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COMMERCIAL LENDING PROCEDURE EFFICIENCY

AND EFFECTIVENESS ON FINANCIAL STABILITY:
A MANAGERIAL PERSPECTIVE AT FIRST
ISABELA COOPERATIVE BANK

A Capstone Research in Managerial Economics

Presented to the Faculty of
College of Business, Entrepreneurship
and Accountancy

In partial fulfillment
of the requirements of the course
Managerial Economics

ARNEL P. RINGOR, Ph.D

COURSE FACILITATOR

By:
Marry Faith F. Ayon-Ayon
Kyla I. Balisi
Janine R. Baliuag
Angeline R. Bartolome
Beverly S. Baturi
Edon Carlo N. Castro
Andrea D. Cudiamat
Queenie T. Cuntapay

May 2019
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CHAPTER I

Within this chapter, the background and objectives of the study are presented. It is

composed of the (1.1) statement of the problem and the (1.2) background and

context of the study, and (1.3) significance of the study. From which it provides

an introduction to cooperative banks most specifically to the First Isabela

Cooperative Bank or FICO Bank and an overview of the various deposit and loan

products they offer.

1. INTRODUCTION

1.1 Statement of the Problem

This capstone research sought to determine the efficiency and effectiveness of

commercial lending procedures of First Isabela Cooperative Bank Tuguegarao

Branch on its financial stability.

Specifically, this study sought to answer the following:

1) How does FICO Bank determine if a client is qualified for a commercial loan?

2) What are the procedures FICO Bank follows in lending commercial loans?

3) How do these lending procedures in commercial loans affect the operational

efficiency and profitability of FICO Bank?

4) What are the deficiencies of FICO Bank current lending procedures in

commercial loans?
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1.2 Background, Context, and Significance of the Study

Cooperative banks are small financial institutions focusing on lending-based retail

banking to cooperatives and their members; providing banking, financial, and

credit services. Whereas contrary to typical banks that are owned by investors,

cooperative banks are owned by its customers and are utilised by the members

among themselves. In which, it is a great banking alternative because (1) they

provide credit at a lower rate and (2) protect the rural population from the

monopoly of money lenders. Moreover, cooperative banks primarily have a goal

to provide affordable financial services and promote financial inclusion. They

focus on supporting local economic development and activities, like to small and

local businesses and to farmers in the agricultural field, through savings and credit

facilities. This helps them accumulate capital which in turn, stimulates the growth

of the economy of the communities they serve.

Specifically, The First Isabela Cooperative Bank (FICOBank) is renowned as one

of the pioneering cooperative banks in the Philippines with a rich history.

Founded 47 years ago by two cooperatives and 47 pre-cooperatives (samahang

nayon), FICOBank originally catered to farmers with limited resources and

banking access. Recognized for its significant progress, remarkable growth, high-

quality performance, outstanding contributions to countryside development, and

adherence to the strictest banking standards, FICOBank has received accolades

from reputable award-giving bodies. These include being honored as the

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Outstanding Cooperative Bank in the Philippines (Gawad PITAK Winner, Gawad

PITAK Hall of Famer, and First Ginintuang Gawad PITAK Awardee); the

Number 1 Cooperative Bank in the Philippines in terms of financial performance;

a Gawad PILAK Awardee (Pagkilala sa mga Institusyon na Lumingap sa mga

Adhikain para sa Kaunlaran); an "AA" EAGLE Achievement Awardee in

microfinance operation; a Producer of Microentrepreneur of the Year (MOTY)

Awardee; and a Nominee for the Asian Banking Awards.

Figure 1. First Isabela Cooperative Bank Logo

The visual identity of FICOBank is marked by distinct elements such as its logo

and the colors of gold, blue, white, and a red background. These elements

symbolize leadership, strength, growth, excellence, credibility, and success

associated with the bank. Furthermore, it represents the mass-based ownership,

democratic structure, and the mission of FICOBank to promote the economic

prosperity of the people.

Over the years, FICOBank has grown from a micro cooperative rural bank to a

significant cooperative bank boasting a resource base exceeding Php5.51 billion

as of the end of December 2022 and becoming one of the leading cooperative
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banks in the Philippines (Banks Philippines, 2023). They were also ranked in

eighth place among the Rural and Cooperative Bank Groups in the Philippines as

of December 2023 with total assets of 5.78 billion (bsp.gov.ph).

FICO Bank provides diverse financial services and products. The firm is engaged

in deposit-taking and lending operations. Primarily involved in financial

intermediation among various sectors, they cater to farmers, fishers, their

organisations, micro, small, and medium entrepreneurs, rural, urban, and overseas

workers, as well as other financial consumers. Additionally, they offer money

transfer, remittance, cash dispensing, and fee-based services to the general public.

Their wide range of innovative financial products, services, and complementary

development support solutions are designed to meet the diverse needs of their

diverse clientele effectively.

To be specific, here are some of their deposit and loan products, as well as other

services they offer:

Deposit Products Loan Products

Basic Deposit Account. The Agricultural Loan. Its purpose is to

aforementioned is a principal aid farmers, fishers, poultry and

passbook-based, interest-bearing livestock breeders, as well as farmers'

deposit instrument with a fixed cooperatives in increasing their

interest rate that permits withdrawals productivity by financing agricultural

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at any time. production and related activities.

Ordinary Savings Account. The Commercial Loan. This product is

described product is a standard tailored to assist small and medium-

passbook-based, interest-earning sized entrepreneurs across key sectors

deposit offering with a stable interest of the economy in growing or

rate allowing withdrawals at will. maintaining their businesses, including

acquiring land, constructing or

improving buildings for business

operations, and obtaining capital for

business expansion or startups.

Checking Account. A demand Jewelry Loan. A consumer lending

deposit product that offers reliable product of FICOBank, supported by

and secure features to provide account acceptable forms of jewelry as

holders with a worry-free way to collateral.

manage their financial obligations.

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Time Deposit Account. This deposit Multi-purpose Loan. A loan offering

product is supported by a Certificate from the Bank intended to extend

of Time Deposit without a fixed financial support to clients for various

maturity date, generating interest at a purposes addressing their productive

rate agreed upon by the Bank and the and/or providential requirements.

account holder.

Other Services:

 Inter-Branch Deposit and Loan Payment

 Utility Bills Payment Service

 SuperPOS ATM Withdrawal

 PERA HUB Remittance

 PERA HUB GCASH-in

 CashKO Bayadak Express

 Project i2i Remittance

Throughout 2022, Commercial Loans, Agricultural Loans, and Jewelry Loans

remained the primary contributors to the Bank's loan portfolio, accounting for

approximately 13.79 percent. These popular loan products resulted in amounts of

Php2.06 billion (with 2,071 accounts), Php631 billion (with 8,508 accounts), and

Php1.14 billion (with 34,497 accounts) respectively.

