1 LBP INSURANCE BROKERAGE, INC. (A LANDBANK Subsidiary) 2016 ANNUAL REPORT 2016 ANNUAL REPORT
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LBP INSURANCE BROKERAGE, INC. (A LANDBANK Subsidiary)
2016 ANNUAL REPORT2016 ANNUAL REPORT
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CONTENTS
Mission & Vision --------------------------------------------------------------- 3
Message from the Chairman -------------------------------------------------- 4
President & CEO Report ------------------------------------------------------- 5
Overview Financial Highlights ------------------------------------------------- 6
Operational Highlights --------------------------------------------------------- 8
2016 Performance Scorecard -------------------------------------------------- 13
LIBI Workforce
Management and Human Resources ------------------------------------- 27
Financial Highlights ------------------------------------------------------------ 29
Insurance Operations ---------------------------------------------------------- 33
Corporate Social Responsibility ----------------------------------------------- 37
Audited Financial Statements ------------------------------------------------- 40
Notes to Financial Statements ------------------------------------------------- 49
LIBI Board of Directors --------------------------------------------------------- 74
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TT o provide comprehensive, innovative, and o provide comprehensive, innovative, and
sustainable risk funding solution that sustainable risk funding solution that
addresses the risk exposure of the LBP and addresses the risk exposure of the LBP and
its clients.its clients.
To provide competitive FX rates and the timely To provide competitive FX rates and the timely
and safe delivery of the currencies to LBP clients.and safe delivery of the currencies to LBP clients.
BB y 2018, LIBI (Insurance) will be the trusted y 2018, LIBI (Insurance) will be the trusted
partner of the LANDBANK of the partner of the LANDBANK of the
Philippines for risk management, risk Philippines for risk management, risk
rere--engineering, and risk transfer advice and engineering, and risk transfer advice and
service.service.
By 2018, LIBI (Forex) will be the trusted alternative By 2018, LIBI (Forex) will be the trusted alternative
of LANDBANK's clients for the sale and of LANDBANK's clients for the sale and
acquisition of foreign currencies.acquisition of foreign currencies.
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MESSAGE FROM THE CHAIRMANMESSAGE FROM THE CHAIRMAN
M ajor changes occurred in
2016 which greatly affected
the insurance industry. Compliance with
stricter capital requirements for both life
and non-life companies led some
companies to merge with stronger
companies or close shop.
For LIBI, the focus shifted to delivering
on our commitments to GCG and
LANDBANK in order to provide more
inclusive insurance coverage to the
mandated sectors defined by the new
leadership. Thus, providing insurance to
farmers, fishers, micro entrepreneurs became our priority. Upgrading customer services
through better facilities, personalized attention and a uniquely Filipino way of interacting with
clients became our major focus.
But behind all these activities is the clear objective of giving the most responsive,
cost-effective and technically accurate insurance packages to LANDBANK and its affiliates.
This 2017, LIBI expects to continue its service focus thru a well-planned and executed training
program for management and technical personnel.
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GENERAL MANAGER REPORTGENERAL MANAGER REPORT
L BP (Land Bank of the Phil.) Insurance Brokerage (LIBI) is a
wholly owned subsidiary of Land Bank of the Philippines (LBP), and was created in 1982 for the purpose of engaging in the business of general insurance brokerage management, and risk management consultancy services to LBP clients or borrowers, and other government offices. As of 31 December 2016, LIBI’s total assets amounted to ₱1.24 billion.
We managed to end the year with a net premium of ₱577.16 million, representing an increase of ₱70.90
million, or 14% higher than last year’s ₱506.26 million. A total net commission in 2016 amounted to ₱105.61 million which is ₱14.64 million, or 16% higher than the previous year of ₱90.97 million.
But more than the improved financials, LIBI integrated social concerns to help our countrymen who are in need. In coordination with the MANILA BAY SUNSET PARTNERSHIP, INC. (MBSPPI), LIBI actively participated in the program of protecting and rehabilitating Manila Bay. The employees’ cooperative is likewise involved in the outreach program for the street children, in cooperation with OPERATION BLESSING FOUNDATION PHILIPPINES.
2017 will continue to be a challenging year as we celebrate our 35th anniversary. All initiatives shall be focused towards providing total custom-er satisfaction. We are grateful to our Board of directors for their wisdom and guidance in the pursuit of our vision & mission, and be one of the most preferred insurance brokers. LIBI shall continue to conduct proper business with integrity and honesty, manned by hard working, competent personnel.
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2016 2015 INCREASE
(DECREASE) %
INSURANCE 94.96 96.00 (1.04) (1.08)
FOREX 8.89 12.93 4.04 31.24
INVESTMENTS 26.62 27.42 (0.80) (2.92)
OTHER INCOME 2.00 1.78 0.22 12.36
TOTAL REVENUE 132.47 138.13 (5.66) (4.10)
STATEMENT OF FINANCIAL POSITION
FINANCIAL HIGHLIGHTS
Note 2016 2015
ASSETS
Current Assets
Cash and cash equivalents 3 242,629,531 292,792,051
Loans and receivables, net 4 163,722,612 180,351,651
Inventory held for consumption 5 80,195 107,690
Prepayments 6 6,858,666 5,522,271
413,291,004 478,773,663
Non-current Assets
Investment securities at amortized cost 7 797,842,474 713,534,724
Other investment 0 29,300
Property and equipment, net 8 23,145,518 21,395,548
Investment property 9 998,316 998,316
Intangible asset 10 2,132,633 0
Deposits 97,769 77,769
Deferred tax asset 40 6,817,500 8,760,938
831,034,210 744,796,595
TOTAL ASSETS 1,244,325,214 1,223,570,258
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FINANCIAL HIGHLIGHTS
LIABILITIES AND EQUITY
Current Liabilities
Payables 11 234,417,243 242,990,842
Other financial liabilities 12 7,327,776 6,673,054
Inter-agency payables 13 8,405,067 8,835,220
Trust liabilities 14 35,576,973 47,967,347
Provisions 15 6,789,287 6,402,187
Other payables 16 1,690,054 453,577
294,206,400 313,322,227
Equity
Share capital 17 300,000,000 300,000,000
Retained earnings 18 650,118,814 610,248,031
950,118,814 910,248,031
TOTAL LIABILITIES AND EQUITY 1,244,325,214 1,223,570,258
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OPERATIONAL HIGHLIGHTS
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INSTITUTIONAL VIABILITY
AND VITALITY
I. LIBI CORPORATE GOVERNANCE STRUCTURE
A. LIBI BOARD COMPOSITION LBP (Land Bank of the Phil.) Insurance Brokerage, Inc. (LIBI) was organized as a wholly-owned
subsidiary of the Land Bank of the Philippines on October 22, 1981. LIBI was primarily
established to service the bank's insurance requirements, its subsidiaries, clients/borrowers and
other government offices. It was created to engage in the business of general insurance
brokerage management and consultancy services on insurance-related activities. LIBI is
governed by a Board of Directors with eleven (11) seats. The LIBI Board is chaired by Mr. Tomas
T. de Leon, Jr. and also the Officer-in-Charge as President & CEO of LIBI on October 1, 2016. As
of 31 December 2016 the Board is composed of the following:
B. RESPONSIBILITIES, DUTIES AND FUNCTIONS OF THE BOARD
1. GENERAL RESPONSIBILITY
It is the responsibility of the Board to foster the long-term success of the Corporation,
and to sustain its competitiveness and profitability in a manner consistent with its
corporate objectives, and in line the best interests of its stockholders and other
stakeholders.
The Board formulates the Corporation’s vision, mission, strategic objectives, policies and
procedures that shall guide its activities, including the means to effectively monitor
Management’s performance.
MR. TOMAS T. DE LEON, JR
CHAIRMAN
MR. RODOLFO V. PESTAÑO
GENERAL MANAGER
MEMBERS ATTY. REYNAULD R. VILLAFUERTE MR. ALAN V. BORNAS YOLANDA D. VELASCO JENNIFER A. TANTAN TERESITA E. CHENG DAISY M. MACALINO ATTY. VERGEL A. CRUZ ATTY. DAVID P. CORPIN GERMAN S. CACCAM
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2. DUTIES AND FUNCTIONS
To ensure a high standard of best practice, the Board conducts itself with honesty and
integrity in the performance of the following duties and functions:
a. Appoint competent, professional, honest and highly-motivated management officers
in accordance with the Fit and Proper Rule. Adopt an effective succession planning
program for Management for approval of the GCG.
b. Provide sound strategic policies and guidelines on major capital expenditures.
Establish programs that can sustain the Corporation’s long-term viability and
strength. Periodically evaluate and monitor the implementation of such policies and
strategies, including the business plans, operating budgets and Management’s
overall performance.
c. Ensure that the Corporation complies with all applicable laws, regulations and best
business practices.
d. Establish and maintain an investor relations program that will keep the stockholders
informed of important developments in the Corporation. If feasible, the
Corporation’s CEO shall exercise oversight responsibility over this program.
e. Identify the stakeholders who are directly affected by the operations of the
Corporation, and formulate a clear policy on delivery of accurate, timely and effective
information to its stakeholders.
f. Adopt a system of internal checks and balances.
g. Identify key risk areas and performance indicators and monitor these factors with
due diligence to enable the Corporation to anticipate and prepare for possible
threats to its operational and financial viability.
h. Formulate and implement policies and procedures that shall ensure the integrity and
transparency of related party transactions between and among the Corporation and
its parent company, joint ventures, subsidiaries, officers and directors, including their
spouses, children and dependent siblings and parents and of interlocking director
relationship by members of the Board.
i. Constitute an Audit Committee and such other committees it deems necessary to
assist the Board in the performance of its duties and responsibilities.
j. Establish and maintain an alternative dispute resolution system in the Corporation
that can amicably settle conflicts or differences between the Corporation and its
stockholders and the Corporation and third parties, including the regulatory
authorities.
k. Properly discharge Board functions by meeting regularly. The meetings should be
duly recorded through the minutes of the meeting. Independent views during Board
meetings shall be given due consideration.
l. Keep Board authority within the powers of the institution as prescribed in the Articles
of Incorporation and by-laws, and in accordance with existing laws, rules and
regulation; and
m. Appoint a Compliance Officer who shall have the rank of at least officer level. In the
absence of such appointment the Corporate Secretary, shall act as Compliance
Officer.
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C. BOARD IN ACTION
The Board of Directors in its first meeting for 2016 set the calendar of Board meeting every 4th
week of the month.
The Board acted upon the following resolutions for CY 2016:
Board Resolution
No. PARTICULARS
2016-001-001 Issuance of LIBI’s Financial Statements for CY 2016
2016-002-002 Proposed Target for CY 2016
2016-002-003 Adoption of the CY 2015 Performance Based Incentives (PBI) Systems for the Appointive Members of the Governing Boards of LIBI
2016-002-004 Proposal and Recommendation of the Nomination and Remuneration Committee for the Promotion of the Administrative Head Ms. Antonette C. Serapio
2016-002-005 Proposed Amendments to the Codified Approving and Signing Authority (CASA)
2016-003-006 Revoking the provision on the grant of Christmas Gift Package/Raffle
2016-003-007 Allocated appropriation for CY 2016 (Upgrading of the Software System of LIBI)
2016-003-008 Declaration and Payment of Cash Dividend
2016-003-009 Proposal to direct Mrs. Victoria G. Marcial to claim against the Errors and Omissions of LIBI
2016-003-010 LIBI will not assume the portfolio of DBP Insurance in advance of the merger and before due diligence is conducted
2016-003-011 Proposal to stop the brokering transactions of LIBI-Forex starting April 5, 2016
2016-003-011A Designating the representatives for the Integrated Corporate Reporting System pursuant to GCG MC No. 2014-02
2016-004-012 Endorsement of Intra-Strata Assurance Corporation and MAA General Assurance Philippines, Inc. to LBP-FID for re-evaluation
2016-004-013 Renewal of Contract of Service of Mr. Rodolfo V. Pestaño for the Claim Management Project for another six (6) months.
2016-004-014 The Brokering Activities of LIBI-Forex of LIBI-Forex will continue provided that the clients are both depositories of LANDBANK and the settlement will be performed using the LBP Deposit Balance Account
2016-005-015 Guidelines for Whistleblowing and Reporting of LIBI
2016-005-016 Update on the existing WeAccess Enrolment and Maintenance Agreement
2016-005-017 Proposal for reorganization, rationalization and personnel planning
2016-005-018 Training Road Map for LIBI-Personnel
2016-006-019 Authorization to surrender and deliver thirteen (13) stock certificates with a total of 3010 shares representing the Subscriber Investment Plan (SIP) shares of LIBI from the Philippine Long Distance Telephone Company (PLDT)
2016-006-020 Write-Off the long outstanding Accounts Receivable (A/R) Non-trade amounting to ₱39,000.00
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Board Resolution
No. PARTICULARS
2016-007-021 Proposal to designate Mr. Rodolfo V. Pestaño as General Manager and Soliciting Official of LIBI
2016-007-022 LIBI’s Donation to LandBank Countryside Development Foundation, Inc. (LCDFI)
2016-008-024 Designate the President and CEO and/or the General Manager of LIBI with Authority to further designate any lawyer from the OGCC as LIBI’s Attorney-in-Fact/Representative to appear in all cases
2016-008-025 The Approval of the Technical and Investment Proposals for the IIBS Upgrade from Client Server (v3.3) to Web Version (v4.0)
2016-008-026 Proposed Amendments to LIBI’s CASA particularly the inclusion of Member of the LIBI Executive Committee as additional signatory to certain transactions under the Accounting and Finance Functions
2016-008-027 Proposal of Director Teresita Cheng regarding the Identified Risks for the Risk Management Manual of LIBI
2016-008-028 Management to give a letter of commendation to President & CEO George R. Francisco for the excellent service, innovation, vision and creative thinking he provided to LIBI
2016-008-029 Proposal of Management to designate Chainman Tomas T. de Leon, Jr. as Office-In-Charge of LIBI until a new President & CEO is appointed
2016-008-030 Create an Investment Committee composed of Director Jennifer A. Tantan and GM Rodolfo V. Pestaño as member
2016-009-030A Proposed Implementing Guidelines and Mechanics for the CSR Initiatives/Stakeholder Support for the Service Contractual Workers (SCWs) and other non-regular personnel performing services to LIBI
2016-009-031 Endorsement of the application for Accreditation of Commonwealth Insurance Company, Inc. to LBP-FID for further evaluation
2016-009-031A Proposed Amendments to LIBI’s CASA particularly on the Marketing Transactions
2016-009-032 Proposed and recommendation of the Remuneration and Nomination Committee for the alignment of salary of all LIBI-Personnel
2016-009-033 Proposal and recommendation of the Investment Committee for the Investment of LIBI’s Fund in the amount of ₱110 million thru Treasury for FXTN
2016-009-034 LIBI-Forex for the exemption of Progressive Forex Corporation from existing guidelines for accreditation of Forex Corporation
2016-010-035 Resignation of Director Teresita E. Cheng as member of the Board of Directors of LIBI effective November 21, 2016
2016-010-036 Designation of Director Daisy M. Macalino as Member of the Nomination and Remuneration Committee vice Teresita E. Cheng
2016-011-037 Proposed LIBI Risk Management Manual
2016-011-038 Proposed Competency Framework/Model of LIBI
2016-011-039 Grant of Productivity Enhancement Incentive (PEI) for CY 2016
2016-011-040 Proposal to nominate SVP Ludivino Geron vice Teresita E. Cheng as Member of the Board of Directors of LIBI
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Component Agreed LIBI Submission GCG Valida-
tion Rating
Objective/Measure Rating Scale Target Weight Actual Rating Actu-
al
Fin
an
cia
l
SO 1 Ensure Sustainable Financial Growth
SM 1 EBITDA Margin
Actual/Target x
Weight (but not to
exceed the weight)
75% 35% 71% 33.13%
35.00% 33.13%
Cu
stom
ers / S
tak
eh
old
ers
SO 2 Improve Service Delivery
SM 2 Customer Satisfaction Survey 80% in 2015
85% in 2016 Very Good 10% 90.4% 10%
SO 3 Offer Competitive FX Rates
SM 3 Accredited Counterparty for FX rate
canvassing
Actual/Target x
Weight (but not to
exceed the weight)
6 (additional
1) 5% None 0%
SO 4 Provide Wider Market Reach for Banccassurance Products for Agricultural Development
SM 4 No. of Products with Improved Market
Access
50% = products
developed
50% = products
sold
2 10% 2 10%
SO 5 Provide Wider Market Reach for Banccassurance Products for Financial Viability
SM 5 No. of New Products Offered
50% = products
developed
50% = products
sold
2 10% 2 10%
35.00% 30.00%
Inte
rnal P
rocess
SO 6 Improve Efficiency and Quality of Insurance Process
SM 6 Average Number of Days to Process
Insurance Coverage (1- [(A-T)/T]) x W
5 working
days 5% 7 working days 3%
SO 7 Enhance Existing Processes Comparable with the Industry
SM 7
2015: Manualization of Core Operations
in Preparation for ISO/GQMSS
Certification for Quality Service
2016: Preparation for ISO/ GQMSS
Certification for Quality Service
2015: Actual/Target
x Weight (but not to
exceed the weight)
2016: All or Nothing
Conduct of
Internal
Quality Audit
(IQA) based
on Manuals
10%
Note: With renegotiat-
ed from Conduct of
Internal Quality Manu-
al Audit to preparation
of Risk Management
Manual
10%
Sub-total 15.00% 13.00%
Learn
ing
an
d G
row
th
SO 8 Develop Strategic Skills & Competence of Officers and Staff
SM 8
2015: Percentage of Personnel who have
Undergone Technical Trainings/Seminars
(Insurance & FOREX)
2016: Competency Level of the Organiza-
tion
2015: Actual/Target
x Weight (but not to
exceed the weight)
2016: All or Nothing
Board
Approved
Competency
Framework
10%
Approved
Competency
Framework
10%
SO 9 Enhance IT Infrastructure
SM 9 Improvement of Existing Computer
System All or Nothing
Develop
Transaction
Tracking
Systems
5%
Note: With Renegoti-
ated from Develop
Transaction Tracking
Systems to Upgrading
of IIBS from Version
3.3 to Version 4.0
5%
Sub-total 15.00% 15.00%
Total 100.00% 93.02%
2016 PERFORMANCE SCORECARD
Note: The 2016 Performance Scorecard still for GCG validation as of preparing or writing ng 2016 Annual Report
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D. BOARD PERFORMANCE AND ATTENDANCE
MATERIAL SUBMISSION OF BOARD OF DIRECTORS MEETING
The materials are delivered to the Board of Directors/Commissioners three (3) calendar days
prior to the board meeting, but in some instances, the materials are delivered a day before the
said meeting.
