PSMBFI Annual Report 2018

Corporate Governance PSMBFI 2018 51
Annual Report

Transparency

The Association capitalizes on the Board of Trustees last 04 August 2018
were immediately posted in the website
PSMBFI website and social media as with the PSMBFI 2017 Annual Report
which contains the audited financial
accounts as one of its transparency statements of the Association. Other
announcements such as invitation to
platforms. These are utilized in bid, career opportunities and significant
activities are posted in the website.
information dissemination, customer
The PSMBFI Facebook account, on the
communication, compliance to other hand, has been actively engaging
customers by answering inquiries and
regulations and greater disclosure. soliciting feedback as basis for the
continuous service improvement.
The ASEAN Corporate Governance
Scorecard of the Association together
with the requisite documents were
uploaded in the PSMBFI Website. The list of
the Board of Trustees including the newly
elected members during the Election of

Code of Discipline

The PSMBFI Code of Discipline ensures of professional and personal ethics
that all personnel and members of the in the conduct of the company’s
Board act with utmost professionalism at business and their respective duties
all times. It was developed to establish and responsibilities. The Whistleblower
guidelines for the enforcement of Policy is intended to form part of
PSMBFI policies and in imposing the initiatives to ensure that the company’s
appropriate disciplinary measures activities and transactions are at par
for the committed infractions. Each with best practices in corporate good
personnel is provided with a copy of governance and at protecting the
the Code. rights of employees and officers while
encouraging and enabling them to
Part of the Code of Discipline is the freely communicate serious concerns
Whistleblower Policy. It is the policy of on policy violations and fraudulent
the PSMBFI to require all its directors, acts without fear of retribution or
officers and employees to commit repercussion.
and observe the highest standards

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The sole mandate of PSMBFI is to provide insurance to its members. To
improve the delivery of services, the Board of Trustees and Management
ensure that the company’s growth continues to improve and in an upward
trend. Our sound policy bears flexibility, depending on current market
demands, as well as risks. It also innovates policies to sanction those that
hinder the continuous growth.

Coming together with growth much more their devotion. The Board
is development. Introduction of likewise listens to Management. With
products to correct inadequacies this atmosphere, I am confident that
in the past are put in place. As Vice business, social and environmental
Chairman, I aid the Chairman and risks are fully addressed.”
collectively manage the Board
of Trustees, to accomplish the For the past three years, I have
job on policy formulation. It is in witnessed how PSMBFI works for the
this perspective that growth and benefit of its members. The company’s
development are very crucial, and financial soundness is the very proof
material in sustaining what we have of these hard works. With the vigor of
set to achieve.” its employees, I can confidently say
that the company will continue to
As the concurrent Chairman of the grow and provide better products
Executive Committee, Management and services for its members in the
is kept on its toes when monthly years to come.”
Committees are convened. The
Chairmen and Committee members I enjoin our valued members and
are very participative and well- stakeholders to continue sustaining
motivated, brought about by their the trust and securing your future
diverse minds and experiences. Their through PSMBFI’s reliable insurance
capacities are beyond question coverage.

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Departments and Offices

TOP MANAGEMENT AND SUPPORT OFFICES

OFFICE OF THE PRESIDENT, VICE PRESIDENT, AND GENERAL MANAGER

Come up with strategic plans, policies, and procedures that will ensure the smooth flow of
business operations, the company’s growth and stability to provide members with better
service and more benefits.

OFFICE OF THE INTERNAL AUDITOR

Responsible for the soundness of the internal control system and the safeguarding of
company assests. The OIA is the departmental arm of the Risk and Audit Committee.

OFFICE OF THE LEGAL OFFICER

Anticipates and reduces the risk and exposure of the company from any unreasonable
and unjustified claims. The department also protects the company against all claims.

BOARD SECRETARIAT

Provides administrative support to the Board of Trustees. The Secretariat also keeps all
records and minutes of the meetings and ensures its confidentiality.

