ANNUAL REPORT 2023

Annual Report 2023 51 PSMBFI Departments and Offices ment Heads MICHELLE P. CAYABYAB FUND & INVESTMENT MANAGEMENT DEPARTMENT JOEL IAN A. VILLABONA BILLING, COLLECTION & REMEDIAL MANAGEMENT DEPARTMENT MARY JEAN P. ZAMORA MEMBERSHIP SERVICES DEPARTMENT PAOLO V. PAPA MARKETING DEPARTMENT MA. IMELDA C. ACULINA LOANS DEPARTMENT ROWENA O. SERMONIA SALES & BRANCH OPERATIONS DEPARTMENT REGINA ANGELA CHARISSA M. MOLINES POLICY & CLAIMS MANAGEMENT DEPARTMENT

52 Annual Report 2023 KABALIKAT RONDA GMME 2023 KABALIKAT KABUHAYAN FAIR COURTESY CALLS 2023

Annual Report 2023 53 INFORMATION DRIVES CORPORATE SOCIAL RESPONSIBILITY INSURANCE CLAIMS in Review

54 Annual Report 2023 1 PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED SAN JUAN CITY – PHILIPPINES FINANCIAL STATEMENTS DECEMBER 31, 2023 (With Comparative Figures for 2022)

Annual Report 2023 55 INDEPENDENT AUDITORS’ REPORT To the Members and the Board of Trustees PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI), INCORPORATED No. 318-320 Santolan Road corner 1st and 2nd West Streets San Juan City Opinion We have audited the financial statements of PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED (the “Association”) which comprise the statement of financial position as of December 31, 2023, and the statement of total comprehensive income, statements of changes in fund balance and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policies and other explanatory information. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Association as at December 31, 2023, and its financial performance and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards (PFRSs). Basis for Opinion We conducted our audit in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Association in accordance with the ethical requirements that are relevant to our audit of the financial statements in the Philippines, the Code of Ethics for Professional Accountants in the Philippines, and we have fulfilled our other responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Matter The financial statements of the Association as of and for the year ended December 31, 2022 were audited by another auditor who expressed an unqualified opinion in their report dated April 5, 2023. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation of the financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

56 Annual Report 2023 In preparing the financial statements, management is responsible for assessing the Association’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Association or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Association’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Association’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Association to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Annual Report 2023 57 The Supplementary Information Required under Revenue Regulations Nos. 15-2010 and 34-2020 Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required Revenue Regulations Nos. 15-2010 and 34-2020 are presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ALAS, OPLAS & CO., CPAs BOA Registration No. 0190, valid from October 31, 2022, to February 18, 2025 BIR A.N. 08-001026-000-2024, issued on January 5, 2024; effective until January 4, 2027 SEC A.N. (Firm) 0190-SEC, Group A, issued on October 21, 2021; valid for 2021 to 2025 audit period TIN 002-013-406-000 By: RYAN A. SABUG Partner CPA License No. 0111183 BIR A.N. 08-001026-004-2023, issued on February 9, 2023; effective until February 8, 2026 SEC A.N. (Individual) 111183-SEC, Group A, issued on February 4, 2021; valid for 2020 to 2024 audit period TIN 232-158-286-000 PTR No. 10075665, issued on January 2, 2024, Makati City April 16, 2024 Makati City, Philippines

58 Annual Report 2023 PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2023 (With Comparative Figures for 2022) In Philippine Peso Notes 2023 2022 ASSETS Cash and cash equivalents 10 1,478,842,138 2,087,045,364 Financial assets at amortized cost – net 11 19,798,811,986 18,345,252,609 Financial assets at fair value through profit or loss 12 653,450,748 310,458,177 Investment property 13 2,814,000 2,814,000 Property and equipment – net 14 477,288,252 312,291,554 Retirement plan asset 22 22,547,837 27,526,514 Other assets – net 15 143,626,353 108,538,871 TOTAL ASSETS 22,577,381,314 21,193,927,089 LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable and accrued expenses 16 1,057,875,739 1,305,372,989 Claims payable 17 158,768,718 176,254,206 Legal policy reserves 17 599,169,534 592,881,810 Premium deposits 17 108,186,021 99,990,244 Members’ contributions 18 6,229,746,289 5,179,785,721 Total Liabilities 8,153,746,301 7,354,284,970 FUND BALANCE Retained surplus – appropriated 19 9,290,117,330 7,531,000,945 Retained surplus – unappropriated 19 5,168,375,179 6,329,849,984 Accumulated other comprehensive loss (34,857,496) (21,208,810) Total Fund Balance 14,423,635,013 13,839,642,119 TOTAL LIABILITIES AND FUND BALANCE 22,577,381,314 21,193,927,089 See Notes to Financial Statements.

Annual Report 2023 59 PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED STATEMENT OF TOTAL COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2023 (With Comparative Figures for 2022) In Philippine Peso Notes 2023 2022 UNDERWRITING INCOME Insurance premiums 1,533,174,535 1,503,842,237 UNDERWRITING EXPENSE Claims expense 17 (330,971,882) (352,584,360) Experience refund 16 (8,632,331) (7,561,899) Increase in legal policy reserves 17 (6,287,724) (70,655,054) (345,891,937) (430,801,313) NET UNDERWRITING INCOME 1,187,282,598 1,073,040,924 Interest income 1,695,467,395 1,521,228,730 Interest expense 18 (357,570,965) (425,141,824) NET INTEREST INCOME 1,337,896,430 1,096,086,906 PROVISION FOR CREDIT LOSSES 11 (315,258,978) (152,635,911) NET INTEREST INCOME AFTER CREDIT LOSSES 1,022,637,452 943,450,995 OTHER INCOME (LOSS) Rental income 24 6,615,796 6,539,717 Fair value changes on financial assets at fair value through profit or loss 12 17,469,244 (10,008,660) Others 21 13,197,350 8,089,111 37,282,390 4,620,168 INCOME BEFORE OPERATING EXPENSES 2,247,202,440 2,021,112,087 GENERAL AND ADMINISTRATIVE EXPENSES 20 (1,649,623,386) (589,929,233) INCOME BEFORE INCOME TAX 597,579,054 1,431,182,854 INCOME TAX BENEFIT (EXPENSE) 25 62,526 (277,911) NET INCOME 597,641,580 1,430,904,943 OTHER COMPREHENSIVE LOSS 22 (13,648,686) (4,241) TOTAL COMPREHENSIVE INCOME 583,992,894 1,430,900,702 See Notes to Financial Statements.

60 Annual Report 2023 PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED STATEMENT OF CHANGES IN FUND BALANCE FOR THE YEAR ENDED DECEMBER 31, 2023 (With Comparative Figures for 2022) In Philippine Peso Retained Surplus Total Retained Surplus Accumulated Other Comprehensive Loss (Note 22) Total fund balance Appropriated (Note 19) Unappropriated (Note 19) Balance at December 31, 2021 9,105,535,237 3,324,410,749 12,429,945,986 (21,204,569) 12,408,741,417 Net income for the year – 1,430,904,943 1,430,904,943 – 1,430,904,943 Other comprehensive loss – – – (4,241) (4,241) Appropriation of surplus 632,399,629 (632,399,629) – – – Reversal of appropriation (2,206,933,921) 2,206,933,921 – – – Balance at December 31, 2022 7,531,000,945 6,329,849,984 13,860,850,929 (21,208,810) 13,839,642,119 Net income for the year – 597,641,580 597,641,580 – 597,641,580 Other comprehensive loss – – – (13,648,686) (13,648,686) Appropriation of surplus 1,759,116,385 (1,759,116,385) – – – Balance at December 31, 2023 9,290,117,330 5,168,375,179 14,458,492,509 (34,857,496) 14,423,635,013 See Notes to Financial Statements.

