Bpi 75 PDF

2014 Annual Report
ABOUT BPI
Founded in 1851, Bank of the Philippine Islands is the first bank in the Philippines and in the
Southeast Asian region. BPI is a universal bank and together with its subsidiaries and affiliates,
it offers a wide range of financial products and solutions that serve both retail and corporate
clients.
BPIs services include consumer banking and lending, asset management, insurance, securities
brokerage and distribution, foreign exchange, leasing, and corporate and investment banking.
The bank has a network of 825 branches in the Philippines, Hong Kong and Europe, and
2,575 ATMs and Cash Deposit Machines (CDMs).
The establishment of BPI, originally known as El Banco Espanol Filipino de Isabel II, ushered
in the start of the countrys banking and finance industry. It performed many functions, from
providing credit to the National Treasury to printing and issuing currency, making it in effect
the countrys first central bank. The bank proudly carries on this tradition, financing many
private and public sector initiatives and enterprises in support of economic growth and
nation-building.
BPI is acknowledged as a leading provider of financial services in the Philippines.
THE BPI CREDO

We believe our first responsibility is to our Clients. If we understand and address our clients
financial needs, we will be trusted with their most important financial transactions, and we will
build lasting relationships. We do well when our clients do well.
We believe in our responsibility to our People. We seek to hire the best people for each job,
provide them with the means to perform at a high level and reward them fairly. We value
integrity, professionalism and loyalty. We promote a culture of mutual respect, meritocracy,
performance and teamwork. We strive to be the employer of choice among Philippine financial
institutions.
We believe in our responsibility to our Shareholders. We treat capital as a most
valuable asset, and seek to generate superior returns while being prudent in risk-taking,
spending and investment.
We believe in our responsibility to our Country. Our prosperity is greatly dependent on
the well being of our nation. We aim to be inclusive and responsible in nation building.
Through BPI Foundation, we are committed to the welfare and sustainability of the
communities we serve.
About the Cover

At BPI, the year 2014 was one of deepening relationships with clients, truly Making the
Best Happen for each and every one of themfrom clients who transacted at any one of our
channels, borrowers who funded growth amidst a resurging economy, users of transactional
banking, to investors who sought to grow their funds.
In this Annual Report, we recount to you not only our financial performance, but also
the stories of our clients, men and women, individuals and enterprises, big and small, that
complete the BPI story. Indeed, we are dedicated to our clients, and we are proud to be part of
their lives and histories.
Bank of the Philippine Islands
Unibankers remain
focused on one simple
goal: Helping clients
achieve their financial
aspirations.
Jaime Augusto Zobel de Ayala

2014 Annual Report
4
Shareholders & Owners
Financial Highlights
Citations
Message from the Chairman

and the President & CEO
12 Our Clients
20 Our Products & Services
30 Global Markets
33 People and Community
39 Corporate Governance
68 Audited Financial
Statements
190 List of Products & Services
192 Group Directory
2014 Annual Report
Shareholders & Owners

BPIs founding shareholders were primarily charities and
endowments associated with the Roman Catholic Church, and
its directors consisted of government officials and prominent
businesspersons, including Antonio de Ayala, a partner in a
predecessor firm of todays Ayala Corporation. In 1969, Ayala
Corporation became the banks largest shareholder.
TOTAL ASSETS
OWNERSHIP STRUCTURE
37.8%
As of December 31, 2014, Ayala Corporation and its affiliates

owned an effective interest of 48.3 percent in BPI. The Roman
Catholic Archbishop of Manila owned 8.3 percent; and the
Government of Singapore Investment Corporation, 5.6 percent.
Public investors held 37.8 percent, well above the required
minimum public float of 10 percent.
8.3%
800
878
844
720
630
600
681
527
500
600
600
800
700
802
985
900
800
989
1000
1,195
1000
900
1,176
1200
1300
(In P Bn)
(In P Bn)
1,450
1500
TOTAL LOANS
TOTAL DEPOSITS
(IN BILLION
(In P Bn)PHP)
400
454
379
300
400
200
10
21.3%*
32.6%
11
12
13
14
10
TOTAL CAPITAL
PUBLIC
AYALA DBS HOLDINGS INC.
AYALA CORPORATION
ROMAN CATHOLIC ARCHBISHOP OF MANILA
120
90
* Ayala Corporation owns 73.8% of Ayala DBS Holdings, giving it an

effective interest of 15.7% in BPI via this vehicle. GIC owns 26.2% of
Ayala DBS, and an effective interest in BPI of 5.6%.
REVENUES
20
55
20
47,385
45
12
12
13
14
3.55
3.67
14
13,737
15.6
14
1.91
1.53
1.87
1.63
1.44
15.4
13.8
0.5
0.0
11
12
13
10
14
11
3.03
4.62
4.60
3.38
3.63
14
(In P)
2.5
13
DIVIDENDS PER SHARE
(In P)
2.3
5.19
3.32
12
2.0
1.8
1.8
1.8
1.8
1.0
3
1.0
2
12 11,312
35
12
0.5
30
10
10
13
1.5
EARNINGS PER SHARE
14 13,414
12,899
18
3.57
16
40 38,407
17.7
12
(IN
(In %)
2.0
10
(In %)
14,230
11
RETURN ON ASSETS
10
11
NET INTEREST MARGIN
17,972
17,937
18
16
41,758
30
18,038
16,352
50
14
(In P Mn)
18
52,498
16
60
COMPREHENSIVE INCOME
18,811
55,787
10
14
1.0
10
(IN MILLION
(In P Mn)PHP)
60
88
13
20
18
106
NET INCOME
(In P Mn)
82
98
12
(In %)
147
150
11
RETURN ON EQUITY
(In P Bn)
100
200
300
11
12
13
14
10
10
11
12
13
14
10
11
12
13
14
0
10
11
12
13
14
0.0
10
11
12
13
2014 Annual Report
14
10
11
12
13
14
Citations
AWARD-GIVING BODY
Basel III
Consolidated CAR
14.85%
(Implemented January 2014)
NPL Ratio
0.50%
(30 days)
Reserve Cover
Alpha Southeast Asia
Loan-to-Deposit
Ratio
69%
Float-to-Bought
Ratio
69:31
216%
(30 days)
Asiamoney
Asia Risk
Corporate Treasurer
Employers Confederation of the Philippines
Euromoney
Finance Asia
BRANCH, ATM AND CDM NETWORK
EMPLOYEES
Total Number
of Branches
Domestic
Greater Metro Manila
Provincial
International
Hong Kong
Europe
825
820
451
369
5
1
4
Head Count
Banking services
Insurance services
14,542
14,129
413
Social Security System
2,575
ATMs and CDMs*
Global Finance
Housing and Urban Devt Coordinating Council
IMMAP
International Finance Review Asia
Philippine Insurers and Reinsurers Association
Readers Digest
The Asset Triple A
*Cash deposit machines
The Asian Banker

OTHER TRANSACTION
CHANNELS
Internet, mobile, contact
center, remittance partners
Eight in 10
transactions are now
executed through our
electronic channels.
NUMBER OF CLIENTS
BPI Express Mobile,

consistently the most
downloaded financial
app in both the App
Store and Google Play
Our market share

in home loans and
auto loans remains
substantial, at 22 and
17 percent, respectively.
BPI-Philamlife
Assurance, with
significant growth,
gaining market share
The Digital Filipino.com Club

Trade Finance
World Wildlife Fund-Philippines
million
AWARD
Best Mortgage Lending Bank
Best Bond House
Best Equity House
Best Cash Management Award
Best SME Bank
Best Project Financing in SE Asia (Pagbilao Energys P33.3-B loan)
Best Local Cash Management Bank
House of the Year
Best Transaction Bank
Kapatiran sa Industriya Awards Hall of Fame
Best Trade Bank
Best Bank for Real Estate Service Overall
Best Equity Capital Markets House
Best Philippine Deal (Ayala Corporations $300-M exchangeable bond)
Best Trade Finance Bank
Most Active Bank Lender for Housing
Effectivity in Sales (www.bpiloans.com)
Philippine Capital Markets Deal (SSI Groups P7.5-B IPO)
Best in Corporate Social Responsibility
Gold Award: Investment Fund Category
Gold Trusted Brand Award
Most Trusted Brand (Payments)
Best Collecting Commercial Bank
Best Paying Thrift Bank
Philippine Deal of the Year (Century Pacifics P3.1-B IPO)
Best Small Cap Equity Deal (SSI Groups P7.6-B IPO)
Best Cash Management Bank
Best Retail Bank
Best Trade Finance Bank
Best Payments Product in Asia
Best Website
Best Trade Finance Service Provider
Corporate Partner of the Year
BPI Securities more

than doubled its equity
brokerage volume.
Research now covers
30+ companies.
2014 Annual Report

HOLDING TRUE TO OUR VALUES
In a world of divergent
economic prospects
among countries, the
Philippines stands out
with a strong trajectory.
BPI possesses all the
businesses needed to
exploit growth in the
Philippine economy.
Dear Shareholders:
The Bank of the Philippine Islands celebrated its 163rd anniversary last year. As we cross the threshold
into a new year, we are proud of the fact that we remain true to the values that have defined us
since our founding in 1851. We are committed to our clients and our team of unibankers remain
focused on one simple goal: Helping clients achieve their financial aspirations. More importantly
for shareholders, we continue to build on our tradition of strong corporate governance as our way
of keeping the foundation of our business strong. We also remain committed to delivering robust
financial performance by working hand in hand with a seasoned management teamone that
delivers superior profitability while taking prudent risks.
Financial Performance
We have set a series of high benchmarks for quality of earnings, cost efficiency, and profitability. Last
year, BPI recorded both net income and total comprehensive income of P18.0 billion, achieving a
return on assets of 1.44 percent and a return on equity of 13.75 percent. Our cost-to-income ratio
closed the year at 53.70 percent. We are also the only major Philippine bank that pays dividends on a
regular basis. For 2014, we received Bangko Sentral approval to pay P7.08 billion in total dividends,
an annual payout ratio of 39.2 percent. Our ability to consistently return capital to shareholders,
while adhering to regulatory requirements on risk and capitalization, speaks to the strength of our
culture of fiduciary prudence.
Our clients entrusted us with record business volumes in 2014. Total assets, loans, and deposits
ended the year at all-time highs of P1.4 trillion, P800 billion, and P1.2 trillion, respectively.
Loans and deposits grew 27 percent and 19 percent, respectively. Assets managed by our trust and
investment teams grew 7.0 percent, ending the year at P619 billion. In our capital markets business,
BPI originated and distributed record levels of equities and bonds. As reported by Bloomberg, we
ranked No. 1 in equities for the first time, managing more than P25 billion in offerings; in bonds,
we placed third, managing more than P41 billion in volume.
The quality of our balance sheet remains strong and our credit ratings are equal to that of the
Philippine government, as published by both Moodys and Fitch Ratings. Our non-performing loans
increased by far less than the growth of our loan book. As a result, our ratio of NPLs to loans fell to
1.52 percent (90-day). Despite this, we continue to build our loan loss reserves. At the end of last
year, our reserve-to-NPL ratio reached 109.3 percent, a new high for BPI. Furthermore, this ratio
assigns no value to collateral which, we believe, has substantial intrinsic value. We continue to see
opportunities to grow our core loan business while maintaining our strong credit quality, especially
as the Philippine economy continues to expand.
We thank you for supporting our highly successful rights issue, which concluded in February
2014. More than 99 percent of our stockholders subscribed to this issue, which raised P25 billion,
the largest financial transaction in our companys history. This, combined with our significant
earnings power, translated to some of the strongest capital ratiosand most straightforward capital
structuresamong Philippine banks. Our ratios for CAR and CET1 ended 2014 at 14.8 percent
and 14.0 percent, respectively.
Growth and Leadership
We are very excited to reflect on where BPI stands today. In a volatile global economic environment
that has increasingly seen countries decouple in economic terms, it has been comforting to see the
Philippines enjoy a strong trajectory in domestic demand, driven by private spending and positive
business and consumer sentiment. Furthermore, inflation remains benign and comfortably within
the Bangko Sentrals target range. As it grows, our economy is also becoming increasingly inclusive. At
2014 Annual Report

BPI, we have grown our customer base to 7 million; and if we include our microfinance finance efforts
at BPI Globe BanKO, it expands to 8 million. We seek to contribute to our national development
agenda of inclusive growth as we engage a larger segment of our potential customer base.
We believe that BPI has the products and services needed to take full advantage of the growth in
the Philippine economy. We are diversified and have scale across a broad range of deposit, payment,
credit, capital markets, bancassurance, and asset management services. We have sophisticated, well
developed channels that connect us to our clients. In 2014, we reinforced our leasing business by
concluding a strategic partnership with Century Tokyo Leasing one of Japans most successful asset
finance companies. Century Tokyo offers BPI an opportunity to broaden its product offerings through
new financial technologies, as well as unique connectivity to Japanese equipment manufacturers. We
also announced a partnership with Global Payments, a NYSE-listed company that manages one of
the worlds largest merchant acquiring networks. By combining our point-of-sales terminals with
theirs, our service offerings for BPI card customers will expand significantly.
10
In December 2014, we took steps to further sharpen the focus of our organization. To complement
our legacy product teams, we added new teams charged with the sole purpose of strengthening our
dialogue with clients at even deeper levels. This initiative is the essence of One BPI. If we are to
continue multiplying the products used by each customer, we must first understand, at a deeper level,
their financial objectives. And as our customers definition of financial success evolves over time,
our client and product bankers must likewise adjust and be ready to address these needs. The ability
to cross-sell products is a common objective among banks. Many fail at this task. To do it well
requires a talented, dedicated management team that communicates effectively and works together
to do many things right. At BPI, we have already experienced some success at cross-selling, but we
want to do much more.
Regulation
BPI is in the business of building trust. Good governance and compliance are the very bedrock of
trust. The year 2014 saw the onset of Basel III capital standards in Philippine banking, and a variety
of Bangko Sentral initiatives to stem the risk of imbalances in property prices, promote sound credit
practices, and enhance protection for consumers. We have taken a proactive stance in engaging our
Bangko Sentral and contributing to policies that improve our banking system and build confidence
with our public. Consistent with this stance, we have increased the resources devoted to our
Compliance, Risk Management and Internal Audit functions. We believe that these functions at
BPI have always set the standard to which many in our industry aspire. The continued protection
of the reputation and financial well-being of BPI, its clients, and its shareholders remains one of our
paramount objectives.
The BPI Family, Our Future
We are both very proud of BPIs accomplishments in 2014, and remain excited by what we see in our
collective future. Our firm has embarked on an exciting new chapter in its 163-year history, Making
the Best Happen for clients in ways we have not done before. Our successes are the result of the
hard work, commitment, and deep sense of belonging that is the hallmark of our 14,542 unibankers.
We are grateful to our whole team at BPI, both at home and abroad, for their commitment to our
goals. We remain grateful, also, to our diverse and experienced board of directors. Their individual
and collective wisdom has provided valuable guidance and their regular engagement across a number
of committees has kept our governance strong. Finally, we remain grateful to all our stockholders for
their engagement and trust as we continue to build for the future.
Yours sincerely,

Chairman
Cezar P. Consing
President & Chief Executive Officer
Our Clients
THE YEAR 2014 was one of deepening
relationships with all our clients, truly
striving to Make the Best Happen for
each one of them.
These are some of their stories.
Jina Juson
Irene and Edmund Felix

Homeowners
Franchise business owner

Ystilo Salon
Jina Juson was working a 9-to-5 job in a Makati-based firm,
and by all indications seemed set on a career in the corporate
world. And then her family started to grow. That was when
she realized that her monthly paycheck was not going to be
enough anymore.
Irene and Edmund Felix saved up for their first home

for five months. Our first night as a married couple was
spent in that house, Edmund says.
An account manager for a logistics company, Edmund
says that the two-bedroom affair served them well until
the family started to grow. The children were getting
bigger, and so we realized we needed more space where
each of my sons could get a room to himself.
14
The couple then acquired a lot in a subdivision in

Bian, Laguna, but they had not secured the funds to
build the house. They went to a number of banks, in
search of an affordable housing loan. BPI, in fact, was
the last bank we visited, Edmund recalls. It was the first
place, however, where the couple found what they were
looking for.
Raised by a mother who always had her hand in business,

Jina took a pivot and embarked on starting a business
herself. Her mother used to run a salon, so it wasnt strange
that Jina thought she had a shot in the very same business.
Having chosen her business location, a mall in Alabang,
Muntinlupa, Jina now had to find the right salon brand.
Ystilo, which owns and operates a chain of salons, was a
suitable option. One of its owners was actress-entrepreneur
Vina Morales, a person that Jina respected.
Irene and Edmund Felix
Those who talked to us were really very accommodating.

That is in fact one of the things I like about BPI, staff
who really seek to engage us, Edmund says.
They dont offer cut-and-dried solutions. The bank
formulates a solution just for you, in order to answer the
needs of their clients.
Irene and I are now open to

the idea of having a business
in the near future. We believe
BPI could help us raise the
funds to finance this next
phase in our lives.
With that initial loan, the Felix couple was able to

complete their 161 sq m family home for their growing
family. They have also taken out another loan with the
bank, in order to buy their first family car. We believe that
our good standing as housing loan clients made the car
application faster, says Edmund.
He adds, I really like banking with BPI because of its
auto-debit arrangement. They just deduct my monthly
amortization from my savings account. We dont have to go
to a branch every month to make the payments.
Edmund hopes that the relationship with BPI would bear
fruit once more. He says: Irene and I are now open to having
a business in the near future. We believe BPI could help us
raise the funds to finance this next phase in our lives.
Jina Juson
Taking a leap of faith, Jina opened the first Ystilo branch in
Alabang. Though Ystilo had a strong following, Jina knew she
was taking a calculated risk. During the branchs first years,
money was always an issueJina had to deal with burgeoning
operating costs in a low-sales environment, but she left nothing
to chance. She went through the books with a fine-tooth
comb, made sure her team always delivered quality service, and
ensured that each client enjoyed their time at the salon.
Since my first loan with BPI,

Ive had several car loans and
a housing loan, and Ive been
really happy with the terms
offered me. BPI really supports
me in achieving my dreams for
my family.
Jinas hard work paid offher salon enjoyed good business,

such that Morales asked her if she wanted to open another
branch, the first Ystilo in Calamba, Laguna. Jina readily
agreed. BPI Family Bank was an important partner to
Jina. Its Ka-Negosyo loan, targeted at the needs of sole
proprietors, was a unique source of growth capital.
With P5 million in loans, Jina was able to manage the
Calamba branchs finances efficiently, even during its early
days, with as yet no customer base to speak of. In just three
years, and with a lot of hard work, Jina was able to pay off
the loan.
Jinas journey as a businessperson doesnt stop there
with the earnings of her salon, shes been able to put up a
restaurant to support the fledgling culinary careers of two of
her children. They are, after all, the reason Jina decided to go
into business herself.
2014 Annual Report
15
Grant Lim
Maria Socorro Oca
Proprietor
Home Studio
Chairperson
GOLD Foundation
Grant Lim, the man behind Home Studio, wasnt always the
guy who catered to homeowners who needed Italian tiles.
16
Thirty-four kilometers south of Metro Manila, in an

unassuming part of Cavite province, is a village developed
and built especially for Filipino seafarers and their families.
A marketing major with an interest in architecture, Grant

worked in one of the countrys biggest conglomerates. His
stint in the corporate world allowed him to analyze customer
preferences, read financial reports, and apply strategic
thinking. All these would prove useful when he later set up his
own business. And a peso term loan with BPI reinforced the
power of his ideas.
Built in 1991, Seamens Village is a 19-hectare mediumcost subdivision with ample grounds and impressive
recreational facilities. Located in Dasmarias, Cavite,
the village is a landmark project of AMOSUP, or the
Associated Marine Officers and Seamens Union of the
Philippines, founded in 1960 by Dr. Conrado F. Oca.
In the late 1990s, Grants mother asked his help to renovate a

condominium unit. Looking for tiles and fixtures, he couldnt
help but be disappointed with what was available in the
market. Then he realized, he could start a business by filling in
the demand of homeowners and renovators like himself.
The Seamens Village is designed as a community of

900 houses, some 400 of which have been awarded to
members of AMOSUP. It is not surprising that this
village, inspired by the ideals of Oca, is now at the center
of a landmark study.
First, he set up a 30 sq m store in their Mandaluyong City

residence. It wasnt exactly easyhe had no track record to
begin with, his space was too small, he hadnt learned the
intricacies of importing and dealing with customs agencies,
and he only had himself to count on.
Eventually, he found a bigger place for his growing
businessa 200 sq m space in the Greenhills shopping district
I have big dreams, an

ambitious vision, and I am
just starting. I am sure BPI
will be helpful when I will
require more financial help in
achieving that vision.
Grant Lim
in San Juan, available for P3 million. Grant knew it would

not be easy to find such an ideal location in the future, and so
he took it. It was during the Asian crisis, so it seemed like a
gamble, he says. But the opportunity was there, and so I told
myself, subukan mo lang [just try it out].
He turned to BPI to help him acquire the property that
would house his dream showroom. Grant had been aspiring
to expand his business, and offer more than tiles. He wanted
to transform his store into a home design hub that offered
unique and high quality finishing and furnishing needs. The
loan that he got from BPI, Grant affirms, was the major kickoff in growing Home Studio.
At first, we were really small, but when we decided to expand
it, BPI was there to help us. BPI has proved to be a great
partnerthe bank personnel working with me understood
my needs and responded accordingly, he says.
It took two years for Grant to finish the Home Studio
showroom, which now stands proudly on Connecticut Street
in Greenhills, San Juan with an expanded offering of tiles,
mattresses, furniture, fittings and accessories.
The study, to be carried out by the Gregorio Oca

Leadership & Development (GOLD) Foundation and
the BPI Foundation, will look into the financial needs
of overseas Filipino seafarers, who typically earn aboveaverage salaries. The study will generate and make use of
information and other inputs from the residents of
the village.
We are an aspirational
country, but lack in
meaningful support to realize
timeless motivations. This study
funded by BPI Foundation is
a small yet important step in
supporting them.
Maria Socorro Oca
Apart from mapping out spending habits of seafarers

and their families, the study will attempt to build a
deep understanding of their aspirations and values. In
the process, the study will help seafarers acquire more
information and the discipline to preserve and grow their
wealth.
The project will go a long way towards informing and
educating seafarers and their families in proper wealth
management, says Maria Socorro Oca, chair of GOLD
Foundation and Dr. Ocas daughter.
GOLD is all about building on the successes of
AMOSUP, and by embarking on this endeavor, in
partnership with the BPI Foundation, we hope to further
equip seafarers and their families with the means to
become financially fit and build productive lives.
2014 Annual Report
17
BPI and I have a similar

vision of creating an
enabling environment
for SMEs, encouraging
more wealth-creation
activities.
Openness and flexibility are the

reasons we keep banking with BPI.
This means our partnership with BPI
will grow bigger, better, and stronger.
Arturo Yan
Arturo Yan
President & Chairman

Glacier Refrigerated Services
18
Helping to fight climate change has become an imperative

for many enterprises, but programs specifically designed to
reduce their carbon footprint are not too common. Glacier
Refrigerated Services has found such a program in BPIs
Sustainable Energy Finance.
Glacier Refrigerated Services owns and operates hugecapacity, high-performance cold storage facilities in Metro
Manila and in the provinces of Iloilo, Bicol, Davao,
Palawan, Pangasinan, and South Cotabato. Its cold chain
infrastructure has addressed low-profit margins of primary
producers. Food manufacturers, traders, and processors rely
on Glaciers competitive services.
Glacier has shifted from a cooling system that used
ozone-depleting refrigerants to a newer, environmentfriendly, and more efficient system for its cold storage
facilities. It installed energy-efficient compressors that
prevent power losses, evaporative condensers that optimize
current flow and wall insulation to help maintain
temperatures. It has also started using Freon 507, a green
refrigerantrefrigerants used traditionally by industry,
like chlorofluorocarbon and hydrochlorofluorocarbon have
been directly linked to the destruction of the earths ozone
layer, which shields the planet from ultraviolet radiation.
Glacier is now expanding this system, initially
implemented in its Taguig City facility, to achieve the
same results in other locations in the country. It is during
this expansion phase that Glacier turned to BPI,a bank

that has the same lofty goals that we have, remarks Arturo
Yan, Glacier President and CEO.
Glacier tapped BPIs Sustainable Energy Finance program
to fund its environment-responsible projects. Glacier is also
installing solar panels on its facilities rooftops, to cut its
reliance on electricity from fossil fuels.
Started in 2008, the SEF program is conducted by the
bank in partnership with the World Banks International
Finance Corporation. It is focused on supporting projects
that promote energy efficiency, renewable energy, and green
technology.
For its efforts, Glacier recently received the IFC Sustainable
Energy Finance Award.
The support of BPI has allowed us to reinvent our business
model and invest more in green and environment-friendly
projects, he says. Adopting energy-efficient systems
and using renewable energy require more capital at the
beginning. BPI understood this, and delivered just-in-time
project financing that allowed us to implement our project at
the fastest possible time.
Glacier aims to become a leading player in the cold chain
industry by having the largest capacity by end-2015, says
Yan, who is now training his sight on vertical integration, to
include third-party logistics and food processing. Hopefully,
this will improve the market value of products and expand
the market reach of producers, manufacturers, and sellers,
he says.
Robert Trota
Robert Trota
BPI Capital served as Maxs exclusive financial advisor

in the acquisition, and sole arranger for an acquisition
financing.
President & CEO

Maxs Group
It was just after the Second World War when one of the
countrys most loved brands came into existenceMaximo
Gimenez lived in a house near a US military camp in
Quezon City, on a street thats now called Scout Tuazon.
American soldiers in the area found stimulating conversation
and good food in the home of Gimenez, who soon enlisted
his niece, Ruby, to prepare her signature chicken dish for his
American friends.
Soon, the American soldiers said, we like it here and
wed like to pay for the food. So they started to pay
and it took off from there, narrates Robert Trota, a
grandnephew of Gimenez and president and CEO of the
present-day Maxs Group.
Seven decades later, the family-run Maxs had become a
restaurant group, that included Maxs Restaurant, Maxs
Corner Bakery, and the Philippine franchises of Krispy
Kreme and Jamba Juice. It was also eyeing a much bigger
restaurant chain, the publicly listed Pancake House Group,
in order to achieve significant growth.
In July 2014, Maxs acquired 89.9 percent of PHG for
P3.5 billion, bringing together 14 restaurant brands under
one roof. These brands include Pancake House, Yellow
Cab, Le Coeur de France, Dencios, and Teriyaki Boy. The
acquisition catapulted Maxs to a position of undisputed
leadership in the Philippine casual dining space, with over
500 restaurants in the country and about 25 more abroad.
In December 2014, the Maxs Groupthe combined entity

after the mergerraised another P3.5 billion through the
sale of over 197 million common shares, in the process
deleveraging the company, and positioning it for sustainable
growth. BPI Capital again acted as Maxs sole bookrunner,
issue manager and lead underwriter.
Together with BPI, we created a record of sortswe raised
the bar in terms of targeting an acquisition, doing a merger,
and carrying out a follow-on offering all in one year. All
these are normally done in three years, says Robert.
The relationship with the whole team, BPI Capital and BPI
Securities [which acted as tender offer agent and buy-side
broker], has given us the confidence to do bigger things,
together.
BPI continues to assist Maxs in unlocking and enhancing
value, capitalizing synergies from the integrated restaurant
group.
Trota underscores this vision: We want to be the Filipino
company with the most loved brands by 2025. Our mission
statement is, We build loved brands. Thats how we want
our customers to remember us by. We would love to be
part of those loved brands, and being a Filipino company, a
Filipino brand, makes it even better.
2014 Annual Report
19
OUR PRODUCTS & SERVICES

In tandem with our commitment to deepen client
relationships, we focus on the excellence of our service. Our
Products & Services teams work to design and deliver financial
products that address specific top-of-mind needs, and in ways
that clients find accessible, convenient, and efficient. In so
doing, we also adhere to our mission of financial inclusiveness
to an ever growing base of Filipino clients.
GREAT EXPERIENCE = STRONG GROWTH
Deposits. In 2014, our total deposits reached the trillion

mark at P1.2 trillion, an increase of 19 percent from
previous years P989 billion. Both our float and bought
deposits increased by 19 percent, to reach P816.1 billion
and P360.1 billion, respectively.
Asset Management. We are one of the Philippines largest
asset managers, and offer a wide range of mutual fund, unit
trust, and discretionary portfolio services. We have a long
track record of managing assets of both institutional, high
net worth, and mass affluent investors. We employ highly
trained and experienced investment professionals, who
follow a rigorous process that delivers superior risk-adjusted
returns over a time horizon established by our clients. We
employ state-of-the-art technology to construct and risk
manage portfolios, provide reports, and engage in planning
and distribution.
In 2014, assets under management grew by 7.0 percent
to P619 billion, achieving strong market share growth
and ranking No. 2 in the industry. We launched two
innovationsfund-of-funds and feeder fundsthrough
which retail investors may access international expertise in
non-Peso equity and fixed income assets in a convenient,
cost-efficient manner.
BPI Family Savings Banks focus on great customer

experience enabled by technology resulted in
double-digit growth for our consumer loans.
60
SECONDS
FIRST
CAR PLAN
Retail Lending. Retail loans, at P255.0 billion, constitutes

31.5 percent of net loans. We are one of the Philippines
largest providers of lending products to the retail market.
Our retail lending flagship is BPI Family Savings Bank, the
Philippines largest thrift bank. We have a significant presence
in home mortgages, auto loans, and small business loans
(Ka-Negosyo), and personal loans. We promote easy access to
our retail lending products through a dedicated website, and
support our applications with credit scoring and processing
systems that enhance our responsiveness to clients.
In 2014, we experienced significant growth across our home
mortgage, auto, and Ka-Negosyo loans portfolios. At P99.1
billion, home mortgages constituted the largest share of the
banks retail loan portfolio, at 39 percent. Auto loans recorded
net growth of 20 percent; Ka-Negosyo loans, 28 percent.
2014 Annual Report
AMOUNT OF TIME A CLIENT CAN GET

PRE-QUALIFICATION ON AN AUTO
LOAN ONLINE
A PROGRAM THAT PROMOTES

OWNERSHIP OF BRAND-NEW CARS
AMONG FIRST-TIME OWNERS
This features a selection of small,

affordable cars, and special loan
rates and terms.
24%
INCREASE IN AUTO
LOAN RELEASES
15%
GROWTH IN TOTAL
CUSTOMER BASE
96%
INCREASE IN VISITORS
TO BPILOANS.COM
32%
GROWTH IN LOAN
APPLICATIONS CARRIED
OUT THROUGH THE SITE
21
Corporate Lending. Corporate loans, at P555.8 billion,

comprise the largest share of our lending book, at 68.5
percent of net loans. We also experienced significant
rates of growth this year in our corporate loan book,
at 30 percent. We offer a diverse range of lending
products to corporate clients, including short term
inventory and trade financing, term facilities for the
financing of capital expenditures or acquisitions, and
project financing. We also innovate specialized lending
products, such as:
Leasing, which provides innovative asset financing
alternatives to our clients. We concluded a partnership
with Century Tokyo Leasing, one of Japans leading and
most profitable leasing companies. BPI Century Tokyo
Lease and Finance offers not only a unique ability to
source equipment from Japans leading OEMs (original
equipment manufacturers), but also new technologies
that allow it to expand its class of assets covered by its
leasing and rental products.
22
Sustainable Energy Finance, which is provided in

partnership with the IFC, the investment arm of the
World Bank. IFC launched its first SEF awards in
October 2014 and, four out of seven SEF awardees
hailed from BPI. SEF loans cover projects in energy
efficiency, renewable energy, and climate change projects.
In 2014, SEF loans and leases totalled P9.6 billion,
bringing BPIs cumulative total of SEF-funded loans to
P22.8 billion. As of end-2014, outstanding SEF loan
balances reached P16.9 billion, over 73 percent from
previous levels.
USAID Credit Facility, which was initiated in 2012.
At P1.15 billion in total availments since inception,
the facility achieved 100-percent utilization in 2014.
This facility is targeted at SMEs in the countryside
seeking to fund working capital and capital expenditure
requirements and, through BPI, has had a direct benefit
on SMEs involved in health care, tourism, agribusiness,
manufacturing, and trading.
FUNDING ENVIRONMENT-RESPONSIBLE ENTERPRISES
P9.6
BILLION
TOTAL LOAN RELEASES
>40% of P22.8B releases

in last 6 years
73%
GROWTH
IN OUTSTANDING
LOANS
LENDING TO COUNTRYSIDE ENTERPRISES

Financing offered by
tie-up with USAID
Working capital
Capital expenditure for
start-up or expansion
167,516
851,317
ENERGY SAVED
BY SEF PROJECTS
YEARLY
GREENHOUSE GAS
EMISSIONS CUT
MWH
1,149,162
MWH
CLEAN ENERGY
PRODUCED
TONS
ALMOST
200
CLIENTS
FINANCED BY SEF
CLOSE TO
100%
UTILIZATION RATE
P1.15
BILLION
TOTAL AVAILMENTS
IN 2014
SECTORS ASSISTED
Health care
Tourism
Agribusiness
Manufacturing
Trading
We focus on the excellence

of our service.We work
to design and deliver
financial products and
services that address
specific needs, and in ways
that clients find accessible,
convenient and efficient.
Bancassurance. BPI has two strategic partnerships in the

bancassurance space: In life insurance, we are partnered
with Philam Life, one of the countrys longest-standing and
largest providers of life insurance policies, and a subsidiary
of Hong Kongs AIA Group; in non-life insurance, we are
partnered with Mitsui Sumitomo Insurance (MS), one
of Japans largest non-life insurance companies. Together,
BPI-Philam and BPI/MS are at the forefront of providing
services that offer Filipinos financial security. Sales executives
are dispersed throughout BPIs extensive branch network and
render advisory services that address customers financial and
protection needs.
In 2014, BPI-Philam generated 21-percent growth in
annualized premiums, ranking it in the Top 5 of its industry
segment. BPI/MS, for its part, achieved net premiums at a
level highest in its 12-year history of partnership with BPI.

BPI/MS achieved strong profitability, notwithstanding low
interest rates, weaker trading environments, and higher
claims activity related to bad weather.
Payments. BPI provides comprehensive payment solutions
to both retail and corporate clients. The bank services the
funds transfer requirements of overseas Filipinos, offering
direct-to-account, branch pick-up, and door-to-door delivery
alternatives. Remittance volume and transaction count
grew 11 percent and 10 percent, respectively, garnering
BPI a 29-percent share of the remittance market last year.
For corporates, we offer a comprehensive array of bills and
supplier payment services, both electronic and in-branch,
payments to government agencies, check-printing services,
and international wire transfers.
STEADY GROWTH IN 2014
25
11%
IN TRANSACTION
GROWTH VOLUME
29%
SHARE
OF THE REMITTANCE
MARKET
10%
IN TRANSACTION
GROWTH COUNT
We provide comprehensive
payment solutions to both
retail and corporate clients.
46%
SHARE
29
NEW
REMITTANCE
TIE-UPS
2014 Annual Report
IN SEA-BASED
REMITTANCES
We are also one of the countrys largest providers of credit card

services. We ranked first in consolidated merchant acquisition
billings, with a market share of 37 percent; second in card
base, with a share of 18 percent; second in issuing billings,
with share of 22 percent; and third in credit card loans, with
share of 18 percent. We announced a strategic partnership
with Global Payments (GPN), an Atlanta, GA-based payment
services provider, which will further expand our footprint
of POS terminals and expand offerings to BPI clients. Our
partnership with GPN is scheduled to conclude in late 2015,
pending regulatory approvals.
We are also active in providing internet and mobile

banking services. Our retail app, BPI Express Mobile,
and corporate app, BPI ExpressLink Mobile, offer some
of the most function-rich payment solutions available
to Philippine customers. Enrollments in our retail
application grew 60 percent and active users, 71 percent.
Furthermore, enrollments in our corporate application
grew 73 percent and active users, 45 percent. BPI Express
Mobile has consistently ranked as the most downloaded
application in the free finance category of both the App
Store and Google Play.
BANKING MADE MORE ACCESSIBLE
SPREAD THE HAPPY

The fast growth of the countrys first offline, contactless
prepaid card system, the Happy Plus Card created and
powered by BPI for Jollibee Foods Corporation, shows the
readiness of Filipinos to adopt cashless payment modes.
31%
OR 2M
CLIENTS WHO NOW BANK ONLINE

EXPRESS MOBILE APP
MOST
HOW DOES IT WORK?
DOWNLOADED
26
The user simply waves his

Happy Plus card over the
reader at the point of sale in
order to pay for his meal, no
signature or PIN verification
required.
APP IN APP STORE

AND GOOGLE PLAY
228%
INCREASE
IN APPLICATION
USAGE
60%
GROWTH
IN NUMBER OF
CLIENTS ENROLLED
7 in 10
ENROLLED
USERS WHO ACTIVELY

USE THE APP
CASH DEPOSIT MACHINES
395
CDMs
54%
GROWTH
DEPLOYED
NATIONWIDE
IN USE OF
CDMs
2M
HAPPY PLUS
CARD BASE
156%
ANNUAL
GROWTH
1,600
NO. OF STORES
ACCEPTING THIS CARD
P5B
BILLINGS
IN 2014 ALONE
We offer a comprehensive
array of bills and supplier
payment services, both
electronic and in-branch.
Transaction Banking. We help clients manage their

working capital and liquidity needs, and assist in managing
the logistics of collections and payments, and providing
reports thereon. We have cooperated closely with our large
industrial clients this year, helping them manage down
increased working capital requirements, given logistical
bottlenecks that have adversely impacted their supply chain.
We are also active in providing foreign exchange and trade
financing services. In 2014, we became the first Philippine
bank to issue Renminbi-denominated letters of credit,
facilitating the importation of goods and services from the
Peoples Republic of China.
Our mobile apps offer

some of the most
function-rich payment
solutions available to
Philippine customers.
FACILITATING RENMINBI-DENOMINATED TRADE

We are the first local bank to issue Renminbi-denominated
letters of credit and facilitate Renminbi-denominated foreign
outward payments to China.
RENMINBI
30M
Investment Banking & Capital Markets. BPI Capital is

our flagship in investment banking and BPI Securities, in
equities brokerage. In 2014, Bloomberg ranked us as No.
1 in managing equity capital markets transactions, with an
18 percent market share; and No. 3 in debt capital markets,
with a 16 percent share. The markets saw BPI demonstrate
newfound leadership in equities transactions, where it helped
successfully conclude initial public offerings for leading
companies such as Century Pacific, Stores Specialists, the
Maxs Group, and Integrated Micro-Electronics. In debt
capital markets, we helped corporate clients raise P143
billion in total funding, including JG Summits P30 billion
and PLDTs P10 billion retail bond offerings.
We also innovated in loan financing and financial advisory
services. We financed Navegars acquisition of the Bistro
Group, as well as Baring Private Equitys purchase of the
ACCRA Law Tower. We also raised P33 billion in project
financing for Pagbilao Energy, the largest of its kind in
Philippine domestic project finance. A significant amount
of our loan and capital markets financing activity arose
from financial advisory assignments. We advised, among
others, the Maxs Group in its acquisition of Pancake
House, providing acquisition financing, all prior to its
initial public offering. In doing so, BPI helped transform
the Maxs Group into the largest casual dining restaurant
group in the country.
WORTH OF
TRANSACTIONS
FACILITATED
(ABOUT $5M)
TOP IN INVESTMENT BANKING
NUMBER
18%
MORE THAN
P94B
IN EQUITY
UNDERWRITING*
NUMBER
16%
MARKET SHARE
OVER
RAISED IN EQUITY
CAPITAL FOR PH FIRMS
P143B
IN DEBT
UNDERWRITING*
MARKET SHARE
RAISED IN
CORPORATE BONDS
Notable bond offerings:

