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PhilEXIM's Code of Corporate Governance
(Revised per Board Resolution No. 2317 dated 15 December 2010)
It is the policy of PhilEXIM to actively promote and pursue corporate governance reforms and to continuously observe the principles of fairness, accountability and transparency. The Board of Directors of PhilEXIM hereby adopts this Code of Corporate Governance as a conscious attempt to significantly enhance PhilEXIM’s corporate organization to make it a valuable partner of the government in national development and to make it a corporation that is competitive both locally and globally.
PhilEXIM is committed to institutionalize the principles of good corporate governance in the entire organization.
The Board of Directors, Management and Staff of PhilEXIM hereby commit themselves to the principles and best practices contained in this Code and acknowledge that this will serve as a guide in the attainment of corporate goals and the programs of reform for the government corporate sector as encapsulized in the acronym FIESTA: fair sharing/contribution in the fiscal consolidation efforts of the National Government, integrity and enhanced corporate governance, efficient and effective delivery of public services, sustainability, transparency and accountability.
The Board of Directors, Management and Staff believe that corporate governance is an integral component of sound strategic business management and of transparency and accountability in public corporate governance and will therefore undertake every effort necessary to create awareness within the organization.
II. GOVERNANCE / COMPLIANCE SYSTEM
A. BOARD OF DIRECTORS
The Board of Directors, hereinafter referred to as the “Board,” is primarily responsible for the governance of the Corporation. Compliance with the principles of good corporate governance shall start with the Board. The main responsibility of the Chairman of the Board shall be focused on the proper governance of the Corporation through the Board.
Composition of the Board
Pursuant to Section 10 of Presidential Decree No. 1080 as amended (the PhilEXIM Charter), the powers and functions of PhilEXIM shall be exercised by a Board which shall be composed of nine (9) members, as follows:
1. The Secretary of Finance who shall be the Chairman of the Board. Whenever the Secretary of Finance is unable to attend a meeting of the Board, he shall designate an Undersecretary to attend as his alternate, who shall act as Chairman;
2. The President of the Corporation, who shall be the Vice-Chairman of the Board, shall assist the Chairman and act in his stead in case of absence or incapacity;
3. The Secretary of Trade and Industry. Whenever the Secretary of Trade and Industry is unable to attend a meeting of the Board, he shall designate an Undersecretary to attend as his alternate;
4. The Governor of the Bangko Sentral ng Pilipinas (BSP). Whenever the BSP Governor is unable to attend a meeting of the Board, he shall designate a BSP Deputy Governor to attend as his alternate;
5. The Director-General of the National Economic and Development Authority (NEDA). Whenever the NEDA Director-General is unable to attend a meeting of the Board, he shall designate a NEDA Deputy Director-General as his alternate;
6. The Chairman of the Philippine Overseas Construction Board (POCB). Whenever the POCB Chairman is unable to attend a meeting of the Board, he shall designate the POCB Vice-Chairman to attend as his alternate; and
7. Three (3) representatives from the private sector, at least one of which shall come from the export community, who shall be elected by the ex-officio members of the Board and who shall hold office for a term of not more than two (2) consecutive years; provided, that the representative from the private sector should be of known probity in the sector he represents.
Powers of the Board
Pursuant to Section 11 of Presidential Decree No. 1080 as amended, the Board shall have the authority to:
1. Formulate policies to carry out effectively the provisions of the PhilEXIM Charter;
2. Prepare and issue rules and regulations as it considers necessary for the effective discharge of the responsibilities and exercise of the powers assigned to PhilEXIM under its Charter;
3. Direct the management, operations and administration of PhilEXIM;
4. On recommendation of the President, appoint, fix the remunerations and other emoluments, and remove the personnel of PhilEXIM: Provided, however, that positions considered by the Board to be policy-determining, primarily confidential or highly technical in nature shall not be subject to the Civil Service Law;
5. Authorize such expenditure by the Corporation as are in the interest of the effective administration and operations of PhilEXIM; and
6. Compromise or release, in whole or in part any claim or settled liability to the Corporation regardless of the amount involved, under such terms and conditions it may impose to protect/promote the interest of PhilEXIM. This authority to compromise or release extends to claims against the Corporation.
Meetings of the Board
Pursuant to Section 12 of Presidential Decree No. 1080 as amended, the Board shall convene as frequently as is necessary to discharge its responsibilities properly, but shall meet at least once every two weeks as worded in the Charter, but for the purpose of the Corporate Governance Committee, at least once a month. The Board may be convoked either by the Secretary of Finance or by the President of PhilEXIM.
General Responsibilities of the Board
It shall be the responsibility of the Board to foster the long-term success of PhilEXIM and secure its sustained competitiveness in a manner consistent with its powers set out in the PhilEXIM Charter, which the Board shall exercise in the best interest of the Corporation and its stakeholders. The Board shall decide on all corporate acts as a collegial body. The Board shall conduct itself with utmost honesty and integrity in the discharge of its duties, functions and responsibilities.
Specific Duties and Responsibilities of the Board
To ensure a high standard of best practice for PhilEXIM and its stakeholders, the Board shall:
1. Determine PhilEXIM’s vision, mission and core values to guide the carrying out of its objectives and business strategies;
2. Establish corporate objectives and draw up strategies for achieving them including the formulation of a business plan to direct corporate activities towards ensuring PhilEXIM’s long-term viability and strength;
3. Oversee and monitor Management action and performance to ensure optimum results;
4. Ensure the adoption of sound written policies on all major business activities including the maintenance of adequate risk management policy, provision of technology and strategic guidelines on operating budget and major capital expenditures;
5. Prescribe a clear assignment of responsibilities and decision-making authorities, incorporating a hierarchy of required approvals from individual employees to the Board itself;
6. Keep Board authority within the powers of PhilEXIM as prescribed in its Charter, and in existing laws, rules and regulations;
7. Assess at least annually its performance and effectiveness as a body, as well as its various committees, the Chief Executive Officer and the Corporation itself;
8. Adopt a system of internal checks and balances - Among the Board members, an effective system of checks and balances must exist. The system shall also provide a mechanism for effective check and control by the Board over the Chief Executive Officer and key managers and by the latter over the line officers of the Corporation. Such systems should be regularly reviewed and updated;
9. Properly discharge Board functions by meeting regularly - Independent views during Board meetings shall be given due consideration and all such meetings shall be duly minuted;
10. Ensure that PhilEXIM complies with all relevant laws, rules and regulations, company policies, procedures, and codes of ethics and corporate governance;
11. Oversee the process of disclosure and communications - Identify PhilEXIM’s major and other stakeholders and formulate a clear policy on communicating or relating with them;
- Establish a competitive selection process to ensure that the key executives have the necessary motivation, integrity, competence and professionalism as well as adopt a professional development program for officers and employees, and a succession planning for key executives;
- Ensure the integrity of PhilEXIM’s accounting and financial reporting systems, including independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards;
- Constitute an Audit Committee and such other Board-level committees as may be necessary to assist the Board in discharging its functions; and
15. Assume overall responsibility for ensuring adherence to corporate governance principles and best practices.
General Responsibility of a Director
A Director assumes a position of trust and confidence, and as such, he must act in the best interest of PhilEXIM. He shall act in a manner characterized by transparency, accountability and fairness and shall assume certain responsibilities to different constituencies or stakeholders, e.g., the Corporation itself, the Government, customers, creditors, employees, and the public at large, who have the right to expect that the Corporation is run with integrity, prudence and in a sound manner geared towards sustained progress over the long term.
Specific Duties and Responsibilities of a Director
A Director shall have the following duties and responsibilities:
1. Conduct fair business transactions with PhilEXIM and ensure that personal interest does not compromise Board decisions - A Director shall avoid situations that give rise to a conflict of interest or compromise his impartiality. A Director shall not use his position to make profit or to acquire benefit or advantage for himself and/or his related interests;
2. Act always in good faith with the care which an ordinarily prudent man would exercise under similar circumstances, with loyalty and in the best interest of PhilEXIM and its stakeholders;
3. Devote time and attention necessary to properly discharge his duties and responsibilities - A Director shall familiarize himself with PhilEXIM’s business, be aware of the Corporation’s condition, contribute meaningfully to the Board’s work, attend and actively participate in Board and committee meetings, request and review meeting materials;
4. Act judiciously - Before deciding on any matter, a Director shall thoroughly evaluate the issues, ask questions and seek clarifications when necessary;
5. Exercise independent judgment - A Director shall view each problem or situation objectively. When disagreement with others occurs, he shall carefully evaluate the situation and state his position, he shall not be afraid to take a position even though unpopular, and he shall support plans and ideas that he thinks will be beneficial to PhilEXIM;
6. Have a working knowledge of the statutory and regulatory requirements affecting PhilEXIM, including the contents of its Charter and the requirements of government regulatory agencies - A Director shall also keep himself informed of the industry developments and business trends in order to safeguard PhilEXIM’s competitiveness;
7. Observe confidentiality - A Director shall observe the confidentiality of non-public information acquired by reason of his position as Director, and shall not disclose such information without authority of the Board;
8. Ensure the continuing presence, soundness, effectiveness and adequacy of PhilEXIM’s internal control mechanisms for good governance.
The minimum internal control mechanisms for the Board’s oversight responsibility shall include but not limited to:
- Ensuring the presence of organizational and procedural controls, supported by an effective management information system and risk management reporting system;
- Reviewing proposed senior management appointments and ensuring the selection, appointment and retention of qualified and competent Management; and
c) Reviewing the Corporation’s personnel and human resource policies and guidelines, conflict of interest situations and its appropriate remedial measures, changes to the compensation plan for officers and employees and management succession plan.
Any Director who enters into a transaction or contract grossly disadvantageous to the government, whether he profited from it or not, shall be liable for violation of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act.
The Corporate Secretary
The Board shall, upon recommendation of the President, appoint a Corporate Secretary to assist the Board in making business judgment in good faith and in the performance of its responsibilities and obligations.
The Corporate Secretary shall be a resident and citizen of the Philippines. He must possess organizational, interpersonal, and legal skills of a Chief Legal Officer.
The Corporate Secretary shall have the following functions:
1. Serve as an adviser to the Board Members on their responsibilities and obligations;
2. Keep the minutes of meetings of the shareholders, the Board, the Executive Committee, and all other committees in a book or books kept for that purpose, and shall furnish copies thereof to the Chairman, the President/CEO and other members of the Board as appropriate;
3. Keep in safe custody the seal of the Corporation and affix it to any instrument requiring the same;
- Attend to the giving and serving of notices of Board and shareholder meetings, if applicable;
- Be fully informed and be part of the scheduling process of other activities of the Board;
- Prepare an annual schedule of Board meetings and the regular agenda meetings, and put the Board on notice of such agenda at every meeting;
- Oversee the adequate flow of information to the Board prior to meetings; and
- Ensure fulfillment of disclosure requirements to regulatory bodies.
B. BOARD COMMITTEES
To aid in complying with the principles of good corporate governance, the Board shall constitute Board-level committees. Such committees shall be provided with the resources necessary to discharge the functions, duties and responsibilities assigned to them, and shall include the following:
i) Corporate Governance Committee (CGC)
The CGC shall be composed of at least five (5) members, including the President and CEO, from among the Board of Directors, who shall be appointed or designated by the Board. The Chairman of the Committee shall be chosen from among the members representing the private sector. The Chairman and the members shall hold office for a period of one (1) year. In case of permanent incapacity, resignation, removal or death, the vacancy shall be filled-up by appointing/designating one from among the members of the Board of Directors, who shall serve for the unexpired portion of the term.
Duties and Responsibilities of the CGC
1. Ensure adherence to the PhilEXIM’s Code of Ethics;
2. Ensure faithful observance of PhilEXIM’s Code of Corporate Governance;
3. Keep abreast of the developments in the corporate governance field that might affect PhilEXIM;
4. Review from time to time the Code of Corporate Governance, the Code of Ethics and the CGC Charter and recommend any changes to the Board;
5. Design and recommend an orientation program for new Directors as well as a continuing education program for existing Directors, particularly relating to corporate governance improvement program;
6. Determine if there is any potential conflict of interest by a Director, and institute a process for handling these situations in accordance with existing law, rules and regulations and in line with global as well as ethical and other regulatory standards;
7. Conduct evaluation and assessment of the performance of the Board as a body and report the same to the Board every end of the year;
8. Review, as the need arises, the organization plans and structure including proposed organizational changes/enhancements as well as manpower plan to ensure adequacy in meeting the growth need of PhilEXIM.
9. Oversee PhilEXIM’s compliance efforts with respect to the Code of Corporate Governance, Code of Ethics, and related laws, rules and regulations as well as company policies and procedure;
10. Meet with compliance and ethics officers to review programs designed to raise the culture of ethics and compliance within the Corporation, and corollary, to install an enforcement mechanism which should sanction non-compliance and unethical behavior while rewarding the deserving ones;
- Review the compensation of the Boards of other government financial institutions and come up with a recommendation of the overall practice;
- Review and establish compensation for Directors and recommend changes to the Board;
- Provide oversight and guidance in the compensation and benefit philosophy for all employees of the Corporation;
- Review and recommend to the Board the Corporation’s base salary, incentive-compensation, equity-based compensation and such other incentives/awards for officers and employees of the Corporation;
- Review annually the Corporation’s goals and objectives relevant to the compensation of the Chief Executive Officer in light of those goals and objectives; and
- Carry out such other duties as may be delegated to it by the Board of Directors from time to time.
PhilEXIM may establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of individual Directors, if any, and other officers. No Director shall be involved in deciding his own remuneration.
The compliance functions of the CGC shall cover non-financial matters while financial audit, including non-financial items which are directly relevant to the financial audit work, is assigned to the Audit Committee. Whenever necessary, the CGC shall jointly work with the Audit Committee to make sure that governance and compliance aspects of a particular issue are thoroughly and adequately addressed.
ii) Risk Oversight Committee (ROC)
The ROC shall assist the Board in directing the affairs of the Corporation particularly in the development and oversight of the Corporation’s risk management plan and program. It shall likewise assist the Board in assessing and providing oversight to management relating to the identification and evaluation of major risks involved in the Corporation’s business operations, finance and accounting, legal compliance, personnel policy, treasury, budgeting or any other areas that could create significant risks to the Corporation’s results, reputation or capacity to fulfill its mandate and reviewing and evaluating the Corporation’s actions to mitigate and manage the risks; and in overseeing and reviewing information regarding the Corporation’s risk management framework, including the significant policies, procedures and practices employed to manage credit risk, market risk and operational risk.
The ROC shall be composed of at least four (4) members of the Board of Directors including the President and Chief Executive Officer. The members of the ROC shall possess a range of expertise as well as adequate knowledge of the Corporation’s risk exposures that will enable them to develop appropriate strategies for preventing losses and minimizing the losses when they occur.
The Committee Chairman and members shall be appointed by the Board provided that the Chairman shall be an ex-officio member of the Board. The Board may replace Committee members, when circumstances warrant. Each member of the Committee shall attend at least once a year a training/seminar on risk management.
The Chairman and members shall hold office for a period of one (1) year. In case of permanent incapacity, resignation, removal or death, the vacancy shall be filled up by appointing/designating one from among the members of the Board of Directors, who shall serve for the unexpired portion of the term.
Duties and Responsibilities of the ROC
1. Review and revise the Risk Management Plan as needed. It shall evaluate the Plan to ensure its continued relevancy, comprehensiveness and effectiveness. It shall revisit strategies, look for emerging or changing exposures, and stay abreast of developments that affect the likelihood of harm or loss;
2. Together with the Audit Committee, review, assess and discuss with the Chief Legal Counsel, the Finance Officer, the Chief Risk and Compliance Officer, and the Commission on Audit any significant risks or exposures; the steps Management has taken to minimize such risks/exposures; and the Corporation’s underlying policies with respect to risk assessment and risk management;
3. Report regularly to the Board of Directors the Corporation’s overall risk exposure, actions taken to reduce the risks, and recommend further action or plans as necessary; and
4. Oversee the system of limits to discretionary authority that the Board delegates to Management, ensure that the system remains effective, that the limits are observed and that immediate corrective actions are taken whenever limits are breached.