BASIC INFORMATION
Name of Board Mem-
ber Position
Incu
mb
ency*
Date of Most
Recent Appointment
Committee Membership
(Executive Committee)
Committee Membership (Audit Com-
mittee)
Committee Membership (Risk Man-agement
Committee)
Committee Membership (Governance Committee)
Committee Membership (Nomination & Remunera-tion Comm.)
Tomas T. de Leon, Jr.
Chairman Tomas T. de
Leon, Jr. Yolanda D.
Velasco Teresita E.
Cheng Tomas T. de
Leon, Jr. David P. Corpin
George R. Francisco*
Vice-Chairman
George R. Francisco
Daisy M. Macalino
Alan V. Bor-nas
Vergel A. Cruz German S.
Caccam
Reynauld R. Villafuerte
Member Reynauld R.
Villafuerte David P. Corpin
Daisy M. Macalino
Reynauld R. Villafuerte
Teresita E. Cheng
Alan V. Bornas
Member Yolanda D.
Velasco German S.
Caccam
Jennifer A. Tantan
Jennifer A. Tantan
Yolanda D. Velasco
Member
Vergel A. Cruz
Daisy M. Macalino
Member
German S. Caccam
Member
David P. Corpin
Member
Vergel A. Cruz
Member
Jennifer A. Tantan
Member
Teresita E. Cheng**
Member
*Resigned effective September 26, 2016 **Resigned effective November 21, 2016
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D. BOARD PERFORMANCE AND ATTENDANCE (CONT.)
GOVERNING BOARD MEETING AND ATTENDANCE
Name of Board Member
Tota
l
Actu
al
%
Date of Board Meeting
1/28/16 2/26/16 4/4/16 4/25/16 5/27/16
Tomas T. de Leon, Jr. 13 13 100% P P P P P
Reynauld R. Villafuerte 13 13 100% P P P P P
Alan V. Bornas 13 13 100% P P P P P
Yolanda D. Velasco 13 13 100% P P P P P
Daisy M. Macalino 13 12 92.31% P P P P P
German S. Caccam 13 13 100% P P P P P
David P. Corpin 13 12 92.31% P P P P P
Vergel A. Cruz 13 13 100% P P P P P
Jennifer A. Tantan 13 13 100% P P P P P
Teresita E. Cheng** 11 11 100% P P P P P
George R. Francisco* 10 9 90% A P P P P
The Board of Directors was able to hold a meeting without the President & CEO at least once during the year which happens on January 28, 2016.
GOVERNING BOARD MEETING AND ATTENDANCE (CONT.)
Name of Board Member
Date of Board Meeting
6/6/16 6/28/16 7/29/16 8/26/16 9/23/16 10/27/16 12/1/16 12/16/16
Tomas T. de Leon, Jr. P P P P P P P P
Reynauld R. Villafuerte P P P P P P P P
Alan V. Bornas P P P P P P P P
Yolanda D. Velasco P P P P P P P P
Daisy M. Macalino P P P P A P P P
German S. Caccam P P P P P P P P
David P. Corpin P A P P P P P P
Vergel A. Cruz P P P P P P P P
Jennifer A. Tantan P P P P P P P P
Teresita E. Cheng** P P P P P P
George R. Francisco* P P P P P
*Resigned effective September 26, 2016 **Resigned effective November 21, 2016
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E. TRAINING AND CONTINUING EDUCATION BY THE BOARD
For 2016, some of LIBI Board of Directors attended various training and seminars conducted by
different training centers including our mother company Land Bank of the Philippines. Below
are the list of training that they attended:
DIRECTORS TRAININGS CONDUCTED BY
Tomas T. de Leon, Jr. Updating on Anti-Money
Laundering Act
Landbank of the
Philippines (LBP)
George R. Francisco
Actuarial Valuation &
General Insurance
Liabilities
Insurance Institute for Asia
and the Pacific (IIAP)
Risk Based Capital &
Stress Testing
Insurance Institute for Asia
and the Pacific (IIAP)
Updating on Anti-Money
Laundering Act (AMLA)
Landbank of the
Philippines (LBP)
Reynauld R. Villafuerte
Updating on Anti-Money
Laundering Act (AMLA)
Landbank of the
Philippines (LBP)
Yolanda D. Velasco
Daisy M. Macalino
German S. Caccam
David P. Corpin
Vergel A. Cruz
Jennifer A. Tantan
Teresita E. Cheng
Actuarial Valuation &
General Insurance
Liabilities
Insurance Institute for Asia
and the Pacific (IIAP)
Risk Based Capital &
Stress Testing
Insurance Institute for Asia
and the Pacific (IIAP)
Basic in Actuarial Pricing Insurance Institute for Asia
and the Pacific (IIAP)
Updating on Anti-Money
Laundering Act (AMLA)
Landbank of the
Philippines (LBP)
Alan V. Bornas
Financial Service
Summit IDC Financial Insight
GLOBE Users Council
Convention GLOBE TELECOM, INC.
EMC World 2016 Dell EMC
Asian Financial
Services Congress IDC Financial Insight
SAS Leaders Exchange
Conference SAS Philippines
Updating on Anti-Money
Laundering Act (AMLA)
Landbank of the
Philippines (LBP)
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F. THE BOARD COMMITTEES
A. Executive Committee
The Executive Committee is composed of not less than three (3) members of the Board, with
the Chairman of the Board as the Committee Chairman.
The Executive Committee, in accordance with the authority granted by the Board, or during
the absence of the Board, act by a vote of a least two-thirds (2/3) of its members on such
specific matters within the competence of the Board as may from time to time be delegated
to the Executive Committee in accordance with LIBI’s Articles of Incorporation and By-Laws,
except with respect to:
Approval of any action for which shareholders’ approval is also required;
Filling of vacancies on the Board or in the Executive Committee;
Amendment or repeal of By-Laws or the adoption of new By-Laws;
Amendment or repeal of any resolution of the Board which by its express terms
cannot be amended or subject to repeal;
Distribution of cash dividends; and
Exercise of powers delegated by the Board exclusively to other committees.
The LIBI Executive Committee is chaired by Director Tomas T. de Leon, Jr. with members
namely: Director Reynauld R. Villafuerte, Director Vergel A. Cruz and
Director Yolanda D. Velasco.
*Resigned effective September 26, 2016
Executive Committee Meeting
Name of Board
Member To
tal
Actu
al
%
Date of Committee Meeting
1/1
4/1
6
2/1
9/1
6
3/2
2/1
6
4/1
8/1
6
5/1
3/1
6
6/1
7/1
6
7/2
2/1
6
8/2
4/1
6
9/1
9/1
6
10
/5/1
6
10
/21
/16
11
/16
/16
12
/14
/16
Tomas T. de Leon, Jr.
13 13 100 P P P P P P P P P P P P P
Reynauld R. Villafuerte
13 13 100 P P P P P P P P P P P P P
Yolanda D. Velasco
13 13 100 P P P P P P P P P P P P P
George R. Francisco*
9 9 100 P P P P P P P P P
Vergel A. Cruz**
13 13 100 P P P P P P P P P P P P P
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EXECUTIVE COMMITTEE ACTIVITIES
ExCom
Resolution No. PARTICULARS
2016-001-001 Change of Employment Status of Ms. Kristina M. Undecimo from Probationary to Permanent Status effective January 31, 2016
2016-001-002 Proposed Target for 2016
2016-001-003 The Release of LIBI’s Two Million Pesos (₱2.0 M) Donation to LandBank Countryside Development & Foundation, Inc. (LCDFI)
2016-002-004 Proposed Amendments to the Codified Approving and Signing Authority (CASA)
2016-002-005 Revocation of Item B(2) of LIBI’s Guidelines on the Grant of Christmas Gift Package/Raffle to Contract Service Workers
2016-002-006 Declaration and payment of the Forty One Million Four Hundred Seven Thousand Six Hundred Eighty One Pesos Only (₱41,407,681.00) Cash Dividend to the National Government
2016-003-007 Renewal of the Contract Service of Mr. Rodolfo V. Pestaño the Claim Management Project for another six (6) months
2016-003-008 Change of employment status of Ms. Renalyn P. Caneja from probationary to permanent status effective May 1, 2016
2016-003-009 Grant and/or entitlement of the Corporate Secretary for the per diem of ₱4,000.00 every CGCom Meeting
2016-004-010 Official travel of Mr. John Pablo S. Tan, Claim Assistant to Baybay Leyte to attend the June 13, 2016 hearing in Civil Case No. B-05-07-19 entitled “Sps. Paraiso, et.al v.s LBP, Stronghold Insurance and LIBI
2016-004-011 Request of Landbank Countrsyside Development Foundation, Inc. for additional liquidation/reimbursement of the amount of ₱40,000.00
2016-004-012 Proposal of President & George R. Francisco to sign the proxy form in favor of LBP-Trust Department for the Notice of Noteholders’ Meeting for DBP Tier 2
2016-004-013 Ms. Vivian L. Torres availment of the early retirement effective June 1, 2016
2016-005-014 Request and recommendation of the Head of LIBI-Forex to re-hire Mr. Gorgonio D. Verecio, Jr.
2016-005-015 Change of employment status of Ms. Kim Roina E. Calimlim from probationary to permanent status effective July 1, 2016
2016-006-016 Promotion of Purisima Concepcion N. Chugani from Trader II to Trader III
2016-006-017 Promotion of two (2) Accounting Unit personnel namely: Ms. Merriesan B. Pador and Ms. Sheryl F. Atuan effective August 1, 2016
2016-007-018 Change of employment status of Ms. Erica Blest T. Aboy as Marketing Clerk from Direct Contractual to Probationary Status
2016-007-019 ₱2.0 M donation to Landbank Countryside Development Foundation, Inc. (LCDFI)
2016-007-020 Hiring of Mr, Constancio S. Arriesgado, Jr. as Director Contractual Driver
2016-008-021 Proposed Amendments to LIBI’s CASA Presented by Administrative Head particularly the Inclusion of any member of the LIBI Executive Committee as Additional Signatory to certain transactions under the Accounting and Finance Functions
2016-008-022 Proposed salary increase for regular employees
2016-009-023 Proposed Amendments to LIBI’s CASA presented by Administrative Head particularly on the Marketing transactions
2016-009-024 Proposed of the Remuneration and Nomination Committee for the Alignment of Salary of all LIBI personnel
2016-009-025 Proposed Implementing Guidelines and Mechanics for the CSR Initiative/Stakeholder Support for the Service Contractual Workers (SCWs)
2016-009-026 Proposed LIBI Risk Management Manual
2016-010-027 Proposed Competency Framework/Model of LIBI
2016-010-028 Grant Productivity Enhancement Incentive (PEI) for 2016
19
B. Audit Committee
The Audit Committee is composed of at least three (3) members of the Board, who shall
preferably have accounting and finance background, one (1) of whom shall be an
independent director and another with audit experience. The Chair of the Audit Committee
is an independent director.
Duties and Responsibilities of Audit Committee:
Assist the Board in the performance of its oversight responsibility for the financial
reporting process, system of internal control, audit process, and monitoring or
compliance with applicable laws, rules and regulations;
Perform oversight over Management’s activities in managing credit, market, liquidity,
operational, legal and other risks of the Corporation. The Committee shall receive
regularly from the Management of information on risk exposures and risk management
activities;
Perform oversight functions over the Corporation’s internal and external auditors. It
should ensure that the internal and external auditors act independently from each other
and that both auditors are given unrestricted access to all records, properties, and
personnel to enable them to perform their respective audit functions;
Review the annual internal audit plan to ensure its conformity with the objectives of the
Corporation;
Prior to the commencement of the audit, discuss with the external auditor the nature,
scope and expenses of the audit;
Organize an internal audit department, and consider the appointment of an independent
internal auditor;
Monitor and evaluate the adequacy and effectiveness of the Corporation’s internal
control system, including financial reporting control and information technology security;
Review the reports submitted by the internal and external auditors;
Review the quarterly, half-year and annual financial statements before submission to the
Board, with particular focus on the following matters:
Any change/s in accounting policies and practices
Major judgmental areas
Significant adjustments resulting from the audit
Going concern assumptions
Compliance with accounting standards
Compliance with tax, legal and regulatory requirements
Coordinate, monitor and facilitate compliance with laws, rules and regulations;
20
Evaluate and determine the non-audit work of the external auditor, and review
periodically the non-audit fees paid to the external auditor in relation to their significance
to the total annual income of the external auditor and to the Corporation’s overall
consultancy expenses. The committee shall disallow any non-audit work that will conflict
with his duties as an external auditor or may pose a threat to his independence. The
non-audit work shall be disclosed in the Corporation’s Annual Report;
Establish and identify the reporting line of the Internal Auditor to enable them to properly
fulfill their duties and responsibilities. They shall functionally report directly to the Audit
Committee. The Audit Committee shall ensure that in the performance of the work of the
Internal Auditor, they shall be free from interference by outside parties.
LIBI Audit Committee is chaired by Director Yolanda D. Velasco with the following members:
Director Daisy M. Macalino, Director German S. Caccam and Director David P. Corpin.
AUDIT COMMITTEE ACTIVITIES
Date of Meeting ACTION TAKEN
February 9, 2016 Deliberation and discussion of COA’s Audit Observation
March 22, 2016 Discussed Exit Conference on COA’s Audit Observation and Recommendation
June 3, 2016 Discussed Action Plan to address HOSTAD findings
November 25, 2016 Discussed the result of Special Audit of HOSTAD
AUDIT COMMITTEE MEETING
Name of Board Member
Tota
l
Actu
al
%
Date of Committee Meeting
2/19/2016 3/22/2016 6/3/2016 11/25/2016
Yolanda D. Velasco 4 4 100% P P P P
German S. Caccam 4 4 100% P P P P
David P. Corpin 4 4 100% P P P P
Daisy M. Macalino 4 4 100% OB OB P P
21
C. Governance Committee
The Governance Committee shall assist the Board of Directors in fulfilling its corporate
governance responsibilities. The Committee shall be composed of at least three (3) members
of Board, and chaired by the Chairman of the Board.
