INTRODUCTION

It is time to picture the Canlaon City of today in its proper

perspective, by viewing it according to its noble goals and objectives,

which are formulated towards attaining a transformation from what

she has done in the past, towards what she can do at the present, 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 government gains experience in managing growth and

change, its institutional capability improves considerably. The 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. After the closure of the Rural Bank of Canlaon in September

1986, most financial transactions have ended up being made outside

of Canlaon, thereby pulling out cash for circulation and putting it into

nearby cities with banking institutions, instead of circulating 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 proper assessment or appraisal of the area,

without follow ups 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

with Central Bank which amounts to approximately P80 million.

We recommend that in order to avoid repeating the mistakes of

RB Canlaon, DCDB Canlaon branch should: maintain a high liquidity

ratio especially during its first 3 years of operation, carefully screen all

loan applicants to ensure their capability to pay, monitor its loan

portfolio constantly with regard to non performing loans, invest in a

varied 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

larger swathe of the community, it is imperative that a financial

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 study team proposes a suitable location that is in the

Uptown area, this will further coincide with the City’s plans for

development. The proposed location is in the Uptown area, which is

outside the city center. The land is beside the City Mayor’s 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 proximity to the Mayor’s residence and the security

provided at that location.

OBJECTIVE OF THE STUDY

This study aims to determine the feasibility of establishing 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 main focus of this project study is the feasibility of the

proposed branch of DCDB in Canlaon City. Like most business

proposals, feasibility criteria have major aspects that need to be

considered in arriving at final conclusions and recommendations. The

aspects that need to be factored into this study are divided into

marketing, organization and management; the technical, financial,

socio-economic aspects, and legal aspects.

Responses to the questionnaire were limited to employed

residents of Canlaon City, both government and 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 intention of this study is to aid, guide, and assist the

proponent in determining whether or not to establish the business.

This study would help the DCDB Board of Directors in determining 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 analysis of the market demand is important in order to

determine if the target market will patronize the proposed project.

To draw a conclusion for its market demand, the researchers first

determined who the target markets were. The target markets

identified were the employed residents of Canlaon City and small and

medium business establishments.

Employed residents refer to the City’s labor force and are

categorized as follows: government, private and self-employed

individuals. In order to define the population of these markets, the

researchers requested assistance from the City Planning Office of

Canlaon, obtaining and reviewing documents showing the total number

of employed residents of that city.

The sample size was determined using Slovin’s Formula.

Questionnaires were distributed to respondents based on the

computed sample size. After retrieving the questionnaires, the

responses were tallied and 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

343

Permanent Private Employees 4,618

Self Employed 4,838

Total 9,799

Figures based on Population Distribution by Status 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 essential to the feasibility study. Please see the

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, layout and human resources required, equipment 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, Canlaon City. Its main office or head office is 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, Province of Negros Occidental; on the east by Vallehermoso,

Province of Negros Oriental; on the west by the Municipalities 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 geographic location at 10° 24.7’ North Latitude, 23° 7’ East

Longitude.

The City is geographically divided into three sectors: Downtown,

Midtown/City Center, and Uptown. The City Center is 38 kilometers

away from San Carlos City, Negros Occidental; 50 kilometers from

Guihulngan City; 20 kilometers from Vallehermoso; 102 kilometers

from Bacolod City, the capital of Negros Occidental (taking the cross-

island country road traversing Negros Occidental and Negros Oriental

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.

Further information was gathered from an interview with Mr.

Roderick Schon. He volunteered that there are 4 major and traditional

sugarcane planters in the area. He mentioned the Schon farm,

Valmayor Hermanos, Jalandoni farm, and the Amador farm. Another

major property holder especially around the mabigo barrangay is the

Bautista family.

These major planters each have 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.

Apart from these planters and farmers there are also a 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 and Du Ek Sam. Some of the more prominent

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. 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 strategies for economic development as an area

targeted for economic growth.

C. DESCRIPTIVE DEFINITION OF THE 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 Philippines granted DCDB authority to operate as a private

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

(Negros Oriental), Inc. On August 27, 1993, a second branch in 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

authority to accept demand deposits. On November 16, 1994,

computerization of branches’ Current Account/Savings Account began.

Today DCDB Canlaon City branch Negros 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 Negros through the protection of its environmentally critical area system, maximize the output of its agricultural, commercial, 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.

D. PROJECT’S LONG-RANGE OBJECTIVES

Establishing a DCDB branch in Canlaon, a city rich in agricultural

resources, will provide the community with the banking and other

financial services the community needs. Accomplishing this would

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) Accumulating the savings of depositors and investing them,

together with capital loans secured by bonds, mortgages in real estate

and insured improvements thereon, chattel mortgage, bonds and other

forms of security or in loans for personal or household finance, whether

secured or unsecured, or in financing for homebuilding and home

development; in readily marketable and debt securities; in commercial

papers and accounts receivables, drafts, bills of exchange,

acceptances or notes arising out of commercial transactions; and in

such other investments and loans which the Monetary Board may

determine 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. HIGLIGHTS OF THE PROJECT

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 (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 legal requirements have

been met, and after the authority to establish a branch has been

given, the branch shall be opened within six months from the date

of approval. The target 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 OF FINANCING

The establishment of the proposed branch of 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 construction of the building shall be taken from existing

funds of the bank that have been earmarked for this purpose. The

DCDB Board of Directors has the intention of purchasing the land

and constructing a building that the DCDB Canlaon branch will

occupy.

F. MAJOR ASSUMPTIONS, SUMMARY OF FINDINGS AND

CONCLUSIONS OF THE FOLLOWING:

1. MARKET FEASIBILITY

In the survey conducted by the group, it was ascertained

that one of the reasons that there is a need for a banking

institution in Canlaon City is due to the absence of certain financial

services in the city such as: savings deposits, checking 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 and role of a bank in their city. It was also

determined that there are a number of probable clients, 99

percent of the respondents to be exact, who would be willing to

avail of the products and services that the DCDB Canlaon branch

will offer.

City Treasurer Ma. Luisa L. Luza, informed us of the

possibility of using the bank as a depository for all the financial

transactions of the government, both local and national. 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

transactions go through the bank instead of her preparing 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 Administrator of Canlaon. Ms. Flores described the people of

Canlaon as hardworking and resilient. When asked 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 Philippines (DBP) in San Carlos City and other

accounts are maintained with Landbank and the Philippine

National Bank (PNB). The requirement that the Government

deposit its money 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.

According to Ms. Flores, attempts had been 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

regarding this. She added that the City has continuity 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 through, we will support them if they need equity for

construction. We will place our local revenues and income 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. 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 highway

connecting the city has also been improved.