JG Summits P30B
retails bonds
PLDTs debut P10B
retail bonds
Introduced well-known brands to

stock market investors
Maxs Group
SSI Group
Century Pacific Foods
*Source: Bloomberg
2014 Annual Report
29
Global Markets
In Global Markets, our core competence is the
management of the banks positions in liquidity, interest
rates, foreign exchange, and fixed income capital markets
instruments. We are one of the largest Eligible Dealers
in government securities, and are a major counterparty
to the Bureau of the Treasury (BTr). Our prudent stance
in markets risk-taking resulted in significant retention of
comprehensive income from net income, underscoring
our focus on quality of earnings and our desire to achieve
profitability through the interest rate cycle.
We retain in-house economists who conduct extensive
research on Philippine and global macro-economic trends.
Furthermore, we gather market intelligence through
formal advisory arrangements with major international
banks and asset managers. Finally, we have reinforced our
sales and distribution teams to improve across-the-board
connectivity with institutional, corporate, private banking,
and retail clients, thereby improving our intelligence
about market movements and generating flow-related
volume and revenues. We are a significant complement to
BPI Capital, as it increases its capital markets origination
activity and builds out its syndicate functions.
30
Expanding Access
In 2014, we opened investments and foreign exchange
centers in Manila and Quezon City; we also plan to open
yet another in Cebu City in February 2015. We have also
strategically placed marketing units present in areas like
Cebu, Davao and Pampanga, complementing the ability of
our branch network to provide funding, foreign exchange,
and hedging products to our clients. We are committed to
providing services tailored to the local needs of its clients
needing to access fast-moving global and capital markets.
Industry Position
Our performance in Global Markets points to significant
opportunities for earnings growth for BPI:
Awarded by the BTr as the 2nd Best Performing
Government Securities Eligible Dealer;
Ranked No. 3 by the Philippine Dealing and
Exchange Corporations fixed income exchange;
Awarded Overall Best Local Currency Interest Rate
Research and Market Coverage by Asiamoney, in
recognition of its first-rate economic and financial
markets research.
ENTERPRISE SERVICES
PHOTO MONTAGE
People and
Community
In 2014, BPI saw its largest organic increase in manpower

in its past 10 years. From 13,024 unibankers in 2013, we
closed last year with approximately 14,500 employees,
resulting in growth of 12 percent. This growth underpinned
the significant increase in volumes seen by the bank over the
same period.
Human Resource Development
Employee training and education are essential to our growth
strategy. By ensuring that our staff, specialists, and officers
are trained, steeped in best practices, and exposed to an
environment that nurtures continuous learning, we are able
to provide the highest quality service to our customers.
We highlight below some of the significant training activities
BPI conducted last year:
Credit Risk Analysis Certification Program. This program,
designed for corporate account managers and credit policy
officers, enhanced the credit assessment capabilities of
officers and improved the banks lending practices overall,
helping to boost its aggressive growth strategy.
Target shooting sales course. Relationship managers and
sales assistants who took part in this program improved their
skills in sales and executing campaigns in offsite or out-ofbranch locations. Some 400 Relationship Managers and
Sales Assistants participated in this refresher course.
Cross-selling program. The banks branch personnel were
drilled in the practice of cross-selling in support of our
retail client campaigns. Training on this front focused on
providing tools that enabled value-adding conversations with
our customers.
Regular programs. Through our so-called BPI University,
unibankers benefit from a process of continuous training
throughout their careers in the bankthese programs range
from the new employee orientation and values orientation
workshops for new hires; officers training program, which
initiates our growing corps of officers into their leadership
roles; sales officers training program; the Leadership
33
GENDER
Competitive Compensation
BPI has placed increasing focus on recruiting best-of-class
professionals, and putting the most qualified person into
each role. A key component of our value proposition to
employees is a competitive compensation package, one that
is aligned with performance standards we endeavor to consistently apply across the bank. The bank offers a basic monthly
salary that exceeds the mandatory minimum wage. It also
offers generous benefits that include quarterly bonuses (inclusive of 13th month pay), discretionary bonuses, overtime
pay, and various leave credits (vacation, sick, emergency and
maternity/paternity).
Excellence Acceleration Program, conducted in partnership

with Harvard Business School, focusing on executive
education; and the RM Academy, an intensive two-month
program designed for strengthening the financial advisory
skills of our relationship managers.
Aside from a wide range of mandatory, functional, leadership
and core courses offered in-classroom or online via BPIs
My eLearning portal, the bank introduced new focused
programs last year, including the corporate finance program
for investment and corporate banking employees, a supply
chain management workshop for the shared administrative
services group, and a business process redesign workshop for
the operations team.
The bank administers its compensation programs in a way

that rewards high-level performance. It maintains sound
salary structures that recognize the potential, competence
and responsibility levels of individuals. The compensation
packages are reviewed on a regular basis, while job
evaluations at the beginning of the year serve as the bases for
salary adjustments and promotions.
One of our major incentives for deserving officers is the
grant of an annual performance bonus, which is directly
related in amount to the size and quality of the banks annual
earnings. Our PB payouts are based not only on an officers
individual productivity and performance relative to assigned
targets, but also on a relative comparison to the performance
of peers within their rank.
Another testament to BPIs commitment of offering greater
value to its employeesand aligning managements interest
with shareholders--are its equity-linked incentive plans. For
two consecutive years now, the bank has granted stock purchase and stock option plans to its most senior officers.
Rank distribution
President and EVP
SVP
VP
AVP
SM
MGR
AM
Staff
7
34
140
266
676
1,185
2,311
9,923
30.1%
MALE
69.9%
FEMALE
HEAD COUNT
15
14,542
35
14
13,024
13
12,355
AGE
12,406
12
11
7%
10
11
12
13
14
19%
Expeditious CBA Signing

Collective bargaining agreements with unionized employees,
effective for years 2014 to 2016, were signed in record time.
A total of 24 labor unions signed the CBA, which covered
salary increases and employee benefits, such as allowances
and loans.
53%
21%
UP TO 30 YEARS
41-50
31-40
51-60
2014 Annual Report
TENURE
1%
3%
Responsible Corporate Citizenship
3%
In 2014, the bank once more demonstrated its corporate

citizenship through the BPI Foundation, which made
significant contributions to the lives of Filipinos through
its triple advocacy of entrepreneurship, education and
environment, marked by two milestone events.
9%
16%
48%
3%
17%
36
UP TO 5 YEARS
6 -10
11 -15
16 -20
21 -25
31 -35
26 -30
MORE THAN 35
Climate change adaptation study. In December 2014,

the BPI Foundation and the World Wide Fund for Nature
(WWF) completed a four-year, 16-city business-risk
assessment and climate change adaptation study, which
generated socio-economic baselines for sectors most likely
to be affected by climate change. The study has proven
useful not only in understanding city-specific business
vulnerabilities, but also in aiding local governments to
implement policies and actions to mitigate the risks arising
from climate change.
For BPI, recommendations made through the study will
serve as reference in the development of concrete and innovative solutions related to sustainable development.
GEOGRAPHY
The cities covered by the study are Laoag, Santiago, Baguio,

Dagupan, Angeles, Batangas, Naga, and Puerto Princesa
in Luzon; Iloilo, Tacloban, and Cebu in the Visayas; and
Butuan, Cagayan de Oro, Davao, Zamboanga, and General
Santos in Mindanao.
41%
For the fourth straight year, the bank was named by the
WWF-Philippines as its Corporate Partner of the Year.
14%
24%
21%
METRO MANILA
VISAYAS
LUZON
MINDANAO
BPI-DOST Science Awards. Celebrating its 25th year

in 2014, the BPI-DOST Science Awards recognizes and
gives incentives to outstanding young men and women
whose science and technology projects are entered in the
competition. Undertaken with the countrys Department
of Science and Technology, the Awards promotes budding
science professionals in the fields of mathematics, physics,
chemistry, engineering, computer science and biology as they
come up with innovative projects that contribute to nationbuilding.
Last years 29 awardees, screened from 10 partner
universities, were given cash prizes and scholarship grants
from the DOST Science Education Institute.
Employee Volunteerism
The bank has a built-in volunteerism program, BPI Bayan
(bayan means nation in Filipino), which encourages and
organizes employees to devote personal time to communities
relevant to BPI and its clients. Using a seed fund first
provided by the bank in 2009, BPI Bayan is at the forefront
of various social uplift programs. Its funding has since grown
thanks to the efforts of the banks employee-community
organizers, making the community programs self-sustaining.
37
The bank, through the BPI Foundation, published

the book, Salapi: The Numismatic Heritage of
the Philippines, a 280-page coffee table book
chronicling the evolution and development
coins, bank notes, and other currencies of the
past. The book was written by Jose Eleazar
Reynes Bernales and Carlo Ledesma Apuhin, a
Cebu-based relationship manager of BPI.
Salapi, unveiled during the launch of the BPI

Cebu Library in January 2014, honors the richness
of Philippine culture and is a preeminent
testimony to the Filipinos pioneering heritage
and capacity for economic development and
progress.
Corporate Governance
Tradition of Integrity
For 163 years, BPI has built its business on a foundation of
integrity and ethical business practice. Our stockholders,
clients, business partners, employees, and suppliers expect
and deserve to transact with a bank they can trust. Strong
corporate governance represents the very core of our
reputation. While we memorialize our governance standards
in various charters and manuals, we aspire that integrity and
ethics define our decision making and behavior as a matter
of culture, not conformity to rules.
Benchmarks
We benchmark our Corporate Governance under the
guidance of the Bangko Sentrals Circular 749 and the
ASEAN Corporate Governance Scorecard, in accordance
to standards prescribed by the Securities and Exchange
Commission and Institute of Corporate Directors.
Furthermore, we continuously gauge against risk-based
audit standards set forth by the Bangko Sentrals Capital
Adequacy, Asset Quality, Management Quality, Earnings,
Liquidity and Sensitivity to Market Risk (CAMELS) rating
system. Our policies and standards comply with applicable
laws and regulations, and are regularly reviewed and updated
to conform to changes in the global and local regulatory
environments.
We pursue best practices in enterprise and financial risk
management across all our businesses. In 2014, we were
awarded House of the YearPhilippines by Asia Risk magazine,
the first-ever bestowed to a Philippine bank.
House of the Year

Philippines
2014
39
Board of Directors
Our Board of Directors is the highest governance body of
the bank. It provides direction on the business of the bank
and delegates the conduct of such business to the banks
management and operating levels under the leadership
of its Chief Executive Officer. The Boards directive is to
generate reasonable returns on shareholder capital by, among
others, reviewing and approving strategies and objectives,
appointing senior executives, confirming organizational
structures, approving enterprise-wide policies, monitoring
business and financial performance, overseeing risk
management frameworks and risk appetite, and fostering
regulatory compliance. BPIs Board operates with significant
independence from its management. Our Chairman has
historically been a non-executive and separately appointed
from our Chief Executive Officer.
40
Our Board convenes regular meetings in accordance with

a monthly cycle, and special meetings may be called for as
needed; in 2014, the Board convened 14 times.
Selection: Qualified individuals are screened, reviewed, and

evaluated by the Nominations Committee. Board members
are elected by BPI stockholders who are entitled to one vote
per share at the banks annual stockholders meeting.
Compensation of Board Members
The banks by-laws provide that:
Each director shall be entitled to receive from the bank,
pursuant to a resolution of the Board of Directors, fees and
other compensation for his services as director. The Board
of Directors shall have the sole authority to determine
the amount, form and structure of the fees and other
compensation of the directors. In no case shall the total yearly
compensation of directors exceed 1 percent of the net income
before income tax of the bank during the preceding year.
Composition: Our Board consists of 15 directors, six of

whom are classified as independent, or having no interest or
relationship with BPI at time of election, appointment, or
re-election. Fourteen of these 15 directors are non-executive
officers of the bank, and the one executive director is the
banks President and CEO.
Board members receive per diems for each occasion

of attendance at meetings of the board or of a board
committee. Bonuses paid to board members may be given
as approved by stockholders during the annual stockholders
meeting, upon recommendation of the personnel and
compensation committee. Historically, total compensation
paid to all board members have been significantly less than
the cap of 1 percent of the total net income stipulated by the
banks by-laws.
Qualification: Our board members are business and civic

professionals of significant stature and integrity, with a
track record of accomplishment in their own right, often
independent of our bank. They deliver a broad range of
experience and expertise on subject matters relevant to the
governance of present-day universal banking institutions.
Board members within the BPI Group with executive

responsibilities are compensated as full-time officers of the
company, not as non-executive directors. This is consistent
with our HR policy on offering a competitive compensation
package, one thats aligned with bankwide performance
standards.
The banks compensation practice in relation to board

members remains similar to that of last year.
Board Committees
The banks by-laws allow the Board to carry out its various
responsibilities through the Executive Committee, as well
as delegate specific responsibilities to other committees for
specific areas of focus, as allowed by regulations. The banks
Nominations Committee reviews the charter and board
member assignments of each board committee annually. The
bank has a total of nine board committees, as follows:
Executive Committee. The Executive Committee, in the
interim between meetings of the Board, possesses and
exercises all powers of the Board in the management and
direction of the affairs of the bank subject to the provisions
of the banks by-laws, and the limitations of the law and
other applicable regulations. It serves as the operating arm of
the Board in all matters related to corporate governance. It
approves all major policies and oversees all major risk-taking
activities, including the approval of material credit exposure.
Executive Committee Members
Chairman
Vice chairman
Fernando Zobel de Ayala
Members
Cezar P. Consing, President and CEO
Rebecca G. Fernando
Aurelio R. Montinola III
Antonio Jose U. Periquet (Independent)
Mercedita S. Nolledo
Corporate Governance Committee. The Corporate

Governance Committee assists the board in fulfilling its
corporate governance responsibilities, and ensures the
boards effectiveness and due observance of sound corporate
governance principles and guidelines, as embodied in the
Corporate Governance Manual.
Corporate Governance Committee Members

Chairman
Artemio V. Panganiban (Independent)
Members
Romeo L. Bernardo (Independent)
Oscar S. Reyes
Astrid S. Tuminez (Independent)
Dolores B. Yuvienco
Nominations Committee. The Nominations Committee

ensures that the Board of Directors is made up of individuals
of proven integrity and competence, and that each possesses
the ability and resolve to effectively oversee the bank in their
capacity as member of the Board and of their respective
committees. This committee also reviews and evaluates the
qualifications of all persons nominated to the Board.
Chairman
Members
Nominations Committee Members

Xavier P. Loinaz (Independent)
Vivian Que Azcona

Audit Committee. The Audit Committee monitors and
evaluates the adequacy and effectiveness of the banks
internal control system. It also provides oversight of the
overall management of operating risks, financial reporting
and control, internal audit department and external auditors,
quality of compliance with the compliance and corporate
governance manuals and reviews conducted by the Bangko
Sentral.
Chairman
Members
2014 Annual Report
Audit Committee Members

Xavier P. Loinaz (Independent)
Octavio V. Espiritu (Independent)
Oscar S. Reyes
Dolores B. Yuvienco
41
Risk Management Committee. The Risk Management

Committee is tasked with nurturing a culture of risk
management across the enterprise. It proposes guidelines and
regularly reviews risk management structures, metrics, limits,
and issues across the bank, in order to meet and comply with
regulatory and international standards on risk measurement
and management. It also supports technology and training
for key personnel in risk management.
Risk Management Committee Members
Chairman
Members
Cezar P. Consing
Astrid S. Tuminez (Independent)
42
Trust Committee. The Trust Committee oversees the

proper administration and management of the banks trust
and other fiduciary business, and its investment activities
to ensure effective management of all risks inherent in the
business.
Chairman
Vice Chairman
Members
Trust Committee Members

Cezar P. Consing
Rebecca G. Fernando
Maria Theresa M. Javier, Trust Officer
Personnel & Compensation Committee. The Personnel

& Compensation Committee directs and ensures the
development and implementation of long-term strategies
and plans for the banks human resources, in alignment with
the Boards vision for the organization.
Retirement & Pension Committee. The Retirement &

Pension Committee oversees the fiduciary, administrative,
investment portfolio, and other non-investment aspects of
the banks retirement plan.
Retirement & Pension Committee Members
Chairman
Members
Cezar P. Consing
Rebecca G. Fernando
Florendo G. Maranan, Head of Human
Resources Management
Related Party Transactions Committee. The Related Party

Transactions Committee is charged with ensuring that the
banks dealings with the public and various stakeholders
are imbued with the highest standards of integrity. In
conjunction with the Executive and Corporate Governance
committees, this committee endeavors to ensure compliance
with Bangko Sentrals Circular 749 (on strengthening
corporate governance). It independently reviews, vets, and
endorses all related party transactionsabove and beyond
transactions qualifying under directors, officers, stockholders,
and related interests (DOSRI) restrictionssuch that these
transactions are dealt on terms no less favorable to the bank
than those generally available to an unaffiliated third party
under the same or similar circumstances.
Related Party Transactions Committee Members
Chairman
Members
Rebecca G. Fernando
Oscar S. Reyes
Rosemarie B. Cruz, Chief Audit Executive
(Non-voting)
Marita Socorro D. Gayares, Chief
Compliance Officer (Non-voting)
The EVPs are responsible for ensuring development and

expansion of the banks client relationships; service quality
and innovation in its products and services; management
of the banks trading business including enterprise assetliability management; and reliability, productivity, and
cost-efficiency in the banks operating infrastructure.
Operating Management
Organization
BPIs President and CEO is responsible for formulating
the strategy and the overall management of the bank to
achieve desired outcomes of its strategy.
Effective January 2015, the Bank has five Executive Vice
Presidents, each reporting to the President and CEO and
responsible for an area of the banks business, as follows:
In addition to the above, the bank has a Management

Committee, which is convened from time to time to discuss
matters of firm-wide relevance. The Management Committee
is appointed by the President and CEO, and its membership
is rotated periodically, to reflect current initiatives of the bank
and to grant senior decision-making exposure to executives
below the rank of EVP.
Natividad N. Alejo, Head, Retail Clients;

Alfonso L. Salcedo, Head, Corporate Clients;
Simon R. Paterno, Head, Financial Products &
Services;
Antonio V. Paner, Head, Global Markets; and
Joseph A. Gotuaco, Head, Enterprise Services.
The following is an overview of the banks principal activities

and its functional organization:
BOARD OF DIRECTORS
43
Corporate
Secretary
EXECUTIVE
COMMITTEE
RISK
MANAGEMENT
RELATED PARTY
TRANSACTION
TRUST
Other
Committees*
AUDIT
PRESIDENT
Asset Management
and Trust
Risk Management
Security Office
Internal Audit
Compliance
Accounting
Centralized
Credit
Personnel & Compensation Committee Members

Chairman
Members
Oscar S. Reyes
Vivian Que Azcona
Financial Products
and Services
Client Segments
Global Markets
Enterprise Services
BPI Family
Savings Bank
Retail
Corporate
Deposits
Treasury trading
Human resources
Centralized operations
Customer segments
Top corporates
and Fls
PEZA and
Asian MNCs
Remittance and
payments
Balance sheet
and ALM
Strategic and
corporate planning
Shared administrative
services
Branches
Metro Manila
Provincial
Corporate products
Global market sales
Legal services
BPI Foundation,
sustainability
Field sales
Large-medium
enterprises
Filipino-Chinese
Bancassurance
International
offices
Information
technology
Customer relationship
management
BPI/MS Insurance,
Ayala Plans
BPI Forex Corporation
Electronic channels
Board Committees
BPI Capital
Corporation
2014 Annual Report
* Other committees are Personnel & Compensation,

Retirement & Pension, Nominations,
and Corporate Governance.
Planning and Performance Management

We articulate our strategy in periodic planning exercises,
distill our plans in formal budgets, and conduct periodic
performance reviews against both our budgets and our
past performance. We act in accordance with well-defined
operating policies and procedures, and ensure the accuracy
and transparency of our operational and financial reporting
to protect the banks reputation for integrity and fair dealing.
We also strive to achieve accountability in our revenue
performance, efficiency in our expenditure of resources,
and high quality in the delivery of services and achievement
of customer satisfaction. Our management is periodically
reviewed and rewarded according to their performance
relative to assigned targets, and to feedback from customers
and peers.
44
We place strong emphasis on prudent risk taking and risk

management. Specific management committees ensure that
major risks are identified, measured, and controlled against
established limits. These management committees include:
Credit Committee;
Assets and Liabilities Committee;
Operational and IT Risk Management Committee;
and
Information Technology Steering Committee.
an effective Internal Capital Adequacy Assessment Process

and other risk management processes. Our framework
focuses on three key components:
Sound governance;
Effective processes, information systems, and controls;
and
Timely and reliable data.
Our board fulfills its risk management function through
the Risk Management Committee. More junior
committees and units within our organization manage
more granular financial and non-financial exposures. Our
Risk Management Office is headed by our Chief Risk
Officer. The CRO is ultimately responsible for formulating
risk management policies and methodologies in alignment
with the strategy of the bank, ensuring that risks are
rationally undertaken and within the banks risk appetite,
as well as commensurate to maximize returns on capital.
The CRO and the RMO facilitate risk management
learning programs and promote best practices on an
enterprise-wide basis.
The membership of these committees consist of the banks

senior management (or, in the case of the ITSC, nonexecutive board members), who are subject matter experts
in areas of knowledge relevant to the respective committees.
Members include client specialists, product specialists,
members of the Risk Management Office, and other senior
executives.
We track risks according to three major classifications:

credit, market, and operational risks. Credit risk arises from
the banks core lending and investing business; market risk
arises from the banks business in managing interest rate and
liquidity gaps, as well as in the trading and distribution of
fixed income, foreign exchange, and derivative instruments
(as allowed by regulation); and operational risk arises from
the banks people and processes, its information technology,
threats to the security of its facilities, personnel, or data,
business interruption risk, reputational risk, and compliance
obligations to regulatory or taxing authorities, among others.
Risk Management
We espouse a comprehensive risk management and capital
management framework, which integrates the management
of all our risk exposures. We work to ensure that the
bank has adequate liquidity and capital to mitigate risks.
Our framework conforms not only to our own rigorous
standards, but also to Bangko Sentral directives promoting
Financial risk management is carried out by a dedicated

team of skilled risk managers and senior officers who have
extensive prior operational experience working within
our firm. Our risk managers regularly monitor key risk
indicators, and report exposures against carefully established
credit, market, and operational and IT risk metrics and
limits approved by our Risk Management Committee.
Credit Risk. We have a Credit Policy and Risk Management

unit responsible for the overall management of the banks
credit risk. CPRM is accountable to the RMC in assisting to
establish the banks risk appetite and in the RMCs oversight
function on credit risk. In addition, the CPRM supports
senior management in ensuring the quality of the banks loan
portfolio by identifying, measuring, monitoring, reporting,
and controlling credit risks.
CPRM ensures that the banks stringent underwriting
standards and rating parameters are met by the various
lending units. In 2014, the bank experienced significant
growth in loan volumes, and did so in general compliance
with regulatory and prudential requirements relating to credit
risk management (for example, DOSRI restrictions, single
borrowers limits, and credit concentration, among others).
The bank continues to maintain a diversified loan portfolio
with no significant concentrations. Our top 20 group
exposures generally remain within the internal single
borrowers limit and operate in diversified industries. Our
commercial loans account for about 78 percent of the total
portfolio, consumer loans account for the balance of 22
percent. Large corporate borrowers comprised approximately
85 percent of commercial loans, while SMEs account for the
remaining 15 percent.
Credit reviews are regularly conducted to assess that the
credit processfrom loan origination, credit analysis,
approval, implementation, and administrationconforms
to the standards set in our internal policies and complies
with regulatory requirements. In 2014, we reviewed eight
key lending units and portfolios nationwide, and its reviews
revealed generally acceptable credit performance and
portfolio qualities. As the banks loan portfolio grew, asset
quality generally improved in terms of both non-performing
loan amounts and ratio. As of year-end 2014, the banks
gross 90-day NPL ratio stood at 1.52 percent and net 30-day
NPL ratio at 0.5 percent, the lowest for the bank in the last
seven years. In accordance with PFRS reporting standards,
NPL reserves cover improved in 2014 to 109 percent from
105 percent in 2013.
Asset quality is reviewed and monitored through the regular

monitoring and validation of the internal credit risk rating
of corporate borrowers proposed by the lending units. We
have developed and used internal credit risk rating system
and scoring models, which are then independently validated
by a reputable independent third party, jointly with our Risk
Models Validation unit. Regular monitoring of our ICRRS
and scoring models is done to ensure that their predictive
powers remain both qualitatively and statistically acceptable.
In 2014, we implemented enhanced retail housing credit
risk scorecards and an internal credit risk rating model
for corporate SMEs, incorporating probability of default
estimates into our models, as part of the banks preparations
to transition into a Basel Internal Ratings-Based (Foundation
IRB) approach.
Regular reviews of the appropriateness of classifications and
impairment rates of classified loan accounts are conducted
for proper assessment of loan quality. Similarly, collective
impairment of unclassified corporate accounts is determined
based on the PDs of each rating grade. On the other hand,
consumer loans are impaired through a portfolio-approach
methodology using historical flow rates as basis for the
impairment factors.
Stress tests are regularly conducted on the banks loan
portfolio to determine the impact of various economic
scenarios, to surface any undue credit concentration risk
and to comply with regulatory reporting. Results showed
that even on an adverse macro-economic scenario, our
capital adequacy ratio will remain above the regulatory CAR
requirement of 10 percent.
We undergo continuous cycles of improvement, in our quest
to enhance the banks credit policies and guidelines, as well
as review lending programs to ensure that credit parameters
meet the banks standards, regulatory compliance and best
practices, while supporting our firms growth strategies. Our
credit risk information system is currently being upgraded to
a more robust system that will enable more granular analysis
of the loan portfolio while delivering timely and accurate
reporting of the banks loan structures, credit concentrations,
2014 Annual Report
45
and other risk data analytics. These efforts are undertaken

in recognition of the Bangko Sentrals recent policy memo,
Guidelines on Sound Credit Risk Management Practices.
Market Risk. Our Market Risk Management unit
implements risk metrics that guide dealers in preserving
incomes during times of volatility and uncertainty. It
develops forward-looking risk scenarios and analyze their
impact on profitability, leading to the establishment of
market and liquidity risk measurements and limits that
balance risk appetite with profitability goals. In 2014, this
unit oversaw a rigorous regime of market risk discipline
which led to significant growth in our total comprehensive
income.
46
The year 2014 was characterized by increased volatility in

both global and local financial markets. Against this, we
implemented stringent measures to manage the market
risk exposures of the bank, in particular, the risk of rising
interest rates. Furthermore, we introduced supplemental
measures to highlight sensitivities to movements in
additional risk factors, as well as risk-adjusted performance
measures to highlight quality of earnings. A significant
area of focus for us this past year was improving our
liquidity and repricing gap models, its assumptions, as
well as incorporating global scenarios in our stress test
models. This headway in liquidity and interest rate risk
management is aligned with building our foundation of
integrity and prudent risk management.
We continued to make strides in advancing our asset and
liability management capabilities with the rollout of our
fully automated ALM system. This robust risk engine ran
countless scenario analyses under both static and dynamic
balance sheet conditions. All these enhancements are
executed by our team of highly talented risk officers with
diverse experiences in market risk, dealing room risk, trading
and treasury operations. With our market risk (for value-atrisk, calculations) and ALM risk systems fully operational,
our team of MRM professionals is well equipped for an even
more robust market risk management regime as the scale of
our businesses continues to expand.
Operational and Information Technology Risk.

Our Operational and Information Technology Risk
Management unit monitors risks arising from inadequate
or failed internal processes, people, and systems
(for example, fraud, product flaws, breakdowns in
informational or physical safeguards) or from external
events (natural disasters, electrical or telecommunication
failures). Operational risks are embedded in all banking
products and services, and may include risks that give
rise to adverse legal, tax, regulatory, or reputational
consequences. Information technology is a significant
risk factor assumed in conjunction with operational risk,
given the highly automated nature of the banks processes
and services. We define IT risk as the risk of any adverse
outcome arising from the use of or reliance on information
systems; as such, IT risk includes, but are not limited to,
information security, service availability, reliability and
availability of IT operations, completion-on-specification
of IT development projects, and regulatory compliance
pursuant to the Bangko Sentrals policy guidelines on
Information Technology Risk Management.
The OITRM unit formulates policies, develops, and
monitors KRIs, and oversees thoroughness of bank-wide
risk and control self-assessments, loss incident management
processes, and risk management awareness and appreciation
programs. A significant resource and governance tool
employed by the OITRM unit to perform its function are
the banks Business Risk Officers. We have several BROs
embedded across the organization in key functional units,
such as information systems, retail clients, corporate
clients, financial products and services, asset management,
global markets and centralized operations and services.
The BROs are responsible to the OITRM for promoting a
sound risk management culture, implementing operational
and IT risk management best practices as determined
by the OITRM unit, and ensuring timely submission of
operational and IT risk reports. In addition to employing
BROs, in 2014, the bank reinstituted the operational
and IT risk management committee to provide oversight
over its OITRM unit, in accordance with regulatory
requirements.
We manage our operational and IT risks by ensuring such

risks are thoroughly identified, monitored, reported, and
mitigated. We have defined clear responsibilities related
to the performance of the risk management function, as
well as the accountabilities, methods, and tools employed
to identify and mitigate operational and IT risks in our
operating units. We require operating units to undertake
regular self-assessments to identify risks, assess the design of
controls and the performance effectiveness of such controls.
KRIs are used to monitor risk profiles, trigger early warning
alerts, and instigate mitigating action. We measure loss
incidents diligently, with specific guidelines and processes in
place to ensure timely reporting, analysis of root cause and
business impact, and speedy problem resolution.
Our risk management processes are ingrained in our new
product development efforts. From inception to launch, new
products are subject to design and testing activities aimed
at safeguarding both the bank and our clients from the risk
of economic loss, operational disruption, or compromise of
personal or financial data. We are particularly diligent in this
respect with our online products and services.
We are disciplined about disaster preparedness. To mitigate
the impact of adverse events, we have in place business
continuity and disaster recovery plans to ensure the
recovery and availability of all critical customer-servicing
infrastructure. To meet the increasing demand on business
continuity preparedness of the banks operations, we have
also installed bigger and more robust BCP sites for critical
head office services.
For information systems, the bank operates a secondary
data center, which houses backup facilities that provide
processing, memory, network, and storage infrastructure that
allows the bank to operate its critical application systems.
The secondary data center is located at a site significantly
distant from the banks primary data center. Furthermore,
business units performing critical functions in the delivery of
the banks products, services, and channels have completed
an annual testing of their respective BCPs. Our employees
undergo continuous BCP training to promote awareness.
We are vigilant about physical and information security.

To enhance our monitoring and reporting of information
security risks, our enterprise information security
management team is undertaking efforts to identify
information assets and build an asset register, and to
implement and conduct an information security risk
assessment process methodology that identifies threats,
vulnerabilities, and appropriate mitigating measures.

Our Central Security Office is responsible for the security of
the banks facilities and the overall safety of our customers and
employees. Its main objectives are the protection of personnel
and property, close monitoring and resolution of incidents,
the rescue of personnel in distress, and the prevention and
prosecution of crime. The CSOs mission is performed using
a three-tiered defense system which comprises of intelligence,
target hardening, and incident management. Cooperation with
law enforcement agencies is encouraged whenever appropriate.
In addition, a safety officer has been designated to be primarily
responsible for the safety activities and requirements of the
bank, including monitoring of threats that might impact
adversely on the general well-being of bank operations.
We have adopted technologies which integrate the banks
alarms, access controls, and centralized closed circuit TV
systems. To date, all branches are equipped with CCTVs
and selected branches are connected to our central video
and alarm monitoring system. Certain sensitive operational
centers are also connected to this system, and monitored
24/7 at our centralized Security Operations Center.
We prepare extensively against risk of litigation or regulatory
penalty. Our Legal Affairs and Dispute Resolution unit
serves as our main legal resource. As such, it plays a critical
preventive role by issuing legal advisory bulletins that
highlight legal issues, new laws, and regulatory fiats that
impact our products and services; and tax advisory bulletins
that promote tax compliance and awareness of initiatives
of the Bureau of Internal Revenue and other regulatory
and legislative entities. This unit also provides training
and seminars in support of its bulletins, and has an active
documentation team that reviews all bank contracts.
2014 Annual Report
47
Beyond its preventive role, our legal affairs unit plays a

significant role in mitigating losses when the bank is involved
in litigation. It handles all criminal, civil and administrative
cases, that is, defensive cases filed by any party against the
bank for any reason; cases filed on behalf of the bank to
assert its rights and interests, claim for damages and/or to
prosecute errant employees and other parties; and to recover
or collect from delinquent borrowers. To expedite resolution
of cases, the unit adopts innovative litigation techniques and
alternative modes of dispute resolution, with the sole objective
of protecting the rights and interests of the bank.
48
Model Risk. We continuously test the quality of our risk

models. Our Risk Models Validation unit is responsible
for conducting the independent model validation activities
of the banks risk and financial models. The independent
validation of risk models is governed by the banks model
risk management policy and governance framework, aimed
at ensuring an active and effective model risk management
across the BPI Group.
Asset Management and Trust Risk. In 2014, we have also
fully integrated the accountability of the risk management
unit of the asset management and trust business under
the auspices of the banks Chief Risk Officer and the Risk
Management Office. In so doing, we have enforced
bank-wide standards on the units risk management policies
and methodologies, KRIs, and reporting, altogether now
under the purview with the banks other self-assessment and
control units.
Management of Risk Exposure
The bank uses various methodologies, tools, and systems
to measure its risk exposure. Our credit risk exposures are
assessed using internal credit risk rating models that take
into account our existing exposure to the counterparty (by
asset class), the counterpartys probability of default, and
the value recoverable from the counterparty in the event of
default. Credit risk rating and probability of default models
are developed internally by our CPRM unit using statistical
methods on quantitative and qualitative risk factors, including
credit judgment overlaysto account for borrower-specific

and other factors that cannot be modeled statistically. Our
models are independently validated, and their predictive
power and performance are regularly monitored.
Credit risk exposures are classified and managed according
to rating grades. Each rating grade has a corresponding
probability of default that exponentially increases as a rated
account moves from the best to the worst rating grade. The
migration of accounts between rating grades is regularly
monitored and analyzed. Loss provisioning also takes into
account the rating grade of each exposure. While specific
reserves are set up for defaulted exposures, provisioning for
non-default exposures is based on expected loss, which is a
function of the probability of default and loss given default
(under standardized approach). Expected losses are constantly
assessed and measured following our internal policies and the
Bangko Sentrals regulatory provisioning policies.
In compliance with Basel and Bangko Sentral standards
on minimum capital requirements, our CAR calculation
is computed based on qualifying capital and riskweighted assets. We also measure the banks credit risk
exposures in terms of regulatory capital requirement
using the standardized approach. Using this method, our
credit exposures to sovereigns, corporate and banks are
risk-weighted to reflect credit assessment from eligible
ratings agencies (Fitch, Moodys, Standard & Poors, and
PhilRatings, where applicable). This method also allows for
the use of eligible collaterals (cash, financial instruments,
and guarantees) to mitigate credit risk. The bank ensures
all documentation used in collateralized or guaranteed
transactions are binding on all parties and legally enforceable
in the relevant jurisdiction.
Using the Basel regulatory standardized approach, our total
credit risk-weighted assets as of December 31, 2014 amounted
to P757.0 billion, and are composed of on-book credit
exposures after risk mitigation of P748.7 billion, off-balance
sheet risk-weighted assets of P5.7 billion and counterparty
risk-weighted assets in the trading book of P3.4 billion.
The table below provides a summary of our credit risk-weighted assets for 2014 and 2013:
AMOUNT
2014
CREDIT RWAS (P Mn)

Total RWA (On-Balance Sheet) 0/
748,720
612,242
Total RWA (Off-Balance Sheet) 0/
5,664
6,475
Total Counterparty RWA (Banking Book) /

Total Counterparty RWA (Trading Book)
Total RWA Credit-Linked Notes (Banking Book)
Total Gross RWA
37
3,374
93
757,888
Deductions: General Loan Loss Provision 2/

Total Credit RWAs
(864)
757,024
2,312
621,029
(1,236)
619,794
/ Risk-weighted assets (RWA)
1
/ For derivatives and repo-style transactions; for 2014, the bank has HTM (Banking Book), with 50-percent risk weight, and P98-M credit
equivalent amount (CEA)
0
/ In excess of the amount permitted to be included in Upper Tier 2
The Banks credit risk exposures on both on- and off-balance sheet assets after mitigation, broken down by risk buckets, for 2014
and 2013 are as follows:
Schedule A
December 31, 2014
RWA (On-Balance Sheet)
(P Mn)
Cash on hand
Checks and other cash items
Due from BSP
Due from other banks
Available-for-sale (AFS)
Held-to-maturity (HTM)
UDSCL 2/
Loans and receivables
Loans and receivables - Others 3/
Sales contract receivables
ROPA 4/
Sub-Total
Other assets
Total exposures, plus other assets
Total risk-weighted OBSA (no CRM) 0/5/
Total Credit Risk

Exposures after
0%
Risk Mitigation
38,185
38,185
293
211,957
211,957
21,594
50,087
20,345
208,905 173,987

766,598
0
501
501
38 4,344 1,302,504 444,975
13,685
1,316,189 444,975

-
Total risk-weighted OBSA (with CRM) 5/

Total RWA (On-Balance Sheet)
Risk Weights
20 %
50 %
75 %
100 %
150 %
Total CRWA
1
/
293
38,185
293
211,957
6,999
7,506
818
64,575
80,192
80,192
16,038
14,447
15,940
24,075
27,783
82,246
82,246
41,123
148
5,402
2,434
609,774
38
617,795
13,685
631,480
631,480
5,537
4,344
9,881
9,881
14,822
21,594
49,193
201,314
766,598
501
38
4,344
1,294,019
13,685
1,307,704
747,661
219
16,258
706 134
41,829 44,198 631,614
14,822
1,059
748,720
58,930
58,930
58,930
44,198
/ On-balance sheet assets (OBSA)

/ Credit risk-weighted assets
2
/ Unquoted debt securities classified as loans
3
/ Loans and receivables arising from repurchase agreements, certificates of assignment/participation with
recourse, and securities lending and borrowing transactions
4
/ Real and other properties acquired
5
/ Not covered by, and covered by credit risk mitigants, respectively
0
1
2013
2014 Annual Report
49
December 31, 2013
December 31, 2013

Total Credit Risk
Exposures after
0%
Risk Mitigation
25,502 25,502
219
244,547 244,547
15,803
89,960 68,045
95,702 68,237
20%
50%
219
5,022
5,416
73
8,577
10,015
16,204
431
608,003
11,518
78
5,225
4
11,518
-
37,268
-
36,830
-
41,192 487,113
67
-
431
5,596
11
5,225
431
608,003
11,518
78
5,225
1,096,988 417,853
21,152
1,118,140 417,853
-
47,998
47,998
9,600
71,625
71,625
35,813
41,192 497,036
21,152
41,192 518,188
30,894 518,188
11,264
11,264
16,896
1,086,969
21,152
1,108,121
611,391
271
467
113
Total risk-weighted OBSA (with CRM) 5/
Total RWA (On-Balance Sheet)
9,870 36,280 30,894 518,302

0
/ On-balance sheet assets (OBSA)
1
2
/ Unquoted debt securities classified as loans
3
/ Loans and receivables arising from repurchase agreements, certificates of assignment/participation with
recourse, and securities lending and borrowing transactions
4
/ Real and other properties acquired
5
/ Not covered by, and covered by credit risk mitigants, respectively
16,896
851
612,242
RWA (On-Balance Sheet)

(P Mn)
Cash on hand
Checks and other cash items
Due from BSP
Available-for-sale (AFS)
Held-to-maturity (HTM)
UDSCL 2/
Loans and receivables - Others 3/
Sales contract receivables
ROPA 4/
Sub-Total
Other assets
Total exposures, plus other assets
Total risk-weighted OBSA (no CRM) 5/
50
Risk Weights
75%
100%
2,204
5,385
2,267
150%
-
Total CRWA 1/
Direct credit substitutes 2/

Transaction-related contingencies 3/
Trade-related contingencies 4/
Total RWA (Off-Balance Sheet)
Risk Weights
0%
3,467
869
1,613
20 %
4
0
4
50 %
-
75 %
707
16
87
809
100 %
2,506
848
1,497
4,851
150 %
-
50 %
-
75 %
693
61
58
812
100 %
2,603
1,586
1,473
5,662
Total CRWA 1/
150 %
-
3,296
1,647
1,531
6,475
December 31, 2014

Counterparty Assets
Trading Book (P Mn)
SCHEDULE B
CEA 0/
20 %
1
1
0%
SCHEDULE C
December 31, 2014

RWA (Off-Balance Sheet)
(P Mn)
Risk Weights
CEA 0/
Direct credit substitutes 2/

3,527
Transaction-related contingencies 3/
1,667
Trade-related contingencies 4/
1,553
Total RWA (Off-Balance Sheet)
0
/ Credit equivalent amount
1
2
/ Such as general guarantees of indebtedness and acceptances
3
/ Such as performance bonds, bid bonds, warranties and stand-by LCs related to particular transactions
4
/ Arising from movement of goods, such as documentary credits collateralized by the underlying shipments,
and commitments with an original maturity of up to one (1) year
25,502
219
244,547
15,803
88,862
86,781
RWA (Off-Balance Sheet)

(P Mn)
Total CRWA 1/
3,216
864
1,584
5,664
Derivative Exposures:
Exchange Rate
Interest Rate
Credit Derivatives
CEA 0/
0%
5,717
707
67
Total Counterparty RWA 2/

of Derivative Transactions
Risk Weights
50 %
99
2,259
33
262
34
20 %
100 %
Total CRWA 1/
150 %
669
19
-
3,027
313
34
3,374
132
2,555
688
20 %
50
23
Risk Weights
50 %
1,182
123
22
100 %
910
1
December 31, 2013

Counterparty Assets
Trading Book (P Mn)
Derivative Exposures:
Exchange Rate
Interest Rate
Credit Derivatives
Total Counterparty RWA 2/
of Derivative Transactions
CEA 0/
3,524
364
44
0%
73
/ Credit equivalent amount

2
0
1
2014 Annual Report
1,327
912
150 %
Total CRWA 1/
2,142
148
22
2,312
51
As of end-2014, our total outstanding investment in

structured products was $155.0 million, composed of
investments in credit-linked notes (53 percent), range
accrual notes (32 percent) and collared floaters (15 percent).
The banks exposure on selling credit protection is limited to
investments in CLNs.
52
We manage the market risk exposures of both our trading

and non-trading portfolios. Our assets in both on- and
off-balance sheet trading portfolios are subject to trading
gains and losses. Market risk exposure from these portfolios
is measured by VaR models. As part of the management of
market risk, the bank undertakes various hedging strategies.
The bank also enters into interest rate swaps to match the
interest rate risk associated with fixed-rate long-term debt
securities. In terms of capital usage using the standardized
approach, total market risk-weighted assets stood at P25.6
billion as of end-2014, of which foreign exchange exposure
accounted for more than half, followed by interest rate
exposures and equity exposure, respectively.
The table below presents the breakdown of the banks market
risk-weighted assets for 2014 and 2013:
MARKET RWA (P Mn)
Using Standardized Approach:
Foreign Exposures
Interest Rate Exposures
Equity Exposures
TOTAL MARKET RWA
AMOUNT
2014
15,518
8,811
1,238
25,567
2013
4,766
3,194
565
8,525
Our liquidity profile is observed and monitored using

the minimum cumulative liquidity gap metric, which is
computed monthly. MCLG measures net inflow levels of the
bank. BPI, on a consolidated basis, should be liquid enough
to provide sufficient buffer for critical liquidity situations.
A red flag is raised should the MCLG projected within the
next quarter breaches the RMC-prescribed MCLG limit.
Interest rate risk measurement is fundamental to our
banking business. Movements in interest rates can expose the
bank to adverse shifts in the level of net interest income and
can impair the underlying values of its assets and liabilities.
BPI is exposed to interest rate risk on unfavorable changes
in the rate curves, which would have adverse effects on the
Groups earnings and its economic value of equity. Interest
rate risk exposure arising from the core banking activities is
measured by:

Earnings-at-risk (EaR), or the potential deterioration

in net interest income over the next 12 months due to
adverse movements in interest rates; and
Balance Sheet Value-at-Risk (BSVaR), or the impact
on the economic value of the future cash flows in the
banking book due to changes in interest rates.
Our interest rate gap model is measured based on the

repricing schedule of the balance sheet accounts. To
illustrate, loans are mapped on either the maturity date
(for accounts paying fixed interest rate) or next interest
rate review date (for accounts paying floating interest
rate). Meanwhile, for deposit accounts that do not have
defined maturity dates (e.g. savings and current accounts),
repricing schedules are derived through a study on the
pattern of the banks historical review of deposit rates and
of the depositors behavior.
As of end December 2014, the banks BSVaR level (P2.0

billion) and EaR level (P90 million) were well within the
banks established risk appetite.
Our exposure to operational risks are identified, assessed,
and monitored as an integral part of risk assessment
processes. We currently use the Basel regulatory basic
indicator approach to quantify operational risk-weighted
assets, by using the historical total annual gross income as
the main measure of risk. For the year 2014, the banks total
operational risk-weighted assets stood at P83.1 billion.
The table below shows the banks operational risk-weighted
assets for the years 2014 and 2013:
OPERATIONAL RWA (P Mn)
Gross Income (a)
Capital Requirement 1/
Average Capital Requirement (b) 2/
AMOUNT
2014
2013
48,803 43,750
7,321
6,563
6,649
6,179
8,312
7,724
Adjusted Capital Charge (c) 3/
TOTAL OPERATIONAL RWA 4/
83,117 77,237
0
1
/ (a) multiplied by 15 percent
2
/ Average of 15 percent of (a) for the past (3) years
3
/ (b) multiplied by 125 percent
4
/ (c) multiplied by factor 10
In 2014, we saw the increasing industry-wide trend in

credit card fraud, particularly for the card-not-present
fraud, and ATM/debit card skimming incidents, so the
OITRM unit continued to closely monitor through
established measurements and limits on risk indicators,
and implemented mitigating measures. We have employed
a real-time card fraud detection system that helped the
bank significantly improve fraud detection, false positive
rates, and fraud case handling efficiencies. Furthermore, we

continuously strengthened our security awareness program
that provides our customers with relevant information
about the risks associated with online and other banking
transactions.
As part of the initiatives to advance risk management
methodologies, the banks OITRM unit has begun stress
testing through scenario analysis to support the internal
capital assessment for operational and IT risks. Through
a series of stress scenarios, OITRM is able to identify,
analyze, and assess the impact of unexpected and severe
operational risk events. This exercise ensures that the
impact of high severity events are captured during risk
assessment, especially those not yet reflected in the banks
existing historical loss data.
Capital Adequacy
Our Strategic and Corporate Planning Division oversees
the management of the banks capital adequacy. Capital
adequacy ratio is the ratio of the banks total qualifying
capital to the standard risk weights assigned to the banks
assets, and it measures the capability of its capital funds to
cover its various business risks. This division also ensures
compliance with regulatory and internal minimum capital
adequacy requirements, referred to as the banks internal
minimum CAR, or IMCAR, and the CAR management
action trigger, or CARMAT, which incorporates the banks
internal capital buffers and limit trigger, and captures risks
beyond Pillar 1 risks (credit, market, and operational).
Furthermore, as the central planning unit of the bank, this
division is responsible for raising all strategic capital needs
of the bank, as well as initiating approvals for dividend
payments to shareholders.
2014 Annual Report
53
BPI submits an Internal Capital Adequacy Assessment

Process, or ICAAP, document annually to the Bangko
Sentral, in full accordance with the Basel-Pillar II guidelines.
As of December 31, 2014, BPIs solo (parent) and
consolidated CAR stood at 13.56 percent and 14.85 percent
respectively, well within the regulatory requirement of
10.0 percent, and above the banks internally set IMCAR
and CARMAT. The banks solo and consolidated common
equity tier 1 capital at 12.69 percent and 13.97 percent,
respectively, compare favorably with regulatory CAR,
IMCAR and CARMAT.
The banks total qualifying capital for the years ended
2014 and 2013 were P128.5 billion and P96.7 billion,
respectively. This years qualifying capital grew at a significant
rate owing to a P25-billion rights issue completed in
February 2014.
54
The banks total qualifying capital for 2014 and 2013 were
largely composed of CET1 capital and Tier 1 at 93.7 percent
and 95.2 percent, respectively.
The table below sets out the banks CAR components for
2014 and December 2013:
Risk
(P Mn)
Credit Risk
Market Risk
Operational Risk
TOTAL
Capital Adequacy
CET1/Net Tier1 1
Tier2/Net Tier2 2
Total QC
Total CRWA 4
Total MRWA 5
Total ORWA 6
TRWA 7
Consolidated Ratios (%)
CAR
CET1/Tier 1
Solo (Parent) Ratios (%)
CAR
CET1/Tier 1
Regulatory Capital
2014
2013
75,702
61,979
2,557
853
8,312
7,724
86,571
70,556
Amount (P Mn)
2014
2013
120,940
92,007
7,579
4,648
128,519
96,655
757,024
619,794
25,567
8,525
83,117
77,237
865,708
705,556
14.85
13.97
13.70
13.04
13.56
12.69
12.15
12.15
Common Equity Tier 1 Capital/Net Tier 1

Tier 2 Capital/Net Tier 2
Qualifying Capital
Credit risk-weighted assets
Market risk-weighted assets
Operational risk-weighted assets
Total risk-weighted assets
The next table shows the composition of the banks capital structure and total qualifying capital.
Total Gross Qualifying Capital Breakdown
December 31, 2014
Capital Structure (P Mn)
CET1 /Tier 1
Core Capital
Paid-up common stock
Additional paid-in capital
Retained Earnings
Undivided profits
Net unrealized gains or losses on AFS securities
Cumulative foreign currency translation
Minority interest 1
Net unrealized gains on AFS equities 2
General loan loss provision 3
Deductions
Net unrealized losses on AFS equities 4
Total O/S unsecured credit accommodations 5
Total O/S unsecured loans 6
Deferred tax 7
Other intangible assets
Defined benefit pension fund assets (liabilities)
Investments in equity 8
Significant minority investments 9
Other equity investments 10
Gross Qualifying Capital
Required deductions 11/
TOTAL QUALIFYING CAPITAL
% to Total
139,604
39,272
29,260
56,433
18,538
(4,013)
(278)
391

18,664

1,937
1,766
6,644
2,045
10
1,960
2,567
1,735
120,940

120,940
94%
December 31, 2013
Tier 2
TOTAL
Tier 1
Tier 2
7,579
-
7,579
7,579

7,579
6%
147,183
39,272
29,260
56,433
18,538
(4,013)
(278)
391
7,579
18,664
1,937
1,766
6,644
2,045
10
1,960
2,567
1,735
128,519
128,519
100%
103,443
35,564
8,235
41,716
18,007

(213)
133
9,826
20
1,930

7,877

93,616
(1,609)
92,007
95%
6,257
47
6,210
6,257
(1,609)
4,648
5%
TOTAL
109,700
35,564
8,235
41,716
18,007
(213)
133
47
6,210
9,826
20
1,930
7,877
99,873
(3,218)
96,655
100%
For 2014, minority interest in subsidiary banks, which are less than wholly-owned (for consolidated basis)
For 2013, minority interest in subsidiary financial-allied undertakings, which are less than wholly-owned (for consolidated basis)
Net unrealized gains on available for sale equity securities purchased (subject to a 55-percent discount)
General loan loss provision, limited to a maximum of 1 percent of credit risk-weighted assets, and any amount in excess thereof shall be deducted from the credit
risk-weighted assets in computing the denominator of the risk-based capital ratio
Net unrealized losses on available for sale equity securities purchased
For 2014, total outstanding unsecured credit accommodations, both direct and indirect, to directors, officers, stockholders and their related interests (DOSRI); for
2013, total outstanding unsecured credit accommodations, both direct and indirect, to DOSRI (net of specific provisions, if any), and unsecured loans, other credit
accommodations and guarantees granted to subsidiaries and affiliates (net of specific provisions, if any) per BSP Circular 560
Total outstanding unsecured loans, other credit accommodations and guarantees granted to subsidiaries and affiliates
For 2014, deferred tax assets. For 2013, deferred income tax (net of allowance for impairment, if any)
Investments in equity of unconsolidated subsidiary securities dealers/brokers and insurance companies after deducting related goodwill, if any (for both solo and
consolidated bases)
Significant minority investments (10-50 percent of voting stock) in securities dealers/brokers and insurance companies, after deducting related goodwill, if any (for
both solo and consolidated bases)
Other equity investments in non-financial allied undertakings and non-allied undertakings
Investments in equity of unconsolidated subsidiary securities dealers/brokers, insurance companies, and non-financial allied undertakings, after deducting related
goodwill, if any (for both solo and consolidated bases)
2014 Annual Report
55
A summary of our CAR is set forth in our audited financial

statements, attached herewith, under Note 3.7 (Capital
Management). Computation of the banks CAR in the
AFS was primarily based on the CAR reporting template
provided by Bangko Sentral Circular No. 538.
In preparation for the phased-in implementation of
Basel III capital and liquidity reforms by the BSP
effective January 2014 and moving forward, the bank
has performed quantitative impact studies on credit
value adjustment for Treasury credit instruments and
asset correlation, and identified the transition and
implementation plans to be able to meet the revised
minimum capital requirements prescribed by the Basel
regime. Key officers of the bank have had in-depth and
relevant training on risk management best practices and
other Basel III-related topics.
56
Related Party Transactions

In the normal course of business, the bank transacts with
related parties which consist of its directors, officers,
stockholders and related interest, subsidiaries and affiliates
(including those under the Ayala group of companies),
as well as other related parties (as defined in the banks
internal policy) who may have a significant influence in a
transaction.
These transactions involve credit and non-credit exposures
such as borrowings, guarantees, agreements for the periodic
provision of leases or other services, asset purchases
and sales, derivative transactions, trust transactions,
investments, and the purchase or sale of goods. The bank
invests significant effort in ensuring that transactions with
related parties are normal banking activities and are done
at arms length, particularly, on terms and conditions
comparable to those offered to non-related parties or to
similar transactions in the market. The bank is committed
to ensure strict compliance with laws, regulations and
reporting requirements relating to DOSRI and related
party transactions. The board has a Related Party
Transactions Committee, consisting of four directors and

headed by an independent director, to vet all related party
transactions crossing certain thresholds of materiality.
The committee is supported by the RPT Vetting unit of
the RMO, which is responsible for the coordination and
documentation of transactions of the recommending
business units prior to submission to the RPTC.
The banks Chief Audit Executive and Chief Compliance
Officer also sit as non-voting members of the RPTC and
perform post-reviews to ensure proper implementation of
related party transactions.
Regulatory Compliance
Our Compliance Office is charged with nurturing the
banks culture for integrity, ethical business practice, and
fair dealing. It is directly accountable to the banks Audit
Committee. While we are interested in compliance with
regulations that impact usin particular, those of the
Bangko Sentral, Securities and Exchange Commission, and
the Philippine Deposit Insurance Corporationwe value
most our reputation and the fact that we are trusted by our
shareholders, our clients, our employees, our partners, and
members of our community.
The Compliance Office oversees the implementation of the
banks enterprise-wide compliance programs. The programs
take into account the size and complexity of the bank, the
relevant rules and regulations that affect its operations, and
the business risks that may arise due to non-compliance. By
using regulatory and self-assessment compliance matrices,
compliance measures are formulated to mitigate identified
business risks and tested to ensure effectiveness.
The Compliance Office is also supported by the accountability
of 14 Group Compliance Coordinating Officers who are
embedded in the operational units throughout the bank.
The GCCOs are charged with enforcing Compliance
Office initiatives, as well as providing timely reports to the
Compliance Office.
The bank has implemented a three-layered compliance

testing and monitoring process, which include:
Program, the banks anti-money laundering program covers

all its subsidiaries and affiliates.
1.
2.
Our program aims to implement sound anti-money

laundering practices and combat terrorist financing and
other financial crimes. It consists of:
3.
Unit self-assessment testing, conducted by GCCOs;

Independent random testing, performed by the
Compliance Office; and
Independent periodic review by the banks Internal
Audit unit, whose results are reported regularly to the
banks Audit Committee.
1.
2.
Compliance to the banks corporate governance manual,

policies, and code of conduct is enforced through selfregulation within the business units, and independent
reviews conducted by the Compliance Office and Internal
Audit. Results of these reviews are elevated to the banks
Corporate Governance Committee.
3.
4.
5.
The Compliance Office promotes adherence and awareness

to laws, rules and regulations by electronically posting
information and documents in a compliance database
that is accessible to all employees. Regular meetings are
conducted by the Compliance Office with the GCCOs to
discuss the impact of new regulations, decide on the required
compliance measures and amend compliance matrices as
necessary. Through continued liaison and dialogue with
regulators, the Compliance Office ensures the prompt
dissemination of new regulations and other developments
affecting bank operations.
Anti-Money Laundering
We place great significance on the prevention of financial
crimes, as they pose a significant threat to our reputation.
Under the purview of the Compliance Office, the banks
Anti-Money Laundering Unit is responsible for monitoring
customer and counterparty transactions in compliance
with the Anti-Money Laundering Law, its implementing
rules and regulations, and Bangko Sentral Circular 706.
Developed under the guidance of the Bangko Sentrals
Money Laundering and Terrorist Financing Prevention
6.
Conscientious customer due diligence and know-yourcustomer, or KYC, processes;

Technology and automated tools to identify and detect
financial transactions of a suspicious nature;
Monitoring, periodic review, and timely reporting
of anti-money laundering-countering financing of
terrorism events to senior management and the Board;
Regular and effective AML-CFT training and awareness
programs for all personnel;
Maintenance of customer data and transaction
documents within prescribed timelines; and,
Timely updates of policies and procedures in
accordance with changes in regulations and AML and
CFT typologies.
We constantly review our program to ensure compliance

with the latest legislative and regulatory developments. The
banks specialized IT system captures information required
for covered transaction reports, and detects suspicious
transaction patterns for reporting to the Anti-Money
Laundering Council. To promote awareness, knowledge
and understanding of AML concepts, principles and
requirements, all employees are required to attend training
programs conducted by the banks AML unit or complete
our eLearning courses.
FATCA
The bank values its ability to transact efficiently in U.S.
dollars. In compliance with the Foreign Account Tax
Compliance Act of the United States, the Compliance
Office established a FATCA Compliance Unit to ensure the
consistent and effective compliance with FATCA regulations
2014 Annual Report
57
throughout the bank and its subsidiaries. FATCA is a U.S.

tax regulation designed to improve tax compliance by
U.S. persons who maintain accounts in non-U.S. financial
institutions or who transact with non-U.S. entities. Under
its rules, the bank and some of its identified subsidiaries
and affiliates are required to register with the United
States Internal Revenue Service as participating foreign
financial institutions in order to prevent the imposition of
a 30-percent withholding tax on income received from the
U.S. The registration of the bank and its covered subsidiaries
and affiliates with the IRS was completed in April 2014.
58
As required under the rules of FATCA, a Responsible

Officer has been appointed to oversee the banks compliance
with regulations, establish a program to ensure its effective
implementation and accomplish certain certifications with
the IRS. The FATCA compliance program provides for
additional requirements on customer due diligence and
documentation and new reporting guidelines to the relevant
tax authorities.
Internal Audit
Our Internal Audit unit is an independent body that
evaluates the effectiveness of the banks risk management,
internal controls, and governance processes, as well as
ensures that operating and business units adhere to internal
processes and procedures and to regulatory and legal
requirements. Internal Audit reports directly to the Board
through its Audit Committee. It also works closely with
the Risk Management Office, Compliance Office, external
auditors, and other oversight units for a comprehensive
review of risks and compliance in the institution, and
ensures that business units proactively manage the risk and
compliance exposures.
Internal Audit has an established quality assurance and
improvement program to ensure that audit activities
conform to the International Standards for the Professional
Practice of Internal Auditing. The program includes periodic
internal and external quality assessments and ongoing

monitoring of the performance of the internal audit activity.
Periodic internal assessments are conducted annually, while
external quality assessments are conducted at least once every
five years by a qualified independent validator. Internal Audit
maintains its generally conforms ratings on both internal
and external assessments, which indicate that its activities
have continuously conformed with professional standards,
code of ethics, and other internal standards.
to integrity and ethical behavior by helping to foster and

maintain an environment where all personnel can act
appropriately without fear of reprisal and be treated with
utmost confidentiality. A separate and distinct reporting and
investigation process beyond the normal reporting lines are
in place. Any violation of the banks policies and procedures
may be reported in writing, in person or through a dedicated
and confidential BPI e-mail that has been established for this
purpose.
Internal Audit continuously improves the capabilities of

its auditors through continuous education on auditing
techniques, regulations, and banking products and services.
Conflict-of-interest, insider trading, and whistleblower

policies and guidelines are included in the banks
Management and Operating Manual and Personnel Policy
Manual, each of which is recorded in electronic databases
readily accessible for guidance of our employees. Aside from
availability in these databases, our policies are regularly
announced via internal email-facility to ensure constant topof-mind awareness of the need to comply with these policies.
Conflict-of-Interest Policy
We do not tolerate those who place their interest above that
of our institution, our clients, or our business partners. We
have in place conflict-of-interest policies that elevate the
interest of the bank above that of the personal interests of
directors, officers, and employees. These policies prohibit
directors, officers, and employees from using their position
of authority or rank to directly or indirectly derive personal
gain or advantage.
Insider Trading Policy
The bank has an insider trading policy which prohibits its
directors, officers, employees, and other parties who are
considered to have knowledge of material facts that have not
been disclosed to the public, including any information that
will likely affect the market price of BPIs securities or BPI
clients securities, from buying or selling these securities for
their own personal account.
Whistleblower Policy
The bank supports a whistleblower program, an important
mechanism for preventing and detecting fraud or
misconduct, and enabling fast and coordinated incident
responses as we establish cause, remedial actions, and
damage control procedures. The bank remains committed
Communication and Information

Management is primarily responsible to the Board for the
adequate flow of information, such as but not limited to
financial information. Any variance between projections
and actual results requires managements explanation to the
Board.
The Board is committed to fully disclose at all times all
material information about the bank for the benefit of the
shareholders. All material information that could potentially
affect the banks share price is publicly disclosed in a timely
manner through the PSE and SEC. Additionally, we hold
meetings, briefings, and conferences for investors, analysts,
and members of the media.
More information on BPIs corporate governance
philosophy, policies and practices may be found in our
website, www.bpiexpressonline.com.
2014 Annual Report
59
CEZAR P. CONSING
FERNANDO ZOBEL DE AYALA
VIVIAN QUE AZCONA
ARTEMIO V. PANGANIBAN
CEZAR P. CONSING
Director, President & Chief Executive Officer
60
JAIME AUGUSTO ZOBEL DE AYALA
Board of Directors
JAIME AUGUSTO ZOBEL DE AYALA
Chairman
55 years old, Filipino, has been the Chairman of the Board of the Bank of the
Philippine Islands since 2004, and has been a member of the Board since 1990.
He was also Vice Chairman of the Board from 1995 to March 2004. He is currently
the chairman of the Executive Committee and member of the Nomination
Committee. Mr. Zobel de Ayala is also the Chairman of the Board of BPI Family
Savings Bank and BPI Capital.
Mr. Zobel de Ayala has been a director of Ayala Corporation since May 1987,
becoming Chairman and CEO in April 2006. He holds the following positions in
publicly listed companies: Chairman of Globe Telecom and Integrated MicroElectronics, and Vice Chairman of Ayala Land and Manila Water. He is also the CoChair of Ayala Foundation; Vice Chairman, AC Energy Holdings; Chairman, Harvard
Business School Asia-Pacific Advisory Board; Vice Chairman, Makati Business Club;
member, Harvard Global Advisory Council, Mitsubishi Corporation International
Advisory Committee, JP Morgan International Council, and Endeavor Philippines;
and a Philippine representative to APEC Business Advisory Council.
Mr. Zobel de Ayala obtained his BA Economics, cum laude, from Harvard
College in 1981, and his MBA from the Harvard Graduate School of Business
Administration in 1987.
55 years old, Filipino, became President and CEO of Bank of the Philippine Islands
on April 18, 2013. He served as a member of BPIs Board between February 1995
and January 2000, and from August 2004 to January 2007. He most recently
rejoined the Board in April 2010. Currently, he serves as Chairman of the banks
Credit Committee and is a member of the banks Executive, Trust, Retirement &
Pension, and Risk Management committees.
He also serves as Chairman of BPI Direct Savings Bank, BPI Europe PLC, BPI
Globe BanKO, BPI Century Tokyo and Lease Finance Corporation, and BPI Computer
Systems Corporation. He serves as Vice Chairman of BPI Capital Corporation and
BPI Foundation. He also serves as board director of BPI Family Savings Bank, BPI/
MS Insurance Corporation, and BPI-Philam Life Assurance Corporation.
Mr. Consing is a Senior Managing Director of Ayala Corporation and a
member of the Board of Partners of The Rohatyn Group, an international asset
management firm. He is also a member of the board of directors of National
Reinsurance Corporation of the Philippines and LGU Guarantee Corporation. Since
June 2010, he has served as an independent board director of Jollibee Foods
Corporation. He is a board director of Filgifts.com, Sqreem Technologies Private
Ltd. and Endeavor Philippines.
Mr. Consing joined BPI as a full-time employee in 1980, and worked in its
corporate planning and corporate banking departments. In 1985, he was seconded
to J.P. Morgan & Co., then the second largest shareholder of BPI. Over a 19-year
career with J.P. Morgan in Hong Kong and Singapore, Mr. Consing focused on loan
origination and syndication, capital markets, and mergers and acquisitions. He
was responsible for all of J.P. Morgans banking business in the Philippines, then in
Southeast Asia and ultimately, the Asia Pacific region (excluding Japan). From 1994
to 2004, he was President of J.P. Morgan Securities (Asia Pacific) Ltd.
Prior to re-joining BPI in 2013, Mr. Consing was a Partner at TRG, headed its
Hong Kong office, and was responsible for TRGs private equity businesses in Asia,
which include Arch Capital Management Co., a real estate investment firm, and
Capital Advisors Partners Asia, an infrastructure investment firm. Between 2007
and 2012, TRG owned a 40-percent stake in Premiere Development Bank, where
he served as chairman of its Executive Committee. Between 2004 and 2013,
Mr. Consing served as an independent director of CIMB Group Holdings Bhd and
CIMB Group Sdn Bhd, together one of the largest universal banking institutions in
Southeast Asia. Between 2005 and 2013, he served as an independent director of
First Gen.
Mr. Consing is a member of the Board of Advisors of De la Salle University.
Between 2003 and 2009, he was a member of the Board of Directors of the Asian
Youth Orchestra. He is currently a member of the Trilateral Commission, a global
think tank.
Mr. Consing received an AB Economics degree, magna cum laude, from De La
Salle University in 1979. In 1980, he obtained an MA in Applied Economics from
the University of Michigan, Ann Arbor.
FERNANDO ZOBEL DE AYALA
Director
54 years old, Filipino. Since April 2013, Mr. Fernando Zobel de Ayala has been Vice
Chairman of the bank, and has been a member of the Board since 1994. He is
the Chairman of the Personnel & Compensation committee, Vice Chairman of the
Executive Committee, and member of the Nomination and Trust committees. He is
also the Chairman of the Board of Trustees of BPI Foundation.
Mr. Zobel de Ayala has been a director of Ayala Corporation since May 1994,
becoming President and Chief Operating Officer in April 2006. He is the Chairman
of Ayala Land and Manila Water, and director of Globe Telecom and Integrated
Micro-Electronics. He is also the Chairman of AC International Finance, AC Energy
OCTAVIO V. ESPIRITU, MERCEDITA S. NOLLEDO and AURELIO R. MONTINOLA III
61
Holdings, and Hero Foundation; Co-Chairman of Ayala Foundation; director of LiveIt

Investments, Ayala International Holdings Limited, Honda Cars Philippines, Isuzu
Philippines, Pilipinas Shell Petroleum, Manila Peninsula, and Habitat for Humanity
International; member of the INSEAD East Asia Council, and World Presidents
Organization; chairman of Habitat for Humanitys Asia-Pacific capital campaign
steering committee; and member of the Board of Trustees of Caritas Manila,
Pilipinas Shell Foundation, Kapit Bisig para sa Ilog Pasig Advisory Board, National
Museum and the foundation of the Roman Catholic Church.
Mr. Fernando Zobel de Ayala obtained his BA Liberal Arts from Harvard
College in 1982.
VIVIAN QUE AZCONA
Director
59 years old, Filipino, is the President of the Mercury Group of Companies and
its subsidiary, Mercury Drug. In April 2014, she was elected director of the bank,
where she serves as member of the Nomination, and Personnel & Compensation
committees.
Ms. Azcona is also President of Mercury Drug Foundation. She is a Vice
President of the Philippine Retailers Association, and is also a member of the
Philippine Pharmacists Association for which she has served as an officer and
director.
A registered pharmacist, Ms. Azcona received her BS Pharmacy degree, cum
laude, from the University of Santo Tomas in 1977. She also graduated from the
Basic Management Program of the Asian Institute of Management in 1978.
ROMEO L. BERNARDO
Independent Director
60 years old, Filipino. Mr. Bernardo served as a member of the banks Board of
Directors from February 1998 to April 2001. He was elected as an independent
director in August 2002. He is the Chairman of the Nomination committee,
and a member of the Corporate Governance, Personnel & Compensation, Risk
Management, Trust, and Related Party Transaction committees. Mr. Bernardo also
sits as independent director of BPI Family Savings Bank, BPI Capital, BPI Direct
Savings Bank, BPI/MS Insurance, BPI Globe BanKO, BPI-Philam Life Assurance, and
Philippine Investment Management.
Mr. Bernardo is an independent director of the following listed companies:
Aboitiz Power, National Reinsurance Corporation of the Philippines, Globe Telecom
and RFM Corporation. He is the Chairman of the Board of Directors of Ayala Life
Fixed-Income Fund Peso, Dollar, Growth, Money Market and Euro Bond Funds and
Philippine Stock Index Fund; Vice Chairman and founding fellow of the Foundation
for Economic Freedom; President and Managing Director of Lazaro Bernardo Tiu &
Associates; member of the Board of Governors of the Management Association of
the Philippines; and advisor of Global Source/N.Y.
Mr. Bernardo graduated with BS Business Economics degree, magna cum
laude, from the University of the Philippines in 1974. He obtained his M.A.
Development Economics (top of class) from Williams College, Williamstown,
Massachusetts in 1977.
2014 Annual Report
REBECCA G. FERNANDO, ANTONIO JOSE U. PERIQUET

and ROMEO L. BERNARDO
DOLORES B. YUVIENCO
XAVIER P. LOINAZ
OCTAVIO V. ESPIRITU
62
71 years old, Filipino, has been a member of the banks Board since April 2000. Mr.
Espiritu is currently Chairman of the Risk Management and Related Party Transaction
committees, and a member of the Audit Committee.
Mr. Espiritu was the former President and Chief Executive Officer of Far East
Bank & Trust Company. He served as President of the Bankers Association of the
Philippines for three terms. He was also the Chairman of the Board of Trustees of the
Ateneo de Manila University for 14 years.
Mr. Espiritu is currently the Chairman of GANESP Ventures, and member of the
Board of Directors of International Container Terminal Services, Philippine Dealing
System Holdings Corporation and Subsidiaries; Philippine Stratbase Consultancy, and
Netvoice.
He graduated with an AB Economics degree from the Ateneo de Manila
University in 1963 and obtained his MA Economics degree from the Georgetown
University in 1966.
REBECCA G. FERNANDO
Director
66 years old, Filipino, served as director of the bank from 1995 to 2007. In 2009,
Ms. Fernando was re-elected director of the bank, where she is a member of the
following committees: Executive, Trust, Related Party Transaction, and Retirement
& Pension committees. She is a member of the Board of BPI Capital and BPI Family
Savings Bank, and Chairman of LAIKA Intertrade Corporation. She is the financial
consultant and a member of the finance boards of The Roman Catholic Archbishop of
Manila and The Roman Catholic Archbishop of Antipolo.
Ms. Fernando graduated with a BSBA degree, major in accounting, from the
University of the Philippines in 1970. She took further studies for an MBA at the
University of the Philippines and attended an Executive Program on Transnational
Business at the Pacific Asian Management Institute at the University of Hawaii. Ms.
Fernando is a certified public accountant.
XAVIER P. LOINAZ
71 years old, Filipino. From 1982 to 2004, Mr. Loinaz served as President of the
Bank of the Philippine Islands, where he has been a member of the Board of
Directors since 1982. He is the Chairman of the Audit Committee, and member of
the Nomination committee. He is an independent director of BPI Family Savings
Bank, BPI/MS Insurance, and Ayala Corporation. He was the President of the Bankers
Association of the Philippines from 1989 to 1991.
Mr. Loinaz is the Chairman of the Board of Alay Kapwa Kilusan Pangkalusugan,
XPL Manitou Properties; Vice Chairman of XPL MTJL Properties; and member of the
Board of Trustees of E. Zobel Foundation.
He graduated with an AB Economics degree from the Ateneo de Manila
University in 1963 and obtained his MBA in Finance from the Wharton School of
Pennsylvania in 1965.
AURELIO R. MONTINOLA III
Director
63 years old, Filipino. Mr. Montinola served as President and CEO of BPI from 2005
to 2013. He was the President of the Bankers Association of the Philippines for four
years, and of the Chamber of Thrift Banks for a year. He is a member of the banks
Executive, Audit, Risk Management, and Personnel & Compensation committees.
Mr. Montinola is currently the Chairman of Far Eastern University and Vice
Chairman of the Philippine Business for Education. He is a director of BPI Family
Savings Bank, BPI Capital, BPI Globe BanKO, and BPI Europe PLC. He is also the
OSCAR S. REYES
ASTRID S. TUMINEZ
Chairman of BPI/MS Insurance, BPI-Philam Life Assurance, FEU East Asia Education
Foundation, Amon Trading, and Lafarge Republic. He is a member of the Board of the
Management Association of the Philippines, and trustee of the Makati Business Club
and WWF Philippines.
He has been the recipient of the Management Man of the Year 2012 award
from the MAP, Asian Banker Leadership Award, Legion dHonneur (Chevalier) from
the French government.
Mr. Montinola obtained his MBA in 1977 from the Harvard Business School and
BS Management Engineering in 1973 from the Ateneo de Manila University.
MERCEDITA S. NOLLEDO
Director
73 years old, Filipino. Ms. Nolledo has served as director of BPI since 1991. She is the
Chairman of the Trust and Retirement & Pension committees, and member of the
Executive and Corporate Governance committees. Ms. Nolledo is the Chairman of the
Board of BPI Investment Management, and a director of BPI Family Savings Bank and
BPI Capital.
Ms. Nolledo is a director of Ayala DBS Holdings, Ayala Land Commercial REIT,
Michigan Holdings, Anvaya Cove Beach and Nature Club, Honda Cars Cebu, Honda
Cars Makati, Isuzu Automotive Dealership, Isuzu Cebu, Ayala Automotive Holdings,
and Prime Initiatives. She is a member of the Board of Trustees of Ayala Foundation
and BPI Foundation. She is Vice President of Sonoma Properties. She also served as
director of Ayala Corporation from 2004 to September 2010.
Ms. Nolledo graduated with the degree of Bachelor of Science in Business
Administration major in Accounting from the University of the Philippines in 1960
and topped the CPA exams (second place) in the same year. In 1965, she finished
Bachelor of Laws degree also from the University of the Philippines; she topped the
Bar exams (second place) that same year.
ARTEMIO V. PANGANIBAN
78 years old, Filipino. Former Chief Justice of the Supreme Court of the Philippines, Mr.
Panganiban was elected independent director of Bank of the Philippine Islands (BPI)
on April 15, 2010. He is the Chairman of the Corporate Governance committee.
Mr. Panganiban is an independent director of the following listed corporations:
Manila Electric Company, Petron, First Philippine Holdings, Metro Pacific Investment
Corporation, Robinsons Land, GMA Network, GMA Holdings, Asian Terminals, and
Philippine Long Distance Telephone Company.
He also holds the following positions: Chairman, Board of Advisers, College of
Law of the University of Asia and the Pacific; non-executive director, Jollibee Foods
Corporation; adviser, Double Dragon Properties Corporation; senior adviser, V. Mapa
Blue Falcon Honor Society and Metropolitan Bank and Trust Company; Chairman,
Board of Advisers, Metrobank Foundation and Asian Institute of Management Ramon
V. Del Rosario Sr.-C.V. Starr Center for Good Corporate Governance; Chairman Emeritus,
Philippine Dispute Resolution Center; President, Manila Metropolitan CathedralBasilica Foundation; member, Board of Advisers, De La Salle University College of Law
and Johann Strauss Society; member, Advisory Board of The World Bank (Philippines);
Chairman, Board of Trustees, Foundation for Liberty and Prosperity; and member,
Board of Trustees, Tan Yan Kee Foundation. He is also a columnist of the Philippine
Daily Inquirer and a member of the Philippine National Committee of the Asean Law
Association.
From 1995 to 2006, Mr. Panganiban held various government posts, including
Associate Justice of the Supreme Court, chairman of the Presidential Electoral Tribunal,
Judicial and Bar Council, Philippine Judicial Academy and House of Representatives
Electoral Tribunal and Member of the Senate Electoral Tribunal.
Mr. Panganiban graduated with the degree of Bachelor of Laws, cum laude,
from Far Eastern University in 1960 and obtained his Doctor of Laws honoris causa
from various universities, including the University of Iloilo (1997), Far Eastern
University (2002), University of Cebu (2006), Angeles University (2006), and Bulacan
State University (2006).
ANTONIO JOSE U. PERIQUET
53 years old, Filipino. Mr. Periquet has been an independent director of the bank
since April 2012. He is Vice Chairman of the Trust Committee, and member of the
Executive and Risk Management committees. He is also an independent director of
BPI Capital Corporation and BPI Family Savings Bank.
Mr. Periquet is the Chair of Board of Directors of Pacific Main Holdings and
Campden Hill Advisors. He is currently an independent director of ABS-CBN Holdings,
ABS-CBN Corporation, Ayala Corporation, DMCI Holdings, Maxs Group of Companies
and Philippine Seven Corporation. He is also a member of the Board of Trustees of the
Lyceum University of the Philippines.
Mr. Periquet graduated with AB Economics degree at the Ateneo de Manila
University in 1982. He earned a Master of Science in Economics at Oxford University
in 1988 and an MBA from The University of Virginia in 1990.

OSCAR S. REYES
Director
68 years old, Filipino. Mr. Reyes is the President and Chief Executive Officer of the
Manila Electric Company. Mr. Reyes has been a director of the Bank of the Philippine
Islands since April 2003. At the bank, he is a member of the Audit, Corporate
Governance, Personnel & Compensation, and Related Party Transaction committees.
Mr. Reyes is a member of the Advisory Board of the Philippine Long Distance
Telephone Company, and of the Board of Directors of Manila Water Company, PLDT
Communications and Energy Ventures, Basic Energy Corporation, Cosco Capital, and
Sun Life Financial Phils., Clark Electric Distribution, and Republic Surety & Insurance
Co., among other firms.
At Meralco, he also serves as director. He is President of Meralco PowerGen
Corporation and chairman of Pepsi Cola Products Philippines, Meralco Industrial
Engineering Services Corporation, CIS Bayad Center, Meralco Energy, Redondo
Peninsula Energy, and Pacific Light Pte. Ltd.
Mr. Reyes obtained his BA Economics, cum laude, from the Ateneo de
Manila University in 1965 and MBA (academic units completed) from the Ateneo
Graduate School of Business Administration in 1971. He completed the Program
for Management Development from the Harvard Business School in 1976, and the
Commercial Management Study Program at the Lensbury Centre, Shell International
Petroleum Co., United Kingdom. He took up Business Management Consultants and
Trainers Program at the Japan Productivity Center/Asian Productivity Organization in
1968, and the International Management Development Program leading to Diploma
in Business Administration and Certificate in Export Promotion at the Waterloo
University, Ontario, Canada in 1969-1970.
ASTRID S. TUMINEZ
50 years old, Filipino. Ms. Tuminez joined the bank as an independent director in
December 2013. She is a member of the Risk Management, Corporate Governance,
and Management committees of the bank.
Dr. Tuminez joined Microsoft in October 2012 as its Regional Director of Legal
and Corporate Affairs in Southeast Asia, responsible for driving government relations,
corporate citizenship, and business and regulatory initiatives in the Asean countries
as well as Sri Lanka, Bangladesh, Nepal and Bhutan.
Dr. Tuminez is also an Adjunct Professor, the former Vice Dean (Research)
and Assistant Dean (executive education) of the Lee Kuan Yew School of Public
Policy (National University of Singapore), 2008-present. From 2003 to 2007, at the

U.S. Institute of Peace, she assisted in advancing peace negotiations between the
Philippine government and the Moro Islamic Liberation Front. She was also a Senior
Advisor to the Salzburg Global Seminar (2006), Executive Associate and then Director
of Research for Alternative Investments at AIG Global Investment (1999-2003), a
Consultant to The World Bank and an institutional sales/research professional at
Brunswick Warburg (1998).
In 1989-1992, she worked with the Harvard Project on Strengthening
Democratic Institutions, eventually running operations in Moscow, Russia, where she
worked with leading reformers like Eduard Shevardnadze and Mikhail Gorbachev. In
1992-1998, she was a research associate and, later, program officer at the Carnegie
Corporation of New York, focusing on grant-making in democratization, conflict
prevention, and non-proliferation of weapons of mass destruction. She is a member
and former adjunct fellow of the Council on Foreign Relations in New York City, and is
the author of the book, Russian Nationalism Since 1856. Ideology and the Making of
Foreign Policy (2000) and other scholarly publications, reports and opinion pieces.
In 2013, the Filipina Womens Network of the U.S. selected Dr. Tuminez as a
recipient of their Global Influencer Award. Her educational background includes
a BA with a double major in Russian Literature and International Relations from
Brigham Young University; a Masters in Soviet Studies from Harvard University
(1988); and a Ph.D. in Political Science from the Massachusetts Institute of
Technology.
DOLORES B. YUVIENCO
Director
66 years old, Filipino, was elected director of BPI in April 2014. She is a member of
the Audit and Corporate Governance committees.
Ms. Yuvienco joined the Bangko Sentral (formerly known as Central Bank of
the Philippines) in April 1972 as Senior Executive AssistantOffice of the Governor.
She transferred to the Bangko Sentrals supervision and examination sector in 1975
and moved up the organization until she retired as Assistant Governor at the Bangko
Sentral in March 2013.
While working at the supervision and examination sector, she participated
in the crafting of major policies on banking supervision, as well as in the on-site
and off-site supervision activities over Bangko Sentral-supervised entities. She
represented the Bangko Sentral in international fora like the EMEAP (Executives
Meeting for East Asia and the Pacific Central Banks) Working Group on Banking
Supervision and the South East Asian Center for Central Banking (SEACEN) Group on
Banking Supervision.
She served as a member of the technical working group of the Financial Sector
Forum, a voluntary intersectoral body formed by the Bangko Sentral, the Securities
and Exchange Commission, the Insurance Commission, and the Philippine Deposit
Insurance Corporation.
A former President of the BAIPhil, a training provider for bankers, Ms. Yuvienco
continues to be an adviser to the BAIPhil Training Institute.
Ms. Yuvienco obtained her BS Commerce, major in accounting, from St.
Theresas College, Quezon City in 1967. She took up post graduate studies at the
University of the Philippines, Diliman.
Ms. Yuvienco is a certified public accountant and a career executive service
professional.
2014 Annual Report
63
JOSEPH A. GOTUACO, JOSE TEODORO K. LIMCAOCO

and ALFONSO L. SALCEDO JR.
Principal Officers
64
NATIVIDAD N. ALEJO
Executive Vice President
58 years old, Filipino, serves as Head of Retail Clients. As such, Ms. Alejo
oversees the banks relationship with all clients who avail of BPIs services in
their individual capacities, including private banking and overseas Filipino clients.
She is also responsible for managing the banks extensive branch network. Ms.
Alejo serves on the banks Management, Assets & Liabilities, and IT Steering
committees. She also serves on the boards of BPI-Philam Life Assurance, where
she is Co-Chair of the Bancassurance Working Committee and member of the
Investment Committee; BPI Family Savings Bank; and BPI Direct.
Ms. Alejo joined BPI in 1979, when the bank acquired Commercial Bank
& Trust, and worked in the corporate planning department. She has served in
a senior management role in the banks retail banking business since 2007.
Between 2001 and 2007, Ms. Alejo served as the President and director of BPI
Capital and BPI Securities. She also served as President of the Investment House
Association of the Philippines in 2004 to 2006.
Ms. Alejo graduated in 1976 with AB Economics degree, summa cum
laude, from Divine Word University, Tacloban City, where she was also a
Gansewinkle Scholastic Trophy Awardee. She took MA Economics at University
of the Philippines in 1978 and completed the Advanced Management Program
at Harvard Business School in 2005. She is currently a director of An Waray Party
List, a Manila-based civic organization consisting of Filipinos from Eastern Visayas.
Ms. Alejo also serves on the Board of Regents of Leyte Normal University.
JOSEPH A. GOTUACO
49 years old, Filipino, is Chief Financial Officer and serves as Head of Enterprise
Services. As such, he is responsible for managing the primary infrastructure
of the bank. He is Chairman of the banks IT Steering and Capital Expenditure
committees, and also serves on its Management, Assets and Liabilities, and
Credit committees. Mr. Gotuaco serves on the boards of two subsidiaries, BPI
Capital and BPI International Finance Ltd.
Mr. Gotuaco began his banking career in New York City in 1986, trading
interest rate swaps, fixed income instruments, and Eurodollar futures. He
joined J.P. Morgan in 1994, then a strategic shareholder in BPI, with client
responsibilities in the Philippines and in Southeast Asia. In 2002, he joined
Credit Suisse in its Fixed Income Division; in 2005, he joined Merrill Lynch,
where he served as Managing Director in its fixed income, currencies and
commodities division, where he was responsible for the divisions sovereign
and corporate clients in non-Japan Asia and served on the firms Asia-Pacific
operating committee. From 2009, he was based in Singapore, where he worked
in an investment management vehicle of the Brunei government, and served in
various capacities in the aviation and aviation finance industry.
Mr. Gotuaco obtained his BS Economics in Finance and Marketing, summa
cum laude, from the Wharton School, University of Pennsylvania, in 1986. He
obtained his MBA from Harvard Business School in 1994. Mr. Gotuaco also
serves as a non-executive board member of AirFleet Capital, a US-based aviation
finance company.
SIMON R. PATERNO, NATIVIDAD N. ALEJO and ANTONIO V. PANER
SIMON R. PATERNO
JOSE TEODORO K. LIMCAOCO

