UNDERSTANDING CULTURE, SOCIETY, AND

POLITICS
QUARTER 11
Non-State Institution
 Learning Competency:
◦MELC
Explain the forms and functions of state and non-state institutions
Direction: Read each item carefully and use your notebook to write your answers.

1. Which of the following is not a non-state institution?

A. Bank C. Corporations
B. DepEd D. None of the choices

2. What is known as the bank of all banks in the Philippines?

A. Bank of the Philippine Island C. Landbank
B. Central Bank of the Philippines D. Veterans Bank

3. What organization is legally bound by a charter to conduct a certain type of business?

A. Corporation C. Trade Union
B. Cooperative D. None of the choices

4. Which of the following is Not a function of a bank?

A. Serves as link between the source of funds, the depositor, the fund user, and the borrower
B. Does not provide safe keeping place for money and valuables of individuals
C. Receive savings and deposits of their clients
D. All of the above

5. What does it mean when the corporation has unlimited life?

A. not ceasing to exist if a major stockholder die
B. the corporate form is the most effective for raising money
C. spreading business risks among many owners
D. None of the choices
6. In what category of banks does a private development bank belong?
A. Commercial banks C. Rural Banks
B. Thrift banks D. None of the choices

7. It is written applications to the government requesting permission to form a corporation?

A. Articles of incorporation C. Letter of Intent
B. Request for clearance D. None of the choices

8. Which of the following is a primary reason why banks play significant roles in the country’s economy?
A. They are the ones providing the needs of the people that the government cannot provide.
B. They provide safe-keeping place for money and valuables of individuals.
C. They link in the transfer of money from the source to the borrower.
D. None of the choices

9. What refers to a voluntary association of either employees, employer, or independent workers to protect their
interest and avoid maltreatment?
A. Cooperative C. Corporation
B. Trade unions D. None of the choices

10. What type of cooperative procures and distribute commodities to members and nonmembers?
A. Credit cooperative C. Consumer Cooperative
B. Producer cooperative D. Marketing Cooperative
11. What is a voluntary organization of people who have agreed to pool their resources together in other to undertake an economic
plan?
A. Trade unions C. Bank
B. Cooperative D. Corporation

12. How is a cooperative and trade union similar?

A. Organized and formed by a group of people to protect their interest
B. Promote the common good among members
C. Voluntary in nature
D. All of the above

13. Every quarter of the year, the service cooperative is conducting a seminar about specialized knowledge related to different fields
of their members. Which function of the cooperative is best described by the situation?
A. Provide maximum economic benefits to its members
B. Teach people efficient and effective ways of doing things in a cooperative manner
C. Propagate cooperative practices and new ideas in business and management
D. None of the choices

14. Which is not a purpose of trade / labor union? A. negotiate wages and working condition terms
B. doesn’t help in settling grievances
C. regulate relations between workers
D. All of the above

15. What does a credit cooperative want to promote among its members? A. Procures and distributes commodities to members and
non-members
B. Undertakes joint agricultural or industrial production
C. Promotes thriftiness among its affiliates, and creates funds to grant loans for productive endeavor of members
D. Participates in the supply of production inputs to constituents, and markets their products
Fill-in the diagram with the different types of non-state institutions that are familiar to you.
1. Can you identify the different types of non-state
institutions?
2. Who owned these institutions?
3. Does the government have power/control over these
institutions?
 Non-state institutions refer to institutions that are organized by private individuals or groups for the
purpose of providing services to the members of society. These institutions are not controlled by the
government but are regulated through laws and statutes of the state.
There are non-state institutions that play vital roles in the economy because they are the ones providing
the needs of the people that the government cannot provide. However, a corresponding price or payment is
needed in exchange for their services.
Typical examples are different kinds of financial institutions, specifically a bank, and different kinds of
business organizations, specifically a corporation.
Trade unions and cooperatives have the primary role of promoting labor welfare and good industrial
relations. Trade unions and cooperatives are organizations comprising workers and laborers with common
goals, purposes, and interests. They mostly concern employment relations, decency, and welfare
Financial institutions are organizations that serve as bridges or intermediaries that facilitate the flow of
money in various transactions. This means that financial institutions serve as links between the source of
funds, the depositor, the fund user, and the borrower.
 Banks receive savings and deposits of their clients. These may be loaned out to borrowers.
Example:

Juan dela Cruz has PhP 10,000.00, which he has saved from his salary as a manager. He deposits it at
Maharlika Bank, which offers a 2% interest per annum. This would mean that if he does not withdraw
any of his savings, he will get 10,000.00 + 2% = 10,200.00 after one year.
Now, Mr. Entrepreneur needs PhP 7,000.00 because he wants to put up a sari-sari store. He borrows
PhP 7,000.00 form Maharlika Bank.
Can you see the flow of money? Juan gets more than PhP 10,000.00 after a year. At the same time, he
is able to help Mr. Entrepreneur put up a business. These would not have happened without the help of
Maharlika Bank since Juan and Mr. Entrepreneur do not know each other.
Banks started during the Renaissance period in Italy. The word 'bank' traces its origin from the Old
Italian word banca which means 'table' or 'bench,' and is where transactions occurred at that time.
The role of a financial institution as a link in the transfer of money from the source to the borrower is
very important to our economy.
Banks provide safe-keeping place for money and valuables of individuals. They also perform a role in
settling payments and credit intermediation.
chonacamposano
BANKING INSTITUTIONS
The Bangko Sentral ng Pilipinas is known as the banks of all banks in the Philippines. It is the bank
responsible for the regulation, creation, and management of monetary supply in the country.
These are the different types of banks:
• Commercial banks accept savings deposits, check deposits, and time deposits. Examples of Philippine
commercial banks are Bank of the Philippine Islands and Metrobank.
• Thrift banks are categorized into stock savings and loan associations, savings and mortgage banks, and
private development banks. They consolidate the savings deposits of their members into a fund from which
their members can draw loans with interest. They also accept deposits from the public and provide loans for
small- and medium-scale enterprises.
• Rural banks cater primarily to farmers and small business people, mostly in rural areas.
 CORPORATIONS
A corporation is an organization of people legally bound by a charter to conduct some type of business. It has a
legal entity separate from its owners. The type of business that a corporation wants to venture in depends on its articles of
incorporation.
Articles of incorporation are written applications to the government requesting permission to form a corporation.
This will give the name, address, and type of business for the corporation; the names of the officers, and the initial
amount of money being put into the business.
The following are the advantages of corporations as business organizations in the economy:
• easy to raise funds–since the corporate form is the most effective for raising money
• limited liability–the concept that owners of the business are only responsible for its debts up to the amount they invest
in the business
• unlimited life–not ceasing to exist if a major stockholder dies
• specialized management–affording to have specialized managers to run the business
• shared risks–spreading business risks among many owners