Regarding the security concerns Blanco opined “They don’t

need to worry…we have two battalions: the 11th and 12th Infantry

Brigade assigned in Canlaon. Peace and order situation is ok

now.” This is backed up by a city crime rate of .05 percent as

seen in the CDS of 2007.

2. TECHNICAL FEASIBILITY

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 by the bank. The cost of the lot is priced competitively

based on comparisons with the other prospective sites that were

identified. The lot is priced at 1,500 pesos per square meter and

the recommendation is to buy a 500 square meter 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 description of products and services was based on

existing products and services offered by DCDB head 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.

Another consideration is the established bank operations

policies and procedures which are applicable to the Canlaon

branch without further modification.

3. FINANCIAL FEASIBILITY

The financial study was made based on the following

assumptions:

Operational Assumptions

a) The branch will start its operation on August 8, 2008

b) Bank hours will be from 9:00am to 3:00pm

c) Employees will work till 8:00am to 5:00pm with 1 hour lunch

break.

d) The bank will be open on weekdays and be closed on all

public and special holidays.

e) Cut- off for clearance of cheques will be 11:30am to allow for

travel time to BPI San Carlos whose cut off time is 1:00pm.

f) Excess funds will be deposited with BPI- San Carlos or 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 of 10 percent current/saving deposits will be kept

as cash in vault

h) Company will procure a motorcycle for bank use.

i) Main office will provide a service vehicle for branch manager’s

use.

j) There will be a provision of an ATM machine in the bank

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 policies and regulations of the Department of Labor and

Employment (DOLE) will be complied with.

l) All policies, rules and regulations of the DCDB main office will

apply to the branch office.

m)The first branch manager will be an officer from DCDB main

office.

n) Rank and file staff will be recruited from qualified residents of

Canlaon.

Revenue Assumptions

a) Agricultural loans will have an interest rate of 15-18 percent,

as prescribed by DCDB bank policy and the Agri-Agra Law.

b) Commercial loans will have an interest rate of 15-18 percent,

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.

Depreciation is computed on the straight-line basis over the

estimated useful lives of the assets as follows:

Buildings 40 years

Furniture, fixtures and equipment 1-10 years

Leasehold improvements are amortized over the terms of the

related leases or the useful lives of the improvements whichever is

shorter.

4. SOCIO-ECONOMIC FEASIBILITY

The project will be consistent with Canlaon’s economic

expansion and growth since DCDB supports the Philippine

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. MANAGEMENT FEASIBILITY

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 assistant, a loan processor, one teller,

and a messenger/janitor.

PROJECT STATUS AND TIMETABLE

The research project started with the identification of the

proponent and the prospect study. On July 26, 2007, soon after the

proponent, Dumaguete City Development Bank, and the study to be

undertaken was identified, the group began formulating the survey

questionnaire. This took one week. The formal distribution of 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 collected data and drafting the feasibility study. The researchers

collected the information necessary to accomplish the project during

the fourth and fifth weeks. The period from August 13 to September 3

was used to focus on the Technical and Financial Study of the project.

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. Project Feasibility Study

B. Ocular/Site Inspection

C. Purchase of Land

D. Processing of Business 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 of major stockholders, indicating the citizenship and the

number, amount and percentage of the voting and non-voting 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

Certified photocopies of Income Tax Returns for the last (2) calendar years

BIR clearance Detailed Plan of Operation and Economic Justification 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 construction and furnishing of the bank 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 and complete the recruitment and hiring of officers 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-data sheet, evidence of citizenship and NBI and BIR

clearances of each of the officers (who have not had the previous approval of the Monetary Board/Governor) which are needed for the evaluation of their qualification 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. Inauguration/Opening of the branch for business (Target Date is August 8, 2008)

J. Requirements within 30 days after first day of operations

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. ORGANIZATION AND MANAGEMENT

A thrift bank shall be organized in the form of a stock

corporation. The Monetary Board shall fix the minimum paid-up capital

of thrift banks in such amount as the Board may consider necessary for

the safe and sound operation of thrift banks taking into account the

development thrusts of this Act and due protection of the general

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,

“Board of Directors”. The provisions of the Corporation Code to 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 a person other than an officer or employee of the

bank, its subsidiaries or affiliates or related interests.

Non-Filipino citizens may become members of the board 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.”

Republic Act 7906, Thrift Bank Act, Section 7, “Directors 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 government-owned or controlled

corporation to the bank: Provided, further, That in the case of merger

or consolidation duly approved by the Monetary Board, the limitation

on the number of directors 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 number of directors provided for

in the respective articles of incorporation of the merging or

consolidating banks.”

DCDB SENIOR MANAGEMENT

Executive CommitteeGregorio L. Uymatiao, Jr. ChairmanSusano O. Sy Vice-ChairmanNicholas S. Ramas-Uypitching MemberSilvestre H. Sung MemberMa. Vivian Joyce V. Sastrillo Member

Corporate Management and OfficersJulio O. Sy PresidentGregorio E. Uymatiao, Sr. TreasurerMa. Vivian Joyce V. Sastrillo Executive Vice

PresidentSinfronio C. Viloro Vice President/Area ManagerMargarito E. Credo Assistant Vice

PresidentRowena I. Buling ComptrollerBilliam G. Sy Internal Auditor

Head OfficeConsolacion Gilda F. Elli Assistant Manager-HRDWalden E. Justalero Loan Officer

Dumaguete BranchFloranita U. Calaurian ManagerMa. Rosario I. Espina CashierMa. Elvie J. Teves Accountant

Assets and Liabilities Committee Ma. Vivian Joyce V. Sastrillo ChairmanGregorio L. Uymatiao, Jr. Vice-ChairmanSilvestre H. Sung MemberJocelyn S. Limkaichong MemberRowena I. Buling MemberFloranita U. Calaurian MemberConsolacion Gilda F. Elli MemberWalden E. Justalero Member

Compliance, Audit and Examination CommitteeNicholas S. Ramas-Uypitching ChairmanMiguel A. Diaz Vice-ChairmanJulio O. Sy Member

B. FORM OF OWNERSHIP

Ownership of thrift banks, “At least forty percent (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 stock of thrift banks. The percentage

of the foreign-owned voting stocks shall be determined by the

citizenship of individual stockholders and in case of corporations

owning shares, by the citizenship of each stockholder in the said

corporations.”

