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

- 101 -The Notes also increased and strengthened the Parent Bank’s capital base, inanticipation of continued growth in the coming years.The outstanding balance of the Notes amounted to P38,255 and P23,152 as ofDecember 31, 2011 and 2010, respectively.Total interest expense on subordinated notes payable included as part of InterestExpenses on bills payable and other liabilities in the statements of income amounted toP2,154, P1,775, and P1,725 in 2011, 2010 and 2009, respectively, both in the BDOUnibank Group and Parent Bank statements of income (see Note 21).18. OTHER LIABILITIESOther liabilities consist of the following:BDO Unibank GroupParent BankNote 2011 2010 2011 2010Bills purchased-contra P 10,287 P 9,162 P 10,287 P 9,162Accounts payable 7,436 5,125 5,504 4,481Manager’s checks 6,558 4,609 6,473 4,586Accrued expenses 5,088 4,222 4,790 3,985Derivatives with negativefair values 3,320 4,715 1,877 3,168Outstanding acceptancespayable 1,569 1,214 1,569 1,214Unearned income 9.03 989 1,083 893 976Withholding taxes payable 899 760 859 729Capitalized interest andother charges 602 677 602 677Payment order payable 252 266 252 266Due to principal 230 236 - -Due to BSP and Treasurerof the Philippines 166 357 163 354Others 6,693 8,063 4,025 5,189P 44,089 P 40,489 P 37,294 P 34,787The liability for unredeemed reward points amounting to P1,176 and P800 as ofDecember 31, 2011 and 2010, respectively, presented under Accrued Expensesrepresents the fair value of points earned which are redeemable significantly for goodsor services provided by third parties, which the Parent Bank identified as partners in therewards program (see Note 2.20).19. EQUITY19.01 Capital Management and Regulatory CapitalOn January 15, 2009, the BSP issued Circular No. 639 articulating the need for Banks toadopt and document an Internal Capital Adequacy Assessment Process (ICAAP). Alluniversal and commercial banks are expected to perform a thorough assessment of alltheir material risks and maintain adequate capital to support these risks. This isintended to complement the current regulatory capital requirement of at least 10% ofrisk assets, which covered only credit, market and operational risks.