The following are the disadvantages of corporations as business organizations in the economy:
• difficult to start–needs government approval before starting the business
• less direct control–owners that are usually far from the day-to-day operation of the business
• double taxation–corporate taxes that need to be paid by the corporation and the owner who received dividends from
the profit
• limited activities–limited activities by the article of incorporation
 COOPERATIVES AND TRADE UNIONS
A cooperative is a voluntary organization of people who have agreed to pool their resources together to
undertake an economic enterprise to meet their everyday needs. A cooperative is something that they
democratically manage, control, and share the economic benefits by participation and patronage
(Cooperative Development Authority, CDA).
Trade unions or labor unions are voluntary associations of either employees, employers, or
independent workers to protect their interest and become an instrument of defense against exploitation and
maltreatment.
The commonalities of these two non-state institutions are the following:
• organized and formed by a group of people to protect their interest,
• promotes the common good among members, and
• voluntary in nature.
Type of Cooperative Description
Credit cooperative Promotes thriftiness among its affiliates, and creates funds to grant
loans for productive endeavour of members

Consumer cooperative Procures and distributes commodities to members and

nonmembers

Producer cooperative Undertakes joint agricultural or industrial production

Marketing cooperative Participates in the supply of production inputs to constituents, and
markets their products

Service cooperative Engages in medical and dental care, hospitalization, transportation,

insurance, housing, labor, electric lights and power, communication,
and other services
 The Differences between Cooperatives and Trade Unions As to the Purpose:
Cooperatives Trade Unions
Republic Act 6938: Cooperative Code of the Philippines
To encourage thrift and savings mobilization among members, To maintain or improve the
conditions of employment at the
To produce funds and extend credit to constituents for productive and provident purposes, workplace, such as ensuring
safety standards, right to be
To encourage systematic production and marketing among members, protected from unfair termination
To provide goods, services, and some requirements to members, To develop expertise and of employment, right to paid
skills among members, leave, and right to equality,

To acquire lands and provide housing benefits or support to members, To bargain with the employer on
behalf of the union members and
To insure against losses of the members, negotiate labor contracts, and

To promote or advance the educational, social, and economic status of members, To protect the economic, political,
and social interests of its
To establish, own, or lease cooperative banks, cooperative wholesale and retail complexes, members
insurance, agricultural, or industrial processing enterprises, and public markets, and

To coordinate and facilitate various activities of the union.

As to Function:

Cooperatives Trade Unions

Provide maximum economic benefits Negotiate or discuss with the
to its members management the issues that affect the
organization’s workers
Teach people efficient and effective Represent individual members when
ways of doing things in a cooperative they have a problem at work
manner
Provide information and advice to its
Propagate cooperative practices and members about work-issues and
new ideas in business and concerns
management, and allow lower income
groups to expand their ownership of
wealth
 Cooperatives and Trade Unions as Means of Promoting Self-help Towards
Economic Development
Cooperatives are self-help organizations presently utilized by the government as more efficient tools for economic
development. These are also business enterprises which affiliates own, manage, and control following accepted
democratic principles. Members are not organized primarily for profit nor to serve other persons, but to address the
needs of their members. Memberships in cooperatives are voluntary and open to all those who need their services.
Members share economic benefits from unions in proportion to the individual member's patronage of the business or
enterprise.
Trade unions are always fighting for better wages by improving employees pay and other benefits such as holiday
entitlements.
Functions:
• Secure improvements in employees' working conditions, including hours of work, health or safety at work, improving
pensions, and industry injury benefits.
• Provide improved standards of living.
• Safeguard the interest of workers by encouraging firms to increase employee participation in decision-making.
• Prevent employees from exploitation.

With trade union on a place, strikes can be avoided, thus resulting in stability and growth of the firm. This promotes
unity, spirit of self-reliance, and self-respect, and may lead to economic development.
 Imagine a construction worker earning minimum wage with no additional
benefits from the employer, no security of tenure from his work, and can be
terminated any time of the day. ( Write your answer in your notebook.) Question:
1. What can cooperatives and trade unions do to improve his condition?
2. If you were the employer, how would you adjust your job policies in order to suit the
needs of the employee?
Are these non-state institutions beneficial to us? Why or why not?
Direction: Write a letter to the President suggesting ways as to how to improve the situation of Non-state
institutions in the country.
Rubrics: Content 10 pts.
Format 5 pts.
Organization and language use 10 pts
Total: 25 pt
Direction: Create a collage depicting the vital role of Non state institutions in our country.
Rubrics: