LEYTE COLLEGES

Tacloban City
COLLEGE OF BUSINESS AND OFFICE ADMINISTRATION
MODULE IN CURRENT ISSUES & UPDATES IN OFFICE

Topic covered:
CHAPTER 1: AN OVERVIEW OF THE CURRENT ISSUES & UPDATES IN OFFICE
The Gross International Reserves (GIR)
The Gross International Reserves Statistics
The Source of Dollar
The Conglomerate San Miguel Corporation (SMC)
The Companies owned or controlled by SMC
The Philippine Banking Industry
The Bangko Sentral ng Pilipinas
The Classes of Banks
I. INTRODUCTION

In the ever-evolving landscape of today's professional world, the dynamics of office

environments are experiencing a significant transformation. From the challenges posed by global
events to the rapid integration of cutting-edge technologies, staying informed about the latest
trends and issues is essential for any thriving workplace. This introduction aims to provide a
comprehensive overview of the pressing matters and noteworthy updates shaping our office
spaces.
In the pages ahead, we will explore a range of topics, each shedding light on a different
facet of the modern workplace. From the adoption of hybrid work models to enhance flexibility,
to the implementation of stringent health and safety measures in response to the ongoing
pandemic, these changes are not only reshaping the way we work but also redefining our
understanding of productivity and collaboration.
Additionally, we'll delve into the pivotal role of technology in streamlining operations
and enhancing communication. As the boundaries between physical and virtual workspaces blur,
the tools and platforms we employ become critical in ensuring seamless workflows and
meaningful connections.
Furthermore, we will address the importance of prioritizing employee well-being and
mental health. Recognizing that a healthy, engaged workforce is the bedrock of any successful
organization, companies are increasingly investing in programs and initiatives that support the
holistic well-being of their employees.
 By examining these key issues and updates, we aim to provide a comprehensive
understanding of the evolving dynamics of the modern office. Armed with this knowledge, we
can proactively adapt to the changing landscape and foster a workplace that not only thrives in
the present but is well-prepared for the challenges and opportunities of the future.

II. Intended Learning Outcomes (ILOs)

At the end of this Chapter, Learners are expected to
1. Know about over dollar International reserves, its sources and uses.
2. Know about Philippine Conglomerates Specifically the San Miguel Corp. its
ownership profitability and the companies under the conglomerate.
3. The Philippine Banking Industry, the Bangko.

KEY TERMS:
International Monetary Fund (IMF) - The International Monetary Fund (IMF) works
to achieve sustainable growth and prosperity for all of its 190 member countries. It does so by
supporting economic policies that promote financial stability and monetary cooperation, which
are essential to increase productivity, job creation, and economic well-being. The IMF is
governed by and accountable to its member countries.
Rapid Depreciation- Accelerated depreciation is the depreciation of fixed assets at a
faster rate early in their useful lives. This type of depreciation reduces the amount of taxable
income early in the life of an asset, so that tax liabilities are deferred into later periods.
Federal Reserve- the Federal Reserve, or the Fed—is the most powerful economic
institution in the United States, perhaps the world. Its core responsibilities include setting interest
rates, managing the money supply, and regulating financial markets.
Ascendancy- the state of being in the ascendant; governing or controlling influence;
domination.
Deficit Spending- when a government's expenditures exceed its revenues during a fiscal
period, causing it to run a budget deficit.
Stagflation- In economics, stagflation or recession-inflation is a situation in which the
inflation rate is high or increasing, the economic growth rate slows, and unemployment remains
steadily high.
Exorbitant Privilege- The term exorbitant privilege (privilège exorbitant in French)
refers to the benefits the United States has due to its own currency (the US dollar) being the
international reserve currency.
 III. CONTENT: An Overview of the Current Issues & Updates in Office
Gross international reserves
The term “Gross International Reserves” (GIR) refer to a country’s foreign exchange
holdings, special drawing rights, reserve position in the IMF, and gold at the end of a given
period. These are put together and expressed as a US dollar value.
The higher these reserves are, the more resilient and flexible that nation can be when the market
is volatile. That’s because the government can choose to dip into the GIR when it needs to help
meet the country’s foreign exchange requirements. Further, in case of rapid depreciation, these
reserves can be used to stabilize the national currency.