Annual Report 2023 61 9PUBLIC SAFETY MUTUAL BENEFIT FUND (PSMBFI) INCORPORATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2023 (With Comparative Figures for 2022) In Philippine Peso Notes 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax 597,579,054 1,431,182,854 Adjustments for: Interest income (1,695,467,395) (1,521,228,730) Interest expense 18 357,570,965 425,141,824 Provision for credit losses 11 315,258,978 152,635,911 Depreciation 14,20 59,865,956 49,374,295 Fair value changes on financial assets at fair value through profit or loss 12 (17,469,244) 10,008,660 Retirement benefit expense 22 7,799,991 8,094,348 Increase in legal policy reserves 17 6,287,724 70,655,054 Reversal of incurred but not reported claims 17 (5,747,467) (6,712,992) Gain on disposal of property and equipment 14,21 (4,109,734) (867,241) Operating cash flows before working capital changes (378,431,172) 618,283,983 Changes in operating assets and liabilities: Decrease (increase) in: Insurance receivables (6,642,109) 4,542,505 Loans and receivables (591,563,924) (10,175,846) Other assets (35,024,956) (22,913,094) Increase (decrease) in: Accounts payable and accrued expenses (247,497,250) (1,360,323,552) Claims payable (11,738,021) (138,488,136) Premium deposits 8,195,777 (17,834,962) Cash used in operations (1,262,701,655) (926,909,102) Interest received from cash in banks and loans receivables 1,175,513,362 1,117,613,907 Contributions to the retirement fund 22 (16,470,000) – Net cash generated from (used in) operating activities (103,658,293) 190,704,805 CASH FLOWS FROM INVESTING ACTIVITIES Interest received from investments 460,581,936 384,880,539 Additional investments in: Investment securities at amortized cost 11 (4,654,564,225) (5,324,878,368) Financial assets at fair value through profit or loss 12 (360,009,319) (620,984,793) Proceeds from maturities of: Investment securities at amortized cost 11 3,543,324,000 4,815,377,000 Financial assets at fair value through profit or loss 12 34,485,992 529,783,227 Additions to property and equipment 14 (224,897,881) (96,957,671) Proceeds from sale of property and equipment 14 4,144,961 867,241 Net cash used in investing activities (1,196,934,536) (311,912,825) CASH FLOWS FROM FINANCING ACTIVITIES Additional members’ contributions 18 1,207,474,712 1,171,060,608 Refund of members’ contributions and accumulated earnings 18 (515,085,109) (1,145,830,593) Net cash generated from financing activities 692,389,603 25,230,015 NET DECREASE IN CASH AND CASH EQUIVALENTS (608,203,226) (95,978,005) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,087,045,364 2,183,023,369 CASH AND CASH EQUIVALENTS AT END OF YEAR 10 1,478,842,138 2,087,045,364 See Notes to Financial Statements.

62 Annual Report 2023 LESSONS WE CAN LEARN FROM THE GEESE • As each goose flaps its wings, it creates an “UPLIFT” for the geese following. By flying in a “V” formation, the whole flock adds 71% more range than if each goose flew alone. LESSON: People who share a common direction and a sense of community can get to their destination quicker and with less difficulty because they are traveling on the thrust of one another. • When the lead goose gets tired, it rotates back in formation, and another goose flies at the point position. LESSON: It pays to take turns doing hard tasks and sharing leadership with people interdependent with each other. • The geese honk from behind to encourage those in front to keep up their speed. LESSON: We need to make sure our honking from behind is an encouragement that will strengthen a diminishing resolve, not something less helpful. • When a goose gets sick, or wounded or shot down, two geese drop out of formation and follow the member which went down to provide protection. They stay with this member of the flock until it is able to fly again or dies. Then they catch up with the original flock and rejoin the formation. LESSON: If we have as much sense as the geese, we’ll stand by each other.