C. ORGANIZATIONAL CHART

ORGANIZATIONAL CHART OF PROPOSED DCDB CANLAON BRANCH

D. JOB DESCRIPTION

Position Title: BRANCH MANAGER

BASIC RESPONSIBILITIES:

Branch Manager

Branch Cashier Branch Accountant

Accounting Assistant

Loans book keeper

Loan Processor

Messenger/Janitor

Branch Teller

Responsible for the overall supervision of the Cash, Accounting

and Account Services Sections to ensure achievement of deposit

targets, maintain good client relations as well as the proper

implementation of bank policies and procedures including submission

of accurate and timely reports required by the Head Office.

SPECIFIC RESPONSIBILITIES:

1. Develops marketing strategies, plans and programs needed to

ensure achievement of performance targets in terms of deposit

levels.

2. Reviews daily call reports of Accounts Services Representatives;

monitors significant accomplishments; provides marketing

support whenever necessary to capture available opportunities.

3. Monitors daily performance of Accounts Services Representatives

and Accounts Services Assistant; provides training to enhance

marketing skills.

4. Monitors quality of service rendered by field and office personnel

to maintain good client relations. Ensures fast, timely and

reliable servicing of accounts; renders corrective measures to

remedy customer complaints, answers inquiries or addresses

concerns raised by clients.

5. Monitors movements of accounts; studies the peculiarities of

each account to identify business potentials.

6. Supervises the Cashiering and Accounting functions to comply

with the bank’s policies, procedures and reporting requirements.

7. Supervises the preparation and distribution of the monthly bank

statements.

8. Performs other tasks as may be assigned from time to time.

Position Title: CASHIER

BASIC RESPONSIBILITIES:

Responsible for the custodianship of items of value such as cash,

managers checks, time deposit certificates, passbooks, checkbooks,

security/investment papers, unused DCDB checks of other banks and

accountable forms. Also responsible for ensuring that Tellers and other

frontliners under the Cash Section render quality service and are

customer oriented at all times.

SPECIFIC RESPONSIBILITIES:

1. Monitors the daily flow of cash to ensure adequacy of cash

reserve/cash in vault; maintains the Cashier’s Accountability

Book reflecting daily cash movements;

2. Ensures that actual cash in vault balances off with records all the

time and that bills have been carefully counted and bundled

preventing shortages or overages.

3. Assists in monitoring daily cash transactions of Main Branch and

other branches to ensure adequacy of bank reserve in

compliance with Central Bank requirement.

4. Coordinates fund transfers to and from branches with the Fund

Management Unit and depository bank.

5. Verifies and approves over the counter withdrawals and

encashment to authenticate signatures and check the identity of

payees as well as validate sufficiency of account balance.

6. Monitors amount of cash handled by each Teller; replenishes

cash upon request; verifies and receives surrendered excess

cash to maintain safe levels in Teller’s box.

7. Assists Tellers in reviewing the day’s transactions to trace errors

resulting to shortages, overages or incorrect proof sheet

balances.

8. Reviews checks deposited; supervises transmittal/deposit of

checks to depository bank for clearing; notifies clients of

returned checks.

9. Calls on current account clients in case of insufficiency of funds

to avoid nonpayment or non-clearing of issued checks.

10. Leads and trains the front liners in rendering good service and

maintaining professional client relations.

11. Reviews the Teller’s proof sheet before submission to

Accounting.

12. Closely coordinates with corporate clients regarding payroll

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. Assists Tellers in the delivery of cash to valued accounts 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, checking of computations and

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 verifies computation of time deposit transactions

such as placements, terminations, pre-terminations and

renewals.

2. Supervises the Accounting Staff and Bookkeepers in areas of

receiving loan payments and time deposit placements,

disbursements, timekeeping, updating accounts, loans

bookkeeping and general accounting.

3. Verifies entries in the trial balance against source documents to

check correctness of accounting classification and figures

recorded.

4. Checks and verifies computation of interest in loans.

5. Checks and verifies list of back accounting transactions to ensure

correctness of entries and figures.

6. Approves over-the-counter transactions independently for

withdrawals of P20,000.00 and below; co-signs with Cashier for

withdrawals of more than P20,000.00.

7. Reviews tickets prepared by Accounting Staff such as payment of

expenses and deposits to other banks.

8. Checks monthly reports prepared by Bookkeepers of time

deposit, loans and general accounting.

9. Verifies bank reconciliation statements on a monthly 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:

Responsible for the efficient handling of transactions involving

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. Receives cash and checks for such transactions as savings and

current account deposit, time deposit placement, loan payments,

SSS payments and others.

2. Checks quality of bills and verifies cash count.

3. Sorts cash according to quality and bundles them accordingly to

facilitate counting.

4. Pays cash for such transactions as withdrawals, check

encashment and others’.

5. Verifies validity of order to pay; checks date, name of payee as

against identity of presentor, amount in words and figures and

authenticity of signatures.

6. Checks account balances and secures the approval of assigned

authorities prior to any payment.

7. Updates passbooks after completion of each transaction.

8. Maintains adequate amount of cash to serve transactions;

requests additional cash or surrenders excess cash whenever

necessary for security reasons.

9. Prepares proof sheet to summarize transactions processed

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:

Responsible for effectively identifying business prospects,

preparing suitable loan packages that meet clients’ needs, processing

and monitoring of loan accounts.

SPECIFIC RESPONSIBILITIES:

1. Identifies potential loan borrowers; visits prospective accounts

and offers the bank’s loan facilities and discusses how the bank

can assist in the growth of the business.

2. Studies and analyzes the business prospects, its 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 study and analysis of financial

projections and other related activities that can further

strengthen the positive prospects of the business.

3. Ensures timely submission of complete loan

requirements/documents.

4. Prepares loan reports that provide accurate figures and reliable

data/information that can be used by the Credit Committee in

endorsing loan applications for approval of the Board of

Directors.

5. Follows-up the documentation process; prepares the credit

implementation ticket to ensure prompt release of loan

proceeds.

6. Computes for net loan proceeds and verifies correctness from

Accounting.

7. Personally attends to clients for signing of loan documents and

actual release of loan proceeds.

8. Visits projects and monitors business progress and collection

performance.

9. Prepares post-release documents of refinanced 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:

Responsible for the preparation of the daily trial balance and

counterchecking T-accounts of other Sections to validate consolidated

report. Also responsible for the maintenance of the general ledger and

subsidiary ledgers of the Main Branch.

SPECIFIC RESPONSIBILITIES:

1. Prepares the daily trial balance and counterchecks entries with

proofsheet of other sections.

2. Manually balances CA/SA transactions and counterchecks with

computer print-out on a daily basis; balances computer print-out

of accounts by subtype and size against trial balance.

