Osias Colleges, Inc.
F. Tañedo St., San Nicolas, Tarlac City
Tel#: (045) 982-0245; Email: osiastre@plstdsl.net
http://www.osiascolleges.edu.ph
Global Financing Strategy and E-banking System
Elective 3: Global Finance and E-banking
Submitted to
Ma’am Michelle H. Lagasca
Adviser, College of Business Administration
Submitted by
Arma, Ma. Jamaica Vivienne V.
Mula, Junnelyn Mae D.
Oñate, Christiane Shaira B.
Sagun, Joana Marie N.
Topia, Devy Mar M.
APRIL 2025
I. COMPANY BACKGROUND
Figure 1. Logo
Nature of the Business
Hinabi Co. is a Philippine-based clothing company that specializes in making sustainable,
culturally inspired apparels. The brand was founded aiming to be able to merge modern fashion
and the culture and tradition of the Filipino identity, but at the same time doing it in a sustainable
way. The Hinabi Co. was founded by young, creative, and socially aware Filipino entrepreneurs,
who recognized an opportunity in the market to provide a sustainable product that also
showcases the Filipino heritage. The company’s vision was to create apparel that makes a
statement, not just in terms of the design but in values also. Hinabi Co. operations are centered
on producing and selling apparels, including t-shirts, hoodies, joggers, pants, bags, slippers, and
other accessories. As the company is dedicated to their campaign, all products are made using
eco-friendly materials. Moreover, Hinabi Co. believes that through fashion one can tell a story, a
message, and a powerful statement. The brand’s collection aims to honor the Filipino pride by
integrating Filipino culture and art to each piece. Such as indigenous weaves, traditional scripts
or baybayin, myths, and other cultural symbols. These are combined with the minimalist, casual,
streetwear-inspired silhouettes which appeal to Gen Z and Millennials audiences in the
Philippines. Furthermore, Hinabi Co. operates through direct-to-consumer channels such as
physical stores, social media or e-commerce platforms, and also pop-up retail events.
Target Expansion
Hinabi Co. prepares itself to expand and enter the global market, specifically the market
of Northern America. Collectively, both the United States of America and Canada are ideal
markets due to their large, diverse, and socially conscious consumer. In the U.S., there are major
cities that are considered as hubs for streetwear culture and multicultural expression which are
perfect for Hinabi Co. to introduce to Filipino culture, art, and tradition. Cities like Los Angeles,
New York, Seattle, and others. Moreover, the U.S. also has significant numbers of Gen Z and
Millennial population, which is a great opportunity for Hinabi Co. to be successful in the quest of
conquering the international market. On the other hand, in Canada, particularly, cities like
Ontario, British Columbia, Toronto, and Vancouver, have a strong diaspora of Filipinos.
Moreover, Hinabi Co. chooses to expand to these countries as both countries have high
purchasing power, which means, people there have the leisure to spend more of different
products. Additionally, the culture in these countries are very diverse and welcoming to
international brands, which is a great opportunity for foreign businesses like Hinabi Co. to
introduce its product to the U.S. and Canadian market. The stable economies and supportive
business environments in U.S. and Canada further make it easier for Hinabi Co. to operate and
compete with other business in the market. These factors combine create an excellent
environment for Hinabi Co. to be successfully penetrate global expansion in the said foreign
market.
Goals
● Launch Localized E-commerce Platform
● Achieve 50,000 Units Sold
● Collaborate with Influencers
● Run a Physical Stores / Pop-ups Across Major Cities
● Build a Local Community Base
Current Financial Status
Hinabi Co. is already profitable in the Philippines, and has a strong foundation of
consumer base. Revenues are driven by online sales, physical stores, pop-up stores, events, and
influencer partnerships. On the other hand, the operating cost remains manageable due to local
production and digital-first marketing. Moreover the brand has already built its own loyal
customers base and a growing social media presence making it well-positioned for expansion to
adapt in the North American market, specifically U.S. and Canada, Hinabi Co. will strategically
adjust its finances by reinvesting its current profits and also by looking for extra funds from
loans. This money will help Hinabi Co. sell more products, reach new customers, and cover costs
like shipping, marketing, and running physical stores in the North American region.
