2009 ANNUAL REPORT FINANCIAL SUPPLEMENTS - BDO

NOTES TO FINANCIAL STATEMENTSDecember 31, 2009, 2008 and 2007(Amounts in Millions of Philippine Pesos, Except Per Share Data or as Indicated)The following table presents financial assets and liabilities measured at fair value in the statements offinancial position in accordance with the fair value hierarchy. This hierarchy groups financial assets andliabilities into three levels based on the significance of inputs used in measuring the fair value of thefinancial assets and liabilities. The fair value hierarchy has the following levels:• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;• Level 2: inputs other than quoted prices included within Level 1 that are observable for the assetor liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and,• Level 3: inputs for the asset or liability that are not based on observable market data (unobservableinputs).The level within which the financial asset or liability is classified is determined based on the lowest levelof significant input to the fair value measurement.The financial assets and liabilities measured at fair value in the statement of financial position as ofDecember 31, 2009 are grouped into the fair value hierarchy as presented in the following table. For thepurpose of this disclosure, the investments in unquoted equity securities classified as AFS amounting toP3,376 and P565 in the financial statements of BDO Unibank Group and the Parent Bank, respectively,are measured at cost less impairment charges because the fair value cannot be reliably measured andtherefore are not included. Unquoted equity securities consist of preferred shares and common shares ofvarious unlisted local companies.BDO Unibank GroupNotes Level 1 Level 2 TotalResourcesFinancial assets at FVTPL 9.1Derivative financial assets P 3,957 P 1,604 P 5,561Government bonds 1,886 37 1,923Other debt securities 32 936 968Equity securities - quoted 50 - 505,925 2,577 8,502BDO ANNUAL REPORT 200947AFS securitiesGovernment debt securities 34,540 435 34,975Other debt securitiesQuoted 6,483 652 7,135Equity securitiesQuoted 1,118 - 1,118Not quoted - 429 4299.2 42,141 1,516 43,657P 48,066 P 4,093 P 52,159LiabilitiesDerivative with negativefair values 18 P 3,549 P 1,394 P 4,943