According to the Bangko Sentral ng Pilipinas (BSP), GIR is enough if it can finance at least 3
months’ worth of the country’s imports of goods and payments of services and primary income.
Another indicator of reserve adequacy is for the GIR amount to cover at least 100% of the
country’s payments for foreign liabilities, public and private, falling due within the next 12-
month period. While the country’s GIR probably won’t affect you directly, you may feel its
impact during times in which the peso undergoes rapid depreciation. That’s because the central
bank can sell some of the dollars in the reserve to stabilize the local currency.
In turn, this helps the economy stay in good shape, which benefits investors and non-investors
alike. After all, economic stability is good for the country and businesses, and so it is likely to be
positively reflected in a diverse spread of factors, from market conditions to prices of basic
commodities.
Gross international reserves Statistics
Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday
showed that gross international reserves (GIR) rose to USD100. 2 billion as of end-March 2023,
up from USD98. 2 billion as of end-February 2023, but lower than the year-ago's USD 107.8
billion.
Source of dollars
The first U.S. dollar (USD) is one of the world's strongest currencies. It is the official
currency of the United States as well as several other countries. Although it has a deep-rooted
history in the United States, the dollar as we know it today was first printed in 1914.1
Printing began a year after the establishment of the Federal Reserve as the nation's central bank
with the passing of the Federal Reserve Act. That's when the Fed started issuing Federal Reserve
notes in $10 denominations featuring Andrew Jackson's portrait. Three decades later, the dollar
officially became the world’s reserve currency. However, its ascendancy to the throne actually
began not long after the ink was dry on that first printing in 1914.1 Keep reading to learn about
how the dollar became the world's reserve currency.
The U.S dollar was officially crowned the world’s reserve currency and was backed by the
world’s largest gold reserves thanks to the Bretton Woods Agreement. Instead of gold reserves,
other countries accumulated reserves of U.S. dollars. Needing a place to store their dollars,
countries began buying U.S. Treasury securities, which they considered to be a safe store of
money.
The demand for Treasury securities, coupled with the deficit spending needed to finance the
Vietnam War and the Great Society domestic programs, caused the United States to flood the
market with paper money. With growing concerns over the stability of the dollar, the countries
began to convert dollar reserves into gold.
The demand for gold was such that President Richard Nixon was forced to intervene and de-link
the dollar from gold, which led to the floating exchange rates that exist today. Although there
have been periods of stagflation, which is defined as high inflation and high unemployment, the
U.S. dollar has remained the world’s reserve currency.
Uses of dollar
The US dollar is predominantly the standard currency unit in which goods are quoted and
traded, and with which payments are settled in, in the global commodity
markets. See petrocurrency, petrodollar.
The United States Government is capable of borrowing trillions of dollars from the global capital
markets in US dollars issued by the Federal Reserve, which is itself under US government
purview, at minimal interest rates and with virtually zero default risk. In contrast, foreign
governments and corporations incapable of raising money in their own local currencies are
forced to issue debt denominated in US dollars, along with its consequent higher interest rates
and risks of default. The United States's ability to borrow in its own currency without facing
significant balance of payments crisis has been frequently described as its exorbitant privilege
Conglomerate SMC (San Miguel Corp.)
San Miguel Corporation is one of the largest and most diversified conglomerates in the
Philippines by revenues and total assets, with sales equivalent to approximately 4% of the
Philippine GDP in 2020.
SMC’s five key business groups, most of which are market leaders in their respective industries,
include the following: food and beverage, packaging, fuel and oil, energy, and infrastructure. In
addition, SMC has investments in other businesses such as property development and leasing,
cement, car distributorship, and banking services.
SMC has a portfolio of companies that is interwoven into the economic fabric of the
Philippines, benefiting from, as well as contributing to, the development and economic progress
of the nation.
SMC, through its subsidiaries and affiliates, has become a market leader in its businesses in the
Philippines with an extensive portfolio of products that include beer, spirits, non-alcoholic
beverages, poultry, animal feeds, flour, fresh and processed meats, dairy products, coffee,
various packaging products, and a full range of refined petroleum products, most of which are
leaders in their respective markets. In addition, SMC contributes to the growth of downstream
industries and sustains a network of hundreds of third-party suppliers.
