2011 Annual Report Financial Supplements - BDO

NOTES TOFINANCIAL STATEMENTSDECEMBER 31, 2011, 2010 AND 2009(Amounts in Millions of Philippine Pesos, Except Per Share Data or As Indicated)There are no outstanding balances arising from these transactions as ofDecember 31, 2011 and 2010.(iv) Expenses of the Parent Banki. On May 30, 2007, ECN, merged with BDOSHI in 2011 (see Note 26.01), enteredinto a service agreement with the Parent Bank. Under this agreement, ECN agreedto provide marketing, central operations, systems credit and collection support andfinance services to the Parent Bank in connection with the operations of the creditcard business. This agreement is pursuant to the terms and conditions of the MOAwhere ECN agreed to sell its rights, interests and obligations on its receivables andliabilities to the Parent Bank.ii. BDO Technology, merged with BDOSHI in 2011 (see Note 26.01), renderstechnical services and/or management consultation to the Parent Bank andaffiliates at substantially the same terms as transactions with third parties. Thetransactions amounted to P5 each in 2011 and 2010.iii.BDO Unibank Group leases space from related parties for its branch operations.For the years ended December 31, 2011, 2010 and 2009, total rent expense paid torelated parties amounted to P426, P349 and P315, respectively, and is included aspart of Occupancy account (see Note 22).(v) OthersThe Parent Bank has cost sharing agreements with subsidiaries as follows:i. The Parent Bank shall provide BDO Capital with various support servicesconsisting of the following:1) Traditional bank transaction processing functions;2) Preparation and maintenance of BDO Capital's books of accounts;3) Generation of required external regulatory reports and internal managementinformation;4) General and periodic examination of the books of 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 theParent Bank. Under this agreement, the Parent Bank shall provide various supportservices such as general accounting, internal audit, human resources management,advertising and marketing services, information technology systems/processing,legal support and administrative and general services.Outstanding balances arising from these transactions as of December 31, 2011 and2010 both amounted to P6.