LAND BANK OF THE PHILIPPINES Innovations and Best Practices in Internal Audit GILDA E. PICO President & CEO AGIA Annual National Convention October 8, 2015 Waterfront Cebu City Hotel and Casino

in Internal Audit” for CY 2013 LANDBANK was awarded by AGIA as the “Government Agency with Innovations and/or Best Practices in Internal Audit” for CY 2013

LANDBANK A government financial institution with a unique dual role Profits from its commercial banking operations finance the Bank’s development programs Financial intermediary for the Comprehensive Agrarian Reform Program

LANDBANK Continues to expand loan portfolio in favor of its priority sectors, which include: Small farmers, fishers, and their associations Small and medium enterprises Agribusiness and other agri- and environment-related projects Socialized housing, schools & hospitals Major contributor to government funds – LANDBANK remitted the highest cash dividend among GOCCs this year

INDUSTRY RANKING (In Billion Pesos) Particulars Assets 1,090.0 4 As of June 2015 (P B) Rank Assets 1,090.0 4 Deposits 954.3 Loans 414.0 Capital 75.0 5

NUMBER OF BRANCHES, EXTENSION OFFICES AND SERVICING UNITS NETWORK (as of June 2015) NUMBER OF BRANCHES, EXTENSION OFFICES AND SERVICING UNITS Branches EOs Servicing Units Total N-NCRBG 33 10 43 S-NCRBG 32 1 NLBG 39 CLBG 35 SWLBG 28 5 SELBG 34 2 36 WVBG 24 26 EVBG 23 WMBG 30 EMBG 40 TOTAL 311 41 353 TOTAL NUMBER OF ATMs 1404

NUMBER OF EMPLOYEES TOTAL 2,591 5,940 8,531 (as of June 2015) RANK` HEAD OFFICE FIELD UNITS Total Officer 492 552 1,044 Rank & File 1,529 4,907 6,436 Contractual 570 481 1,051 TOTAL 2,591 5,940 8,531

3 KEY POINTS IN GOVERNMENT IA ROLE INTEGRITY BUILDING EFFECTIVE RELATIONSHIPS CONTINUOUS LEARNING

INTEGRITY ‘Guardians’ of the company’s integrity Professional mandate to exhibit integrity, trust, independence, and objectivity Report on the company objectively Requires more than just technical and communication skills LANDBANK’s IAG employs a rigorous selection process to properly assess candidates

HOW DO WE EMPOWER OUR AUDITORS? Develop the Competency Development Framework Assess the current competency level Compare against the desired competency level Prepare action plans (training, workshop, coaching) Determine required resources Set timeline Monitor and Evaluate In addition to the identified trainings: Scholarship grants for graduate studies With approved budget for the Certification Programs Certified Internal Auditor {7} Certified Information Systems Auditor {6} Certified Information Security Manager {1} Certified Fraud Examiner {1} Certified Internal Controls Auditor {2} Accredited Quality Assurance Validator {3}

To the Audit & Compliance Committee and Senior Management

3 KEY POINTS IN GOVERNMENT IA ROLE INTEGRITY BUILDING EFFECTIVE RELATIONSHIPS CONTINUOUS LEARNING

REPORTING ARRANGEMENT Audit & Compliance Committee Board of Directors Audit & Compliance Committee President/CEO Internal Audit Group

BUILDING EFFECTIVE RELATIONSHIPS Conduct “Set Expectation Meeting” with management within the first quarter of each year Undertake the Client Satisfaction Survey covering: Conduct of audit engagement Feedback on the audit team Recognize auditees that attain “Exemplary” audit ratings by giving token cash rewards Present to the Audit & Compliance Committee actions taken and action plans of the auditees that failed the audit

BUILDING EFFECTIVE RELATIONSHIPS Initiate the preparation of: Internal Auditors’ Rule of Conduct Rules on Conflict of Interest for Internal Auditors Internal Audit Group Charter and the Audit and Compliance Committee Charter Monitor the auditee’s action plans on major lapses/findings on a quarterly basis. Validate the Environmental Management System (EMS) Good Practices Act as EMS Lead Auditor for the Bank’s continued ISO 14001:2004 Certification

3 KEY POINTS IN GOVERNMENT IA ROLE INTEGRITY BUILDING EFFECTIVE RELATIONSHIPS CONTINUOUS LEARNING

CONTINUOUS LEARNING Provide consulting services to IT System Development Projects Ensure security and control measures are considered Risk assessment and risk mitigation are addressed

This is a noble task, a higher calling that requires integrity, relationship-building, and continuous learning.

THANK YOU