Indeed, FICO BANK has established its position in the competitive market by

relying on lending activities, particularly commercial loans, as its primary source

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of income. However, commercial lending is a complex process that involves

multiple stages and poses several challenges and risks to lenders and if these risks

are not properly addressed it would lead to inefficient and ineffective operation

that would later result in losses (guys rephrase this part) . These risks can be

broadly categorized into credit risk, liquidity risk, operational risk, and market

risk. Among these, credit risk is one of the most significant and common risks that

lenders face. Credit risk refers to the possibility that the borrower may fail to pay

the interest on time or worse repay the principal itself, leading to financial losses

for the lender. For cooperative banks, credit risk is a significant concern as they

rely on the deposits of their members to fund their lending activities. If a borrower

defaults on a loan, it can lead to a chain reaction of defaults and withdrawals,

leading to liquidity and solvency issues for the bank.

Another risk is the unending economic fluctuation; periods of expansion and

contraction due to factors such as gross domestic product, interest rates, total

employment, and consumers' spending. At the point of expansion, the economy is

stable, people have buying power, and the state is at a level of productivity. On

the other hand, the point of contraction is the complete opposite of the expansion

as the economy is in distress. In effect, economic fluctuation greatly affects the

pricing strategy and decision-making of the cooperative banks regarding their

loans as it can affect the level of collectability of the debt as it decreases or

increases the debtor’s income or increases or decreases the value of the collateral.
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Rules and regulations play a crucial role in promoting and maintaining fair

competition in the market. They serve to prevent anti-competitive behavior,

ensure market integrity, and prevent manipulation of commodity prices. These

regulations are essential for creating a level playing field for all market

participants, which ultimately benefits consumers and the economy as a whole. In

the context of cooperative banks, compliance with these regulations is especially

important. Cooperative banks engage in commercial lending activities, and

compliance with these regulations is vital to ensure that these activities are

conducted in a fair, transparent, and ethical manner. Non-compliance with these

regulations can result in significant consequences for the bank. Offenses and

penalties can lead to substantial cash outlays, which can harm the bank's financial

health. In addition, non-compliance can also damage the bank's reputation, which

can have long-term effects on its ability to attract and retain customers. Therefore,

cooperative banks must prioritize compliance with these regulations and also play

a vital role in the decision-making of the cooperative banks.

Lastly, over the past few years, the banking industry has witnessed a significant

shift in the way it functions, thanks to the advent of technology. While technology

has brought in a lot of positive changes, including streamlining of transactions,

efficient data collection, and faster communication within banks, it has also

introduced new threats that can have dire consequences. The rise of cyber-attacks

and potential vulnerabilities in banking systems is now a major concern for the
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industry. Banks must be aware of these risks, as a single attack can result in the

loss of millions of dollars or sensitive customer data.

With that said and considering FICO BANK’s performance and accomplishments,

we, the researchers, have identified FICO Bank as the optimal subject of our

study which aims to know how effective and efficient cooperative banks are in

handling risk and problems relating to commercial lending.

1.3 Significance of the Study

The findings of this study will be of great benefit to the following:

The Researchers. The results will provide knowledge and insights to the

researchers regarding the strategies, procedures, and policies of FICO Bank. It

will also give them an extensive understanding of cooperative banks and how

managerial economics is applied to such agencies.

FICO Bank and other Cooperative Banks. This study offers valuable insights

that can be used to enhance and improve their operations. The study of the

efficiencies and deficiencies of lending processes will help them utilize their

strengths and determine areas of improvement.

Customers. The findings will serve as their guide throughout the lending process.

This will give them information about the step-by-step procedures followed and
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the manner of how the bank handles their credits and deposits to avoid future

conflicts.

Small and Local Businesses. This study can serve as a point of consideration

upon choosing possible resources of funds and support mechanisms for small and

local businesses looking for a starting or an additional capital. This will also give

them information on how to apply for commercial loans and what requirements

are needed for it.

Future Researchers. This research can be used as a point of reference to those

that are conducting further studies related to commercial loans on cooperative

banks.
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CHAPTER II

2.1 Literature Review

This section presents excerpts, citations, pieces of information taken from

readings, articles, and previous studies conducted in relation to the present study;

all of which shed light and guidance in setting the direction for the researchers to

make this endeavor meaningful and significant.

2.1.1 Cooperatives

Cooperative banking entails the formation of small financial entities by a

collective of individuals with the aim of meeting the financial requirements of

their local community. As per Clark et al. (2018), cooperative banks play a crucial

role as credit establishments in fostering the sustainable growth of regional

economies. They are widely acknowledged for their contributions to economic

advancement, as they offer a range of services beyond mere deposit-taking,

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lending, and credit provision. Cooperative banks also extend educational

opportunities to their members and implement community development initiatives

("Differences Between," 2023).

Goyal (2021) emphasized that non-profit entities, such as cooperative banks, do

not view profit generation as inappropriate. However, their primary emphasis lies

on customer value rather than revenue. This distinctive characteristic of

cooperative banks sets them apart from other types of financial institutions.

Where in the main contrast between cooperative banks and commercial banks is

that the latter is profit-driven and generates revenue through the imposition of

higher interest rates on loans.

Cooperative banks provide loans at lower interest rates, encourage the habit of

saving among customers and help people to start their own business (Kushi,

2022). He also highlights that that type of bank offers services like deposit

accounts such as savings and current account, safekeeping of valuables (locker

facility), loan and mortgage facility to the customers.

Furthermore, Singh (2024) also outlined the operational functions of cooperative

banks. These societies are primarily established to extend loans to their members,

typically at favourable interest rates, to enable the acquisition of essential

resources and other necessities. Moreover, they offer a range of banking services,

including deposits, loans, and other financial products, to their members. In

addition to financial aid, cooperative banks also provide ancillary services like
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crop insurance, storage facilities, and assistance with marketing strategies, all

aimed at assisting farmers in the effective operation of their agricultural ventures.

Lastly, cooperative banks play a pivotal role in promoting and funding various

agricultural undertakings, such as crop insurance schemes and input supply

services.

Singh (2024) also described cooperative banks as a great alternative source of

credit due to the lower interest they demand from loans and how this saves the

lenders from the monopoly of profit-inclined banking organizations.

Supplementary to this, Singh (2019) emphasized that cooperative banks “works

for service motive” like for financial inclusion and for community service.

Additionally, Singh (2017) stated that commercial banks focus on

commercialization. Thus, cooperative banks protect the population from the

monopoly by working for the community instead of taking advantage of people's

needs for an advantage of their own.

As per interest rates, Singh (2017) also stated that cooperative banks provide at

least 2% lower interest rates for loans compared to the Reserve Bank of India.