Companies owned by SMC
San Miguel Food and Beverage, Inc. (SMFB) is the Philippines’ leading food and
beverage company in the Philippines, combining the strength of San Miguel Brewery Inc.,
Ginebra San Miguel Inc, and San Miguel Foods. It has among the most recognizable and top-of-
mind brands in the industry and holds market leading positions in their respective categories.
Key brands under the SMFB portfolio include San Miguel Pale Pilsen, San Mig Light and Red
Horse for beer, Ginebra San Miguel for gin, Magnolia for chicken, ice cream and dairy products,
Monterey for fresh and marinated meats, Purefoods Tender Juicy for hotdogs, Purefoods for
refrigerated prepared and processed meats, canned meats and seafood lines, Veega for plant-
based protein food products, Star and Dari Crème for margarine and B-Meg for animal feeds.
The Packaging Group
is comprised of SMYPC, and SMYPIL and their respective subsidiaries, both are joint
venture companies between SMC and NYG, one of the largest glass and plastic packaging
corporations in Japan; SYFMC, the only manufacturer of glass and plastics molds in the country,
CAI, a pioneer in the production of two-piece aluminum cans, Mincorr, a paper corrugated
carton manufacturer and Wine Brothers Philippines Corp., involved in the sale and distribution
of wine products.
The Packaging Group has one of the largest packaging operations in the Philippines with
diversified businesses producing glass, molds, metal and plastic closures, aluminum cans, plastic
bottles, pallets and crates, flexibles, paper, and other packaging products. The group also
provides services such as beverage filling in aluminum cans, PET and glass bottles, pallet leasing
and logistics services. It also supplies packaging products to customers in the Asia-Pacific
region, U.S., and Australasia, as well as to major multinational corporations across the
Philippines.
Petron Corporation,
is the only integrated oil refining and marketing company in the Philippines and a strong
third player in the Malaysian market. Petron has a combined refining capacity of 268,000 barrels
per day. The company refines crude oil and markets and distributes refined petroleum products
in the Philippines and Malaysia. Petron has an extensive network of around 1,900 retail service
stations in the Philippines and more than 750 retail service stations in Malaysia as of December
31, 2022.
Petron participates in the reseller (service station), industrial, lube, and liquefied petroleum gas
sectors. In addition, the Company’s service station provides a one-stop service experience to
travelers on the road, offering amenities such as Treats convenience stores, restaurants, and
specialty shops.
The Energy business,
which is conducted through San Miguel Global Power Holdings Corp. (formerly SMC
Global Power Holdings Corp.), together with its subsidiaries, associates and joint ventures, is
one of the largest power companies in the Philippines, controlling 4,719 MW of combined
capacity as of December 31, 2022. SMGP benefits from a diversified power portfolio, including
natural gas, coal, and renewable energy such as hydroelectric power and battery energy storage
systems (BESS).
Based on the total installed generating capacities in the Energy Regulatory Commission
Resolution on Grid Market share Limitation, SMGP believes that its combined installed capacity
comprises approximately 19% of the National Grid, 26% of the Luzon Grid and 7% of the
Mindanao Grid, in each case, as of December 31, 2022.
The infrastructure business,
conducted through San Miguel Holdings Corp. doing business under the name and style
of SMC Infrastructure (“SMHC”), consists of investments in companies that hold long-term
concessions in the infrastructure sector in the Philippines.
Its current operating toll roads include the South Luzon Expressway (“SLEX”), SLEX Elevated
Extension, Skyway Stages 1, 2 and 3, the Southern Tagalog Arterial Road (“STAR”), Tarlac-
Pangasinan-La Union Toll Expressway (“TPLEX”) and NAIA Expressway (“NAIAX”).
Ongoing projects include Skyway Stage 4, the extension of SLEX - Toll Road 4 (“SLEX TR4"),
SLEX - Toll Road 5 (“SLEX TR5”), Pasig River Expressway (“PAREX”), Southern Access
Link Expressway (“SALEX”), Northern Access Link Expressway (“NALEX”), Metro Rail
Transit Line 7 (“MRT-7”), and Manila International Airport (“MIA”). It also operates and is
currently expanding the Boracay Airport and has investments in Manila North Harbour Port Inc.
