FINAL PAPER - ARACELI DIVINA PDF Version

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF ENTERPRISE

RISK MANAGEMENT IN THE SELECTED AGENCIES IN PUBLIC SECTOR
GOVERNANCE TOWARDS THE ADOPTION OF
ENTERPRISE RISK MANAGEMENT
FRAMEWORK
Polytechnic University of the Philippines

Open University System
ARCELI S. DIVINA
Master in Public Administration
2021
Philippine Copyright 2021

by the Author
and the Open University – Masters in Public Administration
All rights reserved. Portions of this manuscript may be reproduced with proper referencing
and due acknowledgment of the author.
ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF

ENTERPRISE RISK MANAGEMENT IN THE SELECTED
AGENCIES IN PUBLIC SECTOR GOVERNANCE
TOWARDS THE ADOPTION OF ENTERPRISE
RISK MANAGEMENT FRAMEWORK
A Thesis
Presented to the Open University
In Partial Fulfilment of the Requirements for the Degree

By
ARCELI S. DIVINA
2021
CERTIFICATION
This thesis, ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF
ENTERPRISE RISK MANAGEMENT IN THE SELECTED AGENCIES IN PUBLIC
SECTOR GOVERNANCE TOWARDS THE ADOPTION OF ENTERPRISE RISK
MANAGEMENT FRAMEWORK prepared and submitted by ARCELI S. DIVINA in partial
fulfilment of the requirements for the degree; MASTER IN PUBLIC ADMINISTRATION
has been examined and recommended for Oral Examination.
Evaluation Committee
Ms. NORIE L. MANIEGO

Adviser
NAME OF EVALUATOR, PhD NAME OF EVALUATOR, DBA

Member Member
NAME OF EVALUATOR, DBA

Member
---------------------------------------------------------------------------------------------------------------------
APPROVAL
Approved by the Panel on Oral Examination on (date of oral defense) with the grade of ________.
NAME OF PANEL CHAIR, Ph.D.

Chair
NAME OF PANEL MEMBER, Ph.D. NAME OF PANEL MEMBER, DBA

Member Member
NAME OF PANEL MEMBER, Ph.D. NAME OF PANEL MEMBER, DBA

Member Member
Accepted in partial fulfilment of the requirements for the degree Master in Public Administration.
NAME OF THE DEAN, DPA

Dean
Date of passing the Comprehensive Examinations: _________________ (If applicable)

ACKNOWLEDGEMENTS
First and foremost, glory be to God, our almighty Father, creator of Heaven and
Earth, to whom this research is dedicated to, for this research wouldn’t be possible without
his holy and everlasting guidance. May he bless all of us and celebrate with him the
greatest gift of life and endless pursuit of knowledge and virtue.
This gratitude goes as well towards the Open University of Polytechnic
University of the Philippines for giving this researcher the opportunity to pursue and
accomplish this research, and their most thoughtful and caring gift, the researchers’ thesis
adviser, Ms. Norie L. Maniego, who directed, supervised and encourage the researcher
not only for the completion, but also to best within the researchers’ self to bounds which
were previously unknown.
To the research panelists, thank you for your utmost consideration and necessary
guidance in the service of knowledge.
Acknowledgement and gratitude also goes to all the respondents from the
Department of Social Welfare and Development, National Economic and
Development Agency, Government Service and Insurance Corporation, Social
Security System and Philippine Health Insurance Corporation, for their cooperation
in answering the survey questionnaire.
Furthermore, for teaching the researcher to love and persevere throughout the
trials of life, the researchers’ unending gratitude and love goes out to the researchers’
family: husband, children, parents and siblings, the researchers’ support and purpose
– all that the researcher is all thanks to all of you.
Also, deepest thanks is extended to the Statistician, for helping the researcher to
make this research reliable and valid, her knowledge and information have greatly helped
to complete this thesis within the deadlines.
And lastly, to the researchers’ friends especially Ms. Janeth Ladia-Decipulo,
colleagues, and everyone else, the researcher extends to you a most grateful heart. This
would never have been done without your intimate influences in the researchers’ life.
From the bottom of the researchers’ humble heart, thank you.

CERTIFICATION OF ORIGINALITY
This is to certify that the research work presented in this thesis/ dissertation,
ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF ENTERPRISE RISK
MANAGEMENT IN THE SELECTED AGENCIES IN PUBLIC SECTOR GOVERNANCE
TOWARDS THE ADOPTION OF ENTERPRISE RISK MANAGEMENT FRAMEWORK
for the degree MASTER IN PUBLIC ADMINISTRATION at the Polytechnic University of
the Philippines embodies the result of original and scholarly work carried out by the
undersigned. This dissertation does not contain words or ideas taken from published
sources or written works that have been accepted as basis for the award of a degree from
any other higher education institution, except where proper referencing and
acknowledgment were made.
(Signature)
ARCELI S. DIVINA
Researcher
__________________________
Date Signed (date, month, year)
ABSTRACT
Title : An Assessment of the Effects of the Implementation of Enterprise Risk

Management in the Selected Agencies in Public Sector Governance
towards the Adoption of an Enterprise Risk Management Framework
Researcher : Arceli S. Divina
Degree : Master in Public Administration
Institution : Polytechnic University of the Philippines
Year : 2021
Adviser : Ms. Norie L. Maniego
The main objective of this study is to determine the implementation of ERM in the
selected agencies in Public Sector Governance towards the adoption of an ERM
framework.
The primary data collection used was a researcher-made survey questionnaire
conducted through an online survey via Google Forms.
In general, this study shows that the implementation of ERM in the public sector in
terms of accountability mostly affected the compliance with government policies and
standards; in terms of effectiveness and efficiency, the implementation of ERM has
improved the quality of the provision of service; in relation to the strategic vision the
implementation of ERM has improved tracking and review of plans and actions; in regards
to transparency the implementation of ERM has resulted in the provision of right and
accurate information and has increased the timely provision of information.
This study identifies the most encountered challenges in the implementation of the
ERM are: inadequate change management / resistance to change the risk appetite and
tolerance not clearly defined and insufficient resources such as budget, time, and human
resources, lack of internal knowledge, skills, and expertise, lack of qualified personnel to
implement ERM and inadequate training. While the measure to address the encountered
problems in the implementation of ERM are: context-specific ERM Framework per
government agencies; identify ERM Champion among the top management, a sufficient
allocation of budget, time, and human resource in the implementation of risk and capacity-
building activities.
This study showed that there is no significant difference in the assessment scores
of ERM implementation between the different agencies in relation to accountability. In
terms of efficiency and effectiveness there is significant difference in the item it has
resulted in the attainment of targets on specified time and has resulted in effective
allocation and utilization of resources. In reference to the strategic vision, following
statements have significant differences among the different: (1) has clear organizations
direction and action; (2) has resulted in a better communication plan; and (3) has improved
tracking and review of plans and actions. In terms of transparency, the effects of the
implementation of ERM that has resulted in the provision of right and accurate information
and has increased the timely provision of information made a significant difference
between the different departments/agencies.
To other government agencies, adopt an Enterprise Risk Management framework
that is suitable to your organization to institutionalize risk management procedures in the
organization. Also adoption of ERM framework will provide a structure in complying with
Clause 6.1 “Actions to address risks and opportunities” of ISO 9001:2015 - QMS. The
QMS is a requirement in the public sector.

TABLE OF CONTENTS
Page
Title Page i
Certification and Approval Sheet ii
Acknowledgments iii
Certification of Originality iv
Abstract v
Table of Contents vi
1. The Problem and Its Setting
Introduction 1
Theoretical Framework 5
Conceptual Framework 12
Statement of the Problem 13
Hypothesis 14
Scope and Limitations of the Study 14
Significance of the Study 15
Definition of Terms 16
2. Review of Related Literature and Studies
Risks, Risk Management, and Enterprise
Risk Management: The beginnings 18
Benefits of Enterprise Risk Management 20

ERM, Corporate Governance and Good 21

Governance
ERM and its Effects in the Public Sector 24

Governance
ERM in the Context of the Philippines Public 25

Sector
Synthesis of the Reviewed Literature and 26

Studies
3. Methodology
Method of Research 28
Population, Sample Size, and Sampling 28

Technique
Description of Respondents 31
Research Instrument 33
Data Gathering Procedure 36
Statistical Treatment of Data 37
4. Results and Discussions
Effects of the implementation of Enterprise 39

Risk Management (ERM) to the Philippines
public sector governance
Challenges that the selected government 47

agencies encountered in the implementation
of ERM
Measures to address the problems that the 51

selected government agencies encountered
in the implementation of ERM
Test for Significant Difference 54

ERM Implementation to Agencies Good 55

Governance In terms of Accountability

Governance In terms of Effectiveness and
Efficiency

Governance In terms of Strategic Vision

Governance In terms of Transparency
5. Summary of Findings, Conclusions, and

Recommendations
Findings 79
Conclusions 87
Recommendations 93
6. References 95
7. Appendices 101
LIST OF TABLES
NUMBER TITLE PAGE
1 Samples and Size 30
2 Distribution of Respondents by Sex 31
3 Distribution of Respondents by Department/Agency 32
4 Distribution of Respondents by Position Level 32
5 Distribution of Respondents in terms of Number of Years in the 33

Current Position
6 Assessment on the Effect of ERM Implementation on Agencies 41

Good Governance in terms of Accountability

Good Governance in terms of Effectiveness and Efficiency
8 Assessment on the Effect of ERM Implementation to Agencies 44

Good Governance in terms of Strategic Vision

Good Governance in terms of Transparency
10 Assessment on the Challenges in the Implementation of ERM in 48

terms of Management

terms of Process

terms of Resources
13 Assessment on the Measures to Address the Problems in the 52

Implementation of ERM in terms of Management

Implementation of ERM in terms of Process

Implementation of ERM in terms of Resources
16 Significant Difference of Respondents’ Assessment on the 55

implementation of ERM has led to Compliance with Government
Policies and Standards

Implementation of ERM has resulted in Leaders and Employees
being Accountable for their Actions

implementation of ERM has resulted in Leaders and Employees
to Value their Work and Organization Resources

implementation of ERM increased Leaders and Employees’
Trustworthiness

implementation of ERM has improved the Quality of the Provision
of Service

implementation of ERM has resulted in the Attainment of Targets
on Specified Time

implementation of ERM has resulted in Effective Allocation and
Utilization of Resources

implementation of ERM has improved Beneficiaries / Clientele /
Stakeholder's Confidence and Trust

implementation of ERM has Clear Organizations Direction and
Action

implementation of ERM has resulted in the Identification of
Priorities

implementation of ERM has resulted in a Better Communication
Plan

implementation of ERM has Improved Tracking and Review of
Plans and Actions

implementation of ERM has the Organization’s Communication
and Information Strategy

implementation of ERM has resulted in the Accessibility of
Information for Public Use

implementation of ERM has resulted in the Provision of Right and
Accurate Information

implementation of ERM has increased the Timely Provision of
Information
LIST OF FIGURES
NUMBER TITLE PAGE
1 New ERM Framework 6
2 Corporate Governance 8
3 Elements of Good Governance 11
4 Conceptual Framework 13
LIST OF APPENDICES
NUMBER TITLE PAGE
1 Appendix 1 : Survey Questionnaire 101
2 Appendix 2: Complete List of Results of Post hoc test with 111

significant difference
1
CHAPTER 1
THE PROBLEM AND ITS SETTING
Introduction
The terms “government” and “governance” are used interchangeably in some
dictionaries since these terms involve the exercise of authority in an organization,
institution, or state. Heywood (1997) argues that governance is a broader term than the
government. The government is restricted to the activities of the state itself and the
responsibilities, which are properly exercised by public bodies. Governance on the other
hand in its widest sense refers to the various ways in which social life is coordinated. “It
comprises mechanisms, processes, and institutions, through which citizens and groups
articulate their interests, exercise their legal rights, meet their obligations, and mediate
their differences (UNDP).” Since government functions through its public apparatus or
public institutions, mechanisms such as the Enterprise Risk Management are
implemented so that public bodies such as the courts, the police, and the social security
system can properly provide the services that the people need.
Enterprise Risk Management (ERM) is an approach or method that an
organization uses to detect all possible risks that will affect the organization’s ability to
achieve its objectives and the best ways to manage or prevent them. ERM is important
because it helps an organization to identify risks and be prepared to mitigate them. If
properly implemented, ERM minimizes surprises, ensures efficient use of resources, and
builds a better way to face any risk events. It is said that the major contribution of
2
Enterprise Risk Management (ERM) in the public sector is on the aspect of governance
particularly “good governance.”
Good governance means that processes and institutions produce results that
meet the needs of society while making the best use of resources at their disposal. In the
public sector, however, the challenge lies in the creation of a system of governance that
promotes and sustains participatory, transparent, and accountable governance or the so-
called “good governance”. Good governance ensures that political, social, and economic
priorities are based on broad consensus in society and that the voices of the poorest and
the most vulnerable are heard in decision-making over the allocation of development
resources. The big question however is “to what extent does Enterprise Risk Management
affect the public sector governance?”
In this paper, the researcher focuses on the effects of the ERM on the public sector
good governance in four (4) specific characteristics out of 9 which include (1)
accountability, (2) effectiveness and efficiency, (3) strategic vision and, (4) transparency.
In the Philippines, a few government agencies already have established ERM or
implementing risk identification, evaluation and control for more than three years, among
these various government agencies includes the Department of Social Welfare and
Development (DSWD), Government Service Insurance System (GSIS). Philippine Health
Insurance Corporation (Philhealth), Social Security Services (SSS) and National
Economic and Development Authority) already implemented ERM. The Department of
Social Welfare and Development (DSWD) is the primary government agency mandated
to develop, implement, and coordinate social protection and poverty reduction solutions
for and with the poor, vulnerable, and disadvantaged. With the high level of operational
targets along with huge resources entrusted and to ensure that the risk is properly
managed ERM in the Department was implemented. An MC was circulated to provide

3
information and guidelines in its implementation in 2014. The implementation of the
program was previously handled by the Office of Strategic Management which was, later
on, became one of the divisions under Policy Development and Planning Bureau. The MC
aims to institutionalize a risk management framework and operationalize the identification
of risk in each office, formulate a risk treatment plan and the establishment of risk
management structures within the Department (DSWD, 2020). The Government Service
Insurance System (GSIS) is a government-owned and controlled corporation of the
Philippines. Created by Commonwealth Act No. 186 and Republic Act No. 8291, GSIS is
a social insurance institution that provides a defined benefit scheme under the law.
GSIS is committed to provide social security and financial benefits to all government
employees and their qualified dependents, satisfy the non-life insurance needs of the
government, maintain and strengthen the viability of the fund, and build an enduring
partnership with its stakeholders (GSIS, 2020) . The GSIS has established an ERM
System which is meant to ensure that the corporate assets are managed properly and that
the quality service is rendered to the members and stakeholders of GSIS. Using an ERM
framework, GSIS observes a process to identify, analyze, respond, monitor, and report on
risks that the organization is or will be exposed to. The framework also embodies a
comprehensive, system-wide, and integrated approach to risk management to enhance
governance mechanisms and effectively identify, assess and manage risks. The Risk
Oversight Committee (ROC) assists the Board in its risk policy and oversight functions by
formulating risk policies, setting system-wide risk limits, and reviewing the risks of specific
proposals (GSIS, 2020). The public's clamor for health insurance that is more comprehensive
in terms of covered population and benefits led to the development of House Bill 14225 and Senate
Bill 01738 which became The National Health Insurance Act of 1995 or Republic Act 7875, signed
by President Fidel V. Ramos on February 14, 1995. The law paved the way for the creation of the
Philippine Health Insurance Corporation (PhilHealth), mandated to provide social health insurance
4
coverage to all Filipinos in 15 years' time. PhilHealth assumed the responsibility of administering
the former Medicare program for government and private sector employees from the Government
Service Insurance System in October 1997, from the Social Security System in April 1998, and
from the Overseas Workers Welfare Administration in March 2005 (Philhealth, 2014). The
Philippine Health Insurance Corporation (PhilHealth) considered risk management as far
back as 2007 when it re-engineered its organizational structure. PhilHealth’s risk
management team under the Actuarial Services and Risk Management Sector was
created as part of the corporation’s observance of good governance. The corporation’s
risk management scheme initially followed the Australian/New Zealand Standard of Risk
Management (AS/NZS 4360:2004). Such a scheme later evolved into the ISO 31000:2009
Risk Management Standard and follows an integrated approach in managing risks, i.e. all
types of risks at all levels of the organization – from strategic to day-to-day. The silo
approach in risk management, nevertheless, is likewise used per office/department in
cases where there are risks that need not be addressed on a corporate-wide level
(Philhealth, 2014). As an institution that has the fiduciary responsibility of prudently
managing the funds of its members, the Social Security System (SSS) regularly reviews
the current and potential risks that may materially affect its overall viability. These risks
are present in all activities of the SSS – from the people that are hired and tasked to
manage certain functions, the system that is used to handle collections and benefits, the
investments SSS makes and how these investments match the potential payouts to
members, to the external risks that it faces in cases where it is not completely understood
by its members or the general public.The Risk Management Committee (RMC) is the
oversight body designated by the Social Security Commission (SSC) to adopt and oversee
the risk management program of the Social Security System (SSS) created under SSC
Resolution No. 341 on 8 May 2013. (SSS, 2020). The National Economic and Development
Authority (NEDA), as mandated by the Philippine Constitution, is the government’s independent

5
socioeconomic planning body. To be able to identify the risk that will hinder its objective to formulate
continuing, coordinated, and fully integrated socio economic policies, plans, and programs, in 2016
the NEDA adopted the Executive Order No. 605, series of 2007, Institutionalizing the Structure,
Mechanisms and Standards to implement the Government Quality Management Program, that
includes the Risk Identification, Evaluation and Control. It is these agencies that this paper will
focus on or the locale of the study and the respondents will be from the Planning Office, Internal
Audit Service and Risk Management Office / Office of the Strategy Management / Management
Division since they are directly involved and/or have the direct knowledge in the implementation of
ERM.
Theoretical Framework
The fundamental premise of the Risk Management framework is that good risk
management and internal control are necessary for the long-term success of all
organizations and that the frameworks contribute to improving organizational performance
and governance (Webster & Stanton, 2014). This paper, however, seeks to present
Enterprise Risk Management (ERM) as a means to enhance governance in national
government agencies. In some research findings, the implementation of ERM in banks,
business firms, insurance companies, and government agencies improved organizational
governance (COSO, 2004). This being so, this research uses the framework presented in
figure 1 to properly explain the theories behind the implementation of Enterprise Risk
Management. This ERM framework is derived from the 2017 new ERM framework
published by the Committee of Organizations of the Treadway Commission (COSO).

