Pag-IBIG Fund: Improving risk management for good governance

Part of Manila-based Pag-IBIG Fund’s strategy on improving good governance within the organization, Manila-based Pag-IBIG Fund has developed the “Risk Management Program (Program)” that will enable the Fund to manage risks in all aspects of its operations whether within the Fund, among its officers and employees, and outside the Fund, among its external stakeholders.

Since 2010, under the Program, the Fund has started developing various risk initiatives, including the following: Risk Governance Structure, Capital Adequacy Framework, Single Borrower’s Limit, Full Risk-Based Pricing Framework, Basel III Standards (Liquidity Coverage Ratio and Net Stable Funding Ratio), Financial Risk Management Policy, Enterprise Risk Management Policy Framework, Funding and Liquidity Risk Framework, Contingency Funding Plan, Capital Management Policy, Credit Risk Management Policy, Market Risk Management Policy, Liquidity Risk Management Policy, Operational Risk Management Policy, Reputational Risk Management Policy, and Probability of Default and Loss Given Default Models, and Social Media Risk Management Policy.

The Risk Governance Structure paved the way for the constitution of four (4) Board Oversight Committees, Risk and Capital Management Committee as well as the Risk Management Task Force.

To effectively communicate these risk initiatives, the Fund has conducted sessions of the “Risk Awareness Seminar” in 2017 to train the Fund’s officers and staff to recognize possible key risks and their corresponding impact on daily decision-making, as well as monitoring of risks that require attention. Most of the risk initiatives have been approved by the Pag-IBIG Fund Board of Trustees and Senior Management Committee, showing their commitment in the proper governance of the Corporation.

The Fund is in process of revising its governance structure and mechanisms to ensure better informed decision-making which includes escalation of pertinent concerns to the appropriate levels of authority.

The Program promotes inclusion and sustainable development by encompassing both its internal stakeholders, officers and employees, and external stakeholders – its members and partners.

For the Program, the Fund received a Merit Award at the 2018 ADFIAP Outstanding Development Project Awards, under the Corporate Governance Category.

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