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CORPORATE SERVICES GROUP

ADMINISTRATION DEPARTMENT

Provides administrative and logistical support to all departments in order to attain the
common goal of providing the best services to our members. It also manages the PSMBFI
building and all other real estate concerns of the company and ensures that all records
and documents are adequately protected and maintained.

INFORMATION TECHNOLOGY DEPARTMENT

Develops and maintains an information asset available for utilization in the fields of decision-
making, operations, and finance, in compliance with external regulatory requirements.

HUMAN RESOURCE DEPARTMENT

Ensures organizational soundness and company-wide operational efficiency through
the maintenance of an effective and productive workforce in a customer-oriented work
environment.

CORPORATE PLANNING DEPARTMENT

Consolidates and analyzes data which are vital to company operations and generates
reports that provide valuable support in policy formulation, likewise reinforcing sound
management decision-making and strategic action.

OPERATIONS GROUP

INSURANCE DEPARTMENT

Designs, develops, administers and maintains insurance products and benefits relative to
the requirements of our members, in accordance with the regulations of the Insurance
Commission.

MARKETING DEPARTMENT

Provides frontline services to all PSMBFI members. The department is responsible in
communicating and promoting all the benefits and services of the company. It also ensures
that the Regional Extension Offices nationwide efficiently serve all members assigned in
the regions and provinces.

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REGIONAL EXTENSION OFFICES

Provide frontline services and assistance to members in the regions. Regional Officers
manage these offices while Field Officers are regularly deployed to extend the company’s
services in the provinces.

ONE-STOP SHOP CLES

Provides ease of access to PSMBFI members and ensures prompt processing of transactions
in their availment of the various services and products offered by the company.

FINANCE GROUP

TREASURY DEPARTMENT

Manages the company’s current account funds. The department deals with cash receipts,
disbursements and electronic banking transactions.

ACCOUNTING DEPARTMENT

Maintains the company’s books of accounts. The department generates timely and
reliable financial statements in accordance with Philippine Financial Reporting Standards
and Practices applicable to insurance accounting principles.

INVESTMENT DEPARTMENT

Develops and manages investment activities of the company based on the policies and
approved guidelines of the Insurance Commission.

ACCOUNTS MANAGEMENT DEPARTMENT

Establishes and implements a well-defined billing and collection system relative to the
business transactions of the company. The department also maintains subsidiary ledgers
of members’ accounts.

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SECURING OUR FUTURE THROUGH SUSTAINABLE MANAGEMENT

“Sustainable management drives sustainable business efforts.”

The Management of the Public Safety Mutual Benefit Fund, Inc. comprises of professionals
with military background and in-depth knowledge of the needs of our members being
public safety practitioners. Their qualifications ensure that the company is committed to the
highest standards of ethical and corporate governance, and able to provide for the timely
insurance needs of its growing number of members.

PSMBFI maintains sustainable management, able to manage its risks. Our credibility as a
reliable and stable mutual benefit association is attributed to our forebears who set their sights to
deliver life insurance and responsive services that are tailored-fit for public servants. Twenty-one
years on, we continue to calibrate
our strategies to what are new,
modern, and sustainable. The
hard-earned premium payment
of our members are prudently
managed by stimulating the
market in order to innovate and
produce more cost-effective and
sustainable options.

The Association maintains its
accessibility to members through
our regional offices. Likewise, their
benefits may even be brought
closer right at the convenience of
their offices through the conduct
of office swarmings and field service operations. Most importantly, we inculcate the importance
of their membership that is deeply-rooted to the needs of their profession.

We are all doing our best to raise our members’ standard of living when the unfortunate
happens, and for the protection of families in case of sudden demise.

After having spent a long time getting to grips with the concept of sustainability, we are
optimistic that our operational efficiency and competitiveness will be able to secure more
lives and make better the future of our members.

On the other hand, our Department Managers are instrumental in innovating business
activities to achieve our operational goals. Together with our supervisors and employees,
we are working steadily to maintain our leadership in the industry. We are grateful to all our
partner agencies and for the trust of our members who marches with us, as we endure even
the most challenging times.

As PSMBFI secures the future of its members, together let us secure the future of the Association.



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Public Safety Mutual Benefit Fund (PSMBFI) Incorporated

Statements of Financial Position
December 31, 2018 and 2017
(All amounts in Philippine Peso)

Notes 2018 2017

ASSETS 2,517,545,083
-
Cash and cash equivalents 2.1 2,490,737,333 -
Financial assets at amortized cost 2.1 13,267,734,791
Financial asset at fair value through profit or loss 2.2 221,351,062 2,814,000
Investment property, net 3 2,814,000 240,358,400
Property and equipment, net 4 253,384,492
Other assets, net 5 6,029,756 12,264,121
Insurance receivables, net 2.1 - 14,601,472
Loans and receivables, net 2.1 - 4,991,218,272
Available-for-sale securities 2.2 - 183,403,565
Held-to-maturity securities 2.1 - 6,617,878,435
14,580,083,348
Total assets 16,242,051,434
815,847,018
LIABILITIES AND FUND BALANCE 139,819,669
285,133,593
Accounts payable and accrued expenses 6 641,211,548 123,538,287
Claims payable 7 243,335,637
Legal policy reserves 7 355,182,698 30,332,769
Premium deposits 7 136,081,037 4,750,075,583
Retirement benefit obligation 10 4,580,649 6,144,746,919
Members’ contributions 2.3 4,762,545,069
411,000,000
Total liabilities 6,142,936,638 8,072,342,820
Retained surplus
8 1,902,609,744 (48,065,505)
Appropriated 8,231,793,511
Unappropriated 59,114
Accumulated other comprehensive income 10 (35,288,459) 8,435,336,429
Remeasurement loss on retirement benefit obligations 14,580,083,348
Unrealized gain on change in fair value of 2.2 -
10,099,114,796
available-for-sale securities 16,242,051,434
Total fund balance
Total liabilities and fund balance

(The notes on pages 1 to 43 are an integral part of these financial statements.)

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Public Safety Mutual Benefit Fund (PSMBFI) Incorporated

Statements of Total Comprehensive Income
For the years ended December 31, 2018 and 2017

(All amounts in Philippine Peso)

UNDERWRITING INCOME Notes 2018 2017
Insurance premiums
7 1,301,150,868 821,990,395
UNDERWRITING EXPENSE 7
Claims expense 2.1 (379,812,950) (231,038,483)
Increase in legal policy reserves 2.3 (70,049,105) (35,302,344)
2.1 851,288,813 555,649,568
NET UNDERWRITING INCOME
12 1,540,871,976 1,393,044,215
INTEREST INCOME 2.2 (348,926,971) (390,800,648)
INTEREST EXPENSE 1,191,945,005 1,002,243,567
NET INTEREST INCOME 9 282,336,501 (200,070,049)
REVERSAL OF (PROVISION FOR) CREDIT LOSSES 13 1,474,281,506 802,173,518
NET INTEREST INCOME AFTER CREDIT LOSSES
2.2 7,825,180 5,912,392
OTHER INCOME
Rental income 10 (6,238,532) -
Fair value changes on financial assets at fair value 7,856,745 37,914,925
through profit or loss 9,443,393 43,827,317
Others 2,335,013,712 1,401,650,403

INCOME BEFORE OPERATING EXPENSES (460,001,744) (397,068,354)
1,875,011,968 1,004,582,049
GENERAL AND ADMINISTRATIVE EXPENSES
INCOME BEFORE INCOME TAX (87,519,940) (62,362,764)
1,787,492,028 942,219,285
INCOME TAX EXPENSE
NET INCOME FOR THE YEAR - 675,213
OTHER COMPREHENSIVE INCOME (LOSS)
12,777,046 (28,353,428)
Item that may be subsequently reclassified to profit or 12,777,046 (27,678,215)
loss 1,800,269,074 914,541,070
Fair value gains on available-for-sale securities

Item that will not be subsequently reclassified to profit
or loss
Remeasurement gain (loss) on retirement benefit
obligation

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(The notes on pages 1 to 43 are an integral part of these financial statements.)

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Public Safety Mutual Benefit Fund (PSMBFI) Incorporated

Statements of Changes in Fund Balance
For the years ended December 31, 2018 and 2017

(All amounts in Philippine Peso)

Accumulated other

Retained surplus comprehensive income

Appropriated Unappropriated Remeasurement Unrealized (loss) Total
(Note 8) 7,230,123,535 loss on retirement gain on change in 7,520,795,359
(100,000,000) benefit obligation
311,000,000 fair value of -
(Note 10) available-for-sale
100,000,000 942,219,285
securities (27,678,215)
914,541,070
(Note 2.2) 8,435,336,429
(136,490,707)
Balances as at January 1, 2017 (19,712,077) (616,099) 8,298,845,722
Appropriation of unappropriated surplus (Note 8)
Comprehensive income -- -

Net income for the year - 942,219,285 - - 1,787,492,028
Other comprehensive (loss) income - - (28,353,428) 675,213 12,777,046
Total comprehensive income (loss) for the year - (28,353,428) 675,213
Balances as at December 31, 2017 411,000,000 942,219,285 (48,065,505) 1,800,269,074
Effect of PFRS 9 adoption (Notes 2.1 and 2.2) - 8,072,342,820 59,114 10,099,114,796
Balances as at January 1, 2018, as restated 411,000,000 - (59,114)
Appropriation of unappropriated surplus (Note 8) 1,491,609,744 (136,431,593) (48,065,505)
Comprehensive income 7,935,911,227 -
Net income for the year (1,491,609,744) - -
Other comprehensive income
Total comprehensive income for the year - 1,787,492,028 - -
Balances as at December 31, 2018 - - 12,777,046 -
- 12,777,046 -
1,902,609,744 1,787,492,028 (35,288,459) -
8,231,793,511

(The notes on pages 1 to 43 are an integral part of these financial statements.)

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Public Safety Mutual Benefit Fund (PSMBFI) Incorporated

Statements of Cash Flows
For the years ended December 31, 2018 and 2017

(All amounts in Philippine Peso)

CASH FLOWS FROM OPERATING ACTIVITIES Notes 2018 2017
Income before income tax
Adjustments for: 2.1 1,875,011,968 1,004,582,049
Interest income 2.3
Interest expense 2.1 (1,540,871,976) (1,393,044,215)
(Reversal of) Allowance for credit losses 2.1 348,926,971 390,800,648
Write-off of loans and receivables 2.2 (282,336,501) 200,070,049
Fair value changes on financial assets at fair value 4 - (517,439)
through profit or loss 4
Depreciation and amortization 7 6,238,532 -
Gain on sale of property and equipment 10 40,615,558 41,871,825
Increase in legal policy reserves 2.1
Retirement benefit cost (796,053) -
Amortization of discount of financial assets at amortized 13 70,049,105 35,302,344
cost (2017 - held-to-maturity securities) 10 11,482,739
Net operating income before working capital changes 7,144,491
(Increase) decrease in: 2.2 (4,319,294)
Insurance receivables 2.1 524,001,049 (1,725,638)
Loans and receivables 4 284,484,114
Other assets (302,419)
Increase (decrease) in: 2.1 (408,467,829) 374,611
Accounts payable and accrued expenses 2.2 (145,529,097)
Premium deposits 2.2 5,159,608
Claims payable 4 (1,638,858)
Net cash from (used in) operations (174,635,470)
Final taxes paid 2.3 12,542,750 (280,742,977)
Interest received on cash in banks and loans receivables 2.3 17,416,265
Contributions to the retirement fund 103,515,968 (4,778,435)
Net cash from operating activities 2.1 61,813,657
(87,519,940) (130,414,377)
CASH FLOWS FROM INVESTING ACTIVITIES (62,362,764)
Interest received 1,202,997,333
Proceeds from maturities of financial assets at fair value through (27,442,421) 1,078,217,272
profit or loss (34,522,285)
Proceeds from maturities of financial assets at amortized 1,149,848,629 850,917,846
cost (2017 - Held-to-maturity securities)
Proceeds from sale of property and equipment 321,941,113 314,826,942
Additional investments in:
Financial assets at amortized cost (2017 - Held-to-maturity 65,489,470 -
securities)
Financial assets at fair value through profit or loss 400,000,000 256,270,000
Available-for-sale securities 813,901 -
Property and equipment
Net cash used in investing activities (1,465,108,381) (1,799,387,523)
(109,675,499) -
CASH FLOWS FROM FINANCING ACTIVITIES -
Additional members’ contributions (53,659,498) (153,344,451)
Refund of members’ contributions (840,198,894) (23,862,454)
Net cash used in financing activities
1,098,093,723 (1,405,497,486)
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,434,551,208)
507,565,127
CASH AND CASH EQUIVALENTS (336,457,485) (1,683,686,370)
At January 1 (26,807,750) (1,176,121,243)
At December 31 (1,730,700,883)
2,517,545,083
2,490,737,333 4,248,245,966
2,517,545,083

