This document discusses the concept of ethical banking. It begins by defining business ethics more broadly and noting that banks are now facing pressure to consider ethics and sustainability in their practices beyond just financial concerns. It then discusses how banks can promote sustainable development through their lending policies and products. Banks can support environmentally and socially responsible companies while also improving their own internal environmental performance. The document contrasts internal ethics, which focus on employee and customer well-being, with external ethics, which involve applying social and environmental screens to lending practices. Ethical banks aim to consider both internal and external ethics in their operations.

1. LANDBANK IN
ITS FINEST
A Term Paper on
Ethics in Landbank,
a Government Bank
Submitted by: MARISSA D. TAN
Student / Discussant, MDM 212
PANGASINAN STATE UNIVERSITY – GRADUATE SCHOOL
Urdaneta City, Pangasinan
Submitted to: PROFESSOR MELITON G. DASSUN, D.P.A.
PANGASINAN STATE UNIVERSITY – GRADUATE SCHOOL
Urdaneta City, Pangasinan
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2. TABLE OF CONTENTS
Introduction ........................................................................... 3
Chapter I. Business Ethics .............................................. 5
Chapter II. Ethical Banking............................................... 8
Chapter III. Landbank History – Icons of Ethics ............... 15
Chapter IV. Landbank‘s Mission, Vision and Core Values
As Ethical Goal ............................................... 22
Chapter V. Legal Framework of LBP Code of Conduct .. 26
Chapter VI. Conclusion ...................................................... 34
Chapter VII. Acknowledgement .......................................... 36
Chapter VIII. References ...................................................... 38
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3. INTRODUCTION
When I started writing this term paper, I do not know where to start or even what to write.
The world is full of topics to choose from and ethical issues to discuss of as well. It did took me a
long time to search what topic should Idiscuss or develop for our Ethics subject. My professor
suggested a topic on Landbank of the Philippines, the institution I work with. The next question
that went into my mind is what aspect should I discuss in this paper about Landbank? Landbank
has a wide array of interesting matters and issues to discuss relative to our subject matter. Finally,
it dawned upon me that if there is a bank in the whole country that could display its ethical
standards transparently, it would be no other than Landbank of the Philippines because of its
projects, products and governance that exudes the true meaning of social responsibility and ethics
in the service of the Filipino people and the Republic of the Philippines.
Under a democratic country such as the Philippines, the people‘s fundamental faith in the
integrity of political institutions is what holds the system together even under themost difficult
times. The present situation in the Philippines is a test of this principle.Whether or not the test is
passed with success is a matter yet to be seen. However, atthis stage, what could be gainfully earned
from present experience is the knowledgethat people‘s trust seems to lie on the existence of ethics
and accountabilitymechanisms and infrastructure. As shown and proven with quite a measure
ofsuccess by many studies, ethics and accountability are keys not only to effectivegovernment but
also to effective governance. Besides, it seems everyday, there are new stories about businesses
and organizations being accused or investigated for ethical violations. The continuous reports of
corporate houses falling under the pressure of common unethical practices such as bribery from
contractors, red tape activities, misappropriation of funds, omission of important public data for
self preservation and falsification of public documents has drawn the attention of business leaders,
managers, shareholders and business school students from all over the globe and not only in the
Philippines. World over, businessmen, who once considered ethics and morality as hindrances in
successfully running their organization, are now forced to look towards ethics and morals as
guiding forces. These events around the world have heightened everyone‘s awareness of ethical
business practices.
The following discussions deal withsome of the initiativesto promote ethics in the
Philippines especially in a government bank like Landbank.
Moreover, Landbank is also a business. Business is a financial category that often makes
us wonder whether ethics exist because its primary concern is to make profit. Surprisingly, there
is what we call Business Ethics emphasizing the fact that a business can also be moral while making
billions of profit in its categorical industry. Per observation, companies and business people who
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4. wish to thrive long-term must adopt sound ethical decision-making practices. Companies and
people who behave in a socially responsible manner are much more likely to enjoy ultimate
success than those whose actions are motivated solely by profits. Knowing the difference between
right and wrong and choosing what is right is the foundation for ethical decision making. In many
cases, doing the right thing often leads to the greatest financial, social and personal rewards in the
long run.
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5. Chapter I
BUSINESS ETHICS
According to Christina Gruble, Business Ethics is often defined based on a company‘s
goals, priorities, and how books and resources would define it. I need to define Business Ethics
because Landbank of the Philippines is a banking business that makes profit to help the
Philippine government and its projects.Actually, Landbank is one of the top grosser in income
contribution to our government yet, it still maintains its high ethical standards in the service of the
Filipino people. How our organization does it may be enlightened as the discussion progresses.
The most widely accepted definition for business ethics says that it is a set of corporate
values and codes of principles, which may be written or unwritten, by which a company evaluates
its actions and business-related decisions. As the definition goes, ethics business and the criteria
for what is good and what is bad is shaped by a company‘s best practices and long-standing culture.
In simplest terms, business ethics refers to the propensity to differentiate right from wrong and the
resiliency to choose to do what‘s right in terms of actions and decisions. It applies to the
employees both rank and file and managers as well as the company as a whole.
There are two ways that companies can approach and implement the concept business
ethics. These two approaches are based on two schools of thought, each providing a different
definition for Business Ethics.
The first school of thought is shareholder-focused. It maintains that ethical business
decisions can be made when individuals within the organization and the company as a whole
always keep the best interest of the owners in mind. For those who see business ethics from the
shareholders‘ perspective, actions and decisions should be geared towards generating more profit.
On the other hand, the stakeholder-focused approach puts premium on corporate social
responsibility. Under this concept, ethical companies are those that act and decide with the interest
of all stakeholders not just the owners in mind. Business ethics here means striking a balance to
service all groups that have an impact on, or are impacted by the company‘s decisions and actions.
These stakeholder groups can include the employees, the supply chain, the end consumers,
relevant government and non-government organizations, and the community where the company
operates, among others. Given this, the stakeholder perspective emphasizes the need to make
business decisions that will work well for all the stakeholder groups. This is the approach being
implemented by the Landbank of the Philippines as embodied in its vision and mission as an
institution.
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6. According to Ismael D. Tabije, Business Ethics is a form of applied ethics that examines
just rules and principles within a commercial context; the various moral or ethical problems that
can arise in a business setting; and any special duties or obligations that apply to persons who are
engaged in commerce. Generally speaking, business ethics is a normative discipline, whereby
particular ethical standards are advocated and then applied.
It makes specific judgments about what is right or wrong, which is to say, it makes claims
about what ought to be done or what ought not to be done. While there are some exceptions,
business ethicists are usually less concerned with the foundations of ethics (meta-ethics), or with
justifying the most basic ethical principles, and are more concerned with practical problems and
applications, and any specific duties that might apply to business relationships.
Business ethics can be examined from various perspectives, including the perspective of
the employee, the commercial enterprise, and society as a whole. Very often, situations arise in
which there is conflict between one and more of the parties, such that serving the interest of one
party is a detriment to the other(s). For example, a particular outcome might be good for the
employee, whereas, it would be bad for the company, society, or vice versa. Some ethicists see the
principal role of ethics as the harmonization and reconciliation of conflicting interests.
The definition for business ethics varies in every company. The challenge in defining the
term lies in the fact that there is no clear definition of right and wrong. It is true that we have laws
to punish offenses that are necessarily wrong. Unfortunately, these laws do not define and punish
what is morally right and what is morally wrong. As a result, it is left to individuals and corporate
persons to make their own classifications, and act and decide by these classifications.
Companies arrive at these right-wrong classifications based on many different factors.
These factors include: the culture within the company, the presence of a formal professional code
of business ethics, the internal system of rewards and recognition, recruitment and human
resources practices, the values system, the way management treats its employees, and the flow of
the decision-making process.
In terms of business ethics, the trend now rapidly favors companies that operate from a
stakeholder perspective. The theory is that communicating a socially responsible image compels
end-consumers to support the company and its product because of the moral benefit that it gives
them. To be sustainable, it is thus important for decision makers that set the standards for business
ethics to expand their horizons beyond the quest for profit.
In my opinion, Business Ethics in whatever business category provided must be asserted
from time to time to check and balance profit with social responsibility and morality. I am also
beginning to understand why Landbank in its best effort to promote what is morally good in the
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7. banking industry, had to continuously advertise, conduct seminars and disseminate information
on strict adherence to Landbank‘s Code of Conduct at all times. This is because we need to be
reminded that our service has to comply with the highest ethical standards our institution had
bestowed upon us as a company mission, in order to attain its goals the right way. This should
be seen in our behavior in public, the way we do public service and how we obey the bank rules
and regulations without strict supervision.
According to Leanne Hoagland-Smith, asserting values or ethics and beliefs to the
behaviors is critical because this action helps to ensure consistency and transparency.
Inconsistency, however is probably the greatest challenge any individual or business faces. Possibly
the greatest obstacle to asserting values to behaviors resides within each individual. No one wants
to point the finger at someone else. Yet, if individuals do not assert the agreed positive core
business values and ethics then the results of the past will continue to be manifested. What this
also suggests is each individual may need to become a better self-leader who is more self-aware,
more self-regulated and more motivated. For when we can assert the values to the behaviors while
our individual behaviors are still emotionally aware of the feelings of others, then those positive
core values will remain strong throughout the organization and within each individual.
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8. Chapter II
ETHICAL BANKING
The assertions and definitions in the previous chapter tackle a general point of view on
ethics in the business world but Landbank is a bank. What makes it different with other
businesses? What kind of ethical standards a bank must follow? How does it form its own Code
of Conduct? These are the questions that came into my mind as I continuously dissect the topic I
have chosen to develop. The essence of Ethical Banking may be the answer to the above
questions.
Historically banks have been viewed solely as financial institutions, which should concern
themselves with all things financial. Morality has not entered the equation. This public view has
allowed banks significant leeway with concern to ethical standards. This is because they have not
been associated with the actions taken by the businesses they lend to. Banks have also stated that a
reason for not mounting the new challenges that sustainability presents is that such inspection
would require interference in the activities of clients. (Jeucken 2002) However, with changing
social demands, and as more is known about the effects that banks can have through their lending
policies, banks have begun to feel pressure from the general public, NGOs, governments, and the
like to go beyond conventional business management. For example in the mid 1990s the
Cooperative Bank asked 6,000 customers what their thoughts were on ethical banking; 84%
responded that it was a good idea. (Harvey 1995) In fact the cooperative bank was formed in
response to the growing consumer base looking for ethically oriented banks. There is a potential
for banks to create environmentally and socially conscious business practices.
In general all banks play an intermediary role in the economy; because of this the
possibility for banks to contribute to sustainable development is potentially profound. (Jeucken
2002) Banks have extensive and efficient credit approval systems, which gives them a comparative
advantage in knowledge (regarding sector-specific information, legislation and market
developments). {Jeucken&Bouma 1999} Banks are well seasoned and well equipped to weigh
risks and attach a price to these risks; because of this banks can fulfill an important role in reducing
the information asymmetry between market parties, for example between the business and
consumers. This is important not just to consumers but also to depositors. When depositors allow
a bank to invest for them they are able to assume that the bank will know which investments will
maximize their returns. Conventional banks are legally bound to maximize return for their clients.
If clients are concerned with more than simple return (i.e. the costs of the return on other areas
such as society and the environment) then they may need to turn to an ethical bank to find ways in
which they can garner return while keeping to their own moral concerns.
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9. Through their intermediary role, banks may be able to support progress toward
sustainability by society as a whole—for example, by adopting a ‗carrot-and-stick‘ approach, where
environmental and social front-runners would pay less interest than the market price for borrowing
capital, while environmental laggards would pay a much higher interest rate. Banks can also
develop more sustainable products, such as environmental, social, or ethical investment funds. In
addition, there is great scope for banks to improve their internal environmental performance.
(Jeucken&Bouma 1999) In creating environmental and social screens, banks can promote
socially/environmentally-geared companies and penalize those who do not conform to these
standards. However it is important that these different possibilities (i.e. social/environmental
screens, ethical products, and internal environmental practices) be used as a package. If not, there
is a danger that banks could simply do the things that make them look the most ethical (i.e.
advertise their recycling program) while not changing other areas that would have a larger impact.
If the changes are solely driven by customers, the bank will be pressured to offer preferential
treatment to what depositors deem as desirable, but will have limited ability to punish undesirable
action. Governmental regulation, initiated by an informed and involved public would be an
effective way to ensure that all banks follow socially accepted morals and ethics.
Ethical banks excel in community involvement, as do other financial institutions such as
credit unions. Community involvement is not limited to ethical banks as conventional banks also
partake in such actions. The following are a few examples of community involvement done by
ethical banks, credit unions, and conventional banks:
Affordable housing projects (LandbankProvident Fund Housing Loan for employees and
Easy Home Loan for clients and depositors)
Many banks/credit unions try to increase financial literacy in the community
Give local scholarships & sponsorships.
Financially support community events (Municipal and church fiestas)
Environment is a key focus amongst ethical banks (in this field specially called sustainability
or green banks) as well as amongst many conventional banks that wish to appear more ethically
oriented or that see switching to more environmental practices to be to their advantage. Some view
this move as green washing. In general bankers "consider themselves to be in a relatively
environmentally friendly industry (in terms of emissions and pollution). However, given their
potential exposure to risk, they have been surprisingly slow to examine the environmental
performance of their clients. A stated reason for this is that such an examination would ‗require
interference‘ with a client's activities. (Jeucken 2002) While the desire to not meddle in the
business of the client is valid, one could also note that banks are required to interfere in the
business of their clients regularly to ensure that the clients‘ business plan is viable before issuing
them a loan. The kind of analysis that all banks partake in is termed a single bottom line analysis
(this analysis only considers financial performance). It is arguable whether or not performing a
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10. triple bottom line analysis (an analysis that takes into account environmental, social, and financial
performance) would be any more intrusive.
Internal vs. external banking ethics
Conventional banks deal with mostly internal ethics, ethical banks add to internal
concerns by applying external ethics.
Internal ethics are concerned with the well being of employees, employee and customer
satisfaction, benefits, wages, unionization, fair sex and race representation, and the banks
environmental standing. Environmentally the potential combined effect of banks switching to more
environmentally friendly practices (i.e. less paper use, less electrical use, solar power, energy
efficient light bulbs, more conscientious employee travel policies with concern to commuting and
air travel) is huge. However when compared with many other sectors of the economy banks do not
incur the same burden of energy, water and paper use. (.Jeucken&Bouma 1999) Many times
such energy efficient changes are not based on moral concern but on cost efficiency.
External ethics are concerned with the wider ramifications of banks actions. External ethics
looks at the impacts that their business practices, such as who they loan to or invest in, will have on
society and the environment. In applying external ethics, one looks at how the products of banks
can be used unethically, for example how borrowers use the money that is lent out by the bank.
In general banks are reluctant to broaden the scope of their external ethics policies because
it would require that the bank interfere with the activities of its clients and/or screen its potential
clients. External ethics can be seen as much more important than internal ethics because the
potential that the bank has internally to cause huge societal or environmental damage is minimal
whereas many companies that banks fund have great potential to cause widespread damage.
Internal ethics, such as switching to energy efficient light bulbs, are relatively insignificant if the
bank is, for example, simultaneously funding the unsustainable harvest of natural resources.
Ethical banking is a relatively new sector; along with this fact come problems. These
problems fall under two categories; the first concerns depositors, and the second concerns ethical
banks.
In the first category lies the problem of really knowing how ethical banks measure or
qualify their ethical policies. This is insufficient. Even when given the opportunity to view an
accountability report it is difficult to truly understand what their screening processes are. "The
Ethical Policy requires that all business accounts are screened at the time of account opening by
the staff person dealing with the member. Social and environmental risks of larger business
banking loans (non-credit-scored loans) are assessed at the time of the loan application, guided by
the Ethical Policy and Lending Policies."
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11. This statement does not give the reader the information/he needs to understand the criteria
used in assessing clients. Another issue in this category is that of codes. Many ethical banks as well
as conventional banks voluntarily join larger bodies that put forth certain regulations that,
according to the rules set by the body, should be followed by members. Such outside bodies could
act as overarching institutions that could guarantee a certain level of conformance with certain
regulations. Civil Service is a sample of this larger bodies of institution. Depositors who use ethical
banks do not have this assurance because there is no external regulatory body that sets minimum
acceptable legal standards.
In the second category ethical banks face obstacles such as losing business and consumer
support to conventional banks, and having to regulate above and beyond the present international
legal systems.
According to Cowton, C. J., and P. Thompson, "banks that had signed the United Nations
Environment Programme (UNEP) Statement, a voluntary industry code that promulgated
environmental stewardship, transparency, and sustainable development, did not act significantly
different than the non-signatories. They concluded that, for codes to be more effective; regulators,
monitors, and methods of enforcement need to be in place. (Cowton&Tompson 2000) This
problem is similar to the problems faced by the fair trade movement. Both the fair trade
movement and ethical banks rely on people to pay extra for known ethical goods. There is a limit
to how much more people will pay for that guarantee, after that point further initiatives will
undercut the banks income and therefore are likely to not be followed.
Losing business to banks that do not screen so strictly is a problem for ethical banks. Many
times ethical banks must work with much lower budgets because of this. Ethical banks exclusion of
unethical borrowers often results in the borrowers going to other banks, this brings up the
importance of industry wide regulations. One way of raising the industry wide regulations would be
for citizens to apply pressure on banks. Without this rise it is difficult to impede unethical
businesses from finding a bank to finance their projects. A rise in regulations that deal with moral
topics is not out of the question. The current industry wide codes, for example, prohibit the
financing of illegal drug production. This reflects the prominent societal morals against such drugs.
Credit and court investigations are employed by Landbank to keep up with these standards as an
ethical bank especially in marketing bank products and services.
Ethical banks cannot solely rely upon the legal system to determine whether or not a
potential client has acted unethically or whether or not their future plans are unethical. This is
because of the wide range of laws throughout the world. While a business may be lawful in the
international setting, this does not mean that the laws were up to the moral standards in which the
bank originates. For example, extensive pollution and labor laws that would not be considered
lawful in many developed countries are allowed in many lesser-developed countries.
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12. Judging what is ethical
Claiming to be an "ethical" bank requires an objective way to determine what is ethical.
Popular ethical theories that could be used include those of Mill, Kant and Aristotle.
John Stuart Mill
The premise of John Stuart Mill's utilitarian ethical theory is that an action is of moral
importance if it contributes to the overall happiness of all people. Therefore, in Mill's perspective a
bank would be moral if it tended "to promote happiness".(p. 10)Mill 1957 If the conduct of the
bank in question acts in way that produces the greatest amount of happiness for the greatest
amount of people then it will be acting morally according to Mill. Because the banking sector is so
large, complex and far-reaching in its effects it is difficult to judge the happiness of everyone
affected by the conduct of banks in general or by certain banks in particular. However it is much
easier to see how alternative conduct could produce and/or promote much greater happiness. For
example through the act of generous philanthropy in forms such as giving back to communities,
employees, members, environmental/development groups, etc. could increase happiness.
Donation to DEPED of P4,000,000.00 is Landbank‘s way of sharing its blessings to create
happiness. Similarly lending to businesses that treat employees fairly and are concerned with such
public goods as the environment would also be considered ethical according to Mill. Given that
things such as global warming, air pollution, water contamination, and soil pollution negatively
affect large groups of the population, if not all of the population (in the case of global warming),
banks that chose to partake in the above examples could be viewed as contributing to the overall
happiness of all people and would hence have moral value. In line with this Landbank promoted
its Linis Month and Environment friendly surroundings for all units is another small way of
showing ethics because it contributes to the health and well being of our depositors and
employees.
Immanuel Kant
According to Immanuel Kant's Categorical Imperative, morality lies in actions not in
outcomes. With this knowledge one could propose that the act of lending money is not in and of
itself immoral and according to Kant's perspective banks should not be judged as moral or
immoral based on the outcomes of their lending. However the second formulation of Kant's
categorical imperative states: "act in such a way that you always treat humanity, whether in your own
person or in the person of any other, never simply as a means, but always at the same time as an
end" (pg. 66–67)Kant 1956. Based on this formula one could argue that unethical lending on the
part of banks either commercially (to corporations that will likely incur losses because they act in a
fashion that will soon be unlawful, e.g. pollute excessively, use child labour, etc.) or to individuals
(who, for example, would be financially unable to repay the loan, ex. the American mortgage crisis
today) is treating its clients as merely means for financial gain rather than as ends in themselves.
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13. This interpretation portrays banks that lend without screening their clients to see if they would be
supporting practices or purchases that would ultimately lead to the clients‘ failure as unethical.
Aristotle
For Aristotle, lawfulness is important in the measurement of morality, as is equality and
justice. Whether an action is or is not in accordance with the law is an important measurement of
morality for Aristotle. Many banks do business in accordance with the law in all practices. They
may also specifically seek to do business with law-abiding clients. Nevertheless this can be
problematic, as laws vary internationally. This means that a bank could be viewed as ethical even
while funding clients who lawfully conduct business in harmful manners. However this
measurement is challenged by Aristotle's statement: "what is just in transactions is something
equitable, and what is unjust is something inequitable" (p. 84)Aristotle 2002. This means that a
bank needs to take into account the unjust/inequitable behavior of its borrowers to qualify as an
ethical bank. For example, lending to a law-abiding corporation that does not pay its employees a
sufficient living wage would be immoral.
Bank regulations and the free market
The argument against regulating banks is that the regulations would violate the proper
functioning of the free market economy. Severyn T. Bruyn disputes this argument in his article
"The Moral Economy".Bryun 1999 In fact, morals were supposed to be a natural part of the
workings of the market economy. He believed that economic transactions should be the result of
mutual agreement and should involve morality and friendship. He stated that selfishness could
obstruct the market economy from running morally. If interpersonal relationships did not play a
part, then the interdependency experienced by individuals could vanish and unfair play based on
greed and mistrust would exist. Bruyn discusses today's society as one that has lost its basic morals
in the market. He states that there is a need for a reigniting of civil society. (Bryun 1999)
Originally, civil society was assumed to be naturally able to regulate the morality of the market, but
with the great distances between individuals involved in transactions as time has passed,
governments became the prime regulators of morality in economic exchanges. In recent history
governments have been pressured to stop interfering in the economy. This has allowed bodies
such as corporations, which operate immorally or at best amorally, to create extremely damaging
outcomes without legal or societal penalty. Bruyn promotes the resurrection of civil society, calling
society to demand fair practices and to regulate the morality of the economy. One way people
could influence civil society would be to act as economic regulators by choosing to do business
with banks that do not finance corporations such as the aforementioned.[citation needed]
Rudolf Steiner suggested that capitalism has the task of funding economic initiatives; capital
should be directed into directions productive for society. He proposed that rather than prices
being set through either the total control of government regulation, or the total lack of control of a
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14. free market, each industry could have self-regulating associations of producers, wholesale and retail
businesses, and consumers. These associations would determine prices fair to all three groups.
The state would not interfere with purely economic decisions but would be responsible for
protecting human rights (this could include a minimum wage and safety in the workplace) and
equality of its citizens' rights. Hence, inLandbank a review in its human resources management
are conducted annually in the course of history to gauge its fair practices in dealing with its
employees and measuring each unit‘s way of promoting Landbank‘s ethical standards in handling
the banking business.How it came that the Landbank‘s Code of Conduct was formed for
management and employees, shall also be discussed as a review of the past shall be conducted in
the next chapter.
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15. Chapter III
LANDBANK HISTORY – ICONS OF ETHICS
The story of the Landbank of the Philippines is the story of the Filipino farmer and
Philippine countryside development.
The journey began when President DiosdadoMacapagal provided the vision and leadership
for the passage of Republic Act No. 3844 on August 8, 1963, otherwise known as the Agricultural
Land Reform Code of the Philippines with an initial authorized capitalization of P1.5 Billion.
Under the intent of the law, hailed by President Macapagal as an act to emancipate the Filipino
farmer, Landbank was ―to provide timely and adequate financial support to all phases of Agraraian
Reform‖. Its initial function was to finance the acquisition and distribution of agricultural estates
for division and resale of small landholders as well as the purchase of the landholdings by the
agricultural lessees. Landbank came into being with great aspirations, as it gave meaning and
direction to the lives of its intended clientele, the Filipino farmer, while offering investment
alternatives to former landholders in their quest for more progressive role in the country‘s
economic development.
On July 21, 1973, under PD No. 251, LBP was granted universal or expanded commercial
banking powers and established LANDBANK as thefirst universal bank in the country with a
social mandate to spur countryside development. Its authorized capitalization was increased to P3
Billion. With the strengthening of Landbank, President Marcos reconstituted the Board of
Directors. He appointed Cesar EA Virata, then Secretary of Finance and BasilioEstanislao as
President.
Mr. Cesar EA Virata was recognized by his peers as principled man. He was the epitome
of an honest and uncompromising technocrat. He was a soft-spoken gentlemen whose humility
stood out in the corridors of powers that he started walking at an early age. It was to the sharp-
minded and conscientious Virata that President Marcos gave the privilege of crafting the
reorganization plan of Landbank.
Mr. Basilio M. Estanislao, on the other hand, was a man of humble origins who rose
through the ranks at the Central Bank of the Philippines. Equally forthright as a Central Bank
official ever mindful of his role as a ―bank regulator‖, although relaxed and amiable in demeanor.
Mr. Estanislao was a prudent, honest, hands-on President. He had a passion for the farmers that
could not be seen in anyone else during his time. As the Bank‘s manpower grew, Estanislao
endeavored to create a corporate culture appropriate to the Bank and its mission. For Him,
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16. money was not everything. He wanted the staff to realize that money won‘t buy them happiness.
What will make the staff happy is achievement. He was successful in this part because when he
declared a moratorium on promotions and salary increases, the staff did not complain.
On July 8, 1982, Executive Order No. 816 was issued abolishing the Agricultural Credit
Administration (ACA) and its functions (loans to small farmers) were transferred to LBP.
When President Corazon Aquino appointed Deogracias ―Sonny‖ Vistan as President and
CEO of Landbank seven months after the People Power Revolution of 1986, the 42 – year old
banker brought with him his youth, vigor and his experience from one of the world‘s best banking
institutions. These attributes turned out to be assets in an environment that required progressive
thinking and energetic action, along with strategic approaches essential to the growth of Landbank.
Philippines then, was reeling from an economic crisis, partly brought about by recent political
turmoil, with the international economic situation of rising oil prices aggravating the local problem.
In spite of the country‘s situation, Landbank was able to maintain a very clean and healthy financial
condition. To Mr. Vistan, Landbank was not an abused bank. Compared with other government
financial institutions, Landbank was outstanding and unblemished. It even scored high in
credibility in the international banking sector, thus, uplifting ethical banking standards in the
foreign scene.
On June 10, 1988, Congress passed Republic Act No. 6657 which instituted the
Conmprehensive Agrarian Reform Program with LBP as its financial intermediary. It was at this
point when the Garchitorena Land Scam that involved another agrarian government institution
took place. Having seen the loophole in the valuation of agricultural lands, the President of the
Philippines issued Executive Order 405 which transferred the primary responsibility of
determining land valuation and compensation for all lands covered by CARP to Landbank of the
Philippines. It was then that LBP President Vistan created the Land Valuation and Landowners
Compensation Office nationwide.
When President Fidel V. Ramos appointed Mr. Jesli A. Lapus at age 42 as President of the
theLandbank of the Philippines, Lapus had been away from the corporate scene for a few years.
Serving the government would not be a new experience since he was the Undersecretary of the
Department of Agrarian Reform during the administration of President Corazon C. Aquino. He
was known to be the ―Management Whiz Kid in the ASEAN,‖ as he was named by the
international magazine, Asian Finance.
At the outset, LBP President Jesli A. Lapus realized that Landbank was one place where
you could not put a purely social-minded person. The bank will collapse if this happens.
Likewise, if a purely profit-oriented manager shall be placed, the bank will lose sight of its primary
mandate which is to do Agrarian Reform-based development in the countryside. He dreamed of
making Landbank accessible to both the farmers and the private sector like a one-stop shop so he
~ 16 ~

17. created the Unified Systems Project units where the bank was able to offer both agrarian and
commercial banking services under one roof in all 77 provinces.
LBP President Jesli A. Lapus further looked into the welfare of the officers and staff of the
bank who, for years, had to contend with an uncompetitive salary. He tried to convinced the
congressmen by making his point that Landbank spends P200,000.00 per person in his annual
training, only to lose them because he could not raise their salary considering the fact that
Landbank is not asking from the budget of the national coffers. The year 1995 saw LBP
undergoing major changes with the passage of RA 7907 or Amended LBP Charter on February
23, 1995. Its authorized capital stock was increased from P3 Billion to P9 Billion. The increase in
salary gave Mr. Lapus the opportunity to address the human component of management, his
trademark approach to solving corporate crises and increasing productivity. At the same time, the
Charter amendment allowed him the flexibility to accomplish structural integrity, which to him,
was imperative to the growth of the Bank. When Mr. Lapus joined Landbank in 1992, he
transformed it into an institution in which he would feel at home through agrarian projects,
cooperativism and salary boosting. He dreamt big and all those big dreams came true for
Landbank before he left.
Mr. Florido P. Casuela then took his place. Even as a young man, he had always wanted
to help others, especially those who needed a better deal in life. If his predecessors were insistent
on the practice of professionalism, LBP President Casuela raised the bar when it came to
punctuality. He reported for work at a time security guards were leaving and arriving for a change
of shift and utility men were only about to open doors. Reporting for work early also meant that
Mr. Casuela could check what everyone most likely took for granted.
Under Mr. Casuela‘s time, the World Bank approved the US$ 150 million Countryside
Loan Fund III. Landbank was also tapped as a settlement bank of the Bureau of Treasury‘s Small
Investors Program. On August 25, 1998, the authorized capitalization of LBP was increased to
P25 Billion by the Department of Finance and the President of the Philippines.
What Mr. Casuela imparted to his fellow Landbankers were not sophisticated management
models or mind-boggling paradigms that could have raked in billions of pesos for Landbank.
What he shared was the need to reaffirm the basic values that, in the end, would matter most, as
Landbank seeks to fulfill its mandate to help the poor and the needy in the countryside.
LBP President Margarito B. Teves was an appointee of President Joseph Estrada. He was
trained as an economist and not as a banker. Not knowing enough how a bank should be
managed, Mr. Teves presented to the Landbankers his ―90-10‖ formula style of management
which meant he would rely on Landbankers to provide 90 percent of the knowledge, solutions,
creativity, and work, while he would be responsible for contributing the remaining 10 percent
~ 17 ~

18. management and economic expertise. After a year, the income of the Bank soared to P751
million from P228 million in the same period of the preceding year. As he realized that most
small borrowers, especially farmers and fisherfolk, are very creditworthy much more than their
wealthier counterparts sometimes he made a focus on loans and attained the special status for
Landbank as the largest lender to the country‘s countryside financial institutions. It‘s approved line
during his time was P9.4 billion in 2005. The bank also accredited 440 CFI‘s nationwide.
Mr. Teves realized that the foundation of highly effective organization lies in the quality of
its people. When he left, he recommended a successor who would continue to serve Landbank
with the same luster and dedication. The next President had to be someone who would continue
to lead the Bank with honor, dignity and deeply rooted commitment to the good of the people,
especially the farmers and fisherfolk in the Philippine countryside. Mr. Teves‘ last act as president
was to recommend Madame Gilda E. Pico as the next President and CEO of the Bank. With a
tough, capable yet compassionate woman at the helm, whose aim in life is to serve, the saga of
success that is the Landbank journey continues.
Inspiring leadership, competence, and a good heart define who Gilda Elepano Pico is as a
human being and as the eighth President of the Landbank of the Philippines. Madame Pico‘s
brand of leadership inspires in the men and women of Landbank a collective response marked by
their unwavering support, dedication, integrity, and excellence in the performance of their duties
and responsibilities as they fulfill the mandate of the institution. It is this dynamic synergy,
characterized by mutual respect, concern, teamwork and cooperation espoused by Madame Pico
not only among the staff and officers, but between Landbankers and their clientele and partners,
that motivates them to achieve effective results. With Madame Pico steering the organization
forward, as she instills in the Board of Directors, officers and staff oneness in purpose, Landbank
continues to be the largest government bank and the fourth largest bank in the country. She
believed that effective leadership at any time depends on strong relationships built on a genuine
concern for others. Madame Pico is known to consistently exhibit a calm and purposeful
demeanor during difficult times for the Bank, thus fostering a sense of reassurance that the
situation is under control and everything will turn out right. In times of crisis, Madame Pico makes
sure to be on top of the situation, and if the distance would allow it, she goes to the branch that
needs her support. She makes it a point to visit employees in their times of extreme need, like
when their communities are badly hit by a typhoon. It‘s also a way of showing that care and help is
on the way. It‘s her presence, more than the money or goods that Landbank can give that matters.
She looks at the holistic person and relates to both men and women as more than a co-worker, but
as a friend, a family member, and a fellow citizen whose life she touches. Such an attitude and
approach to relationships can only come from a transformational leader who brings about positive
changes in individuals, in the institution and the Bank‘s clientele. The reach and scope of her
influence thus contribute substantially to the growth of a just and humane society. By keeping true
to her authentic self, she easily and effortlessly transcends self-interest for the greater good.
~ 18 ~

19. Coming from the prominent Elepanos of Calamba, Madame Pico grew up with siblings
who received utmost care from their parents, tempered with discipline and a sense of values that
focused on good education, dignity of hard work and honesty in one‘s dealings. She graduated
from College of the Holy Spirit. She joined Lanbank in 1981 as its Assistant Vice President for
Management and Operation of the Audit Department (MOAD), considering the fact that she
already rose from the ranks at Commercial Bank and Trust Company where she started as a
clerk,then handled remittances, became a new accounts teller, then senior audit clerk, next EDP
programmer and then stepped up to Manager. Her last post was as Assistant Vice President of the
Auditing Division of Commercial Bank before she applied for Landbankon 1981.
In 1986, she was promoted as Vice President of the Audit and Technology Group, an
appropriate appointment for a Certified Public Accountant who also has an eligibility as an
electronic data processing programmer. President Vistan entrusted her the crafting and
implementation of the audit rating system which was used in evaluating performance of units and
employees. She also organized the Credit Review Department and the Rural Banking Audit
Department to review the loan portfolio of Landbank and to review operations of cooperatives
and rural banks. In 1989, she was promoted Senior Vice-President of the Operations Sector
supervising the Controllership Group, Audit Group, Administrative Services and Special Assets
Group, Technology Management Group, Facilities Management and Engineering Group and
Manpower and Special Services Group.
During the time of President Casuela, when the Aisan financial crisis was still at its height,
she doubled her efforts to effectively manage Landbank‘s general and administrative expenses, and
adopted belt-tightening measures that contributed to sustaining their overall profitability.
When Madame Pico finally became the Landbank President, she immediately conducted
dialogues with farmers, rural bankers, and cooperative members who opened her eyes further and
made her realize that farmers and fisherfolk have so little in life. For her, if Landbank would not
help them, then she wondered who else would help them? She was certain that other banks would
not even touch them. She then decided as Landbank President that her remaining years with
Landbankwould be the years that she would certainly help them. What followed was the creation
of programs that would strengthen the conduits of loans and assistance to farmer. She put up a
Development Advocacy Fund of P1 billion; set up the Agricultural Guaranty and Fund Pool of
P4.48 billion; Calamity Assistance Program; and Rice and Corn Productivity Program. She also
directed Landbank to invest in Unsecured Subordinated Debt Issuances of CFIs, where she
reduced the interest rates for farmers to benefit further.
Today, Madame Pico continues to be a model of principled and effective leadership.
Being results-oriented, she always gives her staff a timetable and expects them to produce results at
the time specified. Madame Pico also values a two-way communication with the officers and staff.
To keep them informed she delivers a quarterly thematic ―State of the Bank Address‖ focused on
~ 19 ~

20. the latest Bank accomplishments, programs and challenges. In the same way she also
communicates to clients through her speeches in conferences and conventions she got invited to.
This is also her way of personally relating to clients howLandbank had helped them through crisis
unscarred all these years. For her, as the first woman President of Landbank, it is important to
show the world how ethical banking can be in the very essence of Landbank operations. In one of
her an excerpt from one of her speeches , she stresses the importance of Ethics in the workplace:
58th Annual National Convention and Corporate Meeting (Part I)
Banking on Best Practices: A sure way to success
by LANDBANK President and CEO Gilda E. Pico
May 25, 2011
SMX Convention Center
Pillar #2: Development of Institutional values and principles
―Developing your institutional values and principles is fundamental for any
successful organization. Your mission statement, values, and code of ethics are the "North
Star", the beacon by which you set your compasses and align your strategies. They best
represent what your rural bank is about, and define what it is and what it is not.
I would assume that you all have your vision, mission, and values statements. But it
is not enough to just have them on paper or framed and posted on your walls. You should
constantly revisit them to make sure that you are on the right path or if the path you have
set is indeed the one you wish to tread.
Do your statements define your bank? Remember that your vision statement
should reflect the essence of your organization, and should contain what it envisions in
terms of growth, values, employees, and contributions to society as a whole.
The mission statement, on the other hand, should be a more precise declaration of
a business strategy and developed from the customer's perspective in accordance with the
vision of the organization. Your mission should answer these questions: What do we do?
How do we do it? For whom do we do it? A periodical mission review helps your
organization get back to basics and make sure that you have not skewed your activities to
meet the needs of other stakeholders more than your actual clients.
The values statements, meanwhile, should reflect the core ideology and embody
the values that the organization lives and breathes. And finally, a code of ethics should be
established to ensure that all directors, management and employees abide by the same
~ 20 ~

21. standards of conduct, and as a requisite in guaranteeing the balanced rights and interests of
all stakeholders involved.‖
Consistent with its mandate as a development financial institution, LANDBANK has since
taken the lead in extending timely financial and development support to small farmers and
fisherfolk, micro and small and medium enterprises, agri-infrastructure, agri—business, agri-related
and environment projects which it considers its priority sectors. Madame Pico and all her work
force makes sure that consistency in the performance of their duties and responsibilities to ensure
that the service execution is being carried out and passed on even to newcomers through trainings.
With its strong network of more than 340 branches nationwide complemented by the
strategic partnerships it has forged with key development players, the bank‘s credit delivery system
is able to penetrate almost 90 percent of the country‘s total number of municipalities.
Even while aggressively pursuing its mandate, it has been able to strike the ideal balance by
achieving and sustaining profitable banking operations. To date, LANDBANK ranks among the
country‘s top five banks in terms of assets, loans, deposits and capital. Its sustained financial
viability has continuously enabled it to become one of the biggest contributors to the government‘s
revenue generation efforts and one of the most active partners in supporting its flagship
development programs.
~ 21 ~

22. Chapter IV
LANDBANK‘S MISSION, VISION AND CORE VALUES AS
ETHICAL GOAL
OUR VISION:
LANDBANK shall be the dominant financial institution in countryside development,
committed to the highest standards of ethics and excellence in the service of the Filipino people.
OUR MISSION:
We shall continue to provide timely financial and technical support for our farmers,
fisherfolk and other priority sectors.
We shall deliver innovative products and services that are consonant with ecological
enhancement and effectively address our clients‘ needs.
We shall embody professionalism and integrity, providing our employees with a work
environment that encourages growth and rewards excellence.
LANDBANK is committed to improving the lives of all its stakeholders and working with
them to lead the country to economic prosperity.
OUR CORE VALUES:
SOCIAL RESPONSIBILITY
Patriotism, love of country, service to community, concern for environment, customer
satisfaction, man for others and caring
~ 22 ~

23. TRUST
Equity, openness, and fairness
EXCELLENCE
Leadership, quality, initiative, innovative, competence
PROFESSIONALISM
Integrity, mutual respect, teamwork, dedication, commitment and loyalty
The Constitution declares that a public office is a public trust. The Land Bank of the
Philippines, being a government-owned corporation is a public office. Our ability to secure and
maintain our strong position in the banking industry depends – to a great extent – on the trust and
confidence of our clients, business partners, other stakeholders and the general public.
We recognize that this kind of relationship that is founded on trust entails responsibilities
from the people working for our organization. As such, employees are expected to strive to
consciously adhere to the following work principles consistent with our organization‘s vision and
mission as well as our core values:
*As civil servants, we are accountable to the people, we serve by committing to respond to
their needs with efficiency, genuine concern and professionalism.‖
*We put value on honesty and integrity in our day to day business dealings in the same way
that uphold these principles in our personal lives.‖
*We uphold truth and justice by playing an active role in stamping out corruption and
unfair business practices that taint the image of the institution and the whole bureaucracy.‖
*We treat our clients and colleagues with respect always mindful of their rights as human
beings.‖
*We lead simple and modest lifestyles even as we continue to take pride to work in the
service of the nation.‖
What had been discussed in the History of Landbank and exhibited by Landbank‘s Icons
of Ethics, is better understood through the Mission, the Vision and the Core Values of
Landbank.
~ 23 ~

24. We are Landbankers because we were brought up by Landbank based on the above core
values. It is instilled in us from the very first day we got employed through our orientations and
trainings how to help our institution carry out our social mission without sacrificing the efficiency
and effectiveness in the quality of our services.
Landbank is not a perfect organization. We have our share of ethics related cases. It
could not also be denied that it is a fact that increasing incidents in the workplace have pushed
our organization and other institutions to either implement or actively promote code of ethics that
act as a set of guide posts to helps practitioners understand expected behavior.
For example, Booz Allen Hamilton has implemented a code of ethics and training
program that highlight clear expectations of employee behavior in terms of the organization's core
values and adhered standards.
"These guidelines basically enable security professionals to recognize how they need to act
in circumstances that require an ethics decision," Smith says. For example: Someone borrows an
ID card because they forgot theirs. What could go wrong? How should employees behave? What's
the correct action to take?‖
This document should clearly outline expected behavior of employees based on the values
and standards of the organization. In the case of Booz Allen, these codes clearly spell out what is
acceptable employee behavior, for instance, in the event an employee receives personally
identified information from a client, or how the employee can protect confidential client
information.
"What's important to the organization and how they would like to be viewed by other
companies is what defines their ethical behavior," Smith adds.
Samples from Booz Allen's business code of ethics:
"Protecting Confidential Client Information: The best way to protect client information is to
not take possession of it. Each of us must restrict receipt of client information to only information
that is reasonable necessary to propose or conduct an engagement even if greater information
access is offered. Your obligation to maintain the confidentiality and security of client information
continues not only during and after the engagement ends, but also during and after your
employment with the firm..."
"Employee Personal Data : Each of us must exercise extra caution when handling an
employee's personal data. We do not disclose current or former employee's personal data to third
parties other than confirmation of employment dates and position without prior written consent
~ 24 ~

25. from the employee or former employee unless the information is required to fulfill a legitimate
business need- such as employee benefits or as required by law..."
Ethical Training
Smith also recommends organizations offer refresher courses regularly on codes of ethics
to professionals. These courses will act as a positive reminder to them that ethical behavior is
expected and mandated by the organization's culture. Other options organizations have used:
•Scenario-Based Training: Moretti goes through scenario-based training every six months
in his multinational banking institution. The emphasis is on how professionals need to operate and
follow basic information security principles and financial industry guidelines. For example, the
training outlines a scenario of a professional's access to sensitive data and provides guidelines to
practitioners on how they need to handle data and follow the rules of sharing, distributing and
storing this information.
"Over the last five years these courses are getting better," Moretti says. "Professionals like
me now understand that we are the ambassadors for ethical behavior and should actively
encourage other employees to adhere to it."
•Affiliation with a Professional Association: As a manager of a security group, Moretti
prefers hiring a certified professional who has demonstrated the capability of operating within a
certain code of ethics. Professional associations like (ISC)2 and ISACA usually follow a strict code
of ethics that helps security practitioners maintain their professional standards. "If you are
accredited an information security certification, you are actively encouraged to go through training
on ethics and are also reviewed by your other peers in the industry, as a result you build a strong
ethical awareness."
If this is a picture of how other institutions and organizations arrive to their present code of
ethics and their own regulated code of conduct, Landbank, being a government owned and
controlled corporationemanates its own Code of Conduct with a constitutional legal basis as a
foundational arm for its creation. It has a legal framework because it works hand in hand with our
Philippine Government. This is better discussed in the following chapter.
~ 25 ~

26. Chapter V
LEGAL FRAMEWORK OF LBP CODE OF CONDUCT
The 1987 Constitution of the Philippines provides the basis of ethical and accountable
behavior in the public sector. Section 1 of Article XI states that:
Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency,
act with patriotism and justice, and lead modest lives. This provision requires every public official
and employee to exhibit and live certain values while in government service. In addition, the State
has been mandated by the Constitution to ―maintain honesty and integrity in the public service and
take positive and effective measures against graft and corruption‖.
In 1989, the Philippine legislature passed Republic Act No. 6713, a law embodying the
Code of Conduct and Ethical Standards for Public Officials and Employees. The Code spells out
in fine detail the do‘s and don‘ts for government officials and employees in and out of the
workplace. These do‘s and don‘ts are encapsulated in the eight norms of conduct to be observed
by all government officials and employees. These norms or standards are:
• Commitment to public interest
• Professionalism
• Justness and sincerity
• Political neutrality
• Responsiveness to the public
• Nationalism and patriotism
• Commitment to democracy
• Simple living
The Code, likewise, introduced some reforms in the administrative systems like giving
heads of agencies the responsibility of ensuring there is a value development program for their
employees; continuing studies on work systems and procedures with the end in view of improving
the delivery if public services; and, mandating the designation of a resident Ombudsman in every
department, office and agency. Incentives and rewards system has also been put in place.
Another comprehensive law passed to address and curb the commission of malfeasance in
government is Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act.
In Section 1 of this law, it states that:
~ 26 ~

27. It is the policy of the Philippine Government, in line with the principle that apublic
office is a public trust, to repress certain acts of public officer and privatepersons alike
which constitute graft and corrupt practices which may lead thereto. This law specifies
eleven (11) instances of corrupt practices in addition to acts or
omissions already penalized by existing laws.
Political Commitment
The legal infrastructure that prescribes ethical conduct of; public servants
isreinforced by political commitment. This political commitment, while difficult
tobenchmark, has been demonstrated by some policy pronouncements. Quitesignificant
are the ten-point action agenda of the present Administration and theMedium-Term
Development Plan (2000 2004) or AngatPinoy 2004 which embodythe framework for the
country‘s socioeconomic development.
The agenda and the MTDP place the implementation of a sustained training
andorientation program on anti-graft and corrupt practices and laws, and on the
EthicalStandards Act of Public Officials and Employees among the
Administration‘spriorities to reduce graft and corruption and exact high standards of ethics
ingovernment. Proceeding from this, departments and agencies of the executivebranch
have set up and implemented various programs that aim to eliminatebureaucratic red tape.
One-stop action centers are now being promoted andinstitutionalized in the agencies.
Oversight Institutions
The legal infrastructure and political commitment are supported
andcomplemented by the existence of oversight institutions. The creation of theoversight
institutions that deal with issues of ethics, accountability, graft andcorruption are mandated
by the Constitution. The common feature of theseinstitutions is they enjoy a substantive
degree of fiscal autonomy in the sense that theyare not subject to the fiscal controls of the
executive. The budget is directly releasedto these institutions and the heads are authorized
to realign savings from their budget.They also have quasi-judicial powers in that they can
adjudicate and decide cases andenforce their own decisions, including the imposition of
sanctions which may includesuspension from office or even dismissal from government
service.
In the Philippines, the three constitutionally mandated oversight institutions are
the Civil Service Commission, the Office of the Ombudsman and the Commission on
Audit.
The Civil Service Commission is the central personnel agency of the government.
~ 27 ~

28. Under Section 3, Article IX-B of the Constitution, the CSC is mandated to
―establishcareer service and adopt measures to promote morale, efficiency,
integrity,responsiveness, progressiveness, and courtesy in the civil service.‖ It is also tasked
to―institutionalize a management climate conducive to public accountability.‖ CSC‘seffort
involves in enforcing ethics and accountability of line agencies basicallyinvolves three
approaches. One approach is regulatory, the other, corrective, and thelast one,
developmental. The first approach addresses compliance of-agencies withpolicies and
standards on HRD systems set by the CSC. For instance, CSCprescribes qualification
standards for each and every position in the Philippinegovernment. Non-compliance with
the QS by agencies in the processing ofappointments of their staff results in the disapproval
by the CSC of such appointments.
But, apart from the substantive requirements for practically all kinds of
personnelactions such as the publication requirement and the promotion and selection
boardprocesses. Non-compliance with the procedural requirements constitutes ground
forcorrective or even punitive action. The second approach deals with disciplinaryactions
against official or employee for infractions committed in relation to theperformance of
his/her official functions. The Administrative Code of 1987 orExecutive Order No. 292
outlines the various acts that are subject to administrativedisciplinary proceedings.
However, administrative discipline is not a function within-the exclusive jurisdiction of
CSC. Agency heads as well as the Office of theOmbudsman also have the authority to
proceed against erring government officialsand employees. The third approach is
developmental and will be discussed later inthe succeeding paragraph.
The Office of the Ombudsman acts as a prosecutor against those charged with the
violation of RA 3019, RA 6713 and the law against ill-gotten wealth, among others.It is
mandated to investigate and prosecute the criminal liability of public officials
andemployees involved in graft and corruption.
The Commission on Audit is the fiscal watchdog of the government. COA
isresponsible for ensuring legal and proper disbursement of public funds and
preventingirregular, unnecessary, or extravagant expenditures or usage of public funds. It
alsohas quasi-judicial powers.
All these oversight institutions enforce accountability ethic in government.
Active Citizenry
Market principle is at work in government operations. This simply means that
~ 28 ~

29. the services provided by the government are dictated, to a large extent, by the need of
the people. Some mechanisms by which the extent, type and adequacy of services
are gauged are feedback surveys and the practice of benchmarking.
The CSC has relied on MamamayanMuna, Hindi Mamaya Na! Program(translated
as Citizens First, Not Later) as source of client feedback. The program isa government-
wide campaign of the CSC that not only provides measure of clientsatisfaction but also
addresses the need for behavioral reforms in the bureaucracy,particularly in the manner by
which civil servants deal with the public. Since theformal launching in 1994, the program
has gained wide acceptance by the public.
By reviewing the number and subject matter of complaints received under
theprogram, the CSC has been able to determine the centers of excellence in
government.On the other hand, the performance of agencies that received the highest
complaintsare continuously being monitored.
Promoting Ethics and Accountability in the Public Sector
There have been numerous initiatives in promoting ethics and accountability inthe
public sector. As shown in the earlier discussions, all the above mechanismsfocus on
exacting as well as developing ethics and accountability consciousness ingovernment
officials and employees. The emphasis in the discussion are the various developmental
initiatives, which are withinthe area of knowledge and competence of Landbank as it works
with Civil Service in implementing the right ethics in a banking workplace.
Landbank‘s Code of Conduct is the very heart of ethical standards that guides all officers
and staff of the institution. As a whole, the Code of Conduct in return is a conglomeration of
various executive orders, presidential decrees and republic acts being passed by our governments
to be followed by all public servants. However, it does not exempt its employees from being
covered by the following laws as they are the legal framework that serves as the central processing
unit and foundation of the Code of Conduct of the Landbank of the Philippines. The following
laws are the legal basis of Landbank‘s Code of Conduct:
THE ANTI-GRAFT AND CORRUPTION LAWS
RA No. 1379 - An Act Declaring Forfeiture in Favor of the State Any Property Found to have
been Unlawfully Acquired by Any Public Officer or Employee
Article XI 1987 Philippine Constitution - Accountability of Public Officers
~ 29 ~

30. RA No. 3019 - Anti-Graft and Corrupt Practices Act
RA No. 6713 - An Act Establishing a Code of Conduct and Ethical Standards for Public Officials
and Employees, To Uphold the Time-Honored Principle of Public Office being a Public Trust,
Granting Incentives and Rewards for Exemplary Service, Enumerating Prohibited Acts and
Transactions and Providing Penalties for Violations Thereof and for Other Purposes
Implementing Rules of RA No. 6713 - Rules Implementing the Code of Conduct and Ethical
Standards for Public Officials and Employees
Revised Penal Code (Title II) - Crime Against the Fundamental Laws of the State Revised Penal
Code (Title VII)
RA No. 7080 - An act Defining and penalizing the Crime of Plunder
RA No. 9485 - An Act to improve Efficiency in the Delivery of Government Service to the Public
by Reducing Bureaucratic Red Tape, Preventing Graft and Corruption, and Providing Penalties
PD No. 749 - Granting Immunity from Prosecution to Givers of Bribes and other Gifts and to
their Accomplices in Bribery and other Graft Cases Against Public Officers
PD No. 46 - Making it punishable for Public Officials and Employees to Receive, and for Private
Persons to Give Gifts on any Occasion, including Christmas
Finally, the primary basis for decisions made involving disciplinary actions on ethical issues
concerning the bank as an institution and as a government corporation is the Landbank of the
Philippines Code of Conduct for Employees as stipulated:
CODE OF CONDUCT FOR EMPLOYEES:
1. Statement of Principles
The Constitution declares that a public office is a public trust. The Landbank of the
Philippines, being a government-owned corporation, is a public office. Our ability to secure and
maintain our strong position in the banking industry depends – to a great extent – on the trust and
confidence of our clients, business partners, other stakeholders and the general public.
2. Purpose:
~ 30 ~

31. The Code of Conduct for Landbank Employees is written :
2.1. To provide guidance for all employees to enable them to conduct themselves in a
manner that will merit and inspire public trust and confidence consistent with Landbank‘s
core values of social responsibility, trust, excellence and professionalism; and at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism, and justice and lead modest lives;
2.2. To comply with Section 3(3) of the BangkoSentralngPilipinas (BSP) Circular No.
283 series of 2001 which states in part:
―To conduct affairs of the institution with high degree of integrity, the Board of Directors
should prescribe corporate values, codes of conduct, and other standards of appropriate
behavior for itself, the senior management and other employees‖
3. Scope of the Code
This Code applies to all employees of the Landbank of the Philippines (LBP), regardless
of rank, whether permanent, temporary, co-terminus or directly hired contractuals. The term
―employee‖ as it is used in the Code includes such individuals.
Section 1: Performance of Duties
LANDBANK employees shall at all times perform official duties properly and diligently.
They shall commit themselves exclusively to the business and responsibilities of their office during
working hours unless, otherwise, properly allowed under the existing laws, rules and regulations.
Section 2: Confidentiality of Information
LANDBANK employees shall maintain the confidentiality of all information acquired by
them or entrusted to them by the Bank, its customers or business partners and are prohibited from
making unauthorized disclosure of the same.
Section 3: Conflict of Interest
LANDBANK employees shall avoid conflict of interest in performing official duties.
A conflict of interest exists when:
● the Bank employee‘s objective ability or independence of judgment in performing
official duties is impaired or may reasonably appear to be impaired by the personal concerns of a
Bank employee or of his / her family and relatives which run counter to the objectives of the Bank;
~ 31 ~

32. or when the official act results to unwarranted personal benefit on his / her part of his / her family
and relatives.
●the Bank employee‘s private interest interferes in any way with the interests of the Bank
as a whole
Section 4: Sexual Harassment or Misconduct
LANDBANK employees shall strictly comply with the existing laws, rules and regulations
on sexual harassment as defined below and other inappropriate or improper acts against fellow
employees regardless of rand and consistently exercise prudence, respect and care in their
interaction with one another and the general public.
Sexual Harassment as defined under CSC Administrative Disciplinary Rules on Sexual
Harassment Cases (CSC Resolution No. 01-0940) is an ―act, or series of acts, involving any
unwelcome sexual advance, request, or demand for sexual favor or other verbal or physical
behavior of sexual nature committed by a government employee or official in a work-related,
training, or education-related environment.‖
Section 5: Complaints and Grievances
LANDBANK and its employees shall handle complaints and grievances in accordance
with the Bank‘s formal Grievance Procedure in line with the Grievance Machinery of the Civil
Service Commission.
Section 6: Employee Discipline and Accountability
LANDBANK employees shall have a duty to adhere to this Code and to report violations.
The Bank shall impose strict implementation of policies to ensure employee discipline.
Any violation of this Code shall be acted upon in accordance with the pertinent provisions
of the Bank‘s Rules on Administrative Disciplinary Cases and Civil Service Law, rules, and
regulations.
4. Incorporation of Other Rules
All pertinent laws, rules, and regulations of the Civil Service, BangkoSentralngPilipinas,
Commission on Audit, and other government regulatory agencies and the internal issuances of the
Bank governing or regulating the conduct of public officers and employees are deemed
incorporated in this Code.
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33. 5. Effectivity:
This Code shall take effect upon approval by the Bank‘s Board of Directors.
6. Distribution of the Code
The Code shall be distributed to all employees of the Bank.
Each employee shall sign and submit a Code of Conduct Compliance Certificate to the
Personnel Administration Department (PAD) upon employment. Incumbent employees shall
submit the Code of Conduct Compliance Certificate within 30 calendar days from receipt of the
Code. By signing, we are somewhat bound by contract to serve and any false move will be a
ground for disciplinary action and possible dismissal in spite of what is commonly known as
Security of Tenure in the service of the government.
The same strict rules had set Landbank apart from an ordinary government institution.
There may be isolated cases but in general, Landbank can be viewed as a banking institution
known internationally for its ethical banking standards and procedures. Moreover it is also a
government owned and controlled corporation that balances profit with its social mission and
responsibility. Any employee belonging to this organization is as proud of their membership as
they are of their citizenship. It is also because of this that merely hearing the name of the
institution commands respect, dignity and credibility as its protective armor in the outside world.
~ 33 ~

