ETHICS IN A GOCC-LANDBANK

1. LANDBANK IN ITS FINEST A Term Paper onEthics in Landbank,a Government

BankSubmitted by: MARISSA D. TAN Student / Discussant, MDM 212 PANGASINAN
STATE UNIVERSITY GRADUATE SCHOOL Urdaneta City, PangasinanSubmitted to:
PROFESSOR MELITON G. DASSUN, D.P.A. PANGASINAN STATE UNIVERSITY
GRADUATE SCHOOL Urdaneta City, Pangasinan ~1~
2. TABLE OF CONTENTSIntroduction ...........................................................................
3Chapter I. Business Ethics .............................................. 5Chapter II. Ethical
Banking............................................... 8Chapter III. Landbank History Icons of
Ethics ............... 15Chapter IV. Landbanks Mission, Vision and Core Values As Ethical
Goal ............................................... 22Chapter V. Legal Framework of LBP Code of
Conduct .. 26Chapter VI. Conclusion ...................................................... 34Chapter
VII. Acknowledgement .......................................... 36Chapter VIII.
References ...................................................... 38 ~2~
3. INTRODUCTION When I started writing this term paper, I do not know where to
start or even what to write.The world is full of topics to choose from and ethical
issues to discuss of as well. It did took me along time to search what topic should
Idiscuss or develop for our Ethics subject. My professorsuggested a topic on
Landbank of the Philippines, the institution I work with. The next questionthat went
into my mind is what aspect should I discuss in this paper about Landbank?
Landbankhas a wide array of interesting matters and issues to discuss relative to
our subject matter. Finally,it dawned upon me that if there is a bank in the whole
country that could display its ethicalstandards transparently, it would be no other
than Landbank of the Philippines because of itsprojects, products and governance
that exudes the true meaning of social responsibility and ethicsin the service of the
Filipino people and the Republic of the Philippines. Under a democratic country such
as the Philippines, the peoples fundamental faith in theintegrity of political
institutions is what holds the system together even under themost difficulttimes.
The present situation in the Philippines is a test of this principle.Whether or not the
test ispassed with success is a matter yet to be seen. However, atthis stage, what
could be gainfully earnedfrom present experience is the knowledgethat peoples
trust seems to lie on the existence of ethicsand accountabilitymechanisms and
infrastructure. As shown and proven with quite a measureofsuccess by many
studies, ethics and accountability are keys not only to effectivegovernment butalso
to effective governance. Besides, it seems everyday, there are new stories about
businessesand organizations being accused or investigated for ethical violations.
The continuous reports ofcorporate houses falling under the pressure of common
unethical practices such as bribery fromcontractors, red tape activities,
misappropriation of funds, omission of important public data forself preservation
and falsification of public documents has drawn the attention of business
leaders,managers, shareholders and business school students from all over the
globe and not only in thePhilippines. World over, businessmen, who once considered

ethics and morality as hindrances insuccessfully running their organization, are now
forced to look towards ethics and morals asguiding forces. These events around the
world have heightened everyones awareness of ethicalbusiness practices. The
following discussions deal withsome of the initiativesto promote ethics in
thePhilippines especially in a government bank like Landbank. Moreover, Landbank
is also a business. Business is a financial category that often makesus wonder
whether ethics exist because its primary concern is to make profit. Surprisingly,
thereis what we call Business Ethics emphasizing the fact that a business can also
be moral while makingbillions of profit in its categorical industry. Per observation,
companies and business people who ~3~
4. wish to thrive long-term must adopt sound ethical decision-making practices.
Companies andpeople who behave in a socially responsible manner are much more
likely to enjoy ultimatesuccess than those whose actions are motivated solely by
profits. Knowing the difference betweenright and wrong and choosing what is right
is the foundation for ethical decision making. In manycases, doing the right thing
often leads to the greatest financial, social and personal rewards in thelong run.
~4~
5. Chapter I BUSINESS ETHICS According to Christina Gruble, Business Ethics is
often defined based on a companysgoals, priorities, and how books and resources
would define it. I need to define Business Ethicsbecause Landbank of the Philippines
is a banking business that makes profit to help thePhilippine government and its
projects.Actually, Landbank is one of the top grosser in incomecontribution to our
government yet, it still maintains its high ethical standards in the service of
theFilipino people. How our organization does it may be enlightened as the
discussion progresses. The most widely accepted definition for business ethics says
that it is a set of corporatevalues and codes of principles, which may be written or
unwritten, by which a company evaluatesits actions and business-related decisions.
As the definition goes, ethics business and the criteriafor what is good and what is
bad is shaped by a companys best practices and long-standing culture.In simplest
terms, business ethics refers to the propensity to differentiate right from wrong and
theresiliency to choose to do whats right in terms of actions and decisions. It
applies to theemployees both rank and file and managers as well as the company
as a whole. There are two ways that companies can approach and implement the
concept businessethics. These two approaches are based on two schools of thought,
each providing a differentdefinition for Business Ethics. The first school of thought is
shareholder-focused. It maintains that ethical businessdecisions can be made when
individuals within the organization and the company as a wholealways keep the
best interest of the owners in mind. For those who see business ethics from
theshareholders perspective, actions and decisions should be geared towards
generating more profit. On the other hand, the stakeholder-focused approach puts
premium on corporate socialresponsibility. Under this concept, ethical companies
are those that act and decide with the interestof all stakeholders not just the owners

in mind. Business ethics here means striking a balance toservice all groups that
have an impact on, or are impacted by the companys decisions and actions.These
stakeholder groups can include the employees, the supply chain, the end
consumers,relevant government and non-government organizations, and the
community where the companyoperates, among others. Given this, the stakeholder
perspective emphasizes the need to makebusiness decisions that will work well for
all the stakeholder groups. This is the approach beingimplemented by the Landbank
of the Philippines as embodied in its vision and mission as aninstitution. ~5~
6. According to Ismael D. Tabije, Business Ethics is a form of applied ethics that
examinesjust rules and principles within a commercial context; the various moral or
ethical problems thatcan arise in a business setting; and any special duties or
obligations that apply to persons who areengaged in commerce. Generally
speaking, business ethics is a normative discipline, wherebyparticular ethical
standards are advocated and then applied. It makes specific judgments about what
is right or wrong, which is to say, it makes claimsabout what ought to be done or
what ought not to be done. While there are some exceptions,business ethicists are
usually less concerned with the foundations of ethics (meta-ethics), or withjustifying
the most basic ethical principles, and are more concerned with practical problems
andapplications, and any specific duties that might apply to business relationships.
Business ethics can be examined from various perspectives, including the
perspective ofthe employee, the commercial enterprise, and society as a whole.
Very often, situations arise inwhich there is conflict between one and more of the
parties, such that serving the interest of oneparty is a detriment to the other(s). For
example, a particular outcome might be good for theemployee, whereas, it would
be bad for the company, society, or vice versa. Some ethicists see theprincipal role
of ethics as the harmonization and reconciliation of conflicting interests. The
definition for business ethics varies in every company. The challenge in defining
theterm lies in the fact that there is no clear definition of right and wrong. It is true
that we have lawsto punish offenses that are necessarily wrong. Unfortunately,
these laws do not define and punishwhat is morally right and what is morally wrong.
As a result, it is left to individuals and corporatepersons to make their own
classifications, and act and decide by these classifications. Companies arrive at
these right-wrong classifications based on many different factors.These factors
include: the culture within the company, the presence of a formal professional
codeof business ethics, the internal system of rewards and recognition, recruitment
and humanresources practices, the values system, the way management treats its
employees, and the flow ofthe decision-making process. In terms of business ethics,
the trend now rapidly favors companies that operate from astakeholder perspective.
The theory is that communicating a socially responsible image compelsendconsumers to support the company and its product because of the moral benefit
that it givesthem. To be sustainable, it is thus important for decision makers that set
the standards for businessethics to expand their horizons beyond the quest for
profit. In my opinion, Business Ethics in whatever business category provided must

be assertedfrom time to time to check and balance profit with social responsibility
and morality. I am alsobeginning to understand why Landbank in its best effort to
promote what is morally good in the ~6~
7. banking industry, had to continuously advertise, conduct seminars and
disseminate informationon strict adherence to Landbanks Code of Conduct at all
times. This is because we need to bereminded that our service has to comply with
the highest ethical standards our institution hadbestowed upon us as a company
mission, in order to attain its goals the right way. This shouldbe seen in our behavior
in public, the way we do public service and how we obey the bank rulesand
regulations without strict supervision. According to Leanne Hoagland-Smith,
asserting values or ethics and beliefs to thebehaviors is critical because this action
helps to ensure consistency and transparency.Inconsistency, however is probably
the greatest challenge any individual or business faces. Possiblythe greatest
obstacle to asserting values to behaviors resides within each individual. No one
wantsto point the finger at someone else. Yet, if individuals do not assert the agreed
positive corebusiness values and ethics then the results of the past will continue to
be manifested. What thisalso suggests is each individual may need to become a
better self-leader who is more self-aware,more self-regulated and more motivated.
For when we can assert the values to the behaviors whileour individual behaviors
are still emotionally aware of the feelings of others, then those positivecore values
will remain strong throughout the organization and within each individual. ~7~
8. Chapter II ETHICAL BANKING The assertions and definitions in the previous
chapter tackle a general point of view onethics in the business world but Landbank
is a bank. What makes it different with otherbusinesses? What kind of ethical
standards a bank must follow? How does it form its own Codeof Conduct? These are
the questions that came into my mind as I continuously dissect the topic Ihave
chosen to develop. The essence of Ethical Banking may be the answer to the
abovequestions. Historically banks have been viewed solely as financial institutions,
which should concernthemselves with all things financial. Morality has not entered
the equation. This public view hasallowed banks significant leeway with concern to
ethical standards. This is because they have notbeen associated with the actions
taken by the businesses they lend to. Banks have also stated that areason for not
mounting the new challenges that sustainability presents is that such
inspectionwould require interference in the activities of clients. (Jeucken 2002)
However, with changingsocial demands, and as more is known about the effects
that banks can have through their lendingpolicies, banks have begun to feel
pressure from the general public, NGOs, governments, and thelike to go beyond
conventional business management. For example in the mid 1990s theCooperative
Bank asked 6,000 customers what their thoughts were on ethical banking;
84%responded that it was a good idea. (Harvey 1995) In fact the cooperative bank
was formed inresponse to the growing consumer base looking for ethically oriented
banks. There is a potentialfor banks to create environmentally and socially

conscious business practices. In general all banks play an intermediary role in the
economy; because of this thepossibility for banks to contribute to sustainable
development is potentially profound. (Jeucken2002) Banks have extensive and
efficient credit approval systems, which gives them a comparativeadvantage in
knowledge (regarding sector-specific information, legislation and
marketdevelopments). {Jeucken&Bouma 1999} Banks are well seasoned and well
equipped to weighrisks and attach a price to these risks; because of this banks can
fulfill an important role in reducingthe information asymmetry between market
parties, for example between the business andconsumers. This is important not just
to consumers but also to depositors. When depositors allowa bank to invest for
them they are able to assume that the bank will know which investments
willmaximize their returns. Conventional banks are legally bound to maximize return
for their clients.If clients are concerned with more than simple return (i.e. the costs
of the return on other areassuch as society and the environment) then they may
need to turn to an ethical bank to find ways inwhich they can garner return while
keeping to their own moral concerns. ~8~
9. Through their intermediary role, banks may be able to support progress
towardsustainability by society as a wholefor example, by adopting a carrot-andstick approach, whereenvironmental and social front-runners would pay less
interest than the market price for borrowingcapital, while environmental laggards
would pay a much higher interest rate. Banks can alsodevelop more sustainable
products, such as environmental, social, or ethical investment funds. Inaddition,
there is great scope for banks to improve their internal environmental performance.
(Jeucken&Bouma 1999) In creating environmental and social screens, banks can
promotesocially/environmentally-geared companies and penalize those who do not
conform to thesestandards. However it is important that these different possibilities
(i.e. social/environmentalscreens, ethical products, and internal environmental
practices) be used as a package. If not, thereis a danger that banks could simply do
the things that make them look the most ethical (i.e.advertise their recycling
program) while not changing other areas that would have a larger impact.If the
changes are solely driven by customers, the bank will be pressured to offer
preferentialtreatment to what depositors deem as desirable, but will have limited
ability to punish undesirableaction. Governmental regulation, initiated by an
informed and involved public would be aneffective way to ensure that all banks
follow socially accepted morals and ethics. Ethical banks excel in community
involvement, as do other financial institutions such ascredit unions. Community
involvement is not limited to ethical banks as conventional banks alsopartake in
such actions. The following are a few examples of community involvement done
byethical banks, credit unions, and conventional banks: Affordable housing projects
(LandbankProvident Fund Housing Loan for employees and Easy Home Loan for
clients and depositors) Many banks/credit unions try to increase financial literacy in
the community Give local scholarships & sponsorships. Financially support
community events (Municipal and church fiestas) Environment is a key focus

amongst ethical banks (in this field specially called sustainabilityor green banks) as
well as amongst many conventional banks that wish to appear more
ethicallyoriented or that see switching to more environmental practices to be to
their advantage. Some viewthis move as green washing. In general bankers
"consider themselves to be in a relativelyenvironmentally friendly industry (in terms
of emissions and pollution). However, given theirpotential exposure to risk, they
have been surprisingly slow to examine the environmentalperformance of their
clients. A stated reason for this is that such an examination would
requireinterference with a clients activities. (Jeucken 2002) While the desire to not
meddle in thebusiness of the client is valid, one could also note that banks are
required to interfere in thebusiness of their clients regularly to ensure that the
clients business plan is viable before issuingthem a loan. The kind of analysis that
all banks partake in is termed a single bottom line analysis(this analysis only
considers financial performance). It is arguable whether or not performing a ~9~
10. triple bottom line analysis (an analysis that takes into account environmental,
social, and financialperformance) would be any more intrusive.Internal vs. external
banking ethics Conventional banks deal with mostly internal ethics, ethical banks
add to internalconcerns by applying external ethics. Internal ethics are concerned
with the well being of employees, employee and customersatisfaction, benefits,
wages, unionization, fair sex and race representation, and the banksenvironmental
standing. Environmentally the potential combined effect of banks switching to
moreenvironmentally friendly practices (i.e. less paper use, less electrical use, solar
power, energyefficient light bulbs, more conscientious employee travel policies with
concern to commuting andair travel) is huge. However when compared with many
other sectors of the economy banks do notincur the same burden of energy, water
and paper use. (.Jeucken&Bouma 1999) Many timessuch energy efficient changes
are not based on moral concern but on cost efficiency. External ethics are concerned
with the wider ramifications of banks actions. External ethicslooks at the impacts
that their business practices, such as who they loan to or invest in, will have
onsociety and the environment. In applying external ethics, one looks at how the
products of bankscan be used unethically, for example how borrowers use the
money that is lent out by the bank. In general banks are reluctant to broaden the
scope of their external ethics policies becauseit would require that the bank
interfere with the activities of its clients and/or screen its potentialclients. External
ethics can be seen as much more important than internal ethics because
thepotential that the bank has internally to cause huge societal or environmental
damage is minimalwhereas many companies that banks fund have great potential
to cause widespread damage.Internal ethics, such as switching to energy efficient
light bulbs, are relatively insignificant if thebank is, for example, simultaneously
funding the unsustainable harvest of natural resources. Ethical banking is a
relatively new sector; along with this fact come problems. Theseproblems fall under
two categories; the first concerns depositors, and the second concerns ethicalbanks.
In the first category lies the problem of really knowing how ethical banks measure

orqualify their ethical policies. This is insufficient. Even when given the opportunity
to view anaccountability report it is difficult to truly understand what their screening
processes are. "TheEthical Policy requires that all business accounts are screened at
the time of account opening bythe staff person dealing with the member. Social and
environmental risks of larger businessbanking loans (non-credit-scored loans) are
assessed at the time of the loan application, guided bythe Ethical Policy and
Lending Policies." ~ 10 ~
11. This statement does not give the reader the information/he needs to understand
the criteriaused in assessing clients. Another issue in this category is that of codes.
Many ethical banks as wellas conventional banks voluntarily join larger bodies that
put forth certain regulations that,according to the rules set by the body, should be
followed by members. Such outside bodies couldact as overarching institutions that
could guarantee a certain level of conformance with certainregulations. Civil Service
is a sample of this larger bodies of institution. Depositors who use ethicalbanks do
not have this assurance because there is no external regulatory body that sets
minimumacceptable legal standards. In the second category ethical banks face
obstacles such as losing business and consumersupport to conventional banks, and
having to regulate above and beyond the present internationallegal systems.
According to Cowton, C. J., and P. Thompson, "banks that had signed the United
NationsEnvironment Programme (UNEP) Statement, a voluntary industry code that
promulgatedenvironmental stewardship, transparency, and sustainable
development, did not act significantlydifferent than the non-signatories. They
concluded that, for codes to be more effective; regulators,monitors, and methods of
enforcement need to be in place. (Cowton&Tompson 2000) Thisproblem is similar to
the problems faced by the fair trade movement. Both the fair trademovement and
ethical banks rely on people to pay extra for known ethical goods. There is a limitto
how much more people will pay for that guarantee, after that point further
initiatives willundercut the banks income and therefore are likely to not be followed.
Losing business to banks that do not screen so strictly is a problem for ethical
banks. Manytimes ethical banks must work with much lower budgets because of
this. Ethical banks exclusion ofunethical borrowers often results in the borrowers
going to other banks, this brings up theimportance of industry wide regulations. One
way of raising the industry wide regulations would befor citizens to apply pressure
on banks. Without this rise it is difficult to impede unethicalbusinesses from finding
a bank to finance their projects. A rise in regulations that deal with moraltopics is
not out of the question. The current industry wide codes, for example, prohibit
thefinancing of illegal drug production. This reflects the prominent societal morals
against such drugs.Credit and court investigations are employed by Landbank to
keep up with these standards as anethical bank especially in marketing bank
products and services. Ethical banks cannot solely rely upon the legal system to
determine whether or not apotential client has acted unethically or whether or not
their future plans are unethical. This isbecause of the wide range of laws throughout
the world. While a business may be lawful in theinternational setting, this does not

mean that the laws were up to the moral standards in which thebank originates. For
example, extensive pollution and labor laws that would not be consideredlawful in
many developed countries are allowed in many lesser-developed countries. ~ 11 ~
12. Judging what is ethical Claiming to be an "ethical" bank requires an objective
way to determine what is ethical.Popular ethical theories that could be used include
those of Mill, Kant and Aristotle.John Stuart Mill The premise of John Stuart Mills
utilitarian ethical theory is that an action is of moralimportance if it contributes to
the overall happiness of all people. Therefore, in Mills perspective abank would be
moral if it tended "to promote happiness".(p. 10)Mill 1957 If the conduct of thebank
in question acts in way that produces the greatest amount of happiness for the
greatestamount of people then it will be acting morally according to Mill. Because
the banking sector is solarge, complex and far-reaching in its effects it is difficult to
judge the happiness of everyoneaffected by the conduct of banks in general or by
certain banks in particular. However it is mucheasier to see how alternative conduct
could produce and/or promote much greater happiness. Forexample through the act
of generous philanthropy in forms such as giving back to communities,employees,
members, environmental/development groups, etc. could increase
happiness.Donation to DEPED of P4,000,000.00 is Landbanks way of sharing its
blessings to createhappiness. Similarly lending to businesses that treat employees
fairly and are concerned with suchpublic goods as the environment would also be
considered ethical according to Mill. Given thatthings such as global warming, air
pollution, water contamination, and soil pollution negativelyaffect large groups of
the population, if not all of the population (in the case of global warming),banks that
chose to partake in the above examples could be viewed as contributing to the
overallhappiness of all people and would hence have moral value. In line with this
Landbank promotedits Linis Month and Environment friendly surroundings for all
units is another small way ofshowing ethics because it contributes to the health and
well being of our depositors andemployees.Immanuel Kant According to Immanuel
Kants Categorical Imperative, morality lies in actions not inoutcomes. With this
knowledge one could propose that the act of lending money is not in and ofitself
immoral and according to Kants perspective banks should not be judged as moral
orimmoral based on the outcomes of their lending. However the second formulation
of Kantscategorical imperative states: "act in such a way that you always treat
humanity, whether in your ownperson or in the person of any other, never simply as
a means, but always at the same time as anend" (pg. 6667)Kant 1956. Based on
this formula one could argue that unethical lending on thepart of banks either
commercially (to corporations that will likely incur losses because they act in
afashion that will soon be unlawful, e.g. pollute excessively, use child labour, etc.)
or to individuals(who, for example, would be financially unable to repay the loan, ex.
the American mortgage crisistoday) is treating its clients as merely means for
financial gain rather than as ends in themselves. ~ 12 ~

13. This interpretation portrays banks that lend without screening their clients to
see if they would besupporting practices or purchases that would ultimately lead to
the clients failure as unethical.Aristotle For Aristotle, lawfulness is important in the
measurement of morality, as is equality andjustice. Whether an action is or is not in
accordance with the law is an important measurement ofmorality for Aristotle. Many
banks do business in accordance with the law in all practices. Theymay also
specifically seek to do business with law-abiding clients. Nevertheless this can
beproblematic, as laws vary internationally. This means that a bank could be viewed
as ethical evenwhile funding clients who lawfully conduct business in harmful
manners. However thismeasurement is challenged by Aristotles statement: "what is
just in transactions is somethingequitable, and what is unjust is something
inequitable" (p. 84)Aristotle 2002. This means that abank needs to take into account
the unjust/inequitable behavior of its borrowers to qualify as anethical bank. For
example, lending to a law-abiding corporation that does not pay its employees
asufficient living wage would be immoral.Bank regulations and the free market The
argument against regulating banks is that the regulations would violate the
properfunctioning of the free market economy. Severyn T. Bruyn disputes this
argument in his article"The Moral Economy".Bryun 1999 In fact, morals were
supposed to be a natural part of theworkings of the market economy. He believed
that economic transactions should be the result ofmutual agreement and should
involve morality and friendship. He stated that selfishness couldobstruct the market
economy from running morally. If interpersonal relationships did not play apart, then
the interdependency experienced by individuals could vanish and unfair play based
ongreed and mistrust would exist. Bruyn discusses todays society as one that has
lost its basic moralsin the market. He states that there is a need for a reigniting of
civil society. (Bryun 1999)Originally, civil society was assumed to be naturally able
to regulate the morality of the market, butwith the great distances between
individuals involved in transactions as time has passed,governments became the
prime regulators of morality in economic exchanges. In recent historygovernments
have been pressured to stop interfering in the economy. This has allowed
bodiessuch as corporations, which operate immorally or at best amorally, to create
extremely damagingoutcomes without legal or societal penalty. Bruyn promotes the
resurrection of civil society, callingsociety to demand fair practices and to regulate
the morality of the economy. One way peoplecould influence civil society would be
to act as economic regulators by choosing to do businesswith banks that do not
finance corporations such as the aforementioned.[citation needed] Rudolf Steiner
suggested that capitalism has the task of funding economic initiatives; capitalshould
be directed into directions productive for society. He proposed that rather than
pricesbeing set through either the total control of government regulation, or the
total lack of control of a ~ 13 ~
14. free market, each industry could have self-regulating associations of producers,
wholesale and retailbusinesses, and consumers. These associations would
determine prices fair to all three groups.The state would not interfere with purely

economic decisions but would be responsible forprotecting human rights (this could
include a minimum wage and safety in the workplace) andequality of its citizens
rights. Hence, inLandbank a review in its human resources managementare
conducted annually in the course of history to gauge its fair practices in dealing
with itsemployees and measuring each units way of promoting Landbanks ethical
standards in handlingthe banking business.How it came that the Landbanks Code
of Conduct was formed formanagement and employees, shall also be discussed as a
review of the past shall be conducted inthe next chapter. ~ 14 ~
15. Chapter III LANDBANK HISTORY ICONS OF ETHICS The story of the Landbank of
the Philippines is the story of the Filipino farmer andPhilippine countryside
development. The journey began when President DiosdadoMacapagal provided the
vision and leadershipfor the passage of Republic Act No. 3844 on August 8, 1963,
otherwise known as the AgriculturalLand Reform Code of the Philippines with an
initial authorized capitalization of P1.5 Billion.Under the intent of the law, hailed by
President Macapagal as an act to emancipate the Filipinofarmer, Landbank was to
provide timely and adequate financial support to all phases of AgraraianReform. Its
initial function was to finance the acquisition and distribution of agricultural
estatesfor division and resale of small landholders as well as the purchase of the
landholdings by theagricultural lessees. Landbank came into being with great
aspirations, as it gave meaning anddirection to the lives of its intended clientele,
the Filipino farmer, while offering investmentalternatives to former landholders in
their quest for more progressive role in the countryseconomic development. On July
21, 1973, under PD No. 251, LBP was granted universal or expanded
commercialbanking powers and established LANDBANK as thefirst universal bank in
the country with asocial mandate to spur countryside development. Its authorized
capitalization was increased to P3Billion. With the strengthening of Landbank,
President Marcos reconstituted the Board ofDirectors. He appointed Cesar EA Virata,
then Secretary of Finance and BasilioEstanislao asPresident. Mr. Cesar EA Virata was
recognized by his peers as principled man. He was the epitomeof an honest and
uncompromising technocrat. He was a soft-spoken gentlemen whose humilitystood
out in the corridors of powers that he started walking at an early age. It was to the
sharp-minded and conscientious Virata that President Marcos gave the privilege of
crafting thereorganization plan of Landbank. Mr. Basilio M. Estanislao, on the other
hand, was a man of humble origins who rosethrough the ranks at the Central Bank
of the Philippines. Equally forthright as a Central Bankofficial ever mindful of his role
as a bank regulator, although relaxed and amiable in demeanor.Mr. Estanislao
was a prudent, honest, hands-on President. He had a passion for the farmers
thatcould not be seen in anyone else during his time. As the Banks manpower
grew, Estanislaoendeavored to create a corporate culture appropriate to the Bank
and its mission. For Him, ~ 15 ~
16. money was not everything. He wanted the staff to realize that money wont buy
them happiness.What will make the staff happy is achievement. He was successful

in this part because when hedeclared a moratorium on promotions and salary

increases, the staff did not complain. On July 8, 1982, Executive Order No. 816 was
issued abolishing the Agricultural CreditAdministration (ACA) and its functions (loans
to small farmers) were transferred to LBP. When President Corazon Aquino
appointed Deogracias Sonny Vistan as President andCEO of Landbank seven
months after the People Power Revolution of 1986, the 42 year oldbanker brought
with him his youth, vigor and his experience from one of the worlds best
bankinginstitutions. These attributes turned out to be assets in an environment that
required progressivethinking and energetic action, along with strategic approaches
essential to the growth of Landbank.Philippines then, was reeling from an economic
crisis, partly brought about by recent politicalturmoil, with the international
economic situation of rising oil prices aggravating the local problem.In spite of the
countrys situation, Landbank was able to maintain a very clean and healthy
financialcondition. To Mr. Vistan, Landbank was not an abused bank. Compared with
other governmentfinancial institutions, Landbank was outstanding and
unblemished. It even scored high incredibility in the international banking sector,
thus, uplifting ethical banking standards in theforeign scene. On June 10, 1988,
Congress passed Republic Act No. 6657 which instituted theConmprehensive
Agrarian Reform Program with LBP as its financial intermediary. It was at thispoint
when the Garchitorena Land Scam that involved another agrarian government
institutiontook place. Having seen the loophole in the valuation of agricultural lands,
the President of thePhilippines issued Executive Order 405 which transferred the
primary responsibility ofdetermining land valuation and compensation for all lands
covered by CARP to Landbank of thePhilippines. It was then that LBP President
Vistan created the Land Valuation and LandownersCompensation Office nationwide.
When President Fidel V. Ramos appointed Mr. Jesli A. Lapus at age 42 as President of
thetheLandbank of the Philippines, Lapus had been away from the corporate scene
for a few years.Serving the government would not be a new experience since he
was the Undersecretary of theDepartment of Agrarian Reform during the
administration of President Corazon C. Aquino. Hewas known to be the
Management Whiz Kid in the ASEAN, as he was named by theinternational
magazine, Asian Finance. At the outset, LBP President Jesli A. Lapus realized that
Landbank was one place whereyou could not put a purely social-minded person. The
bank will collapse if this happens.Likewise, if a purely profit-oriented manager shall
be placed, the bank will lose sight of its primarymandate which is to do Agrarian
Reform-based development in the countryside. He dreamed ofmaking Landbank
accessible to both the farmers and the private sector like a one-stop shop so he ~
16 ~
17. created the Unified Systems Project units where the bank was able to offer both
agrarian andcommercial banking services under one roof in all 77 provinces. LBP
President Jesli A. Lapus further looked into the welfare of the officers and staff of
thebank who, for years, had to contend with an uncompetitive salary. He tried to
convinced thecongressmen by making his point that Landbank spends P200,000.00

