Provide a written analysis and ppt or video presentation of two companies (1) government

financial entity and (1) private company, its profile. 

Discuss its current situation, how it had manages its operation, especially in the handling of 
funds in this challenging times of pandemic, its solutions to sustain its operations and future
plans.

I. COMPANY PROFILE

II. ASSESS THE CURRENT SITUATION AND STATE THE PROBLEM RELATING TO CASH
MANAGEMENT OF THE COMPANY.

(CASH TRANSFER, CASH CONCENTRATION, CASH FORECASTING, WORKING CAPITAL

MANAGEMENT)

III.  YOUR ANALYSIS AND THE SOLUTION ON YOUR STATED PROBLEM.

IV. CONCLUSION/RECOMMENDATION

SSS- The SSS is a government financial institution in the Philippines.

Social Security System

INTRODUCTION

The concept of social security evolved from an age-old search of man for protection against
poverty, which breeds grave social ills that not only threaten his survival but also erode his
sense of human dignity. It, therefore, becomes the duty of the State to operate a mechanism
that would provide such protection to its people.

Legislative History

On Jan. 26, 1948, Pres. Manuel A. Roxas proposed a bill seeking to establish a social security
system for wage earners and low-salaried employees. This was recommended to Congress in
his State of the Nation Address.

After the death of President Roxas, Pres. Elpidio Quirino created the Social Security Study
Commission on July 7, 1948. The creation of the commission was his first official act upon his
assumption to office. Based on the report of the Study Commission, a draft of the Social
Security Act was submitted to Congress.

In 1954, Rep. Floro Crisologo, Senators Cipriano Primicias and Manuel Briones introduced bills
based on the report of the Social Security Study Commission in the House of Representatives
and in the Senate. These bills were consolidated and enacted into Republic Act (RA) 1161,
better known as the Social Security Act of 1954.

However, business and labor groups objected to the Social Security Act resulting to a deferment
of its implementation.
In 1957, amendatory bills were presented in Congress. These bills were the bases of RA 1792,
which amended the original Social Security Act.

On Sept. 1, 1957, the Social Security Act of 1954 or the Social Security Law (SS Law) was
finally implemented, marking a significant milestone in the social security program.

Thus, with the implementation of the SS Law, the government also adopted the social insurance
approach to social security, covering the employed segment of the labor force in the private
sector. In 1993, household helpers earning at least P1,000 were included in the compulsory
coverage of employees.

In 1980, some groups of self-employed persons were also required to contribute to the social
security fund from which benefits are paid upon the occurrence of a contingency provided by
law. Self-employed farmers and fisherfolks were included in the program in 1992 while workers
in the informal sector earning at least P1,000 a month such as ambulant vendors and watch-
your-car boys, were covered in 1995.

The Social Security System (SSS) administers social security protection to workers in the
private sector. On the other hand, the Government Service Insurance System (GSIS) takes care
of workers in the public sector.

The SSS administers two programs namely:

1. The Social Security Program; and

2. The Employees’ Compensation Program (EC).

Social security provides replacement income for workers in times of death, disability, sickness,
maternity and old age.

On May 1, 1997, Pres. Fidel V. Ramos signed RA 8282, further strengthening the SSS. Also
known as the Social Security Act of 1997, it amended RA 1161, providing for better benefit
packages, expansion of coverage, flexibility of investments, stiffer penalties for violators of the
law, condonation of penalties of delinquent employers and the establishment of a voluntary
provident fund for members.
The EC program, started in 1975, provides double compensation effective June 1984 to the
worker when the illness, death or accident occurs during work-related activities. EC benefits are
granted only to members with employers other than themselves.

SSS used to administer the Medicare program for hospitalization and other medical needs of
the private sector workers; and the Government Service Insurance System (GSIS), for the
public sector workers. However, with the passage of Republic Act 7875 or the National Health
Insurance Act of 1995, the SSS and GSIS transferred the administration of the Medicare
program to the Philippine Health Insurance Corporation (PhilHealth) for an integrated and
comprehensive approach to health development -effective July 1999.

SSS retirement, death and total disability pensioners prior to the effectivity of RA 7875 on March
4, 1995 are entitled to hospitalization benefits under PhilHealth. Pensioners upon the effectivity
of RA 7875 on March 4, 1995 and thereafter, are no longer covered except when they meet the
qualification requirements set by PhilHealth.

I. COMPANY PROFILE

Philippines Social Security System operates as a national government authority of Philippines.

The Authority promotes social justice and provide meaningful protection to members and their
families against the hazards of disability, sickness, maternity, old age, death, and other
contingencies. Philippines Social Security System serves communities in Philippines.

STATEMENT OF VISION

“The SSS aims to develop and promote a Viable, Universal and Equitable social security
protection scheme through World-class service.”

STATEMENT OF MISSION

“To manage a sound and viable social security system which shall promote social justice and
provide meaningful protection to members and their families against the hazards of disability,
sickness, maternity, old age, death and other contingencies resulting in loss of income or
financial burden.”

STATEMENT OF CORPORATE VALUES

“The SSS aims to institutionalize a corporate culture that instills the core values of Trust,
Empowerment and Teamwork.”

DECLARATION OF POLICY

“It is the policy of the State to establish, develop, promote and perfect a sound and viable tax-
exempt social security system suitable to the needs of the people throughout the Philippines
which shall promote social justice and provide meaningful protection to members and their
families against the hazards of disability, sickness, maternity, old-age, death and other
contingencies resulting in loss of income or financial burden. Towards this end, the State shall
endeavor to extend social security protection to workers and their beneficiaries.” (Section 2, RA
8282)

DESCRIPTION OF PROGRAMS

 BENEFITS

• SICKNESS BENEFIT is a daily cash allowance paid for the number of days a member is
unable to work due to sickness or injury.

• MATERNITY BENEFIT is a daily cash allowance granted to a female member who was unable
to work due to childbirth or miscarriage.

• DISABILITY BENEFIT is a cash benefit granted either as a monthly pension or a lump sum
amount to a member who becomes permanently disabled, either partially or totally.

• RETIREMENT BENEFIT is a cash benefit granted either as a monthly pension or a lump sum
amount to a member who can no longer work due to old age.

• DEATH BENEFIT is cash benefit granted either as a monthly pension or a lump sum amount
to the beneficiaries of a deceased member.

 MEMBER LOANS

SALARY LOAN is a loan intended to meet a member’s short-term credit needs.

 HOUSING LOANS
• CORPORATE HOUSING PROGRAM is designed to support the government’s low-cost
housing project, help accelerate economic activity, and promote good labor-management
relations and industrial peace. The two kinds of loans available under the program are the
Developmental Loan and Commitment Line for individual borrower’s loan. A Developmental
Loan is granted to the employer for land development and house construction. A Commitment
Line is granted to an employer who plans to undertake an employee housing under the terms
and conditions of the existing SSS individual housing loan program.

• HOUSING DEVELOPMENT LOAN is a lending program of the SSS designed to support the
social housing project of the government as well as to provide affordable and decent houses to
all homeless SSS members.

• HOUSING LOAN FOR REPAIRS AND/OR IMPROVEMENTS is a lending program available

either directly from the SSS or through its accredited participating financial institutions (PFIs).
The loan may be used for major repairs, particularly for dilapidated and structurally unsafe
housing units and other house improvements.

• DIRECT DEVELOPMENTAL LOAN is a lending program of the SSS which primarily aims to
support developers for their development of land including the access road and house
construction within the project site, working capital to the extent of 20% of project cost and
construction of housing units eligible for mortgage or take-out financing.

• INDIVIDUAL HOUSING LOAN is a lending program of the SSS established to provide funds
thru SSS-accredited participating financial institutions (PFIs).

• DIRECT HOUSING LOAN FACILITY FOR TRADE UNION MEMBERS AND OVERSEAS
FILIPINO WORKERS is designed to support the government’s Pabahay sa Bagong Siglo
Program which aims to provide socialized and low-cost housing to certified overseas Filipino
workers and bona fide members of duly registered and accredited workers’ organization.

• APARTMENT/DORMITORY LOAN PROGRAM is a lending program available through

accredited participating financial institutions (PFIs) for the construction of apartments and
dormitories
• PARI-PASSU is a joint housing loan program of the SSS and the SSS’ accredited participating
financial institutions (PFIs) which enables a member to avail of credit higher than the loanable
amount under the Individual Housing Loan.

 BUSINESS LOANS

• SME UNIFIED LENDING OPPORTUNITIES FOR NATIONAL GROWTH (SULONG) is a

lending program designed to provide SSS members, belonging to the small and medium
enterprises (SMEs) category, greater access to short and long-term funds through SSS
accredited conduit banks which will re-lend the fund to qualified SSS member-borrowers.

• THE SSS SPECIAL FINANCING PROGRAM is a lending program designed to address the
unavailability of credit facility to the business sector through the conduit banks or participating
financial institutions (PFIs) which will on-lend the fund to eligible borrowers; To encourage the
formation and growth of barangay micro business enterprises; and to generate employment.

• INDUSTRY LOAN PROGRAM (Under the PFIs Omnibus Credit Line) is a lending program
designed to contribute to the national recovery effort by providing financial assistance to
selected companies through conduit arrangement with SSS accredited participating financial
institutions (PFIs); To create employment opportunities by increasing the capacity utilization or
modernization of plant and equipment of selected companies; and to further diversify SSS
investments and to efficiently use its resources consistent with its earnings, liquidity and risk
targets.

• FINANCING PROGRAM FOR TOURISM PROJECTS is a lending program designed to

provide long-term financing to SSS members engaged in tourism projects through accredited
participating financial institutions (PFIs) as a means of spurring economic growth and regional
development; To contribute to the government’s program of generating more employment
opportunities especially in the countryside; and to contribute to the country’s foreign exchange
earnings.

• SPECIAL FINANCING PROGRAM FOR VOCATIONAL AND TECHNICAL SCHOOLS is a

lending program designed to contribute to the development of vocational and technical skills
necessary to increase the overall productivity in the economy, thus help in accelerating the
economic and social development of the country; To improve access of the general population
and in particular, SSS members and their dependents, to better educational facilities by
providing long-term financial assistance to private vocational and technical schools through
accredited participating financial institutions (PFIs); and to create awareness and appreciation of
the demand and potential earning capabilities of vocational and technical skills

• HOSPITAL FINANCING PROGRAM is a lending program designed to facilitate the

establishment of and to help maintain hospitals and related institutions by providing funds
through accredited participating financial institutions (PFIs); to improve hospital care delivery to
the general population and to SSS members and their dependents by making adequate hospital
care accessible and affordable to low-income workers; and to support the national government’s
program of attaining a much better distribution of hospital facilities throughout the country that
will be more responsive to the needs of particular localities and their inhabitants.

• SSS FINANCING PROGRAM FOR EDUCATIONAL INSTITUTIONS is a lending program

designed to improve access to better educational facilities by providing long-term financial
assistance to private educational institutions; To enhance the country’s economic productivity
thru the development of a larger pool of professionals and skilled workers to support the
country’s industrial and agricultural expansion; and to complement the government’s aim to
achieve a better distribution of educational institutions nationwide.

SSC and SSS Management Directory

AURORA CRUZ IGNACIO

President and CEO

JUDY FRANCES A. SEE

Executive Vice President

RIZALDY T. CAPULONG
Executive Vice President/Concurrent Acting Head

ELVIRA G. ALCANTARA-RESARE
Executive Vice President/Concurrent Acting Head

SANTIAGO DIONISIO R. AGDEPPA

Senior Vice President
VOLTAIRE P. AGAS
Senior Vice President and Chief Legal Counsel

PEDRO T. BAOY
Senior Vice President/Concurrent Acting Head

Social Security Commission

CARLOS G. DOMINGUEZ III

Chairperson

AURORA CRUZ IGNACIO

Vice-Chairperson

DIANA PARDO-AGUILAR
Commissioner

MICHAEL G. REGINO
Commissioner

MANUEL L. ARGEL, JR.

Commissioner

SILVESTRE H. BELLO III

Commissioner

ANITA BUMPUS-QUITAIN
Commissioner

CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STAKEHOLDERS

Relationship with SSS Members and Stakeholders - All Commissioners and Officers accept
their positions fully aware that they assume certain responsibilities not only to the SSS and its
members, but also to the different constituencies or Stakeholders, who have the right to expect
that the SSS is being run in a prudent manner and with due regard to the interests of all
Stakeholders. Consequently, Commissioners and Officers shall deal fairly with SSS employees,
members, suppliers and other Stakeholders. No Commissioner or Officer may take unfair
advantage of SSS employees, members, suppliers and other Stakeholders through
manipulation, concealment, abuse of confidential or privileged information, misrepresentation of
material facts, or any other unfair-dealing practices.

Corporate Social Responsibility - As an integral part of the National Government, the SSS is
inherently mandated to be socially responsible, to act and operate as a good corporate citizen.
The SSC recognizes and performs the obligations the SSS has towards the National
Government, its members, suppliers and other Stakeholders and the communities in which it
operates.54 The protection of the reputation and goodwill of the SSS is of fundamental
importance such that the Commissioners, Officers and SSS employees should be aware of the
disciplinary implications of breaches of ethical policies mandated by the GCG. Every employee
of the SSS is encouraged to promptly report any potentially illegal, improper and/or unethical
conduct that he or she may become aware of at the workplace or in connection with work. The
SSC shall create an environment that enables its people to raise genuine and legitimate
concerns internally. In addition, the SSC shall enact policies providing for a regular employee
development discussion and the creation of structured training programs for continuing personal
and professional development of employees.

Responsibility of Commissioners, Officers and Employees - Reciprocally, every

Commissioner, Officer or employee shall:

1. Remember that the biggest stakeholder is the Government;

2. Share the vision of the SSS;
3. Be accountable to the public;
4. Listen and learn from his/her co-employees;
5. Think and act as a team;
6. Focus on SSS members and strive for SSS members satisfaction;
7. Respect others;
8. Communicate with members and stakeholders;
9. Deliver results and celebrate success; and 1
10. Protect the reputation of the SSS

MGA PICTURES (PARA SA PPT)

II. ASSESS THE CURRENT SITUATION AND

STATE THE PROBLEM RELATING TO CASH
MANAGEMENT OF THE COMPANY.
The Social Security System (SSS) examines present and potential risks that may materially
influence its overall sustainability on a regular basis as an entity with the fiduciary responsibility
of prudently managing the money of its members. These threats are present in every aspect of
the SSS's operations, from the people hired and tasked to manage specific functions, to the
system used to handle collections and benefits, to the investments made by the SSS and how
these investments match the potential payouts to members, to the external risks it faces in
cases where it is not fully understood by its members or the general public.

It is important to determine and address the following Cash Management and Liquidity
challenges. The SSS has identified risk groups affecting its operations as approved by the
Social Security Commission (SSC), its governing board, through SSC Resolution No. 875-
s.2014.

SSS

Financial
Risk

Market Credit Liquidity

Risk Risk Risk

Financial Risk

Financial risk is defined as the potential losses due to changes in external markets, working
capital, prices, rates and liquidity supply and demand.

1. Market Risk

The Market Risk refers to the SSS investments declining in value because of economic
developments or other events that affect the entire market. This risk arises from (i) fluctuations
in market prices of equities due to changes in demand and supply for the securities (Equity
Price Risk), (ii) changes in SSS’ investment value due to a change in the absolute level of
interest rates, in the spread between two rates, in the shape of the yield curve or in any other
interest rate relationship (Interest Rate Risk) and (iii) fluctuations in exchanges rates due to
changes in global and local economic conditions and political developments that affect the value
of SSS’ foreign-denominated investments (Foreign Currency Risk).

2. Credit Risk

This refers to the risk of an economic loss from the failure of counterparty to fulfill its contractual
obligations or from the increased risk of default during the term of the transaction. This includes
risk due to (i) SSS debtor’s incapacity or refusal to meet debt obligations, whether interest or
principal payments on the loan contracted, when due (Default Risk); (ii) taking over the
collateralized or escrowed assets of a defaulted SSS borrower or counterparty (Bankruptcy
Risk); (iii) potential for a loss in value of an SSS investment portfolio when an individual or group
of exposures move together in an unfavorable direction (Concentration Risk); (iv) deterioration
of perceived credit creditworthiness of the borrower or counterparty (Downgrade Risk) and (v)
failure of a counterparty to deliver a security or its value in cash when the security was traded
after SSS have already delivered security or cash value, as per the trade agreement
(Settlement Risk).

