2011 Annual Report - BDO

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and any resulting impairment loss could have a material adverse effect on the results ofoperations.No impairment losses on non-financial assets were recognized in 2011 and 2010.(g) Post-employment and Other BenefitsThe determination of the Bank’s obligation and cost of pension and other retirementbenefits is dependent on the selection of certain assumptions used by actuaries incalculating such amounts. Those assumptions are described in Note 19 and include,among others, discount rates, expected return on plan assets and salary increase rates. Inaccordance with PFRS, actual results that differ from the assumptions are accumulated andamortized over future periods and therefore, generally affect the recognized expense andrecorded obligation in such future periods.The amounts of defined benefit liability and net unrecognized actuarial losses arepresented in Note 19.4. CASH AND CASH EQUIVALENTS4.0l Due from BSPThis account is composed of the following:2011 2010Mandatory reserves P 2,588,351,562 P 2,051,950,068Other than mandatory reserves 4,504,544,270 5,003,666,650P 7,092,895,832 P 7,055,616,718Mandatory reserves represent the balance of the deposit account maintained with the BSP tomeet reserve requirements and to serve as clearing account for interbank claims.Due from BSP bears annual effective interest rates ranging from 0.5% to 4.0% in 2011 andfrom 0.5% to 4.1% in 2010, except for the amounts within the required reserve as determinedby BSP. Total interest income earned amounted to P78,124,475 and P39,807,069 in 2011 and2010, respectively, and is included as part of Interest Income on Due from Other Banks in thestatements of income.Cash and balances with the BSP are included in cash and cash equivalents for cash flowstatement reporting purposes.Under Section 254 of the Manual of Regulations for Banks (MORB), a bank is required tomaintain at least 25 percent of its reserve requirements in the form of deposits with theBSP as among the allowable instruments for reserve cover. Section 254.1 of the MORBwww.bdo.com.ph 79
NOTES TOFINANCIAL STATEMENTSfurther provides that such deposit account with the BSP is not considered as a regular currentaccount as BSP checks for drawings against such deposits shall be limited to (a) settlement ofobligations with the BSP, and (b) withdrawals to meet cash requirements.4.02 Due from Other BanksThe balance of this account represents regular deposits with the following:Note 2011 2010Foreign banks P 1,180,236,499 P 1,067,948,712Local banks 20 19,491,235 91,486,565P 1,199,727,734 P 1,159,435,277These deposits earn effective interest at rates ranging from 0.2% to 2.0% and 0.2% to 0.3%per annum in 2011 and 2010, respectively.The total interest earned on due from other banks amounted to P5,528,890 in 2011 andP8,677,173 in 2010.A breakdown of this account by currency follows:2011 2010US Dollar P 1,187,730,188 P 1,022,644,019Peso 446,533 91,486,565Other foreign currencies 11,551,013 45,304,693P 1,199,727,734 P 1,159,435,2775. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSSThis account is composed of the following:Notes 2011 2010Securities purchased underreverse repurchaseagreements P 4,988,496,100 P 2,911,517,511Derivatives 13, 20 1,852,943,552 1,730,355,546Government securities 430,131,048 727,647,591Other debt securities - 467,795,177Aggregate market value P 7,271,570,700 P 5,837,315,825Financial assets at fair value through profit or loss, except derivatives and other debt securities,consist of various treasury bills and other securities issued by the government that earn interest
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TABLE OFCONTENTS246Corporate Missio
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OUR COMMITMENTOur commitment to pro
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We remain steadfast in our vision a
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The Storywww.bdo.com.ph 9
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• Execution. If you are more of a
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ELIZABETH T. SY,Director59 years ol
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ADVISERSHarley T. Sy Ian T. Fish Ra
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CORPORATEGOVERNANCEBDO Private Bank
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CORPORATEGOVERNANCEChairman: Nestor
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Awardswww.bdo.com.ph 23
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Best Private Bankin the Philippines
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REPORT OFINDEPENDENT AUDITORSTHE BO
Page 30 and 31: STATEMENTS OFINCOMEFOR THE YEARS EN
Page 32 and 33: STATEMENTS OFCHANGES IN EQUITYFOR T
Page 34 and 35: www.bdo.com.ph 33
Page 36 and 37: 2.01 Basis of Preparation of Financ
Page 38 and 39: 2010Notes FRSP Difference PFRSChang
Page 40 and 41: Bank is not subject to minimum fund
Page 42 and 43: losses on AFS, can be reclassified
Page 44 and 45: i. only in rare circumstances and i
Page 46 and 47: together with the host contract wit
Page 48 and 49: If there is objective evidence that
Page 50 and 51: Bills payable are recognized initia
Page 52 and 53: In considering each possible relate
Page 54 and 55: translated into the Bank’s presen
Page 56 and 57: Deferred tax is provided, using the
Page 58 and 59: • The Risk Management Unit is res
Page 60 and 61: 2.15.02.01 Foreign Exchange RiskThe
Page 62 and 63: The following table shows the amoun
Page 64 and 65: 2011More MoreOne to than three than
Page 66 and 67: 2010More MoreOne to than three than
Page 68 and 69: The following table sets out the cr
Page 70 and 71: December 31, 2010Loans - Trading an
Page 72 and 73: The Bank’s lead regulator, the BS
Page 74 and 75: 3. CRITICAL ACCOUNTING ESTIMATES AN
Page 76 and 77: Details of impairment losses (recov
Page 78 and 79: payable) with repricing frequencies
Page 82 and 83: from 0.0% to 9.13% per annum in 201
Page 84 and 85: 6.01 Collateralized Debt Obligation
Page 86 and 87: P9,483,508 in 2011 and 2010, respec
Page 88 and 89: this transaction amounted to P84,58
Page 90 and 91: In 2010, the Bank has assessed two
Page 92 and 93: A reconciliation of the carrying am
Page 94 and 95: Interest rates on deposit liabiliti
Page 96 and 97: 14. ACCRUED TAXES AND OTHER LIABILI
Page 98 and 99: 15.05 Surplus ReserveIn compliance
Page 100 and 101: Changes in the present value of the
Page 102 and 103: Assumptions rgarding future mortali
Page 104 and 105: 21. TAXES21.01 Current and Deferred
Page 106 and 107: The Bank is subject to MCIT which i
Page 108 and 109: The composition of the Bank’s AUM
Page 110 and 111: www.bdo.com.ph 109
Page 112: PRODUCTSAND SERVICESWEALTH ADVISORY
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2011 Annual Report - BDO

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