3. Posts daily transactions in the general ledger and subsidiary

ledgers.

4. Computes for the month-end accruals of expenses payables and

amortization of prepaid expenses and deferred expenses to

prepare the month-end proofsheet.

5. Files transaction tickets according to account title.

6. Prepares Main Branch accounting reports for submission to the

Controllership Unit.

7. Prepares SSS collection remittance for all branch collections.

8. Prepares month-end and quarterly reports such as income

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 cleanliness of office premises which

includes work stations, executive rooms, reception areas, toilets, the

conference room, etc. as maybe assigned.

SPECIFIC RESPONSIBILITIES:

1. Plans daily itinerary and daily work priorities to maximize time

and effort as well as ensure prompt delivery of outgoing

documents.

2. Regularly cleans service vehicle.

3. Regularly cleans assigned areas. Collects and disposes garbage

at the end of the day. Washes dishes at the end of the day.

4. Assists in the repair and maintenance of office facilities,

plumbing and electrical works, office equipment and furniture.

5. Assists in the purchasing functions of immediate supervisor.

6. Performs other tasks as may be assigned from time to time.

E. JOB SPECIFICATION

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 be fit and proper for the position he is being

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 be a graduate of a business course preferably

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

TELLER

Must be a graduate of a business course

With good communications and interpersonal skills

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 City Branch, Negros Oriental. As defined in Republic Act No.

8791 The General Banking Law of 2000, banks shall refer to entities

engaged in the lending of funds obtained in the form of deposits.

There are many classifications of banks, most common of which are

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 banks, and stock savings and loans associations

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 has net assets of at least Twenty million pesos (P20,000,000)

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 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 government-owned or controlled corporations. Said institutions

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

exclusively in national currency and exclusively for the financing of

equipment loans, mortgage loans for the acquisition of machinery and

other fixed installations, conservation, enlargement or improvement of

productive properties and real estate mortgage loans for: (a) the

construction, acquisition, expansion or 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 certificates is not later than the date on which the

payment would otherwise become due, in the absence of the aforesaid

prepayment

(8) Purchase, hold and convey real estate under the 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, rules and regulations to the

contrary, to make deductions from his salary, wage or income pursuant

to the terms of his loan, to remit 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 target markets of the proposed project are the local

government of Canlaon City, the employed residents of Canlaon City

and nearby municipalities and the small and medium business

establishments. Employed residents refer to the labor force of the city

and are categorized as: government, private and self-employed

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 bank account. Thirty-six percent do not 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.

Canlaon City is a third class city in the province of Negros

Oriental, 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

development of the province’s geothermal resources. It is building an

additional 20-megawatt power plant at Palinpinon II, and another 40-

megawatt 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 through the bank, negating the need for transacting

business in San Carlos or elsewhere. Currently, Canlaon employees

have to 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 present, these resources are not put to use productively in

Canlaon City; the employees tend to do their shopping in San Carlos

City since they are already there. The market opportunities created by

a bank branch in Canlaon City for small to medium businesses make

this project viable.

D. SUPPLY

Although there are no existing banking institutions in Canlaon

City, there are other financial institutions that more or less provide

similar services. There are three pawnshops: Palawan Pawnshop,

Chamar Pawnshop, and Cebuana Lhullier which also provides the

service of pera padala, and Western Union. There is one lending

investor, AAA Agency, which is based in San Carlos City. Credit

cooperatives also accommodate loans, and among the three biggest in

Canlaon are the Bucalan Multipurpose Credit Cooperative, Canlaon City

Government Employees Credit Cooperative and Canlaon City

Multipurpose Development Credit Cooperative. As shown in Figure 15,

47.9 percent of the respondents avail their loans from SSS/GSIS, 22.9

percent from Credit Cooperatives, 20.2 percent from pawnshops, 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.

Based on the survey conducted, the respondents avail of the

services of the institutions mentioned above.

E. DEMAND-SUPPLY ANALYSIS

In determining the demand and the supply for financial services

of the proposed project, the researchers concluded that there is a high

demand for a bank in Canlaon City. The lack of a bank in the city has

resulted in the respondents turning to other financial institutions like

credit cooperatives and pawnshops. Aside from that they use the

services of banks outside the city regardless of distance, cost and time

considerations. This shows that there is demand and a lack of supply

of financial services which a local bank could provide.

F. PRICE STUDY

Bank charges:Bank certification P50.00Purchase of a Manager’s check, MC P20.00Documentary stamp on MC P1.50Inter-branch transfer P50.00

regardless of amountBelow minimum balances P25.00 per month(current and savings, or C&S)

Dormant C&S accounts P30.00 per month

Overnight checks:if funded or deposited after closingtime or a late deposit P100.00

if funded on the next banking daybefore clearing or cut-off time P600.00

if not funded or returned P1,100.00Demand deposits:

Minimum initial deposit P 5,000.00Minimum maintaining balance P 2,000.00Average daily balance to earn interest P50,000.00

Savings deposits:Minimum initial deposit P 500.00Average daily balance to earn interest P1,000.00

Preferred savings deposit:Minimum deposit of P50,000.00 for one month (renewable)

The interest, amount earned on time deposits, are subject 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 are basically two factors affecting the market; 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 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 the Business

Good management would lead to excellent

operations. And excellent operations lead to give quality service.

4. Employees

Motivated and well-trained employees could help the

bank in giving quality service to its clients. Employees 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 competitors are the most significant external

factor that could affect the market of the bank because more or

less these pawnshops and credit cooperatives provide similar

products and services. The people of Canlaon City do their

banking transactions in San Carlos City, although this is outside

of Canlaon City. It still poses a threat to the new branch of DCDB

because the depositors have already established the trust and

security of their deposits with these banks. It is noted that there

are eight banks in San Carlos namely: Bank Victorias, BPI, DBP,

PNB, Landbank, RCBC, Equitable PCI and Metrobank. Guihulngan

has three banks namely: Landbank, PNB and 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

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

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

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

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)

Competitive

RivalrySUPPPLIER POWER BUYER POWER

THREAT OF SUBSTITUTION

SWOT ANALYSISSTRENGTHS

First bank in Canlaon ergo Captive Market-Wide range of financial services-The bank 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-Market has low trust in banks because of previous bank closure-Market appears to have a growth limit because of the lack of customers passing through the area

OPPORTUNITIES-All loans of small & medium enterprises-Government patronage -Captive market-Private sector patronage

THREATS-Security-Entry of other banks-Fortuitous events, i.e, eruption of Mt. Canlaon

An analysis of the two tools illustrated above reveal certain

aspects of the industry that the marketing program will have to

address.

