2007 Annual Report - Sun Life Financial

Notes to the Financial Statements
As of and for the years ended December 31, 2007 and 2006
The carrying amount of financial assets recorded in the financial statements represents the
Companies maximum exposure to credit risk. The Companies ensure that exposure to any one single
counterparty does not exceed 10% of gross monetary assets at any time during the year. Carrying
amounts of actual exposure as at the end of the year to private corporations are as follows:
40 Prosperity Funds
BOND FUND BALANCED FUND DOLLAR ADVANtAGE DOLLAR ABUNDANCE
2007 2006 2007 2006 2007 2006 2007 2006
Philippine Peso Philippine Peso Philippine Peso Philippine Peso US Dollar US Dollar US Dollar US Dollar
Asian Terminals Inc. P100,000,000 P100,000,000 - - - - - -
Ayala Land Inc. 231,583,997 231,951,548 - - - - - -
Filinvest Land Inc. 165,000,000 165,000,000 P25,000,000 P25,000,000 - - - -
Fort Bonifacio Realty 1,820,000 3,200,000 1,320,000 2,200,000 - - - -
Globe Telecom Inc. 190,000,000 190,000,000 5,000,000 5,000,000 - - - -
LaFarge
Holdings Inc.
Manila Water
Companies Inc.
- 138,461,539 - - - - - -
200,000,000 200,000,000 - - - - - -
PLDT Bonds - - - - $329,235 $113,060 $1,698,853 $904,480
San Miguel
Corporation
SM Investments
Companies Inc.
- - - 5,000,000 - - - -
190,000,000 190,000,000 - - - - - -
P1,078,403,997 P1,218,613,087 P31,320,000 P37,200,000 $329,235 $113,060 $1,698,853 $904,480
Interest rate risk
The primary source of the Companies’ interest rate risk relates to Cash and Fixed Rate Treasury Notes
it holds. The interest rates on these financial assets are disclosed in the liquidity risk management
section of this note.
The risk is managed by the Companies by actively monitoring the prevailing interest rate
environment. The duration of the portfolio is reduced during periods of rising rates and widening
credit spreads to maximize interest income potential. Conversely, the same is increased during
periods of falling rates and narrowing credit spreads.
A 2% increase or decrease in the market value of Fixed Rate Treasury Notes has been determined
for sensitivity analysis based on the exposure to interest rates for Fixed Rate Treasury Notes at the
balance sheet date. The same is used for reporting interest rate risk internally to key management
personnel and represents management’s assessment of the reasonable effect of a possible change in
interest rates.
There are no other interest rate risk which significantly affect the Companies performance.