Duties and Responsibilities of Governance Committee:
Oversee the periodic performance evaluation of the Board and its committees and
Management;
Conduct an annual self-evaluation of the performance of each member;
Decide whether or not a Director is able to adequately carry out his/her duties, bearing in
mind the director’s contribution and performance (e.g., competence, candor, attendance,
preparedness and participation). Internal guidelines shall be adopted to address the
competing time commitments in case when directors serve on multiple boards;
Recommend the continuing education of Directors, the assignment of the directors to
Board Committees, the succession plan for the Executive Officers, and the remuneration
consistent with corporate and individual performance; and
Recommend the manner by which the Board’s performance may be evaluated and
propose an objective performance criteria. Such performance indicators shall address
how the Board can enhance long-term shareholder value.
LIBI Corporate Governance Committee is chaired by Director Tomas T. de Leon, Jr. with
members namely: Director Jennifer A. Tantan, Director Reynauld R. Villafuerte and Director
Vergel A. Cruz.
CORPORATE GOVERNANCE COMMITTEE MEETING
Name of Board
Member
Total
Actu
al
%
Date of Committee Meeting
3/3
/16
4/8
/16
4/1
8/1
6
4/2
5/1
6
05
/11
/16
6/2
/16
7/2
9/1
6
8/1
2/1
6
9/7
/16
12
/1/1
6
Tomas T. de Leon, Jr.
10 9 90% P A P P P P P P P P
Vergel A. Cruz 10 10 100% P P P P P P P P P P
Reynauld R. Villafuerte
10 10 100% P P P P P P P P P P
Jennifer A. Tantan
10 10 100% P P P P P P P P P P
22
D. Nomination and Remunerations Committee
The Board created the Nomination and Remunerations Committee which is composed of
three (3) members one of whom is an independent director.
Duties and Responsibilities of Nomination and Remunerations Committee:
Install and maintain a process to ensure that Officers to be nominated or appointed
shall have the qualifications and none of the disqualifications mandated under the
law, rules and regulations;
Review and evaluate the qualifications of all persons nominated to positions in LIBI
which require appointment by the Board;
Recommend to the GCG nominees for the shortlist in line with LIBI’s and its
subsidiaries’ Board composition and succession plan; and
Develop recommendations to the GCG for updating the CPCS and ensure that the
same continues to be consistent with LIBI’s culture, strategy, control environment as
well as the pertinent laws, rules and regulations.
The LIBI Nomination and Remuneration Committee is chaired by Director David P. Corpin
with members namely: Director Jennifer A. Tantan, Director Teresita E. Cheng and Director
German S. Caccam.
CORPORATE GOVERNANCE COMMITTEE ACTIVITIES
Date of Meeting ACTION TAKEN
March 3, 2016 Discussed the case filed by Phil. Prudential Life Insurance Company, Inc. to LIBI and LANDBANK.
April 8, 2016 Discussed with Office of the Government Corporate Counsel (OGCC) regarding civil case for Accounting and Damages filed by Phil. Prudential Life Insurance Company, Inc.
April 18, 2016 Discussed with Office of the Government Corporate Counsel (OGCC) the reply of LIBI to the complaint of Phil. Prudential Life, Inc.
April 25, 2016 Discussed the detailed narration of facts regarding the case and to finalize the answer
May 11, 2016 Discussed the result of the 2015 Assessment for the Corporate Governance Scorecard.
June 2, 2016 Discussed
July 29, 2016 Discussed the Renegotiation PAN for CY2016 for submission to GCG
August 12, 2016 Discussed the reply of LIBI for the mediation with Phil. Prudential Life, Inc.
September 7, 2016 Discussed the set pre-trials on September 12, 2016
December 1, 2016 Discussed the proposed Competency Framework
23
Nomination and Remunerations Attendance
*Resigned effective November 21, 2016
NOMINATION & REMUNERATION COMMITTEE ACTIVITIES
Date of Meeting Action Taken January 7 Deliberation and Discussion of the Job Description of Accounting Personnel
February 10 Deliberation and Discussion of the Job Description of Marketing Personnel
February 26 Deliberation and Discussion of the Job Description of LIBI-Forex Personnel
March 1 Deliberation and Discussion of the Job Description of Administrative Personnel
March 7 Deliberation and review of the passed discussion on the Job Descriptions of all units of LIBI
March 9 Final discussion for approval of the Board the Job Descriptions of all units of LIBI
May 31 Discussed the proposed Reorganization of LIBI
September 23 Initial discussion on Salary Realignment for LIBI Personnel
September 28 Deliberation and discussion on the LBP Subsidiaries Approved Uniform Salary Structure
October 3 Deliberation and Discussion on the guidelines for Merit Increase and Promotions
October 14 Deliberation and Discussion on the submitted graph, position level and comparable to salary schedule
October 24 Final discussion for approval of the Board on proposed salary realignment of LIBI personnel
November 10 Deliberation and discussion of Competency Framework/Model of LIBI
November 25 Final discussion for elevation to the Corporate Governance the Competency Framework/Model of LIBI
Nomination & Remuneration Committee Meeting
Name of Board Member
Tota
l
Actu
al
%
Date of Committee Meeting
1/7/16 2/10/16 2/26/16 3/1/16 3/7/16 3/9/16 5/31/16
David P. Corpin 14 13 92.86 A P P P P P P
German S. Caccam 14 14 100% P P P P P P P
Jennifer A. Tantan 14 14 100% P P P P P P P
Teresita E. Cheng* 13 13 100% P P P P P P P
Nomination & Remuneration Committee Meeting
Name of Board Mem-ber
Date of Committee Meeting
9/23/16 9/28/16 10/3/16 10/14/16 10/27/16 11/10/16 11/25/16
David P. Corpin P P P P P P P
German S. Caccam
P P P P P P P
Jennifer A. Tantan P P P P P P P
Teresita E. Cheng* P P P P P P
24
E. Risk Management Committee
The Risk Management Committee shall consist of at least three (3) members, with at least
one member having a background in finance and investments.
Duties and Responsibilities of Risk Management Committee:
Perform oversight risk management functions specifically in the areas of managing credit,
market, liquidity, operational, legal, reputational and other risks of LIBI, and crisis
management, which shall include receiving from Senior Management periodic
information on risk exposures and risk management activities;
Develop the Risk Management Policy of LIBI, ensuring compliance with the same and
ensure that the risk management process and compliance are embedded throughout the
operations of LIBI, especially at the Board and Management level; and
Provide quarterly reporting and updating the Board on key risk management issues as
well as ad hoc reporting and evaluation on investment proposals.
LIBI Risk Committee is chaired by Director Teresita E. Cheng with members namely: Director
Alan V. Bornas and Director Daisy M. Macalino.
*Resigned effective November 21, 2016
RISK COMMITTEE ACTIVITIES
Date of Meeting ACTION TAKEN
April 25 Deliberation and discussion of Maintenance Agreement with ABSI
September 29 Discussed the proposed Identified Risk for LIBI’s Risk Management Manual
Risk Committee Meeting
Name of Board Mem-ber
Total Actual % Date of Committee Meeting
4/25/16 9/29/16
Teresita E. Cheng* 2 2 100% P P
Alan V. Bornas 2 2 100% P P
Daisy M. Macalino 2 2 100% P P
25
G. BOARD APPRAISAL
The Governance Commission for GOCCs (GCG) developed a measurement to assess the
performance of the Board of Directors. The internet-based Performance Evaluation for Directors
(iPED) System was created to increase the level of confidentiality and security in the information
being given by the directors. Each director accomplishes the Director Performance Review (DPR)
Forms online and submits directly to the GCG through the iPED System. The DPR, one of the
components of the Performance Evaluation for Directors in the GOCC Sector, appraises the
performance of individual members of the GOCC Governing Board. This was implemented in
2015 which covered the performance evaluation for directors since 2014.
http://iped.gcg.gov.ph/
26
LIBI WORKFORCELIBI WORKFORCELIBI WORKFORCE
27
By the end of 2016, LIBI had thirty five (35) regular employees with only three (3) officers
heading the complement of twenty eight (28) personnel assigned to Insurance operations,
and four (4) assigned to Forex. LIBI had nine (9) are contractual employees assigned at the
Insurance Division.
LIBI EMPLOYEE FORCE 2012 – 2016
LIBI employees and Board of Directors had received, read and understood the Code of
Conduct by accomplishing the Code of Conduct Compliance Commitment Certificate.
As part of LIBI’s continuing program to develop its human resources, LIBI employees were sent
to attend the following training programs:
MANAGEMENT AND MANAGEMENT AND MANAGEMENT AND
HUMAN RESOURCESHUMAN RESOURCESHUMAN RESOURCES
2012 2013 2014 2015 2016 Officers 1 1 1 1 3
Insurance 29 32 34 35 37
Forex 4 4 4 4 4
TOTAL 34 38 39 40 44
COURSE/SEMINAR TITLE NO. OF
PARTICIPANTS Electronic Equipment Insurance 5
The Anti-Money Laundering Act of 2001, as amended and its RIRRs, BSP Circular No. 706 & the MLPP
38
Improving Grammar in Business 6
Training Course on ISO 9001:2008 Quality Management System Requirements & Documentation
10
Risk Management Tools Walkthrough 2
Basic Suretyship 3
Forum on: Motor Car Insurance Recovery/Re-channeling & Anti-Fraud Initiatives 2
Loss Adjustment 301 2
Training on Republic Act No. 9184 and its revised Implementing Rules and Regulations
3
Counterfeit Detection 4
PFRS 9 Seminar 2
Orientation on Gender Mainstreaming Evaluation Framework and GAD Planning and Budgeting
2
Corporate Governance Scorecard Feedback Session 1
Loss Adjustment 101 (Preparation & Investigation) 1
28
HEALTH, SAFETY AND WELFARE SERVICES
LIBI provides Health Plan to its employees
that covers:
preventive health care services or the
annual physical examination
out-patient services (consultation)
Hospitalization benefits (in-patient &
out patient)
Emergency cases
Non-emergency or elective cases
The extent of coverage is based on the
existing guidelines, except those are
provided for in the existing health care
maintenance agreement.
LIBI Management also provides Personal Accident Insurance to its employees and Board of
Directors with coverage of Accidental Death/Disablement, Unprovoked Murder and Assault,
Accidental Medical Reimbursement, Accident Burial Benefit and Daily Hospital Income
(Accident).
In 15 June 2016, LIBI employees
participates on the Building
Emergency Evacuation Plan (BEEP)
conducted by the building
administration of LIBI office. The
activity was observed and evaluated by
the Makati City Disaster Coordinating
Council Officials and Bureau of Fire
Protection. The Management provides
each employee a whistle, flashlight
and hard hat for emergency
preparedness.
29
FINANCIAL FINANCIAL
HIGHLIGHTSHIGHLIGHTS
30
HIGHLIGHTS OF ACTIVITIES & HIGHLIGHTS OF ACTIVITIES & HIGHLIGHTS OF ACTIVITIES &
INITIATIVES INITIATIVES INITIATIVES ––– 201620162016
For CY2016, LIBI realized a Net income After Tax of ₱71.80 million, a decrease of 0.57 per cent or
the equivalent amount of ₱0.41 million, as compared to the CY2015 NIAT of ₱72.21 million.
However, CY2016 NIAT is higher by 6.26 per cent, or the equivalent amount of ₱ million, as
compared to the target of ₱67.57 million. The Return on Equity (ROE) is 7.54 per cent while Return
on Asset (ROA) is 5.75 per cent, lower by 4.92 per cent and 2.54 per cent, respectively, as
compared to last year’s ROE of 7.93 per cent and ROA of 5.90 per cent. However, the per capita
income is ₱2.04 million, higher by 4.61 per cent or the equivalent amount of ₱0.090 million, as
compared to last year’s per capita income of ₱1.95 million. EBITDA margin is 71 percent, higher
by 3 per cent compared to last year’s EBITDA margin of 68 per cent.
Net premium volume produced during the year reached ₱572.04 million, an increase of 0.73 per
cent, or the equivalent amount of ₱4.14 million, as compared to last year’s ₱567.90 million of net
premium volume, attributed primarily due to the increase in premium volume from LBP Branches,
Agrarian Development Lending Sector (ADLS) and Provident Fund.
Net service fees from insurance brokering for the year of ₱94.96 million is ₱3.04 million or 3.31
per cent higher than last year’s ₱91.92 million net service fees. Forex trading income for the year
of ₱8.89 million decreased by 31.19 per cent, or the equivalent amount of ₱4.03 million as
compared to last year’s trading income of ₱12.92 million.
Investment portfolio increased by 11.82 per cent, or the equivalent amount of ₱84.31 million from
₱713.53 million in 2015 to ₱797.79 million as of December 31, 2016.
LIBI’s collection rate of 90 per cent for the current year is 4 per cent higher than the 86 per cent
collection rate last year. Out of the total net premium booked amounting to ₱639.72 million a
total amount of ₱66.80 million remains outstanding as of December 31, 2015.
Volume of dollars traded by LIBI-Forex Division for CY2016 amounted to USD82.82 million. This
amount represents a significant decrease of 49.28 per cent, or the equivalent amount of USD80.47
million, as compared to last year’s volume of dollars traded in the amount USD163.29 million.
Cash dividend declared and paid to the National Government for CY2015 amounted to ₱41.41
million.
Donated ₱2.00 million to Land Bank Countryside Development Foundation, Inc. to help finance its
endeavors in line with LANDBANK’s programs and projects for priority sectors.
Personnel services and maintenance and other operating expenses were within the budget.
Hence, total expenses for the year of ₱41.54 million has a positive variance of ₱9.01 million or
17.82 per cent against the budget of ₱50.55 million.
For the financial year ended 2016, LIBI complied to the code of corporate governance.
31
This year's financial result is slightly lower than last year’s performance by 0.57 per cent or ₱0.41
million, from ₱72.21 million Net Income after Tax (NIAT) in year 2015 to this year’s ₱71.80 million
NIAT. Other income derived from interest from long-term investments in government securities and
savings deposits amounted to ₱27.42 million, 2.02 per cent or ₱0.565 million lower against last
year’s figure of ₱27.99 million.
NIAT of ₱71.80 million was above the target NIAT of ₱67.57 million by 6.26 per cent or ₱4.23
million. This was attributed by the positive variance of 3.31 per cent or ₱3.04 million on the actual
accomplishment of ₱94.96 million against the target of ₱91.92 million net service fees. Likewise, a
favorable variance or cost savings of 17.83 per cent or ₱9.01 million on the actual total expenses for
the year of ₱43.79 million against the ₱50.56 million budgeted expenses for the year.
Actual total revenue for the year of ₱132.47
million represented a 1.54 per cent decrease
or the equivalent amount of ₱2.07 million, as
compared to the total revenue target for the
year of ₱134.54 million. This was primarily
due to LIBI-Forex Division non-attainment of
its trading income target of ₱11.64 million
by 23.62 per cent or ₱2.75 million against
actual accomplishment of ₱8.89 million.
Likewise, interest income derived from
investment in government securities of
₱26.62 million is lower by 7.40 per cent or ₱2.13 million against the target for the year of ₱28.76
million due to reinvestment of matured securities at a lower yield rate. Total revenue for the year of
₱132.47 million is lower by 4.10 per cent of ₱5.66 million compared to CY2015 accomplishment of
₱138.13 million.
60
80(i
n m
illio
n)
NET INCOME 72.01 67.58 75.76 72.21 71.80
2012 2013 2014 2015 2016
0.00
20.00
40.00
60.00
80.00
100.00
2015 Target 2016
75.76 79.5871.80
(in
millio
n)
Net Income After Tax 2016
32
Revenue sources are as follows:
REVENUE SOURCES (in PMM)
Total Revenue for the year of ₱132.47 for million is below the Revenue Target of ₱134.54 million by
₱2.07 million or 1.54 per cent.