6
Figure 1:
New ERM Framework
Source: COSO, New ERM Framework: Integrating with Strategy and Performance
(2017)
The Framework itself is a set of principles organized into five interrelated
components: Governance and Culture, Strategy and Objective-Setting, Performance,
Review and Revision, and Information, Communication, and Reporting. This
framework emphasized the importance of ERM in strategic planning and embedding it
throughout an organization- because risk influences and aligns strategy and performance
across all departments and functions (COSO, 2017). In details, these components are
discussed below which are derived from the Executive Summary of New ERM Framework
(2017):
1. Governance and Culture- Governance sets the organization’s tone, reinforcing
the importance of, and establishing oversight responsibilities for, enterprise risk
7
management. Culture pertains to ethical values, desired behaviors, and
understanding of risk in the entity.
2. Strategy and Objective-Setting- Enterprise risk management, strategy, and
objective-setting work together in the strategic-planning process. Risk appetite is
established and aligned with strategy; business objectives put the strategy into
practice while serving as a basis for identifying, assessing, and responding to risk.
3. Performance- Risks that may impact the achievement of strategy and business
objectives need to be identified and assessed. Risks are prioritized by severity in
the context of risk appetite. The organization then selects risk responses and takes
a portfolio view of the amount of risk it has assumed. The results of this process
are reported to key risk stakeholders.
4. Review and Revision- By reviewing entity performance, an organization can
consider how well the enterprise risk management components are functioning
over time and in light of substantial changes, and what revisions are needed.
5. Information, Communication, and Reporting- Enterprise risk management
requires a continual process of obtaining and sharing necessary information, from
both internal and external sources, which flows up, down, and across the
organization.
As mentioned earlier, the focus of this paper is on finding how Enterprise Risk
Management (ERM) contributes to the improvement of public sector governance. The
widely used definition of corporate governance is defined by OECD (2018) which “a set of
relationships between a company’s management, its board, its shareholders and other
stakeholders.” Corporate governance also provides the structure through which the
8
objectives of the company are set, and the means of attaining those objectives and
monitoring performance are determined” (Applied Corporate Governance, n.d.).
To further explain the relationship of Enterprise Risk Management (ERM) and
governance, the researcher adopted the framework consisting of four components:
corporate stakeholders, the governance “umbrella” provided by the board of directors, risk
management, and assurance. The arrows within and between the four components
represent the various channels of ERM and corporate governance communications (Sobel
& Reding, 2004).
Figure 2.
Corporate Governance
Source: Management Accounting Quarterly 2004
In this paper among the six theories of corporate governance, the researcher
focuses on the steward theory which states that a steward protects and maximizes
shareholders' wealth through firm Performance (Papert Tyari, 2018). Stewards are
company executives and managers working for the shareholders, protecting and making
profits for the shareholders. The stewards are satisfied and motivated when organizational
success is attained (Cossin, Ong, & Coughlan, 2015). It stresses the position of
9
employees or executives to act more autonomously so that the shareholders’ returns are
maximized.
The employees take ownership of their jobs and work at them diligently (Theory of
Corporate Governance, 2018). This theory was used by some researchers in describing
the importance of the board of directors or the head/leader of an organization in the
implementation of ERM who acts as responsible stewards of assets they control on behalf
of the owner of the organization. The researcher’s findings and analysis will be properly
explained using the above frameworks and theories.
As this paper looks into the effects of the implementation of ERM on the
governance of national government agencies, the researcher discusses, in particular, the
concept of good governance. In general, work by the World Bank and other multilateral
development banks on good governance addresses economic institutions and public
sector management, including transparency and accountability, regulatory reform, and
public sector skills and leadership. Other organizations, like the United Nations, European
Commission, and OECD, are more likely to highlight democratic governance and human
rights, aspects of political governance avoided by the Bank. “Good governance” is a term
that has become a part of the vernacular of a large range of development institutions and
other actors within the international arena. What it means exactly, however, has not been
so well established. Below elaborates the elements or characteristics of good governance
which includes (UNDP, 1997):
● Participation - All men and women should have a voice in decision-making,
either directly or through legitimate intermediate institutions that represent their
interests. Such broad participation is built on freedom of association and speech,
as well as capacities to participate constructively.

10
● Rule of law- Legal frameworks should be fair and enforced impartially,
particularly the laws on human rights.
● Transparency- Transparency is built on the free flow of information. Processes,
institutions, and information are directly accessible to those concerned with them,
and enough information is provided to understand and monitor them.
● Responsiveness- Institutions and processes try to serve all stakeholders.
● Consensus orientation- Good governance mediates differing interests to reach
a broad consensus on what is in the best interests of the group and, where
possible, on policies and procedures.
● Equity- All men and women have opportunities to improve or maintain their well-
being.
● Effectiveness and efficiency- Processes and institutions produce results that
meet the needs of the organization while making the best use of resources.
● Accountability- Decision-makers in government, the private sector, and civil
society organizations are accountable to the public, as well as to institutional
stakeholders. This accountability differs depending on the organization and
whether the decision is internal or external to an organization.
● Strategic vision- Leaders and the public have a broad and long-term perspective
on good governance and human development, along with a sense of what is
needed for such development. There is also an understanding of the historical,
cultural, and social complexities in which that perspective is grounded.

11
Figure 3
Elements of Good Governance
Source: UNDP. (1997) Governance for Sustainable Human Development.

United Nations Development
Figure 3 above illustrates how each element is related and how each represents
the characteristics of good governance, highlighted in red are the focus of this paper.
Accountability is one of the cornerstones of good governance, it is said to exist when there
is a relationship where an individual or body, and the performance of tasks and functions
are subject to an oversight (Stapenhurst & O'Brien). Accountability ensures that official's
decisions are justified and their actions are enforced. Effectiveness and efficiency are said
to be integral in government agencies, efficiency implies that costs are minimized while
effectiveness is the achievement of the desired purpose. Thus, effectiveness and
efficiency in governance refer to processes and institutions that produce results that meet
12
the needs of the organization while making the best use of the resources (Corporate
Governance and International Business, 2020).
Strategic Vision is a leader's understanding of the organization’s goals both short
and long-term and development as well as what is needed for such development along
with the knowledge and understanding of the organization's cultural and social
complexities. While transparency in the context of governance means being open and
honest in all official activities. This implies that the actions of the organization be duty-
bound to bear public scrutiny through various means of information dissemination and
communications.
Conceptual Framework
As this paper tries to look into the effects and challenges in the implementation of
ERM in the identified NGAs in the public sector governance, Figure 4 illustrates the
research prototype using the Input-Process-Output model adopted. The IPO chart
illustrates the inputs, outputs, and the method required to identify the significant factors
that will realize its expected output. The INPUT discussed in this paper includes the
Enterprise Risk Management strategy and good governance concepts in the
implementation of ERM based on its four identified elements/characteristics i.e.
accountability, strategic vision, transparency, and effectiveness and efficiency. The
PROCESS contains tools such as survey questionnaires to determine the effects of ERM
implementation on agencies’ governance using the four characteristics of good
governance and identify possible challenges. The statistical data and analysis, and
interpretation of the results are frequency percentage distribution; weighted mean and
Kruskal Wallis H-test are the methodologies to be used. The OUTPUT is the expected
result that will help other government agencies in the adoption of the ERM framework.
13
Figure 4
Conceptual Framework
Effects of ERM GOOD GOVERNANCE

ERM implementation in Accountability
the public sector Efficiency and
Effectiveness
Strategic Vision
- Survey Questionnaire
- Statistical data and Analysis
- Interpretation of results using
frequency, percentage distribution,
weighted mean and Kruskal Wallis H-
Test
Adoption of ERM
FRAMEWORK
Statement of the Problem
Generally, the objective of this study is to assess the effects of the implementation
of Enterprise Risk Management in the public sector governance in selected government
agencies.
Specifically, it seeks to answer the following questions:
1. What are the effects of the implementation of Enterprise Risk Management
(ERM) to the Philippines public sector governance in terms of the following:
1.1. Accountability
1.2. Effectiveness and Efficiency

14
1.3 Strategic Vision
1.4. Transparency
2. What are the challenges that the selected government agencies encountered
in the implementation of ERM?
3. What measures can be suggested to address the problems that the selected
government agencies encountered in the implementation of ERM?
4. Is there a significant difference in the assessment of the effects of the
implementation of ERM on public sector governance when respondents are
grouped according to agency?
5. Based on the findings of the study, what recommendations can be made in the
adoption of an ERM framework?
Hypothesis
There is no significant difference in the effects of the implementation of ERM on
public sector governance among the three government agencies.
Scope and Limitations of the Study
The results of this study do not represent the effects of ERM in the overall
organizational governance of all government agencies in the Philippines. Due to time
constraints, the study had to limit the gathering of data from the Department of Social
Welfare and Development (DSWD), Government Service Insurance System (GSIS),
Social Security System, Philippine Health Insurance Corporation and the National
Economic and Development Authority (NEDA). Besides, the analysis will focus on
15
describing the effects of ERM in public sector good governance in particular to only four
(4) characteristics of good governance, which are Accountability, Effectiveness and
Efficiency, Strategic Vision, and Transparency. Respondents from the five government
agencies will only include selected technical employees from the Office of Strategic
Management, Planning Office, and the Internal Audit Service. The result of the survey also
does not represent the view of the entire agency where the respondents work and even
the whole Philippines government employees.
Significance of the Study
For the past few years, many private agencies established and implemented ERM
to ensure that risks are identified and addressed. It is said that the establishment of ERM
is expensive as such when it comes to the public sector, only a few have implemented
ERM since it requires the use of government resources particularly financial resources
that most of the government agencies in the Philippines are limited or fall short of.
The research aims to provide other government agencies as well as the policy
makers the potential benefits of the implementation of ERM, the information and the
framework needed in the establishment of ERM particularly its effects on good governance
elements of accountability, effectiveness and efficiency, strategic vision, and
transparency. The paper will also illustrate possible challenges as identified by the
selected respondents from the three government agencies as well as possible
recommendations to effectively implement ERM.
The result of the survey will also help the respondents to strengthen and improve
on the areas that need enhancement in the implementation of the ERM. Likewise, this
16
study will provide guidance to the policy makers to institutionalize the ERM as one of the
good governance strategies in the public sector.
Lastly, this paper will add to the literature of the study of ERM as implemented in
the public sector particularly in the Philippines context.
Definition of Terms
For better understanding and interpretation of this study, the following terms are
conceptually and operationally defined:
Accountability. Decision-makers in government, the private sector, and civil
society organizations are accountable to the public, as well as to institutional
stakeholders. This accountability differs depending on the organization and whether the
decision is internal or external to an organization. (UNDP, 1997)
Effectiveness and Efficiency. Processes and institutions produce results that
meet the needs of the organization while making the best use of resources. (UNDP,
1997}
Enterprise Risk Management (ERM). A process, ongoing and flowing through
an entity, affected by people at every level of an organization, applied in strategy setting,
applied across the enterprise, at every level and unit, and includes taking an entity-level
portfolio view of risk, designed to identify potential events that, if they occur, will affect the
entity and manage risk within its risk appetite, able to provide reasonable assurance to an
entity’s management and board of directors, geared to the achievement of objectives in
one or more separate but overlapping categories (Geesink, 2012).

17
Governance. The process of establishing chains of responsibility, authority, and
communication (decision rights) Establishing measurement, policy, standards, and control
mechanisms to enable people to carry out their roles and responsibilities (Cantor &
Sanders, 2007).
Good Governance. How power is exercised in the management of a country’s
economic and social resources for development (IFAD, 1999)
Risk. An event or circumstance that could adversely affect the achievement of
public organization objectives (Power, 2014)
Steward Theory. States that a steward protects and maximizes shareholders'
wealth through firm Performance (Papert Tyari, 2018)
Strategic Vision. Leaders and the public have a broad and long-term perspective
on good governance and human development, along with a sense of what is needed for
such development. There is also an understanding of the historical, cultural, and social
complexities in which that perspective is grounded. (UNDP, 1997)
Transparency. Built on the free flow of information. Processes, institutions, and
information are directly accessible to those concerned with them, and enough information
is provided to understand and monitor them. (UNDP, 1997)

18
CHAPTER 2
REVIEW OF LITERATURE AND STUDIES
Risks, Risk Management, and Enterprise Risk Management: The beginnings
The quote by Mark Zuckerberg “the biggest risk is not taking any risk” represents
a human bold move in facing different odds, as humans became aware of what “risk” and
what outcome it brings when left un-address. With this, individuals, either businessmen or
employees, organizations, whether private or public, find ways and means on how to face
risk head-on by identifying them and finding means to mitigate them. Enterprise Risk
Management is among these means or strategies applied both in the private and public
sectors.
Globally, ERM started as a way to mitigate losses in insurance and business firms
which later on expanded to include the public sector. As government agencies increase
strategies to ensure the provision of public service for the past decades, governments
have started to apply a “risk lens” in their organizations (Mokgatle, 2013). These lenses
are strategies included in the ERM that contributed to increase public sector performance
and enhance governance. The implementation of ERM affected the public sector’s risk
management by comprehensively and strategically identifying and assessing risks
(Dykstra & Maraccini, 2019). If implemented effectively, ERM helps organizations link
strategies to risk and performance, which leads to better decision-making processes and
more effective use of resources (Dykstra & Maraccini, 2019).
In this paper, we define risk as any event or circumstance that could adversely
affect the achievement of public organization objectives (Kopia, Just, & Bussian, 2017).
19
According to Berstein (1996), people began to understand how to predict and manage
risks as early as 1600. According to ISO 31000:2009 risk is defined as a deviation from
the expected which leads to uncertainty on attaining the organization’s objectives (Power,
2014). Risks occur in the everyday life of people, as well as for companies. Taking risks
is fundamental for growth and development. Therefore it is crucial to identify and manage
risks to minimize their threats and improve their potential (Institute of Risk Management,
2006).
As such the need to manage risk is crucial as risks are inevitable. Some historians
believe that the earliest concept of managing risks arose because of gaming. If one were
to consider the role of insurance in risk management, it is still possible to trace it back to
ancient times (Bernstein, 1996). For example, mutual aid and burial societies have been
documented as far back as the earliest days of ancient Rome. These are considered the
precursors of modern insurance companies (Bernstein, 1996)
According to "Risk Management: History, Definition, and Critique," the modern
terms for managing risk rose after World War II, but the discipline mostly began as a study
of using insurance to manage risk (Dionne, 2013). Later, from the 1950s to the 1970s, risk
managers began to realize that it was too expensive to manage every risk with insurance,
so the discipline began to expand to alternatives to insurance (Mehr, Risk Management
Concepts and Applications, 1974). For example, training and safety programs might be
considered insurance alternatives. The first two academic books (Mehr & Hedges, 1963)
were published by Mehr and Hedges in 1963 and Williams and Heins in 1964 content of
which are purely risk management (Williams & Heins, 1964). Risk management has long
been associated with the use of market insurance to protect individuals and companies
from various losses associated with incidents (Harrington and Niehaus, 2003).
Traditionally, risk management happened in a silo-based way, where each risk is

