2011 Annual Report - BDO

NOTES TOFINANCIAL STATEMENTSChanges in the Bank’s holdings of available-for-sale securities are summarized below.2011 2010Balance at beginning of year P 4,224,501,891 P 3,700,738,428Additions 1,605,469,904 3,086,335,390Fair value losses ( 28,930,920 ) ( 24,581,603 )Disposals ( 2,565,490,890 ) ( 2,424,346,068 )Foreign currency revaluation ( 6,140,587) ( 113,644,256 )Impairment losses ( 119,422,767 ) -Balance at end of year P 3,109,986,631 P 4,224,501,891Debt securities earn interest from 0.0% to 10.4% per annum in 2011 and 2.4% to 10.4% perannum in 2010.Other debt securities include collateralized debt obligation (CDO) amounting to P138,587,869in 2010 (nil in 2011, see Note 6.01) and other private securities amounting to P678,671,538 andP1,848,960,033 in 2011 and 2010, respectively.Effective interest rates range from 1.5% to 1.9% and 0.5% to 8.3% for peso denominated andforeign currency denominated AFS securities, respectively, for the year ended December 31, 2011.Effective interest rates range from 5.1% to 9.1% and 2.4% to 10.4% for peso denominated andforeign currency AFS securities, respectively, for the year ended December 31, 2010.In prior years, other debt securities include the host contract of CLNs while the embeddedderivatives were bifurcated and presented separately as part of FVTPL financial assets (seeNote 13). In 2008, all CLNs linked to ROP bonds were reclassified to loans and receivablestogether with the host contracts without bifurcating the embedded derivatives (see Notes 6.02and 13).Total interest earned on available-for-sale securities amounted to P143,282,461 in 2011 andP133,410,628 in 2010. Net gains on the disposal of available-for-sale securities amountedto P40,763,653 and P206,618,008 in 2011 and 2010, respectively, and are included as part ofTrading and Securities Gain – net in the statements of income.