The various products and services offered by banks can be classified into three main categories: deposit products, loan services and other services that are offered to other more financially sophisticated clients.

Deposit Products

Deposit products are the traditional bank offerings such as the savings account, checking account and time deposits and are usually denominated in peso or dollars. Banks usually offer varying interest rates on peso deposit products but the rates are usually below the bellwether 91-day Treasury Bill rate. Other deposit-related services include issuance of manager's check, gift and customized checks, payroll services, telegraphic transfer, safety deposit box, interbranch deposits, demand drafts, night deposit and deposit pick-up services.

Loan Products

While deposit products are generally the means by which a bank can increase the amount of resources it can lend, loan products serve as one of the main tools through which a bank earns income (the other being fees generated from performing banking and advisory services to its clients). Funds generated from deposit accounts are usually loaned to borrowers at a higher rate than the bellwether rate and lent at various maturities that match the profile of the deposit base.

Banks structure their credit departments along its major market segment such as consumer loans and corporate banking. Consumer loans are quite straightforward and generally consist of housing loans, credit card loans, car loans and personal loans. Commercial loans are more varied and suited to the needs of the Corporate clients. They come in the form of short-term working capital loans and long-term loans, letters of credit for domestic and foreign importation, domestic bills purchase line, trust receipts, foreign currency loans and other specialized lending facilities to suit a particular financial transaction need.

Other Products / Services

Aside from deposit and lending services, banks also have special products and services to offer to other more financially sophisticated clients.

For individuals and corporations that have idle excess funds, banks offer trust services to manage or invest these funds for a fee for the clients. Thus, we see banks offer employee benefit trust, personal trust, corporate trust and pre-need trust funds to manage the account or portfolio of assets of an individual or a corporation. Banks may likewise offer to administer via escrow agreement, mortgage/collateral trust indentures or plain custodianship/safekeeping of a particular trust fund.

Another major service offered by banks aside from the traditional deposit and loan products is investment-banking services. Usually catered to the bigger corporate clients, investment-banking products include equity management and underwriting, financial advisory, project financing, debt syndication, debt underwriting, private placements and direct iinvestments.

TRADE FACILITIES

Letter of Credit Line (LC)

An LC is a bank's undertaking to pay an amount of money given certain documents and compliance with conditionsLCs are used in trade transactions by the buyer to substitute or enhance his credit with his supplier. It is an assurance, especially in importation, that the supplier will be paid.Term: up to 360 daysCurrency: All major currenciesType: Domestic, Foreign, Sight, Usance LC Commission: Standard issuance of Bank Guarantee Allowed

Trust Receipt (TR)

A TR is a facility in which the bank advances payment to the supplier and allows the buyer (which is the bank's client) to hold the goods in trust for the bank, with the client undertaking to remit payment to the bank as soon as the goods are processed and sold.Some banks use TRs to finance the purchase of machinery and equipment.Term: up to 180 daysMode of payment: Maximum of 90 days for interest and until maturity for principalCurrency: All major currenciesType: Peso but FX allowed on case to case basis by some banks. Insurance Coverage is required

General Guidelines of some banks about LC/TR

For some big banks, the standard Letter of Credit shall generally mean a Secured Documentary Credit (i.e. Bill of Lading consigned to the Bank).The standard LCTR facility means that the TR booking originates from an LC. A Bank may, however, choose to allow some importers who get their goods on Document vs Payment or Document vs Acceptance to be booked to TR.

The tenor of the TR is normally consistent with the operating cycle of the company or to the estimated sum of days of inventory and receivables.

SPECIAL LENDING PROGRAMS

Industrial Guarantee Loan Fund (IGLF)

Credit Limit: Php100MM

Funding Source: DBP-IGLF

Interest Rate: Base rate plus Spread; variable or Fixed

Tenor: For Fixed Assets: 12 years, including grace period;

for Working Capital: Seven (7) years, including grace period)

Three (3) years maximum grace period

Mode of disbursement: staggered or lump sum

Front-end fee: 3/4 of 1% least 70%

Filipino ownership during term of loan

Industrial and Support Services Expansion Program (ISSEP)

Credit Limit Php100MM

Funding Source: DBP-ISSEP

Interest Rate: Base rate plus Spread; variable or Fixed

Tenor: For Fixed Assets: 15 yrs (including of grace period); for Working Capital: 7 yrs (including of grace period) Five (5) years maximum grace period Mode of disbursement: staggered or lump sum Front-end fee: 3/4 of 1% Commitment fee: 3/4 of 1% of undisbursed amount

At least 70% Filipino ownership during term of loan Insurance coverage: FIP on insurable collateral assets up to appraised value

Countryside Loan Fund (CLF)

Minimum Php20MM

Funding Source: DBP-JEXIMJBICInterest Rate: Base rate plus Spread; variable or fixedTenor: For Fixed Assets and Working Capital: on or before October 2011 (including grace period)Three (3) years maximum grace periodMode of disbursement: staggered or lump sumFront-end fee: 3/4 of 1%At least 70% Filipino ownership during term of loanCredit Limit Php625MM ( peso only)Funding Source: Landbank-CLFInterest Rate: Base rate plus Spread;variable or fixedTenor: For Fixed Assets and Working Capital: on or before

December 2015 (including grace period)

Five (5) years maximum grace periodMode of disbursement: staggered or lump sum

Front-end fee: 3/4 of 1%Commitment fee: 3/4 of 1% of undisbursed amountAt least 70% Filipino ownership during term of loan

Insurance coverage: FIP on insurable collateral assets up to appraised value

Trade Facilities

Credit Limit:

Php50MM for Housing Dev't. Program

Php150MM for Financing Program for Educational Institutions

Php75MM for Special Financing Program for Vocational and Technical Schools

Php150MM for Hospital Financing Program

Php150MM for Financing Program for Tourism Projects

Php50MM for SSS-GSIS Special Financing Program

Funding Source: SSS

Interest Rate: Base rate plus Spread; Fixed for five

( 5) years and renewable thereafter

Maximum grace period: None

Mode of disbursement: staggered or lump sum

Front-end fee: 3/4 of 1%At least 70% Filipino ownership during term of loan

Tenor Limits:Three (3) years for Housing Development Program

Twenty (20) years for Financing Program for Educational Institutions

Fifteen (15) years for Special Financing Program for Vocational and Technical Schools

Twenty (20) years for Hospital Financing Program

Fifteen (15) years for Financing Program for Tourism Projects

Seven (7) years for SSS-GSIS Special Financing Program