34. Chapter VI
CONCLUSION
Spurred by corporate scandals and surveys showing how little employees trust their CEOs
and other senior executives, many companies are required to establish codes of ethics governing
the way they operate. As a businessperson, I am ultimately responsible for my actions. I must be
the person who decides if I should act ethically or not. I could not just act because of other‘s
influence because each one of us has a mind to logically discern our actions, a conscience to listen
to and free will to decide.
Knowing what is ethical, in my own mind, is essential. Morality has a top selling definition
in terms of Landbank: That which is selfish is immoral and that which is unselfish is moral.
Every selfish deed therefore hampers our path towards attaining a goal and every unselfish activity
takes us to the goal of enrichment in life and ethical behavior. However, far more difficult than
knowing what is right is doing what is right. Doing the right thing is not always easy because the
path of ethical behavior and actions is invariably the longer and more difficult path to follow than
the unethical routine, but it is always right and it bears satisfying results more enduring success.
The last 49 years saw the diversity of Landbank as a group. Yet, everyone is bound by
common values such as respect for one another, social responsibility, trust, excellence and
professionalism. Everyone work hard and play hard. Everyone also draws immense fulfillment
from being part of an institution with a social mission.
This term paper on Landbank In Its Finest is actually the story of all the people behind its
success. The success of the institution is the success of the men and women who are committing
the best years of their lives to the cause of countryside development. The success of Landbank-
Urdaneta Branch for example is led by its tireless and dedicated Leader and Unit Manager, Mr.
Jethro M. Martinez who devotes most his time constantly marketing the institution‘s best and most
requested products in the banking industry, diligentlychecks and coaches his officers and staff
while consistently boosting their morals and making them feel that everyone is very important in
the success of the unit.Together with Mr. Johnny R. Lim, our Assistant Department Manager and
Mrs. Editha C. Caron, our Operations Supervisor, they area team who, like our President Gilda E.
Pico, follows the succession scheme where as one officer moves to next rung of the organizational
ladder, a number of Landbankers are to prepare in taking the vacated positions with just
evaluations. They do not foster ―palakasan‖ and ―favoritism‖. They treat everyone fairly as they
challenge their staff to exhibit their potentials and abilities by giving them opportunities to show
their real worth through diverse as much as prolonged assignments, exposure to critical situations,
and on-the-job learning enhancement activities.
~ 34 ~

35. What Landbank is today is the fruition of dreams and visions that, not too long ago,
inspired the pioneers and succeeding leaders, officers and staff to give their best and utmost to the
institution that allowed them the privilege and honor of serving their country and its people,
especially the farmers and fisherfolk, the cooperatives and the micro, small and medium
enterprises.
The journey that started 49 years ago continues progressively because Landbank remains
to be the home of visionaries, dreamers and achievers. When the best and the brightest of a
country are inspiredby the nobility of their mission, their coming together is an appointment with
destiny. Not theirs or that of the institution, but of the Philippines. The future is for those who
know where they are going and how they intend to get there.
At Landbank, the personal values and visions of the staff and officers collectively create an
organizational and corporate culture geared to the attainment of the Bank‘s mission. A dynamic
interaction within the organization and with the various stakeholders, especially clients in the
countryside, enhances and strengthens working relationships and partnerships that ultimately
redound to effectiveness and efficiency in the delivery of services. Clearly said, happy, fulfilled,
committed and principle-centered individuals comprise a successful service-oriented institution.
Landbank is not just about tellers, cashiers, managers, accountants, marketing officers, first
vice presidents, senior vice presidents, and executive vice presidents. Neither is Landbank solely
the domain of its presidents and boards of directors. Landbank is about visionaries, innovators,
creators, workers, builders and leaders.
Landbank has many faces and facets, and they are best seen, understood, and appreciated
in the joys, pleasures, triumphs, angst, and challenges that Landbankers experience from day to
day.
~ 35 ~

36. Chapter VII
ACKNOWLEDGEMENT
Gratitude can be expressed in many ways but the easiest manner would be to acknowledge
everyone‘s contribution and support in the making of this term paper because without them, I
believe that I might not have been able to finish this particular requirement in my graduate studies.
I expressly thank first and foremost, God, for enlightening me, giving me strength and
guiding me through ideas that suddenly pop into my mind in the wee hours of dawn as I face my
computer without reserve nor without knowing as well where to start and what to write. Without
Him, this would not be possible. He gave me the time and the wisdom I need to finish a term
paper that would certainly serve its purpose.
To my Unit Manager, Mr. Jethro M. Martinez, whom I first conferred with before writing
my term paper and asked permission to use Landbank data already made known to the public for
the organization of the ideas I want to project, thank you very much. I hope I was able to project
Landbank In Its Genuine Finest through my term paper. For all its worth, I learned to love my
institution and the people I work with more than before. I express this with honesty and sincerity.
To my professor, Mr. Meliton G. Dassun, whom I continuously pleaded for extension of
term paper deadlines because I forgot about the part where I have to write a term paper to pass
his subject, thank you very much for patiently waiting and giving me a chance. A true teacher I
look up to and hope to continuously mentor me through my graduate studies because I aspire to
be a consultant someday.
To my fellow officemates and colleagues in the graduate school, whom I continuously
laugh with to ease the tiredness and tension and who find ways to understand my ever changing
moods which I often feel as a result of waking up early, thank you dear friends. I will try to make
it up to all of you now that I have finished my term paper.
To the writers of my references, whom I continuously refer this particular subject matter to,
by dissecting their articles and analyzing the facts before fully borrowing their ideas and data, my
deep gratitude I offer to all of you, if you only knew. You are all an instruments in the
development of my term paper because your ideas are so much related to one another and each
concluding statements open new ideas and new matters for discussion as I progress in my chapters.
You are all quoted in my term paper as I progress in each paragraph. Thank you for making my
research possible.
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37. To the inventor of the internet who has an edge for creating a bottomless hole for
information and data that could be dug deeper and deeper, I salute you. You opened portals of
information I know so little of.
It is therefore, with deep love, happiness and pride that I was able to present to all my
readers, a culmination of all the ideas I could gather and all the wonderful facts and figures I could
research as I celebrate the 49th year of Landbank in this term paper of mine entitled ―Landbank In
Its Finest‖.
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38. Chapter VIII
REFERENCES
Quoted Paragraphs from Business Ethics by Rajiv K. Mishra
Articles from the Landbank Employees‘ Handbook
Excerpts from the Civil Service Commission Documentations through the Internet Civil Service
Website
Extractions from subject matter related topics in our Ethics Module at PSU GS MDM 212
Ethical Banking Discussions in the Internet at Wisegeek website
Business Ethics Discussion in the Internet at Wikipedia Website
Various journals from the Internet regarding Ethics in the Banking Industry, already cited in the
quoted paragraphs.
Actual Samples from Everyday Banking Tasks as per observations and personal experiences
Quoted Paragraphs from the Coffee Book of Landbank of the Philippines by Maria Rosa Nieva
Carrion Buck, MNSA of Seagull Philippines Incorporated.
WWW.LANDBANK.COM website for the speeches, facts and figures advertised in the net
~ 38 ~