3. Liquidity Risk

Liquidity risk refers to the risk that a company may be unable to meet short term financial
demands. This usually occurs due to the inability to convert a security or hard asset to cash
without a loss of capital and/or income in the process. This risk also refers to (i) unanticipated
changes in liquidity supply and demand that may affect SSS through untimely sale of assets,
inability to meet contractual obligations or default (Funding Liquidity Risk) and (ii) the possibility
that an institution will not be able to execute a transaction at the prevailing market price because
there is temporarily no appetite for the deal on the other side of the market (Trading Liquidity
Risk).

III.  ANALYSIS AND THE SOLUTION.

In compliance with the Governance Commission for GOCCs' requirements, the SSC established
a Risk Management Committee (RMC), which is an oversight body responsible for the adoption
and oversight of the SSS1's risk management program (GCG). The SSS, for its part, has a Risk
Management Division (RMD) under the Actuarial & Risk Management Group (ARMG), which is
primarily responsible for developing risk policies and overseeing the day-to-day activities of
identifying, measuring, monitoring, and controlling risks affecting the SSS's operations, including
financial risks.

In the management of financial risks, the Social Security Commission (SSC) and Management
are active in the evaluation, scrutiny and credit approval process on all investments being
undertaken by the SSS. By strictly adhering to the legal limit set forth in the Social Security Law
and following the investment guidelines, the SSC has implemented suitable rules on investment
operations, risk assessment and measurement, and risk monitoring. Internal controls are also in
place, and the Internal Audit Services Group is conducting a complete audit.

1. Market Risk

The market is volatile because economic events or other events have an impact on the entire
market, causing fluctuations. The SSS could use risk management tool used to measure the
equity portfolio’s maximum loss under normal market movements for a specified time interval
and at a given confidence level with is the Value-at-Risk (VaR), Given the daily investment
exposure on a trading portfolio, the VaR limit is designed to limit possible loss to a level that
Management can tolerate. It is a broad limit that encompasses a wide range of dangers while
encapsulating their quantification into a single figure. Another is the Stop Loss / Cut Loss
Program which is a disciplined/programmed divestment of losing stocks triggered by certain
conditions (e.g. technical analysis / optimal portfolio recommendations, dividend yield, etc.) until
all subject shares have been fully divested with the primary goal of limiting equity portfolio
losses.

2. Credit Risk

The SSS should further implements structures and standardized evaluation guidelines, credit
ratings and approval processes. Investments are subjected to a technical assessment to
establish their viability and acceptance. To assess if counterparties are creditworthy, the due
diligence process (credit analysis, examination of the issuer/financial borrower's performance to
determine financial capabilities to fulfill commitments when due, etc.) and information from third
parties are employed. Policies and Guidelines in Determining and Managing Debt to Equity
Exposure Limits were designed to ensure compliance with Section 26 of the SSS Law. The
investment limitations for a conglomerate/group, an individual corporation, an individual
corporation's debt, and an individual corporation's equity are set using two principles: the IRF
forecast-based principle and the risk-based principle. For the IRF forecast-based principle, the
following are the limit ceilings as portion of IRF forecast, where the IRF forecast is computed
from the previous year’s IRF plus 90% of the current year’s target net revenue:
10% for Conglomerate/Group, 4% for Individual Corporation, 3% for Individual Corporation’s
Debt and 3% for Individual Corporation’s Equity. The risk-based principle for computing
investment limit is based on the company’s value and its credit score.

3. Liquidity Risk

The SSS should addresses this risk by monitoring financial flows on a daily basis, taking into
account future payment due dates and daily collecting amounts. The SSS should also maintains
a sufficient portfolio of highly marketable assets that can be quickly liquidated in the event of a
cash flow disruption. To ensure that investments in Marketable Securities shall be compliant to
the basic principles of safety, liquidity and yield shall benefit as many members of the System,
SSS only invests in shares of stock and equity related-issues that satisfies its stock
accreditation guidelines. RMD developed a Risk Dashboard to provide the Management with
bird’s-eye view of the financial risks that SSS is facing. This dashboard will help the
Management in identifying the issues that may arise from the cumulative impact of risks over
time.