RISK

MANAGEMENT
Assignment #1

Salig, Hannah C.
BSBAFM 3-5
For each in the list, Give real-world case scenarios - Philippine based, situations or
incidents which manifested the following risks below then cite the nature of the risk and
suggest how to manage such risk:

1.Financial fraud

Real-world Scenario
 According to the article of “BANGLADESH BANK, Plaintiff, v. RIZAL COMMERCIAL
BANKING CORPORATION, et… “In February 2016, the Rizal Commercial Banking
Corporation (RCBC) in the Philippines became embroiled in one of the largest
financial fraud incidents in history, known as the Bangladesh Bank heist. Hackers
stole $81 million from the Bangladesh central bank's account at the Federal Reserve
Bank of New York and transferred the funds to RCBC accounts. This sophisticated
phishing scheme highlighted vulnerabilities in cybersecurity and anti-money
laundering measures globally. The stolen funds were laundered through various
channels, including casinos, raising concerns about the integrity of the banking
system. The incident underscored the urgent need for enhanced security protocols
and regulatory oversight to prevent such large-scale financial crimes in the future.

Nature of the Risk

 Operational Risk-results from the firm’s business operations.

Risk Management
 Banks and other financial institutions need to make significant investments in
reliable fraud detection systems, regularly train staff and consumers on
cybersecurity, using multi-factor authentication might also help, and improve
customer awareness campaigns regarding typical fraud techniques in order to
reduce financial fraud.

Reference.
 Bangladesh Bank v. Rizal Commercial Banking Corp., 19 CIV. 983 ... (n.d.).
https://casetext.com/case/bangladesh-bank-v-rizal-commercial-banking-corp

2.Data privacy and cybersecurity

Real-world Scenario
 On the study that was published by Jessica Haworth In 2021, Cashalo, a fintech
company in the Philippines, experienced a data breach compromising customers'
sensitive personal details.Names, phone numbers, email addresses, device IDs, and
encrypted passwords were made public due to the incident. Customers were
reassured by Cashalo that no accounts had been compromised, and they promptly
improved security procedures.. The incident was reported to the Philippines'
National Privacy Commission, and affected customers were notified directly via
email or in-app message.
Nature of the Risk
 Cybersecurity and Identity Theft

Risk Management
 Data protection must be given top priority in organizations, and this may be
achieved by putting strong cybersecurity measures in place including encryption,
access controls, frequent security audits, and adherence to laws like the Data
Privacy Act of 2012. Strengthening defences against cyber attacks can also be
achieved by supporting a culture of security awareness and providing cybersecurity
training for staff members.

Reference.
 Haworth, J. (2021, February 23). Filipino credit app cashalo suffers data breach. The
Daily Swig | Cybersecurity news and views.
https://portswigger.net/daily-swig/filipino-credit-app-cashalo-suffers-data-breach

3. Regulatory compliance

Real-world Scenario
 The Food and Drug Administration (FDA) issued a warning to the public regarding
the purchase and use of an unnotified cosmetic product, YOKO WHITENING
CREAM (GINSENG & PEARL). This product lacks a valid Certificate of Product
Notification (CPN) as of March 5, 2024, violating regulations under the FDA Act of
2009. The FDA cannot guarantee the product's quality or safety if it is not notified.
Potential concerns include skin irritation, itching, anaphylactic shock, and organ
failure. These risks can also arise from the inclusion of forbidden components or
heavy metal contamination. To protect their health and wellbeing, consumers are
thus strongly warned not to buy and use this illegal cosmetic product.

Nature of the Risk

 Operational risk- results from the firm’s business operations.

Risk Management
 To guarantee compliance with rules, this entails carrying out routine audits,
keeping correct records, encouraging a compliance-oriented culture, and
consulting with legal advice.

Reference
 Rjbbonaobra. (2024, March 20). FDA Advisory No.2024-0524 || public health
warning against the purchase and use of unnotified cosmetic “Yoko whitening
 cream (Ginseng & Pearl)” - food and drug administration. Food and Drug
Administration -. https://www.fda.gov.ph/fda-advisory-no-2024-0524-public-
health-warning-against-the-purchase-and-use-of-unnotified-cosmetic-yoko-
whitening-cream-ginseng-pearl/

4. Urbanization and Infrastructure

Real-world Scenario
 Rapid urbanization in Metro Manila has led to overpopulation and strain on
existing infrastructure, resulting in traffic congestion, inadequate housing,
pollution, and insufficient public services.

Nature of the Risk

 Strategic Risk
Risk Management
 To address urbanization challenges, government agencies and city planners must
prioritize infrastructure development, invest in sustainable urban planning
initiatives, improve public transportation systems, and promote community
engagement in decision-making processes.