2016 2015 Increase
(Decrease)
%
Insurance 94.96 96.00 (1.04) (1.08)
Forex 8.89 12.93 4.04 31.24
Investments 26.62 27.42 (0.80) (2.92)
Other Income 2.00 1.78 0.22 12.36
Total Revenue 132.47 138.13 (5.66) (4.10)
7%
22%
71%
Insurance P96.00M
ForexP12.93M
OtherIncomeP29.20M
0.00
40.00
80.00
120.00
160.00
2015 Target 2016
138.13 134.54 132.47
(in m
illio
n)
Total Revenue 2016
33
OPERATIONOPERATION
PREMIUM PRODUCTIONS
LIBI's net premium volume produced for 2016 of ₱577.29 million represents an increase of 12.70 per
cent, or the equivalent amount of ₱65.06 million, as compared to last year’s ₱512.23 net premium
volume. This was primarily due to the significant increase in premium from LBP Branches’ borrowers of
livelihood loan and premium from loan releases from Agricultural Development Lending Sector (ADLS).
PREMIUM VOLUME 2016
PREMIUM VOLUME (NET OF OTHER CHARGES) & COMMISSION
(BUSINESS SOURCE 2016 VS. 2015)
(IN P MM)
LBP Branches topped this year's business sources both in premium volume and commission.
ADLS is on the second spot both in premium and commission.
400
500
600
700
2015 Target 2016
Premium
% Commission
% 2016 2015 2016 2015
Branches 266.65 237.23 29.42 48.79 45.69 6.78
ADLS 210.91 186.91 15.83 37.08 33.44 10.88
PFO 37.79 35.14 2.65 7.75 7.17 8.09
LBP Visa & Others 30.94 18.57 12.37 6.23 3.89 37.56
Subsidiaries 19.95 20.77 (0.82) 3.62 4.10 (11.71)
Direct 11.05 13.61 (2.56) 2.14 2.67 (19.85)
Total 577.29 512.23 12.70 105.61 96.96 8.92
34
PREMIUM BUSINESS VOLUME
(PER INSURANCE LINE)
(IN P MM)
LBP Insurance Brokerage, Inc. maintained its CY2014 ranks per Insurance Commission’s statistics report
posted in their website as of December 31, 2015 among 60 Insurance Brokers as follows:
Rank
Based on Premium Produced 19
Based on Commission Earned 16
COLLECTIONS AND REMITTANCES
The total collections of P 639.73 million for the period represent 89.55 per cent collection rate of the
net production volume booked net of cancellation) for the year of ₱639.73 million. This year’s
collection rate improved by 5.30 per cent compared to last year’s collection rate of 84.25 per cent. As
of December 31, 2016, collectible accounts for 2016 transactions amounted to ₱66.80 million. For prior
years 2013 to 2015 accounts, ₱35.79 million are unexpired premium of Employees Salary Loan (ESL)
collectible from Philippine Prudential Life Insurance (PPLI).
On last year’s Accounts Receivable with a beginning balance of ₱94.70 million, ₱48.82 million were
collected while ₱14.56 million were cancelled / adjusted. Uncollectable accounts receivable as of
December 31, 2016 for 2015 amounted to ₱33.48 million. As for the 2013 and 2014, remaining credit
life insurance (CLI) collectible amounted to ₱35.79 million as of December 31, 2016 which represents
the unexpired CLI premium collectible from PPLI.
2016 2015 Increase
(Decrease) %
Life 309.72 279.36 30.36 10.87
Fire 135.40 102.51 32.89 32.08
Motor 46.52 39.76 6.76 17.00
Engineering 40.48 53.68 (13.20) (24.59)
Liability 15.00 7.94 7.06 88.92
Floater 10.46 15.48 (5.02) (32.43)
Marine 9.96 1.65 8.31 503.64
Personal Accident 4.80 4.80 0 0
Bonds 3.52 5.60 (2.08) (37.15)
Crop 1.26 1.26 0.00 0.00
MSPR 0.17 0.19 (0.02) (10.53)
Total 577.29 512.23 65.06 12.70
35
ANALYSIS OF RECEIVABLES
(PHP MM)
On the status of Accrued Service Fees Receivable, ₱32.94 million remains outstanding as of year-end.
The amount of ₱9.60 million from private insurers remains outstanding while prior year’s accrual from
private insurers has a balance of ₱14.66 million. Extra remuneration booked for the years 2007 to 2013
amounting to ₱23.34 million remained outstanding as of December 31, 2016.
Total premium remittances made to the principals (insurance companies) amounted to ₱375.94 million
or 66 per cent of the liability during the period of ₱567.09 million, making the balances within current
status excluding the unexpired ESL premium which remained unpaid by PPLI.
STATUS OF CLAIMS FILED BY CLIENTS
The insured clients filed a total of 1,269 claims in 2016. By the end of the year, 981 claims were settled
representing 77.30 per cent of the total claims while 288 claims remain outstanding. Out of the
outstanding 288 claims, 62 claims are for processing of check settlements, 80 claims are being
evaluated by the insurers while 146 claims are awaiting additional documents.
For the previous years 2001 to 2015, there are 382 outstanding claims, out of which the 151 claims are
GSIS accounts while 231 claims are from private insurers mostly from PPLI and Phoenix.
FOREX OPERATIONS
For the year 2016, Forex division total Trading Income for the year of ₱8.89 million is 31.19 per cent or
₱4.03 million lower against last year’s Trading Income of ₱12.92 million. Volume of dollars traded by
LIBI-Forex Division amounted to USD82.82 million, 49.28 per cent or USD80.47 million lower compared
to last year’s volume of USD163.29 million. Out of the USD80.82 million, USD28.21 million represents
trading transactions, which represents a decrease of 66.16 per cent or USD55.16 million compared to
last year’s volume of dollars traded of USD83.37 million while brokering volume amounted to
USD54.61 million. Likewise, it represents a decrease of 31.67 percent or the equivalent amount of
USD25.31, as compared to last year’s brokering transactions of USD79.92 million. This was due to
non-recurring transactions.
Average spread for the year in trading activities is ₱0.0614 centavos, higher by ₱0.0324 centavos or
111.72 per cent compared to last year’s ₱0.0290 centavos. The average spread for the year for
brokering activities is ₱0.1311 centavos, lower by ₱0.0004 centavos or 0.30 per cent compared to last
year’s average spread of ₱0.1315 centavos
DOLLAR TRADING VOLUME
2012 2013 2014 2015 2016
Premium (net of cancellation) 581.06 542.83 539.96 601.21 639.73
Total Collections 532.97 491.09 465.68 506.51 572.93
Collection Rate 91.72% 90.47% 86.24% 84.25% 89.55%
Receivables, end 48.09 49.11 74.28 94.70 66.80
2012 2013 2014 2015 2016
Volume traded ($'000) 111.23 97.73 87.36 163.29 82.82
Ave. spread (PHP) 0.094 0.105 .114 .079 .107
36
2016 ACQUISITION (US $‘000; PHP ‘000)
2016 DISPOSITION (US $‘000; PHP ‘000)
Above tables show LIBI-Forex’s acquisitions came from LBP Branches, Forex corporations and
money changers while its dispositions were mostly thru Forex corporations.
$ P %
LBP Clients 27,574 1,301,513 97.76
ORMD 889 41,531 3.12
TMD 638 30,605 2.30
Branches 26,047 1,229,377 92.34
Other Clients 633 29.798 2.24
Forex Corp. 230 10,696 0.82
Money Changer/OTC 403 19,102 1.43
TOTAL ACQUISITION 28,207 1,331,311 100.00
$ P %
Branches 109 5,145 0.39
Other Clients 28,099 1,328,101 99.61
Forex Corp. 27,295 1,289,723 96.73
Money Changer/OTC 804 38,379 2.88
TOTAL DISPOSITION 28,208 1,333,246 100
Add: Volume (brokering) 54,609 2,589,376
TOTAL VOLUME 82,817 3,922,622
37
CORPORATE SOCIAL CORPORATE SOCIAL CORPORATE SOCIAL
RESPONSIBILITYRESPONSIBILITYRESPONSIBILITY
38
A. MEMBERSHIP TO MANILA BAY S.U.N.S.E.T PARTNERSHIP
PROGRAM (MBSPPI)
To continue supporting the activities and
programs of LAND BANK OF THE
PHILIPPINES that improve and safeguard
the state of the environment for future
generations, LIBI released financial support
in the amount of FIFTY THOUSAND PESOS
(Ph₱50,000.00) to Manila Bay S.U.N.S.E.T
Partnership Program, Inc. (MBSPPI). The
said fund was used for the sustainable programs of MBSPPI for CY2016 as follows:
a. Quarterly clean-up of Manila Bay
b. Adopt-An-Estero Program through the use of Effective Micro-organisms (EM)
Solutions Incorporated in Bokashi Mud Balls.
c. School Tours to promote the MPSPPI IEC campaign entitled, “That Thing Called
Basura”
d. Other fund raising activities
On August 20, 2016, a thousand volunteers including LIBI employees participated in the Annual
Manila Bay Clean-Up, and they were able to make a Bokashi Mudballs.
MANILA BAY CLEAN UP, AUGUST 2016
39
MANILA BAY CLEAN UP, NOVEMBER 2016
B. DONATION TO LANDBANK COUNTRYSIDE DEVELOPMENT
FOUNDATION, INC. (LCDFI)
LIBI donated Two Million Pesos (Ph₱2,000,000.00) to LCDFI for CY2016 to finance the programs
and projects intended for LANDBANK’s priority beneficiaries.
40
41
42
43
44
LBP INSURANCE BROKERAGE, INC.
(A wholly-owned subsidiary of Land Bank of the Philippines)
STATEMENTS OF FINANCIAL POSITION
December 31, 2016 and 2015
(In Philippine Peso)
Note 2016 2015
ASSETS
Current Assets
Cash and cash equivalents 3 242,629,531 292,792,051
Loans and receivables, net 4 163,722,612 180,351,651
Inventory held for consumption 5 80,195 107,690
Prepayments 6 6,858,666 5,522,271
413,291,004 478,773,663
Non-current Assets
Investment securities at amortized cost 7 797,842,474 713,534,724
Other investment 0 29,300
Property and equipment, net 8 23,145,518 21,395,548
Investment property 9 998,316 998,316
Intangible asset 10 2,132,633 0
Deposits 97,769 77,769
Deferred tax asset 40 6,817,500 8,760,938
831,034,210 744,796,595
TOTAL ASSETS 1,244,325,214 1,223,570,258
LIABILITIES AND EQUITY
Current Liabilities
Payables 11 234,417,243 242,990,842
Other financial liabilities 12 7,327,776 6,673,054
Inter-agency payables 13 8,405,067 8,835,220
Trust liabilities 14 35,576,973 47,967,347
Provisions 15 6,789,287 6,402,187
Other payables 16 1,690,054 453,577
294,206,400 313,322,227
Equity
Share capital 17 300,000,000 300,000,000
Retained earnings 18 650,118,814 610,248,031
950,118,814 910,248,031
TOTAL LIABILITIES AND EQUITY 1,244,325,214 1,223,570,258
The Notes on pages 8 to 34 form part of these financial statements.
45
LBP INSURANCE BROKERAGE, INC.
(A wholly-owned subsidiary of Land Bank of the Philippines)
STATEMENTS OF COMPREHENSIVE INCOME
For the Years ended December 31, 2016 and 2015
(In Philippine Peso)
Note 2016 2015
REVENUE
Service income 19 94,960,103 95,999,369
Business income 20 36,055,529 40,905,005
Other revenues 21 1,451,714 1,227,981
132,467,346 138,132,355
EXPENSES
Personnel services 22 18,073,046 18,363,589
Maintenance and other operating expenses 23 16,988,065 15,406,725
Financial expenses 24 229,515 98,397
Non-cash expenses 25 6,245,442 13,055,688
Other expenses 26 5,000 41,385
41,541,068 46,965,784
INCOME BEFORE TAX 90,926,278 91,166,571
PROVISION FOR INCOME TAX 27 19,122,156 18,956,250
NET INCOME 71,804,122 72,210,321
OTHER COMPREHENSIVE INCOME 0 0
TOTAL COMPREHENSIVE INCOME 71,804,122 72,210,321
The Notes on pages 8 to 34 form part of these financial statements.
46
LBP INSURANCE BROKERAGE, INC.
(A wholly-owned subsidiary of Land Bank of the Philippines)
STATEMENTS OF CHANGES IN EQUITY
For the Years ended December 31, 2016 and 2015
(In Philippine Peso)
Retained Earnings
Share Capital (Note 18)
(Note 17) Appropriated Unappropriated TOTAL
Balance at January 1, 2015 300,000,000 48,000,000 529,975,126
877,975,126
Cash dividend (41,245,743) (41,245,743)
Prior period adjustments (Note 18.1) 1,308,327
1,308,327
Appropriations 110,000,000 (110,000,000) 0
Net income 72,210,321
72,210,321
Balance at December 31, 2015 300,000,000 158,000,000 452,248,031 910,248,031
Cash dividend (41,407,681) (41,407,681)
Prior period adjustments (Note 18.1) 9,474,342 9,474,342
Net income 71,804,122 71,804,122
Balance at December 31, 2016 300,000,000 158,000,000 492,118,814 950,118,814
The Notes on pages 8 to 34 form part of these financial statements.
47
LBP INSURANCE BROKERAGE, INC.
(A wholly-owned subsidiary of Land Bank of the Philippines)
STATEMENTS OF CASH FLOWS
For the Years ended December 31, 2016 and 2015
(In Philippine Peso)
Note 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from sale of foreign currencies 2,499,218,590 3,758,771,080
Cash received from advance payment of premiums 353,227,610 297,627,497
Collection of insurance premium 233,275,362 242,867,575
Collection of receivable-others 28,754,426 5,655,132
Contingent profit commission received from insurance com-
panies 9,247,791
4,587,867
Trading income received 8,661,179 12,925,933
Collection of extra remuneration received from GSIS 8,424,273 0
Service fees received from insurance companies due to direct
payments 1,941,175
2,150,151
Rental income 607,500 150,000
Collection of receivables from officers and employees 261,404 146,824
Cash inflows 3,143,619,310 4,324,882,059
Payment for purchases of foreign currencies (2,366,366,739) (3,755,557,364)
Payment of premiums to insurance companies (483,374,821) (462,752,234)
Payment to government agencies (26,172,281) (65,488,206)
Payment to clients (18,810,739) (16,154,878)
Payment to suppliers (14,159,831) (13,454,356)
Payment for salaries and wages (9,001,130) (9,564,293)
Payment for employee other benefits (6,457,791) (6,944,180)
Cash payment for additional funding of Retirement Fund 0 (4,221,907)
Payment for income taxes (5,787,242) (8,005,468)
Cash outflows (2,930,130,574) (4,342,142,886)
Net cash generated from/(used in) operating activities 213,488,736 (17,260,827)
48
LBP INSURANCE BROKERAGE, INC.
(A wholly-owned subsidiary of Land Bank of the Philippines)
STATEMENTS OF CASH FLOWS - CONTINUATION
For the Years ended December 31, 2016 and 2015
(In Philippine Peso)
Note 2016 2015
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 26,658,757 27,799,424
Proceed from redemption of PLDT Stocks 59,189 0
Proceed from disposal of unusable property and equipment 0 314,271
Proceed from maturities of short -term investments 10,258,243,980 1,296,038,068
Proceed from maturities of long-term investments 125,539,887 70,822,500
Cash inflows 10,410,501,813 1,394,974,263
Placement to high yield savings (10,415,000,000) (1,296,000,000)
Placement to short-term investment (29,647,307) 0
Placement to long term investments (181,617,728) (26,988,809)
Acquisition of property and equipment (6,480,352) (441,600)
Cash outflows (10,632,745,387) (1,323,430,409)
Net cash provided by/(used in) investing activities (222,243,574) 71,543,854
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of cash dividend (41,407,681) (41,245,743)
Net cash used in financing activities (41,407,681) (41,245,743)
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS (50,162,519) 13,037,284
CASH AND CASH EQUIVALENTS, beginning of year 292,792,051 279,754,767
CASH AND CASH EQUIVALENTS, end of year 3 242,629,532 292,792,051
The Notes on pages 8 to 34 form part of these financial statements.