Locally however, Tonik Digital Bank, Inc. listed that cooperative banks only

demand 0.5% to 3% interest on loans per month depending on the type of loans

granted (“How To Get Loans,” 2022). Meanwhile, commercial banks’ rates on

loans follow the prevailing market interest rates as listed by First Circle Growth

Finance Corp. in 2023. From which, the Bangko Sentral ng Pilipinas have set a
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benchmark of 6.50% interest rate as of 2024. In addition, unsecured term loans for

businesses could go up to 12% per annum for commercial banks as again listed by

First Circle (A Comparison of 20+ Business Loans in the Philippines, n.d.).

2.1.2 Commercial lending

Commercial Loan

A commercial loan is a type of funding arrangement that a business can have with

a financial institution, like a bank. They’re typically meant as debt-based funding

to support the business’s financial needs. It can be utilized to cover operational

expenses or finance significant capital investments, offering additional financial

support when required. (Gong, 2023)

Hottenstein (2022) defined commercial loan as a form of financing that comes

with specific conditions tailored for businesses. These financial arrangements

enable businesses to access funds for various needs such as daily operations,

growth initiatives, or other business-related objectives. Additionally, companies

have the option to utilize commercial loans for refinancing existing debt

obligations.

2.1.3 Advantages of commercial lending

Sheykin (2023) had well explained the advantages of commercial loans which are

lower interest rates, increased lending limits, and tax advantages.

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Commercial loan interest rates are usually more favorable compared to other

financing options because these loans are backed by collateral like real estate or

inventory. This reduces lenders' risks allowing them to offer competitive rates.

With lower rates, businesses can borrow money at reduced costs, giving them

more capital for investment in their operations.

Commercial loans generally offer businesses access to a substantial amount of

capital compared to alternative financing options. Numerous commercial lenders

extend loan limits reaching several million dollars, enabling businesses to access

significant funds for various purposes, including funding major projects,

acquiring equipment, and more.

Businesses might qualify to deduct the interest payments on commercial loans,

leading to significant tax savings and potentially freeing up more capital for

investment in different business endeavors. Furthermore, they could potentially

defer or even avoid taxation on capital gains resulting from commercial loan

transactions.

Turner (2023) delves into the advantages of commercial finance, highlighting its

flexibility and various benefits for businesses:

Firstly, commercial finance is depicted as a viable option for fledgling businesses

lacking the assets or track record typically required by traditional banks. This

flexibility in lending criteria opens up opportunities for small businesses to access

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funding tailored to their needs, with commercial finance brokers like Funding

Guru providing personalized support.

Moreover, commercial finance is portrayed as more forgiving towards businesses

with adverse credit histories. Unlike banks, commercial lenders are depicted as

willing to assess businesses based on their future potential rather than penalizing

them for past financial difficulties. This forward-looking approach involves

analyzing business plans and current opportunities to make funding decisions.

Additionally, Turner explores the diverse range of finance solutions available

through commercial finance brokers, including invoice financing, bridging loans,

asset refinance, sale-and-lease-back arrangements, and crowdfunding. This array

of options provides businesses with the flexibility to choose the most suitable

financing method for their specific needs.

Furthermore, commercial borrowing is presented as offering lower interest rates

compared to traditional lending avenues due to market competitiveness. This,

coupled with quicker access to funds and shorter application processes facilitated

by commercial finance brokers, underscores the efficiency and accessibility of

commercial finance for businesses.

Overall, Turner emphasizes how commercial finance offers flexibility,

forgiveness, diversity, lower interest rates, and streamlined processes, making it a

favorable choice for businesses seeking funding solutions tailored to their unique

circumstances and objectives.

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2.1.4 Effect in profitability

The expansion of banking services has been undeniable over the years. It is clear

that business lending remains a crucial component of bank activities and financial

institutions. A comprehensive study on European commercial banks demonstrates

that in every country, both firm and household loans consistently surpass 50

percent of bank assets, indicating that lending primarily drives the bank's

profitability. The study's empirical results indicate that corporate and commercial

lending significantly contributes to bank profits, specifically the return on equity.

However, whether the bank is domestic or foreign does not seem to influence the

contribution of business lending to profitability. Instead, the size of the bank plays

a significant role. In large banks, business lending contributes a smaller rate of

return to equity, while in small banks, it contributes larger profits due to their

higher profit potential and a higher fraction of their portfolios (Ekpu and Paloni,

2016).

Al-hawatmah and Shaban (2020) explained that apart from the lending service

itself, the lending policies applied to the lending procedures also contribute to the

bank's profitability. These policies contain various elements that may help

increase the profitability rate, or they may consist of different rules and

regulations regarding risk management to avoid such risks, which help in

increasing the bank's profit. The study concluded that the lending policies

indicated relatively compensate with each other, filling up the gap of the other,
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enabling the complete conveyance or adoption of such policies for risk

management purposes and maintaining efficiency and effectiveness of the lending

policies. Nonetheless, these policies are essential for achieving the anticipated

financial returns in line with the strategic objectives established by the

management. They are critical in ensuring the effectiveness of the credit portfolio,

thereby impacting the overall profitability of banks. As such, the study advocates

for the creation of effective and efficient lending policies, as they are pivotal in

improving lending processes and minimizing credit risks, ultimately resulting in a

boost in bank profits.

2.1.5 Effect in the Economic Growth

The banking sector plays a pivotal role in the economy of every country,

particularly regarding its lending capabilities. Banks utilize funds and assets to

provide loans to various entities, including institutions, individuals, and the

government. In the provision of lending offers and services, banks establish

lending rates, which are considered pivotal in influencing economic growth and

have the potential to enhance the economic landscape of a country, impacting

consumption and investment. However, this paradigm does not universally hold

true, as evidenced in certain countries, notably Ghana. In Ghana, both in the short
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and long term, an increase in lending rates has been associated with a decrease in

economic growth. This phenomenon can be attributed to the fluctuation in lending

rates, resulting in instability and discouraging borrowing, ultimately leading to

reduced investment and economic growth (Buabeng et al., 2021).

However, in a study conducted by Mamman and Hashi (2014), it was discovered

that bank lending in Nigeria has a substantial impact on economic growth, as

evidenced by the high variation observed in their empirical results. On the other

hand, according to Awad and Karaki (2019), their research findings suggest that

bank lending does not directly impact economic growth. Instead, they argue that

economic growth is the driving force behind bank lending.