Annual Report 2023 63 REGIONAL SERVICE OFFICES (RSO) RSO 1 Camp BG Oscar Florendo, Parian,San Fernando City, La Union (072) 607-1840 • 0968-851-4970 0968-851-4971 • 0968-851-4972 0917-125-9798 • 0968-587-3474 RSO 2 Camp Marcelo A Adduru, Tuguegarao City, Cagayan 0966-612-3308 • 0945-104-7576 0945-104-7576 • 0917-194-0728 0917-180-9800 • 0927-713-8097 RSO 3 Camp Capt Julian Olivas, San Fernando, Pampanga (045) 435-1978 • 0908-814-9362 0915-952-9453 • 0916-272-6526 0916-726-6181 • 0966-457-2783 RSO 4A (CALABARZON) Camp Gen Vicente Lim, Calamba City, Laguna 0919-098-9126 • 0949-136-5896 0969-438-2718 • 0962-136-1810 0917-150-0021 • 0917-126-3603 RSO 4B (MIMAROPA) Camp Gen Efigenio Navarro, Calapan City, Oriental Mindoro 0917-610-9780 • 0919-098-9702 0956-933-4455 • 0915-376-9862 0917-145-9392 • 0917-775-3017 0966-345-2548 RSO 5 Camp Gen Simeon A. Ola, Legaspi City, Albay 0917-308-7360 • 0917-107-5439 0917-309-0247 • 0917-109-3315 0917-103-4695 RSO 6 Camp Gen Martin Delgado, Fort San Pedro, Iloilo City (033) 335-0137 • 0927-995-4544 0928-300-7594 • 0917-917-3516 0916-794-1777 • 0939-753-7757 0907-397-0616 RSO 7 Camp President Sergio Osmeña Sr.,Osmeña Boulevard, Cebu City (032) 415-5530 • (032) 256-1140 0922-287-3198 • 0917-304-7221 0917-147-8949 • 0945-809-0084 0921-588-2597• 0956-300-9337 0977-376-9479 RSO 8 Camp Sec Ruperto Kangleon, Palo, Leyte (053) 832-4443 • 0968-851-9036 0931-956-6269 • 0917-126-5089 0963-029-0021 • 0970-996-7341 RSO 9 Camp Col Romeo Abendan, Mercedes, Zamboanga City 0966-551-9880 • 0905-910-2955 0936-822-2245 • 0936-397-8109 RSO 10 Camp 1Lt Vicente G. Alagar, Cagayan de Oro City (088) 850-3204 • 0917-132-8658 0917-132-0257 • 0917-132-2252 0917-123-1613 • 0955-886-4370 0927-511-7710 RSO 11 NEKZS Bldg II, FIL-AM Friendship Highway Catitipan, Brgy. Communal, Davao City (082) 234-9311 • 0917-119-8023 0917-116-7192 • 0938-483-0600 RSO 12 Camp General Paulino T. Santos, Tambler, General Santos City (083) 500-9152 •0948-235-8245 0921-578-9482 • 0917-102-2221 0960-317-3431 • 0919-584-6490 0905-220-8592 • 0999-801-0365 RSO CARAGA Camp Rafael C Rodriguez, Libertad, Butuan City (085) 226-0129 • 0917-571-7722 0929-389-3127 • 0917-119-5900 0926-915-0728 • 0905-527-8924 0995-901-3978 • 0999-363-1871 RSO BAR Camp BGen Salipada Pendatun, Parang, Maguindanao (064) 421-6377 • 0927-298-9331 0995-882-3490 • 0995-948-2672 0915-803-1221 • 0917-188-7629 0917-124-5170 RSO COR Camp Gov Bado Dangwa, La Trinidad, Benguet (074) 422-8154 • 0927-585-1344 0918-912-3857 • 0997-386-8490 0965-533-4577 • 0965-247-7851 0906-272-2906 RSO NCR Camp Bagong Diwa, Bicutan, Taguig City, Metro Manila 0960-481-5849 • 0968-851-0643 0968-851-0644 • 0968-851-0646 0960-370-7459 • 0905-205-0099 0968-851-0645 • 0933-604-1080 0945-992-3443 • 0966-445-3154 0968-851-0642 • 0968-851-0641

PUBLIC SAFETY MUTUAL BENEFIT FUND, INC. 318-320 Santolan Road cor. 1st and 2nd West Streets, Brgy. West Crame, San Juan City, Metro Manila Customer Service Hotlines: +63917 866 5872 • +63919 061 6149 Scan to join the +63969 038 2555 • +63945 992 3446 PSMBFI Viber Community