49
LBP INSURANCE BROKERAGE, INC.
(A wholly-owned subsidiary of Land Bank of the Philippines)
NOTES TO FINANCIAL STATEMENTS
(All Amounts in Philippine Peso unless otherwise stated)
1. CORPORATE INFORMATION
1.1 Corporate Background
The LBP Insurance Brokerage, Inc. (LIBI) was organized as a wholly owned subsidiary of Land
Bank of the Philippines (LBP) on October 22, 1981 under Securities and Exchange Commission
(SEC) Registration No. 105764. On May 16, 1983, its Articles of Incorporation was amended
increasing the number of directors of the Board from 9 to 11. Further, the AOI were amended
on October 17, 1994 increasing the LIBI’s authorized capital stock from ₱20,000,000 to
₱300,000,000 and revising its secondary purpose. It was created primarily for the purpose of
engaging in the business of general insurance brokerage management and consultancy more
particularly as follows:
To act as insurance broker for life, health, accident, motor car, casualty, surety and
fidelity, marine cargo and hull, comprehensive liability insurance and other insurance
coverage allied with and incidental to the above-mentioned lines, and
To engage in management and consultancy work on insurance and in this
connection, to hold, own, purchase, acquire, underwrite, obtain participation in and
manage the business of any corporation, partnership or equity.
Its secondary purpose is to engage in the business of buying and selling of foreign currencies;
and in the buying, selling, importing, exporting and/or dealing in any manner, at wholesale or
retail of goods and merchandise.
The registered and principal office of business is located at 12th Floor SSHG Law Centre
Building, 105 Paseo de Roxas St., Legaspi Village, Makati City.
1.2 Authorization for Issue of the 2016 Financial Statements
The financial statements of LIBI for the year ended December 31, 2016 were authorized for
issue by the Board of Directors on January 27, 2017 in Board Resolution No. 2017-001-006
dated January 27, 2017.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Financial Statements Preparation
The accompanying financial statements have been prepared using historical cost basis except
for Investment in government securities which are stated at amortized cost using effective
interest method, Investments in Agrarian Reform Bonds which are stated at cost, adjusted for
accretion of discounts amortization and attrition due to partial redemption. Foreign currency
cash in bank and on hand that are used for trading in LIBI-Forex division, stated at spot
exchange rate.
50
2.2 Adoption of Philippine Accounting Standards (PAS)/Philippine Financial Reporting
Standards (PFRS)
PAS 1, Presentation of Financial Statements, provides framework of financial statements
presentation. It requires more specific statement of financial position line items (tax liabilities,
provisions, non-current interest bearing debt, among others). The standard requires
presentation of comparative financial statements and information.
PAS 7, Statement of Cash Flows, prescribes the provision of information about historical
changes in cash equivalents of an entity by means of a cash flow statement which classifies
cash flow during the period from operating, investing and financing. The standard explicitly
states that only expenditure that results in a recognized asset can be classified as a cash flow
from investing activities.
PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, removes the
concept of fundamental error and the allowed alternative to retrospective application of
voluntary changes in accounting policies and prospective restatement to correct prior period
errors. It defines material omissions or misstatements, and describes how to apply the
concepts of materiality when applying accounting policies and correcting errors.
PAS 10, Events after the Reporting Period, prescribes the accounting policies and disclosures
related to adjusting and non-adjusting subsequent events. Additional disclosures required by
the standard were included in the financial statements, principally the date of authorization for
release of the financial statements.
PAS 12, Income Taxes, prescribes the accounting treatment for income taxes. Current tax for
the current and prior periods should be recognized as a liability to the extent that it has not yet
been settled, and as an asset to the extent that the amounts already paid exceed the amount
due. Current tax assets and liabilities should be measured at the amount expected to be paid
to (recovered from) taxation authorities, using the rates/laws that have been enacted or
substantively enacted by the end of the reporting period. Deferred tax assets and liabilities
shall be measured at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on the tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting period.
PAS 16, Property, Plant and Equipment, provides additional guidelines and clarification on
recognition and measurement of items of property, plant and equipment. It also provides that
each part of an item, property, plant and equipment with a cost that is significant in relation to
the total cost of the item shall be depreciated separately.
PAS 18, Revenue, provides under item 13 of the appendix accompanying PAS 18 that
Insurance agency commissions received or receivable which do not require the agent to render
further service are recognized as revenue by the agent on the effective commencement or
renewal dates of the related policies. However, when it is probable that the agent will be
required to render further services during the life of the policy, the commission, or part thereof,
is deferred and recognized as revenue over the period during which the policy is in force.
51
PAS 19, Employees Benefits, the objective of this standard is to prescribe the accounting and
disclosure of employee benefits (that is all forms of consideration given by an entity in
exchange for service rendered by employees). This standard requires an entity to recognize a
liability when an employee has provided service in exchange for employee benefits to be paid
in the future; and an expense when the entity consumes the economic benefit arising from
service provided by an employee in exchange for employee benefits.
PAS 21, Effects of Changes in Foreign Exchange Rates, addresses the accounting for
transactions in foreign currency. It provides that foreign currency transactions shall be
recorded, on initial recognition by applying to the foreign currency amount the spot exchange
rate at the date of transaction; exchange difference arising on the settlement of monetary items
or on translating monetary items at rates different from those at which they were initially
recognized shall be recognized in profit or loss in the period in which they arise. The adoption
of this standard will have no material impact on the financial statements.
PAS 24, Related Party Disclosures, provides additional guidance and clarification in the scope
of the standard, the definitions and disclosures for related parties. It also requires disclosures of
the total compensation of key management personnel and benefit types.
PAS 26, Accounting and Reporting by Retirement Benefit Plans, the objective of this
standard is to specify measurement and disclosure principles for the reports of retirement
benefit plans. All plans should include in the report a statement of changes in net assets
available for benefits, summary of significant accounting policies, and description of the plan
and effect of any changes in the plan during the period.
PAS 32, Financial Instruments: Presentation, sets out the required presentation of financial
instruments to enhance financial statement users’ understanding of the significance of financial
instruments to an entity’s overall financial position, performance, and cash flows. PAS 32
requires strict offsetting criteria for financial assets and liabilities.
PAS 36, Impairment of Assets, provides that an asset is impaired when its carrying amount
exceeds its recoverable amount. Indications of impairments are the following: obsolescence or
physical damage; asset is held for disposal and there is evidence that the economic
performance of an asset is, or will be, worse than expected.
PAS 39 Financial Instruments: Recognition and Measurement, establishes specific
categories into which all financial assets and liabilities must be classified.
PAS 40, Investment Property, provides that Investment property should be recognized as an
asset when it is probable that the future economic benefits that are associated with the
property will flow to the enterprise, and the cost of the property can be reliably measured.
Investment property is initially measured at cost, including transaction costs. Such cost should
not include start-up costs, abnormal waste, or initial operating losses incurred before the
investment property achieves the planned level of occupancy.
52
PFRS 9, Financial Instruments covers the classification and measurements of financial assets.
Mandatory effective date of PFRS 9 will be on January 01, 2015 as per SEC Memorandum
Circular No. 03 dated May 24, 2012.
Non-early adoption of this standard has no financial impact on classification and
measurements of financial assets and financial liabilities because all of LIBI’s investments were
held until maturity to collect (contractual cash flows) interest on a quarterly and semi-annually
basis.
2.3 Use of Estimates
The preparation of financial statements in accordance with PFRS requires management to
make estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. The estimates and assumption used in the accompanying financial
statements are based upon management’s evaluation of relevant facts and circumstances as of
the date of the financial statements. Actual results could differ from such estimates.
2.4 Cash and Cash Equivalents
Cash in the statement of financial position comprises cash on hand and in banks. Foreign
currency cash in bank and on hand which are used for trading in LIBI-Forex division are stated
at spot exchange rate. Cash equivalents consists of short-term investments in marketable
government securities with maturities not exceeding three months and that are subject to an
insignificant risk of change in value.
2.5 Investments Securities
LIBI existing policy is to invest excess funds in government securities (GS) because the servicing
and repayments are fully guaranteed by the government.
Investments in GS – Agrarian Reform Bonds are stated at cost, adjusted with the amortization of discounts/premium and attrition due to partial redemption.
Investments in GS – Fixed Treasury Notes, Retail Treasury Bonds are stated at amortized cost
using effective interest method.
2.6 Loans and Receivable Accounts
LIBI acts as an agent in placing the insurable risks of its clients with insurers and as such, is not
liable as principal for amounts arising from such transactions. However, Premium Receivables
were recognized upon issuance of Statement of Accounts. Accrual of service fees from
accredited insurers are based on premium production.
To fairly present the net realizable value of Accrued Service Fees Receivable and Other
Receivables, Allowances for Impairment have been provided. The allowances were then
determined based on the aging schedule multiplied by the rate or per cent of loss experienced
by LIBI.
53
2.7 Property, Plant and Equipment
Property, Plant and Equipment are carried at cost less accumulated depreciation and any
impairment in value. The initial cost of property, plant and equipment comprises its purchase
price and any directly attributable cost of bringing the asset to its working condition.
Depreciation is calculated on a straight-line basis computed at cost less ten percent residual
value over the estimated useful lives of the property and equipment as follows:
An item of property and equipment is derecognized upon disposal or when no further future
economic benefits are expected from its use or disposal. Any gain or loss arising from
derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying value of the asset) is included in the statement of comprehensive income in the
year the asset is derecognized.
Minor expenditures incurred after the fixed assets have been put into operation, such as
replacements, repairs and maintenance costs amounting to ₱15,000 or less are normally
charged to profit and loss in the period in which the costs are incurred.
The assets’ residual values, useful lives and depreciation method are reviewed periodically to
ensure that the period, residual value and the method of depreciation are consistent with the
expected pattern of economic benefits from items of property and equipment.
2.8 Income recognition
Beginning 2008, LIBI recognizes commission income (service fees) from private insurers based
on premium billings upon rendition of brokering services to the assured and upon issuance of
policies by the insurer. Accrual method is used in recognizing commission income from
insurers.
Interest Income is recognized using effective interest method.
Gain or losses arising from trading of foreign currency are reported in the statement of
comprehensive income.
Revenue is recognized to the extent that is probable that the economic benefits will flow to LIBI
and the revenue can be reliably measured.
Number of Years
Building 20
Furniture, Fixtures and Equipment 5
Motor Vehicle 7
54
2.9 Income Taxes
Income tax on the profit for the year comprises current tax only. Income tax is recognized in
the statement of comprehensive income. Current income tax is the expected tax payable on
the taxable income for the year using tax rates enacted or substantially enacted as of the
reporting date, and any adjustment to tax payable in respect to previous years.
Deferred Tax Asset refers to tax consequence attributable to differences between the financial
reporting bases of assets and liabilities. It is measured using the tax rate applicable to taxable
income in the year in which those temporary differences are expected to be recorded or
settled. Deferred Tax Asset is recognized to the extent of the realization of the related Income
Tax Benefit through future taxable income.
2.10 Employee Benefits
In compliance with the provisions of the Retirement Law [Republic Act (R.A.) No. 7641], which
requires corporation to provide retirement benefits for their employees, and the National
Internal Revenue code (R.A. No. 8424), which allows tax deductibility of employer’s
contributions for the retirement benefits of its employees, LIBI has established a retirement
fund pursuant to Board Resolution No. 2010-006-012 dated July 30, 2010. The retirement
benefit plan is a defined benefit type and is non-contributory.
The set-up of Retirement Fund Liability was approved by the Board of Directors on September
01, 2010 per Board Resolution No. 2010-007-013.
The cost of defined benefit plan is determined by using actuarial valuation; hence, LIBI
engaged the services of a duly certified independent actuarial firm on December 30, 2010.
Revaluation of LIBI’s Retirement Plan was done on January 01, 2015 by E. M. Zalamea Actuarial
Services, Inc. Below are the actuarial valuation results:
The retirement plan covers all its officers and regular employees, 12 males and 18 females
totaling 30 eligible employees;
Average age in years is 42.1;
Average years of remaining life of the employees group is 14.9;
Average years of Past Service is 14.4;
Mortality rate was based on the 2001 CSO Table- Generational (Scale AA, Society of
Actuaries) and the disability rate was based on the Disability Study, Period 2, Benefit 5
(Society of Actuaries);
The interest rate was assumed at 4 per cent, compounded annually;
The salary increase rate was assumed at 7 per cent, compounded annually;
The Normal Retirement Age is 60;
The Projected Retirement benefit is one-half month basic salary for every year of service;
55
The funding method used was the Accrued Benefit Actuarial Cost Method (Projected Unit
Credit);
The employee turnover rates are 100 per cent of the following standard table:
Under the Accrued Benefit Valuation Method, Past Service Liability (PSL) is ₱11,099,195 while
the Annual Normal Cost (ANC) is ₱670,783.
Based on LBP-Trust Banking Group Financial Report as of June 30, 2015, LIBI’s Retirement Fund
Book Value amounted to ₱6,877,288. Hence, LIBI made additional funding of ₱4,221,907 to
totally cover the ₱11,099,195 PSL. The additional fund was approved in Board Resolution No.
2015-007-023 dated August 04, 2015.
LIBI appropriated its Retained Earnings from 2000 to 2008 a total amount of
₱10,000,000 for retirement benefit plan. On July 18, 2011, the Retirement Fund was finally
set-up by LIBI of which LBP-Trust Banking Group (LBP-TBG) was appointed as Trustee of the
fund. LIBI treated this fund as off books in accordance with PAS 26-Accounting and Reporting
by Retirement Benefit Plan. The monitoring of this fund would be done by the LIBI
Administrative Head, which would be checked periodically by the Accounting Head.
Out of the original 39 eligible employees, 13 employees availed of the Retirement Fund
wherein retirement benefits totaling to ₱5,795,385 were withdrawn from the fund as at
December 31, 2016. The remaining balance of the Retirement Fund as at December 31, 2016 is
₱8,477,029. Accumulated income since the transfer of the fund on July 18, 2011 to LBP-TBG
reached ₱1,730,574 as at December 31, 2016.
3. CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, cash and cash equivalents includes the following:
Age Rate (%)
19-24 7.50
25-29 6.00
30-34 4.50
35-39 3.00
40-44 2.00
≥45 0.00
2016 2015
Petty cash 52,000 52,000
Local currency on hand
Foreign currency on hand
109,890
63,207
145,636
7,020
Cash in bank-foreign currency 454,251 520,669
Cash in bank-local currency 241,950,183 292,066,726
242,629,531 292,792,051
56
4. LOANS AND RECEIVABLES
This account consists of:
\1 This account represents outstanding premium receivable from the assured whose insurance policies
were issued by accredited insurers. This includes unexpired premium collectible from Philippine
Prudential Life Insurance Company, Inc. (PPLICI) amounting to ₱35,793,972 based on the result of
reconciliation as at December 31, 2016.
\2 This includes the corresponding accrued service fee of ₱7,988,428 on the unexpired premium
collectible from PPLICI.
The following is the status of the Civil Case No. 75133 filed at Pasig Regional Trial Court Branch 155 by
PPLICI against Land Bank of the Philippines and LIBI as of March 27, 2017:
The Case was set for Pre-Trial Conference on 28 February 2017. However, since the
mediation proceedings before the Philippine Mediation Center (PMC) Pasig had just been
terminated without any settlement or compromise agreement with the case between the
parties, there is a possibility that the case will be referred to Judicial Dispute Resolution
(JDR) Proceedings first before proceeding with the Pre-Trial Conference. Nevertheless, LBP
and LIBI counsels (from the Office of Government Corporate Counsel) are required to be
ready with the possibility that Pre-Trial Conference might proceed even there is no JDR yet.
Furthermore, there is a pending Motion for Reconsideration filed by LBP that is pending
resolution with the court.
On the scheduled hearing date, the respective counsels of the parties appeared. Pre-trial
was reset due to a pending incident as LBP’s Motion for Reconsideration is yet to be
resolved by the Court. Next hearing is tentatively set on 04 April 2017. It is possible that
the case will be referred to JDR in the coming hearing.