2.1.6 Lending procedure

Credit Evaluation and Decision

Evaluating a loan is the most crucial way of loan procedures. One of the factors in

assessing the loan for approval is the credit history of the client. It is used by the

institution in order to assess repayment ability of the client and profitability of the

loan. In assessment of processing the credit, a system called credit scoring system

is used. It is done by extracting the customer’s relevant information from the loan

application, evaluation of the customer's risk through a predictive model weighing

the payment behaviour by a score that measures the risk of the borrower and the

operation of the business. Credit scoring system is using statistical tools in

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transformation of relevant data into numerical measures in order to approve credit

applications. Credit scoring system promotes efficiency during the different

phases and activities of lending in order to decrease the probability of granting

bad loans. Sanchez and Lechuga (2016)

A client with no prior credit performance is one of the problems that the credit

institution faces when assessing loan applications. A soft computing technique

which is called Artificial Neutral Networks (ANN) is used in a study in evaluation

performance on loan. It is applied with simulation on unknown data networks

which considered parameters that influence problems and managed to forecast a

fair percentage. It is concluded that this tool is useful to support the judgement

and decision of the loan officers. The system is applicable in evaluation

application of loans when the customer has no prior credit performance history. It

has been trained with real historic data on client's behaviour and assets and can

predict non-performing loans. Makrygianni and Markopoukos (2016)

Francis (2017) encapsulated the influence of the credit assessment process on loan

repayments. It found out that in order to assess the credit risk of a loan advance,

the lending institution needs to check the borrowers' economic, legal, and

environmental situation. In addition, lending institutions should have sound credit

approval authorities, prudent credit practice personnel ought to have customer

relationship responsibility, and there is a need for credit monitoring so that the

bank appreciates the borrower's current financial status and monitors the
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prevailing financial situation affecting the country, like inflation. Credit

institutions should share information about the borrowers in order to make

informed decisions before the loan application is approved. A sound credit policy

should help improve prudential oversight of asset quality before loan approval.

There are credit policies that set the rules regarding who qualifies to be extended

the loan and who doesn't and specify credit. The study concluded that KCB Bank

must be engaged in credit approval to ensure client loan facilities are secured to

minimize credit loss.

2.1.7 Effect of Lending Practices on the Financial Performance of Banks

According to Maina (2016), lending practices significantly affect the financial

performance of commercial banks. Particularly, Know Your Customer

procedures, interest rates and credit policy guidelines.

KYC standards have been developed to safeguard financial institutions from

fraud, corruption, money laundering, and terrorist financing. The KYC process

entails various measures including verifying customer identity, comprehending

the nature of their transactions, confirming the legitimacy of the funds source, and

evaluating potential money laundering risks linked to customers (swift.com).

KYC procedures impact commercial banks' financial performance significantly.

They are crucial in safeguarding lending activities from fraud. Effective KYC

initiatives involve industry collaboration to share client information, enhancing

credit assessment and protecting institutions from fraud risks. Building

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relationships with authorities is essential for quick fraud detection response.

Adhering strictly to KYC procedures directly affects banking operations.

Commercial institutions showcase their commitment to due diligence through

comprehensive KYC procedures. Banking employees, especially in the credit

division, need a thorough understanding of KYC to streamline lending. Individual

staff members grasping KYC is pivotal for successful credit operations (Maina,

2016).

Interest rates have a significant impact on the financial performance of

commercial banks. Customer needs should be the primary consideration when

determining interest rates. Market volatility plays a crucial role in interest rate

fluctuations, directly affecting commercial banks' net turnover. During periods of

market volatility, there is typically an increased demand for borrowing, leading to

potentially higher financial performance through returns on credit income for

financial institutions. Additionally, an increase in interest rates may lead to

reduced borrowing volumes and income from individual borrowers, but could

result in higher income for those borrowing at higher rates (Maina, 2016).

Credit policy guidelines are critical for ensuring consistency in credit operations.

A weak credit policy can lead to substantial losses for commercial banks,

impacting their financial performance negatively. Regulators have the authority to

set common standards for credit policies, which can help in avoiding broader

industry consequences. Consistent implementation of credit policy guidelines is

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essential for enhancing the efficiency and competitiveness of lending operations

(Maina, 2016).

2.1.8 Efficiency

With the use of the stochastic frontier model to interpret the collected data from

different cooperative banks, we found that both cooperative banks from

Switzerland and saving banks from Norway and Sweden have a high level of

efficiency. (Anghel et al, 2015).

Moreover, according to Procedia Economics and Finance in their study on how

banks in the Czech Republic attain efficiency, the result shows liquidity risk and

riskiness of portfolios had a positive impact on banking efficiency. The level of

banks’ capitalization had a positive impact on the banking efficiency model with

constant return of scale. Additionally, Banks with a higher ratio of loans to

deposit, higher ratio of equity to total assets, or lower value of ROA were more

efficient than other commercial banks in the Czech banking sector.

On the other hand, studies in certain countries show several factors that cause

inefficiencies in the operation of banking sectors. The main source of inefficiency

is bad and doubtful debts, followed by the inefficient use of fixed assets and labor,

respectively. The inefficiency level of bad and doubtful debts was at its highest in

2009, gradually decreasing to its lowest in 2014, but again increasing in 2015 and

2016. This finding justifies concerns over irresponsible lending and the risk of
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bad debts despite their improvement after the global financial crisis (GFC) in

2008. The results also support the view that Australian banks perform efficiently

in undertaking their core business activities of attracting deposits and lending

money. (Moradi-Motlagh & Jubb, 2022)

In relation, cooperative banks should consider cutting their cost yet still ensuring

to operate effectively and efficiently. To achieve this, they must consider factors

of GDP growth, and practice proper lending procedures such as secured lending

and strict profiling of existing and potential clients to help them be exposed less to

risks such as non-collection of principal and interest, and write-off of receivables.

2.1.9 Deficiencies

Shuya and Sharma (2018) enumerated problems that cooperative banks encounter

throughout their procedures, such as the uneven distribution of borrowers and

supervision problems. They have found that there were borrowers who were

dishonest and unfaithful during the evaluation of the projects of the borrowers,

which makes it hard for the bankers to assess and analyze the benefit of their

loans. They also mentioned the misutilization of the funds acquired from the

loans, wherein the funds are used for purposes other than their original intention.

This becomes a major cause of non-repayment problems.

Shuya and Sharma (2018) also added that the lack of human resources and

branches of cooperative banks is a factor that slows down the lending processes.
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They observed that the limited branches could not provide for all of the areas

covered.

In another study, Sushmitha and Nagaraja (2019) also identified non-performing

assets as a major problem faced by cooperative banks in India. They defined it as

the principal or interest amount overdue for 90 days. Additionally, Sarkar and

Karak (2018) studied the effect of non-performing assets on the performance of

Burdwan District Central Co-operative Bank Ltd. in India and found that the non-

performing assets and total assets of the cooperative have a high positive

correlation.

Relatively, Singh (2024) also discussed the problems of cooperative banks with

regards to loan overdues: both on short-term and long-term credits. Such that, the

overdues in long-term loans have almost severely damaged land development

banks in 9 states of India.

2.2 Theoretical Framework

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This capstone research explains and highlights First Isabela Cooperative Bank

(FICO BANK). The researchers put essential three variables that affirm its

efficiency in commercial loans and supporting its clients financially.

First, the application of the client in which the requirements are being submitted.