II. GLOBAL FINANCING STRATEGY
Sources of Funds
Hinabi Co. plans to fund its expansion to the North America region, particularly in U.S.
and Canada, through four key sources: internal cash from the business, foreign debt from
financial institutions in the U.S. and Canada, partnerships or joint ventures, and lastly, incentives
from government programs in the North American region.
The company’s first source is from the internal cash, which refers to its retained earnings
and accumulated profits from the successful operations in the Philippines. This is usually used
for the initial cost such as business registration, branding, initial inventory, and set up of
operations in the North American region. One advantage of using internal cash as one of the
sources to fund the expansion is that it does not incur interest or require repayment, which will
give the company full control and flexibility. However, on the downside, using internal cash can
limit liquidity and reduce capital available for domestic operations in the Philippines if not
managed carefully.
Consequently, Hinabi Co. will also source funds from foreign debt from financial
institutions. These loans can provide substantial capital for scaling operations, purchasing
equipment, hiring staff, and managing cash flow. A significant advantage of foreign loans is that
they offer larger amounts of capital compared to using internal cash, also it can help build Hinabi
Co. its creditworthiness in the North American region. On the flip side, these loans typically
require collateral, strong financial documentation, and a business entity. Lastly, repayment terms
may also expose Hinabi Co. to foreign exchange risk and potential interest rate increase.
To lessen the burden of having a large amount of debt, the company will pursue strategic
partnership or joint ventures with local businesses in the U.S. and Canada. Through this, it helps
share the cost of setting up operations, marketing, and distribution. By partnering with businesses
in the U.S. and Canada, Hinabi Co. can quickly reach customers, without spending a lot of
money. Lastly, the company can also leverage government incentives and business support
programs available and applicable for the company. For example, Hinabi Co. can utilize the
economic development programs available in both countries in North America, which offer tax
benefits, grants and business support services, making it easier and more affordable for the
company to expand in the region.
Capital Structure
Figure 2. Capital Structure
The graph above shows the capital structure of Hinabi Co. for its expansion into the
North American market. The structure is divided into four key funding sources. For retained
earnings, the company will be utilizing 50%, which represents the largest portion. This suggests
that half of the total funding will come from the company’s own accumulated profits. Hinabi Co.
can do this because the company is already doing well domestically, and has enough funds to
fully commit to self-funding, reducing reliance on external financing. Following that are the
foreign debt and partnerships or joint ventures, which both have 20%. This is done to strike a
balance between using external resources and managing risk. The 20% foreign debt allows the
business to access funds to expand without overburdening the business with high repayment
pressures. Meanwhile, the 20% for partnership or joint ventures helps mitigate the risk of
entering the North American market as a foreign business. This enables Hinabi Co. to enable a
faster market entry and shared costs while maintaining control over the brand. Lastly, the 10%
allocation from government incentives will help to reduce operational costs without adding to the
company’s debt burden.
Foreign Exchange Risk Management
As Hinabi Co. expands into international markets, specifically in the North American
region, it is inevitable that the company will experience foreign exchange risk. This is due the
fact that the company will deal with different currencies, like Philippine Peso (PHP), U.S.
Dollars (USD), and Canadian Dollars (CAD), which are subject to fluctuations in exchange rates
that can impact the value of international transactions, loans, and revenues. Managing these risks
is very important to maintain financial stability and protect profit margins.
To address this, Hinabi Co. will implement hedging strategies aligned with its capital
structure and sources of funds. Forward contracts will be used to lock in exchange rates or large
purchases. This is used to guarantee a fixed exchange rate for important future payments like
loan repayments, avoiding sudden loss if Philippine Peso depreciates against U.S. Dollars or
Canadian Dollars. Second is Currency Options, this will be applied for planned but flexible
expenses, like marketing campaigns, setting up pop-up stores, or bulk inventory purchases.
