Via ODiSy March 22, 2012 PHILIPPINE STOCK EXCHANGE ... - BDO

- 73 -At Amortized Carrying FairCost Amount ValueFinancial LiabilitiesDeposit liabilities P 762,634 P 762,634 P 765,289Bills payable 56,081 56,081 55,679Subordinated notes payable 23,152 23,152 25,120Other liabilities 32,403 32,403 32,403P 874,270 P 874,270 P 878,4917. CASH AND BALANCES WITH THE BSPThese accounts are composed of the following:BDO Unibank Group Parent Bank2011 2010 2011 2010Cash and other cash items P 33,129 P 26,673 P 33,102 P 26,660Due from BSP:Mandatory reserves 30,566 70,237 28,006 68,166Other than mandatoryreserves 94,328 68,245 87,986 61,552124,894 138,482 115,992 129,718P 158,023 P 165,155 P 149,094 P 156,378Mandatory reserves represent the balance of the deposit account maintained with theBSP to meet reserve requirements and to serve as clearing account for interbank claims.Due from BSP bears annual interest rates of 0.1% to 4.8% in 2011 and 3.2% to 4.2% in2010, except for the amounts within the required reserve as determined by BSP. Totalinterest income earned amounted to P2,025, P2,714 and P1,988 in 2011, 2010 and 2009,respectively, in the BDO Unibank Group financial statements and P1,866, P2,631 andP1,941 in 2011, 2010 and 2009, respectively, in the Parent Bank’s financial statements(see Note 20).Cash and other cash items and balances with the BSP are included in cash and cashequivalents for statements of cash flows purposes.Under Section 254 of the Manual of Regulations for Banks (MORB), a bank is requiredto maintain at least 25 percent of its statutory reserve requirements in the form ofdeposit with the BSP as among the allowable instruments for reserve cover. Section254.1 of the MORB further provides that such deposit account with the BSP is notconsidered as a regular current account as BSP checks for drawings against such depositshall be limited to: (i) settlement of obligations with the BSP; and, (ii) withdrawals tomeet cash requirements.