President
BPI Family Savings Bank
52 years old, Filipino, is President of BPI Family Savings Bank, the consumer
banking flagship of BPI and the largest thrift bank in the Philippines.He has
served in this capacity since July 2010. As such, Mr. Limcaoco is responsible for
the banks consumer lending (retail mortgage and auto loans), commercial loans
to entrepreneurs and small enterprises, and payments businesses.He serves on
the banks Management, and Assets and Liabilities committees. He serves on
the Board of BPI/MS Insurance, the banks property and casualty insurance joint
venture with Mitsui Sumitomo Insurance, BPI Globe BanKO, Ayala Plans, and
Philippine National Reinsurance. He was President of the Chamber of Thrift Banks
in 2013 and 2014. Between 2007 and 2010, Mr. Limcaoco was President of BPI
Capital, the banks investment banking subsidiary.
Mr. Limcaoco joined Ayala Corporation in 1998, where he held various
responsibilities including CFO for Azalea Technology Investments, President
of myAyala.com, trustee and Treasurer for Ayala Foundation. Prior to this, he
headed the investment banking and securities operations of Barclays PLC in
the Philippines.He served as a currency and interest rate trader for J.P. Morgan
in both New York City and Singapore.Before banking, Mr. Limcaoco worked
in the tech industry, where he worked as a programmer at VLSI Technology, a
semiconductor firm in San Jose, California.
Mr. Limcaoco received his BS in Mathematical Sciences (Honors Program)
from Stanford University, in 1984.He received an MBA from Wharton School,
University of Pennsylvania in 1988.
ANTONIO V. PANER
56 years old, Filipino, Mr. Paner serves as Treasurer and Head of Global Markets.
As such, he is responsible for managing the banks interest rate and liquidity
gaps, as well as its fixed income and currency market-making, trading, and
distribution capabilities in both the Philippines and internationally. He is
Chairman of the banks Assets & Liabilities Committee, and is a member of the
banks Management Committee and Asset Management Investment Council.
Mr. Paner is Chairman of BPI International Finance Ltd. and BPI Forex, and also
serves on the boards of BPI Europe and BPI Direct.
Mr. Paner joined BPI in 1985, when the bank acquired Family Savings Bank
and performed various treasury and trust functions until 1989. He rejoined BPI
in 1996 as a result of the merger with Citytrust, which was then the consumer
banking arm of Citibank in the Philippines. He has been responsible for various
fixed income markets-related businesses of the bank, including risk taking, local
currency portfolio management, and money management. He served President
of the Money Market Association of the Philippines in 1998 and remains an
active member of the Bankers Association of the Philippines Open Market
Committee. Mr. Paner is a member of the Money Markets Association of the
Philippines, Makati Business Club, Management Association of the Philippines,
British Chamber of Commerce, and the Philippine British Business Council.
Mr. Paner obtained an AB Economics degree from the Ateneo de Manila
University in 1979 and completed various courses in business and finance,
including strategic financial management in 2006. In 2009, he completed the
Advanced Management Program at the Harvard Business School.
56 years old, Filipino, serves as Head of Financial Products and Services. As such,
he is responsible for building and managing BPIs businesses across all asset,
liability, payments, and bancassurance platforms. He also serves on the banks
Management, Assets & Liabilities, and Credit committees, as well as on the
boards of the following subsidiaries and affiliates: BPI Capital, BPI/MS Insurance,
BPI Century Tokyo Lease and Finance, AF Payments and BPI Philam Life Assurance
Corporation.
Prior to joining BPI, Mr. Paterno represented CIMB in its search for a
Philippine bank investment, having joined the group in late 2012 as CEOdesignate of Bank of Commerce, which was targeted for acquisition by CIMB.
Between 2004 and 2012, he was Managing Director and Country Manager
of Credit Suisse Securities Philippines, which he established and also served
as chairman. Between 2002 and 2004, Mr. Paterno was President and CEO of
Development Bank of the Philippines and concurrently Chairman of the LGU
Guarantee and other DBP subsidiaries. Prior to DBP, Mr. Paterno worked as a
Managing Director at J.P. Morgan, where he spent 18 years in various capacities,
rising to Head for Sovereign Clients in all of Asia and later, Philippines Country
Manager. During the Asian Financial Crisis, he led the project teams that advised
the Indonesian Bank Restructuring Agency and its Malaysian counterpart,
Danaharta. In his career, Mr. Paterno worked on some of the most significant
sovereign financing transactions in the Philippines: restructuring of its foreign
debt (1991), debut eurobond (1992), Brady exchanges (1994), Domestic Bond
Exchanges (2006), and Debt Exchange Warrants (2008).
Mr. Paterno received his MBA from Stanford University in 1984 and his AB
Honors Program in Economics, cum laude, from the Ateneo de Manila University
in 1980. He serves on the boards of trustees of the Foundation for Economic
Freedom and the Ateneo Scholarship Foundation. In 2005, he was elected
President of the Management Association of the Philippines.
ALFONSO L. SALCEDO JR.
59 years old, Filipino, is Head of Corporate Clients. As such, Mr. Salcedo oversees
the banks domestic and international relationships in the corporate and financial
institutions space. He is currently a member of the banks Management, Assets
& Liabilities, and Credit committees, as well as member of the board of the
following subsidiaries and affiliates: BPI-Philam Life Assurance, BPI Direct
Savings, BPI Capital, BPI Century Tokyo Lease and Finance, and BPI Century Tokyo
Rental.
Mr. Salcedo has served at BPI since 2000, when he became responsible for
the firms insurance businesses. Between 2004 and 2010, he served as President
of BPI Family Savings Bank, the banks retail lending flagship, and the largest
thrift bank in the Philippines. Prior to joining BPI, Mr. Salcedo served for 10 years
in the retail banking operations of Citibank Philippines. For five years, between
1983 and 1988, Mr. Salcedo was posted in Osaka, Japan as marketing manager
of Nippon Vicks KK (Japan).
Mr. Salcedo received his AB Economics Honors degree, with honors, from
the Ateneo de Manila University, in 1977. He also completed the Advanced
Management Program at Harvard Business School in 2006. Mr. Salcedo currently
serves on the board of Ayala Automotive Holdings.
2014 Annual Report
65
Senior Management
As of end-December 2014
OFFICE OF THE CHAIRMAN

Chairman
Corporate Secretary
Carlos B. Aquino
Vice Presidents
Rosemarie B. Cruz
Marita Socorro D. Gayares
Angela Pilar B. Maramag
OFFICE OF THE PRESIDENT
President & CEO
Cezar P. Consing
Vice President
Conrado E. Laza
ONE BPI
66

Simon R. Paterno
RISK MANAGEMENT
Senior Vice President
Edgardo O. Madrilejo
Vice Presidents
Frances S. Amado
Daniel S. Bables
Beatrice Marie R. Guzman
Nicanor A. Mendiola
Sylvia P. Sumagpang
CORPORATE BANKING
Alfonso L. Salcedo
Senior Vice Presidents
Joseph Anthony M. Alonso
Olga S. Ang
Reymundo S. Castro
Angela C. Santiano
Judy K. Tecson
Roland Gerard R. Veloso Jr.
Vice Presidents
Homer L. Aniceto
Ma. Nanette A. Biason
Ma. Luisa L. Cruz
Dennis S. David
Ivy Maria E. de Guzman
Marie Joan Socorro J. de Jesus
Jo Ann B. Eala
Ma. Cristina U. Javier
Maria Teresa Anna K. Lim
Noelito C. Marcos
Barbara S. Muoz
Arnold E. Oliva
Victoria Marie G. Ricardo
Jose Martin S. Sangco
Andre Angelo S. Santos
Elisa M. Silva
Ana Maria C. Sison
Barbara Ann C. Untalan
GLOBAL MARKETS
Antonio V. Paner
Marie Christine L. Arguelles
Michael D. Calleja
Dino R. Gasmen
Roy Emil S. Yu
Vice Presidents
Henry C. Arceo
Ma. Lourdes D. Barrameda
Jaena A. Cebrero
Tomas S. Chuidian
Melinda V. Dulay
Rinaldo H. Fernandez
Jenny C. Guevara
Susana M. Manalo
Ma. Lourdes B. Montelibano
Donarber N. Pineda
Maria Socorro D. Ramirez
Ruby Rosario J. Severino
Jennifer Gayle P. Singian
Arthur Noel S. Tan
Lizbeth Joan P. Yulo
ASSET MANAGEMENT & TRUST
Maria Theresa M. Javier
Estelito C. Biacora
Paul Joseph M. Garcia

Mario T. Miranda
Vice Presidents
Remarie Suzette A. Ayson
Ruth B. Bandera
Miguel P. Cervantes
Smith L. Chua
Yvette Mari V. de Peralta
Odette S. Diaz
Irene A. Diomampo
Roberto Martin S. Enrile
Ruben Enrique A. Espiritu
Mario Gerardo Z. Evaristo
Maria Paz A. Garcia
Carlos A. Jalandoni
Marijoy Y. Kawpeng
Aileen Beryl A. Limketee
Christmas G. Sevilla
Eliza May T. Taco
Cecilia P. Tanchoco
Mary Catherine Elizabeth P.

Santamaria
Ma. Dina F. Soriano
Ana Liza C. Sta. Ana
Rommel D. Tadique
Edilberto N. Uichanco Jr.
Melvin M. Miranda
Elfrida S. Narboneta
Rafael J. Pertierra
Paul Roderick A. Ysmael
PAYMENTS & UNSECURED LENDING
President
Jose Teodoro K. Limcaoco

Ma. Cristina L. Go
Aniceta P. del Mundo
Vice Presidents
Jose M. de Vera
Cecile Catherine A. dela Paz
Richmond Ezer O. Escolar
Maria Angelica G. Florentino
Jesus Angelo O. Gomez
Aileen S. Lamasuta
Genaro N. Lualhati
RETAIL SEGMENTS & CHANNELS
ENTERPRISE SERVICES

Natividad N. Alejo

Joseph Albert L. Gotuaco

Raul D. Dimayuga
Angelie O. King
Marie Josephine M. Ocampo
Manuel C. Tagaza
Heidi P. Ver
Sylvia P. Yngente

Fidelina A. Corcuera
Florendo G. Maranan
Pilar Bernadette C. Marquez
Eugenio P. Mercado
Maria Corazon S. Remo
Vice Presidents
Roberto O. Bautista
Arlene S. Dayrit
Brenno C. Dytoc
Jesusa Camila V. Gangoso
Carlo Carmelo S. Gatuslao
Noemi G. Go
Carmencita Lilia B. Gozar
Luis D. Ibarra Jr.
Jose Raul E. Jereza
Danilo L. Kimseng
Maria Consuelo A. Lukban
Rodolfo K. Mabiasen
Gerardo E. Magpantay
Ma. Carmina T. Marquez
Jerome B. Minglana
Joseph Philip Anthony S. Parungao
Ma. Cristina L. San Diego
Vice Presidents
Ramon Eduardo E. Abasolo
Albert I. Alberto
Jocelyn C. Alviar
Maria Concepcion A. Bednar
Rosario J. Benedicto
Napoleon I. Cruz
Josephine F. Fernandez
Andre M. Flores
Roberto E. Galvez
Santiago L. Garcia Jr.
Florentino T. Gonzalez III
Edgardo R. Jimenez
Ailen C. Kho
Eugene O. Lee
Maria Antonia O. Leong
Roseller B. Lim
Irmingardo O. Ludovice
Francisca Ann M. Lustre
BPI FAMILY SAVINGS BANK

Joaquin Ma. B. Abola
Ma. Mercedes D. Roces
Jocelyn C. Sta. Ana
Vice Presidents
Ramon Noel S. Altamirano
Luisito R. Ballelos
Felipe P. Carlos
Amy Belen R. Dio
Susan L. Erguiza
Rodolfo B. Fernandez
Charito O. Hiteroza
Miriam Jane M. Jacinto
Lourdes O. Mallare
Susan E. Pimentel
Erick M. Ramos
Jose Roman H. Santos
Ma. Christina Z. Sison
Bonifacio M. Banzon
Reginaldo Anthony B. Cariaso
Luis Geminiano E. Cruz
Eric Roberto M. Luchangco
Sheila Marie U. Tan
Luis C. Urcia
George S. Uy-Tioco
BPI SECURITIES CORPORATION
Managing Director & CEO
Michaelangelo D. Oyson
Directors
Richard Anthony C. Liboro
Marianna M. Ongpin
Diosdado C. Salang
BPI CENTURY TOKYO LEASE &
FINANCE CORPORATION
President
Shigeo Saito
Vice Presidents
Christine Grace A. Bandol
Gracia C. de Jesus
Masahito Ikeda
Samuel C. Tang
BPI/MS INSURANCE
BPI FOREX CORPORATION
President
Kenichi Tanabe
President
Manuel C. Sanchez
Senior Business Director

Perfecto M. Domingo
BPI EUROPE PLC
Business Director
Ma. Perpetua A. Cutiongco
Managing Director
Ramon G. Opulencia
BPI INTERNATIONAL FINANCE LTD.
BPI DIRECT SAVINGS

President
Herbert Vincent D. Tuason
Managing Director
Jose Esteban J. Salvan
AYALA PLANS INC.
BPI CAPITAL CORPORATION

President
Daniel Gabriel M. Montecillo
Vice Presidents
2014 Annual Report
Director/OIC
Elizabeth J. Tan
67

2014 Annual Report
We remain committed to delivering

robust financial performanceone
that delivers superior profitability
while taking prudent risks.
68 Audited Financial Statements

70 Report of the Audit
Committee to the
Board of Directors
72 Summary of
Financial Performance
73 Statement of Managements
Responsibility for
Financial Statements
74 Independent
Auditors Report
76 Statements of Condition
78 Statements of Income
68
79 Statements of Total
Comprehensive Income
80 Statements of Changes
In Capital Funds
82 Statements of Cash Flows
84 Notes To Financial
Statements
175 Statements Required by
Securities Regulation Code
Rule 68, Part I, Section 4
2014 Annual Report
69
REPORT OF THE AUDIT COMMITTEE TO THE BOARD OF DIRECTORS

For the Year ended December 31, 2014
The Board-approved Audit Committee Charter defines the duties and responsibilities of the Audit Committee. In
accordance with this Charter, the Committee assists the Board of Directors in fulfilling its oversight responsibilities to the
shareholders with respect to:

b) Reviewed and discussed the reports from internal audit and other management assurance units, ensuring that
Management is taking the appropriate corrective actions on the control weaknesses in a timely manner and
all identified risk are reviewed in coordination with the Risk Management Committee. The Committee also
discussed updates on the Information Technology organization and strategy, including Management action
plans focusing on strengthening further IT governance and oversight of outsourced services.
System of internal controls, risk management and governance process of the Bank,
Integrity of the Banks financial statements and financial reporting process
Performance of the internal audit function and the external auditor
Compliance with bank policies, applicable laws, rules and regulatory requirements
c) Reviewed the minutes of meetings of the Audit Committee of BPI subsidiaries, to ensure that identified control
weaknesses, operational risk and compliance issues are monitored and acted upon.
The Committee is composed of five (5) non-executive directors, with two (2) independent directors including the
Chairman. For 2014, the Committee held twelve (12) regular meetings and one (1) special meeting. In carrying out its
functions, the Committee performed the following activities in relation to the:
1. Financial Statements:
d) Evaluated the performance of the Chief Audit Executive. The Committee also ensures that the internal audit
function is independent, has adequate and competent resources, and has authority to be able to effectively
discharge its duties.
4. Regulatory Compliance:
a) Reviewed and discussed the audited consolidated financial statements of the Bank of the Philippine Islands
(BPI) and its related disclosures for the year ended December 31, 2014, including the assessment of the Banks
internal controls relative to the financial reporting process, with Management, internal auditors, and the external
auditor, Isla Lipana & Co., a member firm of Price Waterhouse Coopers. The review was performed in the
following context:
70
That Management has the primary responsibility for the financial statements and the financial reporting
process, and
That Isla Lipana is responsible for expressing an opinion on the conformity of BPIs annual audited
consolidated financial statements with the Philippine Financial Reporting Standards.
After obtaining assurance on the external auditors independent and thorough review of the financial statements,
the Committee endorsed the audited financial statements for approval by the Board and for inclusion in the
2014 Annual Report to the Stockholders.
b) Discussed with Management and internal auditors, the quarterly unaudited financial report of BPI including the
results of operations and endorsed the financial statements to the Board of Directors for approval.
2. External Audit:
a) Reviewed the annual audit plan and the related scope of work of the external auditors, ensuring that areas of
focus are appropriately covered and there were no significant gaps in the scope between external and internal
audits. In consultation with Management, the Committee approved the term of engagement and audit fees of
the external auditor.
b) Assessed the overall performance and effectiveness of the external auditors in terms of their independence,
competence and execution of the audit plan. The Committee recommended for consideration/endorsement
of the Board of Directors to the shareholders, the re-engagement of Isla Lipana & Co. for BPI and its major
operating subsidiaries and affiliates for the year 2015.
a) Approved the updated manuals for the BPI Compliance system and Anti-Money Laundering review, ensuring
that Compliance Office oversees the implementation of the Banks enterprise-wide compliance programs.
b) Discussed the latest BSP report of examination as of October 2013 which indicated satisfactory results,
including Managements responses to the compliance issues and recommendations. The Committee constantly
monitored the status and progress of Managements action plans through the regular reports/updates of the
Compliance Office. Relative to the related party transactions (RPT), a Board-level RPT Committee was created
with both Compliance Office and Internal Audit as non-voting members.
In compliance with the SEC requirement and the BPI Corporate Governance Manual, the Audit Committee:

Attended the annual SEC accredited workshop/program on corporate governance, aside from the regular updates
on new relevant laws, regulations and other applicable standards.
Reviewed and reassessed the Audit Committee Charter to ensure that it is annually updated and aligned with
recent guidelines and other relevant regulations. The Committee also conducted an annual self-assessment
of its performance, results of which were validated by the Compliance Officer and discussed by the Corporate
Governance Committee.
Based on the results of the assurance activities performed by the Banks Internal Audit and the external auditors
unqualified opinion on the financial statement, the Committee assessed that the Banks system of internal controls,
risk management, and governance processes are adequate and generally effective. This overall assessment states,
among others, that the audit scope and coverage are sufficient, comprehensive, and risk-based, that Management
is aware of its responsibility for internal control, and that there is no interference with the accomplishment of audit
activities and reporting of issues and other relevant information to Management, Audit Committee, and the Board of
Directors.
XAVIER P. LOINAZ
Chairman - Audit Committee
Isla Lipana & Co. had reaffirmed its independence from BPI and its subsidiaries. Committee also held an annual
executive session with the external auditor to discuss any matters of concern on internal controls relating to its
financial reporting and attestation process.
3. Internal Audit:
a) Reviewed and approved the Internal Audit work plan including its charter, risk assessment model and audit
rating framework. The Committee ensured that the activities of Internal Audit are conducted in accordance with
the International Standards for the Professional Practice of Internal Auditing (ISPIA).
OCTAVIO V. ESPIRITU
Member
OSCAR S. REYES
Member
AURELIO R. MONTINOLA III

Member
MA. DOLORES B. YUVIENCO

Member
2014 Annual Report
71
72
SUMMARY OF FINANCIAL PERFORMANCE
STATEMENT OF MANAGEMENTS RESPONSIBILITY

FOR FINANCIAL STATEMENTS
Results of Operations
advertising, management and other professional fees,

and other miscellaneous transaction-related expenses.
Occupancy and equipment-related expenses increased
P977 million, or 12.2 percent, due to increases in
computer equipment and software costs, contractuals,
rental, depreciation, and amortization costs.
The management of Bank of the Philippine Islands is responsible for the preparation and fair presentation
of the financial statements for the year ended December 31, 2014, in accordance with the prescribed
financial reporting framework indicated, including the additional components attached therein. This
responsibility includes designing and implementing internal controls relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error, selecting and applying appropriate accounting policies, and making accounting estimates that are
reasonable in the circumstances.
Financial Condition
The Board of Directors reviews and approves the financial statements and submits the same to the
stockholders.
In 2014, BPI achieved net income of P18.0 billion,

an amount P0.8 billion, or 4.1 percent, lower than the
P18.8 billion earned in the prior year. The decline in net
income resulted from a P4.2-billion increase in operating
expense, provisions and taxes, which offset a
P3.3-billion, or 6.3-percent, increase in total revenues.
Return on equity (ROE) was 13.8 percent, 4.3-percent
lower than last years 18.1 percent. The drop in ROE
is the combined result of lower net income and a
26-percent increase in average equity, the result of a
rights issue undertaken at the start of 2014. Return on
assets declined to 1.44 percent from last years
1.87 percent.
Total revenue increased to P55.8 billion, from last
years P52.5 billion, driven largely by a P4.5-billion
improvement in net interest income. Net interest income
of P34.8 billion, increased 14.8 percent from last years
P30.3 billion. This upsurge was primarily due to a
P247.0-billion, or 24.6-percent, expansion in average
asset base and was partly tempered by a 28-basis point
drop in net interest spreads.
Non-interest income of P21.0 billion declined
5.4 percent from last years P22.2 billion. This
P1.2-billion decline was attributed to lower trading gains
on securities (down by P3.5 billion, or 71.8 percent), and
income attributable to insurance operations (down by
P442 million, or 30.5 percent). Other operating income
increased P1.2 billion, or 12.1 percent, mainly due to
higher profit from assets sold, credit card income, and
miscellaneous income. Fees and commissions increased
P1.5 billion, or 25.2 percent, owing to increases in service
charges, bank commissions, and underwriting fees.
Impairment losses at P2.8 billion, increased
P159 million, or 6.0 percent, from 2013 as the bank
added provisions in anticipation of growth in its loan
portfolio.
Other expenses, at P30.0 billion, increased
P3.3 billion, or 12.2 percent, from last years P26.7 billion.
Compensation and fringe benefits increased P1.2 billion,
or 11.4 percent, largely due to increased headcount.
Other operating expenses increased P1.1 billion, or
13.4 percent, on higher regulatory cost, third party fees
and incentives, product related insurance premium,
The banks total resources stood at P1.45 trillion,

P254.8 billion, or 21.3 percent, higher than last years
P1.2 trillion. This increase was driven by a P187.6-billion,
or 19.0-percent, increase in total deposits, which reached
P1.2 trillion. Current and savings deposits grew P130.9
billion or 19.1 percent, while time deposits increased by
P56.7 billion, or 18.7 percent.
Total capital funds increased P40.9 billion, or
38.6 percent, to P146.7 billion from previous years
P105.8 billion. This increase in capital was largely due to
a P25-billion rights issue completed in February 2014.
Profits for the year (net of cash dividends paid) likewise
contributed to the capital growth. The banks capital
adequacy ratio, using Basel III measures, was 14.8
percent, up from last years 13.7 percent. This years
CAR remained substantially higher than the 10-percent
regulatory requirement. BPIs market capitalization
remained one of the largest in the industry at P369.6
billion. As of December 31, 2014, the banks share price
traded at a P94.00 per share, representing a premium of
2.6x its book value per share of P36.64.
Loans, net of impairment losses, increased to
P800.2 billion, an amount P170.0 billion, or 27.0 percent,
higher than last years P630.2 billion. The banks nonperforming loan ratio, at 0.50 percent, slightly increased
from its end-2013 level of 0.48 percent.
Liquid assets at P294.2 billion, declined P15.0 billion,
or 4.8 percent, largely due to lower special deposit
account with Bangko Sentral.
Investment securities, at P260.7 billion, increased
P77.0 billion from the prior years P183.7 billion. Held-tomaturities securities increased P113.2 billion, or
117.7 percent, due to the longer term orientation of the
banks additional investments, while available-for-sale
securities decreased P36.2 billion, or 41.4 percent.
Isla Lipana & Co., a member firm of PwC (PricewaterhouseCoopers), the independent auditors appointed
by the stockholders, has examined the financial statements of the Bank in accordance with Philippine
Standards on Auditing, and in its report to the stockholders or members, has expressed its opinion on the
fairness of presentation upon completion of such examination.

Chairman of the Board
73
Cezar P. Consing
President
and Chief Executive Officer


Executive Vice President and
Chief Financial Officer
SUBSCRIBE AND SWORN to before me at Makati City, Metro Manila this Feb. 26, 2015, affiants exhibited
to me their Passport with the following details:
Name
Cezar P. Consing
Passport No.
EB1548914
EB9284966
EC 2373461
Date/Place of Issue
Dec. 13, 2010/DFA Manila
Oct. 02, 2013/Hong Kong
Oct. 10, 2014/DFA Manila
Doc. No. 358

Page No. 73
Book No. II
Series of 2015
2014 Annual Report
Valid Until
Dec. 12, 2015
Oct. 01, 2018
Oct. 09, 2019
INDEPENDENT AUDITORS REPORT

To the Board of Directors and Shareholders of
BPI Building, 6768 Ayala Avenue
Makati City
74
Independent Auditors Report

Page 2
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Report on the Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of Bank of the Philippine Islands
and Subsidiaries (the BPI Group) and the parent financial statements of Bank of the Philippine Islands
(the Parent Bank), which comprise the consolidated and parent statements of condition as at
December 31, 2014 and 2013, and the consolidated and parent statements of income, statements of total
comprehensive income, statements of changes in capital funds and statements of cash flows for each of
the three years in the period ended December 31, 2014, and a summary of significant accounting policies
and other explanatory information.
In our opinion, the accompanying consolidated and parent financial statements present fairly, in all
material respect, the financial position of the BPI Group and of the Parent Bank as at December 31, 2014
and 2013, and their financial performance and their cash flows for each of the three years in the period
ended December 31, 2014 in accordance with Philippine Financial Reporting Standards.
Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated and parent
financial statements in accordance with Philippine Financial Reporting Standards, and for such internal
control as management determines is necessary, to enable the preparation of consolidated and parent
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated and parent financial statements based
on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entitys preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys
internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
Report on Bureau of Internal Revenue Requirements

Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplementary information in Note 33 to the financial statements is presented
for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial
statements. Such supplementary information is the responsibility of management and has been
subjected to the auditing procedures applied in our audits of the basic financial statements. In our
opinion, the supplementary information is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Isla Lipana & Co.
John-John Patrick V. Lim

Partner
CPA Cert. No. 83389
P.T.R. No. 0007706, issued on January 6, 2015, Makati City
SEC A.N. (individual) as general auditors 0050-AR-3, Category A; effective until January 17, 2016
SEC A.N. (firm) as general auditors 0009-FR-3; effective until August 15, 2015
TIN 112-071-386
BIR A.N. 08-000745-17-2013, issued on April 4, 2013; effective until April 3, 2016
BOA/PRC Reg. No. 0142, effective until December 31, 2016
Makati City
February 20, 2015
Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines
T: +63 (2) 845 2728, F: +63 (2) 845 2806, www.pwc.com/ph
Isla Lipana & Co. is a Philippine member firm of the PwC network. PwC refers to the Philippine member firm, and may sometimes refer to the PwC network. Each member
firm is a separate legal entity. Please see www.pwc.com/structure for further details.
2014 Annual Report
75
STATEMENTS OF CONDITION
STATEMENTS OF CONDITION
December 31, 2014 and 2013

(In Millions of Pesos)

Notes
CASH AND OTHER CASH ITEMS
DUE FROM OTHER BANKS

INTERBANK LOANS RECEIVABLE AND
SECURITIES PURCHASED UNDER AGREEMENTS
TO RESELL
FINANCIAL ASSETS AT FAIR VALUE
THROUGH PROFIT OR LOSS
DUE FROM BANGKO SENTRAL NG PILIPINAS
LOANS AND ADVANCES, net
76
17,397
5,246
10,037
35,981
16,550
35,981
16,550
51,309
87,556
41,866
81,736
800,170
630,203
621,441
475,155
14
12,760
12,205
8,467
8,030
6,726
6,793
22,227
10
15,862
12
209,409
15
5,018
808
17,070
4,597
96,172
5,852
INVESTMENT PROPERTIES, net

INVESTMENTS IN SUBSIDIARIES AND
ASSOCIATES, net
ASSETS ATTRIBUTABLE TO INSURANCE
OPERATIONS
16
4,784
4,176
5, 7
16,445
14,586
OTHER RESOURCES, net
18
13,551
11,048
DEFERRED INCOME TAX ASSETS, net

Total resources
(forward)
17
24,888
5,782
13
ASSETS HELD FOR SALE, net

BANK PREMISES, FURNITURE, FIXTURES AND
EQUIPMENT, net
37,292
2013
195,076
11
HELD-TO-MATURITY SECURITIES
25,696
PARENT
170,648
AVAILABLE-FOR-SALE SECURITIES, net
38,427
2014
244,483
7, 8
- TRADING SECURITIES
RESOURCES
2013
211,946
- DERIVATIVE FINANCIAL ASSETS
CONSOLIDATED
2014
5,718
1,450,197
1,597
15,429
6,620
193,001
2,470
808
8,789
2,626
85,900
3,480
1,597
6,176
3,595
4,296
1,195,364
1,158,248
932,367
8,658
7,414
Notes
CONSOLIDATED
2014
LIABILITIES AND CAPITAL FUNDS
2013
2014
2013
DEPOSIT LIABILITIES
19
1,176,213
988,586
952,681
785,403
BILLS PAYABLE
DUE TO BANGKO SENTRAL NG PILIPINAS
AND OTHER BANKS
MANAGERS CHECKS AND DEMAND
DRAFTS OUTSTANDING
ACCRUED TAXES, INTEREST AND OTHER
EXPENSES
LIABILITIES ATTRIBUTABLE TO INSURANCE
OPERATIONS
DEFERRED CREDITS AND OTHER
LIABILITIES
20
32,993
26,179
26,288
18,990
DERIVATIVE FINANCIAL LIABILITIES
Total liabilities
CAPITAL FUNDS ATTRIBUTABLE TO THE
EQUITY HOLDERS OF BPI
Share capital
5
21
22
Reserves
Surplus
Accumulated other comprehensive loss
NON-CONTROLLING INTERESTS
Total liabilities and capital funds
34,846
16,360
16,360
687
2,051
688
2,052
8,353
7,183
6,664
6,026
5,597
4,907
4,017
3,396
13,561
13,061
31,268
31,230
1,303,518
1,089,557
39,272
35,563
2,098
1,680
29,341
Share premium
Total capital funds
34,846
25,469
26,338
1,050,653
858,565
39,272
35,563
29,341
8,316
2,095
8,316
1,680
76,575
62,137
41,388
32,053
144,063
104,535
107,595
73,802
(3,223)
2,616
146,679
1,450,197
(3,161)
1,272
105,807
1,195,364
(4,501)
-
107,595
1,158,248
(The notes on pages 84 to 174 are an integral part of these financial statements.)
PARENT
2014 Annual Report
(3,810)
-
73,802
932,367
77
STATEMENTS OF INCOME
STATEMENTS OF TOTAL COMPREHENSIVE INCOME
For each of the three years in the period ended December 31, 2014
(In Millions of Pesos, Except Per Share Amounts)
CONSOLIDATED
Notes
INTEREST INCOME
On loans and advances
On available-for-sale securities
2013
2012
2014
2013
2012
36,441
32,368
30,790
23,282
20,255
19,356
831
2,615
3,424
778
2,436
3,126
4,930
5,191
7,545
4,434
4,638
On deposits with BSP and other banks
1,769
1,641
1,230
1,135
904
702
Gross receipts tax
(1,596)
(1,442)
(1,373)
(1,147)
(1,000)
(963)
406
On trading securities
45,992
INTEREST EXPENSE
On deposits
On bills payable and other borrowings
NET INTEREST INCOME
IMPAIRMENT LOSSES
NET INTEREST INCOME AFTER
IMPAIRMENT LOSSES
OTHER INCOME
Trading gain on securities
19
20
11, 13, 18
Income from foreign exchange trading

Income attributable to insurance
operations
Other operating income
Gross receipts tax
OTHER EXPENSES
Compensation and fringe benefits
Occupancy and equipment-related
expenses
Other operating expenses
INCOME BEFORE INCOME TAX

PROVISION FOR INCOME TAX
Current
Deferred
40,802
847
40,109
370
628
31,963
763
27,657
27,622
9,530
11,648
6,735
5,187
6,929
11,184
10,478
12,655
6,873
5,784
7,517
350
948
1,007
138
597
588
34,808
30,324
27,454
25,090
21,873
20,105
32,001
27,676
24,531
23,303
20,274
18,102
1,362
4,839
5,908
1,034
3,983
4,717
2,007
2,042
1,682
1,683
1,652
1,372
2,807
2,648
5,885
2,923
5,111
1,787
1,599
5,400
4,823
4,256
1,449
(1,435)
(1,555)
(1,342)
(1,195)
(1,307)
(1,122)
20,979
22,174
19,931
16,893
17,707
15,994
25
11,850
10,641
10,470
9,568
8,292
8,262
14, 15, 24
9,017
8,040
7,193
7,144
6,460
5,798
29,960
26,703
24,802
23,305
20,624
19,438
23
25
26
NET INCOME FOR THE YEAR

Attributable to:
Equity holders of BPI
10,668
9,093
22
8,022
7,878
7,139
9,971
8,556
6,593
6,771
5,872
23,147
19,660
5,374
4,147
3,576
3,759
2,644
2,444
4,958
4,153
3,158
3,621
2,889
2,231
(416)
(418)
16,891
18,062
18,994
16,502
13,270
18,039
18,811
16,352
13,270
18,062
18,994
16,502
13,270
4.62
183
5.19
17,357
(138)
150 -
4.60 3.40
14,468
Items that may be subsequently reclassified to

profit or loss
Net change in fair value reserve on availablefor-sale securities, net of tax effect
Share in other comprehensive income (loss) of
associates
Fair value reserve on investments of insurance
subsidiaries, net of tax effect
Currency translation differences
Item that will not be reclassified to profit or

loss
Actuarial gains (losses) on defined benefit
plan, net of tax effect
Total other comprehensive (loss) income, net of
tax effect
TOTAL COMPREHENSIVE INCOME FOR THE

YEAR
Attributable to:
Equity holders of BPI
Non-controlling interests
22
CONSOLIDATED
2013
PARENT
2013
2012
16,502
13,270
14,468
12,427
(903)
(3,983)
(718)
(1,043)
(3,671)
(550)
254
(88)
503
169
(309)
233
(104)
161
500
(491)
1,752
352
(416)
1,390
(45)
(4,638)
1,594
(691)
(4,087)
840
18,017
14,356
18,096
12,579
10,381
13,267
17,972
14,230
17,937
12,579
10,381
13,267
18,017
14,356
18,096
12,579
10,381
13,267
(65)
45
126
159
12,427
12,427
3.49
2014
18,994
12,427
3.99
2012
18,062
(213)
14,468
14,468
OTHER COMPREHENSIVE INCOME
2014
14,658
245
NET INCOME FOR THE YEAR
Note
5,378
23,020
23
Non-controlling interests
9,514
694 -
2,003
1,007
17
Earnings per share for net income

attributable to the equity holders of BPI
during the year:
Basic and diluted
690
10,834
7,370
Fees and commissions
78
2014
8,141
On held-to-maturity securities
PARENT
2014 Annual Report
79
STATEMENTS OF CHANGES IN CAPITAL FUNDS
STATEMENTS OF CHANGES IN CAPITAL FUNDS
CONSOLIDATED
PARENT (NOTE 22)
Attributable to equity holders of BPI (Note 22)
Share capital
Balance, January 1, 2012
35,562
Comprehensive income
Reserves
8,317
1,462
Net income for the year
Other comprehensive income for the year
Total comprehensive income for the year

Transactions with owners
Cash dividends
Transfer from surplus to reserves
Other changes in non-controlling interests

Total transactions with owners
Surplus
41,763
1,377
16,352
1,585
16,352
86,939
Noncontrolling
interests
Total
(165)
16,352
150
1,585
1,585
17,937
159
(8,180)
(8,180)
141
(141)
(110)
141
(8,321)
Total equity
88,316
16,502
1,594
18,096
(8,180)
(110)
(8,180)
(110)
(8,290)
Balance, December 31, 2012
35,562
8,317
1,603
49,794
1,420
96,696
1,426
98,122
35,562
8,317
1,603
49,794
1,420
96,696
1,426
98,122
Other comprehensive loss for the year
Total comprehensive income (loss) for the year -

Cash dividends
Others

80
Share
premium
Accumulated
other
comprehensive
income (loss)
18,811
(1)
18,811
183
18,994
(4,581)
(4,581)
(57)
(4,638)
(4,581)
14,230
(6,401) -
76
(1)
18,811
-
(76) -
77
(6,401)
10
(6,468) -
14,356
(6,401)
9 -
126
10
(280)
(280)
(6,391)
(280)
(6,671)
35,563
8,316
1,680
62,137
(3,161)
104,535
1,272
105,807
35,563
8,316
1,680
62,137
(3,161)
104,535
1,272
105,807
18,039
23
18,062
(67)
22
Other comprehensive (loss) income for the year
Total comprehensive income (loss) for the year -
18,039 -
(67)
18,039
(67)
17,972
45

Proceeds from the stock rights offering
3,709
21,025 -
Executive stock plan amortization
Cash dividends
24,734 -
21 -
21 -
397
Change in ownership interest in subsidiary that did

not result in loss of control
-
Others

3,709
39,272
21,025
29,341
418
2,098
(3,538) -
(3,538) -
(397) -
336 (2)
(3,601)
76,575
336 5
- -
3 -
(3,223)
21,556
144,063
1,299
1,299
2,616
(45)
Share capital Share premium
Reserves
12,427
Other comprehensive income for the year
12,427 840 13,267
Cash dividends
(8,180)
141
(141)
35,562
8,317
1,603
24,054 277
69,813
35,562
8,317
1,603
24,054 277
69,813
14,468
14,468
(4,087)
(4,087)
Cash dividends
Total comprehensive income for the year

Total comprehensive income (loss) for the

year
Others
141
(1)
(8,321)
12,427
840
840
(8,180)
-
(8,180)
(6,401)
76
(76)
77
35,563
8,316
1,680
32,053 (3,810) 73,802
35,563
8,316
1,680
32,053 (3,810) 73,802
13,270
Total comprehensive income (loss) for

the year
3,709
21,025
24,734
Cash dividends
397
(3,538)
3,709
39,272
21,025
29,341
18
22,855
146,679
2014 Annual Report
13,270
(691)
(691)
415
2,095
18
(3,538)
(3,538)
(397)
(3,935)
24,734
21,214
41,388 (4,501) 107,595
1,299
(6,392)
13,270 (691) 12,579
Executive stock option plan amortization
21
(6,401)
(1)
(6,469)
19,948 (563) 64,726
14,468 (4,087) 10,381
Proceeds from the stock rights offering
Total
8,317
18,017
336
Surplus
35,562
1,462
Accumulated other
comprehensive
income (loss)
81
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS
Notes
CASH FLOWS FROM OPERATING
ACTIVITIES
Impairment losses
Depreciation and amortization
Share in net income of associates

Dividend and other income
Share based compensation

Interest income
Interest expense
Operating loss before changes in operating
assets and liabilities
Changes in operating assets and liabilities
(Increase) decrease in:
Interbank loans receivable and securities
purchased under agreements to resell
Trading securities, net
Loans and advances, net
Assets held for sale

Assets attributable to insurance
operations
Other resources
82
Increase (decrease) in:
Deposit liabilities
Due to Bangko Sentral ng Pilipinas and
other banks
Managers checks and demand drafts
outstanding
Accrued taxes, interest and other
expenses
Liabilities attributable to insurance
operations
Derivative financial instruments
Deferred credits and other liabilities
CONSOLIDATED
2013
23,020
Income before income tax

Adjustments for:
2014
11, 13, 18
14, 15
16
2, 23
23,147
2012
19,660
2,807
2,648
2,923
(257)
(590)
(138)
3,587
(22)
21
(47,588)
11,184
3,459
(28)
1
(42,244)
10,478
3,346
17,357
14,658
1,787
1,599
2,003
2,299
2,125
2,188
(1,923)
(1,383)
(41,482)
(33,110)
(28,657)
(28,585)
12,655
18
6,874
5,784
7,517
(7,248)
(3,129)
(3,063)
(7,241)
(3,714)
(3,602)
(5,045)
(5,010)
(11,218)
(167,393)
764
(910)
(2,897)
17,345
(110,369)
434
(2,059)
(9,887)
(74,049)
1,868
(724)
(3,952)
(142,705)
878
-
16,291
(91,710)
900
-
(7,593)
(53,801)
1,759
-
3,212
(3,661)
(1,545)
2,901
(3,603)
187,627
186,312
121,173
167,278
157,038
83,951
(1,364)
16
317
(1,364)
16
318
1,170
1,389
1,663
637
1,518
1,120
623
542
557
419
306
652
500
2,267
856
(935)
3,737
(107)
3,250
387
2,684
41,152
31,608
(2,961)
(2,920)
Interest paid
(11,117)
(10,932)
(12,418)
Net cash from operating activities