Through currency options, the company will have the right but not the obligation to exchange a
certain amount of Philippine Peso into the U.S. Dollar or Canadian Dollar at a specific exchange
rate before or on a certain date. In other words, Hinabi Co. can have a favorable exchange rate
today, but does not have to use it, if the market later moves into a more favorable rate. Lastly, the
company will practice Currency Diversification, which means, Hinabi Co, will hold part of its
operating funds directly in USD and CAD. This minimizes the need to constantly convert PHP
into foreign currencies and reduce transaction costs and exposure to currency fluctuations.
Cross-Border Fund Transfer
For Hinabi Co.’s expansion into the United States and Canada, the company will utilize
multinational bank transfer. By partnering with multinational banks, with international networks,
Hinabi Co. can establish U.S. and Canadian business accounts, facilitating large transfers for
capital investments, loan disbursements and major operational expenses. Multinational banks
offer secure, efficient, and compliant wire transfer services. These banks also provide advanced
currency management tools like forward contracts, currency options, and multi-currency
accounts which will help the company against currency exchange fluctuations between
Philippine Peso (PHP), U.S. Dollar (USD) and Canadian Dollars (CAD). In addition,
multinational banks have strict international regulations and standards, which also help Hinabi
Co. maintain strong financial integrity, reduce risks or fraud and demonstrate credibility to the
North American customers.
Taxation and Regulatory Issues
As Hinabi Co. expands into the United States and Canada, the company must carefully
navigate the different taxation systems and regulatory frameworks for these countries. In the
U.S., businesses are subject to federal taxes managed by the Internal Revenue Services (IRS), as
well as state taxes depending on where the business will be located specifically. Similarly, in
Canada, the business must register with Canada Revenue Agency (CRA). Plus, Hinabi CO. is
also responsible for sales tax like Goods and Services Tax/ Harmonized Sales Tax in Canada.
Moreover, the company is required to file tax returns both in the U.S. and Canada, pay corporate
income taxes, and other additional taxes. To avoid the risk of double taxation or being taxed in
the Philippines and also US or Canada, Hinabi Co. will take advantage of the existing Double
Taxation Agreements that the Philippines signed with both the U.S. and Canada. This agreement
will allow certain tax credits and exceptions to be applied.
Beyond taxation, the company will comply with various regulatory requirements, such as
business registration, licensing, labor standards, and consumer protection laws. Each jurisdiction
requires specific permits, business entity registrations, and compliance with employment and
working rules.
III. E-BANKING SYSTEM
System Overview
CrossVault is a digital bank designed for individuals, Small and Medium Enterprises
(SMEs), and enterprises. CrossVault aims to help its customers, enabling them to conduct
multiple international financial operations such as access to multi-currency accounts, cross-
border transactions, and instant payment processes. CrossVault will be accessible through a
mobile app which can be opened and used 24/7, ensuring convenience and security.
System Features
● Multi-Currency Accounts - CrossVault offers its customers access to currency conversion
as well as the ability to hold and manage currencies (USD, EUR, JPY)
● Wire Transfers - CrossVault ensures fast and secure international transfers that support
SWIFT, SEPA, and IBAN.
● Debit Card Issuing - CrossVault allows its customers to avail debit cards which enables
them to access various financial products. A visa card can be ordered by customers
through the mobile application.
● Digital Wallet - Users have access to their digital wallets which can be used for local and
international payments to merchants and online shop purchases.
● Online Management Account - Allows users to access statements, budgeting tools, set up
auto-pay, and KYC/AML-verified registration.
● Crypto Currencies - CrossVault also offers transactions of Cryptocurrencies.
Cryptocurrency (crypto) is a form of digital payment. Unlike traditional currency which
represents physical money, cryptocurrencies are purely digital assets.
● Real-Time Tracking Transactions - CrossVault allows users to track the inflow and
outflow of their financial transactions. These transaction histories can also be
downloaded by the customers to track financial reports.
● AI Assistant - CrossVault integrates new technologies such as AI. This feature is used as
a smart assistant which users can use for help, alerts, and financial advice.
● API for Fintech Partners - CrossVault enables fintech partners to connect directly to the
digital bank and access services like sending or receiving payments, viewing balance and
transactions, ect.
Cybersecurity Considerations
CrossVault ensures privacy and safety by implementing security measures such as two-
factor authentication, end-to-end encryption, and more. These cybersecurity practices ensure that
customer’s data and accounts are protected.