20
addressed separately and focused on financial risks, such as credit, market, and liquidity
risk (Macshane, Nair, & Rustambekov, 2010). However, this approach leads to
inefficiencies since relationships between risks are not seen. These inefficiencies were
addressed by Enterprise Risk Management where risks are handled in a coordinated way,
taken together in a portfolio (Geesink, 2012). Geesink (2012) defined Enterprise risk
management as:
“A process, ongoing and flowing through an entity, affected by people at every
level of an organization, applied in strategy setting, applied across the enterprise, at every
level and unit, and includes taking an entity-level portfolio view of risk, designed to identify
potential events that, if they occur, will affect the entity and manage risk within its risk
appetite, able to provide reasonable assurance to an entity’s management and board of
directors, geared to the achievement of objectives in one or more separate but overlapping
categories.”
Benefits of Enterprise Risk Management
The new ERM framework book enumerated the benefits of ERM in organizations
when integrated throughout the entity, these include but not limited to the following: (1)
Increasing the range of opportunities; (2) Identifying and managing risk-entity-wide; (3)
Increasing positive outcomes and advantage while reducing negative surprises; (4)
Reducing performance variability; (5) Improving resource deployment; and (6) Enhancing
enterprise resilience (COSO, 2017). ERM as it has been practiced, has helped many
organizations identify, assess, and manage risks to the strategy.
Chartered Global Management Accountant enumerated four (4) benefits that ERM
provides these include: (1) Greater awareness about the risks facing the organization and
21
the ability to respond effectively; (2) Enhanced confidence about the achievement of
strategic objectives; (3) Improved compliance with legal, regulatory and reporting
requirements; (4) Increased efficiency and effectiveness of operations (CGMA, 2013).
Many organizations still regard risk documentation as an end, rather than a means
to manage risks, therefore, treating ERM as a checklist-driven box-ticking exercise and
failing to operationalize risk management into strategy setting and mission-critical day-to-
day activities (RSM International Association, 2020). Some lack a strong Board and
management monitoring structure to take firm and timely corrective actions and avoid
further threats (RSM International Association, 2020). Others have organization and
reporting structures that confuse the roles and responsibilities between managing risks
and monitoring risks, consequently failing to recognize the need for separation and
independence (RSM International Association, 2020). Often, there is also an incorrect
assignment of risk owners, resulting in a lack of accountability and inadequate mitigation.
Effective management of risks is also seldom emphasized as a KPI in assessing
management performance (RSM International Association, 2020).
Enterprise Risk Management, Corporate Governance, and Good Governance
The 2008 global financial scandals have increased pressure on corporations to
improve corporate governance practices (Khalik & Sum, 2019). The definition of Corporate
Governance used in this paper is the framework of rules and practices by which a board
of directors ensures accountability, fairness, and transparency in a
company's relationship with its all stakeholders such as financiers,
customers, management, employees, government, and the community (Business
Dictionary). As a response to the crisis, Enterprise risk management (ERM) was

22
introduced as one of the mechanisms that can improve corporate governance practices,
particularly on risk management (Kim, 2014). Since its introduction, ERM has received
major attention from corporations (Shad & Lai, 2019). Despite the claim that ERM is the
solution for corporate governance deficiency, the number of empirical researches
examining this new field is still limited. The manager needs to manage factors that
stimulate risk so that they can pursue strategic advantage and opportunity arise from the
risks (Miccolis & Shah, 2000). Corporate risk management is a vital activity to ensure
business sustainability which in the era of globalization, firms have to encounter a myriad
of risks that sometimes is beyond their control. Therefore, an effective risk management
system is imperative for a firm to be successful and sustained in today’s challenging
business world (Maruhun, Abdullah, Atan, & Yusuf, 2018).
The investors’ weakening confidence towards the firm’s risk management
practices particularly after the crisis has made corporate governance a top priority for the
BODs, top management, auditors, and stakeholders (Sobel & Reding, 2012). Due to this
development, the awareness of risk is growing and firm practices have increasingly
become organized around risk. Corporate governance components, particularly the Board
of Directors (BOD), have increased their attention on risk management activities such as
identifying, assessing, and treating, and monitoring risks, as well as, evaluating the
effectiveness of management control to manage risk (Collier & Soin, 2013).
In research conducted that involved the public sector in Africa, the survey results
confirmed that there is a positive association between the implementation of ERM and
corporate governance and that corporate governance is the main driving force behind its
implementation (Truter, 2007). The research also confirmed that the role of the board and
the internal audit concerning ERM implementation is crucial and important to ensure that
23
guidelines and plans are carried out properly (Truter, 2007). Weak corporate governance
has been blamed as one of the factors that cause major failure in risk management and
as a contributing factor to the collapse of many major firms in the fiasco (Maruhun,
Abdullah, Atan, & Yusuf, 2018). Corporate governance and risk management are linked
together to assist how firms can better understand the risks, improve and deliver its
objectives and mitigate, assess, and manage risk in an appropriate manner (Ghazali &
Abdul Manab, 2013). Risk management is a key component of corporate governance. It
is an important mechanism in achieving an organization’s objectives and monitoring agent
performance (Demidenko & Mcnutt, 2010). Therefore, ERM is an important mechanism in
the firm governance framework that can be used as a monitoring or controlling mechanism
in aligning the principal-agent relationship to reduce agency problems.
Good governance, however, speaks beyond governance itself. Good governance
is how power is exercised in the management of a country’s economic and social
resources for development (IFAD, 1999). Good Governance is an approach to
government that is committed to creating a system founded in justice and peace that
protects an individual’s human rights and civil liberties. According to the United Nations,
Good Governance is measured by the eight factors of Participation, Rule of Law,
Transparency, Responsiveness, Consensus Oriented, Equity and Inclusiveness,
Effectiveness and Efficiency, and Accountability (Creative Learning, 2020). It is said that
enterprise risk management is the key to implementing and sustaining good governance
in an organization that is opposite to Poor governance which affects everyone and is never
excusable (Minsky, 2017). It’s a result of negligence, and a company that allows a scandal
to unfold through negligence is not just being unjust, it’s violating its moral obligation to its
stakeholders and community (Minsky, 2017).

24
Enterprise Risk Management and its Effects in the Public Sector Governance
According to McPhee (2014), many public sector organizations are yet to integrate
risk management into organizational behavior, and this limits employee contribution to
stronger outcomes through more effective engagement. As posited by Owojori et al.
(2011), the risk management structure and culture need to be understood and imbibed
from the board of directors to all staff. Further, it states that having a risk management
structure is not enough but ensuring compliance and the will to implement the structure
effectively and efficiently (Owojori, Akintoye, & Adidu, 2011). It is stated in the literature
that risk management in the public sector strengthens the capacity of the Government to
diagnose, appreciate, manage and take advantage of emerging challenges and
opportunities to optimize performance improvement within public sector organizations
(Martin & Power, 2007).
It is said that the performance of the institution in the public sector has always been
among the main drivers that determine how a country is ultimately perceived by its citizens
(Mokgatle, 2013). Public institutions' objectives can only be achieved with a well-
formulated, implemented, and continuous review of strategies. In the early 1990, the core
of various strategies was Enterprise Risk Management (ERM). The plans formulated
through ERM, as they say, translated strategic objectives of public institutions where
resources are limited if not, resources are put in programs or projects that yielded negative
results thus the need for a deep understanding of the benefits of ERM in the public sector
organizational performance (Ahmed & Abdul Manab, 2016).
Organizational performance means the actual output or results of an organization
as measured against its intended outputs or goals and objectives (iEdunote, n.d.). In a
business firm, it refers to financial performance, market performance, and shareholder

25
returns. But in the public sector, it means more than just output in terms of product,
increase in returns, but rather it is about results and impact. It is about setting standards,
outputs that contribute to policy objectives, it is focused on outcomes and outputs, not just
the input (The World Bank, 2014).
The demand for ERM and relevant risk management capabilities continues to grow
in the public sector (Bhatta, 2008). In recent years, changes in the governance landscape,
such as increasing transparency, have resulted in a shift in focus toward more robust risk
management processes and technologies. Globally, a growing number of private and
public organizations initiated the development of ERM programs to improve upon legacy
risk management capabilities and to incorporate the consideration of risk into
organizational activities (OECD, 2014).
Enterprise Risk Management in the Context of the Philippines Public Sector
As of writing and based on the research so far made, the researcher never
encountered an article that discussed how ERM started in the Philippines public sector. In
the same way, no report or documents provide a list of NGA’s where ERM is established.
However, the practice of risk management is more common among private financial
institutions such as insurance companies, banks, and manufacturing companies. A few,
such as the Central Bank of the Philippines, Manila Water District, and the Department of
Social Welfare and Development (DSWD) are known to have established ERM among the
public sector agencies.
For the past years, a few international researchers, however, mentioned that there
has been a renewed effort by Philippine regulators to further promote the importance of
enterprise risk management as a tool for the continued sustainable growth of the
26
Philippine business environment. Financial institutions falling under the supervision of the
Bangko Sentral ng Pilipinas (BSP) would most likely think of BSP Circular 971: Guidelines
on Risk Governance, which requires banks and nonbank financial institutions alike to
establish their enterprise-wide risk governance framework with the ultimate goal of
ensuring that these institutions possess risk management capabilities that are
commensurate with their size, complexity, risk profile, and systemic importance (OECD,
2018).
Publicly listed companies, on the other hand, maybe more familiar with Principle
12 of the 2016 Code of Corporate Governance for Publicly-Listed Companies issued by
the Securities and Exchange Commission (SEC), which similarly requires these
companies to have an enterprise risk management framework to help sustain safe and
sound operations as well as implement management policies to attain corporate goals.
Synthesis of the Reviewed Literature and Studies
Based on the above narrative, shows that the knowledge of human beings in the
presence of risk is the precursor of human beings also finding ways or strategies on how
to counteract, if not mitigate risks in the different human undertakings. The narrative also
shows that managing risks have long been practiced but only became a globalized
strategy in 1960 and 1970, most companies that adopted risk management strategy are
insurance companies where they need to manage uncertainties to avoid risks arising from
Risk management started with the so-called, “traditional risk management” where the
identified risk is treated separately which later became Enterprise Risk Management which
researchers said, a more integrated way of managing risks in an organization.
Some studies show how beneficial ERM is in private organizations but a few
among the public sector particularly on governance. In the Philippine context, initially,
27
there is no literature as to how ERM started in the Philippines public sector and only a few
that have established ERM, this in contrast to the private sector particularly insurance,
banks, and manufacturing companies that find ERM important tools to minimize lost and
manage opportunities.
As such, this paper is timely as it attempts to find out the benefits of ERM among
the selected NGA’s in the Philippines that have established ERM as governance
strategies.
28
CHAPTER 3
METHODOLOGY
Method of Research
This research paper used a quantitative research method. The quantitative
research method “emphasizes objective measurements and statistical, mathematical, or
numerical analysis of data collected through polls, questionnaires, and surveys, or by
manipulating pre-existing statistical data using computational techniques” (Babbie, 2010).
In particular, the researcher used descriptive quantitative research to systematically
investigate the effects of the implementation of Enterprise Risk Management (ERM) in the
public sectors’ governance by gathering quantifiable data and using these data to perform
mathematical or computational techniques. Also, since the study aims to determine the
effects of the implementation of ERM on public sector governance it is applicable that a
quantitative research method is used. The data came from the identified government
agencies that have already implemented ERM for 3 years and above using questionnaires
as the means to collect the data from the various government agencies.
Population, Sample Size, and Sampling Technique
The focus of this study are the selected government agencies, in particular, the
Department of Social Welfare and Development (DSWD), Government Service Insurance
System (GSIS), and Pag-ibig Fund. Enterprise Risk Management (ERM) in these
government agencies was implemented more than three years ago and they have an
29
established ERM Office or an Office assigned to implement and monitor the Risk
committee. Accessible data and information were also taken into consideration why these
agencies were chosen. Out of the 309 respondents, the researcher will use a sample of
172. The formula below shows the computation of the sample per department of each
agency.
Where n=sample size
Z= z score is 1.96 at 95% confidence level
p= population proportion, assumed to be 50% or 0.50
e= the margin of error=0.05
n=(1.962 ) (0.50)(1-0.50)/0.052
n=384.16
To adjust the sample size to the required population of 309
n=384.16/((1+(384.16-1)/309)
n=171.5 or 172
30
Table 1
Samples and Size
No. of Employees Per No. of Employees Per

Agency (Population) Agency (Sample)
Agency Total Total

RM RM
Plannin Plannin
Office/S IAS Office/S IAS
g g
M M
DSWD 10 26 49 85 6 14 27 47
GSIS 12 51 37 100 7 28 21 56
Pag-
14 69 41 124 8 38 23 69
IBIG
Total 36 146 127 309 20 81 71 172
The researcher used a stratified sampling technique to identify the respondents
from each department per agency. However, a purposive sampling technique was used
to determine the agencies which will be the subject of the study. The sampling method is
relevant since the respondents were selected based on their knowledge of the
implementation of ERM in their agency.
But the Pag-IBIG fund declined to participate in the survey per memo dated August
6, 2020. The researcher, in order to satisfy the needed respondents, identified the Social
Security System, Philippine Health Insurance Corporation and the National Economic and
Development Authority (NEDA) as additional respondents to the survey since they were
also implementing ERM for three years and more. However, due to the COVID-19
pandemic, Metro Manila was placed "community quarantine" on March 14, 2020 and
remained under "general community quarantine" (GCQ), the researcher conducted the
survey online using google forms. The researcher did diligent follow-ups through emails
31
and phone calls from March 14, 2020 until January 30, 2021 but only 75 responded to the
survey.
Description of Respondents
The unit of analysis was individuals or employees from these agencies.
Respondents will be technical staff and head of its department/bureau/division who are
knowledgeable in the implementation of ERM. The offices were chosen by the researcher
because these are offices that work closely on the implementation of the ERM.
Based on the data gathered the following were the detailed description of the
respondents
Table 2
Distribution of Respondents by Sex
Sex Frequency Percent
Male 27 36.0
Female 48 64.0
Total 75 100.0
Table 2 shows the distribution of respondents by sex. Of 75 sample respondents
working in different government agencies/departments, 64 percent were female and 36
percent were male.

32
Table 3
Distribution of Respondents by Department/Agency
Department/Agency Frequency Percent
Department of Social Welfare and Development 24 32.0
Government Service Insurance System 31 41.3
National Economic and Development Authority 6 8.0
Philippine Health Insurance Corporation (PhilHealth) 6 8.0
Social Security System 8 10.7
Total 75 100.0
Table 3 shows the distribution of respondents by Department/agency. Of 75
sample respondents working in different government agencies/department, 41.3 percent
were from the Government Service Insurance System, 32 percent from the Department of
Social Welfare and Development (DSWD), 10.7 percent from the Social Security System,
8 percent for National Economic and Development Authority (NEDA) and 8 percent for
Philippine Health Insurance Corporation (PhilHealth).
Table 4
Distribution of Respondents by Position Level
Under what level is your

position? Frequency Percent
Administrative Personnel 8 10.7
Middle Management 10 13.3
Senior Leadership 7 9.3
Technical Personnel 50 66.7
Total 75 100.0
33
Table 4 shows the distribution of respondents by position level. Of 75 sample
respondents working in different government agencies/departments, 66.7 percent were
technical personnel, 13 percent middle management, 10 percent Administrative
personnel, and 9.3 percent were senior leadership.
Table 5
Distribution of Respondents in terms of Number of Years in the Current

Position
How long have you been working in your

Frequency Percent
current position?
0 - 5 years 49 65.3
11 - 15 years 5 6.7
16 or more years 9 12.0
6 - 10 years 12 16.0
Total 75 100.0
Table 5 shows the distribution of respondents in terms of the number of years in
the current position. Of 75 sample respondents working in different government
agencies/departments, 65.3 percent worked 0-5 years in their current position, 16 percent
between 6- 10 years, 12 percent 16 or more years, and 6.7 percent between 11-15 years.
Research Instrument
The primary data collection used was a researcher made survey questionnaire.
The researcher formulated the survey questionnaire based on the four identified elements
or characteristics of good governance (UNDP, 1997) to determine the effects of ERM on
the selected agencies' good governance. The components of the COSO ERM Framework
(COSO, New ERM Framework: Integrating with Strategy and Performance (2017) to guide
34
the respondents in identifying possible challenges and suggested measures to address
problems encountered in the ERM implementation were considered in the formulation of
the survey questionnaire.
The content of the questionnaire is divided into four parts, which include first, the
message of the researcher that states the purpose of the research. Also, the profile of the
respondents, which includes sex, position, agency, department, position, and number of
years in the said position was included in the first part.
The second part includes questions relevant to accountability, effectiveness and
efficiency, strategic vision, and transparency or the four (4) selected characteristics of
good governance. The following five (5) point Likert scale was used to assess the effects
of Enterprise Risk Management (ERM) on the 4 selected characteristics of good
governance - (1) Strongly disagree; (2) Disagree; (3) Moderately agree; (4) Agree; (5)
Strongly agree.
Likert Scale
Degree of Agreement of the Respondents
Scale Range Verbal Interpretation
1 1.00 - 1.80 Strongly disagree
2 2.61 - 1.81 Disagree
3 3.40 - 2.60 Moderately agree
4 4.20 - 3.41 Agree
5 5.0 - 4.21 Strongly agree

35
The third part is questions related to challenges in the implementation of ERM.
The following five (5) point Likert scale was used to assess the challenges in the
implementation of ERM - (1) Not a problem; (2) Less Serious; (3) Moderately Serious (4)
Serious; (5) Very Serious.
Likert Scale
Degree of Agreement of the Respondents
Scale Range Verbal Interpretation
1 1.00 - 1.80 Not a Problem
2 2.61 - 1.81 Less Serious
3 3.40 - 2.60 Moderately Serious
4 4.20 - 3.41 Serious
5 5.0 - 4.21 Very Serious
The fourth part contains questions on measures that can be suggested to address
problems encountered in the ERM implementation. Likert scale used was the same in the
second part of the questionnaire.
Mr. Juan Angelo G. Rocamora, Division Chief of the National Economic and
Development Authority, Internal Audit Service validated the relevance of the survey
questionnaire in attaining the objectives of the research paper.