An important aspect evident is the fact that the 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) in the immediate area. By being the

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. Should an equivalent competitor enter the

market many of Porter’s forces would change and there would be

a higher level of threat of substitution, thereby giving the buyers

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. MARKETING PROGRAM

Before the start of the operations of the bank, an advertising

campaign must be formulated and put into motion. As the 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.

Printed material should also be disseminated showing the bank’s

products and services and its location.

We suggest constructing two billboards announcing the

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

be the junction in the Municipality of Vallehermosa to San Carlos and

Canlaon City. Another site to be considered is at the corner of 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 Initial Deposit Giveaways

Savings Account P500-P5,000.00

P5,001-20,000.00

P20,001 above

Ball pen

T-shirt

Ball pen & T-shirt

Demand Deposit P5,000-20,000.00 T-shirt

P20,001 above Ball pen & T-shirt

Preferred Accounts P50,000 above Ball pen, T-shirt, Bag

Loan Release Ball pen, T-shirt, Bag

Suggested promotional activities for the subsequent years:

For new accounts with initial deposit of P50,000.00 above,

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, celebration commemorating the founding of the city, etc.

Give out brochures and fliers.

“Summer Extravaganza” Promo – this is between the months of

March to May. Those who will open an account during this 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 differ. The

freebies would be something they could use during the rainy

season like umbrellas, jacket, cap etc.

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

to the clients.

TECHNICALFEASIBILITY

A.PRODUCT/SERVICES DESCRIPTION

Types of Account Ownership

Individual or Personal Account

The most common type of a bank account is the single-name

individual or personal account in which a single individual transacts

with the bank under his own name. Since the bank deposit is a

contract, only those with legal capacity to enter into contracts may

make bank deposits. Under general contract principles, insane or

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 follows when

money is deposited in the individual name of a person is that the

money is his property, and the Bank does not question ownership of

funds deposited. 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 joint account is a joint undertaking between two or more

individuals to open and maintain a deposit account with the bank. It

may take the following form:

a. Joint “and” Account – when an account is 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” Account – When two depositors open an

account with the use of the disjunctive “and/or”, either one of

them may deposit and withdraw from the account without 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 identity of the depositor. Only the registered

owner 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 contract of partnership, two or more persons 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 expressly authorized by law or incident to its existence. A

corporate account may be opened in the name of the corporation. It is

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 unregistered or unincorporated groups may apply for deposit

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 authorized to deal with bank deposits. A certificate of

Authorized Officers must likewise be required.

Treasurer-In-Trust Account

A temporary account pending the Securities and Exchange

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 corporation. Treasurer’s affidavit must be submitted.

This account is opened with a set of temporary cards only, to be

replaced by set of permanent cards upon SEC’s approval. No

checkbook should be issued at this point. Usually the client will

request for a Bank’s certification regarding its cash balance addressed

to SEC. This certification should bear the signature of a Bank officer

and duly notarized before presentation.

TYPES OF DEPOSIT ACCOUNTS

Passbook Savings Accounts

Initial deposit P500.00

ADB to earn interest P1,000.00 1.5%

Is a deposit of client’s funds commonly evidenced by a passbook

issued by the bank to the depositor. The funds are withdrawable

anytime upon presentation of the passbook and withdrawal slip duly

accomplished and signed by the depositor, subject to verification of

identity, authority, validity of signature and adequacy of balance.

Current/Demand Deposits Accounts

Initial deposit P5,000.00

Maintaining Balance P2,000.00

ADB to earn interest P50,000.00 1.5%

Is a deposit wherein funds may be withdrawn through the

issuance of checks. Checking accounts provide its users the safety

and convenience of paying business and personal transactions without

carrying cash. It is withdrawable anytime upon presentation of a duly

endorsed check, subject to verification of:

a. Identity and authority of drawer and person presenting

the check

b. Adequacy of balance.

Clients may open a checking account as long as the proper

identification papers and documents are presented and the

requirements complied with. Current account depositors may pre-

order 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 period of time, thus earning interest higher than that given to

savings accounts. Unlike current and savings account, time deposits

are not subject to check or cash withdrawal upon demand. These

deposits are evidenced by certificates issued by the Bank, which bear

details such as the name of the person to whom the certificate is

payable, the date of issue, amount, interest rate and maturity date.

OTHER SERVICES

Loans (rate:15-18% pa)

Servicing the financial needs of the clients thru borrowing of

funds from the bank either for commercial, industrial, agricultural or

for personal purposes.

Manager’s/Gift Checks

These are checks issued to customers in exchange for cash,

check, or an amount debited against their account. Payment of these

checks and by the bank so much so that they are more acceptable

than ordinary check. Gift checks are issued in different denominations

and serve as gifts for different occasions.

B. BANK POLICIES

The new DCDB Canlaon City branch will follow the bank policies

of that of the Main Branch and other branches as seen in the Bank’s

Operations Policies and Procedures Manual.

Just to cite some of these policies: a branch teller will only have

P25, 000.00 in his/her cashbox possession, as is prescribed in the

manual of operations. The teller will immediately turn over all excess

amounts to the cashier with proper standard documentation of such

transaction. Deposit to other bank transactions releases the amount

from what is available in the cash in vault. Deposit pick-up between

the bank and the client shall follow agreed banking procedures 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 considering bank’s deposits with which

the Bangko Sentral ng Pilipinas, or BSP, has available for its reserve

cover.

Deposits over one million pesos will be under the anti-money

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.

Payment of “on us” checks under a savings account for

withdrawals over the counter require:

Amount approving authority

P500.00 and below tellers

P501.00- 20,000.00 any one of the bank officers

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 of client

2. Address of the client

3. Purpose of the loan

4. Deposit/loan accounts

5. If client is a corporation, it must indicate the 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 heading contains a detailed explanation of the subject/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 and conditions for the payment of the loan applied for.

3. The client’s confidential information sheet.

4. The client’s financial statements for the current past two to three

years.

5. Proof of security and/or collateral support for the loan

application.

6. Credit investigation.

7. Recommendation of loan processor/ account officer to the

approving body/ officer of the bank.

Credit Authority Structure of the loan approval/ levels of approving

authority

1. Board of Directors

2. Executive Committee

3. President

4. Executive Vice President/ Vice President

5. Assistant Vice President

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 regulations issued by the bank compliance

officer, the BSP and some government authority.

General Approving and Signing Authority

Levels of Authority Approving body/ officer

- Broad, strategic and long-term credit 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 agreements, cancellation of mortgage, disclosure

and release of statements, a branch manager is empowered to

perform such duties. But all memorandums of agreements concerning

refinancing programs and/ or special projects are the responsibility of

the President/ Executive Vice President/ Vice President..