The lending standards and policies of the entity, the terms and conditions of the

loan agreement, and the purpose of the loan are stated. These variables fall into

the Theory of Elaboration Likelihood Model by Richard Petty and John Cacloppo

in early 1980. According to ELM, people are more convinced when thinking

thoroughly about detailed information. Therefore, providing the creditor a number

of relevant facts such as personal information, financial statements, projections,

assets, guarantees and the manner in which the loan will be used for the lender to

consider the loan application. Relevant information is essential for the lender for

assessing the capability of the borrower to repay the loan. The terms and

conditions of the loan are also stated to inform the borrower about the contract. In

addition, lending standards and policies are implemented by the company in

approving the loan.

An application review is a stage of first assessment of whether a client will be

qualified for a commercial loan or not. Profiles and backgrounds of the clients are

included in this process, as this may help when evaluating the potential risks

associated with the loan, including the borrower's financial stability and viability.

A risk assessment is the process of identifying possible hazards or threats that

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may occur when venturing into a commercial loan. These variables fall into the

theory of the Five C’s of Credit which stands for Character, Capacity, Capital,

Collateral, and Condition that are introduced by the banking industry. Segal

(2023) outlines five key factors that lenders may consider in evaluating the

creditworthiness of a borrower based on the 5 C's of credit.

The first C is character, which gathers the credit history, reliability, and

trustworthiness of a borrower. Second is the capacity that assures the borrower to

have sufficient cash flow to meet repayment obligations. Third is capital which

assesses the borrowers’ net worth and financial stability. Fourth, collateral that

provides lenders with a form of resource in case the borrower defaults. Lastly, the

conditions encompass broader economic and industry-specific factors like interest

rates, market conditions, the regulatory environment, and the purpose of the loan.

This theory, provided by the banking industry, was used as their framework tool

for assessing the risk associated with extending credit to a particular borrower and

making informed decisions about loan approval and terms. It is also possible to

assess a borrower’s creditworthiness and ability to repay a loan.

Lastly, establishing effective and efficient commercial lending procedures for

financial stability. This variable falls into Scientific Management Theory

(Taylor,1909) for both business and employees to enhance efficiency and achieve

maximum prosperity. As seen on the previous variables, it is important to have

harmony between the lender and borrower. The employees must perform the best
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of their abilities and responsible training in assessing the borrower's capability

and borrower's compliance to the terms and conditions the company provided.

2.3 Conceptual Framework

Input Process Output

a. Application
a. Profile of Review and
clients Evaluation
b. Risk Assessment
b. Lending c. Loan Structuring
Standards or and Efficiency and
Effectivity of
Policies Disbursement
Commercial
terms loans of
c. Terms and
d. Credit Financial
Condition of Decisioning and Stability
the Loan Approval
e. Documentation
d. Purpose of the
and Preparation
Loan of Legal
Documents

Figure 2. Conceptual Framework

This section outlines a structured Input-Process-Output (IPO) model to provide a

general schematic diagram that shows the underlying variables present in the

study.

As shown in the diagram, the input involves:

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a. Loan Application of the Clients: Personal and business information of the

borrower including financial information.

b. Lending Standards and Policies

c. Terms and conditions of the Loan Agreement

d. Purpose of the Loan: The detailed plan of how the funds will be used.

The process entails:

a. Application Review and Evaluation

b. Risk Assessment

c. Loan Structuring and Disbursement terms

d. Credit Decisioning and Approval

e. Documentation or Preparation of Legal Documents

Through the integration of various inputs and processes, the expected outcome is

to establish effective and efficient commercial lending procedures for financial

stability.

CHAPTER III
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Within this chapter, the research approach, the type of research design and the

processes employed while conducting the research were described. It also

includes the steps upon which the collection of data was administered.

3.0 METHODS

This capstone project aims to examine the efficiency and effectiveness of

the commercial lending process in relation to the financial stability within the

operations of the First Isabela Cooperative Bank (FICOBANK). This

investigation will be carried out by utilizing a qualitative research approach

combined with a descriptive research design. In collecting the data, the

researchers conducted a courtesy visit to seek the permission and approval of the

OIC of the fico bank as the subject of the study. After which, the researchers

formulated a series of questions and conducted a face-to-face interview with the

manager of FICO BANK situated along Maharlika Highway, Zone 1, Tanza,

Tuguegarao City, Cagayan.

CHAPTER IV
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4.1 INTRODUCTION

Within this chapter, the analysis and interpretation of the research findings are

presented. The gathered data was scrutinized and explained in accordance with

the study's objective, which aimed to assess the efficiency and effectiveness of

FICO Bank's commercial lending procedures on its financial stability. The chapter

is structured with Section 4.2 focusing on results and Section 4.3 concentrating on

discussion.

4.2 RESULTS

This study was conducted to determine the commercial lending procedure

efficiency and its effectiveness on financial stability of First Isabela Cooperative

Bank. In collecting the data, the researchers conducted a courtesy visit,

formulated a series of questions and conducted a face-to-face interview with the

manager of the said bank.

Lending is the main source of the bank to generate its profit. It has a Business

Development bank for the continuous development of the loan products and

processes with the approval of the higher management and dissemination of any

changes through the issuance of a memorandum to operations.

A business must be established for at least a year and a field officer will visit the

said location of the business. A good credit standing of the client when it comes to

handling the checks. It means that the client has no record of bouncing checks.
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The collateral that can cover the approved credit loan. These are factors that the

bank considers when the client is qualified for the commercial loan.

FICO bank is guided by the policies and procedures set by the bank. The

employees are centralized of the approval beyond the set amount of the manager.

First is the submission of the basic requirements of the client. Next is the

collateral appraisal and validation of the fieldman to process the recommendation

of the loan. The validation of the fieldman is a crucial procedure wherein it is the

determination if the client passes the credit evaluation.

To avoid the non-payment of the loan, the bank has monitoring procedures that

the client also follows. The bank made sure that upon release, the client was

informed enough about the obligations through an orientation about the

corresponding penalties and past due interest. One month before the due date, the

bank will remind the client about the due and once the loan was not paid past its

due, visitation and issuance of notices were made until such time the client will

settle the payment. In the monitoring branch, an account monitoring report was

established to keep track of the visitation and the updates of the account. There is

a certain number of days for every issuance of notices and if the time comes that

the client cannot pay, the account will be forwarded to the Asset Management and

Legal Department (AMLD).

These procedures were proven efficient in making a profit for the entity. FICO

bank’s bank-wide target was annually attained which results in additional

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branches every year and other incentives and bonuses for the welfare of the

employees.

According to the interviewee, it's not deficiency that they are encountering but

rather a threat. In terms of competition, especially with commercial banks, it's

challenging for the cooperative bank to keep up, particularly regarding interest

rates. Commercial banks often offer lower rates, which sometimes are difficult to

align with cooperative banks because they have set interest rates to follow. FICO

Bank's operations also adhere to specific lending criteria. There are numerous

documents required for client risk assessment to determine if they qualify for a

credit line. Perhaps the deficiency in Tuguegarao branch, as the interviewee said,

lies in the area itself. Being in a city, they need to keep pace with the numerous

commercial banks around.

