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Calamba, Laguna─ The Institute of Cooperatives and Bio-Enterprise Development (ICOPED) in partnership with the Cooperatives and Livelihood Development Department (CLDD) of Calamba City Government conducted a training course on Risk Management on October 21, 2016 at the Calamba City Training Center, Plaza Mercado. The risk management course is one of the mandatory trainings for officers of cooperatives engaged in savings and credit with at least PHP 5,000,000 worth of deposit liabilities based on the latest audited financial statement (Philippine Cooperative Code of 2008, RA 9520).
Risk management contributes to good cooperative governance by providing reasonable assurance of the board of directors (BOD) and general manager that the objectives of the coop will be achieved within a calculated degree of risk. One of the duties of the BOD is to identify key risk areas; monitor these to ensure effective internal control. Risk management is a holistic approach to protect assets, revenues, liabilities, personnel and cooperative’s reputation against losses in order to achieve efficiency at a minimum cost. Generally there are four types of risks− financial risk, credit risk, market rate risk, and operational risk. Financial risk is any event which can impair the cash flow of the cooperative. Credit risk is a loss due to counterparties’ default on contracts. Market rate risk is a loss if there is a fall in the market value of an investment, while operational risk is the loss of property, income, and key personnel.
The course covers risks, risk management, and risk management plan knowledge skills, and attitudes required of coop officers to efficiently govern the cooperative. Ms. Arminga B. Peria and Ms. Alicia R. Quicoy, University Researchers of ICOPED, served as resource persons for the training. Special guest, Mr. Emilio Casulla, Head of the Cooperative Division of CLDD, gave an opening and closing remarks during the program. A total of 29 participants, mostly officers of Calamba cooperatives completed the training.
Inadequate risk management strategies can expose the coop to grave risks. The board should carefully evaluate all levels of risk the coop is exposed to. The manager together with the BOD should place appropriate mechanisms to manage risks that indentifies, measures, monitors and controls risk, The pillars of a sound risk management are – sufficient board and management oversight, sound risk management policies and operating procedures, adequate management information systems, strong risk measurement, monitoring and control capabilities, and good internal control. With these pillars in place the coop officers can act confidently on future business decisions even with unexpected events. PM Luis