per person in his annualtraining, only to lose them because he could not raise their
salary considering the fact thatLandbank is not asking from the budget of the
national coffers. The year 1995 saw LBPundergoing major changes with the passage
of RA 7907 or Amended LBP Charter on February23, 1995. Its authorized capital
stock was increased from P3 Billion to P9 Billion. The increase insalary gave Mr.
Lapus the opportunity to address the human component of management,
histrademark approach to solving corporate crises and increasing productivity. At
the same time, theCharter amendment allowed him the flexibility to accomplish
structural integrity, which to him,was imperative to the growth of the Bank. When
Mr. Lapus joined Landbank in 1992, hetransformed it into an institution in which he
would feel at home through agrarian projects,cooperativism and salary boosting. He
dreamt big and all those big dreams came true forLandbank before he left. Mr.
Florido P. Casuela then took his place. Even as a young man, he had always
wantedto help others, especially those who needed a better deal in life. If his
predecessors were insistenton the practice of professionalism, LBP President
Casuela raised the bar when it came topunctuality. He reported for work at a time
security guards were leaving and arriving for a changeof shift and utility men were
only about to open doors. Reporting for work early also meant thatMr. Casuela could
check what everyone most likely took for granted. Under Mr. Casuelas time, the
World Bank approved the US$ 150 million CountrysideLoan Fund III. Landbank was
also tapped as a settlement bank of the Bureau of Treasurys SmallInvestors
Program. On August 25, 1998, the authorized capitalization of LBP was increased
toP25 Billion by the Department of Finance and the President of the Philippines.
What Mr. Casuela imparted to his fellow Landbankers were not sophisticated
managementmodels or mind-boggling paradigms that could have raked in billions of
pesos for Landbank.What he shared was the need to reaffirm the basic values that,
in the end, would matter most, asLandbank seeks to fulfill its mandate to help the
poor and the needy in the countryside. LBP President Margarito B. Teves was an
appointee of President Joseph Estrada. He wastrained as an economist and not as a
banker. Not knowing enough how a bank should bemanaged, Mr. Teves presented to
the Landbankers his 90-10 formula style of managementwhich meant he would
rely on Landbankers to provide 90 percent of the knowledge, solutions,creativity,
and work, while he would be responsible for contributing the remaining 10 percent
~ 17 ~
18. management and economic expertise. After a year, the income of the Bank
soared to P751million from P228 million in the same period of the preceding year.
As he realized that mostsmall borrowers, especially farmers and fisherfolk, are very
creditworthy much more than theirwealthier counterparts sometimes he made a
focus on loans and attained the special status forLandbank as the largest lender to
the countrys countryside financial institutions. Its approved lineduring his time was
P9.4 billion in 2005. The bank also accredited 440 CFIs nationwide. Mr. Teves
realized that the foundation of highly effective organization lies in the quality ofits
people. When he left, he recommended a successor who would continue to serve

Landbankwith the same luster and dedication. The next President had to be
someone who would continueto lead the Bank with honor, dignity and deeply rooted
commitment to the good of the people,especially the farmers and fisherfolk in the
Philippine countryside. Mr. Teves last act as presidentwas to recommend Madame
Gilda E. Pico as the next President and CEO of the Bank. With atough, capable yet
compassionate woman at the helm, whose aim in life is to serve, the saga ofsuccess
that is the Landbank journey continues. Inspiring leadership, competence, and a
good heart define who Gilda Elepano Pico is as ahuman being and as the eighth
President of the Landbank of the Philippines. Madame Picosbrand of leadership
inspires in the men and women of Landbank a collective response marked bytheir
unwavering support, dedication, integrity, and excellence in the performance of
their dutiesand responsibilities as they fulfill the mandate of the institution. It is this
dynamic synergy,characterized by mutual respect, concern, teamwork and
cooperation espoused by Madame Piconot only among the staff and officers, but
between Landbankers and their clientele and partners,that motivates them to
achieve effective results. With Madame Pico steering the organizationforward, as
she instills in the Board of Directors, officers and staff oneness in purpose,
Landbankcontinues to be the largest government bank and the fourth largest bank
in the country. Shebelieved that effective leadership at any time depends on strong
relationships built on a genuineconcern for others. Madame Pico is known to
consistently exhibit a calm and purposefuldemeanor during difficult times for the
Bank, thus fostering a sense of reassurance that thesituation is under control and
everything will turn out right. In times of crisis, Madame Pico makessure to be on
top of the situation, and if the distance would allow it, she goes to the branch
thatneeds her support. She makes it a point to visit employees in their times of
extreme need, likewhen their communities are badly hit by a typhoon. Its also a
way of showing that care and help ison the way. Its her presence, more than the
money or goods that Landbank can give that matters.She looks at the holistic
person and relates to both men and women as more than a co-worker, butas a
friend, a family member, and a fellow citizen whose life she touches. Such an
attitude andapproach to relationships can only come from a transformational leader
who brings about positivechanges in individuals, in the institution and the Banks
clientele. The reach and scope of herinfluence thus contribute substantially to the
growth of a just and humane society. By keeping trueto her authentic self, she easily
and effortlessly transcends self-interest for the greater good. ~ 18 ~
19. Coming from the prominent Elepanos of Calamba, Madame Pico grew up with
siblingswho received utmost care from their parents, tempered with discipline and a
sense of values thatfocused on good education, dignity of hard work and honesty in
ones dealings. She graduatedfrom College of the Holy Spirit. She joined Lanbank in
1981 as its Assistant Vice President forManagement and Operation of the Audit
Department (MOAD), considering the fact that shealready rose from the ranks at
Commercial Bank and Trust Company where she started as aclerk,then handled
remittances, became a new accounts teller, then senior audit clerk, next

EDPprogrammer and then stepped up to Manager. Her last post was as Assistant
Vice President of theAuditing Division of Commercial Bank before she applied for
Landbankon 1981. In 1986, she was promoted as Vice President of the Audit and
Technology Group, anappropriate appointment for a Certified Public Accountant who
also has an eligibility as anelectronic data processing programmer. President Vistan
entrusted her the crafting andimplementation of the audit rating system which was
used in evaluating performance of units andemployees. She also organized the
Credit Review Department and the Rural Banking AuditDepartment to review the
loan portfolio of Landbank and to review operations of cooperativesand rural banks.
In 1989, she was promoted Senior Vice-President of the Operations
Sectorsupervising the Controllership Group, Audit Group, Administrative Services
and Special AssetsGroup, Technology Management Group, Facilities Management
and Engineering Group andManpower and Special Services Group. During the time
of President Casuela, when the Aisan financial crisis was still at its height,she
doubled her efforts to effectively manage Landbanks general and administrative
expenses, andadopted belt-tightening measures that contributed to sustaining their
overall profitability. When Madame Pico finally became the Landbank President, she
immediately conducteddialogues with farmers, rural bankers, and cooperative
members who opened her eyes further andmade her realize that farmers and
fisherfolk have so little in life. For her, if Landbank would nothelp them, then she
wondered who else would help them? She was certain that other banks wouldnot
even touch them. She then decided as Landbank President that her remaining years
withLandbankwould be the years that she would certainly help them. What followed
was the creationof programs that would strengthen the conduits of loans and
assistance to farmer. She put up aDevelopment Advocacy Fund of P1 billion; set up
the Agricultural Guaranty and Fund Pool ofP4.48 billion; Calamity Assistance
Program; and Rice and Corn Productivity Program. She alsodirected Landbank to
invest in Unsecured Subordinated Debt Issuances of CFIs, where shereduced the
interest rates for farmers to benefit further. Today, Madame Pico continues to be a
model of principled and effective leadership.Being results-oriented, she always
gives her staff a timetable and expects them to produce results atthe time
specified. Madame Pico also values a two-way communication with the officers and
staff.To keep them informed she delivers a quarterly thematic State of the Bank
Address focused on ~ 19 ~
20. the latest Bank accomplishments, programs and challenges. In the same way
she alsocommunicates to clients through her speeches in conferences and
conventions she got invited to.This is also her way of personally relating to clients
howLandbank had helped them through crisisunscarred all these years. For her, as
the first woman President of Landbank, it is important toshow the world how ethical
banking can be in the very essence of Landbank operations. In one ofher an excerpt
from one of her speeches , she stresses the importance of Ethics in the
workplace:58th Annual National Convention and Corporate Meeting (Part I)Banking
on Best Practices: A sure way to successby LANDBANK President and CEO Gilda E.

