Notes to Financial Statements - BDO

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Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)Parent BankNotes 2008 2007 2006Employee benefits 23 P 9,378 P 7,592 P 3,553Occupancy 31 3,157 3,070 1,494Taxes and licenses 2,327 2,379 1,132Security, clerical, messengerial and janitorial 1,570 1,059 515Advertising 1,028 641 261Insurance 1,010 989 481Repairs and maintenance 775 779 328Documentary stamp tax used 767 577 426Travelling 552 336 172Representation and entertainment 535 613 257Power, light and water 516 487 214Miscellaneous 4,277 4,386 1,932P 25,892 P 22,908 P 10,76523. EMPLOYEE BENEFITSExpenses recognized for employee benefits are presented below:Group2008 2007 2006Salaries and wages P 6,194 P 4,879 P 2,395Bonuses 1,685 1,315 634Retirement – defined benefit plan 947 779 426Social security costs 284 230 104Other benefits 986 1,160 398P 10,096 P 8,363 P 3,957Parent Bank2008 2007 2006Salaries and wages P 5,683 P 4,360 P 2,142Bonuses 1,583 1,237 612Retirement – defined benefit plan 899 709 391Social security costs 266 213 98Other benefits 947 1,073 310P 9,378 P 7,592 P 3,553The Group maintains a tax-qualified noncontributory retirement plan that is being administered by the Bank’s trust department covering allregular full-time employees.The amounts of retirement benefit asset recognized are determined as follows:GroupParent Bank2008 2007 2008 2007Present value of the obligation (P 7,086 ) (P 6,283 ) (P 6,684 ) (P 5,897 )Fair value of plan assets 3,460 2,989 3,277 2,690Deficiency of plan assets ( 3,626 ) ( 3,294 ) ( 3,407 ) ( 3,207 )Unrecognized actuarial losses 3,778 3,627 3,603 3,554Unrecognized net transitionobligation ( 138 ) ( 278 ) ( 138 ) ( 278 )Retirement benefit asset P 14 P 55 P 58 P 6966Thinking Ahead To Get You Ahead • Annual Report 2008
Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)The movements in the present value of the retirement benefit obligation recognized in the books follows:GroupParent Bank2008 2007 2008 2007Balance at beginning of year P 6,283 P 4,567 P 5,897 P 4,231Current service cost and interest cost 968 797 908 711Actuarial losses 162 1,135 172 1,158Benefits paid by the plan ( 327 ) ( 216 ) ( 293 ) ( 203 )Balance at end of year P 7,086 P 6,283 P 6,684 P 5,897The movement in fair value of plan assets is presented below:GroupParent Bank2008 2007 2008 2007Balance at beginning of year P 2,989 P 2,388 P 2,690 P 2,079Contributions paid into the plan 906 706 889 680Benefits paid by the plan ( 327 ) ( 216 ) ( 293 ) ( 203 )Actuarial loss ( 357 ) ( 108 ) ( 242 ) ( 61 )Expected return on plan assets 249 219 233 195Balance at end of year P 3,460 P 2,989 P 3,277 P 2,690Actual return on plan assets were P969 and P423 and P77 and P62 in 2008 and in 2007 in the Group and the Parent Bank financial statements,respectively.The amounts of retirement benefits recognized in the income statements are as follows:Group2008 2007 2006Current service costs P 455 P 450 P 207Interest costs 513 347 263Expected return on plan assets ( 249 ) ( 219 ) ( 187 )Net actuarial losses recognized 89 209 5Net transition obligation (asset) recognized 139 ( 8 ) 138P 947 P 779 P 426Parent Bank2008 2007 2006Current service costs P 420 P 392 P 178Interest costs 488 313 235Expected return on plan assets ( 233 ) ( 193 ) ( 161 )Net actuarial gain recognized 86 214 -Net transition obligation (asset) recognized 139 ( 8 ) 139P 900 P 718 P 391The movements in the retirement benefit asset recognized in the books follow:GroupParent Bank2008 2007 2008 2007Balance at beginning of year P 55 P 128 P 69 P 107Expense recognized ( 947 ) ( 779 ) ( 900 ) ( 718 )Contributions paid 906 706 889 680Balance at end of year P 14 P 55 P 58 P 69As at December 31, 2008, the Group’s plan assets were composed of 77.7% placements in debt instruments, 10.5% loans and other receivables,6.7% deposits in other banks, and 5.1% other properties, and the Parent Bank’s plan assets were composed of 77.5% placements in debtinstruments, 11.0% loans and other receivables, 6.8% deposit in other banks, and 4.7% other properties.Thinking Ahead To Get You Ahead • Annual Report 2008 67
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ATTUNED TO THE TIMES, WE AREALWAYS
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Financial HighlightsIn Billion Peso
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Report of Independent AuditorsTo th
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Income StatementsFor the Years Ende
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Cash Flow StatementsFOR THE YEARS E
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Notes to Financial StatementsDECEMB
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Page 84: BDO Corporate Center7899 Makati Ave
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Notes to Financial Statements - BDO

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