Determinants and consequences of cash holdings of Philippine publicly-listed banks from 2004-2008

• Main Authors: Co, Charmaine, Lim, Clarisse Joy, Ty, Jasmine, Villanueva, Margaret Joyce
• Format: text
• Language: English
• Published: Animo Repository 2010
• Subjects: Banks and banking > Philippines; Cash flow > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18309
• Institution: De La Salle University

This study focuses on the determinants and consequences of cash holdings. Financial statements of ten Philippine publicly-listed banks for the period of 2004-2008 were used as sample. Several determinants such as cash, cash flow, variance of cash flow, total debt, long term debt, size, liquidity, capital expenditures, Tobin's Q, and interest rate were gathered and determined for each of the banks. After performing the Arellano and Bover dynamic panel data estimation model, results show that only size, liquidity, and interest rate affect bank's cash holdings. In addition, it was shown in the problit model that cash holdings do not affect a bank's performance. Therefore, neither managerial opportunism theory nor transaction cost theory are relevant for this particular study.