36
Data-Gathering Procedure
The primary data collection was done through online survey using google forms
(please see Appendix A) which was sent through email to the head of the 5 identified
agencies. The researcher’s original plan was to administer the survey personally, but due
to the COVID-19 pandemic this was not pushed through. The researcher secured
permission in the conduct of the survey to ensure maximum participation from the head /
authorized representatives of the DSWD, GSIS and Pag-IBIG fund last March 6, 2020
sent through email. As mentioned in the sample size section of this paper, from the
identified government agencies, the Pag-IBIG fund denied the researcher’s request to
conduct a survey last August 20, 2020. In order to satisfy the needed sample size, the
researcher requested to conduct a survey from the Bangko Sentral ng Pilipinas (BSP) but
unfortunately the request was also denied last September 14, 2020. The researcher then
sent a request to the Philhealth and SSS to participate in the conduct of a survey last
September 29, 2020. Likewise, NEDA was also requested to participate in the survey last
December 1, 2020.
However, because of the COVID 19 pandemic, data gathering was greatly
affected. Majority of the personnel of the government agencies that were identified were
working from home. The researcher did diligent follow-ups through emails and phone
calls from March 14, 2020 until January 30, 2021 but only 75 responded to the survey.
The results were summarized and tabulated according to the responses of the
respondents. After the tabulation, results were interpreted using the statistical method
indicated in this paper.

37
Statistical Treatment of Data
For purposes of analysis and interpretation, the responses to the items in the
questionnaire were summarized and tabulated and the following statistical method were
used:
1. Frequency and percentage distribution was used to determine the percentage of
data distribution per characteristics of good governance in the effect of ERM
implementation of the sampled agencies.
1. Weighted means will also be used to calculate the central tendencies of the
responses. The formula is as follows:
Where: X = Weighted mean
Σ = Summation
X = Number of values
N = Number of respondents
2. Likewise, Kruskal-Wallis H test (sometimes also called the "one-way ANOVA on
ranks") was used to analyze the differences between two or more groups of an
independent variable on a continuous or ordinal dependent variable. In particular,
Kruskal-Wallis H test was used to determine whether there are any statistically
significant differences between the means of three or more independent (unrelated)
groups. The formula is as follows:

38
Where the following assumptions are satisfied:
1. One independent variable with two or more levels (independent groups).
The test is more commonly used when you have three or more levels.
2. The level of measurement of dependent variables are ordinal, interval or
ratio level.
3. Observations should be independent.
4. All groups should have the same shape distributions.

39
CHAPTER 4
RESULTS AND DISCUSSIONS
The term governance is diverse and complex in the context of private organizations
and the public sector. However, researchers are in consensus in emphasizing that public
sector governance is more complex since the government has to deal with adaptive
problems that don’t have correct solutions (Bhatta, 2008). To address this, since the
1990’s risk management process was used as a tool and implemented in the public sector
to improve governance and the provision of public service (Palermo, 2014).
Given the above perspective, this chapter will present an assessment of the effects
of the implementation of ERM to public sectors’ governance based on the response of the
participants in the survey conducted. The first part is the assessment of the perception of
the effects of the implementation of ERM to the Philippines public sector governance in
terms of accountability, effectiveness and efficiency, strategic vision, and transparency.
The second part presents the different challenges in the implementation of ERM about the
process, management, and resources. The third part presents the perception of the
respondents of the possible measures to address the problems in the implementation of
ERM. The test of significant difference is presented in the last part of this chapter to assess
if the implementation of ERM in the different departments/agencies has affected public
sectors' accountability, effectiveness and efficiency, strategic vision, and transparency.

40
1. Effects of the implementation of Enterprise Risk Management (ERM) to the
Philippines public sector governance in terms of the following:
1.1. Accountability
Accountability is an important element of good government. It refers to the legal
and reporting framework, strategies, procedures, and actions to help ensure that any
organization that uses public money and makes decisions that affect the people’s lives
can be held responsible for its actions (Part 2: Understanding Public Sector
Accountability , n.d.). The effect of ERM in terms of department/agency accountability
differs and the researcher in this paper included compliance to policies and standards,
accountability to actions, value to work and resources, and trustworthiness as the
elements of accountability that they have to choose.

41
Table 6
Assessment on the Effect of ERM Implementation on Agencies Good Governance

in terms of Accountability
Strongly Moderately Strongly

Disagree Disagree Agree Agree Agree Total
Accountability
f % f % f % f % f % f % WM VI
The
implementation of
ERM has led to
compliance with 2 3% 2 3% 9 12% 41 55% 21 28% 75 100% 4.03 Agree
Government
policies and
standards.
The
implementation of
ERM has resulted
in leaders and 2 3% 3 4% 15 20% 33 44% 22 29% 75 100% 3.93 Agree
employees being
accountable for
their actions.
The
implementation of
ERM has resulted
in leaders and
1 1% 3 4% 14 19% 41 55% 16 21% 75 100% 3.91 Agree
employees to
value their work
and organization
resources.
The
implementation of
ERM has resulted
in increase in the 1 1% 4 5% 20 27% 38 51% 12 16% 75 100% 3.75 Agree
leaders and
employees
trustworthiness
OVERALL WEIGHTED MEAN AVERAGE 3.90 Agree
f - Frequency; % - Percentage; WM - Weighted Mean; VI - Verbal Interpretation
Table 6 describes that on average, 55 percent of the respondents agreed that ERM
implementation had led to compliance with government policies and standards and had
resulted in leaders and employees to value their work and organization resources. The
government workers agreed in the implementation of ERM increased leader's and
employee's trustworthiness which is accounted to 51 percent. While 44 percent of them

42
agreed that implementation of ERM had resulted in leaders and employees being
accountable for their actions. A case study conducted in the UK shows the relevance of
risk management when used as an accountability tool (Palermo, 2014). This resulted in
calls to enhance risk disclosures of UK companies ( (Abu Bakar, S.Z., A., & S., 2019).
However, there is no specific research that discussed the success of ERM as an
accountability tool (Palermo, 2014). Relative to this, notable among the responses from
the survey was “the knowledge that even before ERM, there are other rules and
regulations already in place where public officials and employees are expected to practice
accountability in the fulfillment of their functions and mandates.”
1.2 Effectiveness and Efficiency
To be able to assess the effect of ERM implementation on agencies governance
in terms of effectiveness and efficiency the researcher used the definition of Harty (1978)
that defines efficiency as the “extent to which government produces a given output with
the least possible use of resources” and effectiveness as “the amount of end product,
the real service to the public, that the government is providing" (p. 28). As risk entails
uncertainty, ERM helps identify risks and how to manage them that contributes to
companies confidently making decisions and act in the future ( (The importance of ERM
in an Organization, 2013). The implementation of ERM contributes to organizations'
effectiveness and efficiency when this results in improved quality of the provision of
service, attainment of targets, effective allocation and utilization of resources, and
improved stakeholder's confidence and trust.

43
Table 7

in terms of Effectiveness and Efficiency

Effectiveness and Disagree Disagree Agree Agree Agree Total
Efficiency
f % f % f % f % f % f % WM VI
The implementation of
ERM has improved the
1 1% 3 4% 14 19% 38 51% 19 25% 75 100% 3.95 Agree
quality of the provision
of service
ERM has resulted to
the attainment of 1 1% 4 5% 19 25% 36 48% 15 20% 75 100% 3.80 Agree
targets on specified
time
ERM has resulted in
effective allocation 1 1% 4 5% 20 27% 37 49% 13 17% 75 100% 3.76 Agree
and utilization of
resources.
ERM has improved
beneficiaries/ 2 3% 2 3% 19 25% 39 52% 13 17% 75 100% 3.79 Agree
clientele/stakeholder's
confidence and trust.
The table above describes that on average, respondents agreed that ERM
implementation (1) had led improved the quality of the provision of service with 51 percent;
(2) had resulted in the attainment of targets on specified time with 48 percent; (3) has
resulted in effective allocation and utilization of resources with 49 percent; and (4) has
improved beneficiaries/ clientele/stakeholder's confidence and trust with 52 percent.
Public sector value is determined by an organization’s ability to balance its obligations to
meet delivery expectations, manage costs, and understand and manage risk. Risk
management once embedded in the operational units of the organization the role of
managing the risks is not anymore the tasks of selected individuals but already an integral
44
part of the jobs of the employees, therefore, increasing efficiency and effectiveness
(Deloitte). However, insights were generated from the respondents that suggest that ERM
does not directly affect effectiveness and efficiency since “Even in the absence of an
effective and fully operational ERM, some agencies can still manage to attain their targets
and to utilize their resources.” Also, “employing various means such as Quality
Management System and Citizen's Charter also provides effective and efficient service.”
1.3 Strategic vision
Table 8
Assessment on the Effect of ERM Implementation to Agencies Good Governance

in terms of Strategic Vision
Strongly Moderatel Strongly

Disagree Agree Total
Disagree y Agree Agree
Strategic Vision
f % f % f % f % f % f % WM VI
The implementation
of ERM has clear
1 1% 3 4% 19 25% 32 43% 20 27% 75 100% 3.89 Agree
organizations
direction and action
The implementation
of ERM has resulted
1 1% 2 3% 17 23% 33 44% 22 29% 75 100% 3.97 Agree
in the identification
of priorities
The implementation
of ERM has resulted
1 1% 4 5% 22 29% 30 40% 18 24% 75 100% 3.80 Agree
in a better
communication plan
The implementation
of ERM has
improved tracking 1 1% 1 1% 17 23% 41 55% 15 20% 75 100% 3.91 Agree
and review of plans
and actions

45
The table above describes that on average, majority of respondents agreed that
ERM implementation (1) had resulted to clear organizations direction and action with 43
percent; (2) had resulted in the identification of priorities with 44 percent; (3) had resulted
in a better communication plan with 40 percent and; (4) improved tracking and review of
plans and actions with 55 percent. It is said that when ERM is implemented effectively it
enhances organizations' strategic vision since it links strategies to risk, which leads to
better decision-making (Dykstra & M.J., 2019). While some of the respondents agree that
an ERM is essential for an organization to attain its strategic vision some mentioned that
“we still manage to implement our strategic initiatives effectively even without the
implementation of ERM.” Also, “the implementation of ERM is politicized”; and lacks the
support of the management.” There is also “No continuity since different leaders have
different priorities” and “there is already a Risk Treatment Plan, but monitoring and
evaluation are not in place.”
1.4. Transparency
Zhao and Hu (2017) define transparency as a strategic responsibility essential to
enhance trust in relationships. It builds people's trust and confidence in the government
and participation in the decision-making process (Bauhr and Grimes, 2014). In a research
study conducted by Carson, et.al. (2018) the implementation of ERM creates value to the
firm by reducing information asymmetry. The below table enumerates possible results
when ERM is implemented in the public relevant to transparency. The table below shows
that on average, respondents agreed that the implementation (1) resulted in the
accessibility of information for public use; (2) resulted in the provision of right and accurate
information; (3) increased the timely provision of information, and; (4) had resulted in
improved organization’s communication and information strategy with 44, 48, 52, and 56
46
percent, respectively. In regards to the implementation of ERM agreed with an average
scale of 3.64 percent.
Table 9

in terms of Transparency

Total
Disagree Disagree Agree Agree Agree
Transparency
f % f % f % f % f % f % WM VI
ERM has improved the
organization’s
communication and 1 1% 4 5% 20 27% 33 44% 17 23% 75 100% 3.81 Agree
information strategy
ERM has resulted in the
accessibility of 1 1% 4 5% 27 36% 36 48% 7 9% 75 100% 3.59 Agree
information for public
use
ERM has resulted in the
provision of right and 1 1% 2 3% 25 33% 39 52% 8 11% 75 100% 3.68 Agree
accurate information
ERM has increased the
1 1% 2 3% 22 29% 42 56% 8 11% 75 100% 3.72 Agree
timely provision of
information
Government agencies are expected to perform their duties effectively while making
sure that they can adapt to changes such as technologies and resources (Holzinger,
2018). An example of this is the tax bureaus expected transparency towards the taxpaying
public on how their taxes are spent. In doing so, the implementation of ERM should be
able to increase transparency making the bureau a good steward of the taxes (Holzinger,
2018).
47
2. Challenges that the selected government agencies encountered in the

implementation of ERM
Various researches enumerate the challenges that private and public
organizations encountered in the implementation of the ERM. Common among
these are the challenges that the researcher identified by clustering them into three
major aspects of an organization which is management, process, and resources.
2.1 Management
In terms of management Ahmed, I., & Abdul Manab, N. (2016) included
lack of commitment from the top management, no existing ERM unit, Risk
Management is not part of the strategic planning, and lack of innovativeness as
the major challenges that public sector faces in the implementation of ERM.
Leaders who are champions in the implementation of ERM set the conditions for
followers to carry out their duties effectively (Niskanen, 2015). In the same way,
the establishment of an ERM unit that will do the task required in the
implementation of ERM should form part of the priority of the management
however this will not happen if it lacks the support it needed. Furthermore, rigid
management culture and the resistance to adapt to change can also hinder the
successful implementation of ERM (Ahmed, I., & Abdul Manab, N., 2016).
48
Table 10
Assessment on the Challenges in the Implementation of ERM in terms of

Management
Not a Less Moderately Very

Total
Problem Serious Serious Serious Serious
Management
f % f % f % f % f % f % WM VI
There is lack commitment Moderately

from the top management. 12 16% 12 16% 15 20% 11 15% 25 33% 75 100% 3.33
Serious
There is no responsible
unit/office to implement the Moderately
21 28% 3 4% 14 19% 15 20% 22 29% 75 100% 3.19
ERM within the organization Serious
Risk awareness is not fully

integrated into decision-
making process including
the strategic decision- 9 12% 11 15% 13 17% 22 29% 20 27% 75 100% 3.44 Serious
making process.
Inadequate change
management and resistance
2 3% 14 19% 16 21% 24 32% 19 25% 75 100% 3.59 Serious
to change.
Moderately
OVERALL WEIGHTED MEAN AVERAGE 3.39
Serious
The table above describes that on average, most of the respondents believe that
the challenges in the ERM implementation in terms of management is very serious in
particular, (1) the lack of commitment from the top management with 33 percent; (2) There
is no responsible unit/office to implement the ERM within the organization with 29 percent;
and; (3) Inadequate change management and resistance to change with 25 percent. In
terms of risk awareness that is not fully integrated into decision-making processes
including the strategic decision-making process, 32 percent of randomly selected staff
observed this undertaking was serious.