Collection of Accounts

1. A first notice is prepared by the branch bank loan processor and

is mailed through the ordinary post office mail fifteen days

before the loan’s due date.

2. A second notice is mailed through registered post office mail one

week after the loan’s due date. Enclosed is a statement of the

account.

3. A mail inconvenience letter is mailed fifteen days after the

receipt of the second notice.

4. A lawyer’s letter will follow, giving the subject fifteen days to

settle the account’s business before instituting judicial or

extrajudicial proceedings.

5. If there is no payment/ settlement after fifteen days of the

receipt of the lawyer’s letter, judicial and extrajudicial

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 get back to its current status.

Foreclosure proceedings shall apply only as the last recourse of the

bank.

“In case of non-payment of the amount of this note by any

amortization on demand when due, or any other amount or amounts

due on the account of this note, the entire obligation plus interest 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 Branch. Special thought should also be given to specific

Agricultural loans and programs designed to: improve irrigation

infrastructure, provide post harvest facilities such as mechanical dryers

and rice mills, seed bank programs, livelihood programs, agricultural

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 P223, 414.00

Equipment Price

Adding Machine P2,750.00

Bill/Money Counter 40,000.00

Coin Counter 30,000.00

Check Writer 4,494.82

Doc Stamps Machine 18,160.90

Typewriter 2,185.50

Computer 6 @ 28,550.00 171,300.00

Printer 5 @ 2,495.00 12,475.00

Generator 42,800.00

Fax Machine 6,995.00

Filing Cabinets 2 @ 4,000 8,000.00

Tables and Chairs

ATM Machine 24 hours

20, 000.00

272,187.00

Total 631, 348.22

Stationary and Supplies Price

Scissor 6@42.00 252.00

Push Pin 26.00

Clip paper 24.75

Foldback clips 19.00

Fastener 10.50

Cutter 33.00

Eraser 6.25

Sharpener 20.25

Ring Files 138.50

Clear tape 12@19.50 234.00

Masking tape 6@20.25 121.50

Glue 47.75

Long Folder 12@8.00 96.00

Short Folder 12@4.25 51.00

Lond Bond paper 1 rim 224.25

Short Bond paper 1 rim 202.75

Record Book 106.50

Stapler

6@169.25

1,015.50

Puncher 3@189.50 568.50

Staple Wire 12@36.00 432.00

Journal Book 6@24.00 144.00

Ledger 6@29.00 174.00

Total 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 develop a commercial complex containing retail, service, and

other business including the bank. Offer this as a start for the small to

medium entrepreneurs of the city. Suggested types of business are a

grocery store and a restaurant or service providers.

FINANCIAL

FEASIBILITY

A. GENERAL ASSUMPTIONS

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 including the payroll of the government employees and

public school teachers will avail of the bank’s services.

Quarterly Internal Revenue Allotment (national) P44,574,756.00

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 hours will be from 9:00am to 3:00pm

b) Employees will work till 8:00am to 5:00pm with 1-hour lunch

break.

c) The bank will be open on weekdays and be closed on all

public and special holidays.

d) Cut- off for clearance of cheques will be 9:30am to allow for

travel time to BPI San Carlos whose cut-off time is 11:00am.

e) Excess funds will be deposited with BPI- San Carlos. A portion

may be invested in government securities at manager’s

discretion subject to restrictions.

f) Maximum of 10 percent current/saving deposits will be kept

as cash in the vault

g) Company will procure a motorcycle for bank use.

h) Main office will provide a service vehicle for the branch

manager’s use.

i) There will be a provision for an ATM machine in the bank

layout but it will not be installed in the first year of operation,

until the bank will be financially stable to purchase one.

j) All policies and regulations of the department of labor and

employment (DOLE) will be complied with.

k) All policies, rules and regulations of the DCDB main office will

apply to the branch office.

l) The first branch manager will be an officer from DCDB main

office.

m)Rank and file staff will be recruited from qualified residents of

Canlaon City.

Revenue Assumptions

a) One percent service charge will apply to all government

transactions.

b) Two percent service charge will apply to all payroll

transactions.

c) Agricultural loans will have an interest rate of 15 percent

d) Commercial loans will have an interest rate of 15 percent.

Expense Assumptions

a) The salary of the bank branch employees will have a three

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, furniture, fixtures and equipment are carried

at acquisition cost or construction cost less depreciation and

impairment losses.

Depreciation is computed on the straight-line basis over the

estimated useful lives of the assets as follows:

Buildings 40 years

Furniture, fixtures and equipment 1-10 years

Leasehold improvements are amortized over the terms of the

related leases or the useful lives of the improvements whichever is

shorter.

SOCIO-

ECONOMIC

FEASIBILITY

A. ECONOMIC 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 Carlos City or elsewhere for the purpose of cashing checques and

obtaining money will be minimized. Following this line of thought,

people may travel less and demand that local establishments upgrade

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.

Industrial loans will promote the growth of businesses in the

community. This in turn could lead to more employment opportunities.

Agricultural loans could lead to higher productivity through

improvements in farming practices.

B. SOCIAL DESIRABILITY

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 use a loan wisely bring confidence in all working people.

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 OPPORTUNITY

As for the bank, there will be a staff of at 6 persons, not including

the security guards. The tellers, bookkeepers, clerks and messenger

can be locally hired if qualified.

As for the city, the bank provides the ability, for small to medium

business entrepreneurs through loans, to put up the business, which in

turn creates jobs.

As for the agriculture sector, through education and

communication, will develop the consumer confidence that can fuel the

city’s economy thus creating more jobs. The agricultural community

will also benefit from having the capital to utilize more efficient means

of production such as mechanization, improved storage and handling

facilities.

LEGAL ASPECT

When starting a business, it’s crucial that the owner must be

familiar with the basics of business law. Most businesses legal

troubles are the result of unclear documents. 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. 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 Inspection clearance. The officer-in-

charge will then assess the building for architectural presentability,

structural stability, sanitary inspection and signage. Assessment and

Payment must be made and after that is the issuance of

Business/Mayor’s Permit.

Since the project is to establish a bank, legalities with the

Bangko Sentral must also be accomplished. The application for

authority to establish a bank should be completed before 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

General Banking Law, Section 21, “Banking Days and Hours” are,

“Unless otherwise authorized by the Bangko Sentral in the interest of

the banking public, all banks including their branches and offices 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.