PicoMay 25, 2011SMX Convention Center Pillar #2: Development of Institutional

values and principles Developing your institutional values and principles is
fundamental for any successful organization. Your mission statement, values, and
code of ethics are the "North Star", the beacon by which you set your compasses
and align your strategies. They best represent what your rural bank is about, and
define what it is and what it is not. I would assume that you all have your vision,
mission, and values statements. But it is not enough to just have them on paper or
framed and posted on your walls. You should constantly revisit them to make sure
that you are on the right path or if the path you have set is indeed the one you wish
to tread. Do your statements define your bank? Remember that your vision
statement should reflect the essence of your organization, and should contain what
it envisions in terms of growth, values, employees, and contributions to society as a
whole. The mission statement, on the other hand, should be a more precise
declaration of a business strategy and developed from the customers perspective in
accordance with the vision of the organization. Your mission should answer these
questions: What do we do? How do we do it? For whom do we do it? A periodical
mission review helps your organization get back to basics and make sure that you
have not skewed your activities to meet the needs of other stakeholders more than
your actual clients. The values statements, meanwhile, should reflect the core
ideology and embody the values that the organization lives and breathes. And
finally, a code of ethics should be established to ensure that all directors,
management and employees abide by the same ~ 20 ~
21. standards of conduct, and as a requisite in guaranteeing the balanced rights
and interests of all stakeholders involved. Consistent with its mandate as a
development financial institution, LANDBANK has sincetaken the lead in extending
timely financial and development support to small farmers andfisherfolk, micro and
small and medium enterprises, agri-infrastructure, agribusiness, agri-relatedand
environment projects which it considers its priority sectors. Madame Pico and all her
workforce makes sure that consistency in the performance of their duties and
responsibilities to ensurethat the service execution is being carried out and passed
on even to newcomers through trainings. With its strong network of more than 340
branches nationwide complemented by thestrategic partnerships it has forged with
key development players, the banks credit delivery systemis able to penetrate
almost 90 percent of the countrys total number of municipalities. Even while
aggressively pursuing its mandate, it has been able to strike the ideal balance
byachieving and sustaining profitable banking operations. To date, LANDBANK ranks
among thecountrys top five banks in terms of assets, loans, deposits and capital.
Its sustained financialviability has continuously enabled it to become one of the
biggest contributors to the governmentsrevenue generation efforts and one of the
most active partners in supporting its flagshipdevelopment programs. ~ 21 ~
22. Chapter IVLANDBANKS MISSION, VISION AND CORE VALUES AS ETHICAL
GOALOUR VISION: LANDBANK shall be the dominant financial institution in

countryside development,committed to the highest standards of ethics and

excellence in the service of the Filipino people.OUR MISSION: We shall continue to
provide timely financial and technical support for our farmers,fisherfolk and other
priority sectors. We shall deliver innovative products and services that are
consonant with ecologicalenhancement and effectively address our clients needs.
We shall embody professionalism and integrity, providing our employees with a
workenvironment that encourages growth and rewards excellence. LANDBANK is
committed to improving the lives of all its stakeholders and working withthem to
lead the country to economic prosperity.OUR CORE VALUES: SOCIAL RESPONSIBILITY
Patriotism, love of country, service to community, concern for environment,
customersatisfaction, man for others and caring ~ 22 ~
23. TRUST Equity, openness, and fairness EXCELLENCE Leadership, quality,
initiative, innovative, competence PROFESSIONALISM Integrity, mutual respect,
teamwork, dedication, commitment and loyalty The Constitution declares that a
public office is a public trust. The Land Bank of thePhilippines, being a governmentowned corporation is a public office. Our ability to secure andmaintain our strong
position in the banking industry depends to a great extent on the trust
andconfidence of our clients, business partners, other stakeholders and the general
public. We recognize that this kind of relationship that is founded on trust entails
responsibilitiesfrom the people working for our organization. As such, employees are
expected to strive toconsciously adhere to the following work principles consistent
with our organizations vision andmission as well as our core values: *As civil
servants, we are accountable to the people, we serve by committing to respond
totheir needs with efficiency, genuine concern and professionalism. *We put value
on honesty and integrity in our day to day business dealings in the same waythat
uphold these principles in our personal lives. *We uphold truth and justice by
playing an active role in stamping out corruption andunfair business practices that
taint the image of the institution and the whole bureaucracy. *We treat our clients
and colleagues with respect always mindful of their rights as humanbeings. *We
lead simple and modest lifestyles even as we continue to take pride to work in
theservice of the nation. What had been discussed in the History of Landbank and
exhibited by Landbanks Iconsof Ethics, is better understood through the Mission,
the Vision and the Core Values ofLandbank. ~ 23 ~
24. We are Landbankers because we were brought up by Landbank based on the
above corevalues. It is instilled in us from the very first day we got employed
through our orientations andtrainings how to help our institution carry out our social
mission without sacrificing the efficiencyand effectiveness in the quality of our
services. Landbank is not a perfect organization. We have our share of ethics related
cases. Itcould not also be denied that it is a fact that increasing incidents in the
workplace have pushedour organization and other institutions to either implement
or actively promote code of ethics thatact as a set of guide posts to helps
practitioners understand expected behavior. For example, Booz Allen Hamilton has

implemented a code of ethics and trainingprogram that highlight clear expectations

of employee behavior in terms of the organizations corevalues and adhered
standards. "These guidelines basically enable security professionals to recognize
how they need to actin circumstances that require an ethics decision," Smith says.
For example: Someone borrows anID card because they forgot theirs. What could go
wrong? How should employees behave? Whatsthe correct action to take? This
document should clearly outline expected behavior of employees based on the
valuesand standards of the organization. In the case of Booz Allen, these codes
clearly spell out what isacceptable employee behavior, for instance, in the event an
employee receives personallyidentified information from a client, or how the
employee can protect confidential clientinformation. "Whats important to the
organization and how they would like to be viewed by othercompanies is what
defines their ethical behavior," Smith adds. Samples from Booz Allens business code
of ethics: "Protecting Confidential Client Information: The best way to protect client
information is tonot take possession of it. Each of us must restrict receipt of client
information to only informationthat is reasonable necessary to propose or conduct
an engagement even if greater informationaccess is offered. Your obligation to
maintain the confidentiality and security of client informationcontinues not only
during and after the engagement ends, but also during and after youremployment
with the firm..." "Employee Personal Data : Each of us must exercise extra caution
when handling anemployees personal data. We do not disclose current or former
employees personal data to thirdparties other than confirmation of employment
dates and position without prior written consent ~ 24 ~
25. from the employee or former employee unless the information is required to
fulfill a legitimatebusiness need- such as employee benefits or as required by law..."
Ethical Training Smith also recommends organizations offer refresher courses
regularly on codes of ethicsto professionals. These courses will act as a positive
reminder to them that ethical behavior isexpected and mandated by the
organizations culture. Other options organizations have used: Scenario-Based
Training: Moretti goes through scenario-based training every six monthsin his
multinational banking institution. The emphasis is on how professionals need to
operate andfollow basic information security principles and financial industry
guidelines. For example, thetraining outlines a scenario of a professionals access to
sensitive data and provides guidelines topractitioners on how they need to handle
data and follow the rules of sharing, distributing andstoring this information. "Over
the last five years these courses are getting better," Moretti says. "Professionals
likeme now understand that we are the ambassadors for ethical behavior and
should activelyencourage other employees to adhere to it." Affiliation with a
Professional Association: As a manager of a security group, Morettiprefers hiring a
certified professional who has demonstrated the capability of operating within
acertain code of ethics. Professional associations like (ISC)2 and ISACA usually
follow a strict codeof ethics that helps security practitioners maintain their
professional standards. "If you areaccredited an information security certification,

you are actively encouraged to go through trainingon ethics and are also reviewed
by your other peers in the industry, as a result you build a strongethical awareness."
If this is a picture of how other institutions and organizations arrive to their present
code ofethics and their own regulated code of conduct, Landbank, being a
government owned andcontrolled corporationemanates its own Code of Conduct
with a constitutional legal basis as afoundational arm for its creation. It has a legal
framework because it works hand in hand with ourPhilippine Government. This is
better discussed in the following chapter. ~ 25 ~
26. Chapter V LEGAL FRAMEWORK OF LBP CODE OF CONDUCT The 1987
Constitution of the Philippines provides the basis of ethical and accountablebehavior
in the public sector. Section 1 of Article XI states that: Public office is a public trust.
Public officers and employees must at all times beaccountable to the people, serve
them with utmost responsibility, integrity, loyalty, and efficiency,act with patriotism
and justice, and lead modest lives. This provision requires every public officialand
employee to exhibit and live certain values while in government service. In addition,
the Statehas been mandated by the Constitution to maintain honesty and
integrity in the public service andtake positive and effective measures against graft
and corruption. In 1989, the Philippine legislature passed Republic Act No. 6713, a
law embodying theCode of Conduct and Ethical Standards for Public Officials and
Employees. The Code spells outin fine detail the dos and donts for government
officials and employees in and out of theworkplace. These dos and donts are
encapsulated in the eight norms of conduct to be observedby all government
officials and employees. These norms or standards are: Commitment to public
interest Professionalism Justness and sincerity Political neutrality
Responsiveness to the public Nationalism and patriotism Commitment to
democracy Simple living The Code, likewise, introduced some reforms in the
administrative systems like givingheads of agencies the responsibility of ensuring
there is a value development program for theiremployees; continuing studies on
work systems and procedures with the end in view of improvingthe delivery if public
services; and, mandating the designation of a resident Ombudsman in
everydepartment, office and agency. Incentives and rewards system has also been
put in place.Another comprehensive law passed to address and curb the
commission of malfeasance ingovernment is Republic Act No. 3019 or the Anti-Graft
and Corrupt Practices Act. In Section 1 of this law, it states that: ~ 26 ~
27. It is the policy of the Philippine Government, in line with the principle that
apublicoffice is a public trust, to repress certain acts of public officer and
privatepersons alikewhich constitute graft and corrupt practices which may lead
thereto. This law specifieseleven (11) instances of corrupt practices in addition to
acts oromissions already penalized by existing laws.Political Commitment The legal
infrastructure that prescribes ethical conduct of; public servantsisreinforced by
political commitment. This political commitment, while difficulttobenchmark, has
been demonstrated by some policy pronouncements. Quitesignificantare the ten-