49
Relative to this, a study was conducted that shows that as the support of senior
management increases, the quality and effectiveness of ERM implementation also
increases (Mensah & Gottwald, 2016). Indicating that effective implementation of ERM
requires top management support and commitment.
2.2 Process
In terms of process, the organization should be able to choose and adapt
a context-specific framework; an example of this framework is the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). However, in
most cases, an ERM framework is missing which leads to difficulty in identifying,
defining, assessing, and prioritizing risks (Mensah & Gottwald, 2016).
Table 11
Assessment on the Challenges in the Implementation of ERM in terms of Process

Serious Total
Problem Serious Serious Serious
Process
f % f % f % f % f % f % WM VI
The risk appetite and tolerance

are not clearly defined. 4 5% 11 15% 15 20% 23 31% 22 29% 75 100% 3.64 Serious
The process of risk

Moderately
identification, analysis and 6 8% 18 24% 17 23% 17 23% 17 23% 75 100% 3.28
Serious
responses is not clear.
Inadequate risk policies in the

establishment of common risk
language, description of risk
appetite and implementation of 5 7% 13 17% 18 24% 22 29% 17 23% 75 100% 3.44 Serious
a risk-ranking methodology to
prioritize risks within and
across functions.
The ERM is not fully integrated

Moderately
into the business processes. 6 8% 15 20% 16 21% 20 27% 18 24% 75 100% 3.39
Serious
OVERALL WEIGHTED MEAN AVERAGE 3.44 Serious

50
The table above describes that on average, 29 percent of the respondents believe
that the challenges in the ERM implementation in terms of process is very serious,
particularly in "the risk appetite and tolerance are not clearly defined". The 24 percent
noted that in terms of "process of risk identification, analysis, and responses are not clear"
was less serious. Regarding with "inadequate risk policies in the establishment of common
risk language, description of risk appetite and implementation of a risk-ranking
methodology to prioritize risks within and across functions" and "the ERM is not fully
integrated into the business processes", most of the respondents observed that these
problems was serious with 29 and 27 percent, correspondingly. Common among the
responses were attributed to ERM “as a new process and that monitoring and evaluation
were not yet undertaken.” Organizations have different stages in the implementation of
ERM, but what is common and consistent among these stages is the establishment of an
enterprise risk structure. This means that the whole organization requires to identify,
communicate, and manage risk using a common approach based on a consistent policy
and process (Five Steps to Enterprise Risk Management, 2011).
2.3 Resources
Ahmed, I., & Abdul Manab, N. (2016) also mentioned the challenges in the
implementation of ERM in terms of resources with great emphasis on the aspect
of human resources particularly staff competence. However, this does not mean
that financial resources are not a challenge, another researcher also emphasizes
the failure to allocate funds hinders continuity of operation as well as the
implementation of activities that will address the risks identified (Na Ranong &
Wariya, 2009).
51
Table 12
Assessment on the Challenges in the Implementation of ERM in terms of

Resources

Total
Problem Serious Serious Serious Serious
Resources
f % f % f % f % f % f % WM VI
Insufficient resources
such as budget, time and 7 9% 8 11% 20 27% 23 31% 17 23% 75 100% 3.47 Serious
human resources.
There is lack of internal

knowledge, skills, and 8 11% 8 11% 14 19% 24 32% 21 28% 75 100% 3.56 Serious
expertise.
Lack of qualified
personnel to implement 5 7% 11 15% 13 17% 26 35% 20 27% 75 100% 3.60 Serious
ERM.
Inadequate training on the

4 5% 12 16% 16 21% 25 33% 18 24% 75 100% 3.55 Serious
ERM process.
OVERALL WEIGHTED MEAN AVERAGE 3.54 Serious
The table above describes that on average, 31 to 35 percent of the respondents
believe that the challenges in the ERM implementation in terms of resources is serious in
particular, (1) Insufficient resources such as budget, time, and human resources; (2) There
is a lack of internal knowledge, skills, and expertise; (3) Lack of qualified personnel to
implement ERM.; and (4) Inadequate training on the ERM process which accounted. The
implementation of ERM requires resources such as financial and human resources.
Critical to the success of the implementation in particular is the professional expertise and
training needed to do the tasks involved in risk management (Na Ranong & Wariya, 2009).
3. Measures to address the problems that the selected government

agencies encountered in the implementation of ERM
This part of the research poses some of the measures to successfully
implement ERM in the public sector. The responses consistently point out the
52
importance of identifying the ERM framework or process, ensuring that budget is
allocated solely for the implementation of the program as well as the professional
expertise needed. Alongside these, the support of the top management is also
essential so that ERM can be mainstreamed and institutionalized as part of the
day-to-day operation of the organization.
Management
Table 13
Assessment on the Measures to Address the Problems in the Implementation of

ERM in terms of Management

Disagree Agree Total
Disagree Agree Agree
Management
f % f % f % f % f % f % WM VI
Identify ERM Champion

among the top
Strongly
management adequate 0 0% 1 1% 11 15% 23 31% 40 53% 75 100% 4.36
Agree
training on the ERM
process.
Clearly define ERM Strongly

Operational Structure 0 0% 1 1% 9 12% 23 31% 42 56% 75 100% 4.41
Agree
Establishment of Risk
Strongly
Management Office / 0 0% 3 4% 8 11% 16 21% 48 64% 75 100% 4.45
Agree
Committee
Institutionalize Enterprise Strongly

Risk Management 0 0% 2 3% 8 11% 16 21% 49 65% 75 100% 4.49
Agree
Strongly
Agree
The table above describes that on average, 53 to 65 percent respondents strongly
agreed that the challenges in the ERM implementation in terms of management can be
addressed by, (1) Identifying ERM Champion among the top management adequate
training on the ERM process; (2) Clearly defining ERM Operational Structure; (3)
53
Establishing of Risk Management Office / Committee; and (4) Institutionalizing Enterprise
Risk Management.
3.2 Process
Table 14

ERM in terms of Process

Total
Process
f % f % f % f % f % f % WM VI
Development of ERM Strongly

0 0% 0 0% 11 15% 25 33% 39 52% 75 100% 4.37
Framework. Agree
Establishment of a clear Risk Strongly

0 0% 1 1% 11 15% 18 24% 45 60% 75 100% 4.43
Management Process. Agree
Establishment of common
risk language, description of
risk appetite and
Strongly
implementation of a risk- 0 0% 2 3% 9 12% 24 32% 40 53% 75 100% 4.36
Agree
ranking methodology to
across functions.
Strongly
Agree
The table above describes that on average, 52 to 60 percent of the respondents
strongly agreed that the challenges in the ERM implementation in terms of the process
can be addressed by, (1) the development of ERM Framework; (2) the establishment of a
clear Risk Management Process.; and (3) Establishment of common risk language,
description of risk appetite and implementation of a risk-ranking methodology to prioritize
risks within and across functions.

54
3.3 Resources
Table 15
ERM in terms of Resources

Total
Resources
f % f % f % f % f % f % WM VI
Sufficient allocation of
budget, time, and human Strongly
1 1% 2 3% 12 16% 19 25% 41 55% 75 100% 4.29
resource in the Agree
implementation of risk
Capacity-building activities Strongly

for ERM implementers. 1 1% 1 1% 9 12% 18 24% 46 61% 75 100% 4.43
Agree
Strongly
Agree
The table above describes that on the average, employees strongly agreed on the
challenges in the ERM implementation in terms of resources can be addressed by, (1)
Sufficient allocation of budget, time, and human resource in the implementation of risk;
and (2) Capacity-building activities for ERM implementers with percentage share of 55
and 61, respectively.
Test for Significant Difference
To measure significance on the effects of the ERM implementation in terms of
accountability, efficiency and effectiveness, strategic vision and transparency the Kruskal-
Wallis test was performed to compare the five mean ranks of independent samples of
DSWD, GSIS, NEDA, Philhealth and SSS.

55
1. ERM Implementation to Selected Agencies in the public sector governance In
terms of Accountability
Table 16
Significant Difference of Respondents’ Assessment on the implementation of ERM

has led to Compliance with Government Policies and Standards
The implementation of ERM has led

Mean H- P-
to compliance with Government Decision Interpretation
Rank computed value
policies and standards.
Department of Social Welfare and 30.21

Development (DSWD)
Government Service Insurance 40.42

System (GSIS)
Do not No significant
National Economic and Development 44.33 6.1430 0.1887
reject Ho difference
Authority (NEDA)
Philippine Health Insurance 40.17

Corporation (PhilHealth)
Social Security System (SSS) 45.63
Note: If H-computed is less than critical value (9.488), we do not reject Ho, otherwise reject Ho.
Based on the table above, highest mean rank was noted in SSS with 45.63 which
suggests that most of the respondents had higher evaluation on this statement regarding
the effects of the ERM implementation which has led to compliance with government
policies and standards. The lowest mean rank was observed in DSWD at 30.21 which
signifies that employees had lower assessment scores. While, GSIS, NEDA and
Philhealth posted average ranks of 44.33, 40.17 and 45.63 respectively. The summary
statistics above implies that there is no significant difference in their assessment score
(H=6.1430, p=0.1887). The results of this can be attributed to the fact that the public
sector is governed by laws, rules and regulations established in the Philippine Constitution
56
and other regulating bodies in the bureaucracy hence majority of the agencies has a high
assessment scores in this item, Also, some of the comment from the respondents was
that “even without the full/effective implementation of the ERM, public officials and
employees are expected to practice accountability in the fulfillment of their functions and
mandates''. Perception of the respondents differs in this item which can be attributed to
its different structures. With the DSWDs’ structure in which basic social service functions
were devolved in the Local Government Units (LGU), along with this devolution are the
redirected functions of the DSWD from direct service deliverer to technical assistance
provider. DSWDs’ structure has limitations to communicate its policies and standards
and encourages a greater degree of diversity in the behavior of their employees due
to the decentralization of power to the LGUs. While the SSS, its power came from the
Commission, with this structure compliance to government and policies is easily
determined and monitored.
Table 17
Significant Difference of Respondents’ Assessment on the Implementation of ERM

has resulted in Leaders and Employees being Accountable for their Actions
The implementation of ERM has

Mean H- P-
resulted in leaders and employees Decision Interpretation
Rank computed value
being accountable for their actions.

Development
Government Service Insurance System 37.32
National Economic and Development 50.75 Do not No significant

8.4304 0.0770
Authority reject Ho difference
Philippine Health Insurance Corporation 46.75

(PhilHealth)
Social Security System 47.31

57
Based on the table above, highest mean rank was noted in NEDA with 50.75 which
suggests that the majority of the respondents had higher evaluation on this statement
regarding the effects of the ERM implementation which has resulted in leaders and
employees being accountable for their actions. The lowest mean rank was observed in
DSWD at 30.40 which signifies that employees had lower assessment scores. While,
GSIS, Philhealth and SSS posted an average rank of 37.32, 46.75 and 47.31 respectively.
The summary statistics above implies that there is no significant difference in their
assessment score (H = 8.434, p = 0.0770). DSWDs devolution of functions to the LGUs
can be related to its lower assessment scores in this item since accountability in basic
social service functions were also transferred to the LGUs. Whereas, NEDA as
government’s independent socioeconomic planning body, and member of the NEDA
Board with the President as the Chair is more likely to be more accountable for their
actions since they are directly reporting to the President.

58
Table 18

has resulted in Leaders and Employees to Value their Work and Organization
Resources

resulted in leaders and employees to Mean H- P-
Decision Interpretation
value their work and organization Rank computed value
resources.

Development

System
Authority

Note: If H-computed is less than critical value (9.488), we do not reject Ho, otherwise reject Ho
Based on the table above, highest mean rank was noted in NEDA with 48.50
which suggests that the majority of the respondents had higher evaluation on this
statement regarding the effects of the ERM implementation which has resulted in leaders
and employees to value their work and organization resources. The lowest mean rank
was observed in DSWD at 29.13 which signifies that employees had lower assessment
scores. While, GSIS, Philhealth and SSS posted an average rank of 41.40, 39.17 and
42.69 respectively. . The summary statistics above implies that there is no significant
difference in their assessment score (H = 7.9409, p = 0.0938). This is also related to the
structure of DSWD since devolved basic social service functions - together with its direct
workers, assets and liabilities and corresponding budgets were devolved to the LGUs in
59
some way affected the assessment of DSWD respondents in this area. While NEDAs
structure is centralized and chain of command comes from the top to the bottom including
its Regional Offices, assessment in this area is somewhat higher since its functions and
resources are centralized.
Table 19

increased Leaders and Employees’ Trustworthiness

resulted in an increase in the Mean H- P-
leaders and employees' Rank computed value
trustworthiness.

Development

System
Authority

Based on the table above, highest mean rank was noted in NEDA with 48.00 which
regarding the effects of the ERM implementation which has increased in the leaders and
employees trustworthiness. The lowest mean rank was observed in DSWD at 33.23 which
signifies that employees had lower assessment scores. While, GSIS, Philhealth and SSS
posted an average rank of 38.02, 39.00 and 44.00 respectively. The summary statistics
60
above implies that there is no significant difference in their assessment score (H = 3.5804,
p = 0.4658). Complexities in the functions and structure of an agency may affect its
assessment in this area. DSWD being an implementing agency with different sectors,
programs and projects for social welfare and development that they served, and also with
different partner agencies this affects their assessment in terms of this area. Whereas
compared to the NEDAs’ function as social and economic development planning and
policy coordinating body primarily it is more direct since its power comes from the NEDA
Board that is chaired by the President hence assessment for this item is higher in NEDA.
2. ERM Implementation to Agencies Good Governance In terms of Effectiveness

and Efficiency
Table 20

has improved the Quality of the Provision of Service

Mean H- P-
improved the quality of the Decision Interpretation
Rank computed value
provision of service
Department of Social Welfare and

Development 28.35

System
National Economic and 42.67 8.3089 0.0809
Development Authority

61
suggests that majority of the respondents had higher evaluation on this statement
regarding the effects of the ERM implementation which has improved the quality of the
provision of service. The lowest mean rank was observed in DSWD at 28.35 which
Philhealth posted an average rank of 41.87, 42.67 and 42.67 respectively. The summary
statistics above implies that there is no significant difference in their assessment score (H
= 8.3089, p = 0.0809). This area is affected on the different services that the agency
provides and the beneficiaries they served. Since the DSWD is an implementing agency
catering frontline social service delivery to different sectors of the society especially the
vulnerable individuals, family, and organizations, is more prone to criticisms from the
public and the beneficiaries they served. While the SSS is a large government financial
institution catering to the private sectors employer and employees as its stakeholders,
which is more focused as compared to the DSWD. Hence the quality of service the
provision of service is affected.

62
Table 21
Significant Difference of Respondents’ Assessment on the effects of the

implementation of ERM has resulted in the Attainment of Targets on Specified time

Mean H- P-
resulted to the attainment of targets Decision Interpretation
Rank computed value
on specified time

Development

System
Reject Significant
Ho Difference
Authority

There was a statistically significant difference on the effects of the implementation
of ERM that has resulted in the attainment of targets on specified time in terms of efficiency
and effectiveness between the different departments/agencies (H=11.5796, p=0.0208),
with a mean rank of 28.19 for DSWD, 38.71 for GSIS, 46.42 for NEDA, 46.42 for Philhealth
and 52.06 SSS.
The effects of the implementation of ERM that has resulted in the attainment of
targets on specified time in terms of efficiency and effectiveness made a significant
difference between the different departments/agencies in the Likert scale choices. The
scores of the Likert scale ranged from 1 for strongly disagree to 5 for strongly agree. From
this rating scale, the comparisons of mean ranks with significance, shows that DSWD
choose lower scores than respondents from SSS. A post hoc analysis (Appendix 2.1) was
done to determine the pairs that posted a significant difference. With adjusted P-value of
63
0.039, mean ranks between DSWD and SSS implies that the multiple comparisons were
significantly different. While the average rank of DSWD compared with NEDA and
PhilHealth showed minor differences at 0.049 P-value. The perceptions of the
respondents from DSWD compared to SSS may be attributed to the structures, functions
and the beneficiaries they served. As mentioned above, DSWD has a decentralized
structure, its functions includes implementation of projects and / or programs with different
partner agencies and serving different sectors of the society as their beneficiaries and the
different services were provided thus attainment of targets in specified time is difficult for
DSWD. On the other hand compared with SSS the structure is centralized and its clients
are limited to the members of the SSS i.e employer and employees from private sectors
and is the sole provider of the social security system for the private companies and
individuals hence attainment of targets in specified time is more achievable.
Table 22

has resulted in Effective Allocation and Utilization of Resources

Mean H- P-
resulted in effective allocation and Decision Interpretation
Rank computed value
utilization of resources.

Development

System
Reject Significant
Ho Difference
Authority

64
of ERM that has resulted in effective allocation and utilization of resources in terms of
efficiency and effectiveness between the different departments/agencies (H=9.6500,
p=0.0468), with a mean rank of 28.00 for DSWD, 40.71 for GSIS, 42.83 for NEDA, 47.58
for Philhealth 47.58 and 46.42 for SSS.
The effects of the implementation of ERM that has resulted in effective allocation
and utilization of resources in terms of efficiency and effectiveness made a significant
this rating scale, the comparisons of mean ranks with minimal significance, shows that
DSWD choose lower scores than respondents from GSIS, SSS, PhilHealth. Using
pairwise comparison, (Appendix 2.2) the assessment scores of DSWD compared to GSIS,
SSS, PhilHealth noted a minimal difference with P-value of 0.020, 0.023, and 0.033,
accordingly. Effective allocation and utilization of resources is more achievable in a
centralized structure like the Philhealth, GSIS, and SSS, they are solely implementing their
respective functions while decentralized structure like DSWD may have difficulty in the
allocation and utilization of its resources since they have different partners in performing
their functions.
65
Table 23

has improved Beneficiaries/Clientele/Stakeholder's Confidence and Trust

improved beneficiaries/ Mean H- P-
clientele/stakeholder's confidence Rank computed value
and trust.

Development
Government Service Insurance System 40.31
Authority

Based on the table above, highest mean rank was noted in Philhealth with 46.83
which suggests that the majority of the respondents had higher evaluation on this
statement regarding the effects of the ERM implementation has improved beneficiaries /
clientele / stakeholder's confidence and trust. The lowest mean rank was observed in
DSWD at 29.19 which signifies that employees had lower assessment scores. While,
GSIS, NEDA and SSS posted an average rank of 40.31, 42.00 and 45.88 respectively.
assessment score (H = 7.7601, p = 0.1008). The perceptions of the respondents in this
area can be attributed to the beneficiaries or client the agencies served and the service
they provide. Since DSWD is a social service provider, their beneficiaries are the poor,
vulnerable and disadvantaged, they are prone to complaints and criticisms once
services needed were not provided on time. Also, with so many programs and projects
66
that DSWD are implementing, grievance redress systems are in place to address
complaints, problems and issues that arise from the provision of services and
implementation of projects and programs. Looking at Philhealth as a health service
provider with the Filipinos as its member is more concentrated on providing health
care financing and also since they are collecting fees from their clients they have the
advantage of having their clients trust and confidence.
3. ERM Implementation to Agencies Good Governance In terms of Strategic

Vision
Table 24

has Clear Organizations Direction and Action

Mean H- P-
clear organizations direction Decision Interpretation
Rank computed value
and action

Development

System
National Economic and 39.67 0.035 Significant

10.3261 Reject Ho
Development Authority 3 Difference

Note: If H-computed is less than critical value (9.488), we do not reject Ho, otherwise reject H o
67
of ERM that has Clear Organizations Direction and Action in terms of strategic vision
between the different departments/agencies (H=10.3261, p=0.0353), with a mean rank of
27.46 for DSWD, 41.79 for GSIS, 39.67 for NEDA, 43.92 for Philhealth and 49.25 for SSS.
The effects of the implementation of ERM that has resulted in the attainment of
targets on specified time in terms of efficiency and effectiveness made a significant
this rating scale, the comparisons of mean ranks with significance, shows that DSWD
choose lower scores than respondents from SSS and GSIS. A post hoc test (Appendix
2.3) was performed to identify the pair/s that posted a significant difference. In comparing
mean rank of DSWD with GSIS and SSS, the test implies that the minimal differences
were noted with P-value of 0.010 (DSWD and GSIS) and 0.009 (DSWD and SSS). The
difference in perceptions in this area can be related to the structure, functions, services
provided and the clients / beneficiaries they served. Although DSWD has clear
organizations direction and action, assessment on this area can be affected by its
decentralized functions to the LGUs, having different partners in the implementation of
their programs and projects, providing services to all the vulnerable, poor and
disadvantaged sector, also when it comes to its partners direction and action maybe
different since leadership and management are different. Compared with SSS and GSIS
the structure of these agencies are centralized and its functions are focused on the
provision of security services to its respective members from private and government
sectors, direction and actions are much direct.