(MNHPI) and Luzon Clean Water Development Corporation (“LCWDC”) for the Bulacan Bulk
Water Supply Project.
The cement business
is conducted under SMEII, which owns 100% of the issued and outstanding common
stock of Northern Cement Corporation (NCC) and Southern Concrete Industries Inc. [formerly,
Oro Cemento Industries Corporation] (SCII) and 99.96% of newly acquired Eagle Cement
Corporation (Eagle) as of end December 2022. As of December 31, 2022, SMC owns 100% of
SMEII.
It is a strong player in the cement industry with an established reputation and with long
experience in cement production and domestic sales. It has a leading and contemporary cement
plants with new integrated production line showcasing sustainable, environment-friendly, world-
class and state-of-the art equipment capable of producing high quality cement products with
comprehensive strength above and beyond the prescribed specifications.
Philippine banking industry
The Philippine banking industry has been one of the key drivers of the country's
economy, providing financial services to millions of individuals and businesses. The industry has
grown tremendously in the past few decades and has played a crucial role in enabling the
country's economic growth and development. With the increasing importance of digitalization
and technology, the banking sector in the Philippines has undergone significant changes in the
past few years, transforming the way it operates and serves its customers.
One of the major trends in the Philippine banking industry is the growth of digital banking. With
the rise of smartphones and other digital devices, more and more customers are turning to online
and mobile banking services for their financial needs. Banks have responded to this trend by
investing in digital technologies, such as mobile apps and online platforms, to provide customers
with fast, convenient, and secure banking services. This shift has also enabled banks to reach a
wider customer base, including those who live in remote areas or who have limited access to
traditional banking services.
Another trend in the Philippine banking industry is the increasing demand for financial services
by small and medium-sized enterprises (SMEs). SMEs are an important segment of the
Philippine economy and contribute significantly to the country's growth and development.
However, many SMEs face challenges in accessing financing and other financial services due to
a lack of collateral, poor credit history, or lack of access to formal banking channels. Banks have
responded to this challenge by developing specialized financial products and services for SMEs,
such as microfinance and business loans, to help them grow and succeed.
The Philippine banking industry is also undergoing significant consolidation, with mergers and
acquisitions becoming increasingly common. This trend has been driven by the desire of banks
to expand their market reach, improve their competitiveness, and increase their efficiency. By
merging with or acquiring other banks, banks can gain access to new customers, products, and
services, and can also reduce costs by streamlining operations and eliminating redundancies.
Despite these developments, the Philippine banking industry faces several challenges. One of the
biggest challenges is the increasing competition from new entrants, such as fintech companies
and digital-only banks. These companies are using innovative technologies and business models
to disrupt the traditional banking sector, offering customers new and better ways to manage their
finances. To stay ahead of the competition, banks must continue to invest in digital technologies
and adopt new business models that can better serve the needs of their customers.
Another challenge facing the Philippine banking industry is the need to improve financial
inclusion. While the industry has made significant progress in recent years, there are still
millions of people in the Philippines who do not have access to formal banking services. This is
particularly true in rural areas, where many people still rely on informal financial services, such
as pawnshops and moneylenders, to meet their financial needs. Banks must work to expand their
reach and improve access to financial services for all Filipinos, regardless of their location or
socio-economic status.
CreditBPO is an integral part of the Philippine banking industry, providing critical support
services to banks and other financial institutions. It has recently been accredited by the
Philippine Securities and Exchange Commission as a Credit Rating Agency (under specific SEC
conditions*). Such accreditation involved due diligence by the SEC on CreditBPO’s workflows
and processes .
As a leading provider of business process outsourcing (BPO) services, CreditBPO helps banks
streamline their operations, reduce costs, and improve customer service through its CreditBPO
Rating and Benchmarking Solution that enables business credit origination, faster processing,
reduce risk and cost while allowing banks to focus on their core competencies and better serve
their customers.
CreditBPO's services are designed to meet the unique needs of the Philippine banking industry,
and the company has extensive experience working with banks and other financial institutions.