point action agenda of the present Administration and theMediumTermDevelopment Plan (2000 2004) or AngatPinoy 2004 which embodythe
framework for thecountrys socioeconomic development. The agenda and the MTDP
place the implementation of a sustained trainingandorientation program on antigraft and corrupt practices and laws, and on theEthicalStandards Act of Public
Officials and Employees among theAdministrationspriorities to reduce graft and
corruption and exact high standards of ethicsingovernment. Proceeding from this,
departments and agencies of the executivebranchhave set up and implemented
various programs that aim to eliminatebureaucratic red tape.One-stop action
centers are now being promoted andinstitutionalized in the agencies.Oversight
Institutions The legal infrastructure and political commitment are
supportedandcomplemented by the existence of oversight institutions. The creation
of theoversightinstitutions that deal with issues of ethics, accountability, graft
andcorruption are mandatedby the Constitution. The common feature of
theseinstitutions is they enjoy a substantivedegree of fiscal autonomy in the sense
that theyare not subject to the fiscal controls of theexecutive. The budget is directly
releasedto these institutions and the heads are authorizedto realign savings from
their budget.They also have quasi-judicial powers in that they canadjudicate and
decide cases andenforce their own decisions, including the imposition ofsanctions
which may includesuspension from office or even dismissal from
governmentservice. In the Philippines, the three constitutionally mandated
oversight institutions arethe Civil Service Commission, the Office of the Ombudsman
and the Commission onAudit. The Civil Service Commission is the central personnel
agency of the government. ~ 27 ~
28. Under Section 3, Article IX-B of the Constitution, the CSC is mandated
toestablishcareer service and adopt measures to promote morale,
efficiency,integrity,responsiveness, progressiveness, and courtesy in the civil
service. It is also taskedtoinstitutionalize a management climate conducive to
public accountability. CSCseffortinvolves in enforcing ethics and accountability of
line agencies basicallyinvolves threeapproaches. One approach is regulatory, the
other, corrective, and thelast one,developmental. The first approach addresses
compliance of-agencies withpolicies andstandards on HRD systems set by the CSC.
For instance, CSCprescribes qualificationstandards for each and every position in
the Philippinegovernment. Non-compliance withthe QS by agencies in the
processing ofappointments of their staff results in the disapprovalby the CSC of such
appointments. But, apart from the substantive requirements for practically all kinds
ofpersonnelactions such as the publication requirement and the promotion and
selectionboardprocesses. Non-compliance with the procedural requirements
constitutes groundforcorrective or even punitive action. The second approach deals
with disciplinaryactionsagainst official or employee for infractions committed in
relation to theperformance ofhis/her official functions. The Administrative Code of
1987 orExecutive Order No. 292outlines the various acts that are subject to
administrativedisciplinary proceedings.However, administrative discipline is not a

function within-the exclusive jurisdiction ofCSC. Agency heads as well as the Office
of theOmbudsman also have the authority toproceed against erring government
officialsand employees. The third approach isdevelopmental and will be discussed
later inthe succeeding paragraph. The Office of the Ombudsman acts as a
prosecutor against those charged with theviolation of RA 3019, RA 6713 and the law
against ill-gotten wealth, among others.It ismandated to investigate and prosecute
the criminal liability of public officialsandemployees involved in graft and corruption.
The Commission on Audit is the fiscal watchdog of the government.
COAisresponsible for ensuring legal and proper disbursement of public funds
andpreventingirregular, unnecessary, or extravagant expenditures or usage of
public funds. Italsohas quasi-judicial powers. All these oversight institutions enforce
accountability ethic in government.Active Citizenry Market principle is at work in
government operations. This simply means that ~ 28 ~
29. the services provided by the government are dictated, to a large extent, by the
need of the people. Some mechanisms by which the extent, type and adequacy of
services are gauged are feedback surveys and the practice of benchmarking. The
CSC has relied on MamamayanMuna, Hindi Mamaya Na! Program(translated as
Citizens First, Not Later) as source of client feedback. The program isa governmentwide campaign of the CSC that not only provides measure of clientsatisfaction but
also addresses the need for behavioral reforms in the bureaucracy,particularly in
the manner by which civil servants deal with the public. Since theformal launching
in 1994, the program has gained wide acceptance by the public. By reviewing the
number and subject matter of complaints received under theprogram, the CSC has
been able to determine the centers of excellence in government.On the other hand,
the performance of agencies that received the highest complaintsare continuously
being monitored. Promoting Ethics and Accountability in the Public Sector There
have been numerous initiatives in promoting ethics and accountability inthe public
sector. As shown in the earlier discussions, all the above mechanismsfocus on
exacting as well as developing ethics and accountability consciousness
ingovernment officials and employees. The emphasis in the discussion are the
various developmental initiatives, which are withinthe area of knowledge and
competence of Landbank as it works with Civil Service in implementing the right
ethics in a banking workplace. Landbanks Code of Conduct is the very heart of
ethical standards that guides all officersand staff of the institution. As a whole, the
Code of Conduct in return is a conglomeration ofvarious executive orders,
presidential decrees and republic acts being passed by our governmentsto be
followed by all public servants. However, it does not exempt its employees from
beingcovered by the following laws as they are the legal framework that serves as
the central processingunit and foundation of the Code of Conduct of the Landbank
of the Philippines. The followinglaws are the legal basis of Landbanks Code of
Conduct:THE ANTI-GRAFT AND CORRUPTION LAWSRA No. 1379 - An Act Declaring
Forfeiture in Favor of the State Any Property Found to havebeen Unlawfully Acquired

by Any Public Officer or EmployeeArticle XI 1987 Philippine Constitution Accountability of Public Officers ~ 29 ~
30. RA No. 3019 - Anti-Graft and Corrupt Practices ActRA No. 6713 - An Act
Establishing a Code of Conduct and Ethical Standards for Public Officialsand
Employees, To Uphold the Time-Honored Principle of Public Office being a Public
Trust,Granting Incentives and Rewards for Exemplary Service, Enumerating
Prohibited Acts andTransactions and Providing Penalties for Violations Thereof and
for Other PurposesImplementing Rules of RA No. 6713 - Rules Implementing the
Code of Conduct and EthicalStandards for Public Officials and EmployeesRevised
Penal Code (Title II) - Crime Against the Fundamental Laws of the State Revised
PenalCode (Title VII)RA No. 7080 - An act Defining and penalizing the Crime of
PlunderRA No. 9485 - An Act to improve Efficiency in the Delivery of Government
Service to the Publicby Reducing Bureaucratic Red Tape, Preventing Graft and
Corruption, and Providing PenaltiesPD No. 749 - Granting Immunity from Prosecution
to Givers of Bribes and other Gifts and totheir Accomplices in Bribery and other
Graft Cases Against Public OfficersPD No. 46 - Making it punishable for Public
Officials and Employees to Receive, and for PrivatePersons to Give Gifts on any
Occasion, including Christmas Finally, the primary basis for decisions made
involving disciplinary actions on ethical issuesconcerning the bank as an institution
and as a government corporation is the Landbank of thePhilippines Code of Conduct
for Employees as stipulated:CODE OF CONDUCT FOR EMPLOYEES: 1. Statement of
Principles The Constitution declares that a public office is a public trust. The
Landbank of thePhilippines, being a government-owned corporation, is a public
office. Our ability to secure andmaintain our strong position in the banking industry
depends to a great extent on the trust andconfidence of our clients, business
partners, other stakeholders and the general public. 2. Purpose: ~ 30 ~
31. The Code of Conduct for Landbank Employees is written : 2.1. To provide
guidance for all employees to enable them to conduct themselves in a manner that
will merit and inspire public trust and confidence consistent with Landbanks core
values of social responsibility, trust, excellence and professionalism; and at all times
be accountable to the people, serve them with utmost responsibility, integrity,
loyalty, and efficiency, act with patriotism, and justice and lead modest lives; 2.2. To
comply with Section 3(3) of the BangkoSentralngPilipinas (BSP) Circular No. 283
series of 2001 which states in part: To conduct affairs of the institution with high
degree of integrity, the Board of Directors should prescribe corporate values, codes
of conduct, and other standards of appropriate behavior for itself, the senior
management and other employees 3. Scope of the Code This Code applies to all
employees of the Landbank of the Philippines (LBP), regardlessof rank, whether
permanent, temporary, co-terminus or directly hired contractuals. The
termemployee as it is used in the Code includes such individuals.Section 1:
Performance of Duties LANDBANK employees shall at all times perform official
duties properly and diligently.They shall commit themselves exclusively to the

business and responsibilities of their office duringworking hours unless, otherwise,