● Two Factor Authentication ● Behavioral Analytics and AI
● End-to-end encryption. ● Compliance with Regulations
Innovation with Emerging Technologies
Newer technologies will be utilized by CrossVault to enhance the performance and security of
the digital banking app. Moreover, these innovative features can also enhance CrossVault’s
services and further provide a seamless transaction.
● Blockchain Audit Transaction - Blockchain technology is revolutionizing the financial
sector by offering unprecedented levels of transparency and security in financial
transactions. By leveraging a decentralized and immutable ledger system, blockchain
ensures that financial data is both accurate and tamper-proof.
● AI & ML (Artificial Intelligence & Machine Learning) - AI customer support automation
in banking refers to the use of artificial intelligence (AI) technologies to automate
customer interactions, streamline support processes, and provide personalized financial
services across multiple communication channels. Machine learning allows AI systems to
analyze customer data, recognize patterns, and continuously improve their responses over
time. In banking, ML-powered systems can predict customer needs, recommend financial
products, and personalize services based on individual preferences and behavior. By
learning from past interactions, AI systems in banking deliver more accurate and
personalized support.
● QR Payments - CrossVault will use QR payments for Cross-Border Peer-to-Peer
Transfers. A QR code (short for “Quick Response code”) is a two-dimensional image-
based barcode capable of holding large amounts of information. QR Ph is the Philippines’
QR code standard based on the Europay-Mastercard-VISA (EMV) standard, a global
standard for secure payments. QR Ph offers you added security, convenience, and peace
of mind.
System Flowchart
Figure 3. CrossVault’s System Flowchart
System Mockup
Figure 4. UI Interface Figure 5. Log-In Options
Figure 6. PIN Code Figure 7. Main Dashboard and
System Features
IV. RISK ASSESSMENT AND COMPLIANCE REVIEW
Financial Risk
● Currency Risk - As Hinabi Co. expands in the North American region, particularly in the
U.S and Canada, the company will deal with different currencies such as Philippine Peso
(PHP), U.S. Dollars (USD), and Canadian Dollars (CAD). Inevitably, the company must
prepare to mitigate currency risk. Fluctuations in exchange rates can either increase costs
or reduce revenue when converting foreign currencies. For example, if the peso
strengthens against the dollar, Hinabi Co.’s profits from the operations in the U.S. and
Canada sales might decrease. Consequently, Hinabi Co. will use different financial tools,
like forward contracts to lock in exchange rates. In addition to, the company will also
diversify its market presence across countries to balance risks and regularly monitor
foreign exchange markets to adjust pricing and contracts.
● Liquidity Risk - This risk will arise if the company will be having a hard time to find an
available cash to meet its immediate financial obligations, such as paying suppliers, rent,
or employees. As Hinabi Co. will have a global expansion, it may tie up cash in foreign
operations or longer supply chains, making it harder to respond to immediate financial
needs. That is why, the company will make sure that there will be enough cash reserves,
establish a line of credit with banks, negotiate favorable payment terms with suppliers,
and closely monitor cash flow forecasts to avoid cash shortages and have enough funds to
address immediate financial obligations.
● Interest Rate Risk - this risk involves the possibility that fluctuations in interest rates
could increase the cost of borrowing for Hinabi Co. especially that the company will take
out loans from financial institutions, to fund the expansion in the U.S. and Canada. To
manage this risk the company will actively monitor interest rate trends and maintain a
healthy balance between debt and equity financing.
Operational Risk
● Logistics Risk - this risk refers to issues that may arise in the transport and delivery of
products, especially transporting products from the Philippines to USA and Canada,
which will cross international borders. Problems like shipping delays, customs clearance
issues, or lost packages could harm customer satisfaction and sales. Because of that
Hinabi Co. will make sure to find and partner with an experienced and reliable logistic
provider, as well as, track shipments closely, ensure proper documentation, and have
clearly communicating delivery timelines.
● Employee Risk - in this risk, it is all about the mistakes, lack of expertise, misconduct, or
fraud committed by employees that can disrupt the business operations or, also harm the
reputation of the Company. Improper customer handling, poor service, or errors in
financial management could surely damage trust and increase cost for the company.
