Philippine National

Bank (PNB)
A CASE STUDY ABOUT PNB’S INTERNAL CONTROL

GROUP 4
JOHN FREE VALLINAS | JEANETTE MACALDO
FRITZIE LABIAL CHRISTINE JANE
ECO
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

I. FACTS OF THE CASE

PNB (Philippine National Bank) has a long history since its establishment in 1916. PNB
was incorporated and registered with the Securities and Exchange Commission on July 22, 1916.
It is one of the oldest and largest banks in the Philippines, with over a century of existence. PNB
offers a wide range of financial services to individuals, businesses, and institutions. Its services
include personal banking, corporate banking, international banking, remittance services, loans,
credit cards, investment products, treasury services, and more. It caters to various customer
segments, including retail customers, corporate clients, overseas Filipino workers (OFWs), and
international customers.

The products and services that are offered by the PNB are the following:

 Checking accounts: day-to-day cash deposits and withdrawals.

 Savings accounts: open/close and other savings accounts services.
 Debit & Credit cards: open debit, credit card & other credit products and
offerings.
 Insurance: cover across medical, travel, car, home, and personal safety insurance.
 Wealth management: provide tailored investment and wealth planning services
for individuals, families, institutions & other entities.

The Bank’s operations are managed through an established organizational structure with
adequate policies and procedures embodied in manuals approved by management and board
committees and the Board. These manuals are subjected to periodic review and update to be
consistent with the new laws, regulations and generally conform to international best practices.
The Bank has adopted the Revised Corporate Governance Manual aligned with recently issued
regulatory guidelines and new reportorial disclosures for entities within the group structure and
significant transactions among related parties with particular focus on the Related Party
Transaction (RPT) Policy. This is in accordance with the SEC and BSP regulations. PNB is one
of the largest banks in the Philippines in terms of assets and market presence. PNB had a
significant branch network, with numerous branches across the Philippines and representative
offices and subsidiaries overseas. It serves a broad customer base, including retail customers,
small and medium-sized enterprises (SMEs), large corporations, and multinational companies.
PNB operates under the governance framework provided by the Bangko Sentral ng Pilipinas
(BSP), the central bank of the Philippines, and other regulatory bodies. The bank is governed by
a Board of Directors composed of individuals with expertise in various fields, overseeing the
strategic direction and governance of PNB. The President and CEO, along with the Senior
Management Team, is responsible for the day-to-day management and operations of the bank.

PNB adheres to regulatory and legal requirements, risk management practices, and
corporate governance principles.
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

I.1. Other Background of the Entity

Corporate Objective

PNB aims to continually provide the best customer experience to generations of Filipinos
here and broad.

Tagline

“You first”

Mission Statement

We are a leading, dynamic Filipino financial services financial services group with a
global presence committed to delivering a whole range of quality products and services that will
create value and enrich the lives of our customers, employees, shareholders and the communities
we serve.

Vision 2010 and Beyond

To be the most admired financial services organization in the country in terms of:

 Financial performance- rank #1 or #2 in its business in terms of return on equity.

 Innovativeness- in products, services, distribution and the use of cutting-edge technology.
 Customer perception
 The preferred financial services provider
 The customer- centered organization with a passion for service excellence
 Social responsibility- the employer of choice, a good corporate citizen and partner in
nation building.
 Long-term vision- developing competitive advantage on a sustained basis by anticipating
changes in customer’s preferences and in the manner of doing business.
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

Core Values

Our Shared Values bind everyone in PNB together, providing the basis for trusting one
another and help enable the Bank to achieve its mission and vision.

Mapaglingkod (Service Orientation)

We are committed to deliver the best possible service to our customer, proactively
responding to their needs and exceeding expectations as manifestation of the value and respect
that the Bank holds for every single one of them.

Mapagkakatiwalaan (Trustworthiness)
We hold sacred the consistent adherence to a strict moral and ethical code manifested
through honesty, professionalism, fairness, prudence and respect for the law.

Mapang-akma (Adaptive to Change)

We nurture within each one of us a positive attitude towards change and innovation,
promoting flexibility and celebrating creativity as drivers of our quest for continuous
improvement and operational excellence.

Mapagkapwa (Team Orientation)

We are committed to work together as a family united in pursuit of common goals and
aspirations, valuing meritocracy in promoting the common good.

Mapagmalasakit (Commitment)
As stewards not only of the Bank’s business, but of its proud name and enduring heritage,
we manifest genuine concern and affection for the Bank, its business, and its core constituents.

Mapagmalaki (Pride)
We take pride in working with the Bank, of being a Philnabanker. In whatever tasks we
undertake. This will be reflected in all our actions, in the passion of how we get things done.
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

I.2 Organizational Structure and Design

ORGANIZATIONAL STRUCTURE
(PNB MAASIN BRANCH)
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

II. CASE PROBLEM AND ANALYSIS

Problem 1: Weak Time and Attendance Controls

Analysis: The company do not have an existing timesheet module as for tracking employee’s
operations and activity. Based on our observation, the company has established weak time and
attendance control that only serve as a basis for every employee payroll calculation and payroll
entry. They lack the accuracy and real-time record hours of the performance of the employees
since they have no tracking and monitoring system. This can give a significant role in the arising
errors in paying the employees.

III. ALTERNATIVES FOR EACH PROBLEM

Problem 1: Weak Time and Attendance Controls

Alternative 1: Provide employee timesheet management that will serve as monitoring, tracking,
and recording employees time and attendance.

Alternative 2: Implement biometric devices, to have an accurate and real-time track of employee.

Alternative 3: Implement task-based tracking, where employees record their achieved task of the
day.

Alternative 4: Reorganize and assess the department specifically for the Human Resources
Management and have a benchmark to other similar company.
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

IV. CONCLUSION AND RECOMMENDATION

Recommendation on Weak Time and Attendance Controls

We recommend all the alternatives listed out for the weak time and attendance control but
only alternative 2 is the best suited for it. Since PNB is a big entity, implementing biometric
devices will help them to mitigate this weakness. The implementation of biometric devices, such
as fingerprint, facial recognition, or ID scanners, offer several benefits in terms of employee
tracking and attendance management. By deploying these devices, they can achieve; first,
accuracy and reliability wherein biometric devices eliminate the possibility of time theft or
buddy punching, ensuring that the recorded attendance data is authentic and trustworthy; second,
real-time tracking wherein biometric devices enables the bank to have an up-to-date and accurate
overview of employee presence, enabling better decision-making and resource allocation; third,
efficiency and time saving wherein biometric devices streamline the attendance tracking process,
eliminating the need for manual timekeeping and reducing administrative burdens; fourth,
security and data privacy wherein biometric data, when properly managed, offers enhanced
security compared to traditional identification methods like ID cards or passwords and it is
unique to each individual, making it difficult to forge or manipulate; lastly, integration with
payroll systems wherein biometric devices can be seamlessly integrated with existing payroll
systems, enabling automatic attendance data synchronization and this eliminates the need for
manual data transfer and reduces errors, ensuring accurate and timely salary processing.

We believe that the implementation of biometric devices will significantly enhance

employee tracking, attendance accuracy, and workforce management within PNB. It
demonstrates the bank's commitment to leveraging technology for improved operational
efficiency and ensures accurate and real-time data for decision-making purposes.
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

V. COMMENTS AND ENCOURAGEMENTS

Upon entering the establishment/bank, the employees were friendly and created a
welcoming atmosphere, avoiding any sense of intimidation considering the fact that we are just
students and needed their participation in order to complete our task in this subject. The office
environment is characterized by a comfortable and secure atmosphere, designed to be welcoming
and accommodating to clients. They do have a good ambiance; the employees are good to their
customers as well as entertain them based on how they should be treated.

Their strong focus on good governance serves as a guiding light in the corporate world.
By ensuring transparency, accountability, and fairness in all of their operations, PNB has
established a solid foundation of trust and credibility among their stakeholders. Their
commitment to maintaining the highest ethical standards fosters an environment that values
integrity, honesty, and responsible decision-making, further enhancing the reputation of the
bank.

The PNB's emphasis on rigorous risk management practices is also commendable. As

financial institutions navigate an increasingly complex landscape, their meticulous approach to
identifying, assessing, and mitigating risks is a testament to their foresight and commitment to
safeguarding the interests of their customers and shareholders. By adhering to sound risk
management principles, PNB continues to establish itself as a resilient and stable institution.

Furthermore, PNB's implementation of robust internal controls deserves special

recognition. Their unwavering focus on establishing effective processes, checks, and balances
ensures that risks are managed efficiently, compliance is upheld, and the integrity of financial
data is preserved. This commitment not only enhances the efficiency of their operations but also
safeguards the interests of stakeholders and helps maintain the trust of their customers.

In a time where corporate responsibility and ethical practices are paramount, the
Philippine National Bank has consistently proven to be a shining example. Their unwavering
dedication to good governance, ethical business practices, strong risk management, and robust
internal controls sets a benchmark for other organizations to aspire to. Their commitment to
these fundamental values not only protects their reputation but also contributes significantly to
the overall growth and development of the banking industry in the Philippines.
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte

VI. CASE STUDY ATTACHMENTS

Documentation:
 THE COLLEGE OF MAASIN
“Nisi Dominus Frustra”
Tunga-Tunga, Maasin City, So. Leyte