The manager also mentioned the surprise visit of the Bangko Sentral ng Pilipinas

to their branch to scrutinize the pricing decisions of the bank. In terms of their

compliance, there are regulatory bodies that are in charge of the investigation of

their legality and fairness when it comes to financial practices. They also point out

the Audit Review Management and Compliance Office and the issuance of

memos that are used to disseminate operational information.

All the clients of FICOBANK are required to sign a Data Privacy agreement. In

line with this, there is also the existence of the Information Technology

Department and DPO-ISO officer that caters to the rights of the clients regarding
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their privacy and the security of their personal information. They also added that

they monitor the user and all the folders, and check the computers with the

internet under the reports on the Register of Information & Inventory of Assets.

FICOBANK gives value to their potential clients and they make sure that they

will be catered to the services and facilities they need. The continuous

engagement with the client before and during the lending process shows support

and care to their borrowers. By continuously assessing client eligibility and

monitoring loan performance including post-release or deposit, the bank

minimizes default risks and upholds its lending standards. In addition,

FICOBANK's mission is to support not only large businesses but also small and

medium enterprises (SMEs).

The Accounting Department and Treasury Department handle the money

deposited by the customers. Monthly reports from them help monitor the

movement of accounts. The money is allocated depending on the strengths of

different branches to handle deposits and other loans.

Some clients provide inaccurate information to secure a loan, but the bank

emphasizes thorough checking and validation to minimize such occurrences.

Validation is primarily conducted by Fieldmen and Managers. The bank also

relies on guidance from various departments to address any uncertainties

regarding documents or accounts. Additionally, the bank utilizes numerous

monitoring papers and assessment documents to determine a client's eligibility.

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4.3 DISCUSSION

The primary purpose of this study is to assess the efficiency and effectiveness of

FICOBANK's commercial lending procedures in maintaining financial stability.

Having completed collecting and formulating the results, we now ought to

thoroughly analyze and interpret the findings to address the specific objectives of

the study, which are the following:

1) How does FICO Bank determine if a client is qualified for a commercial

loan?

Ficobank prides itself on offering equal opportunities to both large businesses and

small or medium enterprises (SMEs) without any form of discrimination. They

carefully assess the operational history of businesses, requiring a minimum of one

year of operation. To ensure the legitimacy of the credentials provided, Ficobank

sends out field representatives to conduct thorough business inspections.

Moreover, they meticulously evaluate the financial capabilities and status of each

business, focusing on its ability to meet loan repayment deadlines. The bank's

stringent review process takes into account various factors such as annual income,

equity, and the overall operational health of the business in both the short and

long term. This comprehensive evaluation aims to gauge the creditworthiness of

potential clients and minimize the risks associated with non-performing or non-
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payment of loans, ultimately safeguarding the efficiency and profitability of

Ficobank.

2) What are the procedures FICO Bank follows in lending commercial loans?

Ficobank places significant emphasis on its credit services, particularly in their

loans, by meticulously complying to a set of defined procedures. The process

starts with the careful submission and thorough review of requirements.

Subsequently, collateral is meticulously appraised and estimated, with the final

loan approval based upon the evaluation and assessment conducted by the field

representative during their site visit. The assessment of the business carries

immense importance, demanding a meticulous evaluation by the field

representative to ascertain the client's adherence to credit standards and to

mitigate the potential risks of deceit or fraud. Following this, clients are provided

with comprehensive instructions, terms, and conditions to ensure their full

understanding and to prevent any oversights in their payments.

The bank's monitoring branch diligently furnishes regular updates regarding the

status of the clients' loans, encompassing crucial details such as payment amounts

and deadlines. To further ensure timely payments, clients are conscientiously

reminded a month before their payments are due. In cases of non-payment, the

bank initiates visitations and issues notices until the clients fulfil their payment

obligations. If clients are unable to meet their loan dues, the account is escalated
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CAGAYAN STATE UNIVERSITY
to the Asset Management and Legal Department (AMLD). These procedures are

meticulously aligned with established policies and regulations.

Policies and regulations serve as indispensable guides and frameworks for day-to-

day operations and decision-making processes. Adherence to these policies and

regulations fosters an organized set of tasks and provides a clear vision of the

bank's objectives, thereby facilitating effective and efficient operations. Also,

engaging with the client throughout the lending process demonstrates a

commitment to providing support and care to borrowers. By continuously

evaluating client eligibility and closely monitoring loan performance, including

after the release of funds or deposit, the bank effectively reduces the risk of

defaults and maintains high lending standards.

3) How do these lending procedures in commercial loans affect the

operational efficiency and profitability of FICO Bank?

The efficiency of lending procedures directly impacts the overall operational

efficiency of FICOBANK. By streamlining processes such as document

submission, collateral validation, and credit assessment, the bank optimizes

resource allocation and reduces processing time. Centralization of approval

authority beyond a certain threshold further enhances efficiency by expediting

decision-making and ensuring consistency across branches.

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CAGAYAN STATE UNIVERSITY
Lending constitutes a primary revenue stream for FICOBANK, making the

effectiveness of lending procedures crucial to its profitability. The study

underscores the bank's success in achieving its annual profit targets, attributed in

part to efficient lending practices. By adhering to stringent monitoring procedures

and proactive risk management, FICOBANK minimizes default risks and

safeguards its financial stability. Additionally, the bank's focus on supporting

small and medium enterprises (SMEs) reflects a strategic approach to diversifying

its lending portfolio and maximizing profitability.

4) What are the deficiencies of FICO Bank current lending procedures in

commercial loans?

Despite its operational efficiency, FICOBANK faces challenges in a competitive

landscape, particularly concerning interest rate differentials with commercial

banks. Cooperative banks typically offer higher interest rates compared to

commercial banks due to their flexible and variable rates.

Additionally, the need for compliance with pricing decisions and financial

practices is emphasized by regulatory oversight from institutions like the Bangko

Sentral ng Pilipinas. The bank's commitment to regulatory compliance is

demonstrated by the existence of the Audit Review Management and Compliance

Office, which guarantees adherence to both legal and ethical standards.

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CHAPTER V

5.1 INTRODUCTION

Within this chapter, the conclusions and recommendations drawn from the study's

findings are presented. Specifically, the chapter is structured into section 5.2

addressing the conclusion, and section 5.3 focusing on recommendations, which

is then further divided into four subsections.

5.2 CONCLUSION

The First Isabela Cooperative (FICO) Bank is one of the country’s most

influential cooperative banks in terms of financial stability due to the

effectiveness and efficiency of their commercial lending procedures. Whereby,

the data shows that they remain competitive and influential in the market for the

stringent policies used by FICO Bank.

