Notes to Financial Statements - BDO

Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)v. Generali has an existing Investment Management Agreement with the Group. For services rendered, Generali shall pay theGroup management fees equivalent to 0.25% of managed funds and 0.10% of directed investments and custodianship whichshall be based on the average daily balance of the fund type and shall be deducted quarterly from the fund.There are no outstanding balances arising from these transactions as of December 31, 2008 and 2007.(ii) Expenses of the Parent Bank(iii) Othersi. On May 30, 2007, ECN entered into a service agreement with BDO Unibank. Under this agreement, ECN agreed to providemarketing, central operations, systems credit and collection support and finance services to BDO Unibank in connection with theoperations of the credit card business. This agreement is pursuant to the terms and conditions of the MOA where ECN agreedto sell its rights, interests and obligations on its receivables and liabilities to BDO Unibank.ii. BDO Technology renders technical services and/or management consultation to the Parent Bank and affiliates at substantially thesame terms as transactions with third parties. In 2008 and 2007, total amount of transactions were P22 and P24, respectively.iii. The Group leases from related parties space for its branch operations. For the years ended December 31, 2008, 2007 and 2006,total rent expense paid to related parties amounted to P259, P298, and P187, respectively, and is included as part of Occupancyaccount in the income statements.iv. Service fees of Property Care, Inc. from property management are billed to the Parent Bank under a service agreement whichis substantially comparable to terms with other individuals and business entities.The Parent Bank has cost sharing agreement with its certain subsidiaries as follows:i. BDO Capital has a service agreement with BDO Unibank whereby BDO Unibank shall provide BDO Capital with various supportservices consisting of the following:1. Traditional bank transaction processing functions;2. Preparation and maintenance of the BDO Capital’s books of accounts;3. Generation of required external regulatory reports and internal management information;4. General and periodic examination of the books of the BDO Capital’s accounts;5. Advertising and marketing services;6. Information technology support services;7. Recruitment and selection of personnel;8. Preparation of payroll and benefit administration; and,9. Other administrative and general services.ii. On January 31, 2008, BDO Securities entered into a service agreement with BDO. Under this agreement, BDO Unibank shallprovide various support services such as general accounting, internal audit, human resources management, advertising andmarketing services, information technology systems/processing, legal support and administrative and general services.Outstanding balances arising from these transactions as of December 31, 2008 and 2007 amounted to P41 and 24, respectively.(iv) The salaries and other compensation given to the Group’s key management personnel follow:Group2008 2007 2006Salaries and wages P 437 P 408 P 191Bonuses 208 167 81Social security costs - - -Other benefits 32 17 8P 678 P 592 P 280Parent Bank2008 2007 2006Salaries and wages P 270 P 274 P 123Bonuses 135 117 53Social security costs - 91 -Other benefits 21 14 6P 426 P 405 P 182Thinking Ahead To Get You Ahead • Annual Report 2008 69