The company's experienced professionals are trained to provide high-quality, cost-effective
services that help banks improve their competitiveness and increase their efficiency. It’s fintech
tools process then condense data into predictive ratings, easy-to-understand and objective
insights that are applicable across many industries allowing banks and lenders to reduce risk and
grow their portfolio.
In conclusion, the Philippine banking industry is undergoing significant changes, with
digitalization, increased competition, and the need for financial inclusion being the major trends.
CreditBPO plays a critical role in supporting the growth and development of the industry,
providing banks with the services and support they need to meet the challenges they face and
better serve their customers. Whether it is loan processing, account management, or other back-
office functions, CreditBPO has the expertise and experience to help banks succeed in an
increasingly competitive and dynamic industry.
Going forward, the Philippine banking industry is poised for continued growth and development,
driven by innovation and technological advancements. Banks that are able to effectively leverage
these trends and adopt new business models will be well-positioned to succeed and meet the
evolving needs of their customers. With the support of companies like CreditBPO, banks in the
Philippines can continue to play a key role in driving the country's economic growth and
development.
Banko sentral ng pilipinas (BSP)
The BSP’s main primary objective is maintain price stability conducive to balanced and
sustainable economic growth. The BSP also aims to promote and preserve monetary stability and
the convertibility of the national currency.
Responsibilities
The BSP provides policy directions in the areas of money, banking and credit. It
supervises operations of banks and exercises regulatory powers over non-bank financial
institutions with quasi-banking functions.
Functions of the BSP
Under the New Central Bank Act of 1993, the BSP performs the following functions, all
of which relate to its status as the Republic’s central monetary authority.
Liquidity Management.
The BSP formulates and implements monetary policy aimed at influencing money supply
consistent with its primary objective to maintain price stability.
Currency issue.
The BSP has the exclusive power to issue the national currency. All notes and coins
issued by the BSP are fully guaranteed by the Government and are considered legal tender for all
private and public debts.
Lender of last resort.
The BSP extends discounts, loans and advances to banking institutions for liquidity
purposes.
Financial Supervision.
The BSP supervises banks and exercises regulatory powers over non-bank institutions
performing quasi-banking functions.
Management of foreign currency reserves.
The BSP seeks to maintain sufficient international reserves to meet any foreseeable net
demands for foreign currencies in order to preserve the international stability and convertibility
of the Philippine peso.
Determination of exchange rate policy.
The BSP determines the exchange rate policy of the Philippines. Currently, the BSP
adheres to a market-oriented foreign exchange rate policy such that the role of Bangko Sentral is
principally to ensure orderly conditions in the market.
Other activities.
The BSP functions as the banker, financial advisor and official depository of the
Government, its political subdivisions and instrumentalities and GOCCs.
Classes of Banks

Understanding Banks
Banks have existed since at least the 14th century. They provide a safe place for consumers and
business owners to stow their cash and a source of loans for personal purchases and business
ventures. In turn, the banks use the cash that is deposited to make loans and collect interest on
them.
The basic business plan hasn't changed much since the Medici family started dabbling in banking
during the Renaissance, but the range of products that banks offer has grown.
Basic Bank Services
Banks offer various ways to stash your cash and various ways to borrow money.
Checking Accounts
Checking accounts are deposits used by consumers and businesses to pay their bills and
make cash withdrawals. They pay little or no interest and typically come with monthly fees,
usage fees, or both. Today's consumers generally have their paychecks and any other regular
payments automatically deposited in one of these accounts.
Savings Accounts
Savings accounts pay interest to the depositor. Depending on how long account holders
hope to keep their money in the bank, they can open a regular savings account that pays a little
interest or a certificate of deposit (CD) that pays a little more interest. The CDs can earn interest
for as little as a few months or as long as five years or more. It is important to note that the
money in checking accounts, savings accounts, and CDs is insured up to a maximum of
$250,000 by the federal government through the Federal Deposit Insurance Corp. (FDIC).