68
Table 25

has resulted in the Identification of Priorities

Mean H- P-
resulted in the identification of Decision Interpretation
Rank computed value
priorities

Development

System
National Economic and 42.00 7.6119 0.1069

To measure significance of assessment on the effects of the ERM implementation
which has resulted in the identification of priorities in terms of strategic vision, the Kruskal-
Wallis test was performed to compare the five mean ranks of independent samples of
DSWD, GSIS, NEDA, Philhealth and SSS. Based on the table above, highest mean rank
was noted in SSS with 47.31 which suggests that the majority of the respondents had
higher evaluation on this statement regarding the effects of the ERM implementation has
resulted in the identification of priorities. The lowest mean rank was observed in DSWD
at 29.27 which signifies that employees had lower assessment scores. While, GSIS,
NEDA and Philhealth posted an average rank of 39.32, 42.00 and 46.88 respectively.
assessment score (H = 7.6119, p = 0.1069). Identification of priorities may influence the

69
services provided and the aspect of programs and projects to implement. This is true in
the case of DSWD, although beneficiaries or sectors are prioritized, services provided are
different with different aspects such as health, education, and infrastructure, livelihood
among others thus identification of priorities is complicated. On the other hand, SSS only
concentrates on managing a sound and viable social security system for each member
thus it is more direct in identifying its priorities.
Table 26

has resulted in a Better Communication Plan

Mean H- P-
resulted in a better communication Decision Interpretation
Rank computed value
plan

Development

System
Reject Significant
Ho Difference
Authority

of ERM that has resulted in a better communication plan in terms of strategic vision
between the different departments/agencies (H=10.0286, p=0.0399), with a mean rank of
70
The effects of the implementation of ERM that has resulted in a better
communication plan in terms of strategic vision made a significant difference between the
different departments/agencies in the Likert scale choices. The scores of the Likert scale
ranged from 1 for strongly disagree to 5 for strongly agree. From this rating scale, the
comparisons of mean ranks with significance, shows that DSWD choose lower scores
than respondents from Philhealth. A pairwise comparison test (Appendix 2.4) was done
to determine the pair/s that posted a meaningful difference. With P-value of 0.008, mean
ranks between DSWD and PhilHealth shows that minimal comparisons were evidently
different. This can be attributed to the structure, services provided and the strategy in the
implementation of projects and programs of the agencies for a better communication plan.
The Philhealth has centralized structure and more focused service thus the respondents
provided the high assessment scores in this area. Whereas the DSWD has a
decentralized structure, more complex services provided and strategy in the
implementation involves education, health, infrastructure, livelihood and many more thus
a lower assessment scores resulted in this area.

71
Table 27

has Improved Tracking and Review of Plans and Actions

Mean H- P-
improved tracking and review of Decision Interpretation
Rank computed value
plans and actions

Development

System
Reject Significant
Ho Difference
Authority

There was a statistically significant difference on the effects of the implementation of
ERM that has improved tracking and review of plans and actions in terms of strategic
vision between the different departments/agencies (H=11.2851, p = 0.0235), with a mean
rank of 27.13 for DSWD, 41.61 for GSIS, 44.50 for NEDA, 44.50 for Philhealth and 46.88
for SSS.
The effects of the implementation of ERM that has improved tracking and review
of plans and actions in terms of strategic vision made a significant difference between the
than respondents from SSS. A post hoc test (Appendix 2.5) was done to determine the
pair/s that posted a meaningful difference. With a P-value of 0.014, average ranks
72
between DSWD and SSS describe that minimal comparisons were significantly different.
As mentioned in the previous item, this can be attributed to the structure, services provided
and the strategy in the implementation of projects and programs of the agencies in tracking
and review of plans and actions. Since the SSS has centralized structure and more
focused service it is much easier to track and review their plans and actions hence the
high assessment scores of the respondents. While the DSWD has a decentralized
structure, more complex services provided and strategy in the implementation involves
education, health, infrastructure, livelihood and many more thus a lower assessment
scores resulted in this area.
4. ERM Implementation to Agencies Good Governance In terms of Transparency
Table 28

has improved the Organization’s Communication and Information Strategy

improved the organization’s Mean H- P-
communication and information Rank computed value
strategy

Development

System
Authority

73
Based on the table above, highest mean rank was noted both in NEDA and
Philhealth with 45.92 which suggests that the majority of the respondents had higher
evaluation on this statement regarding the effects of the ERM implementation has
improved the organization’s communication and information strategy. The lowest mean
rank was observed in DSWD at 31.31 which signifies that employees had lower
assessment scores. While, GSIS, and SSS posted an average rank of 38.32 and 44.94
respectively. The summary statistics above implies that there is no significant difference
in their assessment score (H = 5.2710, p = 0.2610). The difference in the perceptions of
the respondents in this area can be attributed to the structure, the services it provides and
the sector it serves. Communication and information strategy can be a challenge to the
DSWD given their decentralized structure, the beneficiaries they serve who are the
vulnerable, poor and disadvantaged, and social services are too complex hence the lower
assessment scores to this area. For the Philhealth communication and information
strategy will not be a problem since their structure is centralized and they only have their
members to serve thus the respondents perceived it higher in relation to their assessment
scores.
74
Table 29

has resulted in the Accessibility of Information for Public Use

Mean H- P-
resulted in the accessibility of Decision Interpretation
Rank computed value
information for public use

Development

System
0.273 Do not No significant
National Economic and 40.00 5.1390
0 reject Ho difference


regarding the effects of the ERM implementation has resulted in the accessibility of
information for public use. The lowest mean rank was observed in DSWD at 34.25 which
Philhealth posted an average rank of 36.34, 40 and 41.00 respectively. The summary
statistics above implies that there is no significant difference in their assessment score (H
= 5.1390, p = 0.2730). Although transparency seal is required in the government sector,
accessibility of information for public use is a challenge to DSWD since its functions are
decentralized the needed information will come from its partner agencies and the LGUs
75
for them to post in their website hence the lower assessment scores for this area. While
the SSS whose functions are centralized and the needed information will only come from
within the SSS to post on their website thus higher scores on this area. Access to
information for public use is affected by the agencys’ structure where the information will
come from.
Table 30

has resulted in the Provision of Right and Accurate Information

Mean H- P-
resulted in the provision of right and Decision Interpretation
Rank computed value
accurate information

Development

System
Reject Significant
Ho Difference
Authority

of ERM that has resulted in the provision of right and accurate information in terms of
transparency between the different departments/agencies (H=12.3350, p = 0.0150), with
a mean rank of 26.81 for DSWD, 41.03 for GSIS, 46.58 for NEDA, 46.58 for Philhealth
and 46.94 for SSS.

76
The effects of the implementation of ERM has resulted in the provision of right and
accurate information in terms of transparency made a significant difference between the
than respondents from GSIS, NEDA, Philhealth and SSS. Pairwise comparison
(Appendix 2.6) shows that mean rank of DSWD was significantly different across all
departments/agencies with p-values of 0.008 (DSWD and GSIS), 0.028 (DSWD with
NEDA and PhilHealth) and 0.013 (DSWD and SSS). Provision of right and accurate
information is also a challenge to DSWD in terms of beneficiaries and their geographic
locations since their beneficiaries are the poor. They are usually from far flung areas who
have limited resources such as electricity and access to the internet. The only method to
access the information is to personally provide them the information, compared to the SSS
whose members are the private sectors working group who has resources to access the
information through social media. Thus provision of right and accurate information is
affected by the beneficiaries’ capabilities, geographic location and resources.

77
Table 31

has increased the Timely Provision of Information

Mean H- P-
increased the timely provision of Decision Interpretation
Rank computed value
information

Development

System
Reject Significant
Ho Difference
Authority

of ERM that has increased the timely provision of information in terms of transparency
between the different departments/agencies (H=9.4960, p = 0.0500), with a mean rank of
The effects of the implementation of ERM that has increased the timely provision
of information in terms of transparency made a significant difference between the different
departments/agencies in the Likert scale choices. The scores of the Likert scale ranged
from 1 for strongly disagree to 5 for strongly agree. From this rating scale, the comparisons
of mean ranks with significance, shows that DSWD choose lower scores than respondents
from Philhealth and NEDA. The post hoc test (Appendix 2.7) was performed to determine
the pair/s which implies meaningful difference. Comparing the mean ranks of DSWD with
PhilHealth and NEDA, it was noted that minimal comparisons of posted significant
78
difference with P-value 0.032 (DSWD and PhilHealth) and 0.023 (DSWD and NEDA).
Timely provision of information is also a challenge to DSWD in terms of beneficiaries and
their geographic locations since their beneficiaries are the poor. They are usually from far
flung areas who have limited resources such as electricity and access to the internet. The
only method to access the information is to personally provide them the information,
compared to the Philhealth whose members are the Filipinos most of them are the working
group who have resources to access the information through social media. Thus timely
provision of right and accurate information is affected by the beneficiaries’ capabilities,
geographic location and resources.

79
CHAPTER 5
SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
SUMMARY OF FINDINGS
The main objective of this study was to assess the effects of the implementation
of Enterprise Risk Management in the public sector governance in selected government
agencies. Statistically, there is no significant difference in the effects of the implementation
of ERM on public sector governance among the five sampled government agencies based
upon the perceptions of the government employees involved in the implementation of the
ERM framework. Descriptive methods through survey and quantitative research were
applied in the study. All respondents’ data was captured on a spreadsheet designed by
the researcher and approved by the statistician. The analysis was performed using the
SPSS Version 14 software and statistical analysis is based on the standards and
principles on international best practice associated with it. Frequency and percentage,
weighted means and Kruskal Wallis H-test were used in the statistical treatment of data.
Findings
Based on the results gathered, the following are hereby presented:
1. Effects of the implementation of ERM in the Public Sector Governance in
terms of the following:
1.1 Accountability
Majority of the respondents agreed that in terms of accountability,
the effects of the implementation of ERM in the Public sector governance
had led to compliance with government policies and standards (55%); had
80
resulted in leaders and employees to value their work and organization
resources (55%); has an increase in leaders and employees
trustworthiness (51%); and has resulted in leaders and employees being
accountable for their actions (44%).
1.2 Effectiveness and Efficiency
More than half of the respondents agreed that the effects of the
implementation of ERM in the Public sector governance in terms of
effectiveness and efficiency has improved the quality of the provision of
service (51%) and has improved beneficiaries/ clientele/stakeholder's
confidence and trust (52%). While the majority agreed that it has resulted
in the attainment of targets on specified time (48%) and has resulted in
effective allocation and utilization of resources (49%).
1.3 Strategic Vision
In terms of the Strategic Vision, the majority of the respondents
agreed that the effect of the implementation of ERM in the Public sector
governance has improved tracking and review of plans and actions (55%).
While most of the respondents agreed that the implementation of ERM in
the Public sector governance has resulted in clear organizations direction
and action (43%), in the identification of priorities (44%) and a better
communication plan (40%).

81
1.4 Transparency
More than half of the respondents agreed that in terms of
transparency the implementation of ERM has resulted in the provision of
right and accurate information (56%) and increased the timely provision of
information (52%). While most of the respondents agreed that it has
improved the organization’s communication and information strategy (44%)
and has resulted in the accessibility of information for public use (48%).
2. Challenges that the selected government agencies encountered in the
implementation of ERM.
According to the respondents, the lack of commitment from the top
management (33%) and no responsible unit/office to implement the ERM within the
organization (29%) are very serious challenges encountered in the implementation of
ERM in terms of management. Other challenges encountered in the implementation
of ERM were also identified by the respondents under management as serious such
as inadequate change management and resistance to change (32%) and risk
awareness is not fully integrated into decision-making process (29%).
Respondents believe that on the challenges encountered in the
implementation of ERM in relation to process are serious, in particular, (1) risk appetite
and tolerance are not clearly defined (31%); (2) inadequate risk policies in the
establishment of common risk language, description of risk appetite, implementation
of a risk-ranking methodology to prioritize risks within and across functions (29%); and
(3) ERM is not fully integrated into the business processes (27%). While 23% of
respondents think that the process of risk identification, analysis and responses is not
clear is both serious and very serious.

82
According to the respondents the challenges in the ERM implementation in
terms of resources is serious in particular, (1) Insufficient resources such as budget,
time, and human resources (31%); (2) There is a lack of internal knowledge, skills, and
expertise (32%); (3) Lack of qualified personnel to implement ERM (35%); and (4)
Inadequate training on the ERM process (33%).
3. Measures that can be suggested to address the problems that the selected
government agencies encountered in the implementation of ERM.
More than half of the respondents strongly agreed that the measures to
address the problems that the selected government agencies encountered in the
implementation of ERM in terms of the management can be addressed by, (1)
Identifying ERM Champion among the top management adequate training on the ERM
process (53%); (2) Clearly defining ERM Operational Structure (56%); (3) Establishing
of Risk Management Office / Committee (64%); and (4) Institutionalizing Enterprise
Risk Management (65%).
The majority of the respondents strongly agree that the challenges in the ERM
implementation in terms of the process can be addressed by, (1) the development of
ERM Framework (52%); (2) the establishment of a clear Risk Management Process
(60%); and (3) Establishment of common risk language, description of risk appetite
and implementation of a risk-ranking methodology to prioritize risks within and across
functions (53%).
In terms of the resources as one of the suggested measures to address the
problems encountered in the implementation of ERM, majority of the respondents
strongly agree that the challenges in the ERM implementation can be addressed by,
(1) Sufficient allocation of budget, time, and human resource in the implementation of
risk (55%); and (2) Capacity-building activities for ERM implementers (61%).
83
4. Significant difference in the assessment of the effects of the implementation of
ERM on public sector governance when respondents are grouped according to
agency.
Overall the respondents from the 5 agencies, in the assessment of significance
on the effects of the implementation of ERM on public sector governance showed that
statistically, there is no significant difference in their assessment score in terms of
accountability on the following categories:
1. Has led to compliance with government policies and standards;
2. Has resulted in leaders and employees being accountable for their
actions;
3. Has resulted in leaders and employees to value their work and
organization resources; and
4. Has resulted in an increase in the leaders and employees
trustworthiness.
Based on the result of the mean rank, the majority of the respondents from
GSIS, Philhealth, NEDA and SSS suggests had higher evaluation regarding the
effects of the ERM implementation in terms of accountability in the following (1) has
led to compliance with government policies and standards; (2) has resulted in leaders
and employees being accountable for their actions; (3) has resulted in leaders and
employees to value their work and organization resources; and (4) has resulted in
increase in the leaders and employees. While the lowest mean rank was observed in
DSWD which signifies that employees had lower assessment scores.
There was no significant difference in the assessment scores between the
different agencies on the effects of the ERM implementation that has improved quality
of provision of service and has improved beneficiaries / clientele / stakeholder’s

84
confidence and trust in terms of effectiveness and efficiency. Per result of mean rank,
the majority of respondents from GSIS, Philhealth, NEDA and SSS suggests that had
higher evaluation on the effects of the ERM implementation that has improved quality
of provision of service and has improved beneficiaries / clientele / stakeholder’s
confidence and trust. While the lowest mean rank was observed in DSWD which
signifies that employees had lower assessment scores.
However, the effects of the implementation of ERM that has resulted in the
attainment of targets on specified time and has resulted in effective allocation and
utilization of resources in terms of efficiency and effectiveness made a significant
difference between the different departments/agencies. The comparisons of mean
ranks with significance, shows that DSWD choose lower scores than respondents from
SSS in the implementation of ERM that has resulted in the attainment of targets on
specified time. While the average rank of DSWD compared with NEDA and PhilHealth
showed minor differences. Moreover, the comparisons of mean ranks with minimal
significance, shows that DSWD choose lower scores than respondents from GSIS,
SSS, PhilHealth in the implementation of ERM that has resulted in effective allocation
and utilization of resources. A post hoc analysis was done to determine the pairs that
posted a significant difference. Effective allocation and utilization of resources and
attainment of targets on time are more achievable in a centralized structure like the
Philhealth, GSIS, and SSS, they are solely implementing their respective functions
while decentralized structure like DSWD may have difficulty in the allocation and
utilization of its resources and attainment of targets in specified time is difficult for
DSWD since they have different partners in performing their functions.
Assessment of significance in the effects of ERM implementation in terms of
strategic vision has made a significant difference between the different
departments/agencies in the following: (1) implementation of ERM has clear

85
organizations direction and action; (2) ERM implementation has resulted in a better
communication plan; and (3) implementation of ERM has improved tracking and
review of plans and actions. The comparisons of mean ranks with significance, shows
that DSWD choose lower scores than respondents from SSS and GSIS in the
implementation of ERM that has clear organization direction and action. Also, DSWD
choose lower scores than respondents from Philhealth in the ERM implementation has
resulted in a better communication plan. Likewise, DSWD choose lower scores than
respondents from SSS in the implementation of ERM has improved tracking and
review of plans and actions. A pair wise analysis was done to determine the pairs that
posted a significant difference. The difference in perceptions in this area can be
related to the structure, functions, services provided and the clients / beneficiaries they
served. Although DSWD has clear organizations direction and action, assessment on
this area can be affected by its decentralized functions to the LGUs, having different
partners in the implementation of their programs and projects, providing services to all
the vulnerable, poor and disadvantaged sector, also when it comes to its partners
direction and action maybe different since leadership and management are different.
Compared with SSS and GSIS the structure of these agencies are centralized and its
functions are focused on the provision of security services to its respective members
from private and government sectors, direction and actions are much direct. However
the statistics implies that there is no significant difference in the assessment score
between the different agencies in relation to the effects of the implementation of ERM
that has resulted in the identification of priorities. The mean rank results suggests that
the majority of the respondents had higher evaluation regarding the effects of the ERM
implementation has resulted in the identification of priorities in GSIS, PHilhealth, SSS
and NEDA. The lowest mean rank was observed in DSWD which signifies that
employees had lower assessment scores.