The ROC shall meet as often as necessary or as it deems appropriate. It shall periodically meet with the Chief Legal Counsel and other senior officers of the Corporation. The Chairman shall be responsible for scheduling and presiding over the meetings as well as for preparing the agenda. As needed, he may request any officer or employee of the Corporation, resource persons or consultant, if there is any, to attend the meeting of the Committee.
The Office of the Corporate Secretary shall serve as the Secretariat which shall assist the Committee in carrying out its functions effectively and efficiently. All Committee meetings shall be recorded and the minutes of the meeting shall be sent to the members at a reasonable period of time after every meeting.
Powers and Authority of the ROC
For the effective and efficient discharge of its duties, the ROC shall have the following authority and/or prerogatives:
1. Recommend to the Board, upon endorsement of the President, the appointment of a Chief Risk and Compliance Officer (CRCO) who shall have the rank of a Senior Vice President. He shall be administratively under the Office of the President and Chief Executive Officer but shall report functionally to the ROC;
2. Review and approve the qualification standards, job description and responsibilities of the CRCO; and
3. Together with the President and CEO, assess the performance of the CRCO and recommend any appropriate action relative thereto.
In the performance of its duties, the ROC, subject to the approval of the Board, may hire or retain risk management consultants or other experts.
The Chief Risk and Compliance Officer (CRCO)
The Board of PhilEXIM Directors shall, upon recommendation of the ROC and the President, appoint a Chief Risk and Compliance Officer, with the rank of Senior Vice President or as may be determined by the Board, to perform the following general functions:
The CRCO shall oversee the Corporate Compliance Program of PhilEXIM, functioning as an independent and objective officer who, with the assistance of other PhilEXIM personnel, as appropriate, reviews and evaluates compliance issues/concerns within the organization and assists the Board of Directors in ensuring that the rules and regulations of regulatory agencies are complied with, that company policies and procedures are being followed, and that behavior in the organization meets PhilEXIM’s Code of Ethics and other standards of conduct. The CRCO who shall be directly under the administrative supervision of the President and CEO shall report to the Board of Directors, through the CGC, on the implementation and ongoing activities of the Corporate Compliance Program, including any significant non-compliance issues, and through the ROC, on the implementation and ongoing activities of the Risk Management Plan. However, the compliance functions of the CRCO shall exclude financial audit matters (including non-financial items which are directly relevant to the financial audit work) which are within the purview of the Internal Audit Office. Whenever necessary, the Office of the CRCO shall jointly work with the Internal Audit Office to make sure that governance and compliance aspects of a particular issue are thoroughly and adequately addressed.
Duties and Responsibilities of the Chief Risk and Compliance Officer (CRCO)
1. Integrate risk management into the business activities of the Corporation;
2. Ensure that the Corporation manages adequately credit, market, liquidity, legal, operational and other risks:
- Review compliance with existing risk asset management policies, regulations, plans and procedures;
- Provide feedback to Management and/or marketing units on potential losses or gains in risk asset management operations based on periodic financial analysis to gauge the credit health of the Corporation and identify sound credit alternatives;
3. Advise the Board of Directors in areas of risk exposures and risk management activities of the Corporation;
4. Ensure adherence to rules, regulations and issuances relevant to the operations of the Corporation;
5. Manage the implementation and periodic revision of the Corporate Compliance Program;
6. Assist the CGC in ensuring that the Corporation complies with the Code of Corporate Governance, Code of Ethics, and related laws, rules and regulations as well as with company policies and procedures;
7. Coordinate any internal investigation or fact-finding ordered by the Board of Directors and any resulting corrective action to address regulatory compliance issues;
8. Develop and recommend policies and programs to the Board of Directors, through the CGC, which will encourage officers and employees to report suspected fraud and other improprieties without fear of retaliation;
9. Develop, coordinate and participate in educational and training programs that focus on the elements of the Corporate Compliance Program to ensure that all employees are knowledgeable of and comply with the established standards of conduct, related laws, rules and regulations, company policies and procedures, and other specific issues deemed necessary for the effective implementation of the Corporate Compliance Program;
10. Provide the CGC with timely updates on new developments in the field of corporate governance;
11. Prepare the Annual Compliance Report for submission to the Board of Directors, through the CGC, summarizing the activities undertaken pursuant to the Corporate Compliance Program; and
12. Prepare annual budget and work program for compliance-related activities.
The CRCO shall have such other responsibilities as the Board may impose upon him. The CRCO may call on any of PhilEXIM Management and employees to seek assistance or elicit information necessary for the effective implementation of the Corporate Compliance Program. With the permission of the President or the CGC (in case the President is involved), the CRCO shall have access to all documents and information relevant to compliance activities. The CRCO shall seek advice of the Chief Legal Counsel and other lawyers of PhilEXIM whenever necessary. The CRCO may likewise avail of the services of consultants or experts on relevant issues, subject to the approval of the CGC which shall recommend to the Board of Directors for final approval. The CRCO shall be provided with the resources necessary to discharge the duties and responsibilities of the position.
iii) Audit Committee
The objective of the Audit Committee shall be to install and ensure the full operationalization of a proper and adequate control system that guarantees reliability of reporting, safeguarding of assets, compliance with rules and regulations on financial and related matters, effectiveness and efficiency of operations.
The Audit Committee shall be composed of five (5) non-executive Board Members, two (2) of whom shall be ex-officio members and three (3) private sector representatives, who shall have (a) knowledge of the export-import industry; or (b) the ability to read and understand fundamental financial statements, including PhilEXIM’s balance sheet, income statement, statement of cash flow, and key performance indicators; or (c) the ability to understand key business and financial risks and related controls and control processes.
The Chairperson of the Committee shall be appointed by the Board and shall be one who has shown independence, competence, dedication and leadership. He shall be literate in business and financial reporting and control. Such competence shall include knowledge of the regulatory requirements and past employment experience in finance or accounting or other comparable experience or background.
The other members of the Committee, at least one of whom shall have related accounting and audit experience or sufficient training, shall also be independent and financially competent. Independence is measured by the member’s ability to exercise and express objective judgment on any material issue before the Committee, and where he has no close blood or business relation with anyone from the top level of Management of the Corporation. Financial competence entails financial literacy or numeracy which is the ability to read, understand and analyze financial statements.
The Chairman, as well as the other members of the Committee, who shall be appointed by the Board, shall hold office for a period of one (1) year. In case of permanent incapacity, resignation, removal or death, the vacancy shall be filled-up by appointing one from among the other members of the Board of Directors, who shall serve for the unexpired portion of the term.
Duties and Responsibilities of the Audit Committee
1. Act on behalf of the Board of Directors in overseeing all material aspects of PhilEXIM’s reporting, control and audit functions, except those functions and/or responsibilities appertaining to the other standing Committees of the Board;
2. Assist the Board in monitoring the (a) integrity of PhilEXIM’s financial statements; (b) the latter’s compliance with legal and regulatory requirements on financial and related matters, (c) the independence of the Corporation’s Internal Audit Office and, to some extent, the Auditor of the Commission on Audit (COA); and (d) such other matters or works that may require the Committee’s assistance;
3. Focus on the qualitative aspects of financial report to the stakeholders and on PhilEXIM’s processes for the management of the business/financial risk;
4. Coordinate with other Board Committees and maintain strong and positive working relationships with the Management, external and internal auditors, legal counsel, and other Committee advisors;
5. Review and assess the following:
a) All major financial reports (regular management reports, interim statements, annual financial statements, and other disclosure statements to regulatory authorities and other parties) to safeguard the quality and completeness of the said reports and ensure compliance with the disclosure requirements of government regulatory bodies;
b) The significant reports to management prepared by the Internal Audit Office and management responses;
c) The Corporation’s system of internal controls for detecting accounting and reporting financial errors, fraud and defalcations, legal violations, and non-compliance with the corporate code of conduct;
d) The Corporation’s accounting, budgetary and internal control standards and systems, including its risk management policy, and make recommendations to the Board for changes it considers desirable;
e) The external auditor’s independence and the overall scope and focus of the annual/interim audit, including the scope and level of involvement with unaudited quarterly or other interim-period information;
f) The results of examinations of the regulatory authorities in terms of important findings, recommendations and management response;
g) Key financial statement issues and risks, their impact or potential effect on reported financial information, the processes used by management to address such matters, related auditor views, and the basis for audit conclusions, including important conclusions on interim and/or year-end audit work in advance of the public release of financials; and
h) Important internal and COA auditor recommendations on financial reporting, controls, other matters and management’s response.
