LAND BANK OF THE PHILIPPINES

GILDA E. PICOPresident & CEO

AGIA Annual National ConventionOctober 8, 2015

Waterfront Cebu City Hotel and Casino

Innovations and Best Practices in Internal Audit

LANDBANK was awarded by AGIA as the “Government Agency with

Innovations and/or Best Practices in Internal Audit” for CY 2013

• 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:o Small farmers, fishers, and their

associationso Small and medium enterpriseso Agribusiness and other agri- and

environment-related projectso Socialized housing, schools & hospitals

• Major contributor to government funds – LANDBANK remitted the highest cash dividend among GOCCs this year

LANDBANK

INDUSTRY RANKING (In Billion Pesos)

ParticularsAs of June 2015

(P B)Rank

Assets 1,090.0 4

Deposits 954.3 4

Loans 414.0 4

Capital 75.0 5

NETWORK(as of June 2015)

NUMBER OF BRANCHES, EXTENSION OFFICES AND SERVICING UNITS

Branches EOs Servicing Units

Total

N-NCRBG 33 10 0 43

S-NCRBG 32 10 1 43

NLBG 39 0 0 39

CLBG 35 0 0 35

SWLBG 28 5 0 33

SELBG 34 2 0 36

WVBG 24 2 0 26

EVBG 23 5 0 28

WMBG 28 2 0 30

EMBG 35 5 0 40

TOTAL 311 41 1 353

TOTAL NUMBER OF ATMs

1404

NUMBER OF EMPLOYEES(as of June 2015)

RANK`HEAD

OFFICEFIELD 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

1. INTEGRITY

2. BUILDING EFFECTIVE RELATIONSHIPS

3. CONTINUOUS LEARNING

3 KEY POINTS IN GOVERNMENT IA ROLE

INTEGRITY

• ‘Guardians’ of the company’s integrityo Professional mandate to exhibit integrity,

trust, independence, and objectivityo Report on the company objectivelyo 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

resourcesSet 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

1. INTEGRITY

2. BUILDING EFFECTIVE RELATIONSHIPS

3. CONTINUOUS LEARNING

3 KEY POINTS IN GOVERNMENT IA ROLE

Board of Directors

Audit & Compliance Committee

President/CEO

Internal Audit Group

REPORTING ARRANGEMENT

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

1. INTEGRITY

2. BUILDING EFFECTIVE RELATIONSHIPS

3. CONTINUOUS LEARNING

3 KEY POINTS IN GOVERNMENT IA ROLE

CONTINUOUS LEARNING

Provide consulting services to IT System Development Projects

o Ensure security and control measures are considered

o 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