properly allowed under the existing laws, rules and regulations.Section 2:
Confidentiality of Information LANDBANK employees shall maintain the
confidentiality of all information acquired bythem or entrusted to them by the Bank,
its customers or business partners and are prohibited frommaking unauthorized
disclosure of the same.Section 3: Conflict of Interest LANDBANK employees shall
avoid conflict of interest in performing official duties.A conflict of interest exists
when: the Bank employees objective ability or independence of judgment in
performingofficial duties is impaired or may reasonably appear to be impaired by
the personal concerns of aBank employee or of his / her family and relatives which
run counter to the objectives of the Bank; ~ 31 ~
32. or when the official act results to unwarranted personal benefit on his / her part
of his / her familyand relatives. the Bank employees private interest interferes in
any way with the interests of the Bankas a wholeSection 4: Sexual Harassment or
Misconduct LANDBANK employees shall strictly comply with the existing laws, rules
and regulationson sexual harassment as defined below and other inappropriate or
improper acts against fellowemployees regardless of rand and consistently exercise
prudence, respect and care in theirinteraction with one another and the general
public. Sexual Harassment as defined under CSC Administrative Disciplinary Rules
on SexualHarassment Cases (CSC Resolution No. 01-0940) is an act, or series of
acts, involving anyunwelcome sexual advance, request, or demand for sexual favor
or other verbal or physicalbehavior of sexual nature committed by a government
employee or official in a work-related,training, or education-related
environment.Section 5: Complaints and Grievances LANDBANK and its employees
shall handle complaints and grievances in accordancewith the Banks formal
Grievance Procedure in line with the Grievance Machinery of the CivilService
Commission.Section 6: Employee Discipline and Accountability LANDBANK
employees shall have a duty to adhere to this Code and to report violations.The
Bank shall impose strict implementation of policies to ensure employee discipline.
Any violation of this Code shall be acted upon in accordance with the pertinent
provisionsof the Banks Rules on Administrative Disciplinary Cases and Civil Service
Law, rules, andregulations. 4. Incorporation of Other RulesAll pertinent laws, rules,
and regulations of the Civil Service, BangkoSentralngPilipinas,Commission on Audit,
and other government regulatory agencies and the internal issuances of theBank
governing or regulating the conduct of public officers and employees are
deemedincorporated in this Code. ~ 32 ~
33. 5. Effectivity: This Code shall take effect upon approval by the Banks Board of
Directors. 6. Distribution of the CodeThe Code shall be distributed to all employees
of the Bank. Each employee shall sign and submit a Code of Conduct Compliance
Certificate to thePersonnel Administration Department (PAD) upon employment.
Incumbent employees shallsubmit the Code of Conduct Compliance Certificate
within 30 calendar days from receipt of theCode. By signing, we are somewhat

bound by contract to serve and any false move will be aground for disciplinary
action and possible dismissal in spite of what is commonly known asSecurity of
Tenure in the service of the government. The same strict rules had set Landbank
apart from an ordinary government institution.There may be isolated cases but in
general, Landbank can be viewed as a banking institutionknown internationally for
its ethical banking standards and procedures. Moreover it is also agovernment
owned and controlled corporation that balances profit with its social mission
andresponsibility. Any employee belonging to this organization is as proud of their
membership asthey are of their citizenship. It is also because of this that merely
hearing the name of theinstitution commands respect, dignity and credibility as its
protective armor in the outside world. ~ 33 ~
34. Chapter VI CONCLUSION Spurred by corporate scandals and surveys showing
how little employees trust their CEOsand other senior executives, many companies
are required to establish codes of ethics governingthe way they operate. As a
businessperson, I am ultimately responsible for my actions. I must bethe person
who decides if I should act ethically or not. I could not just act because of
othersinfluence because each one of us has a mind to logically discern our actions,
a conscience to listento and free will to decide. Knowing what is ethical, in my own
mind, is essential. Morality has a top selling definitionin terms of Landbank: That
which is selfish is immoral and that which is unselfish is moral.Every selfish deed
therefore hampers our path towards attaining a goal and every unselfish
activitytakes us to the goal of enrichment in life and ethical behavior. However, far
more difficult thanknowing what is right is doing what is right. Doing the right thing
is not always easy because thepath of ethical behavior and actions is invariably the
longer and more difficult path to follow thanthe unethical routine, but it is always
right and it bears satisfying results more enduring success. The last 49 years saw
the diversity of Landbank as a group. Yet, everyone is bound bycommon values such
as respect for one another, social responsibility, trust, excellence
andprofessionalism. Everyone work hard and play hard. Everyone also draws
immense fulfillmentfrom being part of an institution with a social mission. This term
paper on Landbank In Its Finest is actually the story of all the people behind
itssuccess. The success of the institution is the success of the men and women who
are committingthe best years of their lives to the cause of countryside
development. The success of Landbank-Urdaneta Branch for example is led by its
tireless and dedicated Leader and Unit Manager, Mr.Jethro M. Martinez who devotes
most his time constantly marketing the institutions best and mostrequested
products in the banking industry, diligentlychecks and coaches his officers and
staffwhile consistently boosting their morals and making them feel that everyone is
very important inthe success of the unit.Together with Mr. Johnny R. Lim, our
Assistant Department Manager andMrs. Editha C. Caron, our Operations Supervisor,
they area team who, like our President Gilda E.Pico, follows the succession scheme
where as one officer moves to next rung of the organizationalladder, a number of
Landbankers are to prepare in taking the vacated positions with justevaluations.

They do not foster palakasan and favoritism. They treat everyone fairly as
theychallenge their staff to exhibit their potentials and abilities by giving them
opportunities to showtheir real worth through diverse as much as prolonged
assignments, exposure to critical situations,and on-the-job learning enhancement
activities. ~ 34 ~
35. What Landbank is today is the fruition of dreams and visions that, not too long
ago,inspired the pioneers and succeeding leaders, officers and staff to give their
best and utmost to theinstitution that allowed them the privilege and honor of
serving their country and its people,especially the farmers and fisherfolk, the
cooperatives and the micro, small and mediumenterprises. The journey that started
49 years ago continues progressively because Landbank remainsto be the home of
visionaries, dreamers and achievers. When the best and the brightest of acountry
are inspiredby the nobility of their mission, their coming together is an appointment
withdestiny. Not theirs or that of the institution, but of the Philippines. The future is
for those whoknow where they are going and how they intend to get there. At
Landbank, the personal values and visions of the staff and officers collectively
create anorganizational and corporate culture geared to the attainment of the
Banks mission. A dynamicinteraction within the organization and with the various
stakeholders, especially clients in thecountryside, enhances and strengthens
working relationships and partnerships that ultimatelyredound to effectiveness and
efficiency in the delivery of services. Clearly said, happy, fulfilled,committed and
principle-centered individuals comprise a successful service-oriented institution.
Landbank is not just about tellers, cashiers, managers, accountants, marketing
officers, firstvice presidents, senior vice presidents, and executive vice presidents.
Neither is Landbank solelythe domain of its presidents and boards of directors.
Landbank is about visionaries, innovators,creators, workers, builders and leaders.
Landbank has many faces and facets, and they are best seen, understood, and
appreciatedin the joys, pleasures, triumphs, angst, and challenges that Landbankers
experience from day today. ~ 35 ~
36. Chapter VII ACKNOWLEDGEMENT Gratitude can be expressed in many ways but
the easiest manner would be to acknowledgeeveryones contribution and support in
the making of this term paper because without them, Ibelieve that I might not have
been able to finish this particular requirement in my graduate studies. I expressly
thank first and foremost, God, for enlightening me, giving me strength andguiding
me through ideas that suddenly pop into my mind in the wee hours of dawn as I
face mycomputer without reserve nor without knowing as well where to start and
what to write. WithoutHim, this would not be possible. He gave me the time and the
wisdom I need to finish a termpaper that would certainly serve its purpose. To my
Unit Manager, Mr. Jethro M. Martinez, whom I first conferred with before writingmy
term paper and asked permission to use Landbank data already made known to the
public forthe organization of the ideas I want to project, thank you very much. I
hope I was able to projectLandbank In Its Genuine Finest through my term paper.

For all its worth, I learned to love myinstitution and the people I work with more
than before. I express this with honesty and sincerity. To my professor, Mr. Meliton
G. Dassun, whom I continuously pleaded for extension ofterm paper deadlines
because I forgot about the part where I have to write a term paper to passhis
subject, thank you very much for patiently waiting and giving me a chance. A true
teacher Ilook up to and hope to continuously mentor me through my graduate
studies because I aspire tobe a consultant someday. To my fellow officemates and
colleagues in the graduate school, whom I continuouslylaugh with to ease the
tiredness and tension and who find ways to understand my ever changingmoods
which I often feel as a result of waking up early, thank you dear friends. I will try to
makeit up to all of you now that I have finished my term paper. To the writers of my
references, whom I continuously refer this particular subject matter to,by dissecting
their articles and analyzing the facts before fully borrowing their ideas and data,
mydeep gratitude I offer to all of you, if you only knew. You are all an instruments in
thedevelopment of my term paper because your ideas are so much related to one
another and eachconcluding statements open new ideas and new matters for
discussion as I progress in my chapters.You are all quoted in my term paper as I
progress in each paragraph. Thank you for making myresearch possible. ~ 36 ~
37. To the inventor of the internet who has an edge for creating a bottomless hole
forinformation and data that could be dug deeper and deeper, I salute you. You
opened portals ofinformation I know so little of. It is therefore, with deep love,
happiness and pride that I was able to present to all myreaders, a culmination of all
the ideas I could gather and all the wonderful facts and figures I couldresearch as I
celebrate the 49th year of Landbank in this term paper of mine entitled Landbank
InIts Finest. ~ 37 ~
38. Chapter VIII REFERENCESQuoted Paragraphs from Business Ethics by Rajiv K.
MishraArticles from the Landbank Employees HandbookExcerpts from the Civil
Service Commission Documentations through the Internet Civil
ServiceWebsiteExtractions from subject matter related topics in our Ethics Module
at PSU GS MDM 212Ethical Banking Discussions in the Internet at Wisegeek
websiteBusiness Ethics Discussion in the Internet at Wikipedia WebsiteVarious
journals from the Internet regarding Ethics in the Banking Industry, already cited in
thequoted paragraphs.Actual Samples from Everyday Banking Tasks as per
observations and personal experiencesQuoted Paragraphs from the Coffee Book of
Landbank of the Philippines by Maria Rosa NievaCarrion Buck, MNSA of Seagull
Philippines Incorporated.WWW.LANDBANK.COM website for the speeches, facts and
figures advertised in the net ~ 38 ~

Board of Directors and Management Team

BOARD OF DIRECTORS

Sec. Carlos G. Dominguez

Secretary - Department of Finance

Sec. Emmanuel F. Piol

Secretary - Department of Agriculture

Sec. Rafael V. Mariano

Secretary - Department of Agrarian Reform

Sec. Silvestre H. Bello III

Secretary - Department of Labor and Employment

Mr. Crispino T. Aguelo

Representative - Agrarian Reform Beneficiaries Sector

Mr. Tomas T. de leon, Jr.