86
There was no significant difference in the assessment scores between the
different agencies on the effects of the ERM implementation that has improved the
organization’s communication and information strategy and has resulted in the
accessibility of information for public use in terms of transparency. Per result of mean
rank, the majority of respondents from GSIS, Philhealth, NEDA and SSS suggests that
had higher evaluation on the effects of the ERM implementation has improved the
organization’s communication and information strategy and has resulted in the
accessibility of information for public use. While the lowest mean rank was observed
in DSWD which signifies that employees had lower assessment scores. However,
the effects of the implementation of ERM that has resulted in the provision of right and
accurate information and has increased the timely provision of information made a
significant difference between the different departments/agencies. The comparisons
of mean ranks with significance, shows that DSWD choose lower scores than
respondents from GSIS, NEDA, Philhealth and SSS in the implementation of ERM that
has resulted in the provision of right and accurate information. Furthermore, the
than respondents from PhilHealth and NEDA in the implementation of ERM that has
resulted in the accessibility of information for public use. A post hoc analysis was done
to determine the pairs that posted a significant difference. Provision of right and
accurate information is also a challenge to DSWD in terms of beneficiaries and their
geographic locations since their beneficiaries are the poor. They are usually from far
flung areas who have limited resources such as electricity and access to the internet.
The only method to access the information is to personally provide them the
information, compared to the SSS whose members are the private sectors working
group who has resources to access the information through social media. Thus
87
provision of right and accurate information is affected by the beneficiaries’ capabilities,
geographic location and resources.
CONCLUSIONS
Based on the above-mentioned findings, the following conclusions were drawn:
1. In general, this study shows that the implementation of ERM in the public sector in
terms of accountability mostly affected the compliance with government policies,
standards and leaders and employees to value their work and organization resources
and has an increase in leaders and employees trustworthiness. While in terms of
effectiveness and efficiency, the implementation of ERM has improved the quality of
the provision of service and has improved beneficiaries / clientele / stakeholder’s
confidence and trust. Likewise, in relation to the strategic vision the implementation
of ERM has improved tracking and review of plans and actions. Moreover,
respondents agreed that in regards to transparency the implementation of ERM has
resulted in the provision of right and accurate information and has increased the timely
provision of information. The results of the study reinforces the ERM benefits (CGMA,
2013) (1) Greater awareness about the risks facing the organization and the ability to
respond effectively; (2) Enhanced confidence about the achievement of strategic
objectives; (3) Improved compliance with legal, regulatory and reporting requirements;
(4) Increased efficiency and effectiveness of operations. The results of this can also
be attributed to the fact that the public sector is governed by laws, rules and regulations
established in the Philippine Constitution and other regulating bodies in the
bureaucracy hence the majority of the agencies has a high assessment score in this
item.
2. This study identifies the most encountered challenges in the implementation of the
ERM in terms of management are lack of commitment from the top management and
88
inadequate change management / resistance to change. Corroborated with this study
is the rigid management culture and the resistance to adapt to change can also hinder
the successful implementation of ERM (Ahmed, I., & Abdul Manab, N., 2016). In terms
of the process, the risk appetite and tolerance not clearly defined was identified as the
most encountered challenges in the implementation of ERM. In most cases, an ERM
framework is missing which leads to difficulty in identifying, defining, assessing, and
prioritizing risks (Mensah & Gottwald, 2016). Also the insufficient resources such as
budget, time, and human resources, lack of internal knowledge, skills, and expertise,
lack of qualified personnel to implement ERM and inadequate training on the ERM
process were identified as the most encountered challenges in the ERM
implementation in terms of resources. This was further validated in Ahmed, I., & Abdul
Manab, N. (2016) mentioned the challenges in the implementation of ERM in terms of
resources with great emphasis on the aspect of human resources particularly staff
competence. However, this does not mean that financial resources are not a
challenge, another researcher also emphasizes the failure to allocate funds hinders
continuity of operation as well as the implementation of activities that will address the
risks identified (Na Ranong & Wariya, 2009). Relevant to the study in terms of
management Ahmed, I., & Abdul Manab, N. (2016) included lack of commitment from
the top management, no existing ERM unit, Risk Management is not part of the
strategic planning, and lack of innovativeness as the major challenges that the public
sector faces in the implementation of ERM. In terms of process, the organization
should be able to choose and adapt a context-specific framework; an example of this
framework is the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
3. This study also revealed the best measures to address the encountered problems in
the implementation of ERM in terms of the process are a context-specific ERM

89
Framework per government agencies, establishment of a clear risk management
process, and identifying common risk language, description of risk appetite, and
implementation of a risk-ranking methodology to prioritize risks within and across
functions are the top priority for the implementation of ERM to be successful. Likewise,
in terms of the management, identify ERM Champion among the top management,
clearly define ERM Operational Structure, Establishment of Risk Management Office
/ Committee and institutionalize Enterprise Risk Management the respondents believe
that will also address the encountered problems in the implementation of ERM.
Moreover, in terms of the resources the respondents agree that a sufficient allocation
of budget, time, and human resource in the implementation of risk and capacity-
building activities for ERM implementers is necessary in the implementation of ERM.
This part of the research poses some of the measures to successfully implement ERM
in the public sector. The responses consistently point out the importance of identifying
the ERM framework or process, ensuring that budget is allocated solely for the
implementation of the program as well as the professional expertise needed.
Alongside these, the support of the top management is also essential so that ERM can
be mainstreamed and institutionalized as part of the day-to-day operation of the
organization.
4. This study showed that there is no significant difference in the assessment scores of
ERM implementation between the different agencies in relation to accountability.
Relative to this, notable among the comments of the respondents was the knowledge
that even before ERM, there are other rules and regulations already in place where
public officials and employees are expected to practice accountability in the fulfillment
of their functions and mandates. However the lowest assessment scores in DSWD
can be attributed to its decentralized structure in which accountability was also been
transferred to the LGUs. Compared to the structure of GSIS, SSS, Philhealth and
90
NEDA, it is centralized where the power come from the top and down to the lowest
level of the organization only hence accountability lies to the top management and
supervisors of the lowest level in the organizations which affected their higher
assessment score in terms of accountability.
In terms of efficiency and effectiveness there were some statements that revealed
a significant difference such as it has resulted in the attainment of targets on specified
time and has resulted in effective allocation and utilization of resources. The GSIS,
Philhealth, NEDA and SSS gave high evaluation scores on these statements. Some
insights were generated as to why most of the respondents moderately agreed: “Even
in the absence of an effective and fully operational ERM, some agencies can still
manage to attain their targets and to utilize their resources.” “Employing various
means such as Quality Management System and Citizen's Charter also provides
effective and efficient service.” Effective allocation and utilization of resources and
attainment of targets on time are more achievable in a centralized structure like the
Philhealth, GSIS, and SSS, they are solely implementing their respective functions
while decentralized structure like DSWD may have difficulty in the allocation and
utilization of its resources and attainment of targets in specified time since they have
different partners in performing their functions.
In reference to the strategic vision, 3 statements have significant differences
among the different agencies as follows: (1) implementation of ERM has clear
organizations direction and action; (2) ERM implementation has resulted in a better
communication plan; and (3) implementation of ERM has improved tracking and
review of plans and actions. Some of the responses from the respondents were
gathered: “While I strongly agree that an ERM is essential for an organization to attain
its strategic vision, some organizations including DSWD manage to implement their
strategic initiatives effectively. Reasons for the response include very shallow
91
management processes, implementation of ERM has been politicized.” “It is not being
fully supported and championed by the higher management because it is a legacy of
a different leader they are not affiliated with.” “In the dynamics of power among
Execom, ownership of initiative is important.” The difference in perceptions in this area
can be related to the structure, functions, services provided and the clients /
beneficiaries they served. Although DSWD has clear organizations direction and
action, assessment on this area can be affected by its decentralized functions to the
LGUs, having different partners in the implementation of their programs and projects,
providing services to all the vulnerable, poor and disadvantaged sector, also when it
comes to its partners direction and action maybe different since leadership and
management are different. Compared with SSS and GSIS the structure of these
agencies are centralized and its functions are focused on the provision of security
services to its respective members from private and government sectors, direction and
actions are much direct.
In terms of transparency, the effects of the implementation of ERM that has
resulted in the provision of right and accurate information and has increased the timely
provision of information made a significant difference between the different
departments/agencies. This can be related to the adoption of a Quality Management
System within the bureaucracy. Provision of right and accurate information is also a
challenge to DSWD in terms of beneficiaries and their geographic locations since their
beneficiaries are the poor. They are usually from far flung areas who have limited
resources such as electricity and access to the internet. The only method to access
the information is to personally provide them the information, compared to the SSS
whose members are the private sectors working group who has resources to access
the information through social media. Thus provision of right and accurate information
is affected by the beneficiaries’ capabilities, geographic location and resources.

92
This study also reveals that the lowest mean rank observed in DSWD which
signifies lower scores in all the statements in terms of accountability, efficiency and
effectiveness, strategic vision and transparency among the different agencies. This
can be attributed to the DSWDs’ structure in which basic social service functions were
devolved in the Local Government Units (LGU), along with this devolution are the
redirected functions of the DSWD from direct service deliverer to technical assistance
provider; In the beneficiaries that they served which includes the vulnerable, poor and
the disadvantaged; Being an implementing agency with different sectors, programs
and projects for social welfare and development that they served, and also with
different partner agencies. Whereas the SSS, GSIS, Philhealth and NEDA, their
structure is centralized where power come from the top, their functions are
concentrated in their agencies up to the regional offices only, their clients are focused
on their respective members of staff and they are not an implementing agency. The
SSS and GSIS are concerned with the Security System of private and public sectors
while Philhealth covers the health system of the Filipinos and NEDA is the socio
economic and planning body of the government. The assessment scores from these
departments / agency are higher compared to DSWD. Also some of the comments
from the DSWD respondents which are contrasting such as “Top leadership to initiate
the required strong commitment to effect the necessary change” while others think that
“commitment is not an issue especially with DSWD but I guess priorities somehow
affect how effective the organization is implementing its ERM,” hence assessment
scores from this Department are extreme. It may also be noted that DSWD has been
implementing ERM since 2012 with the issuance of DSWD Memorandum Circular
2012 “DSWD Risk Assessment and Management Framework” but some comments
from the respondents showed that “A new policy was issued last 2019 requiring to
integrate ERM (identification, treatment, reporting) with planning and budgeting office
93
but for year 2020, there’s a new policy and technology being reintroduced which is
PGS and this has the potential to supersede the 2019 policy on harmonized planning,
monitoring, evaluation system (HPMES)” and “The official office for ERM was recently
established last Nov 2019 but is more focused on providing technical assistance in
creating office operations manuals. The new staff of this office are not familiar with
ERM technology. They are being groomed as an oversight office in compliance with
Ease of doing Business.” The implementation of ERM in DSWD has no continuity
considering the new policies introduced by the change in priorities by the new
management.
RECOMMENDATIONS
Based on the foregoing findings and conclusions, the researcher would like to recommend
the following:
1. This study reveals that it has an effect in the ERM implementation in public sector
governance in terms of accountability, effectiveness and efficiency, strategic vision
and transparency. As part of the strategy in ensuring good governance in the public
sector, it is recommended for the policy makers, in addition to the adoption of
Quality Management System and strengthening of Internal Control, issuance of a
policy directing all National Government Agencies to establish an Enterprise Risk
Management Framework. Also, for further study to include other good governance
elements to determine the effects of ERM in the public sector governance as a
whole and the potential benefits of the ERM implementation in the public sector.
2. Challenges in the implementation of ERM were identified in this study along with
the measures to address the encountered problems in the implementation of ERM.
To other government agencies, adopt an Enterprise Risk Management framework
that is suitable to your organization to institutionalize risk management procedures

94
in the organization by standardizing the tools, methodology and people processes
in the identification, analysis, evaluation, review and monitoring the risks and
addressing the impact of risk appropriately. Also adoption of ERM framework will
provide a structure in complying with Clause 6.1 “Actions to address risks and
opportunities” of ISO 9001:2015 - QMS. The QMS is a requirement in the public
sector.
3. The result of the study will guide the government agencies to implement the ERM
successfully such as the need to identify an ERM champion, sufficient allocation
of budget, time, and human resource in the implementation of risk and capacity-
building activities for ERM implementers, implementation of ERM across all
department, continuous improvement and development, and measure the results.
4. In order for the DSWD to strengthen the ERM implementation it is recommended
to consider renewing the top management commitment, integrating in the core
management processes and aggressively monitoring the Risk treatment plan.
5. The observed differences in the five selected agencies in terms of its structure, its
functions, and its beneficiaries may have effect in the proper implementation of
ERM, in order to strengthen the observed differences it is recommended to
conduct further study on its effects in the ERM implementation of agencies with
different structures, functions and beneficiaries.
6. The respondents of this study are limited due to the COVID 19 pandemic hence it
is recommended that for further study expand the number of samples to cover, to
be more effective and reliable.
7. For the future researchers, conduct a study on the participation of leaders in the
implementation of ERM in the public sector to determine effectiveness of ERM
implementation.
95
References
Abu Bakar, B., S.Z., A. R., A., M. R., & S., B. (2019). Risk Management Practices to
Strengthen Public Sector Accountability. Asian Journal of Business and
Accounting, 14-15.
Ahmed, I., & Abdul Manab, N. (2016). Influence of. International Journal of Economics
and Financial Issues, 830-836.
Applied Corporate Governance. (n.d.). Applied Corporate Governance. Retrieved from
Applied Corporate Governance People Planet Profit: https://www.applied-
corporate-governance.com/definition-of-corporate-governance/
Bernstein, P. L. (1996). Against the Gods: The Remarkable Story of Risk. New York:
John Wiley and Sons, Inc.
Bhatta, G. (2008). Public Sector Governance and Risks: A Proposed Methodology to do
Risk Assessment at the Program Level. Manila: Asian Development Bank.
Cantor, M., & Sanders, J. D. (2007, May 15). IBM Developer. Retrieved from IBM:
https://www.ibm.com/developerworks/rational/library/may07/cantor_sanders/
CGMA. (2013, June 11). Chartered Global Management Accountant. Retrieved from
CGMA: https://www.cgma.org/resources/tools/essential-tools/enterpise-risk-
management.html
Collier, P., & Soin, K. (2013). Risk and Risk Management in Accounting and Control.
COSO. (2004, December 12). COSO. Retrieved from Committee of Sponsoring
Organizations of Treadway Commission: https://www.coso.org/
COSO. (2017, June). Enterprise Risk Management: Integrating with Strategy and
Performance. Retrieved from COSO Committee of Sponsoring Organizations of
Treadway Commission: https://www.coso.org/
Cossin, D., Ong, B. H., & Coughlan, S. (2015). A Practical Perspective: Stewardship.
IMD.
96
Creative Learning. (2020, February 14). Retrieved from Creative Learning:
http://creativelearning.org/blog/2016/11/08/what-is-good-governance/
Deloitte. (n.d.). Aligning risk and the pursuit of effectiveness, efficiency and
accountability. Retrieved from Risk Transformation:
https://www2.deloitte.com/content/dam/Deloitte/au/Documents/risk/deloitte-au-risk-
aligning-risk-pursuit-effectiveness-efficiency-aountablity-0614.pdf
Demidenko, E., & Mcnutt, P. (2010). Ethics of Enterprise Risk Management as a Key
Component of Corporate Risk Management. International Journal of Social
Economics.
Dionne, G. (2013, October 21). Risk Management: History, Definition, and Critique. Risk
Management and Insurance Review, 147-166.
DSWD. (2020, February 14). DSWD. Retrieved from DSWD: https://www.dswd.gov.ph/
Dykstra, W. T., & Maraccini, M. J. (2019, April 11). Sustainable ERM in the Public
Sector. Retrieved from Crowe: https://www.crowe.com/insights/sustainable-erm-
in-the-public-sector-part-2
Five Steps to Enterprise Risk Management. (2011, April 22). Retrieved from Risk
Decisions: Shaping the Future:
https://www.riskdecisions.com/five-steps-enterprise-risk-management/
Gannarelli, M. (2020, February 11). Governance in the Public Sector: Responsibilities
and Examples. Retrieved from study.com: http://www.study.com
Geesink, L. (2012, July 14). Enterprise Risk Management and Bank Performance During
Financial Crisis. Master Thesis. Twente: University of Twente.
Ghazali, Z., & Abdul Manab, N. (2013). Enterprise Risk Management and Value
Creation: Initial Findings Amongst Non-Financial Public Listed Companies in
Malaysian Bourse. Asian Economic Review.