Also, a Cease and Decease Order for PPLICI was issued by the Insurance Commission on October 14,
2016. Thus, PPLICI is now under conservatorship.
On March 01, 2017, the General Manager together with the Marketing Department Head had a
meeting with the assigned conservator of PPLICI at PPLICI Head Office, Burgundy Building, Ortigas,
Pasig City, and was informed that PPLICI has more liabilities than its assets and if ever PPLICI can sell
their remaining assets, settlement of their obligations to their employees shall be prioritized before
other creditors.
Impairment of accrued service fees receivable was computed based on aging and then multiplied by
the rate or per cent of loss experienced by LIBI.
For the current year, a 100 per cent allowance for impairment losses was provided to the Accrued
service fees receivable-Extra Remuneration from GSIS aged over 360 days totaling ₱3,705,340.
On the other hand, a total amount of ₱10,183,465 was reversed during the year due to collection (Note
27).
2016 2015
Accounts receivable \1 143,440,197 155,318,414 Accrued service fees receivable\2
32,945,070 47,845,650
Interest receivable 5,702,047 4,496,374
Other receivables 1,584,157 1,460,755
Due from SSS 0 3,360
183,671,471 209,124,553 Less: Allowance for impairment-accrued
service fees receivable
19,948,859 28,772,902 163,722,612 180,351,651
57
5. INVENTORY HELD FOR CONSUMPTION
This account consists of:
6. PREPAYMENTS
This account consists of:
The other prepayments consist of tax withheld receivable and creditable withholding taxes.
7. INVESTMENT SECURITIES AT AMORTIZED COST
Details of this account are as follows:
Held to maturity investments of LIBI carry interest rates at December 31 as follows:
On October 29, 2014, the request of LBP Leasing and Finance Corporation (LLFC) for the assignment of
₱500,000,000 worth of government securities – Retail Treasury Bonds as partial collateral for LLFC’s
existing short term loan from Land Bank of the Philippines was approved in Board Resolution No.
2014-009-027. The Deed of Assignment by way of security was executed on October 31, 2014 by and
between LIBI and LLFC for a period of two years. In consideration of the assignment, LLC shall pay LIBI
a guarantee/assignment fee equivalent to 1/8 of 1 per cent or ₱625,000 per annum or ₱52,083.33 per
month. The guarantee/assignment fee is being paid by LLFC on a quarterly basis.
Due to the maturity of the Retail Treasury Bonds on August 19, 2015 and on March 03, 2016 totaling
₱82,855,000, the assignment fee was reduced to ₱530,638.92 per annum or ₱44,219.91 per month
based on the remaining amount of ₱424,511,129.56 with the same guarantee/assignment fee rate.
LLFC did not request for replacement of the matured assigned investment.
2016 2015
Office supplies inventory 33,533 48,794
Accountable forms inventory 44,430 54,125 Non-accountable forms 2,232 4,771 80,195 107,690
2016 2015
Other prepayments 5,928,675 5,088,547
Input tax 789,024 260,929 Prepaid insurance 140,967 172,795
6,858,666 5,522,271
2016 2015
Retail treasury bonds 552,524,935 537,944,076
Fixed treasury notes 150,521,747 0
Treasury bills 19,795,792 100,470,827
DBP-Tier II 75,000,000 75,000,000
Agrarian reform bonds 0 119,821
797,842,474 713,534,724
2016 2015
Retail treasury bonds 6.125%, 3.50% and 3.250% 6.125% and 3.250%
DBP-Tier II 4.875% 4.875%
Treasury bills 1.675% 1.88% and 1.90%
58
8. PROPERTY AND EQUIPMENT
This account consists of:
9. INVESTMENT PROPERTY
This represents assets acquired through dacion en pago from the former employee with outstanding
obligation amounting to ₱998,316. The dacioned properties consist of two parcels of land containing
a total area of 5,847 square meters and are located at Catbalogan, Western Samar. The concerned
employee was given the right to repurchase the properties within one year. However, it did not
materialize. Hence, these were consolidated in the name of LIBI. The appraised value of one lot
amounted to ₱876,900 while there is no appraisal yet conducted for the other one. Management will
request appraisal of the said lot from LBP.
10. INTANGIBLE ASSET
This account consists of the cost of the development in progress of computer software upgrade of the
LIBI’s existing Integrated Insurance Business System (IIBS) version 3.3 to 4.0 web version system. The
total cost of the project is ₱6,439,219. The project duration to upgrade the LIBI IIBS will be six months
or will end on July 2017. As of December 31, 2016, the down payment amounted to ₱2,084,790.
This account also includes the on-going upgrade of LIBI’s payroll system amounting to ₱47,843.
Office
Equipment
Information
and Communica-
tion
Technology
Furniture and
Fixtures Building
Motor
Vehicles Total
Cost,
Jan. 1, 2016 5,863,342 745,792 2,176,028 37,777,151 3,349,214 49,911,527 Acquisitions 748,481 2,487,221 218,661 893,354 0 4,347,717 Reclassification 0 (57,645) 0 0 0 (57,645)
Disposal (894,636) 0 0 0 0 (894,636)
Balance,
Dec. 31, 2016 5,717,187 3,175,368 2,394,689 38,670,505 3,349,214 53,306,963
Accumulated depre-ciation,
Jan. 1, 2016 4,716,726 291,379 1,962,027 20,050,018 1,495,829 28,515,979 Depreciation 307,978 137,964 21,530 1,736,586 367,132 2,571,190 Reclassification 0 (39,280) 0 0 0 (39,280)
Disposal (886,444) 0 0 0 0 (886,444)
Balance,
Dec. 31, 2016 4,138,260 390,063 1,983,557 21,786,604 1,862,961 30,161,445
Net carrying
amount,
Dec. 31, 2016 1,578,927 2,785,305 411,132 16,883,901 1,486,253 23,145,518
Net carrying
amount,
Dec. 31, 2015 1,146,616 454,413 214,001 17,727,133 1,853,385 21,395,548
59
11. PAYABLES
This account consists of:
\1 This pertains to insurance premiums payable to insurance companies as at December 31, 2016.
\2 This includes unreleased checks and authority to debit totaling ₱61,796,491 for payment of
insurance premiums to various insurance companies that remain under the custody of the Cashiering
Unit as at December 31, 2016 awaiting corresponding tax certificates (BIR Form 2307) from various
insurance companies. This account also includes outstanding unexpired premium payable to Philam
Life temporary reclassified under this account while waiting payment of return/refund of unexpired
premium from PPLICI.
\3 This refers to tax refunds and excess health medical insurance due for refund to officers and
employees.
12. OTHER FINANCIAL LIABILITIES
This account consists of handling fees payable to LBP units, lending centers, branches and subsidiaries
of ₱7,327,776 and ₱6,673,054 as of December 31, 2016 and 2015, respectively, for release every month
of March and September of the year.
13. INTER-AGENCY PAYABLES
This account consists of:
14. TRUST LIABILITIES
This account consists of:
\1This refers to the advance payments of premiums by clients/assured awaiting issuance of insurance
policies and/or matching of premium invoices. Transactions representing excess payments of
premiums are also recorded under this account awaiting instruction from assured/LBP for its refund or
application to future renewal of policies.
2016 2015
Insurance/Reinsurance Premium Payable\1 171,782,586 97,034,887
Accounts payable\2 62,570,529 145,945,389
Due to offices and employees\3 64,128 10,566
234,417,243 242,990,842
2016 2015
Income taxes payable 6,303,286 7,573,668
Value added tax payable 1,429,797 926,325
Due to BIR 671,984 335,227
8,405,067 8,835,220
2016 2015
Customers’ deposits payable\1 35,351,773 47,967,347
Guaranty/security deposits payable 225,200 0
35,576,973 47,967,347
60
15. PROVISIONS
This account consists of:
\1 This account pertains to the accrual of Annual Normal Cost (ANC) under the Accrual Benefit
Valuation Method.
\2 This account refers to the estimated Performance Based Bonus (PBB) of LIBI’s officers and staff and
the Performance Based Incentive (PBI) of LIBI’s Board of Directors for CY 2016.
16. OTHER PAYABLES
This account consists of:
\1 This account pertains to receipted credit advices (UCA) as of the close of the transaction date due to
lack of details.
\2 This account refers to refund of premiums to clients that were processed by LIBI. However, the
issued checks remain uncashed and became stale despite several letter notices sent to concerned LBP
units that requested refund.
17. SHARE CAPITAL
As at December 31, 2016, the total authorized, paid, issued and outstanding shares are 3,000,000
shares with par value of ₱100.
The Board of Directors approved the declaration of stock dividends of ₱75,000,000 or 750,000 shares
per Board Resolution No. 07-03-006 dated March 28, 2007.
Additional 250,000 shares or ₱25,000,000 was declared and approved by the Board of Directors on
September 25, 2007 representing full subscription of the Corporation’s authorized capital stock.
18. RETAINED EARNINGS
Declaration of CY2015 cash dividend of ₱41,407,681 was approved on April 05, 2016 per Board
Resolution No. 2016-003-008 and payment of such dividend to the National Government was made
directly to Bureau of Treasury on May 06, 2016.
A total amount of ₱110,000,000 was appropriated from the excess Retained Earnings and approved by
the Board in its Resolution No. 2015-004-010 dated April 30, 2015. As of December 31, 2016, total
appropriations amounted to ₱158,000,000 as follows:
2016 2015
Leave benefits payable 1,524,521 1,423,376
Pension payable \1 1,415,216 1,007,111
Other provisions \2 3,849,550 3,971,700
6,789,287 6,402,187
2016 2015
Undistributed collections \1 1,640,234 339,738
Other payables \2 49,820 113,839
1,690,054 453,577
61
18.1 Prior Period Adjustments
For CY 2016, the total prior period adjustments of ₱9,474,342 is the net effect of the reversals
of allowance for probable losses on the long outstanding extra remuneration receivable from
GSIS and accrued service fees from private insurers amounting to ₱9,891,841 and ₱291,624
(Note 27), respectively, due to subsequent collections in CY2016. Consequently, the
corresponding income tax benefits of ₱3,055,039 were reversed. Likewise, allowances provided
for tax withheld receivable and accounts receivable arising from disallowance amounting to
₱982,755 and ₱1,363,161, respectively, were reversed.
For CY 2015, the prior period adjustments of ₱1,308,327 pertains to over accrual of audit fees in
prior years.
19. SERVICE INCOME
This account represents:
The fees and commission income were derived from performance of services to customers/clients,
while the other discounts refers to the handling expenses /incentives given to LBP branches, groups,
units and subsidiaries for appraisal, inspection of property to be insured and for performance of other
administrative matters such as collection of payments of insured properties.
20. BUSINESS INCOME
This account consists of the following:
Particulars Amount
(In Philippine Peso)
Appropriation for the technology and computer upgrades 18,000,000 Appropriation for other contingencies 30,000,000 Appropriation for non-collection of refund of premium from
Prudential Life
63,000,000
Appropriation for the reversal of related service fee 15,000,000 Appropriation for procurement of Risk Modeling System 27,000,000
Appropriation for trainings and seminars for ISO/GQMSS certification 2,000,000 Appropriation for office expansion 2,000,000 Appropriation for procurement of office equipment, furniture and fixtures 1,000,000
158,000,000
2016 2015
Fees and commission income 104,970,340 104,193,423
Less: Other discounts 10,010,237 8,194,054
94,960,103 95,999,369
2016 2015
Interest income \1 27,163,331 27,968,598
Other business income \2 8,892,198 12,936,407
36,055,529 40,905,005
62
\1 This pertains to interest income earned from investments at amortized cost such as Retail Treasury
Bonds, DBP-Tier II, Fixed Treasury Notes and Treasury Bills totaling ₱797,842,474 as at December 31,
2016. This account also includes interest income earned from current and savings depository accounts.
\2 This refers to income earned from buying and selling, and brokering of foreign currencies with a
volume totaling USD82,817,656 and USD163,289,630 for CY 2016 and CY 2015, respectively. Average
spread increased from 0.079 centavos in 2015 to 0.107 in 2016, equivalent to 35.44 percent or 0.028
centavos.
21. OTHER REVENUES
This account consists of:
21. PERSONNEL SERVICES
Details of this account are as follows:
2016 2015
Gains Gain on sale of foreign exchange 287,846 265,321
Gain on sale of unserviceable property, plant and equipment
0
185,651
Others Rental income 607,500 150,000
Dividend Income 29,089 0
Miscellaneous income 527,279 627,009
1,451,714 1,227,981
2016 2015
Salaries and wages
Salaries and wages-regular 7,895,981 7,560,978
Salaries and wages-contractual 951,088 1,155,032
8,847,069 8,716,010
Other compensation
Other bonuses and allowances \1 4,784,921 4,940,532
Overtime and night pay 933,898 671,748
Year-end bonus 737,970 776,400
Representation allowance (RA) 348,813 259,875
Transportation allowance (TA) 248,000 259,750
Cash gift 172,500 222,500
Clothing/Uniform allowance 160,179 124,955
Longevity pay 112,464 191,893
7,498,745 7,447,653
Personnel benefit contributions
Employees compensation insurance premi-ums
448,877
440,246
PhilHealth contributions 88,725 87,791
Pag-IBIG contributions 42,300 38,989
579,902 567,026
Other personnel benefits\2 1,147,330 1,632,900
18,073,046 18,363,589
63
\1 Other bonuses and allowances consists of the following:
\2 The other personnel benefits pertain to the money value of leave credits that were earned by LIBI
personnel.
23. MAINTENANCE AND OTHER OPERATING EXPENSES
2016 2015
Christmas raffle 1,340,000 1,490,000
Rice allowance 962,900 1,026,210
Performance based bonus 924,260 0
Mid-year bonus 544,070 823,200
Medical, dental and hospitalization 440,917 429,000
Anniversary bonus 278,000 270,000
Productivity enhancement incentive 169,000 733,700
Other bonuses and allowances 114,974 157,622
Teller allowance 10,800 10,800
4,784,921 4,940,532
2016 2015
Supplies and materials expenses
Office supplies 625,631 564,194
Accountable forms 98,966 73,723
Non-accountable forms 5,287 10,389
729,884 648,306
Communication expenses
Postage and courier expenses 502,168 473,236
Telephone expenses 392,426 391,497
Internet subscription expenses 179,127 139,487
1,073,721 1,004,220
Utility expenses
Electricity expenses 965,023 1,184,379
Water expenses 26,213 29,440
991,236 1,213,819
Professional fees
Legal services 340,000 0
Auditing services 321,750 375,750
Other professional services 201,919 254,243
Consultancy services 0 25,000
863,669 654,993
Other general services
Others 1,590,904 1,185,773
Janitorial services 281,675 262,599
Security services 278,076 309,778
2,150,655 1,758,150
Taxes, insurance premium and other fees
Taxes, duties and licenses 1,901,363 2,059,382
Insurance expenses 206,954 152,647
2,108,317 2,212,029
64
23. MAINTENANCE AND OTHER OPERATING EXPENSES (CONT.)
\1For CY 2016, the amount of ₱2,000,000 was a donation and contribution to LandBank Countryside
Development Foundation, Inc. (LCDFI), a subsidiary of Land Bank of the Philippines, and the amount of
₱50,000 for CY 2016 and CY 2015 was donation to the Manila Bay Sunset Partnership Program, Inc.
24. FINANCIAL EXPENSES
This account consists of the following:
\1This account pertains to broker’s fee and other incidental charges in placement or sale of investment
securities.