Representative - Private Sector

Mr. Victor Gerardo J. Bulatao

Representative - Agrarian Reform Beneficiaries Sector

MANAGEMENT TEAM

Ms. Cecilia C. Borromeo

Officer-in-Charge

Mr. Julio D. Climaco, Jr.

Corporate Services Sector

Mr. Liduvino S. Geron

Branch Banking Sector

Mr. Alan V. Bornas

Operations Sector

MANILA, Philippines - New board members of state-run Land Bank of the Philippines,
led by Finance Secretary Carlos Dominguez III, have abruptly replaced Gilda Pico as
president and chief executive officer.

In a statement yesterday, Landbank said its new board met last Thursday and
noted the expiration of Picos term which was effective immediately.

It cited President Dutertes Memorandum Circular No.1, which stated that officials
from the previous administration may remain on holdover capacities until the end of
this month.

Andres Sarmiento, executive vice president, was appointed officer-in-charge.

During her term, (Pico) focused on expanding the banks credit outreach to its
priority sectors, primarily farmers and fishers, micro-enterprises and SMEs, rural
banks and agriculture, the bank said.

Sought for details, Dominguez, who serves as Landbank chair, declined to

comment. He and Pico met for the first time last Thursday.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Please refer to the communications people at Landbank, he said in an e-mail.

Landbank said Pico rose from the ranks during her 35-year service with the staterun lender. She was appointed its first woman president and CEO by President
Arroyo in 2006.

During the past four years, Pico oversaw Landbank which has the highest dividend
remittance among government-owned and -controlled corporations (GOCCs) and
financial institutions to the national government.

This was driven by a steady growth in the banks net income over a five-year
period, increasing to P13.3 billion last year from P8.06 billion.

During the same period, Landbanks assets and deposit base more than doubled to
P1.28 trillion and P1.3 trillion, respectively.

Landbank was also found to have the second best corporate governance among
state-owned enterprises under a maiden scorecard by the Governance Commission
on GOCCs.

Pico introduced major systems innovations and strategic partnerships that

contributed to the banks support to the governments centerpiece development
programs and platforms for inclusive growth, Landbank said.

Under former President Aquino, Landbank was supposed to undertake a merger with
another government lender, Development Bank of the Philippines.

Dominguez, however, cancelled the plan that would have seen Landbank becoming
the second largest lender in asset terms as a surviving entity.

Our Policy for Quality

We are a development-oriented financial institution that measures its success on our ability to deliver
quality products and services that effectively address the needs and expectations of our clients. As a
universal bank with a social mission, LANDBANK endeavors to incorporate a culture of excellence and
professionalism in all levels of the organization.
To uphold this commitment, we shall ensure that

Our people perform their roles and responsibilities honestly and effectively through continuous
education, values and training programs.

Our products and services provide effective financial and technical support with the widest reach,
adhere to local and international standards, and remain responsive to the changing needs of our clients
and stakeholders.

Our management team fosters a work environment that encourages our employees to harness
their fullest potentials and contribute to our organization's goals.

Our processes and operations are continuously monitored and measured to enhance efficiency
and effectiveness in the long run.

Our quality management system is effectively documented,implemented,continuously improved

and communicated to all members of the organization.
We believe that giving premium on quality is one of the best ways to show how much we value our
relationship with our clients and partners.
Quality is a foundation of our business.
Quality is our continuous and relentless commitment.

History
MILESTONES IN CORPORATE EXISTENCE
1. Republic Act 3844 (Agricultural Land Reform Code) - 8 August 1963

Created the Land Bank of the Philippines (LBP) to finance the acquisition and distribution of
agricultural estates for division and resale to small landholders as well as the purchase of the landholding
by the agricultural lessee;
Authorized capitalization of 1.5 billion Php. Initial capital of 200 million Php;

Members of the Board of Trustees

Chairman - LBP President & CEO

One member elected by the holder of preferred shares

4 Members: including the Head of Land Authority (now Dept. of Agrarian Reform)

Tax exempt on all operations, holdings, equipment, property, income and earnings;

Exempted from cash or stock dividend payments to the National Government;

Agricultural Credit Administration (ACA) responsible for extending credit assistance to farmers
cooperatives and directly to small farmers
2. Adoption of By-Laws and Creation of Board of Trustees

Adopted the by-laws, established the first organizational chart and manual of operations in 1965;

Formed the Board of Trustees with the Secretary of Finance as chairman in 1966
3. Presidential Decree 27 (Tenant Emancipation Act) - 21 October 1972

Emancipation of tenant-farmers of private agricultural lands devoted to rice and corn under a
system of share-crop or lease-tenancy, whether classified as landed estate or not;

Value of land transferred to tenant-farmers at 2 1/2 times the average

Harvest of 3 normal crop years immediately preceding the promulgation of PD 27;

LBP to collect 15-year land amortizations from beneficiaries for the cost of the land plus 6%
interest per annum
4. Presidential Decree 251 (Revitalizing LANDBANK) - 21 July 1973

Because LBP was deficient and inadequate both in capitalization and in organization structure to
meet the implementation requirements of agrarian reform, the Bank was revitalized;

Granted universal or expanded commercial banking powers to LBP and established LBP as the
universal bank with a social mission of spurring countryside development;

to cross-subsidize agrarian land transfer and loans to small farmers and fisherfolk;
Expanded LBP's powers to include lending to agricultural, industrial, home-building or homefinancing projects and other productive enterprises;
to ensure LBP's financial stability and sustainability;

Empowered LBP to grant loans to farmers cooperatives/associations to facilitate production,

marketing of crops and acquisition of essential commodities;

LBP mandated to provide timely and adequate support in all phases involved in the execution of
agrarian reform;

Increased authorized capitalization to 3 billion Php ;

Increased the members of the Board of Directors to seven (7):

Chairman - Secretary of Finance

Vice-Chairman - LBP President

Members (Ex-Officio)

Secretary of Agrarian Reform

Secretary of Labor -

Three Members - elected annually

Exempted from all national, provincial, municipal & city taxes and assessments
5. Reorganization - 1977

LBP formed three major sectors - Agrarian, Banking and Operations to strengthen operations and
ensure long-term viability
6. Executive Order 816 (Transfer of ACA to LBP) - 8 July 1982

To adopt an integrated approach in the provision of financial assistance to AR farmerbeneficiaries a single institution is preferred;
ACA was abolished and its functions (loans to small farmers) were transferred to LBP
7. Executive Order 229 (CARL) - 22 July 1987

Created the Presidential Agrarian Reform Council (PARC) as the highest policy-making and
coordinating body of the Comprehensive Agrarian Reform Program (CARP) to ensure timely and effective
delivery of the necessary support services;

Established the Agrarian Reform Fund (ARF) with an interim amount of 50 Php billion to cover the
financing requirements of CARP with appropriations coming from the proceeds of the Asset Privatization
Trust and the Presidential Commission on Good Government;

FBs to pay for lands acquired and redistributed by the government in 30 equal annual
amortizations at 6% p.a. with the first payment due one year after resale (annual amortization should not
exceed 10% of the land's annual value of gross production);


o
o

LBP to provide assistance to landowners through:

investment information and counselling assistance.
conversion and/or exchange of LBP Agrarian Reform bonds to/from government stocks
with government assets.
marketing of LBP Agrarian Reform bonds.
8. Republic Act 6657 (CARL) - 10 June 1988

Broadened the coverage of agrarian reform to include all public and private agricultural lands
including other lands of the public domain suitable for agriculture;

Payment to landowners at 25% to 35% cash and the balance in 10-year Agrarian Reform bonds
with a yield of 91-day T-bills;

Authorized LBP to collect from the FBs payment for lands awarded to them in 30 annual
amortizations at 6% per annum;

Established LBP as the financial intermediary of the CARP.

9. Executive Order 405 (CARP Land Valuation) - 14 June 1990

Transferred the primary responsibility of determining land valuation and compensation for all
lands covered under CARP from the DAR to the LBP;
Accelerated and streamlined certain procedures in land valuation and compensation;
LBP created regional Land Valuation and Landowners Compensation Offices (LVOs) to carry out
land valuation and compensation.
10. Republic Act 7907 (Amended LBP Charter) - 23 February 1995

Increased authorized capitalization to 9 billion Php ;

Established LBP as an official government depository;

Increased the members of the Board of Directors to nine (9) composed of:

Chairman - Secretary of Finance

Vice- Chairman - LBP President and CEO

Members:

Secretary of Agrarian Reform.

Secretary of Labor.

Secretary of Agriculture.

2 Representatives of Agrarian Reform Beneficiaries.

2 Representatives from the Private Sector.

11. Executive Order 267 (CARL) - 25 July 1995

National Government to issue Agrarian Reform (AR) bonds to be used by LBP for land transfer
payments;
Segregation of the accounts of CARP-related transactions from the books of LBP;
CARP accounts and AR bonds were previously part of LBP's books and adversely affected LBP's
financial position (leverage and capital adequacy ratios).
12. Increase of Authorized Capital - 25 August 1998

Authorized capitalization increased to 25 billion Php by the Department of Finance and the
President of the Philippines.