(The notes on pages 1 to 43 are an integral part of these financial statements.)



MAIN OFFICE

318-320 Santolan Road cor.

1st and 2nd West Streets,

Brgy. West Crame, San Juan

City, Metro Manila

Tel Nos. (02) 725-1635

(02) 726-1675

PSMBFI CLES PRO 5 PRO 11
Center for Law Enforcement
Studies Building Camp Gen Simeon A Ola Camp Quintin M Merecido
Camp Crame, Quezon City
Tel. No. (02) 8-234-1886 Legazpi City, Albay Buhangin, Davao City

Tel. Nos. (052) 820-6027 Tel. Nos. (082) 234-9311

+63 916-5605717 +63 943-5534928

+63 915-3413827

PRO 1 PRO 6

Camp BG Oscar Florendo Camp Gen Martin Delgado PRO 12
Police Regional Head Office 12
Parian, San Fernando City, Fort San Pedro, Iloilo City Brgy. Tambler,
General Santos City
La Union Tel. Nos. (033) 335-0137 Tel. Nos. +63 905-2208592

Tel. Nos. (072) 607-1840 +63 927-9954544

+63 905-8213560

PRO 7

PRO 2 Camp President Sergio PRO CARAGA
Camp Gen Marcelo A Adduru
Alimanao, Tuguegarao City, Osmeña Sr., Camp Rafael C Rodriguez
Cagayan
Tel. No. +63 935-1773039 Osmeña Blvd., Cebu City Libertad, Butuan City

Tel. Nos. (032) 256-1140 Tel. Nos. (085) 341-8050

+63 922-2873198 +63 929 389-3127



PRO 3 PRO 8 PRO ARMM
Camp Capt Julian Olivas Camp BG Salipada Pendatun
San Fernando, Pampanga Camp Sec Ruperto Kangleon Parang, Maguindanao
Tel. No. (045) 435-1978 Tel. No. +63 995 788-0031
PC Hills, Palo, Leyte

Tel. Nos. (053) 323-4818

+63 917-3113572

PRO 4A (CALABARZON) PRO COR
Camp Gov Bado Dangwa
Camp Gen Vicente Lim PRO 9 La Trinidad, Benguet
Camp Col Romeo Abendan Tel. Nos. +63 927-5851344
Calamba City, Laguna Mercedes, Zamboanga City
Tel. No. +63 977-3150424
Tel. Nos. (049) 306-0453

+63 906-3629747

NCRPO

PRO 4B (MIMAROPA) PRO 10 Camp Bagong Diwa

Camp Gen Efigenio Navarro Camp 1Lt Vicente G Alagar Taguig, Metro Manila

Calapan City, Oriental Mindoro Cagayan de Oro City Tel. No. (02) 838-4891

Tel. Nos. (043) 288-1367 Tel. Nos. (088) 850-3204 +63 927-7890836

+63 917-6109780 +63 917-9854558

+63 932-5131295

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