FICO Bank's meticulous implementation of their policies and rigorous procedures

has not only mitigated inherent risk and challenges in their commercial loan but

also paved the way for a highly efficient and effective operational framework.

This approach has enabled the bank to consistently meet its targeted goals,

thereby fostering substantial growth. Consequently, allowing them to have

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sufficient capital to facilitate a wide array of banking activities, thereby

contributing positively to the country’s overall improvement.

Also, when evaluating existing and potential clients, the bank ensures that they

comply with conditions, make timely payments, and secure all commercial loans.

Regarding collections, they take measures to ensure that clients do not default on

the terms by issuing continuous notices and conducting home visits, enabling

them to collect more effectively.

Furthermore, to avoid additional expenses such as penalties and to have a good

standing in the public, FICO Bank makes sure that they comply with the rules and

regulations imposed by the regulatory body. Aside from that, they ensure that

clients will feel secure and valued by providing Data Privacy agreements signed

by the clients. An IT Department and a DPO-ISO officer also tracks the data of

the clients, employees, and users alike through a regular checking of the Register

of Information and Inventory of Assets Report.

However, FICO Bank still experiences deficiencies, threats, and problems in their

commercial lending operation. Specifically, the collection of accounts, delayed

payments of their client, and excessive expenses that they incur by sending

fieldmen and continuous notice to their client who fails to pay interest and the

principal amount. Moreover, since the branch is located in the city it is exposed to
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CAGAYAN STATE UNIVERSITY
various threats and problems such as the presence of numerous commercial banks

which is their primary competitor in the line of commercial lending.

In conclusion, FICO Bank has been effective and efficient based on their

profitability as they are able to reach their yearly target and continue to grow and

expand to additional branches. They consider the care and security received by

their customers to be of great importance and they always go an extra mile in

avoiding repayment problems even though it incurs additional expenses.

5.3 RECOMMENDATIONS

5.3.1. Commercial Lending and Monitoring Policies and Procedures

The researchers found out that FICO Bank has effective policies and procedures

in evaluating clients before loaning, as well as adequate monitoring procedures in

repayment of loan to ensure that the borrowers settle their obligations to the bank.

The researchers recommend strict and consistent implementation of the lending

and monitoring policies and procedures, as it has been found out that these

policies and procedures affect the profitability and success of FICO Bank.

Owning a competitive team to oversee the implementation of commercial lending

and monitoring policies and procedures is also imperative in mitigating credit risk

and upholding the bank's competitive edge.

5.3.2. Threat brought by Commercial Banks

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The researchers found out that FICO Bank has a competitive advantage among

other cooperative banks in the Philippines, however, FICO Bank finds

commercial banks a threat. While commercial banks can adjust their pricing to

attract and cater clients, FICO Bank has to abide with the interest rates set by the

Bangko Sentral ng Pilipinas (BSP). The researchers recommend that FICO Bank

should make a thorough survey and analysis of the market and come up with

interest rates that are both considerate and competitive enough in order for the

bank to keep pace with commercial banks. The researchers also recommend that

FICO Bank should invest in other activities that could attract and retain more

customers. FICO Bank can introduce supplementary benefits such as fee waivers

for loan origination or processing fees, grace periods, and flexible repayment

options during financial adversities under loan-related incentives, loyalty

programs, cash rewards for digital payment usage under digital banking

incentives and special promotions.

Additional recommendations for FICO Bank to attract and retain more clients and

to possibly outpace commercial banks: enhancement of customer service;

establishing alliances with esteemed enterprises and; SWOT analysis— giving

emphasis to FICO Bank’s strengths, enhancing their weaknesses, exploring and

focusing on new opportunities and addressing other threats.

5.3.3 Implementing Online Banking Platform

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Implementing an online banking platform is essential for cooperative banks to

align with the demands of modern society. This technological advancement not

only minimizes customer wait times, but also provides them the convenience of

accessing services and conducting transactions at their own discretion, regardless

of location or time. By offering features such as online loan applications, account

management, and automated loan repayments through a mobile banking

application, cooperative banks can streamline operations, reduce costs, and

promote self-service while minimizing the need for extensive human interaction.

5.3.4. Suggestions for Further Studies

(i) The study on the importance of technology in the lending procedures of

cooperative banks.

(ii) The study on the significance of customer feedback in determining interest

rates for cooperative banks.

(iii) Future researchers are encouraged to broaden the scope of this study, which

was limited to FICO Bank, by including several cooperative banks in the

Philippines.

(iv) Further study can also be done on other firms like microfinance institutions

and other financial institutions.

(v) Further studies should include a quantitative analysis on the effects of

commercial lending procedures on the financial stability of cooperative banks.

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CAGAYAN STATE UNIVERSITY
(vi) This study was only focused on commercial loans, further studies should

include deposits and other loan products.

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Al-hawatmah, Z., & Shaban, O. S. (2020). The effect of lending policy on the

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Buabeng, E., Adabor, O., & Nana-Amankwaah, E. (2021). Understanding the

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Clark, E., Mare, D. S., & Radić, N. (2018). Cooperative banks: What do we know

about competition and risk preferences? Journal of International Financial

Markets, Institutions & Money, 52, 90–101.

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Khamis, F. S. (2020, May 1). Influence of credit assessment process on

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Makrygianni, I. I., & Markopoulos, A. P. (2016b). Loan Evaluation Applying

Artificial Neural Networks. https://doi.org/10.1145/2984393.2984407

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Mamman, A., & Hashim, Y. A. (2014). Impact of Bank Lending on Economic

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Sarkar, S. C., & Karak, D. K. (2018). Management of Non-Performing Assets of

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organizational-behavior/what-is-scientific-management-theory
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Sheykin, H. (2023, April 10). Commercial Loans – Weighing the advantages and

disadvantages. https://finmodelslab.com/blogs/blog/pros-cons-commercial-

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Shuya, K., & Sharma, A. (2018). Problems faced by the borrowers in utilization

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Testbook. (2023, June 26). Difference Between Commercial and Cooperative

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Turner, B. (2023, August 24). What Are the Advantages of Using Commercial

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APPENDICES

Appendix I: Permit to Conduct Interview at First Isabela Cooperative Bank

(FICOBANK) Tuguegarao Branch

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Appendix II: Unstructured Questionnaire / Guide Questions

1. What are the factors that you consider when the client is qualified for a
commercial loan?
2. What are the procedures that fico bank follows in commercial loan?
3. What do you do when your client fails to pay the loan?
4. Are these procedures efficient in making profit for the entity?
5. In all the activities offered by your bank, is venturing into lending
processes can help more in the operational efficiency and profitability of
the bank? How?
6. Does your bank encounter deficiencies particularly in the commercial
lending procedure? If so, can you state some and what are the ways you do
in addressing these kinds of challenges?
7. How does certain regulation affect your pricing strategies? How does your
company(?) make sure that you're complying with all the requirements set
by the law?
8. What are the actions you consider is assuring that information about your
clients would not be subject to certain technological threats such as cyber
hacking etc.
9. What are the things that you do in order to make sure to meet your
obligations to your borrowers?
10. How do you manage the money deposited by your customers? Where is it
allocated? Is it invested somewhere else? loaned to other customers? Etc?
11. Have you already experienced deception when it comes to assessing the
eligibility of your client, particularly in commercial loans? How does this
kind of problem affect your bank?
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Appendix III: Capstone Attachments Pictures with FICOBANK,