(forward)
27,778
125,335
65,159
45,984
(4,500)
42,407
(5,243)
(935)
3,949
39,386
Income taxes paid
16,891
2012
(2,000)
99,103
Interest received
2013
(27)
(2,589)
Net cash (used in) from operations
PARENT
2014
(107)
3,157
(6,672)
(6,149)
(7,423)
105,714
Held-to-maturity securities
Bank premises, furniture, fixtures and
equipment, net
Investment properties, net
Investment in subsidiaries and
associates, net
Assets attributable to insurance operations
Dividends received
Proceeds from sale of interest in a subsidiary

Net cash used in investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
11
December 31
2013
2012
(19,695)
14,479
(32,756)
13,230
(105,811)
(17,879)
7,078
(28,286)
14
(3,434)
(2,557)
(2,748)
(2,061)
(1,406)
(1,416)
(95)
(349)
(24)
(248)
23
2
709
(851)
-
22
20
2
909
(12)
936
(614)
28
27
709
912
302
12,165
(12)
(80)
572
1,923
1,383
1,744
(80,542)
(6,249)
(22,897)
(66,643)
(9,070)
(16,246)
(6,739)
(3,201)
(11,380)
(6,739)
(3,201)
(11,380)
24,733
24,733
Collection on stock subscriptions
Net cash from (used in) financing activities

NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS
January 1
38,452
PARENT
(111,906)
Increase (decrease) in:
Unsecured subordinated debt

Proceeds from sale of interest in a subsidiary
to a non-controlling interest
35,013
2014
2012
12
Cash dividends paid
Bills payable
2013
6,812
-
1,744
(100)
(5,000)
-
7,144
7,300
(2,973)
-
7,076
-
26,550
(8,301)
(4,236)
25,294
(6,174)
(4,304)
(26,214)
110,785
38,026
(10,189)
90,470
20,427
299,772
188,987
150,961
233,799
143,329
122,902
273,558
299,772
188,987
223,610
3,191
23,000
31,160
Available-for-sale securities, net
CONSOLIDATED
86,596
(3,660)
(Increase) decrease in:
2014
608
9,144
28,927
CASH FLOWS FROM INVESTING

ACTIVITIES
Notes
27,479
(2,079)
40,977
2014 Annual Report
233,799
143,329
83
BANK OF THE PHILIPPINE ISLANDS
NOTES TO FINANCIAL STATEMENTS
NOTES
FINANCIAL
STATEMENTS
As atTO
December
31, 2014
and 2013 and for each of the three years
AS AT DECEMBER
31, 2014
AND 31,
2013
AND FOR EACH OF THE THREE YEARS
in the period ended
December
2014
IN THE PERIOD ENDED DECEMBER 31, 2014
Note 1 - General Information
2.2 Changes in accounting policy and disclosures
Bank of the Philippine Islands (BPI or the Parent Bank) is a domestic commercial bank with an expanded banking license and has its
registered office address, which is also its principal place of business, at BPI Building, Ayala Avenue corner Paseo de Roxas, Makati City.
NOTES
FINANCIAL
STATEMENTS
BPI and itsTO
subsidiaries
as detailed
in Note 2.3 (collectively referred to as the BPI Group) offer a whole breadth of financial services that
include
banking,
consumer
banking,
investment
banking,
assetOF
management,
corporate
finance, securities distribution, and
AS
ATcorporate
DECEMBER
31,
2014 AND
2013
AND FOR
EACH
THE THREE
YEARS
insurance
services.
At
December
31,
2014,
the
BPI
Group
has
14,542
employees
(2013
13,024
employees)
and operates 825 branches
IN THE PERIOD ENDED DECEMBER 31, 2014
and 2,575 ATMs (2013 - 825 branches and 2,181 ATMs) to support its delivery of services. The BPI Group also serves its customers through
alternative electronic banking channels such as telephone, mobile phone and the internet. The BPI shares have been traded in the Philippine
Stock Exchange (PSE) since October 12, 1971. The Parent Bank was registered with the Securities and Exchange Commission (SEC) on
Note
1 - 4,
General
January
1943. Information
This license was extended for another 50 years on January 4, 1993.
Bank
the Philippine
Islands
(BPI
or approved
the Parent
Bank)
is a domestic
commercial
bank with
an expanded
license
Theseoffinancial
statements
have
been
and
authorized
for issuance
by the Board
of Directors
of thebanking
Parent Bank
onand has its
registered
office
address,
also its events
principal
place
of business,
at BPItoBuilding,
Avenue
Paseo
Roxas, Makati City. BPI
February 18,
2015.
There which
are noismaterial
that
occurred
subsequent
FebruaryAyala
18, 2015
untilcorner
February
20,de
2015.
and its subsidiaries as detailed in Note 2.3 (collectively referred to as the BPI Group) offer a whole breadth of financial services that include
corporate
banking, consumer
banking,
investment
banking, asset management, corporate finance, securities distribution, and insurance
Note 2 - Summary
of Significant
Accounting
Policies
services. At December 31, 2014, the BPI Group has 14,542 employees (2013 - 13,024 employees) and operates 825 branches and 2,575
ATMs
(2013 - accounting
825 branches
and 2,181
ATMs)
support its of
delivery
of services.
The BPIare
Group
alsobelow.
servesThese
its customers
through
alternative
The principal
policies
applied
in thetopreparation
these financial
statements
set out
policies have
been
electronic
banking
channels
aspresented,
telephone,unless
mobileotherwise
phone and
the internet. The BPI shares have been traded in the Philippine Stock
consistently
applied
to all thesuch
years
stated.
Exchange (PSE) since October 12, 1971. The Parent Bank was registered with the Securities and Exchange Commission (SEC) on
January
4, 1943.
This license was extended for another 50 years on January 4, 1993.
2.1 Basis
of preparation
These
financial
statements
been
approved
and authorized
issuance by
thePhilippine
Board of Directors
the Parent
Bank on(PFRS).
The financial
statements
of have
the BPI
Group
have been
prepared inforaccordance
with
Financial of
Reporting
Standards
February
2015.
There are
no material
events that
occurred
subsequent
to February
18,(PAS),
2015 until
20, 2015.
The term 18,
PFRS
in general
includes
all applicable
PFRS,
Philippine
Accounting
Standards
and February
interpretations
of the Philippine
Interpretations Committee (PIC), Standing Interpretations Committee (SIC) and International Financial Reporting Interpretations Committee
Note
2 -which
Summary
Significant
Policies
(IFRIC)
have of
been
approvedAccounting
by the Financial
Reporting Standards Council (FRSC) and adopted by the SEC.
The
principal
policies
applied
in the preparation
of these
financial statements
areprovisions
set out below.
policies
haveChart
been of
As allowed
byaccounting
the SEC, the
pre-need
subsidiary
of the Parent
Bank continues
to follow the
of theThese
Pre-Need
Uniform
consistently
applied prescribed
to all the years
presented,
otherwise
stated. Commission.
Accounts (PNUCA)
by the
SEC andunless
adopted
by the Insurance
84
2.1
Basis ofstatements
preparationcomprise the statement of condition, statement of income and statement of total comprehensive income shown as
The financial
two statements, statement of changes in capital funds, statement of cash flows and the notes.
The financial statements of the BPI Group have been prepared in accordance with Philippine Financial Reporting Standards (PFRS). The
term
PFRS
in general
includes
allbeen
applicable
PFRS,
Philippine
Accounting
Standards as
(PAS),
and interpretations
of the
These
financial
statements
have
prepared
under
the historical
cost convention,
modified
by the revaluation
of Philippine
trading securities,
Interpretations
Committee
Interpretations
Committee (SIC) and International Financial Reporting Interpretations Committee
available-for-sale
financial (PIC),
assetsStanding
and all derivative
contracts.
(IFRIC) which have been approved by the Financial Reporting Standards Council (FRSC) and adopted by the SEC.
The preparation of financial statements in conformity with PFRS requires the use of certain critical accounting estimates. It also requires
As
allowed by to
theexercise
SEC, the
of theofParent
Bank
to follow
the provisions
the
management
its pre-need
judgmentsubsidiary
in the process
applying
thecontinues
BPI Groups
accounting
policies. of
Changes
in assumptions may have a
Pre-Need
Chart
Accounts
(PNUCA)
SEC and adopted
byManagement
the Insurancebelieves
Commission.
significantUniform
impact on
the of
financial
statements
in prescribed
the period by
thethe
assumptions
changed.
that the underlying
assumptions are appropriate and that the financial statements therefore fairly present the financial position and results of the BPI Group.
The
statements
comprise
the
statement
income
and statement
of total comprehensive
shown as
The financial
areas involving
a higher
degree
ofstatement
judgment of
or condition,
complexity,
or areas of
where
assumptions
and estimates
are significantincome
to the financial
two
statements,
statementinofNote
changes
statements
are disclosed
4. in capital funds, statement of cash flows and the notes.
New and amended standards adopted by the BPI Group

The following standards have been adopted by the BPI Group effective January 1, 2014:
Amendment to PAS 32, Financial instruments: Presentation on offsetting financial assets and financial liabilities. This amendment
clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counterparties in the
normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement
mechanisms. The amendment did not have a significant effect on the BPI Groups financial statements.
Amendment to PAS 36, Impairment of assets, on the recoverable amount disclosures for non-financial assets. This amendment
removed certain disclosures of the recoverable amount of cash generating units (CGUs) which had been included in PAS 36 by the
issue of PFRS 13, Fair Value Measurement. The amendment did not have a significant effect on the BPI Groups financial statements.
Amendment to PAS 39, Financial instruments: Recognition and measurement on the novation of derivatives and the continuation of
hedge accounting. This amendment considers legislative changes to over-the-counter derivatives and the establishment of central
counterparties. Under PAS 39, novation of derivatives to central counterparties would result in discontinuance of hedge accounting.
The amendment provides relief from discontinuing hedge accounting when novation of a hedging instrument meets specified criteria.
The amendment did not have a significant effect on the BPI Groups financial statements.
Other standards, amendments and interpretations which are effective for the financial year beginning on January 1, 2014 are considered
not relevant to the BPI Group.
New standards, amendments and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after
January 1, 2014, and have not been applied in preparing these financial statements. None of these standards are expected to have a
significant effect on the financial statements of the BPI Group, except the following as set out below:
PFRS 9, Financial instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities.
The complete version of PFRS 9 was issued in July 2014. It replaces the guidance in PAS 39 that relates to the classification and
measurement of financial instruments. PFRS 9 retains but simplifies the mixed measurement model and establishes three primary
measurement categories for financial assets: amortized cost, fair value through other comprehensive income and fair value through
profit or loss. The basis of classification depends on the entitys business model and the contractual cash flow characteristics of the
financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable
option at inception to present changes in fair value in other comprehensive income with no recycling to profit or loss. There is now a
new expected credit losses model that replaces the incurred loss impairment model used in PAS 39. For financial liabilities, there were
no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income
for liabilities designated at fair value through profit or loss. PFRS 9 relaxes the requirements for hedge effectiveness by replacing the
bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the
hedged ratio to be the same as the one management actually use for risk management purposes. Contemporaneous documentation
is still required but is different to that currently prepared under PAS 39. The standard is effective for accounting periods beginning on
or after January 1, 2018. Early adoption is permitted. The BPI Group is assessing the full impact of PFRS 9.
PFRS 15, Revenue from contracts with customers, deals with revenue recognition and establishes principles for reporting useful
information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from
an entitys contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the
ability to direct the use and obtain the benefits from the good or service. The standard replaces PAS 18 Revenue and PAS 11
Construction contracts and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2017
and earlier application is permitted. The BPI Group is assessing the impact of PFRS 15.
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of trading securities,
available-for-sale financial assets and all derivative contracts.
The preparation of financial statements in conformity with PFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the BPI Groups accounting policies. Changes in assumptions may have a
significant impact on the financial statements in the period the assumptions changed. Management believes that the underlying
assumptions are appropriate and that the financial statements therefore fairly present the financial position and results of the BPI Group.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 4.
2014 Annual Report
(2)
85
NOTES TO FINANCIAL STATEMENTS (continued)
There are no other standards, amendments or interpretations that are not yet effective that have a material impact on the BPI Group.
2.3 Consolidation
The consolidated financial statements comprise the financial statements of the BPI Group as at December 31, 2014 and 2013. The
subsidiaries financial statements are prepared for the same reporting year as the Parent Bank. The consolidated financial statements
include the financial statements of the Parent Bank and the following subsidiaries as at December 31:
86
Subsidiaries
BPI Family Savings Bank, Inc.
BPI Capital Corporation
BPI Direct Savings Bank, Inc.
BPI International Finance Limited
BPI Europe Plc.
BPI Securities Corp.
BPI Card Finance Corp.
Filinvest Algo Financial Corp.
BPI Investment Management Inc.
Santiago Land Dev. Corp.
BPI Operations Management Corp.
BPI Computer Systems Corp.
BPI Foreign Exchange Corp.
BPI Express Remittance Corp. USA
BPI Express Remittance Corp. Nevada
BPI Express Remittance Center HK (Ltd.)
Green Enterprises S. R. L. in Liquidation
(formerly BPI Express Remittance Europe,
S.p.A.)
First Far - East Development Corporation
FEB Stock Brokers, Inc.
BPI Express Remittance Spain S.A
FEB Speed International
AF Holdings and Management Corp.
Ayala Plans, Inc.
FGU Insurance Corporation
BPI Century Tokyo Lease and Finance
Corporation (formerly BPI Leasing
Corporation)
BPI Century Tokyo Rental Corporation
(formerly BPI Rental Corporation)
CityTrust Securities Corporation
BPI/MS Insurance Corporation
BPI Globe BanKO, Inc.
Country of
incorporation
Philippines
Philippines
Philippines
Hong Kong
England and Wales
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
USA
USA
Hong Kong
Italy
Philippines
Philippines
Spain
Philippines
Principal activities
Banking
Investment house
Banking
Financing
Banking (deposit)
Securities dealer
Financing
Financing
Investment management
Land holding
Operations management
Business systems service
Foreign exchange
Remittance
Remittance
Remittance
% of ownership
2014
2013
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Philippines
Philippines
Philippines
Remittance
Real estate
Securities dealer
Remittance
Remittance
Financial management
consultancy
Pre-need
Non-life insurance
100
98.67
94.62
100
98.67
94.62
Philippines
Leasing
51
100
Philippines
Philippines
Philippines
Philippines
Rental
Securities dealer
Non-life insurance
Banking
51
51
50.85
40
100
100
50.85
40
BPI has control over BPI Globe BanKO, Inc. since BPI is largely involved in key decisions concerning financial and operating policies and
activities of, and provision of technological support and technical know-how to BPI Globe BanKO, Inc.
On December 23, 2014, BPI sold its 49% interest in BPI Leasing Corporation to Century Tokyo Leasing Corporation for a total
consideration of P1,744 million, thereby bringing its remaining ownership interest to 51%. The BPI Group recognized an increase in noncontrolling interest of P1,231 million and an increase in equity attributable to owners of the Parent Bank of P336 million. The name of BPI
Leasing has also been changed to BPI Century Tokyo Lease and Finance Corporation as a consequence of the sale. In addition, the
Parent Banks effective ownership in BPI Century Tokyo Rental Corporation and CityTrust Securities Corporation, both wholly-owned
subsidiaries of BPI Century Tokyo Lease and Finance Corporation, has been reduced to 51% each as at December 31, 2014.
The effect of change in the ownership interest in BPI Century Tokyo Lease and Finance Corporation on the equity attributable to owners of
BPI Parent during the year is summarized as follows:
Consideration received from non-controlling interest
Carrying amount of non-controlling interest sold, net of related cost
Excess of consideration received recognized in equity

1,744
1,408
336
At BPI Parent, the gain from sale recognized in the statement of income amounts to P1,428 million.
(a)
Subsidiaries
Subsidiaries are all entities over which the BPI Group has control. The BPI Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The BPI
Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and
operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the BPI Groups voting rights
relative to the size and dispersion of holdings of other shareholders give the BPI Group the power to govern the financial and operating
policies.
Subsidiaries are fully consolidated from the date on which control is transferred to the BPI Group. They are de-consolidated from the date
that control ceases.
The BPI Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the
equity interests issued by the BPI Group. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisitionby-acquisition basis, the BPI Group recognizes any non-controlling interest in the acquiree either at fair value or at the non-controlling
interests proportionate share of the acquirees identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirers previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the BPI Group is recognized at fair value at the acquisition date. Subsequent changes to
the fair value of the contingent consideration that is deemed to be an asset or liability is recognized in accordance with PAS 39 either in
profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and
its subsequent settlement is not accounted for within equity.
The excess of the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisitiondate fair value of any previous equity interest in the acquiree over the fair value of the BPI Groups share of the identifiable net assets
acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognized and previously held interest
measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is
recognized directly in profit or loss.
Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses
are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the BPI Group, except for the pre-need subsidiary which follows the provisions of the PNUCA as allowed by the SEC.
When the BPI Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is
lost, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognized in other comprehensive income in respect of that entity are accounted for as if the BPI Group had directly disposed of the
related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or
loss.
(3)
2014 Annual Report
(4)
87
(b)
Transactions with non-controlling interests
2.6 Cash and cash equivalents
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as
transactions with the owners in their capacity as owners. For purchases from non-controlling interests, the difference between any
consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or
losses on disposals to non-controlling interests are also recorded in equity.
Interests in the equity of subsidiaries not attributable to the Parent Bank are reported in consolidated equity as non-controlling interests.
Profits or losses attributable to non-controlling interests are reported in the statement of income as net income (loss) attributable to noncontrolling interests.
(c)
Associates
2.7 Repurchase and reverse repurchase agreements

Securities sold subject to repurchase agreements (repos) are reclassified in the financial statements as pledged assets when the
transferee has the right by contract or custom to sell or repledge the collateral; the counterparty liability is included in deposits from banks or
deposits from customers, as appropriate. The difference between sale and repurchase price is treated as interest and accrued over the life
of the agreements using the effective interest method.
Associates are all entities over which the BPI Group has significant influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Investments in associates in the consolidated financial statements are accounted for using the
equity method of accounting. Under the equity method, the investment is initially recognized at cost and the carrying amount is increased
or decreased to recognize the investors share of the profit or loss of the investee after the date of acquisition. The BPI Groups investment
in associates includes goodwill identified on acquisition (net of any accumulated impairment loss).
Securities purchased under agreements to resell (reverse repos) are recorded as loans and advances to other banks and customers and
included in the statement of condition under Interbank loans receivable and securities purchased under agreements to resell. Securities
lent to counterparties are also retained in the financial statements.
If the ownership interest in an associate is reduced but significant influence is retained, a proportionate share of the amounts previously
recognized in other comprehensive income is reclassified to profit or loss where appropriate.
2.8.1
The BPI Groups share of its associates post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition
movements in reserves is recognized in other comprehensive income. The cumulative post-acquisition movements are adjusted against
the carrying amount of the investment. When the BPI Groups share of losses in an associate equals or exceeds its interest in the
associate, including any other unsecured receivables, the BPI Group does not recognize further losses, unless it has incurred legal or
constructive obligations or made payments on behalf of the associate.
88
Cash and cash equivalents consist of Cash and other cash items, Due from Bangko Sentral ng Pilipinas (BSP), Due from other banks, and
Interbank loans receivable and securities purchased under agreements to resell with maturities of less than three months from the date of
acquisition and that are subject to insignificant risk of changes in value.
The BPI Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired.
If this is the case, the BPI Group calculates the amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognizes the amount adjacent to share of profit (loss) of an associate in profit or loss.
Unrealized gains on transactions between the BPI Group and its associates are eliminated to the extent of the BPI Groups interest in the
associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the BPI Group.
2.4 Investments in subsidiaries and associates
Investments in subsidiaries and associates in the Parent Banks separate financial statements are accounted for using the cost method in
accordance with PAS 27. Under this method, income from investment is recognized in profit or loss only to the extent that the investor
receives distributions from accumulated profits of the investee arising after the acquisition date. Distributions received in excess of such
profits are regarded as a recovery of investment and are recognized as reduction of the cost of the investment.
The Parent Bank recognizes a dividend from a subsidiary or associate in profit or loss in its separate financial statements when its right to
receive the dividend is established.
The Parent Bank determines at each reporting date whether there is any indicator of impairment that the investment in the subsidiary or
associate is impaired. If this is the case, the Parent Bank calculates the amount of impairment as the difference between the recoverable
amount and carrying value and the difference is recognized in profit or loss.
Investments in subsidiaries and associates are derecognized upon disposal or when no future economic benefits are expected to be
derived from the subsidiaries and associates at which time the cost and the related accumulated impairment loss are removed in the
statement of condition. Any gains and losses on disposal is determined by comparing the proceeds with the carrying amount of the
investment and recognized in profit or loss.
2.5 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief executive officer who allocates
resources to, and assesses the performance of the operating segments of the BPI Group.
All transactions between business segments are conducted on an arms length basis, with intra-segment revenue and costs being
eliminated upon consolidation. Income and expenses directly associated with each segment are included in determining business segment
performance.
In accordance with PFRS 8, the BPI Group has the following main banking business segments: consumer banking, corporate banking and
investment banking. Its insurance business is assessed separately from these banking business segments (Note 6).
(5)
2.8 Financial assets

Classification
The BPI Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity securities and available-for-sale securities. The classification depends on the purpose for which the financial
assets are acquired. Management determines the classification of its financial assets at initial recognition.
(a)
Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception.
A financial asset is classified as held for trading if it is acquired principally for the purpose of selling or repurchasing it in the near term or if it
is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern
of short-term profit-taking. Financial assets held for trading (other than derivatives) are shown as Trading securities in the statement of
condition.
Derivatives are also categorized as held for trading unless they are designated as hedging instruments.
Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance is evaluated
on a fair value basis, in accordance with a documented investment strategy. Information about these financial assets is provided internally
on a fair value basis to the BPI Groups key management personnel. The BPI Group has no financial assets that are specifically designated
at fair value through profit or loss.
(b)
Loans and receivables are non-derivative financial assets with fixed or determinable payments: (i) that are not quoted in an active market,
(ii) with no intention of being traded, and (iii) that are not designated as available-for-sale. Significant accounts falling under this category
include loans and advances, cash and other cash items, due from BSP and other banks, interbank loans receivable and securities
purchased under agreements to resell and accounts receivable included under other resources.
(c)
Held-to-maturity securities are non-derivative financial assets with fixed or determinable payments and fixed maturities that the BPI Groups
management has the positive intention and ability to hold to maturity. If the BPI Group were to sell other than an insignificant amount of
held-to-maturity assets, the entire category would be tainted and reclassified as available-for-sale.
(d)
Available-for-sale securities
Available-for-sale securities are non-derivative financial assets that are either designated in this category or not classified in any of the other
categories.
2.8.2
Recognition and measurement
(a) Initial recognition and measurement

Regular-way purchases and sales of financial assets at fair value through profit or loss, held-to-maturity securities and available-for-sale
securities are recognized on trade date, the date on which the BPI Group commits to purchase or sell the asset. Loans and receivables are
recognized upon origination when cash is advanced to the borrowers or when the right to receive payment is established. Financial assets
not carried at fair value through profit or loss are initially recognized at fair value plus transaction costs. Financial assets carried at fair value
through profit or loss are initially recognized at fair value; and transaction costs are recognized in profit or loss.
2014 Annual Report
(6)
89
(b)
Subsequent measurement
Available-for-sale securities and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and
receivables and held-to-maturity securities are subsequently carried at amortized cost. Amortized cost is the amount at which the financial
instrument was recognized at initial recognition less any principal repayments, plus accrued interest, and for financial assets less any writedown for incurred impairment losses. Accrued interest includes amortization of transaction costs deferred at initial recognition and of any
premium or discount to maturity amount using the effective interest method. Accrued interest income, including both accrued coupon and
amortized discount or premium (including fees deferred at origination, if any), are not presented separately and are included in the carrying
values of the related items in the statement of condition. Gains and losses arising from changes in the fair value of financial assets at fair
value through profit or loss are included in the statement of income (as Trading gain/loss on securities) in the year in which they arise.
Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognized directly in other
comprehensive income, until the financial asset is derecognized or impaired at which time the cumulative fair value adjustments previously
recognized in other comprehensive income should be recognized in profit or loss. However, interest is calculated on these securities using
the effective interest method and foreign currency gains and losses on monetary assets classified as available-for-sale are recognized in
profit or loss. Dividends on equity instruments are recognized in profit or loss when the BPI Groups right to receive payment is established.
2.8.3
Reclassification
The BPI Group may choose to reclassify a non-derivative financial asset held for trading out of the held-for-trading category if the financial
asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be
reclassified out of the held-for-trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to
recur in the near term. In addition, the BPI Group may choose to reclassify financial assets that would meet the definition of loans and
receivables out of the held-for-trading or available-for-sale categories if the BPI Group has the intention and ability to hold these financial
assets for the foreseeable future or until maturity at the date of reclassification.
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortized cost as applicable,
and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for
financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date. Further
increases in estimates of cash flows adjust effective interest rates prospectively.
90
2.8.4
Derecognition
For purposes of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk characteristics (i.e., on
the basis of the BPI Groups grading process that considers asset type, industry, geographical location, collateral type, past-due status and
other relevant factors). Those characteristics are relevant to the estimation of future cash flows for groups of such assets by being
indicative of the debtors ability to pay all amounts due according to the contractual terms of the assets being evaluated.
Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of the contractual
cash flows of the assets in the BPI Group and historical loss experience for assets with credit risk characteristics similar to those in the BPI
Group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not
affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not
currently exist. The methodology and assumptions used for estimating future cash flows are reviewed regularly to reduce any differences
between loss estimates and actual loss experience.
When a loan is uncollectible, it is written off against the related allowance for loan impairment. Such loans are written off after all the
necessary procedures have been completed and the amount of loss has been determined.
If in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after
the impairment was recognized (such as an improvement in the debtors credit rating), the previously recognized impairment loss is
reversed by adjusting the allowance account. Subsequent recoveries of amounts previously written-off are credited to impairment loss in
the statement of income.
(b)
Assets classified as available-for-sale
The BPI Group assesses at each reporting date whether there is an objective evidence that a security classified as available-for-sale is
impaired. For debt securities, the BPI Group uses the criteria mentioned in (a) above. For an equity security classified as available-forsale, a significant or prolonged decline in the fair value below cost is considered in determining whether the securities are impaired.
Generally, the BPI Group treats significant as 20% or more and prolonged as greater than twelve months. The cumulative loss
(difference between the acquisition cost and the current fair value less any impairment loss on that financial asset previously recognized in
profit or loss) is removed from other comprehensive income and recognized in profit or loss when the asset is determined to be impaired. If
in a subsequent period, the fair value of a debt instrument previously impaired increases and the increase can be objectively related to an
event occurring after the impairment loss was recognized, the impairment loss is reversed through profit or loss. Reversal of impairment
losses recognized previously on equity instruments is made directly to other comprehensive income.
Financial assets are derecognized when the contractual rights to receive the cash flows from these assets have ceased to exist or the
assets have been transferred and substantially all the risks and rewards of ownership of the assets are also transferred (that is, if
substantially all the risks and rewards have not been transferred, the BPI Group tests control to ensure that continuing involvement on the
basis of any retained powers of control does not prevent derecognition).
(c)
2.9 Impairment of financial assets
2.10 Financial liabilities
(a)
2.10.1
Assets carried at amortized cost
Renegotiated loans
Loans that are either subject to individual or collective impairment assessment and whose terms have been renegotiated are no longer
considered to be past due but are treated as new loans.
Classification
The BPI Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is
impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence
of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
The BPI Group classifies its financial liabilities in the following categories: financial liabilities at fair value through profit or loss and financial
liabilities at amortized cost.
The criteria that the BPI Group uses to determine that there is objective evidence of an impairment loss include:
This category comprises two sub-categories: financial liabilities classified as held for trading, and financial liabilities designated by the BPI
Group as at fair value through profit or loss upon initial recognition.
Delinquency in contractual payments of principal or interest;

Cash flow difficulties experienced by the borrower;
Breach of loan covenants or conditions;
Initiation of bankruptcy proceedings;
Deterioration of the borrowers competitive position; and
Deterioration in the value of collateral.
The BPI Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
significant, and collectively for financial assets that are not individually significant. If the BPI Group determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets
with similar credit risk characteristics and collectively assesses them for impairment. Financial assets that are individually assessed for
impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of impairment.
(a)
Financial liabilities at fair value through profit or loss
A financial liability is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the
near term or if it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent
actual pattern of short-term profit-taking. Derivatives are also categorized as held for trading unless they are designated and effective as
hedging instruments. Gains and losses arising from changes in fair value of financial liabilities classified as held for trading are included in
the statement of income and are reported as Trading gains/losses. The BPI Group has no financial liabilities that are designated at fair
value through profit loss.
(b)
Other liabilities measured at amortized cost
Financial liabilities that are not classified as at fair value through profit or loss fall into this category and are measured at amortized cost.
Financial liabilities measured at amortized cost include deposits from customers and banks, bills payable, amounts due to BSP and other
banks, managers checks and demand drafts outstanding, subordinated notes and other financial liabilities under deferred credits and other
liabilities.
The amount of impairment loss is measured as the difference between the assets carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have not been incurred) discounted at the financial assets original effective interest
rate (recoverable amount). The calculation of recoverable amount of a collateralized financial asset reflects the cash flows that may result
from foreclosure less costs of obtaining and selling the collateral, whether or not foreclosure is probable. If a loan or held-to-maturity
investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined
under the contract. The carrying amount of the asset is reduced through the use of an allowance account and the amount of loss is
recognized in profit or loss.
(7)
2014 Annual Report
(8)
91
2.10.2
(a)
Recognition and measurement
Initial recognition and measurement

Financial liabilities not carried at fair value through profit or loss are initially recognized at fair value plus transaction costs. Financial
liabilities carried at fair value through profit or loss are initially recognized at fair value; and transaction costs are recognized as
expense in profit or loss.
(b)
Subsequent measurement
Financial liabilities at fair value through profit or loss are subsequently carried at fair value. Other liabilities are measured at amortized
cost using the effective interest method.
2.10.3
Derecognition
For more complex instruments, the BPI Group uses internally developed models, which are usually based on valuation methods and
techniques generally recognized as standard within the industry. Valuation models are used primarily to value derivatives transacted in the
OTC market, unlisted debt securities (including those with embedded derivatives) and other debt instruments for which markets were or
have become illiquid. Some of the inputs to these models may not be market observable and are therefore estimated based on
assumptions.
The fair value of OTC derivatives is determined using valuation methods that are commonly accepted in the financial markets, such as
present value techniques and option pricing models. The fair value of foreign exchange forwards is generally based on current forward
exchange rates, with the resulting value discounted back to present value.
In cases when the fair value of unlisted equity instruments cannot be determined reliably, the instruments are carried at cost less
impairment. The fair value for loans and advances as well as liabilities to banks and customers are determined using a present value model
on the basis of contractually agreed cash flows, taking into account credit quality, liquidity and costs. The fair values of contingent liabilities
and irrevocable loan commitments correspond to their carrying amounts.
Financial liabilities are derecognized when they have been redeemed or otherwise extinguished (i.e. when the obligation is discharged or is
cancelled or has expired). Collateral (shares and bonds) furnished by the BPI Group under standard repurchase agreements and securities
lending and borrowing transactions is not derecognized because the BPI Group retains substantially all the risks and rewards on the basis
of the predetermined repurchase price, and the criteria for derecognition are therefore not met.
(b)
2.11 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
Market approach - A valuation technique that uses observable inputs, such as prices, broker quotes and other relevant information
generated by market transactions involving identical or comparable assets or group of assets.
Income approach - A valuation technique that converts future amounts (e.g., cash flows or income and expenses) to a single current
(i.e., discounted) amount. The fair value measurement is determined on the basis of the value indicated by current market
expectations about those future amounts.
Cost approach - A valuation technique that reflects the amount that would be required currently to replace the service capacity of an
asset (often referred to as current replacement cost).
The BPI Group uses valuation techniques that are appropriate in the circumstances and applies the technique consistently. Commonly used
valuation techniques are as follows:
The fair value of a non-financial asset is measured based on its highest and best use. The assets current use is presumed to be its highest
and best use.
92
The fair value of financial and non-financial liabilities takes into account non-performance risk, which is the risk that the entity will not fulfill
an obligation.
The BPI Group classifies its fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following levels:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. This level includes listed equity securities and
debt instruments on exchanges (for example, Philippine Stock Exchange, Inc., Philippine Dealing and Exchange Corp., etc.).
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices). This level includes the majority of the over-the-counter (OTC) derivative contracts.
The primary source of input parameters like LIBOR yield curve or counterparty credit risk is Bloomberg.
Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs). This level includes equity
investments and debt instruments with significant unobservable components. This hierarchy requires the use of observable market
data when available. The BPI Group considers relevant and observable market prices in its valuations where possible. The BPI Group
has no assets or liabilities classified under Level 3 as at December 31, 2014 and 2013.
Non-financial assets or liabilities
The fair values were determined in reference to observable market inputs reflecting orderly transactions, i.e. market listings, published
broker quotes and transacted deals from similar and comparable assets, adjusted to determine the point within the range that is most
representative of the fair value under current market conditions. The fair values of BPI Groups investment properties and foreclosed assets
(shown as Assets held for sale) fall under level 2 of the fair value hierarchy. The BPI Group has no non-financial assets or liabilities
classified under Level 3 as at December 31, 2014 and 2013.
The appropriate level is determined on the basis of the lowest level input that is significant to the fair value measurement.
(a)
Financial instruments
For financial instruments traded in active markets, the determination of fair values of financial assets and financial liabilities is based on
quoted market prices or dealer price quotations. This includes listed equity securities and quoted debt instruments on major exchanges and
broker quotes mainly from Bloomberg.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange,
dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market
transactions on an arms length basis. If the above criteria are not met, the market is regarded as being inactive. Indications that a market is
inactive are when there is a wide bid-offer spread or significant increase in the bid-offer spread or there are few recent transactions.
For all other financial instruments, fair value is determined using valuation techniques. In these techniques, fair values are estimated from
observable data in respect of similar financial instruments, using models to estimate the present value of expected future cash flows or
other valuation techniques, using inputs (for example, LIBOR yield curve, FX rates, volatilities and counterparty spreads) existing at
reporting dates. The BPI Group uses widely recognized valuation models for determining fair values of non-standardized financial
instruments of lower complexity, such as options or interest rate and currency swaps. For these financial instruments, inputs into models
are generally market observable.
(9)
2014 Annual Report
(10)
93
2.12 Classes of financial instruments
2.13 Offsetting of financial instruments
The BPI Group classifies the financial instruments into classes that reflect the nature of information and take into account the characteristics
of those financial instruments. The classification made can be seen in the table below:
Financial assets and liabilities are offset and the net amount reported in the statement of condition when there is a legally enforceable right
to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.
Financial assets
Classes (as determined by the BPI Group)
Categories
(as defined by PAS 39)
Main classes
Financial assets at fair value

through profit or loss
- Trading securities
- Derivative financial assets
- Cash and other cash items
- Loans and advances
to banks

- Loans and advances to
customers
- Others
94
Held-to-maturity investments
Available-for-sale financial
assets
Financial liabilities
Financial liabilities at fair

value through profit or loss
Financial liabilities at
amortized cost
Off-balance sheet
financial
instruments
(11)
Loan commitments
- Investment securities
(debt securities)
(debt securities)
(equity securities)
Sub-classes
- Debt securities
- Equity securities
- Due from BSP
- Due from other banks
- Interbank loans receivable and
securities purchased under agreements
to resell
- Real estate
mortgages
- Loans to
- Auto loans
individuals
(retail)
- Credit cards
- Others
- Large corporate
- Loans to
customers
corporate
- Small and mediumentities
sized enterprises
- Accounts receivables
- Sales contracts receivable
- Rental deposits
- Other accrued interest and fees
receivable
- Government
- Others
- Government
- Others
- Listed
- Unlisted
- Derivative financial liabilities

- Demand
- Deposits from
- Savings
customers
- Time
- Deposits from banks
- Bills payable
- Due to BSP and other
banks
- Managers check and
demand drafts outstanding
- Interest payable
- Unsecured subordinated
debt
- Other liabilities
- Accounts payable
- Outstanding acceptances
- Dividend payable
2.14 Derivative financial instruments

Derivatives are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured
at their fair value. Fair values are obtained from quoted market prices in active markets including recent market transactions, and valuation
techniques (for example for structured notes), including discounted cash flow models and options pricing models, as appropriate. All
derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
Certain derivatives embedded in other financial instruments are treated as separate derivatives when their economic characteristics and
risks are not closely related to those of the host contract and the host contract is not carried at fair value through profit or loss. The
assessment of whether an embedded derivative is required to be separated from the host contract is done when the BPI Group first
becomes a party to the contract. Reassessment of embedded derivative is only done when there are changes in the contract that
significantly modify the contractual cash flows. The embedded derivatives are measured at fair value with changes in fair value recognized
in profit or loss.
The BPI Groups derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that
does not qualify for hedge accounting are recognized immediately in the statement of income under Trading gain/loss on securities.
2.15 Bank premises, furniture, fixtures and equipment
Land and buildings comprise mainly of branches and offices. All bank premises, furniture, fixtures and equipment are stated at historical
cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of an asset which
comprises its purchase price, import duties and any directly attributable costs of bringing the asset to its working condition and location for
its intended use.
Subsequent costs are included in the assets carrying amount or are recognized as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the BPI Group and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to profit or loss during the year in which they are incurred.
Land is not depreciated. Depreciation for buildings and furniture and equipment is calculated using the straight-line method to allocate cost
or residual values over the estimated useful lives of the assets, as follows:
Building
Furniture and equipment
Equipment for lease
25-50 years
3-5 years
2-8 years
Leasehold improvements are depreciated over the shorter of the lease term (ranges from 5 to 10 years) and the useful life of the related
improvement (ranges from 5 to 10 years). Major renovations are depreciated over the remaining useful life of the related asset.
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its
estimated recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell and value in use. Bank
premises, furniture, fixtures and equipment with carrying value of P69 million were fully impaired as at December 31, 2014
(2013 - P56 million).
An item of Bank premises, furniture, fixtures and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period the item is derecognized.
Guarantees, acceptances and other financial facilities
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2.16 Investment properties
(c)
Properties that are held either to earn rental income or for capital appreciation or both, and that are not significantly occupied by the BPI
Group are classified as investment properties. Transfers to, and from, investment property are made when, and only when, there is a
change in use, evidenced by:
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These
costs are amortized on a straight-line basis over the expected useful lives (three to five years). Computer software is included in Miscellaneous
assets under Other resources.
(a)
(b)
Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique software products controlled by the BPI Group are recognized as intangible
assets when the following criteria are met:
(c)
(d)
Commencement of owner-occupation, for a transfer from investment property to owner-occupied property;

Commencement of development with a view of sale, for a transfer from investment property to real properties held-for-sale and
development;
End of owner occupation, for a transfer from owner-occupied property to investment property; or
Commencement of an operating lease to another party, for a transfer from real properties held-for-sale and development to investment
property.
Transfers to and from investment property do not result in gain or loss.