Reference
 The growth of Metro Manila and the National Capital Region. (n.d.-b).
https://pdf.usaid.gov/pdf_docs/PA00TGS4.pdf

5.Political and social unrest

Real-world Scenario
 The People Power Revolution of 1986 stands as a significant example of political
and social unrest in the Philippines. Under the authoritarian rule of President
Ferdinand Marcos, allegations of corruption, human rights abuses, and electoral
fraud fueled public discontent. The assassination of opposition leader Benigno
Aquino Jr. in 1983 intensified opposition to Marcos' regime.
In February 1986, millions of Filipinos converged in Manila for non-violent protests,
known as the EDSA Revolution or "Yellow Revolution," reflecting the color of the ribbons
worn by protesters. Led by diverse groups including civil society, religious organizations,
and military defectors, the movement demanded Marcos' ousting.

Nature of the Risk

 Property Risk
Risk Management
 Governments should prioritize inclusive governance, uphold democratic values,
solve socioeconomic disparities, and have productive conversations with opposing
viewpoints in order to reduce the likelihood of political and social instability.

Reference
30th anniversary of the 1986 EDSA people power revolution | official ... (n.d.-a).
https://www.officialgazette.gov.ph/edsa/

6.Cybersecurity

Real-world Scenario
 October 22, 2023 there was research published by Sneha Swaminathan tackling
the Hackers attacked the Philippine Health Insurance Corporation (PhilHealth) in
a major cybersecurity breach that affected millions of people, including Filipino
workers abroad. After PhilHealth refused to pay a 0,00 ransom, there was a breach.
The defacement of the House of Representatives' webpage further highlights the
vulnerabilities present in the government's digital infrastructure, which were
brought to light by this incident.
The hacker, known only as DiabloX Phantom, took credit for breaking into five
important government organizations and obtaining a substantial quantity of data.
The goal of DiabloX Phantom's actions was to highlight flaws in the government's
cybersecurity protocols.

Nature of Risk
 Operational Risk
Risk Management
 Implement multi-layered cybersecurity defenses, including network security,
endpoint protection, and employee awareness training. Develop an incident
response plan to mitigate the impact of cyber incidents and regularly test security
controls for effectiveness.

Reference
 Philippines faces cybersecurity crisis as hackers expose state secrets, Personal
Data. WION. (n.d.). https://www.wionews.com/world/philippines-faces-
cybersecurity-crisis-as-state-secrets-personal-data-exposed-by-hackers-649856

7.Economic vulnerabilities
Real-world Scenario
 In early 2020, the world was gripped by the emergence of the COVID-19 pandemic,
and the Philippines was no exception. With the first suspected case investigated on
January 22, 2020, and 633 suspected cases reported by March 1, the nation faced a
daunting challenge in confronting this novel virus. Two confirmed cases of
COVID-19 in the Philippines shed light on the clinical and epidemiological aspects
of the disease. Both cases involved previously healthy Chinese nationals, a couple
on vacation in the country during January 2020. Patient 1, a 39-year-old female,
exhibited symptoms of cough and sore throat and was admitted to San Lazaro
Hospital in Manila on January 25. As the pandemic spread, its impact extended far
beyond public health concerns. The economic vulnerabilities of the Philippines
were starkly exposed, triggering a cascade of consequences.
A great number of jobs were lost, companies closed, and supply networks broke as a result
of trade disruptions and lockdown procedures. Millions of Filipinos experienced greater
hardships as a result of the economy's contraction.

Nature of the Risk

 Personal Risk
Risk Management:
 Governments can invest in social safety nets, support resilience-building initiatives,
encourage entrepreneurship and innovation, and seek diversified economic
policies in order to reduce economic vulnerabilities. In order to manage
uncertainty, businesses should also have cash on hand, diversify their sources of
income, and modify their company plans to become more flexible.

Reference
Edrada, E. M., Lopez, E. B., Villarama, J. B., Salva Villarama, E. P., Dagoc, B. F., Smith, C.,
Sayo, A. R., Verona, J. A., Trifalgar-Arches, J., Lazaro, J., Balinas, E. G. M., Telan, E. F. O.,
Roy, L., Galon, M., Florida, C. H. N., Ukawa, T., Villaneuva, A. M. G., Saito, N.,
Nepomuceno, J. R., … Solante, R. M. (1970, January 1). First covid-19 infections in the
Philippines: A case report. Trop Med Health. https://search.bvsalud.org/global-literature-
on-novel-coronavirus-2019-ncov/resource/en/covidwho-47780

8.Natural disasters and calamities

Real-world Scenario
 Typhoon Haiyan (Yolanda) struck the Philippines in 2013, causing widespread
devastation, loss of lives, displacement of communities, and extensive damage to
infrastructure and livelihoods.

Nature of the Risk

 Non Diversifiable Risk
Risk Management
 Governments should establish early warning systems, build and enforce building
codes and land-use regulations, invest in disaster preparedness and response
capabilities, and bolster community resilience through infrastructure
reinforcement, education, and training in order to lessen the impact of natural
disasters

Reference
 Typhoon haiyan in the Philippines - activations - international disasters charter.
(n.d.). https://disasterscharter.org/web/guest/activations/-/article/typhoon-
haiyan-in-the-philippin-5