2011 Annual Report - BDO

NOTES TOFINANCIAL STATEMENTS25. COMMITMENTS AND CONTINGENT LIABILITIESThe following are the significant commitments and contingencies involving the Bank:(a) The Bank has been a party to a lease agreement with a third party covering its officepremises, the term of which will end on April 11, 2011. Further, in October 2011 andNovember 2009, the Bank entered into two lease agreements with a related party for thelease of its new office which for a period of five years and one year (renewed November2012), respectively, renewable upon agreement by the parties. The future minimum rentalspayable under these operating leases amounted to P123,161,066 and P126,462,884 as ofDecember 31, 2011 and 2010, respectively.Rent expense, which is shown as part of Occupancy in the statements of income,amounted to P33,472,292 and P29,635,121 in 2011 and 2010, respectively.(b) In the normal course of its operations, the Bank has various outstanding commitmentsand contingent liabilities such as guarantees, commitments to extend credit, etc., which arenot reflected in the accompanying financial statements. The Bank recognizes in its booksany losses and liabilities incurred in the course of its operations as soon as these becomeknown and quantifiable.As of December 31, 2011, the Bank’s management believes that losses, if any, fromthe above commitments and contingencies will not have a material effect on the Bank’sfinancial statements.The following is a summary of the Bank’s commitments and contingent accounts as ofDecember 31:Notes 2011 2010Trust department accounts 22 P 109,062,691,948 P 102,312,019,434Forward exchange sold 13 26,250,996,736 27,787,829,088Forward exchange bought 13 26,249,533,909 27,796,515,495Interest rate swap receivable 13 788,400,000 1,514,480,000Interest rate swap payable 538,400,000 1,286,080,000Spot exchange sold 39,384,102 39,384,102Loan commitments 2.15.04 1,321,192,659 76,171,892Other contingent accounts - 818,300,000P 164,250,599,354 P 161,630,780,022