Investment properties comprise land and building. Investment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and impairment losses, if any.
Depreciation on investment property is determined using the same policy as applied to Bank premises, furniture, fixtures, and equipment.
Impairment test is conducted when there is an indication that the carrying amount of the asset may not be recovered. An impairment loss is
recognized for the amount by which the propertys carrying amount exceeds its recoverable amount, which is the higher of the propertys
fair value less costs to sell and value in use.
An item of investment property is derecognized upon disposal or when no future economic benefits are expected to arise from the continued
use of the asset. Any gains and losses arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the item) is included in profit or loss in the period the item is derecognized.
Computer software
it is technically feasible to complete the software product so that it will be available for use;
management intends to complete the software product and use or sell it;
there is an ability to use or sell the software product;
it can be demonstrated how the software product will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use or sell the software product are available;
and
the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalized as part of the software product include the software development employee costs and an
appropriate portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognized as an expense when incurred. Development costs previously
recognized as an expense are not recognized as an asset in a subsequent period.
2.19 Impairment of non-financial assets
2.17 Foreclosed assets
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Foreclosed assets not classified as Assets held for sale are accounted for in any of the following classification using the measurement basis
appropriate to the asset as follows:
Assets that have indefinite useful lives - for example, goodwill or intangible assets not ready for use - are not subject to amortization and are
tested annually for impairment and more frequently if there are indicators of impairment. Assets that have definite useful lives are subject to
amortization and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an assets fair value less costs to sell and value in use. For purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of impairment at each reporting date.
(a)
Investment property is accounted for using the cost model under PAS 40;
2.20 Borrowings and borrowing costs
(b)
Bank-occupied property is accounted for using the cost model under PAS 16; and
(c)
Financial assets are classified as available-for-sale.
The BPI Groups borrowings consist mainly of bills payable and unsecured subordinated debt. Borrowings are recognized initially at fair value,
being their issue proceeds, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between
the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the
effective interest method.
Assets foreclosed shown as Assets held for sale in the statement of condition are accounted for at the lower of cost and fair value less cost to
sell similar to the principles of PFRS 5. The cost of assets foreclosed includes the carrying amount of the related loan less allowance for
impairment at the time of foreclosure. Impairment loss is recognized for any subsequent write-down of the asset to fair value less cost to sell.
2.18 Intangible assets

(a)
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost
of the asset. All other borrowing costs are expensed as incurred. The BPI Group has no qualifying asset as at December 31, 2014 and 2013.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the BPI Groups share in the net identifiable assets of the
acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in Miscellaneous assets under
Other resources in the consolidated financial statements. Goodwill on acquisitions of associates is included in Investments in subsidiaries and
associates. Separately recognized goodwill is carried at cost less accumulated impairment losses. Gains and losses on the disposal of a
subsidiary/associate include carrying amount of goodwill relating to the subsidiary/associate sold.
Goodwill is an indefinite-lived intangible asset and hence not subject to amortization.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each cash-generating unit is represented by each primary
reporting segment.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment.
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell.
Any impairment is recognized immediately as an expense and is not subsequently reversed.
(b)
Contractual customer relationships
Contractual customer relationships acquired in a business combination are recognized at fair value at the acquisition date. The contractual
customer relationships have finite useful lives and are carried at cost less accumulated amortization. Amortization is calculated using the
straight-line method over the expected life of the customer relationship.
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2.21 Interest income and expense

Interest income and expense are recognized in profit or loss for all interest-bearing financial instruments using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest
income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of
the financial asset or financial liability.
When calculating the effective interest rate, the BPI Group estimates cash flows considering all contractual terms of the financial instrument but
does not consider future credit losses. The calculation includes all fees paid or received between parties to the contract that are an integral part
of the effective interest rate, transaction costs and all other premiums or discounts.
Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is
recognized using the rate of interest used to discount the future cash flows for the purpose of measuring impairment loss.
2.22 Fees and commission income
Fees and commissions are generally recognized on an accrual basis when the service has been provided. Commission and fees arising
from negotiating or participating in the negotiation of a transaction for a third party (i.e. the arrangement of the acquisition of shares or other
securities, or the purchase or sale of businesses) are recognized on completion of underlying transactions. Portfolio and other
management advisory and service fees are recognized based on the applicable service contracts, usually on a time-proportionate basis.
Asset management fees related to investment funds are recognized ratably over the period in which the service is provided.
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2.23 Dividend income
2.28 Income taxes
Dividend income is recognized in profit or loss when the BPI Groups right to receive payment is established.
(a)
2.24 Credit card income
Income tax payable is calculated on the basis of the applicable tax law in the respective jurisdiction and is recognized as an expense for the
year except to the extent that current tax is related to items (for example, current tax on available-for-sale investments) that are charged or
credited in other comprehensive income or directly to capital funds.
Credit card income is recognized upon receipt from merchants of charges arising from credit card transactions. These are computed based
on rates agreed with merchants and are deducted from the payments to establishments.
2.25 Foreign currency translation
The BPI Group has substantial income from its investment in government securities subject to final withholding tax. Such income is presented
at its gross amount and the final tax paid or withheld is included in Provision for income tax - Current.
(a)
(b)
Functional and presentation currency
Items in the financial statements of each entity in the BPI Group are measured using the currency of the primary economic environment in
which the entity operates (the functional currency). The financial statements are presented in Philippine Peso, which is the Parent Banks
functional and presentation currency.
(b)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions
or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or
loss. Non-monetary items measured at historical cost denominated in a foreign currency are translated at exchange rates as at the date of
initial recognition. Non-monetary items in a foreign currency that are measured at fair value are translated using the exchange rates at the
date when the fair value is determined.
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Current income tax
Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are analyzed between
translation differences resulting from changes in the amortized cost of the security, and other changes in the carrying amount of the
security. Translation differences are recognized in profit or loss, and other changes in carrying amount are recognized in other
comprehensive income.
Translation differences on non-monetary financial instruments, such as equities held at fair value through profit or loss, are reported as part
of the fair value gain or loss recognized under Trading gain (Ioss) in the statement of income. Translation differences on non-monetary
financial instruments, such as equities classified as available-for-sale, are included in Accumulated other comprehensive income (loss) in
the capital funds.
(c)
Foreign subsidiaries
Deferred income tax
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in
a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the reporting date and are
expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax losses (net operating loss
carryover or NOLCO) and unused tax credits (excess minimum corporate income tax or MCIT) to the extent that it is probable that future
taxable profit will be available against which the temporary differences, unused tax losses and unused tax credits can be utilized. Deferred
income tax liabilities are recognized in full for all taxable temporary differences except to the extent that the deferred tax liability arises from
the initial recognition of goodwill.
The BPI Group reassesses at each reporting date the need to recognize a previously unrecognized deferred income tax asset.
Deferred income tax assets are recognized on deductible temporary differences arising from investments in subsidiaries, and associates and
joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit
available against which the temporary difference can be utilized.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, and associates and joint
arrangements, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the BPI Group
and it is probable that the temporary difference will not reverse in the foreseeable future. Generally the BPI Group is unable to control the
reversal of the temporary difference for associates except when there is an agreement in place that gives the BPI Group the ability to control the
reversal of the temporary difference.
The results and financial position of BPIs foreign subsidiaries (none of which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax
liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the
taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
(i)
assets and liabilities are translated at the closing rate at reporting date;
2.29 Employee benefits
(ii)
income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions); and
(a)
(iii)
all resulting exchange differences are recognized as a separate component (Translation adjustments) of Accumulated other
comprehensive income (loss) in the capital funds. When a foreign operation is sold, such exchange differences are recognized in
profit or loss as part of the gain or loss on sale.
2.26 Accrued expenses and other liabilities

Accrued expenses and other liabilities are recognized in the period in which the related money, goods or services are received or when a legally
enforceable claim against the BPI Group is established.
2.27 Provisions for legal or contractual obligations
Provisions are recognized when all of the following conditions are met: (i) the BPI Group has a present legal or constructive obligation as a
result of past events; (ii) it is probable that an outflow of resources will be required to settle the obligation; and (iii) the amount has been reliably
estimated. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the
class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item is included in the
same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that
reflects the current market assessments of the time value of money and the risk specific to the obligation. The increase in the provision due to
the passage of time is recognized as interest expense.
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Pension obligations
The BPI Group has a defined benefit plan that shares risks among entities within the group. A defined benefit plan is a pension plan that
defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age,
years of service and compensation.
The liability recognized in the statement of condition in respect of defined benefit pension plan is the present value of the defined benefit
obligation at the reporting date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent
actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be
paid, and that have terms to maturity approximating the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in
other comprehensive income in the period in which they arise.
Past-service costs are recognized immediately in profit or loss.
For individual financial reporting purposes, the unified plan assets are allocated among the BPI Group entities based on the level of the
defined benefit obligation attributable to each entity to arrive at the net liability or asset that should be recognized in the individual financial
statements.
(b)
Share-based compensation
The BPI Group engages in equity-settled share-based payment transactions in respect of services received from certain employees.
The fair value of the services received is measured by reference to the fair value of the shares or share options granted on the date of the
grant. The cost of employee services received in respect of the shares or share options granted is recognized in profit or loss (with a
corresponding increase in reserve in capital funds) over the period that the services are received, which is the vesting period.
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The fair value of the options granted is determined using option pricing models which take into account the exercise price of the option, the
current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and other relevant factors.
(b)
(i)
When the stock options are exercised, the proceeds received, net of any directly attributable transaction costs, are credited to share capital
(par value) and share premium for the excess of exercise price over par value.
(c)
Operating lease
Properties (land and building) leased out under operating leases are included in Investment properties in the statement of
condition. Rental income under operating leases is recognized in profit or loss on a straight-line basis over the period of the
lease.
Profit sharing and bonus plans

(ii)
The BPI Group recognizes a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the
profit attributable to the Parent Banks shareholders after certain adjustments. The BPI Group recognizes a provision where contractually
obliged or where there is a past practice that has created a constructive obligation.
Finance lease
When assets are leased out under a finance lease, the present value of the lease payments is recognized as a receivable. The
difference between the gross receivable and the present value of the receivable is recognized as unearned finance income.
2.30 Capital funds
Lease income under finance lease is recognized over the term of the lease using the net investment method before tax, which
reflects a constant periodic rate of return.
Common shares and preferred shares are classified as share capital.

Share premium includes any premiums or consideration received in excess of par value on the issuance of share capital.
2.35 Insurance and pre-need operations
Incremental costs directly attributable to the issue of new shares or options are shown in capital funds as a deduction from the proceeds,
net of tax.
(a)
2.31 Earnings per share (EPS)

Basic EPS is calculated by dividing income applicable to common shares by the weighted average number of common shares outstanding
during the year with retroactive adjustments for stock dividends. In case of a rights issue, an adjustment factor is being considered for the
weighted average number of shares outstanding for all periods before the rights issue. Diluted EPS is computed in the same manner as
basic EPS, however, net income attributable to common shares and the weighted average number of shares outstanding are adjusted for
the effects of all dilutive potential common shares.
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BPI Group is the lessor
2.32 Dividends on common shares

Dividends on common shares are recognized as a liability in the BPI Groups financial statements in the period in which the dividends are
approved by the Board of Directors and the BSP.
Non-life insurance
The more significant accounting policies observed by the non-life insurance subsidiaries follow: (a) gross premiums written from short-term
insurance contracts are recognized at the inception date of the risks underwritten and are earned over the period of cover in accordance with
the incidence of risk using the 24th method; (b) acquisition costs are deferred and charged to expense in proportion to the premium revenue
recognized; reinsurance commissions are deferred and deducted from the applicable deferred acquisition costs, subject to the same
amortization method as the related acquisition costs; (c) a liability adequacy test is performed which compares the subsidiaries reported
insurance contract liabilities against current best estimates of all contractual future cash flows and claims handling, and policy
administration expenses as well as investment income backing up such liabilities, with any deficiency immediately charged to profit or loss;
(d) amounts recoverable from reinsurers and loss adjustment expenses are classified as assets, with an allowance for estimated uncollectible
amounts; and (e) financial assets and liabilities are measured following the classification and valuation provisions of PAS 39.
(b)
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Pre-need
The BPI Group commonly acts as trustee and in other fiduciary capacities that result in the holding or placing of assets on behalf of individuals,
trusts, retirement benefit plans and other institutions. These assets and income arising thereon are excluded from these financial statements, as
they are not assets of the BPI Group (Note 29).
The more significant provisions of the PNUCA as applied by the pre-need subsidiary follow: (a) premium income from sale of pre-need
plans is recognized as earned when collected; (b) costs of contracts issued and other direct costs and expenses are recognized as expense
when incurred; (c) pre-need reserves which represent the accrued net liabilities of the subsidiary to its plan holders are actuarially computed
based on standards and guidelines set forth by the Insurance Commission; the increase or decrease in the account is charged or credited
to other costs of contracts issued in profit or loss; and (d) insurance premium reserves which represent the amount that must be set aside
by the subsidiary to pay for premiums for insurance coverage of fully paid plan holders, are actuarially computed based on standards and
guidelines set forth by the Insurance Commission.
2.34 Leases
2.36 Related party relationships and transactions
(a)
Related party relationship exists when one party has the ability to control, directly, or indirectly through one or more intermediaries, the other
party or exercises significant influence over the other party in making financial and operating decisions. Such relationship also exists between
and/or among entities which are under common control with the reporting enterprise, or between and/or among the reporting enterprise and its
key management personnel, directors, or its shareholders. In considering each possible related party relationship, attention is directed to the
substance of the relationship, and not merely the legal form.
2.33 Fiduciary activities
BPI Group is the lessee

(i)
Operating lease
Leases in which a significant portion of the risks and rewards of ownership are retained by another party, the lessor, are classified
as operating leases. Payments, including prepayments, made under operating leases (net of any incentives received from the
lessor) are charged to Occupancy and equipment-related expenses in the statement of income on a straight-line basis over the
period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be
made to the lessor by way of penalty is recognized as an expense in the period in which the termination takes place.
(ii)
Finance lease
Leases of assets, where the BPI Group has substantially all the risks and rewards of ownership, are classified as finance leases.
Finance leases are capitalized at the commencement of the lease at the lower of the fair value of the leased property and the
present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as
to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
2.37 Comparatives
Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with comparative information.
Where PAS 8 applies, comparative figures have been adjusted to conform with changes in presentation in the current year. There were no
changes to the presentation made during the year.
2.38
Reclassification
Certain amounts have been reclassified in the statement of condition to conform with the current years presentation. This is not considered
material and did not change the amount of total resources as at December 31, 2013.
2.39 Subsequent events (or Events after the reporting date)
Post year-end events that provide additional information about the BPI Groups financial position at the reporting date (adjusting events) are
reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements when
material.
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Note 3 - Financial Risk and Capital Management
(b)
Risk management in the BPI Group covers all perceived areas of risk exposure, even as it continuously endeavors to uncover hidden risks.
Capital management is understood to be a facet of risk management. The Board of Directors, through its Risk Management Committee
(RMC), sets the BPI Groups management tone by specifying the parameters by which financial and business risks are to be taken and by
allocating the appropriate capital for absorbing potential losses from such risks.
For debt securities and other bills, external ratings such as Standard & Poors, Moodys and Fitchs ratings or their equivalents are used by
the BPI Group for managing credit risk exposures. Investments in these securities and bills are viewed as a way to gain better credit quality
mix and at the same time, maintain a readily available source to meet funding requirements.
The primary objective of the BPI Group is the generation of recurring acceptable returns to shareholders capital. To this end, the BPI Groups
policies, business strategies, and business activities are directed towards the generation of cash flows that are in excess of its fiduciary and
contractual obligations to its depositors, and to its various other funders and stakeholders.
3.1.2 Risk limit control and mitigation policies

The BPI Group manages, limits and controls concentrations of credit risk wherever they are identified - in particular, to individual
counterparties and groups, to industries and sovereigns.
To generate acceptable returns to its shareholders capital, the BPI Group understands that it has to bear risk, that risk-taking is inherent in its
business. Risk is understood by the BPI Group as the uncertainty in its future income - an uncertainty that emanates from the possibility of
incurring losses that are due to unplanned and unexpected drops in revenues, increases in expenses, impairment of asset values, or increases
in liabilities.
The BPI Group structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one borrower,
or groups of borrowers, and to geographical and industry segments. Such risks are monitored on a regular basis and subjected to annual or
more frequent review, when considered necessary. Limits on large exposures and credit concentration are approved by the Board of
Directors.
The possibility of incurring losses is, however, compensated by the possibility of earning more than expected income. Risk-taking is, therefore,
not entirely bad to be avoided. Risk-taking presents opportunities if risks are accounted, deliberately taken, and are kept within rationalized
limits.
The exposure to any one borrower is further restricted by sub-limits covering on- and off-balance sheet exposures. Actual exposures against
limits are monitored regularly.
The most important risks that the BPI Group manages are credit risk, liquidity risk, market risk and other operational and information technology
(IT) risks.
The BPI Group takes on exposure to credit risk, which is the risk that a counterparty will cause a financial loss to the BPI Group by failing to
discharge an obligation. Significant changes in the economy, or in the prospects of a particular industry segment that may represent a
concentration in the BPI Groups portfolio, could result in losses that are different from those provided for at the reporting date. Management
therefore carefully manages its exposure to credit risk. Credit exposures arise principally in loans and advances, debt securities and other bills.
There is also credit risk in off-balance sheet financial arrangements. The Credit Policy Group works with the Credit Committee in managing
credit risk, and reports are regularly provided to the Board of Directors.
Loans and advances
Collateral
One of the most traditional and common practice in mitigating credit risk is requiring security particularly for loans and advances. The BPI
Group implements guidelines on the acceptability of specific classes of collateral for credit risk mitigation. The principal collateral types for
loans and advances are:
Mortgages over real estate properties and chattels; and
Hold-out on financial instruments such as debt securities deposits, and equities
In order to minimize credit loss, the BPI Group seeks additional collateral from the counterparty when impairment indicators are observed
for the relevant individual loans and advances.
In measuring credit risk of loans and advances at a counterparty level, the BPI Group considers three components: (i) the probability of
default by the client or counterparty on its contractual obligations; (ii) current exposures to the counterparty and its likely future
development; and (iii) the likely recovery ratio on the defaulted obligations. In the evaluation process, the BPI Group also considers the
conditions of the industry/sector to which the counterparty is exposed, other existing exposures to the group where the counterparty may be
related, as well as the client and the BPI Groups fallback position assuming the worst-case scenario. Outstanding and potential credit
exposures are reviewed to likewise ensure that they conform to existing internal credit policies.
The BPI Group assesses the probability of default of individual counterparties using internal rating tools tailored to the various categories of
counterparty. The BPI Group has internal credit risk rating systems, designed for corporate, small and medium-sized enterprises (SMEs),
and retail accounts, that measure the borrower's credit risk based on quantitative and qualitative factors. The ratings of individual
exposures may subsequently migrate between classes as the assessment of their probabilities of default changes. For retail, the consumer
credit scoring system is a formula-based model for evaluating each credit application against a set of characteristics that experience has
shown to be relevant in predicting repayment. The BPI Group regularly validates the performance of the rating systems and their predictive
power with regard to default events, and enhances them if necessary. The BPI Group's internal ratings are mapped to the following
standard BSP classifications:
Unclassified - these are loans that do not have a greater-than-normal risk and do not possess the characteristics of loans classified
below. The counterparty has the ability to satisfy the obligation in full and therefore minimal loss, if any, is anticipated.
Loans especially mentioned - these are loans that have potential weaknesses that deserve managements close attention. These
potential weaknesses, if left uncorrected, may affect the repayment of the loan and thus increase the credit risk of the BPI Group.
Substandard - these are loans which appear to involve a substantial degree of risk to the BPI Group because of unfavorable record or
unsatisfactory characteristics. Further, these are loans with well-defined weaknesses which may include adverse trends or
development of a financial, managerial, economic or political nature, or a significant deterioration in collateral.
Doubtful - these are loans which have the weaknesses similar to those of the substandard classification with added characteristics that
existing facts, conditions, and values make collection or liquidation in full highly improbable and substantial loss is probable.
Loss - these are loans which are considered uncollectible and of such little value that their continuance as bankable assets is not
warranted although the loans may have some recovery or salvage value.
(19)
(a)
3.1.1 Credit risk management

(a)
Exposure to credit risk is also managed through regular analysis of the ability of existing and potential borrowers to meet interest and capital
repayment obligations and by changing these lending limits where appropriate.
The BPI Group employs a range of policies and practices to mitigate credit risk. Some of these specific control and mitigation measures are
outlined below.
3.1 Credit risk
102
Debt securities and other bills
(b)
Derivatives
The BPI Group maintains strict market limits on net open derivative positions (i.e., the difference between purchase and sale contracts). Credit
risk is limited to the net current fair value of instruments, which in relation to derivatives is only a small fraction of the contract, or notional values
used to express the volume of instruments outstanding. This credit risk exposure is managed as part of the overall lending limits with
customers, together with potential exposures from market movements. Collateral or other security is not usually obtained for credit risk
exposures on these instruments (except where the BPI Group requires margin deposits from counterparties).
Settlement risk arises in any situation where a payment in cash, securities, foreign exchange currencies, or equities is made in the expectation
of a corresponding receipt in cash, securities, foreign exchange currencies, or equities. Daily settlement limits are established for each
counterparty to cover the aggregate of all settlement risk arising from the BPI Groups market transactions on any single day. The introduction
of the delivery versus payment facility in the local market has brought down settlement risk significantly.
(c)
Master netting arrangements
The BPI Group further restricts its exposure to credit losses by entering into master netting arrangements with counterparties with which it
undertakes a significant volume of transactions. Master netting arrangements do not generally result in an offset of balance sheet assets and
liabilities, as transactions are usually settled on a gross basis. However, the credit risk associated with favorable contracts (asset position) is
reduced by a master netting arrangement to the extent that if a default occurs, all amounts with the counterparty are terminated and settled on a
net basis. The BPI Groups overall exposure to credit risk on derivative instruments subject to master netting arrangements can change
substantially within a short period, as it is affected by each transaction subject to the arrangement.
(20)
2014 Annual Report
103
(d)
Credit-related commitments
3.1.4 Maximum exposure to credit risk before collateral held or other credit enhancements
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Standby letters of credit carry the
same credit risk as loans. Documentary and commercial letters of credit - which are written undertakings by the BPI Group on behalf of a
customer authorizing a third party to draw drafts on the BPI Group up to a stipulated amount under specific terms and conditions - are
collateralized by the underlying shipments of goods to which they relate and therefore carry less risk than a direct loan.
Credit risk exposures relating to significant on-balance sheet financial assets are as follows:
Consolidated
Commitments to extend credit represent unused portions of authorizations to extend credit in the form of loans, or letters of credit. With respect
to credit risk on commitments to extend credit, the BPI Group is potentially exposed to loss in an amount equal to the total unused
commitments. However, the likely amount of loss is less than the total unused commitments, as most commitments to extend credit are
contingent upon customers maintaining specific credit standards. The BPI Group monitors the term to maturity of credit commitments because
longer-term commitments generally have a greater degree of credit risk than shorter-term commitments.
Due from BSP

Interbank loans receivable and securities purchased
under agreements to resell (SPAR)
Derivative financial assets
Trading securities - debt securities
Available-for-sale - debt securities
Other financial assets
Accounts receivable, net
Other accrued interest and fees receivable
Sales contracts receivable, net
Rental deposits
Others, net
3.1.3 Impairment and provisioning policies

As described in Note 3.1.1, the BPI Groups credit-quality mapping on loans and advances is based on the standard BSP loan classifications.
Impairment provisions are recognized for financial reporting purposes based on objective evidence of impairment (Note 2.9).
The table below shows the percentage of the BPI Groups loans and advances and the related allowance for impairment.
Consolidated
2013
2014
Loans and
advances (%)
104
Unclassified
Loans especially mentioned
Substandard
Doubtful
Loss
Allowance for
impairment (%)
98.14
0.26
0.64
0.45
0.51
0.77
5.35
21.19
63.85
100.00
100.00
Loans and
advances (%)
Allowance for
impairment (%)
97.61
0.34
0.90
0.52
0.63
0.81
5.46
20.12
62.55
100.00
100.00
Parent
2013
2014

170,648
244,483
15,429
17,070
211,946
22,227
5,782
17,397
5,246
10,037
35,981
15,247
47,484
209,409
800,170
16,550
4,334
85,885
96,172
630,203
35,981
6,620
41,604
193,001
621,441
16,550
2,626
81,486
85,900
475,155
1,489
661
39
366
425
879
662
78
335
444
1,063
613
304
387
623
573
27
280
393
1,351,226
1,114,492
1,092,337
877,515
Consolidated
Loans and
advances (%)
Unclassified
Loans especially mentioned
Substandard
Doubtful
Loss
98.61
0.16
0.55
0.25
0.43
0.75
6.75
21.23
72.32
100.00
100.00
2013
2014
2013
Allowance for
impairment (%)
Loans and
advances (%)
97.99
0.28
0.76
0.38
0.59
100.00
Allowance for
impairment (%)
0.84
5.37
19.23
67.92
100.00
195,076
8,789
105
Credit risk exposures relating to off-balance sheet items are as follows:
Parent
2014
2013
2014
Undrawn loan commitments

Bills for collection
Unused letters of credit
Others
Parent
2014
2013
154,257
13,686
12,196
1,213

148,215
120,792
13,679
14,863
12,196
13,117
1,213
1,390
114,960
14,848
13,117
1,390
181,352
150,162
144,315
175,303
The preceding table represents the maximum credit risk exposure at December 31, 2014 and 2013, without taking into account any collateral
held or other credit enhancements. For on-balance-sheet assets, the exposures set out above are based on net carrying amounts as reported
in the statement of condition.
Management is confident in its ability to continue to control and sustain minimal exposure to credit risk of the BPI Group resulting from its loan
and advances portfolio based on the following:
(21)
98% of the loans and advances portfolio is considered to be neither past due nor impaired (2013 - 97%);
Mortgage loans are backed by collateral; and
The BPI Group continues to implement stringent selection process of granting loans and advances.
2014 Annual Report
(22)
3.1.5 Credit quality of loans and advances
(b)
Loans and advances are summarized as follows:
The table below presents the gross amount of loans and advances that were past due but not impaired classified by type of borrowers.
Collateralized past due loans are not considered impaired when the cash flows that may result from foreclosure of the related collateral are
higher than the carrying amount of the loans.
Consolidated
2013
2014
Neither past due nor impaired
Past due but not impaired
Impaired
2014

617,395
624,220
4,454
7,481
8,770
11,119
793,702
5,407
14,767
Allowance for impairment
Parent
2013
Loans and advances past due but not impaired
Consolidated
471,920
3,182
8,916
813,876
(13,706)
642,820
(12,617)
630,619
(9,178)
484,018
(8,863)
800,170
630,203
621,441
475,155
Impaired category as shown in the table above includes loan accounts which are individually (Note 3.1.5c) and collectively assessed for
impairment.
The total consolidated impairment provision for loans and advances is P2,990 million (2013 - P1,886 million), of which P1,703 million
(2013 - P1,334 million) represents provision for individually impaired loans and the remaining amount of P1,287 million (2013 - P552 million)
represents the portfolio provision. Further information of the impairment allowance for loans and advances is provided in Note 13.
When entering into new markets or new industries, the BPI Group focuses on corporate accounts and retail customers with good credit rating
and customers providing sufficient collateral, where appropriate or necessary.
2013
2014
Large
corporate
customers
Small and
medium
enterprises
Large
corporate
customers
Small and
medium
enterprises
Retail
customers
Retail
customers
Past due up to 30 days
541
292
2,057

2,890
175
Past due 31 - 90 days
262
148
996
226
1,623
2,024
1,406
81
144
888
466
241
1,113
47
754
122
224
1,628
Over 180 days
124
274
1,974
(41)
357
42
444
1,884
1,393
955
2,370
5,407
420
1,038
6,023
7,481
3,059
Fair value of collateral
Total
4,322
4,437
Parent
2013
2014
Collaterals held as security for Loans and advances are described in Note 13.
106
(a)
Large
corporate
customers
Small and
medium
enterprises
Retail
customers
Past due up to 30 days
459
193
1,909
252
80
752
454
144
76
1,241
Loans and advances neither past due nor impaired
Loans and advances that were neither past due nor impaired consist mainly of accounts with Unclassified rating and those loans accounts in a
portfolio to which an impairment has been allocated on a collective basis. Details of these accounts follow:
Consolidated
2013
2014
Parent
2014
2013

Corporate entities:
Large corporate customers
Small and medium enterprises
Retail customers:
Mortgages
Credit cards
Others
554,372
88,187
414,136
80,369
534,073
55,268
396,663
50,916
119,759
25,712
5,672
102,118
22,215
5,382
152
25,367
2,535
147
22,059
2,135
793,702
624,220
617,395
471,920
Total
Over 180 days

(c)
Total
Large
corporate
customers
Small and
medium
enterprises
Retail
customers

2,561
84
63
1,492
1,639
1,084
53
16
656
725
598
72
42
465
579
135
211
98
141
239
552
2,661
209
219
2,754
3,182
4,454
107
Total
319
1,881
Loans and advances individually impaired
The breakdown of the gross amount of individually impaired loans and advances (included in Impaired category) by class, along with the fair
value of related collateral held by the BPI Group as security, are as follows:
Consolidated
2014
Parent
2013
2014
2013

Corporate entities:
Small and medium enterprises
Retail customers:
Mortgages
Credit cards
Others
(23)
2014 Annual Report
3,825
4,919
4,661
4,864
3,438
3,333
4,078
3,376
893
1,427
177
6
1,370
10
5
1,423
177
6
1,370
2
11,241
10,911
8,376
8,832
7,602
9,459
6,856
5,385
(24)
d.
3.1.6 Credit quality of other financial assets

a.
Due from Bangko Sentral ng Pilipinas
The table below presents the Standard & Poors credit ratings of counterparties for derivative financial assets at December 31, 2014 and 2013
presented in the consolidated and parent financial statements.
Due from BSP are considered fully performing at December 31, 2014 and 2013. This account consists of:
Consolidated and Parent

Consolidated
2014
Clearing account
Special deposit accounts (SDA)
b.
2013
Parent
173,954
37,992

156,348
130,617
14,300
113,866
118,476
76,600
211,946
244,483
195,076
170,648
Consolidated
2014
AA- to AA+
A- to A+
Lower than AUnrated
108
2,954
15,818
45
3,410
22,227
c.

AA- to AA+
A- to A+
Lower than A-
2013
Parent
2013
2014

2,954
6,419
11,628
8,490
44
38
803
2,123
17,070
15,429
e.
29
1,291
35,981
16,550
Debt securities, treasury bills and other government securities
At December 31, 2014
5,259
3,099
7
424
Consolidated
Trading
securities
8,789
AAA
AA- to AA+
A- to A+
Lower than AUnrated
Interbank loans receivable are considered fully performing at December 31, 2014 and 2013. The table below presents the credit ratings of
counterparty banks based on Standard & Poors.
Lower than AUnrated
692
14,395
172
The table below presents the ratings of debt securities, treasury bills and other government securities at December 31, 2014 and 2013 based
on Standard & Poors:
Interbank loans receivable and securities purchased under agreement to resell
Consolidated
383
35,536
33
Unrated
Due from other banks are considered fully performing at December 31, 2014 and 2013. The table below presents the credit ratings of
counterparty banks based on Standard & Poors.
2013
2014
2013
2014
Availablefor-sale
Parent
Held-tomaturity
1,521
1,251
122
12,090
263
212
6,011
6,327
32,962
1,972
280
5,438
4,845
196,608
2,238
15,247
47,484
209,409
Total
Trading
securities

2,013
1,521
12,700
1,251
11,294
122
241,660
3,632
4,473
94
272,140
6,620
Availablefor-sale
Held-tomaturity
Total
194
5,887
5,395
28,369
1,759
173
5,153
4,351
181,379
1,945
1,888
12,291
9,868
213,380
3,798
41,604
193,001
241,225
Parent
2014
2013
5,282

888
5,246
4,991
888
4,991
5,282
5,879
5,879
2014
5,246
2013

Consolidated
Trading
securities
Securities purchased under agreements to resell includes reverse repurchase agreements amounting to P500 million and nil for the BPI
Group and Parent Bank, respectively (2013 - P11,518 million and P4,158 million, respectively), which are made with a sovereign
counterparty and are considered fully performing.
AAA
AA- to AA+
A- to A+
Lower than AUnrated
f.
Availablefor-sale
Parent
Held-tomaturity
3,774
22
353
185
487
4,859
4,560
73,040
2,939
110
5,293
732
89,229
808
4,334
85,885
96,172
Total
Trading
securities

597
2,442
13,926
Availablefor-sale
5,314
162,622
3,932
124
487
4,790
4,484
69,833
1,892
186,391
2,626
81,486
22
38
Held-tomaturity
Total
79,983
808
487
12,341
4,506
149,854
2,824
85,900
170,012
5,109
The BPI Groups other financial assets (shown under Other resources) at December 31, 2014 and 2013 consist mainly of sales contracts
receivable, accounts receivable, accrued interest and fees receivable from various unrated counterparties with good credit standing.
(25)
2014 Annual Report
(26)
109
3.1.7 Repossessed or foreclosed collaterals

The BPI Group acquires assets by taking possession of collaterals held as security for loans and advances. As at December 31, 2014, the BPI
Groups foreclosed collaterals have carrying amount of P5,018 million (2013 - P5,852 million). The related foreclosed collaterals have
aggregate fair value of P6,861 million (2013 - P7,673 million). Foreclosed collaterals include real estate (land, building, and improvements),
auto or chattel, bond and stocks.
Repossessed properties are sold as soon as practicable and are classified as Assets held for sale in the statement of condition.
3.1.8 Concentrations of risks of financial assets with credit risk exposure
The BPI Groups main credit exposure at their carrying amounts, as categorized by industry sectors follow:
Consolidated
Financial
institutions
110
Consumer
Manufacturing
Real estate
Due from BSP

Interbank loans receivable
and SPAR
Financial assets at fair
value through profit or
loss
Derivative financial
assets
Trading securities debt securities
Available-for-sale - debt
securities
Other accrued interest
and fees receivable
Sales contracts
receivable, net
Rental deposits
Others, net
211,946
22,227

-
5,782
394,585
(27)
35,941
10
372
6
92
Less allowance
Others
Total
211,946
22,227
5,782
30
35,981
36
14,833
15,247
209
502
179,477
32,369
200,954
295,950
(13,706)
47,484
209,409
800,170
(1,037)
1,489
14,814
7,953
95,550
74,991
167,908
2,526
661
49
366
523
(10)
(98)
39
366
425
75,083
167,924
548,261
(14,851)
1,351,226
180,224
Financial
institutions
Consumer
Manufacturing

-
Due from BSP

and SPAR
loss
assets
securities
and fees receivable
Sales contracts
receivable, net
Rental deposits
Others, net
244,483
17,070
17,397
16,373
101
245
2
139,187
364,049
16,886
855
50,740
Real estate
62,670
Less allowance
Others
Total
244,483
17,070
17,397
76
16,550
4,084
4,334
300
502
173,326
68,699
94,815
216,897
(12,617)
85,885
96,172
630,203
(1,397)
879
2,276
662
662
82
335
466
(4)
(22)
78
335
444
388,392
(14,040)
1,114,492
62,670
139,290
174,131
661
2014 Annual Report
(28)
111
Parent
Financial
institutions
112
Consumer
Manufacturing
Real estate
Due from BSP

and SPAR
loss
assets
securities
and fees receivable
Sales contracts
receivable, net
Rental deposits
Others, net
170,648
15,429

-
5,246
35,941
351
10
92
Others
Less allowance
Total
170,648
15,429
5,246
30
35,981
6,269
6,620
27,751
185,673
254,655
(9,178)
41,604
193,001
621,441
(901)
1,063
13,562
6,826
93,098
32,940
163,173
199
502
86,753
1,964
613
613
10
304
477
(10)
(90)
304
387
341,101
33,032
163,183
87,454
477,746
(10,179)
1,092,337
Financial
institutions
Consumer
Due from BSP

and SPAR
loss
assets
securities
and fees receivable
Sales contracts
receivable, net
Rental deposits
Others, net
195,076
8,789
10,037
16,373
245
289,383
15,816
95
42,952
26,533
Manufacturing
Real estate

-
Less allowance
Others
Total
195,076
8,789
10,037
101
76
16,550
2,381
2,626
135,394
196
502
87,738
65,474
85,303
191,401
(8,863)
81,486
85,900
475,155
(1,252)
623
1,875
573
573
29
280
407
(2)
(14)
27
280
393
347,799
(10,131)
877,515
26,533
135,495
88,436
Trading, available-for-sale and held-to-maturity securities under Others category include local and US treasury bills. Likewise, Loans and
advances under the same category pertain to loans granted to individual and retail borrowers belonging to various industry sectors.
3.2 Market risk
The BPI Group is exposed to market risk - the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk is managed by the RMO guided by policies and procedures approved by the RMC and confirmed by
the Executive Committee/Board of Directors.
Market risk management
Market risk management is incumbent on the Board of Directors through its RMC. Market risk management in BPI covers managing exposures
to trading risk, foreign exchange risk, counterparty credit risk, interest rate risk of the banking book and liquidity risk. At the management level,
the Banks market risk exposure is managed by the Risk Management Office (RMO), headed by the Banks Chief Risk Officer (CRO) who
reports directly to the RMC. In addition, Internal Audit is responsible for the independent review of risk assessment measures and procedures
and the control environment.
The BPI Group reviews and controls market risk exposures of both its trading and non-trading portfolios. Trading portfolios include those
positions arising from the BPI Groups market-making transactions. Non-trading portfolios primarily arise from the interest rate management
of the BPI Groups retail and commercial banking assets and liabilities.
As part of the management of market risk, the BPI Group undertakes various hedging strategies. The BPI Group also enters into interest
rate swaps to match the interest rate risk associated with fixed-rate long-term debt securities.
(29)
2014 Annual Report
(30)
113
Value-at-Risk (VaR) measurement is an integral part of the BPI Groups market risk control system. This metric estimates, at 99%
confidence level, the maximum loss that a trading portfolio may incur over a trading day. This metric indicates as well that there is 1%
statistical probability that the trading portfolios actual loss would be greater than the computed VaR. In order to ensure model soundness,
the VaR is periodically subject to model validation and back testing. VaR is supplemented by other risk metrics and measurements that
would provide preliminary signals to Treasury and to the management to assess the vulnerability of Banks positions. To control the risk, the
RMC sets risk limits for trading portfolios which are consistent with the Banks goals, objectives, risk appetite, and strategy.
Stress tests indicate the potential losses that could arise in extreme conditions that would have detrimental effect to the Banks positions. The
Bank periodically performs stress testing (price risk and liquidity risk) to assess the Banks condition on assumed stress scenarios. Contingency
plans are frequently reviewed to ensure the Banks preparedness in the event of real stress. Results of stress tests are reviewed by senior
management and by the RMC.
The BPI Group takes on exposure to the effects of fluctuations in the prevailing exchange rates on its foreign currency financial position and
cash flows. The table below summarizes the BPI Groups exposure to more material foreign currency exchange rate risk at December 31, 2014
and 2013. Included in the table are the BPI Groups financial instruments at carrying amounts, categorized by currency.
Consolidated
USD
JPY
EUR
Less allowance
GBP
Total
The average daily VaR for the trading portfolios are as follows:
Consolidated
Parent
2013
230
66
44
75
26
19

206
984
63
118
14
33
75
78
14
26
911
114
10
78
-
460
1,253
114
2013
As at December 31, 2014

Financial Assets
2014
2014
Local fixed-income
Foreign fixed-income
Foreign exchange
Derivatives
Equity securities
Mutual fund
3.2.1 Foreign exchange risk
358
1,113
Cash and other cash items

Interbank loans receivable and SPAR
Financial assets at fair value through
profit or loss
Trading securities
Others financial assets
Other accrued interest and
fees receivable
Others
Total financial assets
1,815
72
79
16
1,982
13,520
2,705
755
2,957
1,980
-
19,212
2,705
4,777
1,565
22,239
37,382
97,772
161
55
1,193
1,530
69
636
375
107
980
20
(451)
5,574
1,995
23,539
39,892
98,060
(11)
88
650
79
15
149
-
125
47
-
115
321
-
182,003
1,477
6,184
4,166
(462)
193,368
Deposit liabilities
Derivative financial liabilities
Bills payable
Due to BSP and other banks
outstanding
Other financial liabilities
Accounts payable
Others
154,687
3,699
26,077
70
1,152
-
3,390
171
-
1,029
641
-
160,258
4,511
26,077
70
Total financial liabilities
184,833
Financial Liabilities
Net on-balance sheet financial

position (in Philippine Peso)
(31)
181
15
196
119
-
38
-
1
-
158
-
1,152
3,614
1,671
191,270
325
2,570
2,495
(462)
(2,830)
2014 Annual Report
2,098
(32)
USD
JPY
EUR
Less allowance
GBP
Parent
Total

Financial Assets
profit or loss
Trading securities
Others financial assets
Other accrued interest and fees
receivable
Others
116
Deposit liabilities
Bills payable
outstanding
Accounts payable
Others
Net on-balance sheet financial position
(in Philippine Peso)
(33)
USD
JPY
EUR
Less allowance
GBP
Total

1,691
55
89
20
1,855
13,746
747
838
1,185
16,516
888
888
2,009
3,796
15,782
29,653
73,989
713
116
473
1,717
169
346
133
657
31
(481)
2,471
3,796
16,388
32,027
74,421
78
59
(9)
129
99
-
111
-
45
-
255
-
141,731
1,515
3,572
2,418
128,301
2,062
17,758
87
1,084
-
3,056
144
696
346
-
(490)
148,746
133,137
2,552
17,795
87
37
-
55
267
1,565
11
75
102
343
1,684
150,089
1,095
3,418
1,051
155,653
420
154
1,367
49
(8,358)
(490)
(6,907)

Financial Assets
profit or loss
Trading securities
receivable
Others
1,659
8,063
71
751
2,705
4,777
1,565
18,264
34,630
97,593
650
71
2,779
-
161
55
1,193
1,530
69
14
1,445
1,815
13,038
2,705
636
375
107
-
79
149
-
125
-
32
-
(449)
5,574
1,995
19,564
36,160
97,863
(11)
68
306
-
169,484
1,472
5,983
2,609
(460)
179,088
Deposit liabilities
Bills payable
outstanding
Accounts payable
Others
142,702
3,699
26,063
70
1,152
-
3,270
171
147,844
4,511
26,063
70
172,830
117
Net on-balance sheet financial

position (in Philippine Peso)
720
641
-
180
15
195
116
-
20
136
-
178,819
(3,346)
1,152
3,476
1,361
320
2,507
1,248
2014 Annual Report
(460)
269
(34)
USD
JPY
EUR
Less allowance
GBP
The table below summarizes the BPI Groups exposure to interest rate risk, categorized by the earlier of contractual repricing or maturity dates.
Total
Consolidated

Financial Assets
profit or loss
Trading securities
receivable
Others
118
Deposit liabilities
Bills payable
outstanding
Accounts payable
Others
Net on-balance sheet financial position
(in Philippine Peso)
3.2.2
Repricing
1,535
5,864
55
743
78
698
18
243
1,686
7,548
888
888
2,009
2,464
15,094
27,705
73,989
116
346
473
1,718
169
133
7
713
(479)
2,471
2,464
15,700
29,423
74,399
68
(9)
59
99
111
14
224
-
129,715
1,511
3,363
761
116,608
2,062
17,758
87
1,084
-
3,023
144
-
414
346
-
121,129
2,552
17,758
87
36
30
(488)
134,862
Over 1 up to
3 years
Over 3 years
Non-repricing
Total