Repairs and maintenance
Transportation and equipment 130,903 77,695
Furniture, fixtures and books 62,046 268
Machinery and equipment 42,379 28,471
Semi-expendable machinery and equipment 14,186 0
249,514 106,434
Training expenses 246,700 194,962
Other maintenance and operating expenses
Directors and committee members’ fees 3,663,250 4,659,250
Donations \1 2,050,000 50,000
Other maintenance and operating expenses 1,309,978 1,393,770
Representation 895,675 888,112
Rent/lease expenses 309,623 302,088
Traveling expenses- Local 297,472 263,303
Advertising, promotional and marketing 31,571 47,432
Membership dues and contribution to organ-
ization
12,000 5,357
Subscription expenses 4,800 4,500
8,574,369 7,613,812
16,988,065 15,406,725
2016 2015
Other financial expenses \1 209,390 48,186
Bank charges 20,125 50,211
229,515 98,397
65
25. FINANCIAL EXPENSES
Details of this account are as follows:
26. OTHER EXPENSES
Details of this account are as follows:
27. PROVISION FOR INCOME TAX
The provision for/(benefit from) income tax consists of the following:
Reconciliation of Income before income tax against taxable income is as follows:
2016 2015
Depreciation
Depreciation-building and other structures 1,736,586 1,698,329
Depreciation-machinery and equipment 406,661 364,635
Depreciation-transportation equipment 367,133 387,682
Depreciation-furniture, fixtures and books 21,530 0
2,531,910 2,450,646
Impairment loss
Impairment loss-loans and receivables 3,705,340 10,605,042
Impairment loss-property, plant and equipment 8,192 0
3,713,532 10,605,042
6,245,442 13,055,688
2016 2015
Loss on sale of unserviceable property and equipment
0
41,385
Other losses 5,000 0
5,000 41,385
2016 2015
Income tax expenses 20,233,758 22,137,763
Income tax benefit (1,111,602) (3,181,513)
19,122,156 18,956,250
2016 2015
Income before income tax 90,926,278 91,166,571
Non-deductible expenses
Impairment loss-loans and receivables (Note 25)
Impairment loss-property, plant and equipment (Note 25)
Non-taxable income and income subjected to final tax:
Interest income
Dividend income
Bond discount
3,705,340
8,192
(27,163,331)
(29,089)
(1,530)
10,605,042
0
(27,968,598)
0
(10,473)
(23,480,418) (17,374,029)
Net taxable income 67,445,860 73,792,542
Income tax rate 30% 30%
20,233,758 22,137,763 Provision for income tax
66
Deferred tax asset/Income tax benefit is computed as follows:
Income tax benefits shall be deducted from the LIBI’s future tax obligations to the extent of the
amount of provision for accrued service fees receivable that will have no economic benefits to the
Corporation.
28. COMPLIANCE WITH TAX LAWS
In compliance with the requirements set forth in RR 15-2010, hereunder are the information on taxes,
duties and license fees paid and accrued during the taxable year.
A. LBP Insurance Brokerage, Inc. is a VAT- registered Corporation with VAT output tax declaration of
₱14,180,228 based on actual collections during the year of service fees and rental income
amounting to ₱118,168,569. Actual VAT paid for the year amounted to ₱12,557,862 after applying
Input Tax of ₱1,055,310 and creditable withholding tax of ₱567,057. Government VAT of ₱398,820
deducted from payments to suppliers of goods and services was remitted to the BIR.
LIBI’s secondary purpose is to engage in the business of buying and selling of foreign currencies
and paid the amount of ₱622,347 recorded under the Taxes and licenses account representing
gross receipt tax (GRT) pursuant to RR 9-2004 and based on the amount reflected in the Trading
income account of ₱8,890,667.
The amount of input taxes claimed are broken down as follows:
2016 2015 Balance, beginning of year 8,760,938 5,579,425
Reversal of CYs 2015 and 2014 provisions on accrued service
fees receivable from private insurance due to collection
Reversal of provisions on receivable-extra remuneration due to
collection:
(291,624)
(208,196)
PY2013 accrued extra remuneration (263,405) PY2012 accrued extra remuneration (1,451,529) PY2011 accrued extra remuneration (1,973,829) PY2010 accrued extra remuneration (1,163,449) PY2009 accrued extra remuneration (1,313,096) PY2008 accrued extra remuneration (2,574,454) PY2007 accrued extra remuneration (1,152,079)
Provision for probable losses recorded at year end : Accrued service fees receivable from private insurance 0 158,136 Uncollected extra remuneration from GSIS:
PY2013 accrued extra remuneration 1,061,775 0 PY2012 accrued extra remuneration 1,282,622 0 PY2009 accrued extra remuneration 1,360,942 0
Accrued service fees receivable from PY2013 CLI 0 1,327,987 Accrued service fees receivable from PY2014 CLI 0 9,327,115
Prevailing income tax rate
(6,478,126)
30%
10,605,042
30%
Deferred tax asset/income tax benefit (reversed)/recorded
at year end
(1,943,438)
3,181,513
Balance, end of year 6,817,500 8,760,938
Balance, beginning of year 260,929 Current year’s purchases:
Capital goods 87,895 Goods other than for resale or manufacture 220,999 Services lodged under other accounts 746,416 Claims for tax credit/refund and other adjustments (527,215) 528,095
Balance, end of year 789,024
67
B. Other taxes and licenses recorded under Taxes and licenses account are as follows:
C. The income taxes/withholding taxes paid/accrued for the year amounted to:
The income tax payable as of December 31, 2016 amounted to ₱6,303,286 (Note 13).
There are outstanding Letter Notices (LN) No. 047-RLFTRS-12-00-00402 and No.
047-RLF-11-00-00123 dated June 10, 2014 and January 28, 2013, respectively regarding the
discrepancies resulting from Reconciliation of Listing for Enforcement (RELIEF) and Third Party
Matching – Tax Reconciliation system (TRS) as declared in LIBI’s tax returns filed for CY2012 and
2011 particularly VAT returns filed by suppliers. The required documents needed to refute the
findings were forwarded to the BIR.
29. RELATED PARTY DISCLOSURES
The financial statements include various transactions with its parent and affiliated companies. The
more significant related party transactions, arising from normal course of business include the
following:
a) The LIBI with its foreign exchange trading division, LIBI-Forex, entered into a lease contract
agreement with its parent company, LBP. The essential terms and conditions of the contract
are as follows:
That LIBI (Lessee) has agreed to lease from Land Bank of the Philippines (Lessor) an
office space with an aggregate floor area of 64.07 sq. m., at the 14th Floor of Land
Bank Plaza located at 1598 M. H. del Pilar cor. Dr. J. Quintos Sts., Malate, Manila.
Local Mayor’s permit 893,415 Real property tax 188,050 Real estate tax 100,037 Community tax certificate 10,500 Fire realty tax and inspection fee 1,076 Barangay clearance 2,200
1,195,278 National Gross receipts tax 622,347 License and filing fee – Insurance Commission 75,750 Registration of motor vehicle at LTO 4,758
Filing fee at the Office of the Government Corporate Counsel 2,500
BIR annual registration
Tax clearance certification
500
230
706,085 1,901,363
Corporate tax 10,505,097
Creditable withholding tax at source
(paid in advance by LIBI and used as tax credits)
9,565,336
20,070,433
Tax on compensation and benefits 1,833,980
Expanded withholding tax from suppliers 676,172
22,580,585
68
The term of the lease shall be for a period of five years, commencing from
November 01, 2012 and shall expire on October 31, 2017.
The Lessee, shall pay a concessional rate of ₱200 per sq. m. or Pesos; Twelve
Thousand Eight Hundred Fourteen and 00/100 (₱12,814) per month, inclusive of
electricity, electrical fixtures, water, toilet fixtures/supplies, (except the telephone),
which rental shall be payable upon receipt of notice/billing statement from the
Lessor.
The Lessee shall share pro-rata in the cost of the receptionist, janitorial services,
pest, and similar expenses to maintain the floor area, and the cost shall be
computed based on the leased area divided by the total floor area, which amount
shall be payable upon receipt of notice/billing statement from the Lessor.
b) To defray expenses in the appraisal, inspection of property to be insured and other
administrative matters such as collection of insurance premium payments of insured
properties; handling fees are given to LIBI’s clients, the LBP units, branches and subsidiaries.
For the current year, handling fee accrued and payable to LBP units, branches and
subsidiaries reached ₱10,010,237 (Note 19).
c) Compensation of key management personnel for 2016 and 2015 are as follows:
d) A Trust Agreement was made and entered into by and between LBP Insurance Brokerage,
Inc. (LIBI) and LBP – Trust Banking Group (LBP-TBG) on July 18, 2011 thereby appointing the
latter as the Trustee of the LIBI’s Retirement Benefit Plan. The essential terms and
conditions of the agreement are as follows:
The Trustor (LIBI) shall deliver and pay to the Trustee such sums representing the
annual contributions of the Trustor as provided in the Plan, starting with the
contribution for the current year in the amount of PESOS: Ten Million One
Thousand Pesos (Ph₱10,001,000.00).
The Trustor hereby waives all its rights and interest to the money or properties
which are and will be paid or transferred to the Fund, to the extent required to
provide the benefits pursuant to the Plan.
2016 2015
For the President and General Manager
Total salaries and wages
Total short-term employee benefits
(RA, PEI, per diem, bonuses, medical benefits)
1,508,411
1,260,942
1,331,871
911,090
2,769,353 2,242,961
For Corporate officers who are employees
of the parent company, LBP:
Total short-term employee benefits
(per diems and reimbursable expenses)
253,000
219,104
3,022,353
2,462,065
69
The Trustee shall hold the title to the Fund to be held in trust for the purpose stated
in and subject to all the terms and conditions of the Agreement as well as the Plan,
which shall be deemed part of this Agreement. The Trustee shall invest and
re-invest the Fund, together with all increments and proceeds in fixed-income
government securities like Treasury Bills or Notes, Agrarian Reform Bonds, Retail
Treasury Bonds, BSP Special Deposit Account and other financial instruments duly
guaranteed by the Republic of the Philippines; deposit arrangements/special
deposit account with reputable banks including the Trustee’s own commercial
banking sector; and common or preferred shares of stocks, bonds or note issued by
blue-chips private and government-owned corporations. Other investment outlets
shall require prior written approval of the Trustor.
To cause any asset acquired from the investment/reinvestment of the Fund to be
held, registered and issued in its own name as Trustee or in the name of its
nominee, provided, that the books and records of the Trustee shall at all times
show that all such properties are part of the Fund. To pay all costs, fees, charges and
such other expenses connected with the investments, administration, reservation
and maintenance of the Fund and to charge the same to the Fund.
In the management of the fund, the Trustee shall pay to the beneficiaries the
benefits under the Plan upon written advice of the Trustor. To keep and maintain
books of accounts and/or records of the management and operations of the Fund,
which the Trustor or its authorized representative may inspect from time to time. At
the end of every calendar quarter, to submit the financial reports, investment
activity reports or such other reports as may be requested by the Trustor. The
Trustee shall administer the funds held in trust with such degree of skill and care as
a prudent man would exercise in the conduct of an enterprise of like character and
with similar aims.
For its services, the Trustee shall be entitled to a fee equivalent to 0.75 per cent per
annum of the average total assets of the Fund, computed daily and collected at the
end of each quarter. The Trustee is hereby authorized to debit its fees from the
Fund. The above fee is quoted with the understanding that the same may be
reviewed at the request of either party and adjusted in a mutually satisfactory basis.
Except for fraud, bad faith or gross negligence, the Trustee shall not be liable for
any losses or depreciation in the value of the Fund resulting from investments or
reinvestments thereof as authorized herein, or from the performance of any act in
accordance with the provision of the Agreement. This Agreement shall not
guarantee a yield, return of income on the investment/reinvestments of the Fund as
the same can fall as well as rise depending on prevailing market conditions and is
not covered by Philippine Deposit Insurance Corporation. Losses, if any, shall be for
the account of the Trustor (pursuant to Section X409.1 of the Manual of Regulations
for Banks-Part IV).
The Agreement shall remain in full force and effect until the termination of the Plan
unless sooner terminated by either party hereto by giving thirty days advance
notice to the other.
70
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
LIBI recognizes the importance of an effective financial risk management program and a Risk
Management Manual was finalized and approved by the members of the Board in 2009.
The objective of the Manual is to serve as basis and reference for consistent risk management that is
applicable to all employees of LBP Insurance Brokerage, Inc. (LIBI). It aims to create a culture of
risk-awareness, not risk-aversion based on the prudential framework required by BSP circulars. It
provides a general set or risk principles delegated to each business unit through its reporting and
approval procedures.
A Risk Management Committee was created to be primarily responsible for the development and
oversight of the risk management programs of LIBI which include oversight of management functions
and approval of proposals regarding LIBI’s policies, procedures and best practices relative to asset and
liability management, credit, market and business operations risks ensuring that: (a) insurance
requirements of its mother unit Land Bank of the Philippines and their lending units are passed on to
LIBI; (b) system of limits remain effective; and (c) immediate corrective actions are taken whenever
limits are breached or whenever necessary.
As part of identification risk, the following are classified as major risks that LIBI manages in the course
of its business.
MARKET RISK
Market risk can be generally defined as risk of loss, immediate or over time, due to adverse,
fluctuations in price or market value of instruments, products and transactions in LIBI’s overall
portfolio. Market risks are central focus of risk measurement methodologies and limits, as well
as gauge by which LIBI can determine returns it will require for its activities.
INSURANCE DIVISION
Net premium volume produced during the year reached ₱577,294,328, an increase of
₱5,256,283 or 0.92 per cent compared to last year’s ₱572,038,045 net premium volume. This
was primarily due to the significant increase in premium from LBP Branches’ borrowers of
employee salary loan and premium from loan releases from Agricultural Development Lending
Sector (ADLS).
Net service fees from insurance brokering for the year of ₱94,960,103 is ₱1,039,266 or 1.08 per
cent lower against last year’s ₱95,999,369 net service fees (Note 19).
LIBI, as a subsidiary of LBP, has already a captured LBP as market for its products and services.
Nonetheless, LIBI continues to intensify its campaign to solicit more direct business from
private corporations and other government entities.
FOREX DIVISION
Other business income (trading income) for the year of ₱8,892,198 is 31.26 per cent or
₱4,044,209 lower against last year’s trading income of ₱12,936,407 (Note 20).
Volume of dollars traded by LIBI-Forex Division for CY2016 amounted to USD82,817,656. This
represents a significant decrease of USD80,471,974 or 49.28 per cent compared to last year’s
volume of dollars traded of USD163,289,630. Average spread has increased from 0.079
centavos in 2015 to 0.107 in 2016, equivalent to 35.44 percent or 0.028 centavos.
71
FOREIGN EXCHANGE RISK
LIBI-Forex’s foreign currency cash on hand and in bank used for trading has a minimal balance
of ₱517,458 (Note 3) which is 0.36 per cent of the division’s total assets of ₱143,375,584 thus,
foreign exchange risk is low.
LIQUIDITY RISK
It is the risk that LIBI will be unable to make a timely payment of any of its financial obligations
to customers or counterparties in any currency. Trading Liquidity risk refers to inability to
unwind positions created from markets, exchanges and counterparties due to temporary or
permanent factors.
Prudent liquidity risk management implies sufficient cash and cash equivalents and marketable
securities. Insurance and Forex Divisions’ cash inflows from operations and readily marketable
government securities investments provide the bulk of LIBI’s liquidity buffer.
INTEREST RATE RISK
This is the risk that future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. LIBI’s fixed rate investments in held-to-maturity investments are
exposed to such risk. Interest income derived from investments this year of ₱26,619,910 was
lower by 2.93 per cent or equivalent to ₱804,820 against last year’s interest income of
₱27,424,730.
It is the policy of LIBI to invest excess funds in government securities (GS) where the servicing
and repayments are fully guaranteed by the government. The investment in GS may be placed
with the LBP Treasury and Investment Banking Group or LBP Trust Banking Group.
LIBI’s Investment Committee observes diversified GS portfolio, varied maturity spectrum and
optimum yields in deciding the type and term of investment. When yields of GS are expected
to go down, LIBI buys long-term GS in order to lock-in on high yielding GS. Conversely, when
yields are expected to go up, it buys short-term GS to stay liquid and be able to switch to high
yielding GS when rates start to pick up.
LIBI’s principal financial instruments comprise of cash deposits, held-to-maturity investments
consisting primarily of investment in government securities like Retail Treasury Bonds, DBP
Tier-II and Agrarian Reform Bonds (Note 7). These are not subjected to mark-to-market
valuation but impairment testing is being done on HTM in RTBs.
Total investments at amortized cost as at December 31, 2016 is ₱797,842,474 which is 64.12
per cent of the LIBI’s total assets of ₱1,244,325,214. Liquid assets of ₱241,950,183 are 0.822
times the total liabilities of ₱294,206,400.
72
The table below summarizes the Maturity Profile of the Corporation’s Assets, Liabilities and
Capital.
