2010 Annual Report


The Board of Directors
Philippine Postal Savings Bank, Inc.
PostalBank Center, Liwasang Bonifacio 1000 Manila


The Management and Staff of the Philippine Postal Savings Bank, Inc., a government depository bank, hereby report the result of its operations for the Year 2010. 

Under the guidance of the Board of Directors, and with the collective efforts of Management and the whole organization, the Bank posted the following figures in these key result areas:

Total Resources. Although there was a decrease in our asset base by 4.8%, year-onyear, the bank still managed to increase its loan portfolio by 5% and dispose 14% or PhP14.0 million of its Real and Other Properties Acquired (ROPA)

Deposits. Our deposits (outstanding) stood at PhP4.56 billion.

Loans. Our loans (gross) increased by 5.3% or PhP112.1 million as compared to last year’s figure from PhP2.10 billion in 2009 to PhP2.23 billion in 2010.

Total Investments. Total Investments (inclusive of Interbank Call Loans) amounted to PhP2.17 billion in 2010 against PhP2.78 billion in 2009.

Total Revenues. Total Revenues recorded in 2010 was PhP540.93 million, PhP304.65 million of which came from interest income from loans, PhP102.62 million from investments, PhP70.68 million from fee-based activities and PhP62.98 million from other income.

Net Income. Net Income after tax for the year ended December 2010 amounted to PhP14.58 million which was above the Bank’s target of PhP14.1million for Year 2010.

Capital. Our capital position as of December 2010 improved from PhP413.40 million in 2009 to PhP444.93 million in 2010.

Therefore, we thank everyone for doing his best in the Year 2010, that enabled the Bank to attain its Net Income Target for Year 2010, despite the austere economic forecasts in 2010.

In the year 2011, we shall not be complacent, although recovery is already being gradually felt in some bright spots of the economy. 

Among the initiatives that we will implement to attain our objectives for 2011 are the following:

On Loans, we will:

  • Allocate more funds for Development Incentive Projects, especially those implemented by Local Government Units, to support the government’s socioeconomic agenda, in line with our mission of assisting in countryside development.
  • Continue lending to the MSME Sector (Micro, Small and Medium Enterprises Sector) which will contribute to the generation of more employment and in stimulating economic activity.
  • Maximize our returns from loans by lessening the Non-Performing Loans (NPL) of the Bank, with joint efforts from the Account Management Department and Office of the General Counsel, by doubling the collection efforts, and by introducing programs to entice borrowers to sit down with us to determine the best mode of repayment without sacrificing the Bank’s interest.
  • Lower our exposure to salary and other clean loans and divert the loan portfolio to more secured loans, at the same time maintaining reasonable yields. We will manage/control consumer lending to reduce instances of default.

On Deposits, we will:

  • Generate funds both from the private and government sectors focusing on low-cost funds and channeling the same to loans and investment instruments with reasonable and sustainable yields for the Bank.

On Fee-based Income and Gross Revenues:

  • Generate more funds from service charges and fees (thru ATM, payroll servicing, remittance operations, POS (Point-of-Sale) System, Bills Payment, International Money Order, internet banking and other collateral activities) and other non-earning assets of the bank
  • To complement our deposit mobilization campaign especially of low cost funds from partner government agencies, we will aggressively market our ATM payroll facility. Likewise, we will further promote our bills payment and collection agreements with water districts and other local utilities companies.
  • Creation of new product lines to respond to the needs of the market and to compete in the industry. This way, we shall be able to increase our lending portfolio, and sustain the profitability that we desire.

On Business Operation/ Bank Management:

  • Strive to achieve bankwide automation by converting the remaining non-online branches to Online Deposit System.
  • Fully implement our Business Continuity Plan, which aside from being a requirement of Bangko Sentral ng Pilipinas (BSP), is a crucial aspect in maintaining the stability of the Bank.
  • Maximize ATM operations through strategic positioning of ATM facilities in off-site locations with financial viability.
  • Adopt an online Loan System to hasten our lending process, thereby enabling our officers to focus more on loans marketing.
  • Revisit our capital build-up options in our continuous bid to strengthen the capital structure of the Bank, thereby presenting the Bank with opportunities to engage in allied undertakings.
  • Disposal of foreclosed properties will also be a priority. This shall rid the Bank of unnecessary expenses on maintenance and security.
  • Establish a smooth and orderly flow of operations within the Bank through the manualization of all processes and transactions.
  • Provide more seminars and trainings to our personnel to better equip them in performing functions that are critical to the Bank’s operations, such as property appraisal, cash operations, and antimoney laundering, among others.
  • Strengthen the risk management aspect particularly in loan processing by adopting a more comprehensive loan review process to be handled by the Credit Policy and Review Unit.
  • Intensify the development of our products and services which is dependent largely on our technological advancement.

Again, I encourage you all to help the Board and Management in all these undertakings, so that we can sustain the momentum that we have already gained. Thank you...

President and CEO


“To be a strong and dynamic national institution that will mobilize savings and promote entrepreneurship to widen economic opportunities for all Filipinos.”

“To provide the Filipino people with a full range of professional banking and financial services accessible in all areas of the country and to promote the values of thrift, industry, and prudence especially in the youth.”


  • Provide the best possible rate of return to the Filipino saver
  • Raise domestic savings to new levels and enable the country lessen its dependence on foreign borrowings
  • Be the vehicle for the efficient delivery of countryside credit, provide financial investments to widen economic opportunities, and
  • Enhance the level of awareness of the youth towards the benefits of thrift and industry as crucial elements to national self-reliance and independence


The Articles of Incorporation approved by the Securities and Exchange Commission on 13 October 1997 gives the Philippine Postal Savings Bank the authority to:

  1. Engage in the general business of savings and mortgage banking
  2. To perform all the services authorized for commercial banks under RA 337, or operate under an expanded and promote the virtue of thrift among the general public, especially the youth;
  3. To receive collections and make payments for the account of others, including postal money orders;
  4. To invest in government securities and other debt instruments; and,
  5. To undertake, upon approval of the BSP, trust and quasi-banking functions.
  6. With prior approval of the Monetary Board to invest in financial allied undertakings such as leasing companies, banks, investment houses, credit card operations and other allied undertakings.
  7. To undertake such other forms of loans, investments, credit facilities, or financial intermediation.
  8. With prior approval of the Monetary Board, to act as managing agent, adviser, consultant for the administration of investment accounts.

It has an authorized capital stock of one billion pesos (PhP1,000,000.00), with five hundred million (PhP500,000,000.00) actually subscribed, and three hundred million (PhP300,000,000.00) paid-up capital stock.


In 24 May 1906, the passage of Act No. 1493 created the Postal Savings Bank as a division of the Bureau of Posts. All post offices were considered and in fact operated as a division of Posts. Its operations tapped savings by bringing banking services to rural areas.  

During the Japanese occupation period (1943-1944), all loans were liquidated with Japanese war notes. Coupled with severe inflation, said era caused a complete breakdown of the banking system of the economy. These setbacks and other ravages of war which damaged about 70% of the records of the PSB crippled its operations.

To enable the economy to recover, Executive Order No.48 was issued on 6 June 1945 to pave way for the reopening of the pre-war banks.

However, it is only in 1946 that the PSB resumed service in Manila.  Starting with only 15,737 savings deposits accounts with a total value of P4,104,223, the bank rapidly grew with deposits jumping to P14.4 million in 1947 (250% increase), P25 million in 1948 (74% increase), and P33 million in 1949 (32% increase). Moreover, as a result of thrift campaign conducted by the PSB, demand for savings banking services increased which opened up opportunities for the expansion banking facilities.

In 1960’s the private banking sector, especially the rural banks, rapidly grew while the operations of the PSB deteriorated due to the shift of its clients to private banks because of higher interest on savings deposits offered. 

Nonetheless, the PSB was considered unduly competing with the private sector and was thus dissolved. In view of this, Pres. Ferdinand E. Marcos issued the Presidential Decree No. 121 dated 29 January 1973 mandating that: a) PSB branches shall not be established in places where banking services are already available; b) one year thereafter, existing PSB operations maintained in such places shall be completely discontinued; and c) within three years from the said date, all operations of the PSB shall be completely discontinued.

On January 1976, the PSB was finally phased out with the Philippine National Bank (PNB) serving as its liquidator pursuant to provisions of P.D. No. 241.

Among the powers granted to the Philippine Postal Corporation (Philpost) under Republic Act No. 7354 was the power to reopen or reactivate the Philippine Postal Savings Bank (PPSB)

On 05 October 1993, PhilPost requested the Bangko Sentral ng Pilipinas for an authority to reopen the defunct Postal Savings Bank.

On 23 October 1993, the Philpost Board of Directors passed Resolution No. 93-119 approving PHILPOST 2000, the Medium Term Corporate Plan of the Philippine Postal Corporation (1994-2000). Among others, said corporate plan states, “ Pursuant to the Macroeconomy & Development Financing Policy stipulated in the Medium-Term Philippine Development Plan 1993-1998 to ‘Develop the rural financial sector to ensure adequate supply of credit to the countryside,’ the PhilPost shall re-establish the Postal Savings Bank as a subsidiary.

After consultations with the representatives of the Bangko Sentral and the Office of the Government Corporate Counsel (OGCC), the Philpost Board of Directors approved the re-opening of the Philippine Postal Savings Bank (PPSB) as a wholly-owned subsidiary of the Corporation with its own separate funds, books of accounts and set of accountable officers and employees.

On 21 July 1994, the Philippine Postal Savings Bank was re-opened by former Pres. Fidel Valdez Ramos in a simple ceremony held in Malacañang.


Total Resources

PostalBank’s resources narrowed by 5% from PhP5.58 billion in Year 2009 to PhP5.32 billion in Year 2010. Loans and discounts (net) account for 39% (PhP2.1 billion), while Investments in Bonds and Other Debt Instruments comprise 33% (PhP1.75 billion) of Total Resources. Eight per cent (8%) or PhP426 million is composed of Interbank Call Loans Receivables. The remaining 20% (PhP1.04 billion) is composed of other assets. (Real and Other Properties Acquired or ROPA of PhP86.63 million, Due from Bangko Sentral ng Pilipinas of PhP452.64 million, Cash on Hand of PhP94.62 million, Bank Premises, Furniture, Fixture and Equipment of PhP81.36 million and Others of PhP324.75 million).



Total Revenues for 2010 reached PhP540.93 million, 9% lower than the previous year’s level of PhP597.04 million.  This was due to lower market rates on investments which decreased by 0.63% on the average across all maturities.  Interest income totaled PhP449.75 million from P516.47 million in the Year 2009, with interest income from loans contributing PhP304.65 million, as against last year’s PhP322.03 million and interest income from investments of PhP102.61 million against PhP132.11 million in December 2009. Non-interest income reached PhP91.18 million composed of Fees and Commissions Income (PhP70.68 million), Gains from Financial Assets (PhP6.76 million) and Other Income (PhP13.74 million).

Net income after tax stood at PhP14.58 million after booking of provisions amounting to PhP16.23 million and Litigation Expenses of PhP10.75 million. The Net Income is equivalent to 3.39% Return on Equity (ROE) (based on average equity) compared to industry’s ratio of 5.19% (as of March 2010) and a Return on Assets (ROA) of 0.27% vs. the industry’s ratio of 0.63% (as of March 2010).


Our deposits (outstanding) stood at PhP4.56 billion. Total Deposit Liabilities (outstanding) decreased by 1.6% from PhP4.63 billion last year to PhP4.56 billion in year-end 2010.

In terms of deposit mix, the bank generated 70% of its total deposits or PhP3.19 billion from government entities, while the remaining PhP1.37 billion or 30% was contributed by the private sector compared to a deposit mix of 58:42 government to private deposits, registered in the year 2009.

Deposit by Type

By type of deposits (outstanding), 92.04% or PhP4.19 billion were savings deposits. Time deposits comprised 3.94% of total deposit liabilities while demand deposits, 4.02% for the year 2010.

Lending Operations

Current loans (gross of provisions for probable loss) outstanding totaled PhP1.9 billion, while Non-Performing loans (gross provisions for probable loss) outstanding amounted to PhP321.84 million or 12.13% of total loan portfolio.

Consumption loans comprise 48.8% or PhP1.08 billion while the remaining 51.2% or PhP1.14 billion were regular and other loans, composed of the following:  (1) Loans to Government - PhP374.97 million; (2) Agrarian Reform and Other Agricultural Loans - PhP67.62 million; (3) Development Incentive Loans - PhP134.86 million; (4) Microfinance Loans - PhP0.90 million; (5) Small and Medium Enterprises - PhP190.84 million; (6) Loans to Private Corporations - PhP219.54 million; (7) Loans to Individuals for Housing Purposes - PhP131.55 million; and (8) Loans to Individuals for Other Purposes - PhP20.59 million

Our Lending Efficiency improved to 77% by 10 percentage points from 67% last year.


Total investments went down to PhP2.17 billion from PhP2.78 billion last year or by 21.8%. IBCL decreased by 47.4% from last year's PhP810 million to PhP426 million as of end December 2010.

Branch Operations

In terms of regional/branch performance, the top deposit generators were Head Office with PhP787.52 million or 17.3% of total deposits, followed by Iloilo with PhP395.47 million or 8.7%, Tuguegarao with PhP350.16 million or 7.7%, Cebu with PhP312.41 million or 6.9% of the total deposits and Legazpi with PhP294.01 million or 6.5%.

On a per area level, top funds generator was the Visayas Area, contributing PhP1.18 billion to the total deposit portfolio. This was followed by the Metro Luzon Area with PhP1.17 million deposit funds.

For loans, the top performers were Head Office with gross loan portfolio of PhP714.11 million or 32.1%, Cagayan De Oro with PhP203.5 million or 9.14%, Tacloban with PhP161.7 million or 7.26%., Tuguegarao with PhP145.62 million or 6.54% and Iloilo with PhP119.04 million or



Employees Undergo Various Trainings

  • Ms. Robella Padernos, the Bank’s First Aider, attended a 6-day seminar on Basic Life Support and Standard First Aid, conducted by the Philippine National Red Cross, last August 23-28, 2010.
  • Seminar on Signature Analysis and Verification conducted by the Bankers Association of the Philippines (BAIPHIL) was attended by the front liners of the Bank last September 25, 2010 at the Berjaya Hotel, Makati City.
  • VP Alfredo Cristobal, Atty. Ronilo Conde, Mr. Glenn Py’ll Samson and Manager Victor Pacardo attended a series of seminars on IT Governance and Fundamentals & Processes of IT Auditing - Best Practices and Practical Approaches last Sept 4, 18 and 25, 2010 conducted by BAIPHIL at Makati City.
  • Cagayan de Oro and Manolo Fortich Branch employees attended a 2-day Seminar on Signature Identification and Fraud Detection and the Counterfeit Money Detection (Phil. Peso), conducted by the OroBanker’s Club, Inc., last Oct 2-3, 2010.
  • Mgr. Joel Lara, Security Officer of the Bank conducted a series of seminars on Security Awareness at the Branches, which started last May 13 – 14, 2010 at the PPSB Baguio Branch, in compliance with the provisions of BSP Circular No. 620, dated September 3, 2008, particularly Subsec. X171.2., under the duties and responsibilities of the Bank Security Officer.
  • The resource speaker for the seminar “Revisiting the AMLA Law and Its Updates” was no less than the Compliance Officer Beatriz F. Callo. The seminar was conducted by batch, with the first set of participants attending the seminar last August 28, 2010.  Banks conduct AMLA seminars at least once a year in compliance with existing regulations.  

Banks, thru the Compliance Office and Human Resource Department, are tasked to ensure continuing AMLA training for all employees. This is to remind the employees regarding the major compliance requirements for banks to combat money laundering. It also seeks to safeguard the Bank’s integrity by ensuring that it is not used as a money laundering site nor its employees to launder proceeds of any unlawful activity.

  • The Development Academy of the Philippines in partnership with the Government Procurement Policy Board conducted a series of trainings on the Revised Implementing Rules & Regulation of RA 9184 for Government Procurement. Vice President Alfredo Cristobal, head of the Information and Communications Technology Group, and Mgr. Victor Pacardo of the Systems and Methods Department attended the first batch last October 13-14, 2010.
  • The Money Market Association of the Philippines (MART) sponsored a seminar on Advance FS Analysis and Advance Economics (2nd run) last October 14, 2010 at the Yuchengco Institute, RCBC Plaza, Makati City. This was attended by the following 16 officers and employees: AVP Ma. Theresa Urbano of the Branch Support Department, Mgr. Patria Madrio of the Accounting Department, Ms. Clarissa Pitallano of the Treasury Group, Mr. Vergel Bautista of the Account Management Department, Ms. Glenda Llarena and Mr. Marc Lawrence Fernandez of the Corporate Planning Department.


16th WSBI-RGM Discusses Mortgage Financing to Underserved

The World Savings Banks Institute (WSBI) held its 16th Asia-Pacific Regional Group Meeting last May 20 – 21, 2010 in Bali, Indonesia. Gracing the event were PPSB Dir. Bituin V. Salcedo, Dir. Ma. Corazon K. Imperial, Dir. Lamberto R. Barbin, and Dir. Numeriano C. Dayrit, along with other key officials of WSBI member institutions in the Asia-Pacific Region.

Themed “Promising Opportunities for Savings and Retail Banking in the Aftermath of the Financial Crisis”, the meeting delved on the issue of financial inclusion in Asia-Pacific Region as well as the identification of opportunities for savings banks, brought about by the fast-changing

Participants were made to present their experiences and perspectives in light of a strengthened partnership between financial institutions and post offices particularly the impact of said initiative on the development of an improved and quality postal financial services.