Financial Assets
Due from BSP
Financial assets at fair value through profit
or loss
receivable
Rental deposits
Others, net
38,427
-
211,946
22,227
5,782
38,427
211,946
22,227
5,782
12,607
6,938
4
611,809
20,224
43,678
3,150
81,386
15,247
40,546
209,405
63,297
35,981
15,247
47,484
209,409
800,170
1,489
1,489
661
39
366
425
661
39
366
425
571,430
1,389,653
669,785
63,902
84,536
584,042
839
-
509,929
21,769
-
9,440
12,238
-
119
252
1,565
11
2
102
254
1,684
138,362
1,095
3,275
768
143,500
416
88
(8,647)
(7)
(488)
(8,638)
Interest rate risk
There are two types of interest rate risk: (i) fair value interest risk and (ii) cash flow interest risk. Fair value interest rate risk is the risk that the
fair value of a financial instrument will fluctuate because of changes in market interest rates. Cash flow interest rate risk is the risk that the
future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The BPI Group takes on exposure to the
effects of fluctuations in the prevailing levels of market interest rates on both its fair value which affects mainly the BPI Groups trading securities
portfolio and cash flow risks on available-for-sale securities portfolio which is carried at market.
Interest rate risk in the banking book arises from the BPI Groups core banking activities. The main source of this type of interest rate risk is
repricing risk, which reflects the fact that the BPI Groups assets and liabilities are of different maturities and are priced at different interest rates.
Interest margins may increase as a result of such changes but may also result in losses in the event that unexpected movements arise. The
Board of Directors sets limits on the level of mismatch of interest rate repricing that may be undertaken, which is monitored monthly by the
FRMC.
(35)
Up to 1 year
Deposit liabilities
Bills payable
outstanding
Accounts payable
Outstanding acceptances
Deposits on lease contract
Dividends payable
Others
Total interest gap
72,802
32,993
687
1,176,213
34,846
32,993
687
8,353
8,353
4,735
947
1,974
1,838
4,735
947
1,974
1,838
584,881
531,698
21,678
124,329
1,262,586
84,904
(467,796)
62,858
447,101
127,067
2014 Annual Report
(36)
Parent
Repricing
Up to 1 year
Over 1 up to
3 years
Over 3 years
Non-repricing
Repricing
Total
120

Financial Assets
Due from BSP
or loss
receivable
Rental deposits
Others, net
Deposit liabilities
Bills payable
outstanding
Accounts payable
Dividends payable
Others
Total interest gap
(37)
Up to 1 year
Over 1 up to
3 years
Over 3 years
Non-repricing
Total

25,696
-
244,483
17,070
17,397
25,696
244,483
17,070
17,397
13,100
223
9,265
4
518,048
665
22,860
2,785
45,072
4,111
76,620
96,168
44,223
16,550
4,334
85,885
96,172
630,203
879
879
662
78
335
444
662
78
335
444
23,525
47,857
502,470
1,140,188
513,541
719
-
14,353
2,712
-
26,179
2,051
988,586
16,360
26,179
2,051
566,336
460,692
12,929
-
7,183
7,183
3,551
1,677
2,076
3,201
1,607
3,551
1,677
2,076
3,201
1,607
473,621
514,260
17,065
47,525
1,052,471
92,715
(490,735)
30,792
454,945
87,717

Financial Assets
Due from BSP
or loss
receivable
Rental deposits
Others, net
37,292
-
170,648
15,429
5,246
37,292
170,648
15,429
5,246
12,607
6,938
4
531,154
20,224
19,846
3,150
44,503
6,620
34,666
192,997
25,938
35,981
6,620
41,604
193,001
621,441
1,063
1,063
613
304
387
613
-
587,995
40,070
47,653
453,911
1,129,629
Deposit liabilities
Bills payable
outstanding
Accounts payable
Dividends payable
Others
447,239
839
-
434,227
21,769
-
12,238
-
71,215
26,288
688
952,681
34,846
26,288
688
448,078
455,996
Total interest gap
139,917
(415,926)
121
304
387
6,664
6,664
3,502
947
1,694
3,502
947
1,694
12,238
110,998
1,027,310
35,415
342,913
102,319
2014 Annual Report
(38)
Repricing
Up to 1 year
Over 1 up to
3 years
Over 3 years
Non-repricing
Total
122

Financial Assets
Due from BSP
or loss
receivable
Rental deposits
Others, net
Deposit liabilities
Bills payable
outstanding
Accounts payable
Dividends payable
Others
24,888
-
The BSVaR estimates the riskiness of the balance sheet and compares the degree of risk taking activity in the banking books from one period
to the next. In consideration of the static framework, and the fact that income from the positions is accrued rather than generated from markingto-market, the probable loss (that may be exceeded 1% of the time) that is indicated by the BSVaR is not realized in accounting income.
195,076
8,789
10,037
24,888
195,076
8,789
10,037
The average BSVaR for the banking or non-trading book are as follows:
Consolidated
Parent
2014
2013
1,932
1,627
1,511
2014
BSVaR
13,100
222
9,264
3
447,055
665
6,196
2,785
12,475
2,404
72,222
85,897
9,429
16,550
2,626
81,486
85,900
475,155
623
623
573
27
280
393
573
27
280
393
494,532
6,861
15,260
385,750
902,403
310,213
12,929
-
354,198
719
-
1,451
2,712
-
119,541
18,990
2,052
785,403
16,360
18,990
2,052
6,026
6,026
2,370
1,677
3,201
1,498
2,370
1,677
3,201
1,498
323,142
354,917
4,163
155,355
837,577
Total interest gap
171,390
(348,056)
11,097
230,395
64,826
2013
1,325
3.3 Liquidity risk

Liquidity risk is the risk that the BPI Group will be unable to meet its payment obligations associated with its financial liabilities when they fall
due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repay depositors and fulfill
commitments to lend.
3.3.1
(39)
In order to measure the interest rate risk in the banking book, the BPI Group employs Balance Sheet VaR (BSVaR) which measures impact of
interest rate movements on the economic value of equity. The BSVaR is founded on re-pricing gaps, or the difference between the amounts of
rate sensitive assets and the amounts of rate sensitive liabilities. An asset or liability is considered to be rate-sensitive if the interest rate applied
to the outstanding principal balance changes (either contractually or because of a change in a reference rate) during the interval.
Liquidity risk management process
The BPI Groups liquidity management process, as carried out within the BPI Group and monitored by the RMC includes:
Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be met. This includes replenishment of
funds as they mature or as borrowed by customers;
Maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any unforeseen interruption to
cash flow;
Monitoring liquidity gaps against internal and regulatory requirements (Note 19);
Managing the concentration and profile of debt maturities; and
Performing periodic liquidity stress testing on the BPI Groups liquidity position by assuming a faster rate of withdrawals in its deposit
base.
Monitoring and reporting take the form of cash flow measurement and projections for the next day, week and month as these are key
periods for liquidity management. The starting point for these projections is an analysis of the contractual maturity of the financial liabilities
(Notes 3.3.3 and 3.3.4) and the expected collection date of the financial assets.
The BPI Group also monitors unmatched medium-term assets, the level and type of undrawn lending commitments, the usage of overdraft
facilities and the impact of contingent liabilities such as standby letters of credit.
3.3.2
Funding approach
Sources of liquidity are regularly reviewed by the BPI Group to maintain a wide diversification by currency, geography, counterparty,
product and term.
2014 Annual Report
(40)
123
3.3.3
Non-derivative cash flows
The table below presents the maturity profile of non-derivative financial instruments based on undiscounted cash flows, including interest,
which the BPI Group uses to manage the inherent liquidity risk. The maturity analysis is based on the remaining period from the end of the
reporting period to the contractual maturity date or, if earlier, the expected date the financial asset will be realized or the financial liability will
be settled.
Consolidated
Up to 1 year
Over 1 up to 3
years
Over 3 years
Total

Financial Assets
124

Due from BSP
or loss
Available-for-sale securities - debt
securities
receivable
Rental deposits
Others, net
38,427
211,971
22,227
717,004
186,192
553,952
1,457,148
Deposit liabilities
Bills payable
outstanding
Accounts payable
Dividends payable
Others
660,774
36,109
687
513,147
4,968
-
9,762
428
-
1,183,683
41,505
687
715,417
3,045
2,733
225
10,280
380
7,356
7,933
28,853
391,288
8,709
73,239
101,131
45,581
186,025
314,765
38,427
211,971
22,227
6,003
18,016
62,223
288,117
807,184
1,489
661
39
366
425
661
39
366
425
Total maturity gap
(41)
4,735
947
1,974
1,838
1,587
8,353
Over 3 years
Total

Financial Assets
Due from BSP
or loss
Available-for-sale securities - debt
securities
receivable
Rental deposits
Others, net
Deposit liabilities
Bills payable
outstanding
Accounts payable
Dividends payable
Others
25,696
244,606
17,070
25,696
244,606
17,070
14,605
2,761
245
17,611
3,827
126
605
4,558
9,517
17,492
392,546
15,257
26,936
82,158
87,745
104,272
205,191
112,519
148,700
679,895
879
879
662
27
335
444
662
78
335
444
727,706
127,289
398,058
1,253,053
290,777
25,466
2,051
278,941
598
-
419,912
367
-
989,630
26,431
2,051
7,183
7,183
3,551
1,677
2,076
3,201
1,607
3,551
1,677
2,076
3,201
1,607
51
337,589
279,539
420,279
Total maturity gap
390,117
(152,250)
(22,221)
125
1,037,407
215,646
4,735
947
1,974
1,838
518,115
10,190
1,243,722
(331,923)
543,762
213,426
Over 1 up to 3
years
1,489
8,353
Up to 1 year
2014 Annual Report
(42)
Parent
Up to 1 year
Over 1 up to 3
years
Up to 1 year
Over 3 years
Total

Financial Assets
126

Due from BSP
or loss
Other financial assets, net
receivable
Rental deposits
Others, net
37,292
170,655
15,429
2,493
2,088
5,152
20,678
376,748
2,733
327
7,305
69,723
87,261
225
6,670
42,829
169,533
166,217
37,292
170,655
15,429
5,451
9,085
55,286
259,934
630,226
1,063
1,063
613
-
613
-
632,902
167,349
385,474
1,185,725
Deposit liabilities
Bills payable
outstanding
Accounts payable
Deposits on lease contracts
Dividends payable
Others
517,730
27,991
688
435,571
439
-
396
-
953,301
28,826
688
559,216
436,010
73,686
(268,661)
304
387
304
387
Total maturity gap
(43)
6,664
6,664
3,502
947
1,694
3,502
947
1,694
396
995,622
385,078
190,103
Over 1 up to 3
years
Over 3 years
Total

Financial Assets
Due from BSP
or loss
Other financial assets, net
receivable
Rental deposits
Others, net
Deposit liabilities
Bills payable
outstanding
Unsecured subordinated debt
Accounts payable
Deposits on lease contracts
Dividends payable
Others
24,888
195,161
8,789
24,888
195,161
8,789
7,238
2,761
245
10,244
2,459
7,673
14,925
348,050
38
14,907
24,185
42,397
220
84,882
93,883
126,488
2,717
107,462
132,993
516,935
623
623
573
27
280
393
573
27
280
393
611,079
84,288
305,718
1,001,085
230,468
18,215
2,052
222,030
560
-
333,045
319
-
785,543
19,094
2,052
6,026
-
6,026
-
2,370
1,677
3,201
1,498
2,370
1,677
3,201
1,498
265,507
222,590
333,364
821,461
Total maturity gap
345,572
(138,302)
(27,646)
179,624
2014 Annual Report
127
(44)
3.3.4 Derivative cash flows
3.4 Fair value of financial assets and liabilities
(a)
The table below summarizes the carrying amount and fair value of those significant financial assets and liabilities not presented on the
statement of condition at fair value at December 31.
Derivatives settled on a net basis
The BPI Groups derivatives that are settled on a net basis consist of interest rate swaps, non-deliverable forwards and non-deliverable
swaps. The table below presents the contractual undiscounted cash flows of interest rate swaps based on the remaining period from
December 31 to the contractual maturity dates that are subject to offsetting, enforceable master netting arrangements and similar
agreements.
Consolidated
Carrying amount
2014
Interest rate swap contracts - held for trading

- Inflow
- Outflow
41
(58)
9,718
(9,951)
- Net inflow (outflow)
(17)
(233)
32,824
(32,836)
8,731
(8,456)
Non-deliverable forwards and swaps - held for trading

- Inflow
- Outflow
- Net inflow
(12)
Up to 1 year
2013
Interest rate swap contracts - held for trading
- Inflow
137
(133)
Non-deliverable forwards and swaps - held for trading

- Inflow
- Net inflow
2013
Financial assets
Over 3 years
Total
2,815
(2,813)
2
-
275
Over 1 up to
3 years
Over 3 years
12,574
(12,822)
(248)
41,555
(41,292)
263
Total
- Outflow
(b)
Over 1 up to
3 years
2014
- Outflow
2014

Up to 1 year
128
Fair value
2013
5,559
(5,453)
106
615
(643)
2,732
(2,712)
(28)
3,484
(3,488)
(4)
20
11,900
(11,879)
21
17,459
(17,332)
127

Due from BSP
Rental deposits
Others, net
Deposit liabilities
Bills payable
Managers checks and demand drafts outstanding
Accounts payable
Dividends payable
Others
38,427
211,946
22,227
5,782
209,409
800,170
25,696
244,483
17,070
17,397
96,172
630,203
38,427
211,946
22,227
5,782
220,292
815,038
25,696
244,483
17,070
17,397
104,563
659,885
1,489
661
39
366
425
879
662
78
335
444
1,489
661
39
366
425
879
662
78
335
444
1,176,213
32,993
687
8,353
988,586
26,179
2,051
7,183
1,175,367
32,985
687
8,353
963,463
26,352
2,051
7,183
4,787
1,974
947
1,838
3,551
2,076
1,677
3,201
1,607
4,787
1,974
947
1,838
3,551
2,076
1,677
3,201
1,607
129
Derivatives settled on a gross basis
The BPI Groups derivatives that are settled on a gross basis include foreign exchange derivatives mainly, currency forwards, currency
swaps and spot contracts. The table below presents the contractual undiscounted cash flows of foreign exchange derivatives based on the
remaining period from reporting date to the contractual maturity dates.
Up to 1 year
Over 1 up to
3 years
Over 3 years
Total

Foreign exchange derivatives - held for trading
2014
- Inflow
- Outflow
2013
- Inflow
- Outflow
(45)
110,902
(110,954)
(52)
77,495
(77,456)
39
12,501
(11,396)
1,105
1,053
622
(665)
78,117
(78,121)
(43)
(4)
123,403
(122,350)
2014 Annual Report
(46)
The estimated fair value of fixed interest-bearing deposits and other borrowings not quoted in an active market is based on discounted cash
flows using market interest rates for new debts with similar remaining maturity.
Parent
Carrying amount
2014
Fair value
2013
2014
2013

Financial assets
130

Due from BSP
Rental deposits
Others, net
37,292
170,648
15,429
5,246
193,001
621,441
1,063
613
304
387
623
573
27
280
393
1,063
613
304
387
623
573
27
280
393
Deposit liabilities
Bills payable
Accounts payable
Deposit on lease contracts
Dividends payable
Others
952,681
26,288
688
6,664
785,403
18,990
2,052
6,026
949,453
26,280
688
6,664
710,719
19,022
2,052
6,026
(i)
24,888
195,076
8,789
10,037
85,900
475,155
37,292
170,648
15,429
5,246
202,888
621,097
24,888
195,076
8,789
10,037
93,586
488,832
(v)
Other financial assets / liabilities
Carrying amounts of other financial assets / liabilities which have no definite repayment dates are assumed to be their fair values.
3.5 Fair value hierarchy
The following table presents the fair value hierarchy of the BPI Groups assets and liabilities at December 31:
Consolidated
Fair value
2014
Recurring measurements
Financial assets
Trading securities
- Debt securities
- Equity securities
Available-for-sale financial assets
- Debt securities
- Equity securities
Level 1
Level 2
Total
35,981
35,981
14,932
615
315
-
15,247
615
43,750
2,216
3,734
1,514
47,484
3,730
61,513
41,544
103,057
34,846
34,846
3,033
3,033
131
3,502
947
1,694
2,370
1,677
3,201
1,498
3,502
947
1,694
2,370
1,677
3,201
1,498

Non-recurring measurements
Assets held for sale, net
Cash and other cash items, due from BSP and other banks and interbank loans receivable and SPAR
The fair value of floating rate placements and overnight deposits approximates their carrying amount. The estimated fair value of fixed
interest bearing deposits is based on discounted cash flows using prevailing money-market interest rates for debts with similar credit risk
and remaining maturity. All of these financial assets have a maturity of one year, thus their fair values approximate their carrying amounts.
(ii)
Investment securities
Fair value of held-to-maturity assets is based on market prices or broker/dealer price quotations. Where this information is not available,
fair value is estimated using quoted market prices for securities with similar credit, maturity and yield characteristics.
(iii) Loans and advances
The estimated fair value of loans and advances represents the discounted amount of estimated future cash flows expected to be received.
Expected cash flows are discounted with the use of assumptions regarding appropriate credit spread for the loan, derived from other market
instruments.
(iv) Financial liabilities
The estimated fair value of deposits with no stated maturity, which includes non-interest-bearing deposits, is the amount repayable on
demand.
(47)
2014 Annual Report
(48)
Fair value
Level 1
2014
Level 2
Fair value
Total
Fair values disclosed

Financial assets
Due from BSP
Rental deposits
Others, net
Deposit liabilities
Bills payable
132
38,427
211,946
22,227
5,782
644
815,038
38,427
211,946
22,227
5,782
220,292
815,038
1,489
661
39
366
425
1,489
661
39
366
425
1,175,367
32,985
687
1,175,367
32,985
687
8,353
8,353
219,648

Accounts payable
Dividends payable
Others
Non-financial assets
4,787
947
1,974
1,838
4,787
947
1,974
1,838
Investment properties
2,057
2,057
Level 1
Recurring measurements
Financial assets
Trading securities
- Debt securities
- Equity securities
- Debt securities
- Equity securities
16,550
16,550
3,926
263
408
-
4,334
263
74,208
1,285
11,677
-
85,885
1,285
79,682
28,635
108,317
16,360
16,360
3,078
3,078

Financial assets
Due from BSP
Rental deposits
Others, net
Deposit liabilities
Bills payable
Accounts payable
Dividends payable
Others
Level 2
Total
25,696
244,483
17,070
17,397
659,885
25,696
244,483
17,070
17,397
104,563
659,885
879
662
78
335
444
879
662
78
335
444
963,463
26,352
2,051
963,463
26,352
2,051
7,183
7,183
3,551
1,677
2,076
3,201
1,607
3,551
1,677
2,076
3,201
1,607
3,289
3,289
104,563
-
Total
(49)
Level 2
Level 1
133
Parent
Fair value
2013
2013
Level 1
Level 2
Total
2014
Financial assets
- Debt securities
- Equity securities
6,475
35,981
145
35,981
6,620
38,435
203
45,113
3,169
39,295
41,604
203
84,408
34,846
34,846
1,865
1,865
2014 Annual Report
(50)
Fair value
Level 1
2014
Level 2
Fair value
Total

Financial assets
Due from BSP
Rental deposits
Others, net
134
37,292
170,648
15,429
5,246
644
621,097
37,292
170,648
15,429
5,246
202,888
621,097
1,063
613
294
387
1,063
613
294
387
Deposit liabilities
Bills payable
Accounts payable
Dividends payable
Others
949,453
26,280
688
6,664
949,453
26,280
688
6,664
3,554
947
1,694
3,554
947
1,694
2,057
2,057
202,244
-
Level 1
2013
Financial assets
- Debt securities
- Equity securities
Total
Level 1

Financial assets
Due from BSP
Rental deposits
Others, net
Deposit liabilities
Bills payable
Accounts payable
Dividends payable
Others
Level 2
Total
24,888
195,076
8,789
10,037
488,832
24,888
195,076
8,789
10,037
93,586
488,832
623
573
27
280
393
623
573
27
280
393
710,719
19,022
2,052
6,026
710,719
19,022
2,052
6,026
2,370
1,677
3,201
1,498
2,370
1,677
3,201
1,498
3,289
3,289
93,586
-
135
The BPI Group has no financial instruments, other assets or liabilities with non-recurring fair value measurements or with fair values
disclosed that fall under the Level 3 category as at December 31, 2014 and 2013. There were no transfers between Level 1 and Level 2
during the years ended December 31, 2014 and 2013.
3.6 Insurance risk management
2,280
16,550
346
16,550
2,626
69,809
136
72,225
11,677
28,573
81,486
136
100,798
16,360
16,360
(51)
Level 2
2013
2,094
2,094
The non-life insurance entities decide on the retention, or the absolute amount that they are ready to assume insurance risk from one event.
The retention amount is a function of capital, experience, actuarial study and risk appetite or aversion.
In excess of the retention, these entities arrange reinsurances either thru treaties or facultative placements. They also accredit reinsurers
based on certain criteria and set limits as to what can be reinsured. The reinsurance treaties and the accreditation of reinsurers require
Board of Directors approval.
3.7 Capital management
Cognizant of its exposure to risks, the BPI Group understands that it must maintain sufficient capital to absorb unexpected losses, to stay in
business for the long haul, and to satisfy regulatory requirements. The BPI Group further understands that its performance, as well as the
performance of its various units, should be measured in terms of returns generated vis--vis allocated capital and the amount of risk borne
in the conduct of business.
2014 Annual Report
(52)
The BPI Group manages its capital following the framework of Basel Committee on Banking Supervision Accord II (Basel II) and its
implementation in the Philippines by the BSP. The BSP through its Circular 538 requires each bank and its financial affiliated subsidiaries to
keep its Capital Adequacy Ratio (CAR) - the ratio of qualified capital to risk-weighted exposures - to be no less than 10%. In quantifying its
CAR, BPI currently uses the Standardized Approach (for credit risk and market risk) and the Basic Indicator Approach (for operational risk).
Capital adequacy reports are filed with the BSP every quarter.
Qualifying capital and risk-weighted assets are computed based on BSP regulations. The qualifying capital of the Parent Bank consists of
core tier 1 capital and tier 2 capital. Tier 1 capital comprises paid-up capital stock, paid-in surplus, surplus including net income for the year,
surplus reserves and minority interest less deductions such as deferred income tax, unsecured credit accommodations to DOSRI, goodwill
and unrealized fair value losses on available-for-sale securities. Tier 2 capital includes net unrealized fair value gains on available-for-sale
investments and general loan loss provisions for BSP reporting purposes.
The Basel II framework following BSP Circular 538 took into effect on July 1, 2007 and was relevant until 2013.
Effective January 1, 2014, the BSP, through its Circular 781, requires each bank and its financial affiliated subsidiaries to adopt new capital
requirements in accordance with the provisions of Basel III. The new guidelines are meant to strengthen the composition of the Bank's
capital by increasing the level of core capital and regulatory capital. The Circular sets out minimum Common Equity Tier 1 (CET1) ratio and
Tier 1 Capital ratios of 6.0% and 7.5%, respectively. A capital conservation buffer of 2.5%, comprised of CET1 capital, was likewise
imposed. The minimum required capital adequacy ratio remains at 10% which includes the capital conservation buffer.
In addition, existing capital requirements as at December 31, 2010 which do not meet the eligibility criteria for capital instruments under the
revised capital framework shall no longer be recognized as capital upon the effectivity of Basel III.
The table below summarizes the CAR under the Basel III and Basel II framework for the years ended December 31, 2014 and 2013,
respectively.
136
Tier 1 capital
Tier 2 capital
Gross qualifying capital
Less: Regulatory adjustments/required deductions
Total qualifying capital
Consolidated
Parent
2014
2014
2013
2013
139,604
139,105
93,616
95,634
7,579
6,199
6,257
5,041
147,183
145,304
99,873
100,675
18,664
50,102
3,218
32,170
128,519
95,202
96,655
68,505
Risk weighted assets

CAR (%)
865,708
14.85
705,556
13.70
701,290
13.58
563,773
12.15
The BPI Group has fully complied with the CAR requirement of the BSP.
Likewise, the BPI Group manages the capital of its non-life insurance subsidiaries, pre-need subsidiary and securities dealer subsidiaries in
accordance with the capital requirements of the relevant regulatory agency, such as Insurance Commission, Philippine SEC and PSE. These
subsidiaries have fully complied with the relevant capital requirements.
As part of the reforms of the PSE to expand capital market and improve transparency among listed firms, PSE requires listed entities to
maintain a minimum of ten percent (10%) of their issued and outstanding shares, exclusive of any treasury shares, held by the public. The
Parent Bank has fully complied with this requirement.
Note 4 - Critical Accounting Estimates and Judgments
The BPI Group makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and judgments are
continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. It is reasonably possible that the outcomes within the next financial year could differ from assumptions
made at reporting date and could result in the adjustment to the carrying amount of affected assets or liabilities.
A. Critical accounting estimates

(i)
Impairment losses on loans and advances (Note 13)
The BPI Group reviews its loan portfolios to assess impairment on a regular basis. In determining whether an impairment loss should be
recorded in profit or loss, the BPI Group makes judgments as to whether there is any observable data indicating that there is a measurable
decrease in the estimated future cash flows from a portfolio of loans before the decrease can be identified with an individual loan in that
portfolio. This evidence may include observable data indicating that there has been an adverse change in the payment status of borrowers in a
group, or national or local economic conditions that correlate with defaults on assets in the group. Management uses estimates based on
historical loss experience for loans with credit risk characteristics and objective evidence of impairment similar to those in the portfolio when
scheduling its future cash flows. The methodology and assumptions used for estimating both the amount and timing of future cash flows are
reviewed regularly to reduce any differences between loss estimates and actual loss experience. To the extent that the net present value of
estimated cash flows of individually impaired accounts and the estimated impairment for collectively assessed accounts differs by +/- 5%,
impairment provision for the year ended December 31, 2014 would be an estimated P524 million (2013 - P428 million) higher or lower.
(ii)
Fair value of derivatives and other financial instruments (Notes 3.4 and 9)
The fair values of financial instruments that are not quoted in active markets are determined by using generally accepted valuation techniques.
Where valuation techniques (for example, discounted cash flow models) are used to determine fair values, they are validated and periodically
reviewed by qualified personnel independent of the area that created them. Inputs used in these models are from observable data and quoted
market prices in respect of similar financial instruments.
All models are approved by the Board of Directors before they are used, and models are calibrated to ensure that outputs reflect actual data
and comparative market prices. Changes in assumptions about these factors could affect reported fair value of financial instruments. The BPI
Group considers that it is impracticable to disclose with sufficient reliability the possible effects of sensitivities surrounding the fair value of
financial instruments that are not quoted in active markets.
(iii) Pension liability on defined benefit plan (Note 28)
The BPI Group estimates its pension benefit obligation and expense for defined benefit pension plans based on the selection of certain
assumptions used by actuaries in calculating such amounts. Those assumptions are described in Note 28 and include, among others, the
discount rate and future salary increases. The BPI Group determines the appropriate discount rate at the end of each year. This is the
interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the
retirement obligations. The present value of the defined benefit obligations of the BPI Group at December 31, 2014 and 2013 are
determined using the market yields on Philippine government bonds with terms consistent with the expected payments of employee
benefits. Plan assets are invested in either equity securities, debt securities or other forms of investments. Equity markets may experience
volatility, which could affect the value of pension plan assets. This volatility may make it difficult to estimate the long-term rate of return on
plan assets. Actual results that differ from the BPI Groups assumptions are reflected as remeasurements in other comprehensive income.
The BPI Groups assumptions are based on actual historical experience and external data regarding compensation and discount rate
trends. The sensitivity analysis on key assumptions is disclosed in Note 28.
(iv) Valuation of assets held for sale
In determining the fair value of assets held for sale, the BPI Group analyzed the sales prices by applying appropriate units of comparison,
adjusted by differences between the subject asset or property and related market data. Should there be a subsequent write-down of the
asset to fair value less cost to sell, such write-down is recognized as impairment loss in the statement of income.
In 2014, the BPI Group has recognized an impairment loss on its foreclosed assets amounting to P65 million (2013 - P599 million) as a
result of reduction in fair market values.
The BPI Group considers that it is impracticable to disclose with sufficient reliability the possible effects of sensitivities surrounding the fair
value of assets held for sale.
B. Critical accounting judgments
(i)
Impairment of available-for-sale securities (Note 11)
The BPI Group follows the guidance of PAS 39 to determine when an available-for-sale security is impaired. This determination requires
significant judgment. In making this judgment, the BPI Group evaluates, among other factors, the duration and extent to which the fair value of
an investment is less than its cost; and the financial health and near-term business outlook of the issuer, including factors such as industry and
sector performance, changes in technology and operational and financing cash flows.
(ii)
Classification of held-to-maturity securities (Note 12)
The BPI Group follows the guidance of PAS 39 in classifying non-derivative financial assets with fixed or determinable payments and fixed
maturity as held-to-maturity. This classification requires significant judgment. In making this judgment, the BPI Group evaluates its intention
and ability to hold such investments to maturity. If the BPI Group fails to keep these investments to maturity other than for the specific
circumstances - for example selling an insignificant amount close to maturity - it will be required to reclassify the entire class as available-forsale. The investments would therefore be measured at fair value and not at amortized cost.
(53)
2014 Annual Report
(54)
137
(iii) Classification of assets held for sale
Management follows the principles in PFRS 5 in classifying certain foreclosed assets (consisting of real estate and auto or chattel), as assets
held for sale when the carrying amount of the assets will be recovered principally through sale. Management is committed to a plan to sell
these foreclosed assets and the assets are actively marketed for sale at a price that is reasonable in relation to their current fair value.
Corporate Banking - this segment consists of the entire lending, leasing, trade and cash management services provided by the BPI Group
to corporate and institutional customers. These customers include both high-end corporations as well as various middle market clients.
Investment Banking - this segment includes the various business groups operating in the investment markets and dealing in activities
other than lending and deposit taking. These services cover corporate finance, securities distribution, asset management, trust and
fiduciary services as well as proprietary trading and investment activities.
(iv) Realization of deferred income tax assets (Note 17)

Management reviews at each reporting date the carrying amounts of deferred tax assets. The carrying amount of deferred tax assets is
reduced to the extent that the related tax assets cannot be utilized due to insufficient taxable profit against which the deferred tax losses will be
applied. Management believes that sufficient taxable profit will be generated to allow all or part of the deferred income tax assets to be utilized.
The BPI Group and the Parent Bank mainly derive revenue (more than 90%) within the Philippines, accordingly, no geographical segment
is presented.
Note 5 - Assets and Liabilities Attributable to Insurance Operations

Details of assets and liabilities attributable to insurance operations at December 31 are as follows:
2014
2013
Assets
Cash and cash equivalents (Note 7)
Insurance balances receivable, net
Investment securities
Available-for-sale
Held-to-maturity
Land, building and equipment
Accounts receivable and other assets, net
Liabilities
Reserves and other balances
Accounts payable, accrued expenses and other payables
138
215
4,810
117
3,803
5,390
3,765
144
2,121
16,445
4,477
3,827
131
2,231
14,586
12,658
903
13,561
12,273
788
13,061
Details of income attributable to insurance operations before income tax and minority interest for the years ended December 31
are as follows:
2014
Premiums earned and related income
Investment and other income
2,868
423
3,291
1,363
(162)
515
554
14
2,284
1,007
Benefits, claims and maturities

Increase (decrease) in actuarial reserve liabilities
Management and general expenses
Commissions
Other expenses
Income before income tax and minority interest
2013
3,020
457
3,477
1,133
(80)
452
518
5
2,028
1,449
2012
2,441
426
2,867
972
271
433
478
19
2,173
694
Note 6 - Business Segments

Operating segments are reported in accordance with the internal reporting provided to the chief executive officer, who is responsible for
allocating resources to the reportable segments and assessing their performance. All operating segments used by the BPI Group meet the
definition of a reportable segment under PFRS 8.
The BPI Group has determined the operating segments based on the nature of the services provided and the different markets served
representing a strategic business unit.
The BPI Groups main operating business segments follow:
(55)
Consumer Banking - this segment addresses the individual and retail markets. It covers deposit taking and servicing, consumer lending
such as home mortgages, auto loans and credit card finance as well as the remittance business. It includes the entire transaction
processing and service delivery infrastructure consisting of the BPI and BPI Family Bank network of branches, ATMs and point-of-sale
terminals as well as phone and Internet-based banking platforms.
The performance of the Parent Bank is assessed as a single unit using financial information presented in the separate or Parent only financial
statements. Likewise, the chief executive officer assesses the performance of its insurance business as a separate segment from its banking
and allied financial undertakings. Information on the assets, liabilities and results of operations of the insurance business is fully disclosed in
Note 5.
Revenues of the BPI Groups segment operations are derived from interest (net interest income). The segment report forms part of
managements assessment of the performance of the segment, among other performance indicators.
There were no changes in the reportable segments during the year. Transactions between the business segments are carried out at arms
length. The revenue from external parties reported to management is measured in a manner consistent with that in profit or loss until 2013.
Funds are ordinarily allocated between segments, resulting in funding cost transfers disclosed in inter-segment net interest income. Interest
charged for these funds is based on the BPI Groups cost of capital. The funds transfer pricing (FTP) prior to 2014 was computed on a gross
basis. In 2014, the manner of reporting has changed, in which interest income and interest expense are no longer presented separately,
considering that the calculation of FTP shifted from gross to net. In addition, majority of the segments revenues are from interest and the chief
executive officer relies primarily on net interest income to assess the performance of the segments and to make decisions concerning the
segments.
Internal charges and transfer pricing adjustments have been reflected in the performance of each business. Revenue-sharing agreements are
used to allocate external customer revenues to a business segment on a reasonable basis. Inter-segment revenues however, are deemed
insignificant for financial reporting purposes, thus, not reported in segment analysis below.
The BPI Groups management reporting is based on a measure of operating profit comprising net income, loan impairment charges, fee and
commission income, other income and non-interest income.
Segment assets and liabilities comprise majority of operating assets and liabilities, measured in a manner consistent with that shown in the
statement of condition, but exclude items such as taxation.
The segment assets, liabilities and results of operations of the reportable segments of the BPI Group as at and for the years ended
December 31, 2014, 2013 and 2012 are as follows:
2014
Consumer
banking
Net interest income
Impairment charge
Net interest income after impairment charge
Fees and commission income
Other income
Gross receipts tax
Other income, net
Occupancy and equipment - related expenses
Total operating expenses
21,984
2,047
19,937
5,294
6,632
(775)
11,151
8,122
4,392
7,031
19,545
Operating profit
11,543
Corporate
Investment
banking
banking
7,242
5,956
755
6,487
5,956
649
1,677
1,958
4,673
(44)
(502)
2,563
5,848
1,041
904
1,174
132
4,147
1,402
6,362
2,438
2,688
9,366

Provision for income tax
Total assets
Total liabilities
Total per
management
reporting
35,182
2,802
32,380
7,620
13,263
(1,321)
19,562
10,067
5,698
12,580
28,345
23,597
257
4,958
463,989
1,205,684
2014 Annual Report
598,184
10,168
361,061
70,255
1,423,234
1,286,107
(56)
139
Reconciliation of segment results to consolidated results of operations:
2013
Consumer
banking
Interest income
Interest expense
Net interest income
Impairment charge
Other income
Gross receipts tax
Other income, net
29,563
9,561
20,002
2,316
17,686
4,775
5,812
(685)
9,902
7,498
4,302
5,695
17,495
Operating profit
10,093
Corporate
Investment
banking
banking
7,754
3,912
377
139
7,377
3,773
1,304
6,073
3,773
524
782
2,028
8,483
(46)
(785)
2,506
8,480
923
674
1,198
144
3,459
1,150
5,580
1,968
2,999
10,285

Total assets
Total liabilities
Total per
management
reporting
41,229
10,077
31,152
3,620
27,532
6,081
16,323
(1,516)
20,888
9,095
5,644
10,304
25,043
Net interest income

Impairment charge
Other income
Gross receipts tax
Other income, net
Total per
Consolidation
consolidated
adjustments/
financial
Others
statements
35,182
34,808
(374)
2,802
2,807
5
32,380
32,001
(379)
7,620
7,370
(250)
13,263
15,044
1,781
(1,321)
(1,435)
(114)
19,562
20,979
1,417
10,067
11,850
1,783
5,698
9,017
3,319
12,580
9,093
(3,487)
28,345
29,960
1,615
23,377
Operating profit
23,597
590
4,153
384,670
1,014,263
460,029
14,918
329,460
42,299
2014
1,174,159
1,071,480
Total per
management
reporting
Share in net income of associates (included in Other income)

(577)
257
4,958
Total assets
Total liabilities
1,423,234
1,286,107
26,963
17,411
23,020
257
4,958
1,450,197
1,303,518
141
140
2013
2012
Consumer
banking
Interest income
Interest expense
Net interest income
Impairment charge
Other income
Gross receipts tax
Other income, net
Operating profit
27,138
11,726
15,412
2,103
13,309
4,192
4,546
(547)
8,191
7,189
4,204
5,230
16,623
4,877
Corporate
Investment
banking
banking
8,226
4,926
475
107
7,751
4,819
817
6,934
4,819
523
641
1,686
8,816
(55)
(697)
2,154
8,760
921
559
1,070
124
3,074
1,015
5,065
1,698
4,023
11,881

Total assets
Total liabilities
(57)
Total per
management
reporting
40,290
12,308
27,982
2,920
25,062
5,356
15,048
(1,299)
19,105
8,669
5,398
9,319
23,386
20,781
138
3,158
336,125
829,128
366,674
16,626
264,426
29,794
967,225
875,548
Total per
management
reporting
Interest income
Interest expense
Net interest income
Impairment charge
Other income
Gross receipts tax
Other income, net
41,229
10,077
31,152
3,620
27,532
6,081
16,323
(1,516)
20,888
9,095
5,644
10,304
25,043
Operating profit
23,377

Total assets
Total liabilities
590
4,153
1,174,159
1,071,480
2014 Annual Report
Consolidation
adjustments/
Others
(427)
401
(828)
(972)
144
(196)
1,521
(39)
1,286
1,546
2,396
(2,282)
1,660
(230)
21,205
18,077
Total per
consolidated
financial
statements
40,802
10,478
30,324
2,648
27,676
5,885
17,844
(1,555)
22,174
10,641
8,040
8,022
26,703
23,147
590
4,153
1,195,364
1,089,557
(58)
Note 8 - Interbank Loans Receivable and Securities Purchased under Agreements to Resell (SPAR)
2012
Total per
management
reporting
Interest income
Interest expense
Net interest income
Impairment charge
Other income
Gross receipts tax
Other income, net
40,290
12,308
27,982
2,920
25,062
5,356
15,048
(1,299)
19,105
8,669
5,398
9,319
23,386
Operating profit
20,781
(1,121)
19,660
138
3,158
138
3,158

Total assets
Total liabilities
142
Consolidation
adjustments/
Others
(181)
347
(528)
3
(531)
(245)
1,114
(43)
826
1,801
1,795
(2,180)
1,416
Total per
consolidated
financial
statements
967,225
875,548
18,016
11,571
40,109
12,655
27,454
2,923
24,531
5,111
16,162
(1,342)
19,931
10,470
7,193
7,139
24,802
985,241
887,119
The account at December 31 consists of transactions with:

Consolidated
Parent
2014
2014
2013
2013
500
11,505
4,150
5,266
5,231
5,879
5,879
5,766
5,231
17,384
10,029
16
15
13
8
5,782
5,246
17,397
10,037
BSP
Other banks
Accrued interest receivable
Interbank loans receivable and SPAR maturing within 90 days from the date of acquisition are classified as cash equivalents in the
statement of cash flows (Note 7).
Consolidated
Parent
2014
2014
2013
2013
2,905
2,369
14,531
7,171
2,877
2,877
2,866
2,866
5,782
5,246
17,397
10,037
Current
Non-current
Government bonds are pledged by the BSP as collateral under reverse repurchase agreements. The face value of securities pledged is
equivalent to the total balance of outstanding placements as at reporting date. All collateral agreements mature within 12 months.
The range of average interest rates (%) of interbank loans receivable of the BPI Group for the years ended December 31 follows:
2014
3.16 - 3.54
0.07 - 0.13
Peso-denominated
US dollar-denominated
Consolidation adjustments/Others pertain to balances of insurance operations, support units and inter-segment elimination in accordance with
the BPI Groups internal reporting.
Note 7 - Cash and Cash Equivalents
Note 9 - Derivative Financial Instruments
This account at December 31 consists of:
Derivatives held by the BPI Group for non-hedging purposes mainly consist of the following:

Due from BSP
Interbank loans receivable and securities purchased
under agreements
to resell (Note 8)
Cash and cash equivalents attributable to insurance
operations (Note 5)
(59)
Consolidated
2014
2013
38,427
25,696
211,946
244,483
22,227
17,070
Parent
2014
2013
37,292
170,648
15,429
24,888
195,076
8,789
743
12,406
241
5,046
215
273,558
117
299,772
223,610
233,799
2013
3.50 - 3.62
0.13 - 0.16
143
Foreign exchange forwards represent commitments to purchase or sell one currency against another at an agreed forward rate on a
specified date in the future. Settlement can be made via full delivery of forward proceeds or via payment of the difference (nondeliverable forward) between the contracted forward rate and the prevailing market rate on maturity.
Foreign exchange swaps refer to spot purchase or sale of one currency against another with an agreement to sell or purchase the
same currency at an agreed forward rate in the future.
Interest rate swaps refer to agreement to exchange fixed rate versus floating interest payments (or vice versa) on a reference notional
amount over an agreed period of time.
Cross currency swaps refer to spot exchange of notional amounts on two currencies at a given exchange rate and with an agreement
to re-exchange the same notional amounts at a specified maturity date based on the original exchange rate. Parties on the transaction
agree to pay a stated interest rate on the borrowed notional amount and receive a stated interest rate on the lent notional amount,
payable or receivable periodically over the term of the transaction.
Credit-Linked Notes (CLNs) are structured notes whose value is derived from the creditworthiness of an underlying reference entity. A
CLN may be viewed as a bundled note that consists of a bond and a credit default swap, allowing the issuer to transfer the credit risk of a
reference entity to the investor during the reference period.
2014 Annual Report
(60)
The BPI Groups credit risk represents the potential cost to replace the swap contracts if counterparties fail to fulfill their obligation. This risk
is monitored on an ongoing basis with reference to the current fair value, a proportion of the notional amount of the contracts and the
liquidity of the market. To control the level of credit risk taken, the BPI Group assesses counterparties using the same techniques as for its
lending activities.
The notional amounts of certain types of financial instruments provide a basis for comparison with instruments recognized on the statement
of condition. They do not necessarily represent the amounts of future cash flows involved or the current fair values of the instruments and
therefore are not indicative of the BPI Groups exposure to credit or price risks. The derivative instruments become favorable (assets) or
unfavorable (liabilities) as a result of fluctuations in market interest rates or foreign exchange rates relative to their terms. The aggregate
contractual or notional amount of derivative financial instruments on hand and the extent at which the instruments can become favorable or
unfavorable in fair values can fluctuate significantly from time to time.
The contract/ notional amount and fair values of derivative instruments held as at December 31 are set out below:
Free-standing derivatives
Foreign exchange derivatives
Currency swaps
Currency forwards
Interest rate swaps
Credit default swaps
Embedded credit derivatives
Total derivatives assets (liabilities) held for trading
144
122,364
101,657
87,499
1,342
5,009
317,871
70,312
60,661
46,862
888
5,327
184,050
Fair Values
Assets
Liabilities
2014
2014
2013
2013
21,828
1,487
12,544
28
94
35,981
12,294
700
3,471
13
72
16,550
(21,359)
(652)
(12,791)
(44)
(34,846)

