2011 Annual Report - BDO

NOTES TOFINANCIAL STATEMENTSThe amounts of retirement benefits recognized in the statements of income follow:2011 2010Current service cost P 14,248,726 P 13,144,323Interest cost 12,476,709 10,438,521Expected return on plan assets ( 4,058,444 ) ( 2,791,353 )Net actuarial losses recognizedduring the year 1,865,051 1,477,806The movements in the unrecognized actuarial losses follow:P 24,532,042 P 22,269,2972011 2010Balance at beginning of year P 58,093,144 P 46,801,251Actuarial gains for the year – obligation 47,873,282 15,828,643Actuarial gain for the year – plan assets ( 321,633 ) ( 3,058,944 )Net actuarial losses recognized during the year ( 1,865,051 ) ( 1,477,806)Balance at end of year P 103,779,742 P 58,093,144In determining retirement benefits, the following actuarial assumptions were used:2011 2010Discount rates 6.2% 8.2%Expected rate of return on plan assets 5.0% 5.0%Expected rate of salary increases 10.0% 10.0%Presented below are the historical information related to the present value of the retirementbenefit obligation, fair value of plan assets and excess or deficit in the plan (amounts inthousands) as well as experience adjustments arising on plan assets and liabilities.2011 2010 2009 2008 2007Present value of the obligation P 224,924 P 151,969 P 113,339 P 84,001 P 41,319Fair value of the plan assets 91,299 75,419 41,450 32,048 36,377Deficit in the plan P 133,625 P 76,550 P 71,889 P 51,953 P 4,942Experience adjustmentsarising on plan liabilities P 47,873 P 15,829 P 9,906 (P 51,671 ) (P 1,079 )Experience adjustmentsarising on plan assets 323 3,059 ( 7,159 ) ( 2010 ) 10