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

- 80 -The fair values are determined through valuation techniques by determining the netpresent value of estimated future cash flows. Annual interest rates on these investmentsrange from 0% to 14% in 2011, 0% to 14% in 2010 and 0% to 11.4% in 2009 both inthe BDO Unibank Group and the Parent Bank financial statements.9.04 Reclassification of Investment SecuritiesBDO Unibank Group recognized the deterioration of the world’s financial markets thatoccurred in the third quarter of 2008. The enormity and extent of the global creditcrisis was crystallized by the substantial government programs instituted by majoreconomies in response to the crisis, including temporary liquidity facilities, outrightpurchase of commercial papers and mortgaged-backed securities, guarantee of newunsecured debt issued by banks and purchase of equity stakes in financial institutions.In 2008, BDO Unibank Group chose to avail of the regulatory relief on specificfinancial assets granted by the BSP under the governing provisions of Circular No. 628,which permitted the reclassification of certain financial assets to help banks cope withthe adverse impact of the global financial crisis.Presented below are the details of the reclassifications made by BDO Unibank Groupin 2008 and the related details at the end of 2011 and 2010.BDO Unibank GroupAtReclassification DateCarrying FairValue ValueReclassification from FVTPL to HTM P 6,297 P 6,297Reclassification of debt securities from AFS to HTM 25,540 25,540Reclassification of embedded derivatives of CLNsfrom FVTPL to Loans and Other Receivables ( 183 ) ( 183 )Reclassification of CLNs from AFS to Loans and Other Receivables 18,520 18,520Balances atDecember 31, 2011 December 31, 2010Carrying Fair Carrying FairValue Value Value ValueReclassification from FVTPL to HTM P 1,547 P 1,960 P 1,635 P 1,885Reclassification of debt securitiesfrom AFS to HTM 17,960 20,768 20,184 22,696Reclassification of CLNs from AFSto Loans and Other Receivables 7,287 7,959 13,037 14,224Parent BankAtReclassification DateCarrying FairValue ValueReclassification from FVTPL to HTM P 6,297 P 6,297Reclassification of debt securities from AFS to HTM 22,474 22,474Reclassification of embedded derivatives of CLNsfrom FVTPL to Loans and Other Receivables ( 70 ) ( 70 )Reclassification of CLNs from AFS to Loans and Other Receivables 14,096 14,096