6. Review, assess and/or approve:
a) Internal Auditor’s Charter and Manual of Operations;
b) Changes in important accounting principles and the application thereof in both interim and annual financial reports;
c) Significant conflicts of interest and related-party transactions;
d) Internal Auditor’s performance and changes in internal audit leadership.
7. Review with Management, Internal Audit Office and, when necessary, the COA Auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on PhilEXIM’s financial statements;
8. Meet periodically with management to review PhilEXIM’s financial risk exposures and the steps management has taken to monitor and control such exposures;
9. Review and approve proposed audit plan developed by the Internal Audit Office inclusive of input from Management and other key Committee chair, responsive to the Committee’s primary responsibilities and, on the basis of which, periodically review the performance of that Office, and recommend to the Board appropriate actions and measures to enhance the audit function of the Internal Audit Office. The annual plan shall be submitted for confirmation/approval by the Board;
10. Oversee compliance audits or reviews on financial and related matters conducted by the Internal Audit Office or by external auditors and consultants as may be necessary;
11. Review with PhilEXIM’s Chief Legal Counsel legal matters that may have a material impact on the financial statements and related compliance policies and any material reports or inquiries received from regulators or government agencies;
12. Report periodically to the Board, through its Chairperson, at least semi-annually, all its activities, monitoring and approvals it has made. It shall also submit highlights of the minutes of meetings conducted specifically identifying monitoring activities and approvals which shall be made available to each Board member at least one week prior to the subsequent Board meeting; and
13. Recommend to the Board appropriate action, in cases where the COA Auditor’s relationship with management has influenced the former’s objectivity and independence in the performance of his/her duties.
Operating Principles of the Audit Committee
In the discharge of its duties, the Audit Committee shall be guided by the following principles:
1. The Committee shall, and to the extent appropriate, get in touch with senior management, other Committee Chairpersons, and other key Committee advisors, internal and COA auditors to strengthen the Committee’s knowledge of relevant current and prospective business issues;
2. The Committee, in tandem with Management, shall develop and participate in a process for review of important financial and operating topics that present potential significant risk to the Corporation. In addition, the individual Committee member shall endeavor to participate in relevant and appropriate self-study or other educational opportunities to assure understanding of the business and environment in which the Corporation operates;
3. Work closely with the Risk Oversight Committee relative to the proper identification and management of risks;
4. Review periodically, at least annually, the Committee Charter to ensure the relevance of the Committee’s function vis-à-vis its operational effectiveness and empowerment;
5. Seek sufficient understanding of significant accounting judgments and always having a keen eye for warning signals and “red flag” that may indicate improper earnings reporting;
6. Ensure that the Corporation’s financial reports give a clear idea of its performance relative to appropriate performance benchmarks; and
7. Watch out for fraudulent reporting due to pressure to beat expectations or meet targets that push up incentive-based compensation plan.
Authority and Prerogatives of the Audit Committee
For the effective and efficient discharge of its duties, the Committee shall have the following authority and/or prerogatives:
1. Review and approve the qualification standards and the job description and responsibilities of the Internal Auditor;
2. Decide on the appointment, performance evaluation, and change or replacement, subject to the final approval or ratification of the Board, of the Internal Auditor, who reports functionally to the Committee and to the President administratively; recommend the hiring of the senior executives of the Internal Audit Office to the Board upon recommendation of the President, and approve the benefits and other emoluments to be given to the COA Auditor;
3. Review the scope and results of internal audit activities;
4. Ensure and evaluate the objectivity of the audit function of the Internal Auditor and, to the extent appropriate, the COA Auditor;
5. Access internal and external resources, as it may deem necessary, to carry out its responsibilities;
6. Obtain from the Internal and COA Auditors, as well as from Management, the list of key control issues and require members of the Management, legal counsel, Internal and COA Auditors, whenever applicable, to participate in Committee meetings;
7. Require a written statement from Management on the integrity of the Corporation’s control and reporting systems and its adherence to government accounting and auditing standards;
8. Review annually, the performance (effectiveness, objectivity and independence) of the internal and, to some extent, COA Auditors;
9. Approve changes in the key officers charged with internal audit; and
- Meet with compliance and ethics officers to review programs designed to raise the culture of ethics and compliance within the corporation. Corollary to the foregoing, to install an enforcement mechanism which would sanction non-compliance and unethical behavior while rewarding the deserving ones.
The Corporate Secretary shall serve as the secretary of the Committee. He shall assist the Committee in carrying out its functions effectively and efficiently.
The Audit Committee shall meet at least once every two (2) months. It may, as the need arises, meet more often. The meetings should be long enough to provide time for full discussion of all issues relevant to the functions of the Committee. At the end of each meeting, the Committee members shall meet in executive session to assess the information they received and to take appropriate action when necessary. All Committee meetings shall be recorded.
The Audit Committee shall meet periodically with the financial management team, and on ‘as needed basis,” with the general counsel and chairman of each of the major operating units of the Corporation.
The Audit Committee shall keep the Chairman of the Board fully informed of its activities, recommendations and issues decided by it for final disposition of the Board, unless it is the Chairman who is the subject of the audit investigation. It shall also work closely with the other Board Committees and maintain harmonious working relationship with the Risk Oversight Committee.
Every effort shall be made to keep a mutually supportive but professionally arms-length relationship with the Chief Executive Officer and other key members of senior management. The Board shall include in its performance evaluation, the relationship of the CEO with the Audit Committee.
The Audit Committee shall regard the Internal Auditor as a key partner who can help ensure its ability to fulfill its functions. The Internal Auditor shall be encouraged to maintain an open, frank and wholly professional relationship with the Committee, with which the Internal Auditor shall meet privately, confidentially and regularly.
To ensure effectiveness in the work of the Audit Committee, it shall maintain a more frequent and open line of communication with the COA Auditor.
In the performance of its duties, the Audit Committee, upon approval of the Board, may hire or retain consultants which shall be paid by PhilEXIM.
PhilEXIM shall have in place an independent Internal Audit Office, through which the Board and Senior Management shall be provided with reasonable assurance that its key organizational and procedural controls are effective, appropriate, and complied with.
The Head of the Internal Audit Office shall report to the Audit Committee.
Functions of the Internal Audit Office
1. Examine and evaluate the adequacy and effectiveness of the internal control systems at various operations and activities of the corporation;
2. Review compliance with legal and regulatory requirements and approved Corporation’s policies and procedures;
3. Examine the quality of credit portfolio and periodically updates Management on the status thereof;
4. Appraise performance and economical and efficient use of corporate resources;
5. Recommend measure to safeguard the assets of the Corporation;
6. Review the accuracy and reliability of the Corporation’s accounting records and financial reports, including that of other entities where the Corporation has financial interest or where it may have review and monitoring authority through contractual agreements or covenants; and
7. Suggest/recommend to Management measures to address the inherent flaws/defects in the systems and operations of the different organizational units of the Corporation.
Pursuant to Section 19 of Presidential Decree No. 1080 as amended, the Chairman of the Commission on Audit shall act as the ex-officio External Auditor of PhilEXIM and, as such, he is empowered and authorized to appoint a representative who shall be the External Auditor.
- Credit Committee (CRECOM)
The CRECOM shall be composed of five (5) members, including the President and CEO who shall act as the Chairman of the Committee, from among the Board of Directors who shall be appointed or designated by the Board.