Chapter 7 of Republic Act 7906, or An Act Providing for the

Regulation of the Organization and Operations of Thrift Banks, And for

Other Purposes, states exemptions which a thrift bank is legally

entitled to. Briefly, the exemptions are: 1) tax emptions; 2) exemption

from publication requirement; 3) exemption from notarial charges; 4)

exemption from registration fees.

For the proposed project, it shall be opened from Monday thru

Fridays, 9:00am to 3:00pm. However, employees are set to work from

8:00am to 5:00pm with a 1-hour lunch period.

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

Figure 1. Age Bracket of Respondents

5% 14%

25%26%

6%12%

12%

Below 20

21-30

31-40

41-50

51-60

above 60

No Answer

Figure 1 shows the age bracket of respondents. Twenty-six

percent of the respondents are aged between 41-50 followed by 31-40

years old, 25 percent. A total of 77 percent of the respondents can be

considered to be in the wage earner age.

Figure2. Gender of Respondents

29%

58%

13%

Male

Female

NO Answer

Figure 2 shows that 58 percent of those who answered the

questionnaires are female and 29 percent are male. Thirteen percent

did not specify their gender

Figrue 3. Civil Status of Respondents

57%

7%

23%13%

Single

Married

Widow

No Answ er

Figure 3 shows the civil status of the respondents. Fifty-seven percent

of those who responded are married and 23 percent are single. Seven

percent are widowed and 13 percent did not specify their status.

Figure 4 shows the bracket for the number of members in the

respondent’s family, 58 percent, 1-5 members; 20 percent, 6-10

members, and 22 percent did not specify.

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 researchers sought to determine if the respondents

belonged to the income generating body of Canlaon City. According to

this data 56 percent of the respondents belonged to the 10,000 and

below monthly income bracket. Even if a large portion of 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 that at least some if not most of the 10,000

peso and below income earners will also only 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 that even the lower income earning individuals may still have

the capacity to save. 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 Expenses of Respondents

44%

27%

18%

8% 3%

Below 5,000

5,001-10,000

10,001-15,000

Above 15,000

No Answ er

Figure 6 shows the monthly expenses of the respondents. The

researchers wanted to know the spending power of the residents of

Canlaon. Forty-four percent of the employed sector spend below 5,000,

twenty seven percent spend P5,001-P10,000, eighteen percent spend

P10,001-15,000 and 8 percent of the respondents spend P15,000 and

above.

Figure 7. Monthly Savings of Respondents

18

227

79

23 289

0

50

100

150

200

250

None Below 1,000 1,001-5,000 5,001-10,000 Above10,000

No Answ er

Series1

Figure 7 shows the monthly savings of the respondents. From their

monthly income, 227 respondents answered that they save below

1,000. 79 respondents save between 1,001-5,000. And 23 respondents

save between 5,001-10,000. There were 18 who answered none and

28 respondents did not specify their savings. The researchers sought

to establish that people still save money. This question also served to

determine the amount of savings of the sample population.

Figure 8. Exsisting Bank Account

60%

36%

4%

yes

no

no answ er

Figure 8 shows that 60 percent of the respondents already have an

existing bank account with other banking institutions outside Canlaon

City and thirty six percent don’t have bank deposits. The researchers

wanted to determine the percentage of those who avail of the services

of a bank and those who don’t.

Figure 9. Existing Banks

PNB

Land Bank

DBP

RB Guihulungan

EPCIB

BPI

RCBC

Union Bank

Victoria's Bank

UCPB

Allied Bank

RB Tanjay

Metrobank

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

46%

7%8%

4%

11%

8%

5%

5%2% 1%

Savings

Time Deposit

Checking Account

Utilities Payment

Loans

Credit Card

Remittances

Direct Deposit

Income tax Assistance

Wire Transfers

Portfolio Management

Figure 10 shows the products and services of the existing banks

which the respondents avail of. It shows that the bigger portion of

the pie goes to savings accounts deposits (46 percent). Eleven

percent avail of the loan services of their banks.

Figure 11 shows the current problems the respondents

encountered with their banks. Twenty-six percent indicated that

the main problem is the low savings interest rates that their

current bank offers. Eighteen percent indicated distance to their

banking institution was a problem.

382

2

0

100

200

300

400

Yes No

Figure 12. Respondents in Favor of DCDB Branch

Yes

No

Figure 12 shows the number of respondents in favor of the

establishment of a DCDB branch in Canlaon City. Only 2

respondents are not in favor. One respondent who answered No

said that the bank would be a future competitor of the office the

respondent is currently working for.

Figure 13. Ideal Location

City Proper/Centre

Mabigo Midtow n

Near Public Market

City Hall

Near Police Station

EXODUS Ave.

Near the School

Old Ceres Terminal

Bautista's Estate

Anyw here Within the city

Along National Highw ay, 7

0 20 40 60 80 100 120 140 160

Series1

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 proper or the city center. This is actually

misleading as Mabigo Midtown and City Proper are the same place. In

effect almost 60 percent of the population prefer the midtown area for

the location of the bank branch. The group are recommending a site

outside of that area due to price considerations. However, the

researchers 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 the respondents wants to avail

2.96%7.78%

2.36%4.24%

6.31%9.66%10.94%

9.95%5.32%

3.65%

35.17%

1.58%

0.10%

Savings Account

Time Deposit

Remittances

Wire Transfers

Checking Account

Utilities Payments

Direct Deposits

Portfolio Management

Loans

Credit Card

Income Tax Assistance

ATM

SSS Pensioner

Figure 14 shows the products and services that the respondents would

like to avail of if the plan for a DCDB branch in Canlaon 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 Utilized By Respondents

47.9%

20.2%

22.9%

7.3% 1.7%

SSS/GSIS

Paw nshops

Credit Coop

Informal Lending

Others

Figure 15 shows the other financial institutions utilized by the

respondents. These institutions are also considered as competitors of

the bank because they offer similar products and services such as

small loans and cashing of cheques. The chart shows that 47.9

percent of the respondents avail of services from SSS/GSIS. 20.2

percent 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. Respondents who would avail of DCDB products and services

YES99%

NO1%

YES

NO

Figure 16 shows the percentage of the respondents who would avail

of DCDB’s product and 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) There is a demand for a bank in Canlaon City. Only two of 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

significant portion of the community saves. Specifically, 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

establish a savings account with the proposed bank. 10.94

percent would put their money in a time deposit account, and

9.95 percent would avail of bank loans.

4) The government’s monthly revenues are as follows:

From taxes, licenses, and permits: P14,224,342.32

From National Government Subsidiaries: P44,574,756.00

From other sources: P1,233,522.76

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 a board resolution from the local government

designating the proposed bank as its’ official

depository.

