Notes to Financial Statements - BDO

Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)Group2008 2007ForeignForeignCurrency Peso Total Currency Peso TotalLiabilities:Deposit liabilities P 172,667 P 464,087 P 636,754 P 116,933 P 328,464 P 445,397Bills payable 16,879 34,557 51,436 27,579 24,904 52,483Subordinated notes - 20,146 20,146 18,631 - 18,631Other liabilities 10,934 24,988 35,922 31,668 8,702 40,370P 200,480 P 543,778 P 744,258 P 194,811 P 362,070 P 556,881Parent Bank2008 2007ForeignForeignCurrency Peso Total Currency Peso TotalResources:Cash and other cash itemsand Due from BSP P - P 81,703 P 81,703 P 9,357 P 57,400 P 66,757Due from other banks 14,573 308 14,881 15,648 454 16,102Trading and Investmentsecurities:At FVTPL 3,448 1,712 5,160 8,236 9,512 17,748AFS Securities 11,888 19,768 31,656 44,166 24,397 68,563HTM 80,325 24,951 105,276 45,901 16,670 62,571Loans and other receivables 68,281 399,309 467,590 41,158 256,473 297,631Other resources 1,448 13,383 14,831 1,841 13,717 15,558P 179,963 P 541,134 P 721,097 P 166,307 P 378,623 P 544,930Liabilities:Deposit liabilities P 163,338 P 449,629 P 612,967 P 105,360 P 328,935 P 434,295Bills payable 16,879 26,363 43,242 25,909 15,283 41,192Subordinated notes - 20,146 20,146 8,557 10,074 18,631Other liabilities 10,766 21,245 32,011 4,896 32,026 36,9224.2.2 Interest Rate RiskP 190,983 P 517,383 P 708,366 P 144,722 P 386,318 P 531,040The Group prepares gap analysis to measure the sensitivity of its resources, liabilities and off-statement of condition positions to interestrate fluctuations. The focus of analysis is the impact of changes in interest rates on accrual or reported earnings. This analysis would givemanagement a glimpse of maturity and re-pricing profile of its interest sensitive resources and liabilities. An interest rate gap report is preparedby classifying all assets and liabilities into various time buckets according to contracted maturities or anticipated repricing dates, and otherapplicable behavioral assumptions. The difference in the amount of resources and liabilities maturing or being repriced in any time periodcategory would then give the Group an indication of the extent to which it is exposed to the risk of potential changes in net interest income.The analyses of the groupings of resources, liabilities and off-statement of condition items as of December 31, 2008 and 2007 based on theexpected interest realization or recognition are presented below:GroupMoreMoreOne to than three than one Morethree months to year to than five Non-ratemonths one year five years years sensitive TotalDecember 31, 2008:Resources:Cash P 21,770 P - P - P - P - P 21,770Loans 387,549 42,667 36,036 21,904 3,830 491,986Investments 20,701 8,472 54,934 72,044 - 156,151Placements 79,722 48 - - - 79,770Other Resources - - - - 52,355 52,355Total Resources (Carried Forward) P 509,742 P 51,187 P 90,970 P 93,948 P 56,185 P 802,03230Thinking Ahead To Get You Ahead • Annual Report 2008