97
GSIS. (2020, February 14). GSIS. Retrieved from GSIS: https://www.gsis.gov.ph/
Holzinger, D. (2018). How formal ERM implementation can help federal agencies.
Journal of Accountancy.
iEdunote. (n.d.). Organizational Performance: Definition, Actors, Models. Retrieved from
iEduNote: https://iedunote.com/organizational-performance
IFAD. (1999). Good Governance: An Overview. Rome: IFAD.
Kester, G. (2019, Julu 18). Logicgate. Retrieved from Logic Gate Blog:
https://www.logicgate.com/blog/who-is-responsible-for-enterprise-risk-manageme
nt/#:~:text=While%20departmental%20roles%20differ%20among,must%20start
%20at%20the%20top.
Khalik, Z., & Sum, R. (2019). The Influence of Corporate Governance on Enterprise Risk
Management Implementation among Non-Financial Public Listed in Malaysia.
IRCMST 2019 (pp. 1-18). Kuala Lumpur: IRCMST.
Kim, E.-S. (2014). How did Enterprise Risk Management first appear in the Korean
Public Sector? Journal of Risk Research, 263-279.
Kopia, J., Just, V., & Bussian, A. (2017). Organizational Performance and Enterprise
Risk Management. Ecoforum.
Macshane, M., Nair, A., & Rustambekov, E. (2010). Does Enterprise Management
Increase Firm Value? Journal of Accounting, Auditing, and Finance.
Martin, D., & Power, M. (2007, January). researchgate . Retrieved from ResearchGate
Publications:https://www.researchgate.net/publication/46454110_The_End_of_E
nterprise_Risk_Management
Maruhun, E. N., Abdullah, W. R., Atan, R., & Yusuf, S. N. (2018). The Effects of
Corporate Governance on Enterprise Risk Management: Evidence from
Malaysian Shariah -Compliant Firm. International Journal of Academic Research
in Business and Social Sciences, 865-877.

98
Mehr, R. (1974). Risk Management Concepts and Applications. US: McGraw Hill.
Mehr, R., & Hedges, D. (1963). Risk Management in the Business Enterprise.
Homewood: McGraw Hill.
Mensah, G. K., & Gottwald, W. (2016). Enterprise Risk Management: Factors associated
with effective implementation. Risk Governance and Control: Financial Markets
and Institutions, 1-32.
Minsky, S. (2017, April 25). Logic Manager. Retrieved from Logic Manager:
https://www.logicmanager.com/erm-software/2017/04/25/good-governance/
Mokgatle, B. (2013, November 11). Enterprise Risk Management within public sector
institutions for improving compliance: A case study into a public sector institution.
Pretoria: Gordon Institute of Business Science.
Na Ranong, P., & Wariya, P. (2009, May). Critical success factors for effective risk
management procedures in financial industries. Sweden, Umea: University of
Umea.
NC State College. (2014, November 1). NC State University Poole College of
Management. Retrieved from NC State University:
https://erm.ncsu.edu/library/article/ERM-strategy-for-success
OECD. (2014). Risk Management and Corporate Governance. OECD Publishing.
OECD. (2018). Managing Risk in the State-Owned Enterprise Sector in Asia:
Stocktaking of National Practices. OECD.
Office of Behavioral and Social Sciences Research. (n.d.). Retrieved from E-Source
Behavioral and Social Sciences Research:
http://www.esourceresearch.org/eSourceBook/SampleSurveys/6DevelopingaSur
veyInstrument/tabid/484/Default.aspx
99
Owojori, A. A., Akintoye, I. R., & Adidu, F. (2011, January). researchgate. Retrieved from
ResearchGate:https://www.researchgate.net/publication/268377052_The_challe
nge_of_risk_management_in_Nigerian_banks_in_the_post_consolidation_era
Pag-IBIG. (2020, February 18). Pag-IBIG. Retrieved from Pag-IBIG:
https://www.pagibigfund.gov.ph/
Papert Tyari. (2018, August 19). Retrieved from papertyari.com:
http://www.papertyari.com/general-awareness/management/theories-corporate-
governance-agency-stewardship-etc/
Palermo, T. (2014). Accountability and expertise in public sector risk management: A
case study. Financial Accountability and Management, 322-341.
Part 2: Understanding Public Sector Accountability . (n.d.). Retrieved from Office of the
Auditor General: https://oag.parliament.nz/2016/accountability/part2.htm
Philhealth. (2014, 14 February). Philhealth. Retrieved from Philhealth:
https://www.philhealth.gov.ph/news/2018/implements_rims.html
Power, B. (2014). Writing Good Risk Statements. ISACA Journal.
Quaranta, J. (2017, January 7). Descriptive Correlational Research: Asthma
Management by School Nurses. Retrieved from Sage: https://dx-doi-
org.eur.idm.oclc.org/10.4135/9781526407696
Risk Management Policy. (n.d.). Retrieved from ERM Resources:
https://web.actuaries.ie/sites/default/files/erm-
resources/risk_management_policy_template.pdf
RSM International Association. (2020, January 10). Retrieved from RSM:
https://www.rsm.global/singapore/insights/our-expert-insights/eight-drivers-
effective-enterprise-risk-management-system
100
Shad, M. K., & Lai, F.-W. (2019). Enterprise Risk Management Implementation and Firm
Performance: Evidence from the Malaysian Oil and Gas Industry. Canadian
Center of Science and Education, 47-53.
Sobel, P. J., & Reding, K. F. (2004). Aligning Corporate Governance and Enterprise Risk
Management. Management Accounting Quarterly, 1-9.
Sobel, P. J., & Reding, K. F. (2012). Enterprise Risk Management: Achieving and
Sustaining Success. The IIA Research Foundation.
SSS. (2020, February 18). SSS. Retrieved from SSS: https://www.sss.gov.ph/
The importance of ERM in an Organization. (2013, August 15). Retrieved from Careers
in Audit: https://www.careersinaudit.com/
The World Bank. (2014, December 30). Understanding Poverty Governance: The World
Bank. Retrieved from World Bank: https://www-worldbank-
org.eur.idm.oclc.org/en/topic/governance/brief/public-sector-performance
Theory of Corporate Governance. (2018, August 19). Retrieved from RBI:
http://www.papertyari.com/general-awareness/management/theories-corporate-
governance-agency-stewardship-etc/
Truter, M. (2007). Implementation of ERM as a tool for Improving Corporate Governance
within the Public Sector. University of South Africa.
UNDP. (1997). Governance for Sustainable Human Development. United Nations
Development.
Webster, D. E., & Stanton, T. H. (2014). Improving Government Decision Making
through Enterprise Risk Management. IBM Center for the Business of
Government, 1-42.
Williams, R., & Heins, R. (1964). Risk Management and Insurance. Chicago: McGraw
Hill.
101
APPENDIX 1: SURVEY QUESTIONNAIRE
SURVEY FORM # : ___________
DATE : ___________
Good Day!
I am a Master in Public Administration student at the Polytechnic University of the
Philippines.
As part of the course requirement, I am conducting a survey based on my thesis
topic that would require actual respondents. The subject of the survey on the
implementation of Enterprise Risk Management (ERM) in public sector governance in the
selected agencies towards the adoption of the ERM framework.
I would like to solicit your views on the matter by responding to the survey. Please
be assured that all responses will be kept anonymous and confidential. The data gathered
from the survey will be used only for academic purposes and in partial fulfillment of my
course requirements.
Your participation is greatly appreciated. Thank you.
ARCELI S. DIVINA
102
For the following questions, please put a check ( / ) on the space provided below
which best describe your answer. If no choices are given, kindly indicate your
answer on the space provided.
PART I : RESPONDENT’S PROFILE
Name of the respondent
(optional)__________________________________________________
Sex: ____ Male ____ Female
1. What office do you work for? ____________________________________
( ) National Agency ( ) GOCC Others pls. specify ____________
2. Under which department do you work for? ________________________
3. What is your current position? __________________________________
4. Under what level is your position?
( ) Senior Leadership ( ) Technical Personnel
( ) Middle Management. ( ) Administrative Personnel
5. How long have you been working in your current position?
( ) 0 – 3 years ( ) more than 3 years
PART II: Effects of ERM implementation to agencies good governance in terms of
accountability, effectiveness and efficiency, strategic vision and transparency
Describe your level of agreement/disagreement with each statement by putting a (/) mark
on the space provided in each item.

103
Strongly Agree Moderately Disagree Strongly
Agree Agree disagree
Accountability
5 4 3 2 1
The implementation of ERM
has…….
6. lead to compliance with
Government policies and
standards.
7. resulted in leaders and
employees being
accountable for their
actions
8. resulted in leaders and
employees to value their
work and organizations
resources
9. increase the leaders and
employees
trustworthiness
104
Effectiveness and
Efficiency
has……
10. Improved quality of the
provision of service
11. Resulted in the
attainment of targets on
specified time
12. Resulted in effective
allocation and utilization
of resources
13. Improved beneficiaries/
clientele/ stakeholders
confidence and trust
Strategic Vision
has……
14. Clear organizations

105
15. Resulted in the
identification of priorities
16. Resulted in a better
communication plan
17. Improved tracking and
review of plans and
actions
Transparency
has……
18. Improved organization’s
communication and
information strategy
19. Resulted in the
accessibility of
information for public use
20. Resulted in the provision
of right and accurate

106
information
21. Increase the timely
provision of information
PART III: Possible challenges in the implementation of ERM.
Describe your level of significance/insignificance of each statement by putting a (/) mark
Very Serious Moderately Less Not a
Serious Serious Serious Problem
Management 5 4 3 2 1
22. There is a lack of
commitment from the
top management.
23. There is no
responsible
unit/office to
implement the ERM
within the
organization
107
24. Risk awareness is
not fully integrated
into the decision-
making process
including the
strategic decision-
making process.
25. Inadequate change
management and
resistance to change.
Process
26. The risk appetite and
tolerance are not
clearly defined.
27. The process of risk
identification,
analysis, and
responses is not
28. Inadequate risk
policies in the
establishment of
108
common risk
language, description
of risk appetite, and
implementation of a
risk-ranking
methodology to
prioritize risks within
and across functions.
29. The ERM is not fully
integrated into the
business processes.
Resources
30. Insufficient resources
such as budget, time,
and human
resources.
31. There is a lack of
internal knowledge,
skills, and expertise.
32. Lack of qualified
personnel to
109
implement ERM.
33. Inadequate training
on the ERM process.
PART IV: Measures to address the problems in the implementation of ERM.
Describe your level of agreement/disagreement with each statement by putting a (/) mark
Strongly Agree Moderately disagree Strongly
Agree agree disagree
Management 5 4 3 2 1
34. Identify ERM Champion
among the top management
35. Clearly define ERM
Operational Structure
36. Establishment of Risk
Management Office /
Committee
37. Institutionalize Enterprise

110
Risk Management
Process
38. Development of ERM
Framework
39. Establishment of clear Risk
Management Process
40. Establishments of common
risk language, description of
risk appetite, and
implementation of a risk-
ranking methodology to
across functions.
Resources
41. Sufficient allocation of budget,
time, and human resource in
the implementation of risk
42. Capacity-building activities for
ERM implementers
111
APPENDIX 2 : Complete list of results of Post hoc test with significant difference
Appendix 2.1 Assessment of the ERM implementation that has resulted to the
attainment of targets on specified time
Hypothesis Test Summary

Null Hypothesis Test Sig. Decision
The distribution of The implementation of
ERM has resulted to the attainment of
Independent-Samples Reject the null
1 targets on specified time is the same 0.02
Kruskal-Wallis Test hypothesis.
across categories of What office do you
work for?.
Asymptotic significances are displayed. The significance level is .05.
112
Appendix 2.2 Assessment of the ERM implementation that has resulted in effective
allocation and utilization of resources

ERM has resulted in effective allocation
1 and utilization of resources. is the same 0.05
work for?.
113
Appendix 2.3 Assessment of the ERM implementation that has clear organizations

ERM has clear organizations direction and Independent-Samples Reject the null
1 0.04
action is the same across categories of Kruskal-Wallis Test hypothesis.
What office do you work for?.
114
Appendix 2.4 Assessment of the ERM implementation that has resulted in a better
communication plan

ERM has resulted in a better Independent-Samples Reject the null
1 0.04
communication plan is the same across Kruskal-Wallis Test hypothesis.
categories of What office do you work for?.
115
Appendix 2.5 Assessment of the ERM implementation that has improved tracking
and review of plans and actions

ERM has improved tracking and review of Independent-Samples
1 0.02 Reject the null hypothesis.
plans and actions is the same across Kruskal-Wallis Test
categories of What office do you work for?.
116
Appendix 2.6 Assessment of the ERM implementation that has resulted in the
provision of right and accurate information

ERM has resulted in the provision of right
1 and accurate information is the same 0.02
work for?.
117
Appendix 2.7 Assessment of the ERM implementation that has increased the
timely provision of information

ERM has increased the timely provision of Independent-Samples Reject the null
1 0.05
information is the same across categories Kruskal-Wallis Test hypothesis.
of What office do you work for?.

FINAL PAPER - ARACELI DIVINA PDF Version

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

FINAL PAPER - ARACELI DIVINA PDF Version

Uploaded by

Copyright:

Available Formats

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF ENTERPRISE

Polytechnic University of the Philippines

Philippine Copyright 2021

ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF

In Partial Fulfilment of the Requirements for the Degree

Master in Public Administration

Ms. NORIE L. MANIEGO

NAME OF EVALUATOR, PhD NAME OF EVALUATOR, DBA

NAME OF EVALUATOR, DBA

NAME OF PANEL CHAIR, Ph.D.

NAME OF PANEL MEMBER, Ph.D. NAME OF PANEL MEMBER, DBA

NAME OF PANEL MEMBER, Ph.D. NAME OF PANEL MEMBER, DBA

NAME OF THE DEAN, DPA

Date of passing the Comprehensive Examinations: _________________ (If applicable)

greatest gift of life and endless pursuit of knowledge and virtue.

This gratitude goes as well towards the Open University of Polytechnic

were previously unknown.

guidance in the service of knowledge.

Department of Social Welfare and Development, National Economic and

Development Agency, Government Service and Insurance Corporation, Social

in answering the survey questionnaire.

– all that the researcher is all thanks to all of you.

to complete this thesis within the deadlines.

And lastly, to the researchers’ friends especially Ms. Janeth Ladia-Decipulo,

From the bottom of the researchers’ humble heart, thank you.

ASSESSMENT OF THE EFFECTS OF THE IMPLEMENTATION OF ENTERPRISE RISK

MANAGEMENT IN THE SELECTED AGENCIES IN PUBLIC SECTOR GOVERNANCE

TOWARDS THE ADOPTION OF ENTERPRISE RISK MANAGEMENT FRAMEWORK

for the degree MASTER IN PUBLIC ADMINISTRATION at the Polytechnic University of

acknowledgment were made.

Title : An Assessment of the Effects of the Implementation of Enterprise Risk

Researcher : Arceli S. Divina

Degree : Master in Public Administration

Institution : Polytechnic University of the Philippines

Adviser : Ms. Norie L. Maniego

selected agencies in Public Sector Governance towards the adoption of an ERM

The primary data collection used was a researcher-made survey questionnaire

conducted through an online survey via Google Forms.

standards; in terms of effectiveness and efficiency, the implementation of ERM has

accurate information and has increased the timely provision of information.

problems in the implementation of ERM are: context-specific ERM Framework per

of ERM implementation between the different agencies in relation to accountability. In

allocation and utilization of resources. In reference to the strategic vision, following

between the different departments/agencies.

To other government agencies, adopt an Enterprise Risk Management framework

that is suitable to your organization to institutionalize risk management procedures in the

QMS is a requirement in the public sector.

Certification and Approval Sheet ii

1. The Problem and Its Setting

Statement of the Problem 13

Scope and Limitations of the Study 14

Significance of the Study 15

2. Review of Related Literature and Studies

Risks, Risk Management, and Enterprise

Risk Management: The beginnings 18

Benefits of Enterprise Risk Management 20

ERM, Corporate Governance and Good 21

ERM and its Effects in the Public Sector 24

ERM in the Context of the Philippines Public 25

Synthesis of the Reviewed Literature and 26

Population, Sample Size, and Sampling 28

Data Gathering Procedure 36