many many supp supply ly incre increas ases es and and peoples way of life eases.

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We will be very happy if you will open here in our city because we really need a bank here.

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Give low interest for loans.

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Hoping that this proposed project will be operating soonest.

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  The The P300 P300.0 .00 0 back back and and fort forth h far fare is a lot lot of mone money y in just just  withdrawing or applying loan, if takes time for how many hours we have to be absent or on leave, whereas if have here in Canlaon City, it’s a great help and great favor for all employees including businessmen/women/people.

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Canlaon City has a strong demand for banking institution and if  DCDB will decide to put up a bank, the pros and cons must be thoroughly considered. There must be a strong tool or procedure to safeguard the investment, particularly loan and credit.

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Hanep because Hanep  because no bank in Canlaon City.

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It’s It’s nice nice/g /goo ood d to have have a bran branch ch here here in Canl Canlao aon n and and it’s it’s an opportunity for the Canlaonians and for me to have an access of  DCDB services especially an agricultural loan, since the area is the agricultural basket of Negros Oriental.

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 This would benefit the residents of Canlaon and safety of keeping code.

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Can it be as soon as possible? Please!

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I hope hope and pray that this prop propos osal al will will come come true true to this this city city because its very hard for us Canlaonians.

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It will be beneficial to the people of Canlaon but it would be a big thread to the company that I’m working with. It will be a future competitor of our office.

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As early as possible.

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Canlaon City badly needs a bank to cater to the needs of the people. We would be vary happy if DCDB decides to open a branch here. Best regards.

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We are in favor to have a branch here in Canlaon City, Negros Oriental, so that the people experience and know how to save for their own good for the future.

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I suggest that the proposed project will be implemented as soon as possible.

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Canla Canlaon on City City is the the city city with with no bank banking ing insti institu tuti tion on wher where e in people are looking forward.

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For immediate implementation of the project.

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We really don’t have fixed income. Last few years I was able to avail of banking services from DBP and other banks in San Carlos City.

It is unwise to place your savings in places where you have to spend and several pesos will be wasted for your fare back and forth. I realized I was not saving because of the distance from the bank to our place. I would be vary happy to avail of services from  your bank because this is what is lacking in our place. I hope you  will open the soonest possible time. •

Soon the bank will be open.

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I’m very happy if DCDB will open here in Canlaon City for the convenience of the people.

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It’s okay to have a bank here in Canlaon so it’s easy, especially for the students on their allowances.

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Big Big inves investo tors rs are are hesit hesitan antt to come come to Canla Canlaon on for for no bank bank is available and they have no travel an hour to San Carlos City for banking services. If DCDB opens its branch in Canlaon, it would be a boost to our local economy and an eye opener for the locals to save or deposit their money to the bank instead of hiding it in certain places that might lead to loss or impulse spending.

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It should be at the city center.

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For additional employment of Canlaon people. 1) Additional employment for the people of Canlaon City. 2) Easy to access for any transaction.

3) A town town or city city shoul should d have have a bank bank for for the the safe safety ty or thei theirr financial transaction. •

 The office I’m working is very interested in opening an account for there is no bank here in Canlaon City. 1) Make this project possible. 2) The strategic location for banking is Mabigo proper. 3) Before Before starti starting, ng, advert advertise isement ment and promot promotion ion must must be given given for barangays.

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Please make this proposed very soon. 1) Easy access for any transaction. 2) Accommodating personnel and staff. 3) It should be at the heart of the city.

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1) Must have low interest rates of loan.( credit services) 2) Must have character loans. 3) Must provide social services to the clients. 4) Short time processing.

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It’s very good to have a bank in Canlaon City, so that they can help Canlaon City in economic progress.

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I’m in favor of DCDB opening a branch in Canlaon City because there is no existing bank here.

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Include assistance to farmers with affordable interest rate.

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Give agricultural loan assistance to Canlaon City farmers with an affordable interest rate.

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I want to have a bank in Canlaon City so that I can easily save very money or deposit, instead of going to San Carlos.

APPENDIX B Banking Laws

APPENDIX C BSP Forms

APPENDIX D Permits, Clearances, Licenses

APPENDIX E Taxation

APPENDIX F Map & CDS of Canlaon City