Notes to Financial Statements - BDO

Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)This account is composed of the following:GroupParent Bank2008 2007 2008 2007Due to banks:Demand P 879 P 571 P 910 P 571Savings 3,157 1,768 3,157 1,750Time 3,440 409 1,753 4097,475 2,748 5,820 2,730Due to customers:Demand 35,442 24,594 21,904 22,631Savings 260,091 316,902 261,646 318,114Time 333,745 101,153 323,597 90,820The breakdown of this account, as to currency, follows:629,278 442,649 607,147 431,565P 636,754 P 445,397 P 612,967 P 434,295GroupParent Bank2008 2007 2008 2007Foreign currency P 172,667 P 116,933 P 163,338 P 105,360Peso 464,087 328,464 449,629 328,935P 636,754 P 445,397 P 612,967 P 434,295The maturity profile of this account is presented below:GroupParent Bank2008 2007 2008 2007Less than one year P 567,926 P 400,090 P 553,155 P 393,130One to five years 39,937 36,323 31,751 32,181Beyond five years 28,891 8,984 28,061 8,984P 636,754 P 445,397 P 612,967 P 434,295The Group’s deposit liabilities are in the form of demand, savings and time deposit accounts bearing annual interest rates of 0% to 10% in 2008and 2007. Demand and savings deposits usually have both fixed and variable interest rates while time deposit has fixed interest rate exceptfor the peso-denominated long-term negotiable certificates of deposits which are repriced every quarter.On December 23, 2004, the BSP approved the Parent Bank’s application to issue in two or more tranches of up to P5,000 worth of pesodenominatedlong-term negotiable certificates of deposits (LTNCDs) within one year from date of approval. The first tranche amounting toP2,100 was issued on June 1, 2005 and will mature on June 2, 2010 and the second tranche amounting to P2,900 was issued on November 23,2005 and will mature on November 24, 2010. The first tranche bears a variable interest based on MART 1 plus 0.3% spread while the secondtranche pays a fixed rate of 9.7%. Also, on September 25, 2006, the BSP approved the Parent Bank’s application to issue another P5,000LTNCDs in one tranche. The P5,000 LTNCDs bear a fixed interest rate of 8.3% per annum. These are presented as part of the Time Depositunder Deposit Liabilities account in the statement of condition.Also on April 26, 2007, the Monetary Board (MB) of the BSP authorized BDO Private to issue up to P5,000 worth of fixed rate or zero couponLTNCDs in one or more tranches. The first tranche, consisting of P2,191 in zero coupon LTNCDs, was issued on June 18, 2007 and will matureon December 18, 2012. These LTNCDs are presented, net of discount and including P17, in capitalized transaction costs, as part of the TimeDeposit Liabilities account in the statement of condition.Under existing BSP regulations, non-FCDU deposit liabilities of the Group are subject to liquidity reserve equivalent to 11% startingJuly 15, 2005 (under BSP Circular 491) and statutory reserve equivalent to 10%. As of December 31, 2008, the Group is in compliance withthese regulations.58Thinking Ahead To Get You Ahead • Annual Report 2008