Notes to Financial Statements - BDO

Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)8. DUE FROM OTHER BANKSThe balance of this account represents regular deposits with the following:GroupParent Bank2008 2007 2008 2007Foreign banks P 16,736 P 18,838 P 14,466 P 14,708Local banks 366 1,852 415 1,394The breakdown of the account as to currency follows:P 17,102 P 20,690 P 14,881 P 16,102GroupParent Bank2008 2007 2008 2007US dollar P 13,817 P 17,967 P 12,038 P 14,393Other currencies 3,157 1,902 2,535 1,255Peso 128 821 308 454P 17,102 P 20,690 P 14,881 P 16,102Annual interest rates on these deposits range from 0% to 5.9% in 2008, 0% to 4.8% in 2007 and 0% to 5.9% in 2006 in the Group financialstatements and 0% to 4.5% in 2008, 0% to 4.8% in 2007 and 0% to 5% in 2006 in the Parent Bank financial statements.Due from other banks are included in cash and cash equivalents for cash flow statement purposes.9. TRADING AND INVESTMENT SECURITIESThe components of this account are shown below:GroupParent Bank2008 2007 2008 2007Financial assets at FVTPL P 6,850 P 20,952 P 5,160 P 17,748AFS securities 35,173 75,604 31,656 68,563HTM investments 114,128 67,944 105,276 62,571P 156,151 P 164,500 P 142,092 P 148,8829.1 Financial Assets at FVTPLThis account is composed of the following:GroupParent Bank2008 2007 2008 2007Derivative financial assets P 4,256 P 4,564 P 2,911 P 3,915Government bonds 1,505 12,903 1,194 10,674Other debt securities 997 3,031 982 3,1596,758 20,498 5,087 17,748Equity securities - listed 92 454 73 -P 6,850 P 20,952 P 5,160 P 17,748All financial assets at FVTPL are held for trading. For government bonds and other debt securities, the amounts presented have beendetermined directly by reference to published prices quoted in an active market. On the other hand, the fair value of derivative financialassets is determined through valuation technique using net present value of future cash flows method. The Group recognized total fair valuegain (loss) on financial assets at FVTPL amounting to (P1,356), P104 and P1,452 in 2008, 2007 and 2006, respectively, in the Group financialstatements and (P1,452), (P83) and P1,405 in 2008, 2007 and 2006, respectively, in the Parent Bank financial statements which were includedas part of Other Operating Income in the income statements.Foreign currency-denominated securities amounted to P3,562 and P8,300 as of December 31, 2008 and 2007, respectively, in the Groupfinancial statements and P3,448 and P8,236 as of December 31, 2008 and 2007, respectively, in the Parent Bank financial statements.44Thinking Ahead To Get You Ahead • Annual Report 2008