Consequently, to minimize these kinds of risks, Hinabi Co. will provide comprehensive
training programs, implement strong internal controls, encourage ethical behavior, and
establish clear policies for employee responsibilities and conduct.
● Technology Risk - Hinabi Co. relies on different technologies in different aspects of the
business. That is why, it is inevitable that the technologies will be at risk with different
issues and problems. This kind of risks involves failures or issues with the digital systems
that Hinabi Co. is using. This will lead to delays in operations, loss of information, loss
sales, or customer dissatisfaction. In conclusion to minimize the possibility of
encountering these risks, the company will have regular updates, and monitor its systems,
and lastly to have backup solutions or disaster recovery plans in place address these
risks, Hinabi Co. will invest in reliable, secure IT infrastructure, regular update, and
maintain its systems, and have backup solutions or disaster recovery plans in place.
Cybersecurity Risk
● Data Breach Risk - the e-banking system of Hinabi Co. may experience some Data
Breach Risk, this happens when hackers break into the company's e-banking system or
database to steal confidential information. To mitigate this kind of risk, Hinabi Co. will
make sure that the system is using strong encryption to protect sensitive data about the
customers and also the business. Moreover, there will be regular updates and patching the
systems, enforce strict access control, and lastly monitor network activity to detect any
suspicious behavior early.
● Malware and Ransomware Risk - this risk happens when there is malicious software that
can surely damage the company's e-banking system and other systems of the business, or
lock users out of their accounts unless a ransom is paid. These attacks can lead to
financial losses, and damage the company's reputation. To defend the company, Hinabi
Co. will do its best to find a reputable antivirus software, and also keep all systems
updated with the latest security patches. In addition, the company will also back up
important data regularly, and lastly educate employees about safe online practices.
● Unauthorized Access Risk - this occurs when individuals gain access to the e-banking
system of the company without permission, either by exploiting weak passwords, system
vulnerabilities, or insider negligence. In the case of Hinabi veg Co. this could damage the
reputation of the company and lead to legal penalties. Consequently, to prevent this risk
the company will enforce strong password policies both for employees and customers,
implement multi-factor authentication (MFA), limit access to sensitive systems only to
authorize personnel, and lastly, conduct regular security audits to detect any weaknesses.
Regulatory Compliance
Hinabi Co.'s financing strategy and e-banking solution are directly affected by
international regulatory requirements. In financing, laws like the Bank Secrecy Act in the United
States, and the Bank Act in Canada require Hinabi Co. To work only with compliant banks and
payment processors to prevent financial crimes such as money laundering. For the e-banking
system of Hinabi Co, the company must ensure that its e-banking systems adhere to consumer
protection regulations, such as this enforced by the Consumer Financial Protection Bureau
(CFPB), in the U.S. and the Financial Consumer Agency of Canada (FCAC). These regulations
require Hinabi Co. to securely and transparently handle customer transactions, with data
protection laws ensuring the safety of customer financial information. Compliance with these
regulations is essential for Hinabi Co. to manage international financing strategy and provide
secure e-banking solutions for its customers.
V. CONCLUSION
Hinabi Co. is at its significant point in its journey towards global expansion. With a very
strong foundation on sustainability, cultural pride, and a still growing loyal customer base in the
Philippines, the company is in the position to succeed in the North American market, particularly
in U.S. and Canada. The strategic financing plan to diversify its capital structure ensures a
balanced and financially sound approach to expand its operations internationally. Moreover, the
company also recognized the risks that come with this expansion, that is why, they prepared
strategic actions to mitigate these risks. Hinabi Co. demonstrates a very proactive standpoint to
protect its financial stability, operational efficiency, and brand reputation. Lastly, the company
also committed to comply with different policies in order for this expansion to materialize. The
company acknowledges the fact that all actions in this expansion must be done in due process.
Overall, Hinabi Co. is ready to take this big step, and ready to reach the global market. By
staying true to its mission to tell and spread Filipino culture through sustainable fashion, Hinabi
Co. will not just achieve domestic success but also make a meaningful impact in the international
market.
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