Duties and Responsibilities of the CRECOM
1. Ensure that the credit policies set by the Board are implemented;
- Promote and market the Corporation’s programs and services;
- Approve/Deny accounts falling under the credit approving authority of the Committee and act in an advisory capacity towards credit decision-making for accounts falling under the approving authority of the Board;
- Whenever the need arises, oversee site/plant visit and inspection; and
- Perform such other related functions as it may deem necessary.
C. CHIEF EXECUTIVE OFFICER (CEO)
The internal control mechanisms for management’s operational responsibility shall center on the CEO, being ultimately accountable for the company’s organizational and procedural controls. The CEO shall be in-charge of management and day-to-day operations.
Pursuant to Section 14 of Presidential Decree No. 1080 as amended, the CEO shall be the President of PhilEXIM who shall be appointed by the President of the Philippines, upon recommendation of the Board, for a term of six (6) years unless removed for cause or by reason of incapacity.
Powers and Duties of the CEO
Pursuant to Section 15 of Presidential Decree No. 1080 as amended, the powers and duties of the President and CEO shall be:
1. To prepare the agenda for meetings of the Board and to submit for the consideration of the Board the policies and measures which he believes to be necessary to carry out the purposes and provisions of the PhilEXIM Charter;
2. To execute and administer the policies and measures approved by the Board;
3. To direct and supervise the operations and internal administration of the Board; and
4. To exercise such other powers as may be vested in him by the Board.
III. SUPPLY OF INFORMATION
In order to fulfill their responsibilities, Board Members shall be provided by the Management with complete, adequate and timely information prior to Board meetings and on an on-going basis. The Board may have separate and independent access to PhilEXIM’s Senior Management thru the President.
The Board Members may require additional information to fulfill their duties properly. Such information may include the background or explanatory information relating to matters to be brought before the Board, copies of disclosure documents, budgets, forecasts and monthly internal financial statements. With respect to the budget, any variance between the projections and actual results shall be disclosed and explained.
The Board shall provide the National Government, through the Department of Finance, with a balanced and understandable assessment of PhilEXIM’s performance, position and prospects on a semestral basis and the Management shall be primarily accountable to the Board in providing a balanced and understandable assessment of PhilEXIM’s performance, position and prospects on a monthly basis.
V. DISCLOSURE AND TRANSPARENCY
All material information shall be fully and accurately disclosed in PhilEXIM’s Annual Report and corporate website, subject to PhilEXIM’s policies and relevant laws, rules and regulations. Such information shall include, among others, financial operating performance, Board changes and information about Board Members, remuneration policy for members of the Board and key executives, organizational structure, changes in capitalization and amendments to the PhilEXIM Charter.
The financial reports shall disclose material compliance or non-compliance with international and Philippine accounting standards.
VI. COMMUNICATION PROCESS
All Directors, Officers and Supervisors of PhilEXIM shall ensure the thorough dissemination of this Code to all employees and related third parties, and to likewise enjoin compliance in the process.
An adequate number of printed copies of this Code must be reproduced and distributed with a minimum of at least one (1) hard copy of this Code per department.
VII. TRAINING PROCESS
Funds shall be allocated for the conduct of an orientation program or workshop to operationalize this Code, and for the continued education and training of all employees to ensure compliance with this Code.
Each Director is enjoined to attend a seminar on corporate governance which shall be conducted by a duly recognized private or government institute.
VIII. MONITORING AND ASSESSMENT
Each Committee shall report regularly to the Board.
The CGC with the assistance of the CRCO shall establish an evaluation system to determine and measure compliance with this Code. The adoption of such performance evaluation system shall be approved by the Board.
This Code shall be subject to periodic review as determined by the Board.
IX. PENALTIES FOR NON-COMPLIANCE WITH THE CODE
Any violation of this Code shall be dealt with accordingly.
The CGC shall, upon recommendation of the CRCO, be responsible for determining violations and recommend the probable imposable penalty for violations or non-compliance to the Board. The Board shall make the final decision on the imposable penalty for all violations.
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PhilEXIM's Code of Ethics and Business Conduct
(Board Resolution No. 1887 dated 19 March 2007)
Pursuant to the provisions of Republic Act No. 6713, known as the Code of Conduct and Ethical Standards for Public Officials and Employees, and its Implementing Rules, PhilEXIM hereby adopts this Code of Ethics and Business Conduct.
- STATEMENT OF POLICY
All PhilEXIM officials and employees are accountable to the people for their overt acts, neglects or omissions while in government service.
It is the policy of PhilEXIM to promote a high standard of ethics among its officials and employees who shall at all times be accountable to the people and shall discharge their duties with utmost responsibility, integrity, competence and loyalty; act with patriotism and justice; lead modest lives; and uphold public interest over personal interest.
This Code of Ethics shall govern the conduct and behavior of all PhilEXIM officials and employees including the members of the Board of Directors. It will serve as their guide in carrying out, with the highest degree, professional and ethical standards of behavior. It is promulgated with the end view of promoting good corporate governance.
This Code shall cover all PhilEXIM officials and employees, including the Board of Directors and their alternates and/or representatives, whether they hold office or employment in a permanent or regular, temporary, casual or hold-over capacity, whether or not they receive compensation, regardless of amount.
- NORMS OF CONDUCT OF PHILEXIM OFFICIALS AND EMPLOYEES
PhilEXIM officials and employees shall observe the following as standards of personal conduct in the discharge and execution of their official duties:
4.1. Commitment to Public Interest
4.1.1. PhilEXIM officials and employees shall always uphold the public interest over and above personal interest.
4.1.2. All resources and powers of their respective offices must be employed and used efficiently, effectively, honestly and economically, and in accordance with law and regulations, particularly to avoid wastage in public funds and revenues, with a view to ensuring efficiency, economy and effectiveness in operations.
PhilEXIM officials and employees shall:
4.2.1. perform and discharge their duties with the highest degree of excellence, professionalism, intelligence and skill.
4.2.2. enter public service with utmost devotion and dedication to duty.
4.2.3. endeavor to discourage wrong perceptions of their roles as dispensers or peddlers of undue patronage.
4.3. Justness and Sincerity
PhilEXIM officials and employees:
4.3.1. shall remain true to the people at all times;
4.3.2. must act with justness and sincerity and shall not discriminate against anyone, especially the poor and the underprivileged;
4.3.3. shall respect the rights of others at all times; and
4.3.4. shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest.
PhilEXIM officials and employees shall not dispense or extend undue favors on account of their office to their relatives whether by consanguinity or affinity except with respect to appointments of such relatives to positions considered strictly confidential or as members of their personal staff whose terms are coterminus with theirs.
4.4. Political Neutrality
PhilEXIM officials and employees shall provide service to everyone without unfair discrimination and regardless of party affiliation or preference.
4.5. Responsiveness to the Public
4.5.1. PhilEXIM officials and employees shall extend prompt, courteous and adequate service to the public.
4.5.2. Unless otherwise provided by law or when required by the public interest, PhilEXIM officials and employees shall provide information on their policies and procedures in clear and understandable language; ensure openness of information, public consultations and hearings whenever appropriate; encourage suggestions; simplify and systematize policy, rules and procedures; avoid red tape; and develop an understanding and appreciation of the socio-economic conditions prevailing in the country, especially in the depressed rural and urban areas.
4.6. Nationalism and Patriotism
PhilEXIM officials and employees shall:
4.6.1. be loyal to the Republic and to the Filipino people at all times;
4.6.2. promote the use of locally produced goods, resources and technology; and
4.6.3. encourage appreciation and pride of country and people.
They shall endeavor to maintain and defend Philippine sovereignty against foreign intrusion.
4.7. Commitment to Democracy
PhilEXIM officials and employees shall:
4.7.1. commit themselves to the democratic way of life and values, maintain the principle of public accountability, and manifest by deeds the supremacy of civilian authority over the military; and 4.7.2. uphold the Constitution and put loyalty to country above loyalty to persons or party, at all times.
4.8. Simple Living
4.8.1. PhilEXIM officials and employees and their families shall lead modest and simple lives appropriate to their positions and income. They shall not indulge in extravagant or ostentatious display of wealth in any form.
