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)The breakdown of MCIT with the corresponding validity periods follow:BDO UnibankYear Group Parent Bank Valid Until2011 P 369 P 369 20142010 367 359 20132009 283 273 2012P 1,019 P 1,001The amounts of unrecognized deferred tax assets arising from NOLCO and other temporarydifferences as of December 31, 2011 and 2010 are as follows:BDO Unibank Group2011 2010Tax Base Tax Effect Tax Base Tax EffectAllowance for impairment P 25,160 P 7,548 P 26,033 P 7,810NOLCO 203 61 1,793 538MCIT 1,019 1,019 713 713Others 3,782 1,134 677 203P 30,164 P 9,762 P 29,216 P 9,264Parent Bank2011 2010Tax Base Tax Effect Tax Base Tax EffectAllowance for impairment P 23,153 P 6,946 P 24,373 P 7,312NOLCO - - 1,711 513MCIT 1,001 1,001 710 710Others 3,781 1,134 599 18027.02 Optional Standard DeductionsP 27,935 P 9,081 P 27,393 P 8,715Effective July 2008, RA No. 9504 was approved giving corporate tax payers an option toclaim itemized deduction or optional standard deduction (OSD) equivalent to 40% of grosssales. Once the option is made at the beginning of the taxable year, it shall be irrevocable forthe taxable year for which the option was made. BDO Unibank Group claims itemizeddeduction for tax purposes.27.03 Change in Applicable Tax RateEffective January 1, 2009, in accordance with RA No. 9337, RCIT rate was reduced from 35%to 30% and non-allowable deductions for interest expense from 42% to 33% of interestincome subjected to final tax.