2) Obtain approval from the Banko Sentral Monetary 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 the site of the proposed branch. Later when

feasible, buy the surrounding lots for future expansion

including after business enterprises.

4) To insure the continued support of the local government 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 years of operation the bank should:

a) Be conservative with its loan exposure

b) Maintain a level of liquidity at or above the industry

average

APPENDICES

Appendix A

Survey Questionnaire

SILLIMAN UNIVERSITY DUMAGUETE CITY, 6200

PHILIPPINES

Dear Sir/Madam:

This is a letter of introduction from the students enrolled in BA240 (Feasibility Study) of the Masters Degree Program in Business Administration of Silliman University.

In partial fulfillment of our academic requirements, we are preparing a feasibility study to be conducted in your area.

Specifically, the study aims at determining the feasibility of establishing a branch of the Dumaguete City Development Bank (DCDB) in Canlaon City, Negros Oriental. While this study is academically driven, this is a 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 local government of Canlaon City, and from the public and private sectors in your area. As representatives of both our 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 the attached questionnaire thoroughly. All 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. FutalanProfessorMBA Program, CBASilliman University

THANK YOU FOR THE TIME AND EFFORT YOU SPENT IN ANSWERING THIS 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 please

indicate the amount __________

How much are your monthly expenses? _____ below P5,000 ______ P5,001-P10,000 _____ P10,001-P15,000 ______ above P15,000 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:______________________

______ No With what financial entity do you bank?_________

3. What kind of services do you avail of from your bank? ____Savings deposit ___ Time Deposit ___Checking Acct

____Utilities Payments ___Loans ___Credit Card(s) ____Remittances ___Direct Deposits ___Income Tax 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 you in favor of Dumaguete City Development Bank (DCDB) opening a branch in Canlaon City? _______YES

______ NO

If no please state your reasons__________________________________________

7. What kind of banking services wound you want to avail of?_____savings accounts _____checking account _____loans_____time deposit _____utilities payments ____credit card(s)_____remittances _____direct deposits ____wire transfer_____income tax assistance _____portfolio managementothers______________________________________________

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 in Canlaon City, would you readily avail of its services? _______YES __________NO

10. Please write your comments and suggestions on the proposed 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.

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.

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.

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.”

There should be low interest rates imposed, fast release of

transactions, and not too many or difficult requirements to

procure.

I would like to suggest the following:

1. High interest in savings account

2. Accommodating staff

3. Offer quick loans release

4. Must have good location and parking area

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!

Make the project soon. It will provide us convenience, the ability

to manage our finances and improve the economic situation in

Canlaon City.

Place ATM Facility

Please hurry.

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

specifically.

Good idea but you need to study it further.

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

Please respond and just do it!

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

DCDB branch.

Please construct your building as soon as possible.

I hope that this project will push through.

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

We need to have a bank in Canlaon City.

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

Here are my suggestions:

1. Have easy access on any transaction

2. Have accommodating staff and personnel

3. Must be located at the heart of the city

I am highly in favor of the proposed project.

We will be very happy if your proposed project will be

materialized.

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

Canlaonians.

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.

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.

Happy to have one because not even one bank is available in

this city.

This proposed project is very good.

The project proposed is very good especially here in Canlaon

City. We need a bank here so please make it true.

Here in our place I agree that this city should have a bank in

order that people here can easier deposit their money.

It is ideal to establish a bank in the city since at the present the

city has no banking institution.

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.

The sooner the better.

Do it now!

ASAP.

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

bank.

Do good service.

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

City.

Very good proposal.

ASAP.

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”

To improve Canlaon City.

I suggest that you will open a bank.

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

Hoping you will open your branch here ASAP.

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

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.

The project of pulling up a branch in Canlaon City is very

beneficial to the constituents considering that as of the moment

there is no available bank at the place.

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

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

saving accounts.

It is a good project; if this will be materialized may be most of the

depositors will no longer go to San Carlos City where banking

institutions are.

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

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.

I suggest that the proposed project must be implemented

immediately, because we need vary badly the bank in Canlaon

City.

I personally and urgently request for the implementation of the

proposed project for the benefit of the constituents of Canlaon

City.

I suggest that you will open or install an ATM machine so that our

problem in going to San Carlos City will be solved.

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 Canlaon City and later the financial transactions of the

constituents of the city and barangays and the neighboring

towns as well.

Early action for this project.

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, Guihulugon and Dumaguete and we need more or

less than 1 day of traveling and transacting.

”needed the soonest possible time”

Afraid of bankruptcy especially on private banks.

I want immediate action if ever…..

Hope it will rise soon.

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.

Hope that this Feasibility Study will be materialized as early as

possible.

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

banking business.

It would be nice if the said proposed project will push through so

it could be convenient for the people here and have their saving

deposits. They don’t have to travel to San Carlos to deposit so

with the city government as it would be less risky.

Good project proposal. Salamat!

I hope this will be materialized.

Madaliin ang pag-open kasi wala kaming banko rito.

Easy to deposit.

This proposed project is really needed here in Canlaon City

because we don’t have any existing bank.

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

City.

This proposed project is needed in our locality.

If in case BSP will grant DCDB an authority to oparate in our area

business will improve their sales, many supply increases and

peoples way of life eases.

We will be very happy if you will open here in our city because

we really need a bank here.

Give low interest for loans.

Hoping that this proposed project will be operating soonest.

The P300.00 back and forth fare is a lot of money in 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.

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.

Hanep because no bank in Canlaon City.

It’s nice/good to have a branch here in Canlaon and 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.

This would benefit the residents of Canlaon and safety of keeping

code.

Can it be as soon as possible? Please!

I hope and pray that this proposal will come true to this city

because its very hard for us Canlaonians.

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.

As early as possible.

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.

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.

I suggest that the proposed project will be implemented as soon

as possible.

Canlaon City is the city with no banking institution where in

people are looking forward.

For immediate implementation of the project.

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.

I’m very happy if DCDB will open here in Canlaon City for the

convenience of the people.

It’s okay to have a bank here in Canlaon so it’s easy, especially

for the students on their allowances.

Big investors are hesitant to come to Canlaon for no 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.

It should be at the city center.

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 or city should have a bank for the safety or their

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 starting, advertisement and promotion must be given

for barangays.

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.

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.

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

help Canlaon City in economic progress.

I’m in favor of DCDB opening a branch in Canlaon City because

there is no existing bank here.

Include assistance to farmers with affordable interest rate.

Give agricultural loan assistance to Canlaon City farmers with an

affordable interest rate.

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