Loan Services
Banks make loans to consumers and businesses. The cash that is deposited by their
customers is lent out to other customers at a higher rate of interest than the depositor is paid. At
the highest level, this is the process that keeps the economy humming. People deposit their
money in banks; the bank lends the money out in car loans, credit cards, mortgages, and business
loans. The loan recipients spend the money they borrow, the bank earns interest on the loans, and
the process keeps money moving through the system. Just like any other business, the goal of a
bank is to earn a profit for its owners. For most banks, the owners are their shareholders. Banks
do this by charging more interest on the loans and other debt they issue to borrowers than they
pay to people who use their savings vehicles. For example, a bank may pay 1% interest on
savings accounts and charge 6% interest for its mortgage loans, earning a gross profit of 5% for
its owners.
Brick-and-Mortar and Online Banks
Banks range in size from small, community-based institutions to global commercial banks.
According to the FDIC, there were just over 4,200 FDIC-insured commercial banks in the United
States as of 2021.2 This number includes national banks, state-chartered banks, commercial
banks, and other financial institutions.
Traditional banks now offer both brick-and-mortar branch locations and online services. Online-
only banks began emerging in early 2010s. Consumers choose a bank based on its interest rates,
the fees it charges, and the convenience of its locations, among other factors.
U.S. banks came under intense scrutiny after the global financial crisis of 2008. The regulatory
environment for banks was tightened considerably as a result.
Depending on their business structures, U.S. banks may be regulated at the state or national
level, or both. State banks are regulated by each state's department of banking or department of
financial institutions. This agency is generally responsible for issues such as permitted practices,
how much interest a bank can charge, and auditing and inspecting banks.
National banks are regulated by the Office of the Comptroller of the Currency (OCC). OCC
regulations primarily cover bank capital levels, asset quality, and liquidity. As noted above,
banks with FDIC insurance are also regulated by the FDIC.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010
following the financial crisis with the intention of reducing risks in the U.S. financial system.
Under this act, large banks now have to submit to regular tests that measure whether they have
sufficient capital to continue operating under challenging economic conditions. This annual
assessment is referred to as a stress test.
Types of Banks
Most banks can be categorized as retail, commercial or corporate, or investment banks.
The big global banks often operate separate arms for each of these categories.
Retail Banks
Retail banks offer their services to the general public and usually have branch offices as
well as main offices for the convenience of their customers. They provide a range of services
such as checking and savings accounts, loan and mortgage services, financing for automobiles,
and short-term loans such as overdraft protection. Many also offer credit cards. They also offer
access to investments in CDs, mutual funds, and individual retirement accounts (IRAs). The
larger retail banks also cater to high-net-worth individuals with specialty services such as private
banking and wealth management services.
Examples of retail banks include TD Bank and Citibank.
Commercial or Corporate Banks
Commercial or corporate banks tailor their services to business clients, from small
business owners to large, corporate entities. Along with day-to-day business banking, these
banks also offer credit services, cash management, commercial real estate services, employer
services, and trade finance, JPMorgan Chase and Bank of America are examples of commercial
banks, though both have large retail banking divisions as well.
Investment Banks
Investment banks focus on providing corporate clients with complex services and
financial transactions such as underwriting and assisting with merger and acquisition
(M&A) activity. They are primarily financial intermediaries in these transactions. Their clients
include large corporations, other financial institutions, pension funds, governments, and hedge
funds. Morgan Stanley and Goldman Sachs are among the biggest U.S. investment banks.
Central Banks
Unlike the banks above, central banks does not deal directly with the public. A central
bank is an independent institution authorized by a government to oversee the nation's money
supply and its monetary policy. As such, central banks are responsible for the stability of the
currency and of the economic system as a whole. They also have a role in regulating the capital
and reserve requirements of the nation's banks. The U.S. Federal Reserve Bank is the central
bank of the U.S. The European Central Bank, the Bank of England, the Bank of Japan, the Swiss
National Bank, and the People’s Bank of China are among its counterparts in other nations.
Bank vs. Credit Union
Credit unions offer banking services but, unlike banks, they are not-for-profit institutions
created for and managed by their members or customers. Credit unions provide routine banking
services to their clients, who are generally called members. Credit unions are created, owned,
and operated by their clients, and are generally tax-exempt. Members purchase shares in the co-
op, and that money is pooled together to fund the credit union's loans. They tend to provide a
limited range of services compared to banks. They also have fewer locations and automated
teller machines (ATMs).