• Modest and simple living means maintaining a standard of living within the official or employee’s visible means of income as correctly disclosed in his income tax returns, annual statement of assets, liabilities and net worth and other documents relating to financial and business interests and connections.
4.8.2. Funds for official use and purpose shall be utilized with the diligence of a good father of a family.
- DUTIES/RESPONSIBILITIES OF PHILEXIM OFFICIALS AND EMPLOYEES
In the performance of their duties, PhilEXIM officials and employees are under obligation to:
5.1. Act promptly on letters and requests
All PhilEXIM officials and employees shall, within fifteen (15) working days from receipt thereof, respond to letters or other means of communications sent by the public. The reply must contain the action taken on the request. 5.1.1. As a general rule, when a request or petition, whether written or verbal, can be disposed of promptly and expeditiously, the official or employee in charge shall do so immediately, without discrimination, and in no case beyond fifteen (15) working days from receipt thereof.
5.1.2. In Departments or units that are usually swamped with persons calling for a particular type of service, the Head of the Department or unit shall devise a mechanism so as to avoid any delay.
5.1.3. In case of written requests, petitions or motions, the official or employee in charge shall act on the same within fifteen (15) working days from PhilEXIM’s receipt thereof, provided that:
188.8.131.52. If within the jurisdiction of PhilEXIM, the official or employee must write an acknowledgement letter, where the matter is routinary or may be acted upon in the ordinary course of business, specifying the date when the matter will be disposed of and the name of the official or employee in charge thereof. Where the matter is non-routinary or the issues involved are not simple or ordinary, the official or employee must write an acknowledgement letter informing the action to be taken and when it can be acted upon. Where there is a need to submit additional information, requirements or documents, the acknowledgement letter shall specify a reasonable time within which to submit and who is in charge thereof. When all the documents or requirements have been satisfactorily submitted, the interested party shall be informed of the action taken and when such action or disposition can be expected, barring unforeseen circumstances.
184.108.40.206. If outside the jurisdiction of PhilEXIM, the official or employee must refer the letter or request to the proper office or agency and acknowledge it by means of a note or letter, informing the action taken and attaching a copy of the letter of referral to the proper office or agency.
5.1.4. All official papers and documents must be processed and completed within a reasonable time determined in accordance with the following rules:
220.127.116.11. When the law or the applicable rule issued in accordance therewith prescribes a period within which a decision is to be rendered or an action taken, the same shall be followed.
18.104.22.168. When the law or applicable rule issued in accordance therewith does not prescribe a period, the President & CEO of PhilEXIM shall issue rules and regulations prescribing, among others, what is reasonable time, taking into account the: (i) nature and complexity of the subject matter, (ii) completeness or inadequacy of data and information requirements, (iii) lack of resources caused by circumstances beyond the control of PhilEXIM, (iv) legal constraints such as restraining orders and injunctions, (v) fault, failure or negligence of the party concerned which renders the decision or action as not possible or premature, and (vi) fortuitous events or force majeure.
5.2. Submit annual performance reports
5.2.1. The President & CEO or other responsible official of PhilEXIM shall, within forty-five (45) working days from the end of the year, render a full and complete report of performance and accomplishments of PhilEXIM, as prescribed by existing laws and regulations, which may be based on its unaudited financial statements, in case the audited financial statements are not yet available. Such report shall be open and available to the public within regular office hours.
5.2.2. Another report of compliance with the provisions of Republic Act No. 6713 and its Implementing Rules shall be prepared and submitted to the Civil Service Commission.
5.3. Process documents and papers expeditiously
5.3.1. All official papers and documents must be processed and completed within a reasonable time from the preparation thereof. Except as otherwise provided by law or regulation, and as far as practicable, any written action or decision must contain not more than three (3) initials or signatures.
5.3.2. In the absence of the duly authorized signatory, the official next-in-rank or officer-in-charge or the person duly authorized shall sign for and in his behalf. The President & CEO of PhilEXIM shall prescribe, through an appropriate office order, the rules on the proper authority to sign in the absence of the regular signatory, as follows:
22.214.171.124 If there is only one official next-in-rank, he shall automatically be the signatory;
126.96.36.199 If there are two or more officials next-in-rank, the appropriate office order shall prescribe the order of priority among the officials next-in-rank within the same organizational unit; or
188.8.131.52 If there is no official next-in-rank present and available, the President & CEO of PhilEXIM shall designate an officer-in-charge from among those next lower in rank in the same organizational unit.
5.4. Act immediately on the public’s personal transactions
All PhilEXIM officials and employees must attend to anyone who wants to avail himself of the services of their offices and must, at all times, act promptly and expeditiously.
5.5. Make documents accessible to the public
5.5.1. All public documents must be made accessible to, and readily available for inspection by, the public within reasonable working hours.
5.5.2. Subject to reasonable conditions prescribed by law or regulation, PhilEXIM adopts and implements a policy of full public disclosure of all its transactions involving public interest.
5.5.3. The President & CEO of PhilEXIM shall establish measures and standards that will ensure transparency of and openness in its transactions (i.e., biddings, purchases, other internal transactions, including contracts, status of projects, and all other matters involving public interest.
5.5.4. Information systems shall be established to inform the public of the policies, rules and procedures; work programs, projects and performance targets; performance reports; and all other documents as may hereafter be classified as public information. Such information shall be utilized solely for the purpose of informing the public of such policies, programs and accomplishment, and not to build the public image of any official or employee or to advance his own personal interest.
5.5.5. PhilEXIM shall provide official information, records or documents to any requesting public, except if:
184.108.40.206. The information, record or document sought falls within the concepts of established privilege or recognized exceptions as may be provided by law or settled policy or jurisprudence, including information covered by disclosure and confidentiality agreements entered into by PhilEXIM with third parties.
220.127.116.11. Such information, record or document compromises drafts or decisions, orders rulings, policy, decisions, memoranda, etc.
18.104.22.168. It would disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy.
22.214.171.124. It would disclose investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records or information would interfere with enforcement proceedings, deprive a person of a right to a fair trial or an impartial adjudication, disclose the identity of a confidential source, or unjustifiably disclose investigative techniques and procedures.
126.96.36.199. It would disclose information the premature disclosure of which would likely or significantly frustrate implementation of a proposed official action, except where PhilEXIM has already disclosed to the public the content or nature of its proposed action, or where PhilEXIM is required by law to make such disclosure on its own initiative prior to taking final official action on such proposal.
5.5.6. PhilEXIM shall establish information systems and networks that will effect the widest possible dissemination of information regarding the provisions of this Code, and the policies and programs relative thereto.
- PROHIBITED ACTS AND TRANSACTIONS
In addition to acts and omissions of public officials and employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited and unlawful acts and transactions of any PhilEXIM official or employee:
6.1. Financial and material interest
PhilEXIM officials and employees shall not, directly or indirectly, have any financial or material interest in any transaction requiring the approval of their office.
- Financial and material interest is defined as a pecuniary or proprietary interest by which a person will gain or lose something.
6.2. Outside employment and other activities related thereto
PhilEXIM officials and employees during their incumbency shall not:
6.2.1. Own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law; 6.2.2. Engage in the private practice of their profession unless authorized by the Constitution, law or regulation, provided that such practice will not conflict or tend to conflict with their official functions; or
6.2.3. Recommend any person to any position in a private enterprise which has a regular or pending official transaction with their office, unless such recommendation or referral is mandated by law, international agreements, commitment and obligation, or as part of the functions of their office.
The above prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or separation from PhilEXIM, except in the case of Item 6.2.2 above. However, the professional concerned cannot practice his profession in connection with any matter before PhilEXIM, in which case the one-year prohibition shall likewise apply.
6.3. Disclosure and/or misuse of confidential information
PhilEXIM officials and employees shall not use or divulge confidential or classified information officially known to them by reason of their office and not made available to the public, either to further their private interests, or give undue advantage to anyone; or to prejudice the public interest.
6.4. Solicitation or acceptance of gifts
6.4.1 PhilEXIM officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office.
- A thing of monetary value is one which is evidently or manifestly excessive by its very nature.
