2016 annual report2016 annual report - lbp insurance · of the philippines (lp), and was created in...

1

LBP INSURANCE BROKERAGE, INC. (A LANDBANK Subsidiary)

2016 ANNUAL REPORT2016 ANNUAL REPORT

2

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

3

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.

4

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.

5

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.

6

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

7

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

8

OPERATIONAL HIGHLIGHTS

9

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

10

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.

11

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

12

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

13

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

14

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


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

15

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.)


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

16

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



Updating on Anti-Money

Laundering Act (AMLA)

Landbank of the

Philippines (LBP)




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



Risk Based Capital &

Stress Testing



Basic in Actuarial Pricing Insurance Institute for Asia




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



Landbank of the

Philippines (LBP)

17

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


13 13 100 P P P P P P P P P P P P P


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

18

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


Tota

l

Actu

al

%


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

%


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


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


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


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


Tota

l

Actu

al

%


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


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


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.

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



STATEMENTS OF COMPREHENSIVE INCOME

For the Years ended December 31, 2016 and 2015


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


46



STATEMENTS OF CHANGES IN EQUITY



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


47



STATEMENTS OF CASH FLOWS



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



STATEMENTS OF CASH FLOWS - CONTINUATION



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


49



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


6. PREPAYMENTS


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


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


\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


14. TRUST LIABILITIES


\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


\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


\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


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


21. PERSONNEL SERVICES


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


26. OTHER EXPENSES


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.



GEORGE R. FRANCISCO

President & CEO

Birthdate: June 16, 1955

Age: 61 years old

Date of Appointment: July 1, 2012


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.



YOLANDA D. VELASCO

Director

Birthdate: February 29, 1952

Age: 64 years old

Date of Appointment: May 31, 2011


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.



ATTY. REYNAULD R. VILLAFUERTE

Director


Age: 64 years old

Date of

Appointment: July 1, 2012


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.



ALAN V. BORNAS

Director


Age: 50 years old

Date of July 1, 2012


College: Bachelor in Computer Science


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.



JENNIFER A. TANTAN

Director

Birthdate: January 11, 1955

Age: 61 years old

Date of July 1, 2014


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.



ATTY. DAVID P. CORPIN

Director

Birthdate: December 29, 1929

Age: 87 years old



College: Bachelor of Laws

Far Eastern University (FEU), 1955

Public Administration

Philippines Executive Academy


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.



ATTY. VERGEL A. CRUZ

Director

Birthdate: July 28, 1946

Age: 70 years old

Date of Appointment:: July 1, 2012


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



DAISY M. MACALINO

Director

Birthdate: June 4, 1957

Age: 59 years old

Date of Appointment:: July 1, 2012


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.



GERMAN S. CACCAM

Director

Birthdate: February 27, 1949

Age: 67 years old



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.



TERESITA E. CHENG

Director

Birthdate: October 3, 1950

Age: 66 years old



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

2016 annual report2016 annual report - lbp insurance · of the philippines (lp), and was created in...

Documents