Tuguegarao Branch

Researchers conduct a courtesy visit to the First Isabela Cooperative Bank- JB

Prime Building, Located at Maharlika Highway, Zone 1, Tanza, Tuguegarao City,
Cagayan.
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CAGAYAN STATE UNIVERSITY

A conversation with Ms. Aiko May V. Tomines, Asst. Manager of First Isabela
Cooperative Bank- JB Prime Building, Located at Maharlika Highway, Zone 1,
Tanza, Tuguegarao City, Cagayan.

An Interview with Ms. Aiko May V. Tomines, Asst. Manager of First Isabela
Cooperative Bank- JB Prime Building, Located at Maharlika Highway, Zone 1,
Tanza, Tuguegarao City, Cagayan.
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CAGAYAN STATE UNIVERSITY

A Picture with the staff of the First Isabela Cooperative Bank- Tanza Branch
located at Maharlika Highway, Zone 1, Tanza, Tuguegarao City, Cagayan.
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CAGAYAN STATE UNIVERSITY
EDON CARLO N. CASTRO
Baybayog, Alcala, Cagayan
09355263734
edoncarlocastro@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education

Junior High School : Baybayog National High School

2019-2020

Senior High School : Baybayog National High School

2021-2022

Elementary Education : Baybayog Elementary School

2015-2016

PERSONAL INFORMATION

Date of Birth : February 26, 2003

Birthplace : Alcala, Cagayan

Sex : Male

Age : 21

Religion : Roman Catholic

Civil Status : Single

Citizenship : Filipino

Mother's Name : Josephine N. Castro

Father's Name : Edgardo B. Castro

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CAGAYAN STATE UNIVERSITY
ANGELINE R. BARTOME
Minante I, Cauayan City
09682795458
angelinebartolome62@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education

Junior High School : Cauayan City National High School -

2019-2020

Senior High School : International School of Asia and the Pacific

2021-2022

Elementary Education : Don Faustino N. Dy Elementary School

2015-2016

PERSONAL INFORMATION

Date of Birth : December 29, 2004

Birthplace : Cauayan City

Sex : Female

Age : 19

Religion : Roman Catholic

Civil Status : Single

Citizenship : Filipino

Mother's Name : Julieta R. Bartolome

Father's Name : N/A

lvii
CAGAYAN STATE UNIVERSITY
BEVERLY S. BATURI
General Balao, Solana, Cagayan
0916227936
baturibeverly@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education

Junior High School : Sampaguita national High School

2019-2020

Senior High School : San Vicente Institute

2021-2022

Elementary Education : General Balao Elementary Schooll

2015-2016

PERSONAL INFORMATION

Date of Birth : November 17, 2003

Birthplace : General balao, Solana, Cagayan

Sex : Female

Age : 20

Religion : Roman Catholic

Civil Status : Single

Citizenship : Filipino

Mother's Name : Estefania S. Baturi

Father's Name : Marlon G. Baturi

lviii
CAGAYAN STATE UNIVERSITY

JANINE R. BALIUAG
Tabang, Sto. Niño, Cagayan
09493681967
ninebaliuag@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education : Sto. Niño National High School

(2016-2022)
Elementary Education : Tabang Integrated School
(2010-2016)

PERSONAL INFORMATION

Date of Birth : January 12, 2004

Birthplace : Cagayan Valley Medical Center
Sex : Female
Age : 20
Religion : Roman Catholic
Civil Status : Single
Citizenship : Filipino
Mother's Name : Myrna R. Baliuag
Father's Name : Elmar M. Baliuag
lix
CAGAYAN STATE UNIVERSITY

ANDREA D. CUDIAMAT
Naganacan, Sta. Maria, Isabela
09364931405
andrea.cudiamat20@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education:

High School : Naganacan-Villabuena National High

School

2010-2014

Elementary Education : Naganacan Elementary School

2004-2010

PERSONAL INFORMATION

Date of Birth : September 29, 1997

Birthplace : Silang, Cavite

Sex : Female

Age : 26

Religion : Born Again

Civil Status : Single

Citizenship : Filipino

Mother's Name : Amelia D. Calata

Father's Name : Alejandro M. Cudiamat

lx
CAGAYAN STATE UNIVERSITY

MARY FAITH F. AYON-AYON

Maddalero, Buguey, Cagayan
09812831407
faithayonayon@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education:

Junior High School : Saint Francis Academy of Sta. Teresita Inc.

2019-2020

Senior High School : Saint Francis Academy of St. Teresita Inc.

2021-2022

Elementary Education : Saint Francis Academy of Sta. Teresita Inc

2015-2016

PERSONAL INFORMATION

Date of Birth : June 30, 2004

Birthplace : Aparri, Cagayan

Sex : Female

Age : 19

Religion : Roman Catholic

Civil Status : Single

Citizenship : Filipino

Mother's Name : Vonnel F. Ayon-ayon

lxi
CAGAYAN STATE UNIVERSITY
Father's Name : Russel T. Ayon-ayon

KYLA I. BALISI
Linao East, Tuguegarao City, Cagayan
09071259057
balisikyla6@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education

Junior High School : Solano High School

2019-2020

Senior High School : Cagayan National High School- Senior High

2021-2022

Elementary Education : Solano Sount Central School

2015-2016

PERSONAL INFORMATION

Date of Birth : August 06, 2003

Birthplace : Linao East, Tuguegara City

Sex : Female

Age : 20

Religion : Roman Catholic

Civil Status : Single

Citizenship : Filipino

Mother's Name : Marites I. Balisi

lxii
CAGAYAN STATE UNIVERSITY
Father's Name : Mario A. Balisi

QUEENIE T. CUNTAPAY
Gammad, Iguig, Cagayan
09955135460
cqueenie684@gmail.com

EDUCATIONAL ATTAINMENT

Tertiary Education : Cagayan State University- Andrews Campus

Present

Secondary Education : Gammad National High School

(2016-2022)
Elementary Education : Gammad Elementary School
(2010-2016)

PERSONAL INFORMATION

Date of Birth : July 15, 2004

Birthplace : Cagayan Valley Medical Center
Sex : Female
Age : 19
Religion : Jehovah’s Witnesses
Civil Status : Single
Citizenship : Filipino
Mother's Name : Thelma Cuntapay
Father's Name : Roberto Cuntapay