- Gift refers to a thing or a right disposed of gratuitously, or any act of liberality, in favor of another who accepts it, and shall include a simulated sale or an ostensibly onerous disposition thereof.
- Loan covers both simple loan and commodatum as well as guarantees, financing arrangements or accommodations intended to ensure its approval.
- Commodatum refers to a contract whereby one of the parties delivers to another something not consumable so that the latter may use the same for a certain time and return it.
6.4.2 The propriety or impropriety of the foregoing shall be determined by its value, kinship or relationship between giver and receiver and the motivation.
6.4.3 This prohibition shall not include:
188.8.131.52 Unsolicited gift of nominal or insignificant value not given in anticipation of, or in exchange for, a favor from a PhilEXIM official or employee or given after the transaction is completed, or service is rendered. As to what is a gift of nominal value will depend on the circumstances of each case taking into account the salary of the official or employee, the frequency or infrequency of the giving, the expectation of benefits, and other similar factors;
184.108.40.206 A gift from a member of his family or relative on the occasion of a family celebration, and without any expectation of pecuniary gain or benefit;
- Family of public officials and employees means their spouses and unmarried children under eighteen (18) years of age. Relative refers to any person related to the official or employee within the fourth civil degree of consanguinity or affinity, including “bilas, inso or balae”.
220.127.116.11 supposed donations from persons with no regular, pending, or expected transactions with PhilEXIM without any expectation of pecuniary gain or benefit;
18.104.22.168 Donations coming from private organizations whether local or foreign which are considered and accepted as humanitarian and altruistic in purpose and mission;
22.214.171.124 Donations coming from and to government entities;
126.96.36.199 Gifts or grants from foreign governments, particularly:
188.8.131.52.1 Gift of nominal value tendered and received as a souvenir or mark of courtesy;
184.108.40.206.2 Gift in the nature of a scholarship or fellowship grant or medical treatment; or
220.127.116.11.3 Travel grants or expenses for travel taking place entirely outside the country (such as allowances, transportation, food, and lodging) of more than a nominal value if such acceptance is appropriate or consistent with the interests of the country, and permitted by the President & CEO of PhilEXIM, subject to existing rules and regulations.
6.5 Other Prohibited Acts and Omissions
6.5.1 Obtaining or using any statement filed under this Code for any purpose contrary to morals or public policy or any commercial purpose other than by news and communications media for dissemination to the general public;
6.5.2 Unfair discrimination in rendering public service due to party affiliation or preference;
6.5.3 Disloyalty to the Republic of the Philippines and to the Filipino people;
6.5.4 Failure to act promptly act on letters and request within fifteen (15) days from receipt, except as otherwise provided herein;
6.5.5 Failure to process documents and complete action on documents and papers within a reasonable time from preparation thereof, except as otherwise provided herein;
6.5.6 Failure to attend to anyone who wants to avail himself of the services of the office, or to act promptly and expeditiously on public personal transactions;
6.5.7 Failure to file sworn statements of assets, liabilities and net worth and disclosure of business interests and financial connections; and
6.5.8 Failure to resign from his position in the private business enterprise within thirty (30) days from assumption of public office when conflict of interest arises, and or failure to divest himself of his shareholdings or interests in private business enterprise within sixty (60) days from such assumption of public office when conflict of interest arises, reckoned from the date when the conflict of interest had arisen.
- CONFLICT OF INTEREST AND DIVESTMENT
7.1. PhilEXIM officials and employees shall avoid conflicts of interest at all times.
7.2. Conflict of interest occurs when:
7.2.1. The official or employee is (a) a substantial stockholder, or a member of the Board of Directors, or an officer of a corporation; or (b) an owner of or has substantial interest in a business; or (c) a partner in a partnership; and
7.2.2. The interest of such corporation or business, or his rights or duties therein, are opposed to or affected by the faithful performance of official duty.
- A substantial stockholder is any person who owns, directly or indirectly, shares of stock sufficient to elect a director of a corporation. This term shall also apply to the parties to a voting trust.
- A voting trust means an agreement in writing between one or more stockholders of a stock corporation for the purpose of conferring upon a trustee or trustees the right to vote and other rights pertaining to the shares for certain periods and subject to such other conditions provided for in the Corporation Law.
7.3. When a conflict of interest arises, the official or employee involved shall resign from his position in any private business enterprise within thirty (30) days from his assumption of office and/or divest himself of his shareholdings or interest within sixty (60) days from such assumption. For those who are already in the service, and conflict of interest arises, the officer or employee must resign from his position in the private business enterprise and/or divest himself of his shareholdings or interests within the periods herein-above provided, reckoned from the date when the conflict of interest had arisen. The same rule shall apply where the official or employee is a partner in a partnership.
7.4. If the conditions in item 7.2 above concur, divestment shall be mandatory for any official or employee even if he has resigned from his position in any private business enterprise.
7.5. Divestment shall be to a person or persons other than his spouse and relatives within the fourth civil degree of consanguinity or affinity.
7.6. The requirement of divestment shall not apply to those specifically authorized by law and those who serve PhilEXIM in an honorary capacity nor to laborers and casual or temporary workers.
- PUBLIC DISCLOSURE
8.1. General Requirement
Every PhilEXIM official or employee, except those who serve in an official honorary capacity, without service credit or pay, temporary laborers and casual or temporary or contractual workers, shall file under oath their statement of assets, liabilities and net worth and a disclosure of business interests and financial connections including those of their spouses and unmarried children under eighteen (18) years of age living in their households, in the prescribed form (Annex A hereof).
8.2. Statement of Assets and Liabilities and Net Worth
This statement shall contain information on (a) real property, its improvements, acquisition costs, assessed value, and current fair market value; (b) personal property and acquisition costs; (c) all other assets such as investments, cash on hand or in banks, stocks, bonds, and the like; (d) all financial liabilities; and (e) net worth.
8.3. Disclosure of Business Interests and Financial Connections
This statement shall contain information on any existing interests in, or any existing connections with, any business enterprises or entities, whether as proprietor, investor, promoter, partner, shareholder, officer, managing director, executive, creditor, lawyer, legal consultant, accountant, auditor, and the like, the names and addresses of the business enterprises or entities, the dates when such interests or connections were established, and such other details as will show the nature of the interests or connections.
8.4. Identification and Disclosure of Relatives
Every PhilEXIM official or employee shall also identify and disclose under oath to the best of his knowledge and information, his relatives in the government, up to the fourth civil degree of relationship, either consanguinity or affinity, including “bilas, inso and balae”, in the prescribed form (Annex A) which shall be filed:
8.4.1. Within thirty (30) days after assumption of office, the information contained therein must be reckoned as of his first day of office;
8.4.2. On or before April 30 of every year thereafter, the information contained there in must be reckoned as of the end of the preceding year; or
8.4.3. Within thirty (30) days after separation from the service, the information contained therein must be reckoned as of his last day of office.
8.5. When to File
The Statement of Assets and Liabilities and Net Worth and the Disclosure of Business Interests and Financial Connections must be filed:
8.5.1. Within thirty (30) days after assumption of office, statements of which must be reckoned as of his first day of service;
8.5.2 On or before April 30 of every year thereafter, statements of which must be reckoned as of the end of the preceding year; or
8.5.3 Within thirty (30) days after separation from the service, statements of which must be reckoned as of his last day of office. A copy of said statements shall be filed with the Human Resources and Administration Department of PhilEXIM.
8.6. Where to File
The Statement of Assets and Liabilities and Net Worth and the Disclosure of Business Interests and Financial Connections shall be filed by all officials and employees of PhilEXIM with the Civil Service Commission. A copy of said statements shall also be filed with the Human Resources and Administration Department of PhilEXIM.
8.7. Every PhilEXIM official or employee shall also execute, within thirty (30) days from the date of their assumption of office, the necessary authority in favor of the Ombudsman to obtain, from all appropriate government agencies, including the Bureau of Internal Revenue, such documents as may show their assets, liabilities, net worth, and also their business interests, and financial connections in previous years, including, if possible, the year when they first assumed any office in the government.