Meanwhile, in her speech as official Chairperson on the topic “Mortgage financing to underserved in Asia-Pacific: market potential, challenges and opportunities”, PPSB Dir. Salcedo put emphasis on addressing the existing gap between housing finance offer and demand in Asia in spite of the continuous growth of housing finance market in the recent years.
According to her, “Our discussion aims at weathering the market trend and develop innovative housing finance products through peer learning. The presentations will address different experiences of housing finance in different markets, including innovations in housing finance, savings linked housing loan schemes and how to link remittances flows to housing finance.”

The second day focused on discussions about risk management and the effect of the financial crisis and continually changing environment on the national regulatory requirements.  Participants also tackled the issue on up-scaling microenterprise finance to SME (Small and Medium Enterprises) finance in view of the development of private entrepreneurship in Asia especially in emerging countries.

Pres. Mortera Attends WSBI Board of Directors Meeting
in Washington D.C.

The 10th Board of Directors Meeting of the World Savings Banks Institute (WSBI) was held last October 9, 2010 at the ICBA Head Office in Washington D.C., U.S.A. The meeting was officially chaired by WSBI President José Antonio Olavarrieta.

PPSB President and CEO Virgilio A. Mortera officially represented the Bank during said meeting which was graced by executives and other highranking officials of other WSBI member institutions.

Said meeting coincided with the World Bank (WB) and International Monetary Fund (IMF) meetings and WSBI/ESBG (European Savings Banks Group) Annual Reception.

Being an elected member of the Board of Directors of WSBI for mandate period 2009-2012, PostalBank, represented by its President and CEO, is enjoined to participate and discuss with other members in WSBI Board meetings, which are held at least twice a year, as part of its responsibilities, pursuant to Article 14 of the WSBI Statutes


2010 PPSB Team Building Activity Held

Employees of the Philippine Postal Savings Bank, Inc. (PPSB) were given the time to relax and enjoy summer during the 2010 PPSB Team Building held last April 24 – 25, 2010 at the Bataan White Corals Beach Resort, in Morong, Bataan.

The conduct of the Team Building activities for PostalBankers aimed at fostering camaraderie, unity, and cooperation within the institution.

Participants were divided into four (4) groups namely, the Red, Green, Maroon, and Blue Teams who all vied for the championship during the series of games and exercises held during the first day. Each group was also made to present their own unique cheer dance number to uplift the spirit of individual participants prior to the exercises. After the fun and competitive activities, the Red Team, led by Human Resource Department Head, Gilmarie Jane P. Decena, bagged the championship title that was awarded during the 2nd day of the event.

The 2010 Team Building was initiated by Management to boost the morale of the employees and strengthen the ties of the PostalBank family.

Friendship Games Held

For the very first time, shuttlers from the Philippine Postal Savings Bank, Inc. (PPSB) and Philippine Postal Corporation – National Capital Region (PPC-NCR) Office, played and showcased their badminton skills during the Joint PPSB – PPC Badminton Tournament, held last September 4 and 10, 2010, at the Smart Shot Badminton Center, and Badminton City in Manila. The event was held in line with the aim of promoting friendship and cooperation between employees of the two institutions.

BAIPHIL Awards 3rd Place to PPSB Badminton Team

PostalBank once again proved that “Size doesn’t matter” when it clinched the 3rd place in the Silver Cup Division of the 7th BAIPHIL (Bankers Institute of the Philippines) Invitational Badminton Tournament, held last November 6, 2010, at the Yonex Badminton Club, in Mandaluyong City.

Competing against the more experienced and well-equipped Badminton Teams of bigger Banks and Financial Institutions, the PPSB Team was undaunted, even surprising other participants and spectators with its improved skills and techniques.

Said tournament was participated by BAIPHIL member institutions including the Bangko Sentral ng Pilipinas (BSP), Philippine Deposit and Insurance Corporation (PDIC), Development Bank of the Philippines (DBP), Banco De Oro (BDO), and Bank of the Philippine Islands (BPI), among others. Sixteen Teams competed under the Mixed Doubles format using the rules of the World Badminton Federation (WBF) for 2010.

The PostalBank Contingent was led by Mgr. Victor Pacardo with Mrs. Luzviminda Pacardo along with the other team members: Mr. Miller Daniolco and Ms. Michelle Barbacena; Mr. Marc Lawrence Fernandez and Ms. Ma. Theresa De Leon; Mr. Joseph Ancheta and AM Glenda Llarena; and, Mr. Noel Eclipse and Ms. Malou Fortunata Rongcales.