This year’s EBITDA margin is 71 per cent, 3 per cent higher compared to 68 per cent EBITDA
margin of CY2015. Return on Equity (ROE) for CY2016 is 7.56 per cent while Return on Asset
(ROA) is 5.77 per cent, lower by 0.37 per cent and higher by 0.13 per cent, respectively,
compared to last year’s ROE of 7.93 per cent and ROA of 5.90 per cent. However, per capita
income is ₱1.63 million, lower by 14.12 per cent or ₱0.268 million than the per capita income of
₱1.90 million last year.
CREDIT RISK
Insurance Division
a) Direct Credit Risk – is the risk that a customer or counterparty will be unable to pay
obligations on time or in full as expected or previously contracted, subjecting LIBI to a
financial loss. It lasts for the entire tenor and is set at full amount of a transaction. The
possibility of non-collection of Accounts Receivable within one year is moderate due to
intensified collection through faster sending of Statement of Accounts thru fax, email, mail
and frequent follow-ups by phone. LIBI’s collection rate of 90.00 per cent for the current
year is 5 per cent higher than the 85 per cent collection rate last year.
b) The Management has negotiated with Land Bank of the Philippines for the advance
payment of policies by the branches/lending units.
ASSETS Up to 3 mos. 3 to 6 mos. 6 mos. to
1 year
More than
1 year TOTAL
Cash and cash equivalents 242,629,531 0 0 0 242,629,531 Loans and Receivable 49,663,870 6,919,958 22,321,480 84,817,304 163,722,612 Inventory held for consumption 26,485 26,408 7,153 20,149 80,195 Prepayments 4,900,520 1,829,656 215 128,275 6,858,666 Investment securities at amor-
tized cost 111,136,487 89,181,052 0 597,524,935 797,842,474 Property, plant and equipment 5,467,333 1,000,963 138,192 16,539,030 23,145,518 Intangibles 2,084,791 47,842 2,132,633 Investment property 0 0 0 998,316 998,316 Deposits 0 74,198 0 23,571 97,769 Deferred tax asset 1,111,602 0 0 5,705,898 6,817,500 Total Assets 417,020,619 99,080,077 22,467,040 705,757,478 1,244,325,214
LIABILITIES AND STOCHKHOLDERS’ EQUITY Payables 113,733,125 11,975,456 19,091,201 89,617,461 234,417,243 Other financial liabilities 1,139,534 1,442,562 4,745,680 0 7,327,776 Inter-agency payables 8,405,067 0 0 0 8,405,067 Trust liabilities 13,626,134 1,202,735 7,544,763 13,203,341 35,576,973 Provisions 3,918,227 591,756 1,150,872 1,128,432 6,789,287 Other payables 1,640,234 0 0 49,820 1,690,054 Capital 19,032,813 21,114,744 31,656,565 878,314,692 950,118,814
Total Liabilities and Equity 161,495,134 36,327,253 64,189,081 982,313,746 1,244,325,214
73
Forex Division
a) Counterparty Risk – is the risk that occurs from transactions where reciprocal obligations
are made between LIBI and counterparties or customers.
Pre-Settlement Risk - risk that LIBI-Forex’s counterparty or customer defaults prior to
settlement date of transaction and will be unable to fulfill the transaction. LIBI would
then be subjected to exposure equivalent to economic replacement cost for defaulted
contract (a current market value) plus a potential increase in that cost due to future
market fluctuation.
Settlement Risk – occurs from simultaneous exchange of value with a customer or
counterparty, where verification of payment from counterparty is not received until
after LIBI-Forex’s is already delivered. Should a non-delivery on the part of the
counterparty occur, LIBI-Forex is exposed to direct credit risk.
Clearing Risk – occurs from payments and transfer made on or behalf of the
customers, where transfers are made prior to verification of reimbursement. Similar
to settlement risk, LIBI-Forex is exposed to direct credit risk if customer fails to make
reimbursement.
Settlement and clearing risks are noteworthy in that these may be controlled by using
operational or transactional methods such as delaying payment until receipt of funds is
confirmed from the counterparties.
Compliance to Anti-Money Laundering Law and BSP regulations has to be conscientiously
observed all throughout LIBI-Forex trading transactions. Trading personnel are encouraged
to attend trainings/seminars for enhancement in trading skills and to keep abreast with new
regulations (if any) from its regulatory body, the BSP.
27. COMMITMENT
LIBI has renewed its Full Service and Maintenance Agreement (FSMA) with Fuji Xerox Philippines, Inc.
for another term of 48 months that commenced on December 04, 2013 and shall expire on December
04, 2017. New and upgraded equipment had been installed to replace the old model. The renewed
FSMA contains same terms and conditions as with the previous one except for the following:
a) Decrease in monthly rental of ₱800, from ₱12,000 to ₱11,200, and
b) Decrease in charge per copy of ₱0.11, from ₱0.56 centavos to ₱0.45 centavos
74
Mr. Tomas Tarnate de Leon, Jr. sits as the
Chairman of the Board of LBP Insurance
Brokerage, Inc. (LIBI) since July 1, 2012.
Mr. De Leon spent the earlier years of his
career gaining management experience
from the Insular Life-FGU Group of
Companies from 1972 to 1974, the Family
Bank & Trust Company from 1978 to 1980,
and as Senior Associate at the Louis A. Allen Associate from 1981 to 1989.
Currently, he is the Chairman of the Metro Rail Transit Corporation (MRTC). He is a stockholder of
the Bacolod Real Estate Development Corporation (BREDCO). He is also the director of IT service
provider Data Trail Corporation.
He previously served as a member of the Board of Directors of the LANDBANK Realty
Development Corporation (LBRDC), and as Chairman and President of the Philippine Society for
Training and Development and the Asian Regional Training and Development Organization.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
TOMAS T. DE LEON, JR.
Chairman
Birthdate: April 5, 1949
Age: 67 years old
Date of
Appointment:: July 1, 2012
Educational Attainment:
Post Graduate:
Masters in Business Administration
Ateneo Graduate
School of Business
Graduated: 1976
College:
AB Economics
Ateneo de Manila University
Graduated: 1972
Others:
Special Courses in Management/
Leadership Ateneo Center for
Continuing Education
75
Mr. George Regala Francisco was appointed Member of the Board as well as President & CEO of
LBP Insurance Brokerage, Inc. on July 1, 2014.
Prior to joining LIBI Mr. Francisco worked with Anscor Insurance Brokers, Inc. as Assistant Vice
President & Deputy General Manager from 1979-1988. He was Vice President & Chief Operating
Officer of Wise Insurance.
Services, Inc. from 1988 – 1992. He was the Managing Director of Pacific Rum Insurance
Management & Underwriting Services from 1995 – 1994. He was the Director of Capital
Strategies Limited from 1994-2001 and Financial Advisor of National Power Corporation
International Insurance Trader from 2001-2002. He was also the Commercial and Financial
Advisor of TSPI Development Corporation from September 2002 – January 2003, Executive Vice
President & CEO of The National Life Insurance Company from January 2003 – December 2007,
Chief of Staff of Deutsche Knowledge Services from March 2008 - December 2011, Technology
Advisor of Philippine Dealing System and as Risk Management and Contract Negotiation Advisor
of the Department of Transportation and Communications from March 2012 – January 2013.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
GEORGE R. FRANCISCO
President & CEO
Birthdate: June 16, 1955
Age: 61 years old
Date of Appointment: July 1, 2012
Educational Attainment:
College: AB Economics
Ateneo de Manila University
76
Mrs. Yolanda Dillague Velasco has been a
Member of the Board of the Corporation
since May 31, 2011. She held the position
of Senior Vice-President/Group Head –
Controllership Group of the LAND BANK OF
THE PHILIPPINES when she retired on
February 1, 2016.
Mrs. Velasco has been the Collection
Assistant and Inventory Financing Clerk of
Filinvest. Mrs. Velasco was the Chairperson,
Membership Committee of the Banker’s
Institute of the Philippines (BIP) from
2009-2010 then Director from 2010-2011.
From 2011-2012 she was the Director of
Audit Committee of the BIP. Mrs. Velasco
was also a Director of the Government
Association of Certified Public Accountants
from 2011-2012.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
YOLANDA D. VELASCO
Director
Birthdate: February 29, 1952
Age: 64 years old
Date of Appointment: May 31, 2011
Educational Attainment:
College:
Certificate Course on Financial
Management
Colombo Plan Bureau
Institution of Financial
Management and Research
Madras, India 1987
Master in Business Administration
(40 units)
Ateneo Graduate
School of Business
Makati, 1979
Bachelor of Science in Business
Administration and Accountancy
(BSBAA)
University of the Philippines, 1973
PROFESSIONAL AND
CIVIL SERVICE ELIGI-
BILITIES
CPA Board Examination
CPA License No. 26400
Issue date: September 4, 1974
77
Atty. Reynauld Ruiz Villafuerte was first appointed as Member of the LIBI Board on July 1, 2012.
He has been the Corporate Secretary and Legal Counsel of the Corporation from 1993-2012.
Atty. Villafuerte held the position of Senior Vice-President/Corporate Secretary of the Legal
Services Group of the LAND BANK OF THE PHILIPPINES when he retired on August 1, 2016.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
ATTY. REYNAULD R. VILLAFUERTE
Director
Birthdate: April 18, 1952
Age: 64 years old
Date of
Appointment: July 1, 2012
Educational Attainment:
College:
Bachelor of Science
in Communication
Ateneo de Zamboanga, 1973
Bachelor of Laws
Zamboanga A.E. College, 1975
Graduate Studies:
Bachelor of Laws/Master in
Business Administration
Adamson University/University of
Sto. Tomas, 1977 - 1980
Professional and Civil
Service Eligibilities
Bar Exam
IBP License No. 30819, 1981
78
Mr. Alan Vidamo Bornas had been a
Member of the LIBI Board since July 1,
2012. He is the Senior Vice-President of
the LAND BANK OF THE PHILIPPINES
heading the Technology Management
Group. Mr. Bornas has been with
LANDBANK since 1988. He had been the
Treasurer of the Brentwood Heights
Townhouses Homeowners Association
from January 2006 up to present.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
ALAN V. BORNAS
Director
Birthdate: April 25, 1966
Age: 50 years old
Date of July 1, 2012
Educational Attainment:
College: Bachelor in Computer Science
University of the Philippines, 1987
79
Mrs. Jennifer Almazan Tantan was appointed member
of the Board on July 1, 2014. Before her
appointment, she was the Assistant Treasurer from
1998-2000, Treasurer from 2001-2005 and Chairman
of the Investment Committee from February 1, 2015
to November 4, 2014 of LIBI. She is the Senior
Vice-President of the LAND BANK OF THE
PHILIPPINES heading the North-National Capital
Region Branches Group (NCRBG) when she retired on
April 1, 2016.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
JENNIFER A. TANTAN
Director
Birthdate: January 11, 1955
Age: 61 years old
Date of July 1, 2014
Educational Attainment:
College: BS Accountancy
Graduate Course:
Master of Business Administration (25 units)
Ateneo Graduate School
Leadership Development Program (6 units)
Ateneo Graduate School
Diploma in Business Development
Concordia Internal College (Canada), 2013
Master of Business Administration
College of the Holy Spirit of Manila, 2014
80
Atty. David Paanod Corpin was appointed as
member of the LIBI Board on July 1, 2012. Before
joining LIBI, he worked as a Consultant to the
Mayor of Manila from 2008-2013. Atty. Corpin was
a Member of the Board of PAGCOR from
1995-1998. He was the Administrator and
Vice-Chairman of the Overseas Workers Welfare
Administration (OWWA) from July 1992 – March
1995. Atty. Corpin worked with the Farmer, Rice
Miller and Coconut Planter in 1972, Practiced Law
& was a Labor Consultant from 1973-1992. He was
the president of the Rural Bankers Association of
the Philippines from 1979-1984.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
ATTY. DAVID P. CORPIN
Director
Birthdate: December 29, 1929
Age: 87 years old
Date of Appointment: July 1, 2012
Educational Attainment:
College: Bachelor of Laws
Far Eastern University (FEU), 1955
Public Administration
Philippines Executive Academy
University of the Philippines, 1971
81
Atty. Vergel Aquino Cruz was appointed to the LIBI
Board in July 2012. Atty. Cruz was the Managing
Partner of the Cruz Law Offices from 2008 – 2012.
He was also the Commissioner and a Member of the
Board of Commissioners of the Philippine Racing
Commission from 2001-2008.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
ATTY. VERGEL A. CRUZ
Director
Birthdate: July 28, 1946
Age: 70 years old
Date of Appointment:: July 1, 2012
Educational Attainment:
College: Bachelor of Laws, 1970
Bachelor of Arts, 1966
Bar Examinations, October 1970
Admitted to the Bar, 1971
82
Mrs. Daisy Montalbo Macalino was appointed to
the LIBI Board on July 1, 2012. She last held the
position of Senior Vice-President heading the
Visayas Lending Group of the LAND BANK OF THE
PHILIPPINES when she retired on September 1,
2016.
Before joining LANDBANK, Ms. Macalino worked
with the Rizal Commercial Banking Corporation
(RCBC) from February 1979 – September 1979.
She has been with the Philippine National Bank
(PNB) from 1979 – 1987. She also worked with
Colvent, Inc. from 1987 – 1988
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
DAISY M. MACALINO
Director
Birthdate: June 4, 1957
Age: 59 years old
Date of Appointment:: July 1, 2012
Educational Attainment:
College:
Bachelor of Science in Commerce
Major in Accounting
St. Paul College Quezon City, 1978
Leadership and Management Program
Ateneo de Manila University, 2002 – 2003
MBA (Top Executive Program)
Pamantasan ng Lungsod
ng Maynila, 1994 – 1995
Master in Business Administration
Polytechnic University of the Philippines, 1993 – 1994
83
Mr. German delos Santos Caccam was
appointed as Member of the LIBI Board on July
1, 2012.
Mr. Caccam is a former LANDBANK Manager
(National Head Office) from 1982-1989 and from
1993-1996. He was LANDBANK Manager
(Provincial) from 1989-1993 and LANDBANK
Manager (Regional) from 1992-1993. After his
retirement from LANDBANK, he worked as the
Head of the Information and Planning Division
under the Office of the Chairman of the
Commission on Human Rights and the Information Division of the Fertilizer and Pesticide
Authority (FPA) of the Department of Agriculture from 1996-2003. Mr. Caccam also worked as
Consultant to the Governor of Batanes, the Congressman of Batanes and the Secretary of
Education from 2006-2010. He was a University professor.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
GERMAN S. CACCAM
Director
Birthdate: February 27, 1949
Age: 67 years old
Date of Appointment: July 1, 2012
Educational Attainment:
College: Bachelor of Arts (English/Political Science)
San Sebastian College
Others:
Master of Arts in Mass Communication
University of the Philippines
Master of Public Administration
University of the Philippines
Government Examinations
passed (Eligibility):
Career Executive Service Officer (CESO) eligible
Civil Service Professional eligible
Passed the Teacher Exams
Passed the Unassembled Exams for Cultural Community
Officer
84
Mrs. Teresita Esmama Cheng was appointed as
member of the LIBI Board on July 1, 2014. She
held the position of First Vice-President of the
LAND BANK OF THE PHILIPPINES heading the
Risk Management Group when she retired on
November 2016.
THE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORSTHE LIBI BOARD OF DIRECTORS
As of December 31, 2016As of December 31, 2016As of December 31, 2016
TERESITA E. CHENG
Director
Birthdate: October 3, 1950
Age: 66 years old
Date of Appointment: July 1, 2014
Educational Attainment:
College: Bachelor of Science in Agricultural Chemistry
University of the Philippines Los Baños (UPLB), 1972
Graduate Studies:
Master of Science in Chemistry
University of the Philippines Los Baños (UPLB), 1982
Master in Business Management
Asian Institute of Management, 1990
85
LBP (LANDBANK OF THE PHIL.)
INSURANCE BROKERAGE, INC.
(LIBI) (A LANDBANK Subsidiary)
12/F SSHG Law Centre Bldg., 105 Paseo de Roxas, Legaspi Village, Makati City 1209 Trunklines: (02) 840-4108; (02) 893-8859; (02) 840-4011
Telefax: 893-7224; 818-7794; 817-1564 www.lbp-insurance.com
Regulated by the Insurance Commission