8.8. Married couples who are both public officials and employees may file the required statements jointly or separately.
8.9. Accessibility of Documents
Any and all statements filed in accordance with Item 8 of this Code shall be made available for public inspection at reasonable hours for a period of ten (10) years after receipt of the statement. The statement may be destroyed after such period unless needed sin an ongoing investigation.
8.10. Review and Compliance Procedure
8.10.1. The President & CEO of PhilEXIM shall have the authority to establish compliance procedures, subject to the approval of the Secretary of Justice, for the review of statements of assets, liabilities, net worth and disclosure information to determine whether said statements have been properly accomplished.
8.10.2. The President & CEO shall likewise have the authority to render any opinion interpreting the provisions on the review and compliance procedures in the filing of statements of assets, liabilities, net worth and disclosure information.
8.10.3. In the event the President & CEO determines that a statement is not properly filed, he shall inform the reporting individual and direct him to take the necessary corrective action.
8.10.4 The individual to whom the opinion is rendered, and any other individual involved in a similar factual situation, and who, after issuance of the opinion acts in good faith in accordance with it shall not be subject to any sanction provided in the Code.
- COMPUTER ETHICS
9.1. All users of any PhilEXIM-maintained electronic data files, software, hardware and network systems shall handle these resources in a responsible manner. These resources shall be used for authorized purposes only.
9.2. All information processed through Information Technology is considered sensitive and confidential. The responsibility for the release or discussion of such data is assigned to the official custodian of the data file(s). Access to information shall be on a “need to know” basis and must be directly related to assigned duties.
9.3. Computer users are expected to be aware of the resources they are using and to make reasonable efforts to use these resources efficiently. Any wasteful use of computer resources (e.g., printing of unnecessary documents, unofficial downloading of sites or large files, and the playing of games for entertainment) is irresponsible and abusive.
9.4. Electronic mail (e-mail) and communication facilities (e.g. Internet) shall not be used for the following:
9.4.1. Transmission of advertisements, solicitations, promotions, destructive programs, political material, or similar non-business related materials for commercial purposes or personal gain;
9.4.2 Sending of fraudulent, harassing, obscene, indecent, profane, intimidating or other messages contrary to law, rules, policies or morals;
9.4.3 Viewing or accessing pornographic sites, films, videos or materials;
9.4.4 Creating or forwarding chain letters or unsolicited e-mail messages, including “junk mail”;
9.4.5 Soliciting e-mail from any other e-mail address, with the intent to harass or collect replies;
9.4.6 Masquerading as someone else by using their e-mail or internet address or electronic signature.
- ADMINISTRATIVE REFORMS
10.1. Ethics Education Programs
10.1.1. PhilEXIM shall conduct value development programs for its officials and employees in order to strengthen their commitment to public service and help promote the primacy of public interest over personal interest in the performance of their duties. Such programs and other parallel efforts on value development shall include, among others, the following subjects:
10.1.1.1. Ethical and moral values;
10.1.1.2. Rights, duties and responsibilities of public servants;
10.1.1.3. Nationalism and patriotism;
10.1.1.4. Justice and human rights;
10.1.1.5. Democracy in a free and just society;
10.1.1.6. Philippine history, culture and tradition; and
10.1.1.7 Socio-Economic conditions prevailing in the country, especially in the depressed areas, and the need for a Code of Ethics and Business Conduct
10.1.2. Continuing refresher courses and seminars and/or workshops to promote a high standard of ethics shall be conducted.
10.1.3 Professional, scientific and technical trainings and education programs shall enhance to the highest degree, professionalism, excellence, intelligence and skills in the performance and discharge of duties and responsibilities of officials and employees. These programs shall be conducted in PhilEXIM and may include the subjects enumerated above.
10.1.4 The President and CEO of PhilEXIM shall ensure that officials and employees attend the value development program and participate in parallel value development efforts.
10.2. Studies on Work Improvement
PhilEXIM shall conduct continuing studies and analyses of its work systems and procedures to improve the delivery of public services, with the end view of:
10.2.1. Identifying systems and procedures that lead or contribute to negative bureaucratic behavior;
10.2.2. Simplifying rules and procedures to avoid red tape; and
10.2.3. Devising or adopting systems and procedures that promote the morale and satisfaction of PhilEXIM officials and employees.
10.3 Service Guide and Workflow Chart
PhilEXIM shall develop a service guide or its functional equivalent which shall be regularly updated and made available to the transacting public. A workflow chart showing procedures or flow of documents shall likewise be posted in conspicuous places for the information and guidance of all concerned.
10.4 Public Consultations
PhilEXIM shall consult the public it serves for the purpose of gathering feedback and suggestions on the efficiency, effectiveness and economy of services. It shall establish mechanisms to ensure the conduct of public consultations.
10.5 Continuing Research
PhilEXIM shall continuously conduct research and experimentation on measures, and adopt innovative programs, which will provide motivation to its officials and employees in raising the level of observance of ethical standards.
10.6 Resident Ombudsman
PhilEXIM shall appoint or designate a resident Ombudsman, who shall act immediately on all requests for public assistance, the disposition of which he shall be held accountable.
10.7 Internal Dialogues
PhilEXIM officials shall make themselves available to their staff for consultations and dialogues.
- INCENTIVES AND REWARDS
11.1 Incentives and rewards shall be granted to PhilEXIM officials and employees who have demonstrated exemplary service and conduct on the basis of the norms of conduct laid down in Item 4 of this Code.
11.2 The grant of awards shall be governed by the merit and fitness principle.
11.3 General Criteria for Conferment of Awards
11.3.1. Years of service; 11.3.2. Quality and consistency of performance;
11.3.3. Obscurity of the position; 11.3.4. Level of salary; 11.3.5. Unique and exemplary quality of achievement; 11.3.6. Risk or temptation inherent in the work; and 11.3.7. Any similar circumstances or considerations in favor of the particular awardee.
11.4. Form of Incentives and Rewards
11.4.1. Bonuses; or
11.4.2. Citations; or
11.4.3. Local and foreign training or scholarship grants; or
11.4.4. Paid vacations; or
11.4.5. Official travels; or
11.5. Committee on Awards
The incentives and rewards system shall be administered by a Committee on Awards. The functions and responsibilities of the Committee are:
11.5.1 Conduct a periodic, continuing review of performance of PhilEXIM officials and employees in all departments/units of PhilEXIM;
11.5.2 Establish a system of annual incentives and rewards to the end that due recognition is given to officials and employees of outstanding merit on the basis of standards set forth in Item 11.3 above;
11.5.3 Determine the form of rewards to be granted; and
11.5.4 Formulate and adopt its own rules to govern the conduct of its activities.
11.6 PhilEXIM may institute an incentives and rewards program in addition, but not inconsistent with the above.
12.1 The acts and omissions of any PhilEXIM official or employee, declared unlawful or prohibited by this Code, shall constitute grounds for administrative disciplinary action, and without prejudice to criminal and civil liabilities under the law and regulations.
12.2 Consistent with the provisions of Republic Act No. 6713, any PhilEXIM official or employee committing a violation of this Code shall, after due notice and hearing, be subject to any of the following penalties depending on the gravity of the offense:
12.2.1 Fine of not exceeding the equivalent of six (6) months’ salary; or
12.2.2 Suspension not exceeding one (1) year; or
12.3. Pursuant to the provisions of Republic Act No. 6713, if the violation is punishable by a penalty heavier than the above under another law, the concerned PhilEXIM official or employee shall be prosecuted under the latter statute.
12.4. In accordance with the provisions of Republic Act No. 6713, violations of Items 6, 7 or 8 of this Code is punishable with imprisonment not exceeding five (5) years, or a fine not exceeding Five Thousand Pesos (P5,000), or both, and, in the discretion of the court of competent jurisdiction, disqualification to hold public office.
12.5. Administrative proceedings for violation of this Code shall be in accordance with the Civil Service Law and applicable Civil Service Rules and Regulations.
- PROVISION FOR MORE STRINGENT STANDARDS
Nothing in this Code shall be construed to derogate from any law, or any regulation prescribed by proper authorities, which provides for more stringent standards for government officials and employees.