Consolidated
Parent
2014
2014
2013
2013
28,046
23,650
65,808
62,636
18,806
17,422
19,115
17,944
46,852
41,072
84,923
80,580
632
532
962
906
47,484
41,604
85,885
81,486
Debt securities
Government securities
Others
Equity securities
Listed
Unlisted

Contract/
Notional Amount
2014
2013
Note 11 - Available-for-Sale Securities
(12,252)
(621)
(3,478)
(9)
(16,360)
2,474
1,663
4,137
51,621
(312)
51,309
643
1,614
2,257
88,142
(586)
87,556
355
113
468
42,072
(206)
41,866
350
113
463
81,949
(213)
81,736
Consolidated
Parent
2014
2014
2013
2013
5,295
2,992
5,038
3,352
46,326
39,080
83,104
78,597
51,621
42,072
88,142
81,949
Current
Non-current
The reconciliation of the allowance for impairment at December 31 is summarized as follows:
Note 10 - Trading Securities
Debt securities
Commercial papers of private companies
Equity securities - listed
Consolidated
Parent
2014
2014
2013
2013
14,537
658
15,195
52
15,247
615
15,862
3,900
429
4,329
5
4,334
263
4,597
6,085
492
6,577
43
6,620
6,620
2,258
367
2,625
1
2,626
2,626
At January 1
Reversal of impairment losses
At December 31
The range of average interest rates (%) of available-for-sale debt securities of the BPI Group for the years ended December 31 follows:
2013
3.30 - 4.60
1.96 - 2.46
The movement in available-for-sale securities is summarized as follows:
At January 1
Additions
Disposals
Amortization of premium, net
Fair value adjustments
Exchange differences
Net change in allowance for impairment
Net change in accrued interest receivable
At December 31
2014
2.84 - 3.18
2.39 - 2.71
Peso-denominated
Foreign currency-denominated
All trading securities are classified as current.
(61)
145
Consolidated
Parent
2014
2014
2013
2013
586
213
586
213
(274)
(7)
312
206
586
213
Consolidated
Parent
2014
2014
2013
2013
87,556
81,736
106,403
92,845
72,240
58,135
264,840
241,745
(107,387)
(96,923)
(280,663)
(249,990)
(2,365)
(2,252)
(507)
(505)
1,831
1,525
(3,347)
(3,129)
38
26
1,214
1,129
(274)
(7)
(330)
(374)
(384)
(359)
51,309
41,866
87,556
81,736
2014 Annual Report
(62)
On January 9, 2014, the BPI Group reclassified certain available-for-sale securities aggregating P63.4 billion to held-to-maturity category.
The reclassification was triggered by managements change in intention over the securities in the light of volatile market prices due to rising
interest rate environment. Management believes that despite the market uncertainties, the BPI Group has the capability to hold those
reclassified securities until maturity dates.
The aggregate fair value loss of those securities at reclassification dates that are still recognized in Accumulated other comprehensive
income (under Capital funds), and which will be amortized over the remaining lives of the instruments using the effective interest rate
method amounts to P4,534 million. Unamortized fair value loss as at December 31, 2014 amounts to P4,201 million. Fair value gain
that would have been recognized in other comprehensive income if the available-for-sale securities had not been reclassified
amounts to P3,678 million for the year ended December 31, 2014. There are no gains or losses recognized in profit or loss or other
comprehensive income.
On October 22, 2008, the BPI Group reclassified certain available-for-sale securities aggregating P19.1 billion to held-to-maturity category.
Likewise, on November 12, 2008, an additional portfolio of US dollar-denominated available-for-sale securities totaling US$171.6 million
(or peso equivalent of P9.2 billion) was further reclassified from available-for-sale to held-to-maturity. The reclassification was triggered by
managements change in intention over the securities in the light of volatile market prices due to global economic downturn. Management
believes that despite the market uncertainties, the BPI Group has the capability to hold those reclassified securities until maturity dates.
The aggregate fair value loss of those securities at reclassification dates still recognized in Accumulated other comprehensive income (under
Capital funds), and which will be amortized over the remaining lives of the instruments using the effective interest rate method amounts to
P1,757 million. Unamortized fair value loss as at December 31, 2014 amounts to P269 million (2013 - P371 million). Fair value loss that would
have been recognized in other comprehensive income if the available-for-sale securities had not been reclassified amounts to P123 million for
the year ended December 31, 2014 (2013 - P277 million loss). There are no gains or losses recognized in profit or loss or other comprehensive
income.
Note 12 - Held-to-Maturity Securities
146
Commercial papers of private companies
Consolidated
Parent
2014
2014
2013
2013
195,779
180,547
91,277
82,129
10,301
9,428
2,898
2,034
206,080
189,975
94,175
84,163
3,329
3,026
1,997
1,737
209,409
193,001
96,172
85,900
The movement in held-to-maturity securities is summarized as follows:
At January 1
Additions
Maturities
Amortization of premium, net
Exchange differences
Net change in accrued interest receivable
At December 31
Consolidated
Parent
2014
2014
2013
2013
96,172
85,900
76,243
67,822
127,125
118,981
48,508
42,493
(13,580)
(11,843)
(29,906)
(25,815)
(1,698)
(1,369)
(1,374)
(1,067)
58
43
2,478
2,269
1,332
1,289
223
198
209,409
193,001
96,172
85,900
Note 13 - Loans and Advances

Major classifications of this account at December 31 are as follows:
Corporate entities
Small and medium enterprise
Retail customers
Credit cards
Mortgages
Others
Unearned discount/income
Consolidated
2014
2013
553,493
417,537
94,185
86,740
31,010
123,965
10,719
813,372
2,753
(2,249)
813,876
(13,706)
800,170
27,222
106,413
5,759
643,671
2,175
(3,026)
642,820
(12,617)
630,203
Current
Non-current
(63)
2014
4.27 - 4.98
4.25 - 4.71
2013
6.82 - 7.89
4.55 - 4.75
532,181
58,875
399,235
54,471
30,931
182
7,390
629,559
1,973
(913)
630,619
(9,178)
621,441
27,054
180
2,291
483,231
1,449
(662)
484,018
(8,863)
475,155
Consolidated
Parent
2014
2013
649,056
619,169
390,421
164,820
11,450
252,399
813,876
630,619
642,820
Current
Non-current
147
2013
345,925
138,093
484,018
The amount of loans and advances above include finance lease receivables as follows:
The range of average interest rates (%) of held-to-maturity securities of the BPI Group for the years ended December 31 follows:
Peso-denominated
Foreign currency-denominated
2013
The Parent balances above include amounts due from related parties (Note 30).
2014
Consolidated
Parent
2014
2014
2013
2013
8,625
7,571
9,851
8,350
200,784
185,430
86,321
77,550
209,409
193,001
96,172
85,900
Parent
2014
Consolidated
2014
2013
6,507
6,546
(817)
(821)
5,690
5,725
(132)
(121)
5,558
5,604
Total future minimum lease collections

Unearned finance income
Present value of future minimum lease collections
2014 Annual Report
(64)
Details of future minimum lease collections follow:
The range of average interest rates (%) of loans and advances of the BPI Group for the years ended December 31 follows:
Consolidated
2014
2013
3,578
3,047
3,499
2,929
6,507
6,546
(817)
(821)
5,690
5,725
Not later than one year

Later than one year but not later than five years
Unearned finance income
The BPI Group, through BPI Leasing Century Tokyo Lease and Finance Corporation, mainly leases out vehicle and equipment under various
finance lease agreements which typically run for a non-cancellable period of two to five years. The contracts generally include an option to
purchase the leased asset after the lease period at a price that generally lies between 5% to 20% of the fair value of the asset at the
inception of the lease. In the event that the residual value of the leased asset exceeds the guaranteed deposit liability at the end of the
lease term, the BPI Group receives additional payment from the lessee prior to the transfer of the leased asset. On the other hand, the BPI
Group sets up a liability to the lessee for any excess of the guaranteed deposit liability over residual value of the leased asset.
The Parent Bank has no finance lease receivables as at December 31, 2014 and 2013.
3.99 - 4.05
2.33 - 2.59
7.44 - 7.65
10.04 - 10.18
Non-performing accounts (over 30 days past due) of the BPI Group and the Parent Bank, net of specific allowance for credit losses,
following BSP Circular 772 are as follows:
Consolidated
Parent
2014
2014
2013
12,540
7,205
11,452
7,477
4,560
8,268
5,063
2,645
3,184
Non-performing accounts (NPL 30)

Specific allowance for credit losses
Net NPL 30
2)
Corporate entities
Consolidated
2014
2013
9.38
10.04
21.00
21.65
2014
5.34
26.45
2013
5.87
27.97
26.97
1.62
12.62
7.89
19.21
100.00
14.06
2.68
14.99
15.09
21.39
100.00
18.13
2.03
15.03
8.87
22.10
100.00
22.45
2.15
12.88
11.95
20.19
100.00
Unsecured loans
Consolidated
2014
2014
2013
187,605
40,146
245,778
473,529
337,594
811,123
179,228
35,968
159,988
375,184
265,461
640,645
97,983
141
210,919
309,043
319,603
628,646
5,059
At December 31
5,581
Small and
medium
enterprises
2,154
727
(152)
(76)
23
Mortgages
80,650
2,673
146,969
230,292
252,277
482,569
Credit cards

1,478
2,390
306
(127)
(47)
30
153
(92)
2,316
1,539
1,079
(1,179)
2
2,292
Others
1,536
725
(177)
(106)
1,978
Total
149
12,617
2,990
(1,635)
(123)
(143)
13,706
2013
2013
Loans and advances aggregating P479 million (2013 - P1,310 million) and P461 million (2013 - P1,232 million) are used as security for bills
payable (Note 20) of the BPI Group and Parent Bank, respectively.
At January 1
Provision for impairment
losses
Write-off/disposal
Unwind of discount
Transfers
Retail customers
Parent
Other collaterals include hold-out deposits, mortgage trust indentures, government securities and bonds, quedan/warehouse receipts,
standby letters of credit, trust receipts, and deposit substitutes.
(65)
Large
corporate
customers
Parent
As to collateral
Secured loans
Real estate mortgage
Chattel mortgage
Others
6,788
5,399
1,389
2014
As to industry/economic sector (in %)
Consumer
Manufacturing
Real estate, renting and other related
activities
Agriculture and forestry
Wholesale and retail trade
Financial institutions
Others
2013
Consolidated
Details of the loans and advances portfolio of the BPI Group at December 31 are as follows:
148
4.50 - 4.73
2.43 - 2.66
7.76 - 8.13
9.68 - 10.12
Reconciliation of allowance for impairment by class at December 31 follows:
There is no contingent rent recognized as income during the years ended December 31, 2014 and 2013.
1)
2013
2014
Commercial loans
Peso-denominated loans
Foreign currency-denominated loans
Real estate mortgages
Auto loans
Corporate entities
Large
corporate
customers
At January 1
losses
Write-off/disposal
Unwind of discount
Transfers
3,054
At December 31
5,059
212
(432)
(87)
2,312
Retail customers
Small and
medium
enterprises
2,780
Mortgages
Credit cards

1,510
2,305
138
(46)
(60)
(658)
2,154
2014 Annual Report
74
(4)
(102)
1,478
1,200
(1,115)
2,390
Others
1,448
262
(72)
(102)
1,536
Total
11,097
1,886
(1,669)
(147)
1,450
12,617
(66)
Parent
Note 14 - Bank Premises, Furniture, Fixtures and Equipment

2014
Corporate entities
Large
corporate
customers
At January 1
losses
Write-off/disposal
Unwind of discount
Transfers
4,307
At December 31
4,698
Retail customers
Small and
medium
enterprises
1,923
566
(152)
(76)
53
179
(99)
(47)
7
1,963
Mortgages
Credit cards

65
2,390
Consolidated
Others
Total
Land
178
8,863
(2)
(34)
1,067
(1,177)
(1)
104
(74)
1
1,914
(1,502)
(123)
26
29
2,279
209
9,178
2013
Corporate entities
Large
corporate
customers
150
At January 1
losses
Write-off/disposal
Unwind of discount
Transfers
2,950
At December 31
4,307
104
(432)
(87)
1,772
Retail customers
Small and
medium
enterprises
2,143
109
(38)
(60)
(231)
1,923
Mortgages
15
(4)
16
1,200
(1,115)
-
65
2,390
Transfers pertain to reclassification of allowance for impairment between accounts.
(67)
Credit cards

38
2,305
Others
7,531
82
(3)
4
1,510
(1,592)
(147)
1,561
5,395
946
(175)
(4)
6,162
12,857
1,494
(512)
13,839
4,786
1,797
(1,671)
4,912
26,112
4,237
(2,184)
(175)
1
(4)
27,987
3,074
2,253
236
32
2,521
3,641
10,027
1,378
(403)
11,002
2,837
1,628
1,109
(1,033)
1,704
3,208
13,908
2,723
(1,404)
15,227
12,760
8,863
Land
Cost
January 1, 2013
Additions
Disposals
Amortization
Transfers
December 31, 2013
Accumulated depreciation
January 1, 2013
Depreciation
Disposals/transfers
December 31, 2013
Net book value, December 31, 2013
Total
3,074
(1)
1
3,074
Total
95
178
Cost
January 1, 2014
Additions
Disposals
Amortization
Transfers
Others
December 31, 2014
January 1, 2014
Depreciation
Disposals/transfers
December 31, 2014
2014
Buildings and
leasehold
Furniture and Equipment for
improvements
equipment
lease
2013
Buildings and
leasehold
Furniture and Equipment for
improvements
equipment
lease
Total
3,146
(76)
4
3,074
5,844
389
(611)
(151)
(76)
5,395
11,890
1,957
(987)
(3)
12,857
4,852
1,883
(1,949)
4,786
25,732
4,229
(3,623)
(151)
(75)
26,112
3,074
2,352
215
(314)
2,253
3,142
9,322
1,317
(612)
10,027
2,830
1,637
1,095
(1,105)
1,627
3,159
13,311
2,627
(2,031)
13,907
12,205
2014 Annual Report
151
(68)
Parent
The movement in investment properties is summarized as follows:
Land
Cost
January 1, 2014
Additions
Disposals
Amortization
Transfers
December 31, 2014
January 1, 2014
Depreciation
Disposals/transfers
December 31, 2014
152
Total
2,664
(1)
1
2,664
4,670
848
(129)
5,389
11,912
1,331
(432)
12,811
19,246
2,179
(433)
(129)
1
20,864
2,664
1,976
206
32
2,214
3,175
9,241
1,289
(347)
10,183
2,628
11,217
1,495
(315)
12,397
8,467
Land
Cost
January 1, 2013
Additions
Disposals
Amortization
Transfers
December 31, 2013
January 1, 2013
Depreciation
Disposals/transfers
December 31, 2013
2014
Buildings and
leasehold
Furniture and
improvements
equipment
2013
Buildings and
leasehold
Furniture and
improvements
equipment
5,055
342
(528)
(114)
(85)
4,670
10,985
1,850
(923)
11,912
18,732
2,192
(1,479)
(114)
(85)
19,246
2,664
2,057
185
(266)
1,976
2,694
8,574
1,237
(571)
9,240
2,672
10,631
1,422
(837)
11,216
8,030
Depreciation is included in Occupancy and equipment-related expenses in the statement of income.
(69)
2,575
(987)
85
(76)
1,597
Investment properties have aggregate fair value of P2,057 million as at December 31, 2014 (2013 - P3,289 million). The fair value of
investment property is determined on the basis of appraisal made by an internal or an external appraiser duly certified by the BPI Groups
Credit Policy group. Valuation method employed by the appraisers mainly includes the market data approach.
Depreciation is included in Occupancy and equipment-related expenses in the statement of income.
All investment properties generate rental income. Rental income from investment properties recognized in the statement of income, as part
of Other operating income, amounts to P298 million for the year ended December 31, 2014 (2013 - P255 million; 2012 - P260 million).
Direct operating expenses (including repairs and maintenance) arising from these investment properties amount to P23 million for the year
ended December 31, 2014 (2013 - P21 million; 2012 - P193 million).
This account at December 31 consists of investments in shares of stock:
2013
963
1,856
2,819
(1,220)
(2)
1,597
Consolidated
Parent
2014
2014
2013
Carrying value (net of impairment)

Investments at equity method
Investments at cost method
4,176
4,176
4,784
4,784
6,726
6,726
2013
153
6,793
6,793
Investments in associates carried at equity method in the consolidated statement of condition follow:
Name of entity
Note 15 - Investment Properties
Land
Buildings
At January 1
Additions
Disposals
Transfers
Depreciation
At December 31
2013
Note 16 - Investments in Subsidiaries and Associates

Total
2,692
(28)
2,664
Consolidated
Parent
2014
2014
2013
97
97
963
2,013
2,013
1,856
2,110
2,110
2,819
(1,300)
(1,300)
(1,220)
(2)
(2)
(2)
808
808
1,597
Consolidated
Parent
2014
2014
2013
1,597
1,597
2,582
157
157
(866)
(866)
(994)
85
(80)
(80)
(76)
808
808
1,597
BPI - Philamlife Assurance Corporation

Automated Fare Collection
Services, Inc.
National Reinsurance Corporation*
Beacon Properties
Victoria 1552 Investments, LP
Citytrust Realty Corporation
Place of business/
country of
incorporation
Percentage of
ownership interest
(%)
2014
2013
Acquisition cost
2014
2013
Measurement
method
Philippines
47.67
47.67
371
371
Equity
Philippines
Philippines
Philippines
Delaware, USA
Philippines
20.00
13.69
20.00
35.00
40.00
15.38
20.00
35.00
40.00
300
204
100
7
2
984
(7)
977
204
100
7
2
684
(7)
677
Equity
Equity
Equity
Equity
Equity
*BPI Group has significant influence due to its representation on the governing body of National Reinsurance Corporation
2014 Annual Report
(70)
For BPI-Philamlife Assurance Corporation, BPI acts as distribution channel for the formers insurance products. In 2014, the distribution
agreement with Philamlife has been extended for another twenty years or until November 27, 2039 unless earlier terminated.
The details of equity investments at cost method in the separate financial statements of the Parent Bank follow:
Details and movements of investments in associates carried at equity method in the consolidated financial statements follow:
Acquisition cost
At January 1
Addition
At December 31
Accumulated equity in net income
At January 1
Share in net income for the year
Dividends received
At December 31
Accumulated share in other comprehensive income
At January 1
Share in other comprehensive income for the year
At December 31
2014
2013
677
300
977
677
677
1,968
257
(201)
2,024
1,385
590
(7)
1,968
1,530
253
1,783
4,784
1,618
(87)
1,531
4,176
As the associates are not considered to be individually material to impact the financial statements of the BPI Group, the unaudited financial
information of associates as at and for the years ended December 31 has been aggregated as follows:
154
2014
2013
79,092
66,239
63,083
52,042
18,667
17,898
480
1,414
Total assets
Total liabilities
Total revenues
Total net income
Acquisition cost
2014
2013
Subsidiaries
BPI Europe Plc.
Ayala Plans, Inc.
BPI Direct Savings Bank, Inc.
BPI Century Tokyo Lease and Finance
Corporation (formerly BPI Leasing
Corporation)
FGU Insurance Corporation
BPI Globe BanKO, Inc.
BPI Foreign Exchange Corp.
BPI Express Remittance Corp. USA
BPI Family Savings Bank, Inc.
First Far-East Development
Corporation
Green Enterprises S.R.L. in
Liquidation (formerly BPI
Express Remittance Europe,
S.p.A)
BPI Card Finance Corp.
FEB Stock Brokers, Inc.
BPI Computer Systems Corp.
BPI Express Remittance Spain S.A
Others
Associates
Allowance for
impairment
2014
2013
Carrying value
2014
2013
1,910
863
623
392
1,910
863
623
392
1,910
863
623
392
1,910
863
623
392
329
303
607
195
191
150
644
303
359
195
191
150
329
303
607
195
191
150
644
303
359
195
191
150
91
91
91
91
54
50
25
23
25
322
677
6,830
54
50
25
23
25
322
677
6,897
54
50
25
23
25
218
677
6,726
54
50
25
23
25
218
677
6,793
(104)
(104)
(104)
(104)
155
In 2014, the Parent Bank made additional capital infusion to BPI Globe BanKO, Inc. amounting to P248 million.
Note 17 - Deferred Income Taxes
The significant components of deferred income tax assets and liabilities at December 31 are as follows:
Deferred income tax assets

Net operating loss carry over (NOLCO)
Minimum corporate income tax (MCIT)
Pension liability
Others
Total deferred income tax assets
Deferred income tax liabilities
Revaluation gain on properties acquired from a
business combination
Fair value gain on available-for-sale securities
Others
Total deferred income tax liabilities
(71)
Consolidated
Parent
2014
2014
2013
2013
5,919
117
1
298
1
6,336
5,662
10
2
370
1,007
7,051
3,901
268
4,169
3,813
283
1,035
5,131
(543)
(42)
(33)
(618)
5,718
(767)
(108)
(875)
6,176
(543)
(31)
(574)
3,595
(731)
(104)
(835)
4,296
2014 Annual Report
(72)
Consolidated
2014
2014
2013
Deferred income tax assets

Amount to be recovered within 12 months
Amount to be recovered after 12 months
Deferred income tax liabilities
Amount to be settled within 12 months
Amount to be settled after 12 months
Parent
Note 18 - Other Resources

2013
444
5,892
6,336
612
6,439
7,051
431
3,738
4,169
559
4,572
5,131
449
169
618
175
700
875
449
125
574
175
660
835
The movement in the deferred income tax account is summarized as follows:

Consolidated
Parent
2014
2014
2013
6,176
4,296
5,087
At January 1
Amounts credited to (charged against) statement of
income
Amounts (charged against) credited to other
comprehensive income
At December 31
416
(874)
5,718
(6)
1,095
6,176
138
(839)
3,595
2013
3,525
(245)
1,016
4,296
The account at December 31 consists of the following:
Intangible assets
Accounts receivable
Residual value of equipment for lease
Sundry debits
Accrued trust and other fees
Creditable withholding tax
Prepaid expenses
Rental deposits
Miscellaneous assets
Miscellaneous assets include returned checks, prepaid taxes and other office supplies.
The reconciliation of the allowance for impairment at December 31 is summarized as follows:
The deferred tax charge (credit) in the statement of income comprises the following temporary differences:
2014
156

NOLCO
Pension
Others
Consolidated
2013
(298)
(107)
76
(87)
(416)
(94)
(3)
82
21
6
2014
2012
(163)
(436)
(3)
75
22
(50)
(1)
(138)
(418)
Parent
2013
191
52
2
245
2012
(210)
19
(22)
(213)
The outstanding NOLCO at December 31 consists of:

Year of Incurrence
Year of Expiration
2014
2013
2012
2011
2010
2017
2016
2015
2014
2013
Used portion/ expired during the year

Tax rate
Deferred income tax asset on NOLCO
Consolidated
Parent
2014
2014
2013
361
20
20
10
10
3
3
11
394
44
(3)
(11)
391
33
30%
30%
30%
117
10
At January 1
(Reversal of) provision for impairment losses
Write-off
At December 31
Current
Non-current
2013
30%
-
Consolidated
Parent
2014
2014
2013
2013
2,334
2,282
2,744
2,689
2,574
1,974
2,356
1,902
1,974
1,994
3,196
2,310
1,167
1,149
1,213
1,109
1,153
1,004
482
210
1,334
1,076
732
508
725
494
366
304
335
280
2,158
1,291
999
420
15,029
9,988
12,807
9,014
(1,478)
(1,330)
(1,759)
(1,600)
13,551
8,658
11,048
7,414
Consolidated
Parent
2014
2014
2013
1,759
1,600
1,662
(246)
(255)
159
(35)
(15)
(62)
1,478
1,330
1,759
Consolidated
Parent
2014
2014
2013
10,366
8,481
8,405
4,663
1,507
4,402
15,029
9,988
12,807
2013
1,523
88
(11)
1,600
157
2013
7,513
1,501
9,014
Note 19 - Deposit Liabilities

Demand
Savings
Time
The details of MCIT at December 31 are as follows:
Consolidated
Parent
2014
2014
2013
199,690
191,954
179,681
616,448
525,129
505,538
360,075
235,598
303,367
1,176,213
952,681
988,586
2013
171,731
430,185
183,487
785,403
The Parent balances above include amounts due to related parties (Note 30).
Year of Incurrence
Year of Expiration
2014
2013
2012
2011
2017
2016
2015
2014
Used portion during the year
(73)
Consolidated
Parent
2014
2014
2013
1
3
3
4
3
(3)
(1)
1
2
2013
-
Current
Non-current
Consolidated
Parent
2014
2014
2013
584,042
447,239
288,733
592,171
505,442
699,853
1,176,213
952,681
988,586
2014 Annual Report
2013
429,754
355,649
785,403
(74)
Related interest expense on deposit liabilities is broken down as follows:

Consolidated
2013
2014
Demand
Savings
Time
2014
2012
405
550
4,320
2,651
2,010
8,447
6,735
11,648
448
3,032
6,050
9,530
452
5,584
4,798
10,834
Note 21 - Deferred Credits and Other Liabilities

The account at December 31 consists of the following:
Parent
2013
2012
403
2,351
2,433
5,187
505
2,190
4,234
6,929
Under current and existing BSP regulations as at December 31, 2014 and 2013, the BPI Group should comply with a simplified minimum
reserve requirement instead of the separate liquidity and statutory reserve requirements. Further, BSP requires all reserves be kept at the
central bank. The BPI Group is in full compliance with the simplified reserve requirement.
The required liquidity and statutory reserves as reported to BSP at December 31 comprise of:
Consolidated
Parent
2014
2014
2013
177,871
160,625
128,276
Due from BSP
Consolidated
Parent
2014
2014
2013
13,854
13,817
11,797
4,787
3,554
3,550
1,974
2,076
947
947
1,677
545
435
502
531
531
731
419
92
425
301
270
366
3,201
7,910
5,823
6,905
31,268
25,469
31,230
Bills purchased - contra

Accounts payable
Deposit on lease contract
Withholding tax payable
Vouchers payable
Other deferred credits
Due to the Treasurer of the Philippines
Dividends payable
Miscellaneous liabilities
2013
116,419
Consolidated
Parent
2014
2014
2013
19,955
17,868
20,354
11,313
7,601
10,876
31,268
25,469
31,230
The account at December 31 consists of:
158
Bangko Sentral ng Pilipinas

Local banks
Foreign banks
2013
919
313
17,758
18,990
Current
Non-current
2014
3.32 - 3.72
3.06 - 3.43
0.90 - 1.05
2014
Interest expense
Current
Non-current
350
Consolidated
2013
545
2014
2012
138
584
Parent
2013
194
Consolidated
Parent
2014
2014
2013
28,476
26,103
25,313
4,517
185
866
32,993
26,288
26,179
2012
Details of authorized share capital of the Parent Bank follow:
Authorized capital (at P10 par value per share)

Common shares
Preferred A shares
18,209
781
18,990
Bills payable include funds borrowed from Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP) and Social
Security System (SSS) which were relent to customers of the BPI Group in accordance with the financing programs of LBP, DBP and SSS
and credit balances of settlement bank accounts. The average payment term of these bills payable is 1.03 years (2013 - 1.35 years).
Loans and advances of the BPI Group arising from these financing programs serve as security for the related bills payable (Note 13).
2013
(In Millions of Pesos,
Except Par Value Per Share)
49,000
600
49,600
49,000
600
49,600
2012
49,000
600
49,600
Details of outstanding common shares follow:
165
2013
18,449
7,889
26,338
159
2014
2013
3.87 - 4.10
5.81 - 6.31
1.04 - 1.31
2013
Note 22 - Capital Funds
The range of average interest rates (%) of bills payable of the BPI Group for the years ended December 31 follows:
Bangko Sentral ng Pilipinas
Private firms and local banks - Peso-denominated
Foreign banks
11,786
2,370
1,677
402
731
35
328
3,201
5,808
26,338
Bills purchased - contra represents liabilities arising from the outright purchases of checks before actual clearing as a means of immediate
financing offered by the BPI Group. Miscellaneous liabilities include insurance and other employee-related payables.
Note 20 - Bills Payable; Unsecured Subordinated Debt
Consolidated
Parent
2014
2014
2013
990
6,916
225
7,395
26,077
26,063
17,794
32,993
26,288
26,179
2013
Issued common shares

At January 1
Issuance of shares during the year
At December 31
Subscribed common shares
2014
2013
(In Number of Shares)
2012
3,558,720,023
373,494,161
3,932,214,184
5,056,319
3,556,356,173
2,363,850
3,558,720,023
2,363,850
3,556,356,173
3,556,356,173
-
Share premium as at December 31, 2014 amounts to P29,341 million (2013 - P8,316 million).
As at December 31, 2014, 2013 and 2012, the Parent Bank has 11,858, 12,111 and 12,447 common shareholders, respectively. There are
no preferred shares issued and outstanding at December 31, 2014, 2013 and 2012.
On August 20, 2013, the Board of Directors of the Parent Bank approved the exercise of its option to call or redeem the P5,000 million BPI
Lower Tier 2 Notes on the optional redemption date, being December 13, 2013.
(75)
2014 Annual Report
(76)
The subscription price for ESPP is equivalent to 15% below the volume weighted average of BPI share price for the most recent previous
30-trading days from grant date. The subscription dates for ESPP were on November 12, 2014 and December 23, 2013.
Details of and movements in Accumulated other comprehensive income (loss) for the years ended December 31 follow:
2014
Consolidated
2013
Fair value reserve on available-for-sale securities
160
2014
2012
Parent
2013
2012
Details of and movements in Reserves for the years ended December 31 follow:
At January 1
Unrealized fair value (loss) gain before tax
Deferred income tax effect
At December 31
Share in other comprehensive income (loss) of insurance
subsidiaries
At January 1
Share in other comprehensive income (loss) for the
year, before tax
At December 31
Share in other comprehensive income (loss) of associates
At January 1
Share in other comprehensive income (loss) for the
year
At December 31
Translation adjustment on foreign operations
At January 1
Translation differences
At December 31
Actuarial (losses) gains on defined benefit plan, net
At January 1
Actuarial (losses) gains for the year
At December 31
(2,952)
(1,406)
503
(3,855)
1,030
(4,901)
919
(2,952)
1,748
(987)
269
1,030
(3,029)
(1,525)
482
(4,072)
642
(4,592)
921
(3,029)
1,192
(809)
259
642
36
289
137
157
(5)
188
(331)
78
36
169
(17)
289
1,530
254
1,784
1,618
(88)
1,530
1,116
502
1,618
(703)
(65)
(768)
(936)
233
(703)
(832)
(104)
(936)
(1,072)
713
(213)
(572)
(3,223)
(581)
(702)
211
(1,072)
(3,161)
(2,333)
2,504
(752)
(581)
1,420
(781)
503
(151)
(429)
(4,501)
(365)
(594)
178
(781)
(3,810)
(1,755)
1,986
(596)
(365)
277
On November 12, 2014, the Board of Directors of the Parent Bank approved to grant to qualified beneficiaries/participants up to 3,200,000
shares for Executive Stock Option Plan (ESOP) and 4,100,000 shares for Executive Stock Purchase Plan (ESPP).
On November 27, 2013, the Board of Directors of the Parent Bank approved to grant to qualified beneficiaries/ participants up to 3,500,000
shares for ESOP and up to 4,300,000 shares for ESPP.
The ESOP has a three-year vesting period with 1/3 of the option being vested at the end of each year from grant date while the ESPP has a
five-year payment period.
The exercise price for ESOP is equal to the volume weighted average of BPI share price for the most recent previous 30-trading days from
grant date. The weighted average fair value of options granted during 2014 determined using the Black-Scholes valuation model was
P16.20 per option (2013 - P17.54).
Movements in the number of employee share options are as follows:
2014
3,250,000
3,175,000
(75,000)
6,350,000
1,058,333
At January 1
Granted
Exercised
Cancelled
At December 31
Exercisable
(77)
The impact of ESOP is not considered material to the 2013 financial statements; thus, the disclosures were only limited to the information
mentioned above.
2013
3,250,000
3,250,000
-
2014
Surplus reserves
At January 1
Transfer from surplus
Executive stock plan amortization
At December 31
1,680
397
21
2,098
Consolidated
2013
2014
2012
1,603
76
1
1,680
1,462
141
1,603
Parent
2013
1,680
397
18
2,095
1,603
76
1
1,680
2012
1,462
141
1,603
Surplus reserves consist of:
2014
Reserve for trust business
Reserve for self-insurance
Executive stock option plan amortization
2,043
34
21
2,098
Consolidated
2013
1,645
34
1
1,680
2014
2012
2,043
1,569
34
34
18
2,095
1,603
Parent
2013
1,645
34
1
1,680
2012
1,569
34
1,603
In compliance with existing BSP regulations, 10% of the Parent Banks income from trust business is appropriated to surplus reserve. This
yearly appropriation is required until the surplus reserve for trust business reaches 20% of the Parent Banks regulatory net worth.
Reserve for self-insurance represents the amount set aside to cover losses due to fire, defalcation by and other unlawful acts of personnel
and third parties.
Cash dividends declared by the Board of Directors of the Parent Bank during the years 2012 to 2014 follow:
Date declared
March 21, 2012
March 21, 2012
October 21, 2012
April 17, 2013
November 6, 2013
May 21, 2014
Date approved by the BSP

April 10, 2012
April 10, 2012
November 16, 2012
May 15, 2013
December 5, 2013
June 19, 2014
Amount of dividends
Total
Per share
0.50
1,778
0.90
3,201
0.90
3,201
0.90
3,201
0.90
3,201
0.90
3,538
On November 19, 2014, cash dividend of P0.90 per share was declared by the Board of Directors, which was approved by the BSP on
February 2, 2015.
Cash dividends declared are payable to common shareholders of record as of 15th working day from receipt by the Parent Bank of the
approval by the BSP and distributable on the 15th working day from the said record date.
2014 Annual Report
(78)
161
The calculation of earnings per share (EPS) is shown below:
Note 24 - Leases
Consolidated
Parent
2014
2013
2012
2013
(In Millions, Except Earnings Per Share Amounts)
2014
a) Net income attributable to equity holders of the
Parent Bank
b) Weighted average number of common shares
outstanding during the year
c) Basic EPS (a/b)
2012
18,039
18,811
16,352
13,270
14,468
12,427
3,905
4.62
3,627
5.19
3,556
4.60
3,905
3.40
3,627
3.99
3,556
3.49
For 2013, the weighted average number of common shares outstanding during the year has been adjusted to take into consideration the rights
issue approved by the Board of Directors on November 6, 2013. The Parent Bank offered for subscription a total of 370,370,370 common
shares to eligible shareholders on a pre-emptive rights basis at P67.50 per share. The stock rights have been fully subscribed and listed on
February 10, 2014. The proceeds from the rights offer amounting to P25 billion has increased the Parent Banks capital base.
The basic and diluted EPS are the same for the years presented as the stock options outstanding is not significant to impact the weighted
average number of common shares.
Note 23 - Other Operating Income
2014
2013
2012
The future minimum lease payments under non-cancellable operating leases of the BPI Group are as follows:
2014
2013
59
67
90
85
149
152
No later than 1 year

Later than 1 year but no later than 5 years
Details of compensation and fringe benefits expenses follow:

Consolidated
2014
2013
162
Consolidated
Parent
1,160
937
1,071
869
936
745
Note 25 - Operating Expenses
Details of other operating income follow:
Trust and asset management fees

Rental income
Credit card income
Gain on sale of assets
Dividend income
Others
The BPI Group and the Parent Bank have various lease agreements which mainly pertain to branch premises that are renewable under certain
terms and conditions. The rentals (included in Occupancy and equipment-related expenses) under these lease contracts are as follows:
3,433
1,796
1,550
1,363
22
2,504
10,668
3,723
1,830
1,359
1,296
28
1,278
9,514
2014
2012
2,913
1,698
1,342
1,192
27
706
7,878
2,793
439
1,548
2,418
572
2,201
9,971
Parent
2013
3,026
425
1,359
1,028
1,923
795
8,556
2012
2,453
415
1,342
640
1,383
538
6,771
Trust and asset management fees arise from the BPI Groups asset management and trust services and are based on agreed terms with
various managed funds and investments.
Rental income is earned by the BPI Group by leasing out its investment properties (Note 15) and other assets which consist mainly of fleet of
vehicles.
Gain on sale of assets arises mainly from disposals of properties (including equity investments), foreclosed collaterals and non-performing
assets.
Dividend income recognized by the Parent Bank substantially pertains to dividend distribution of subsidiaries.
Other income includes recoveries on charged-off assets and revenues from service arrangements with customers and a related party.
2014
Salaries and wages
Retirement expense (Note 28)
Other employee benefit expenses
9,516
826
1,508
11,850
Consolidated
2013
8,788
786
1,067
10,641
2014
2012
7,610
8,328
670
1,032
1,288
1,110
9,568
10,470
Parent
2013
2012
6,831
639
822
8,292
6,565
822
875
8,262
163
Details of other operating expenses follow:
Insurance
Advertising
Travel and communication
Supervision and examination fees
Taxes and licenses
Litigation expenses
Amortization expense
Management and other
professional fees
Office supplies
Shared expenses
Others
Consolidated
2013
2,513
1,335
722
497
469
417
316
1,908
1,346
696
500
461
521
337
2014
2012
1,642
1,685
1,163
1,457
601
662
436
398
295
237
224
444
312
334
297
275
2,252
9,093
261
256
1,736
8,022
188
248
1,486
7,139
2014
251
226
22
1,421
6,593
Parent
2013
2012
1,269
1,104
594
441
239
349
333
1,127
1,268
556
351
130
321
332
197
215
18
1,113
5,872
134
207
33
919
5,378
Others include fees and incentives paid to agents, outsourcing fees and other business expense.
(79)
2014 Annual Report
(80)
Note 26 - Income Taxes
Following are the amounts recognized based on recent actuarial valuations:
A reconciliation between the provision for income tax at the statutory tax rate and the actual provision for income tax for the years ended
December 31 follows:
(a)
Amount
Statutory income tax
Effect of items not subject to statutory tax rate:
Income subjected to lower tax rates
Tax-exempt income
Others, net
Actual income tax
2014
Rate (%)
6,906
30.00
(1,571)
(2,062)
1,685
4,958
(6.82)
(8.96)
7.31
21.53
2014
Amount
Rate (%)
Statutory income tax
Effect of items not subject to statutory tax rate:
Income subjected to lower tax rates
Tax-exempt income
Others, net
Actual income tax
5,067
30.00
(1,491)
(1,035)
1,080
3,621
(8.83)
(6.13)
6.39
21.43
Consolidated
2013
Amount
Rate (%)
6,944
30.00
(689)
(2,938)
836
4,153
(2.98)
(12.69)
3.61
17.94
Parent
2013
Amount
Rate (%)
5,207
30.00
(645)
(1,993)
320
2,889
(3.72)
(11.48)
1.85
16.65
Amount
2012
Rate (%)
5,898
30.00
(1,132)
(2,850)
1,242
3,158
(5.76)
(14.50)
6.32
16.06
Amount
2012
Rate (%)
4,397
30.00
(868)
(1,982)
684
2,231
(5.92)
(13.52)
4.66
15.22
Note 27 - Basic Quantitative Indicators of Financial Performance

164
The key financial performance indicators follow (in %):

Consolidated
2014
2013
13.75
18.05
1.44
1.87
3.03
3.31
Return on average equity

Return on average assets
Net interest margin
Parent
2014
2013
13.37
19.05
1.33
1.87
2.73
3.09
Pension liability as at December 31 recognized in the statement of condition

Consolidated
2014
2013
11,541
11,495
(11,133)
(10,261)
408
1,234
Present value of defined benefit obligations

Fair value of plan assets
Pension liability recognized in the statement of condition
Parent
2014
9,498
(9,165)
333
Present value of defined benefit obligations

Fair value of plan assets
Pension liability recognized in the statement of condition
2013
9,277
(8,332)
945
Pension liability is shown as part of Miscellaneous liabilities within Deferred credits and other liabilities (Note 21).
The movement in plan assets is summarized as follows:
At January 1
Fund transfer due to transferred employees from a subsidiary
Asset return in net interest cost
Contributions
Benefit payments
Remeasurement - return on plan assets
At December 31
Consolidated
Parent
2014
2014
2013
2013
10,261
8,332
10,406
8,385
108
544
448
687
553
942
766
756
605
(1,110)
(897)
(1,158)
(866)
496
408
(430)
(345)
11,133
9,165
10,261
8,332
165
The carrying value of the plan assets as at December 31, 2014 is equivalent to the fair value of P11,133 million
(2013 - P10,261 million).
The plan assets are comprised of the following:
Note 28 - Retirement Plans

BPI and its subsidiaries, and a non-life insurance subsidiary have separate trusteed, noncontributory retirement benefit plans covering all
qualified officers and employees. The description of the plans follows:
BPI
BPI has a unified plan which includes its subsidiaries other than insurance companies. Under this plan, the normal retirement age is 60
years. Normal retirement benefit consists of a lump sum benefit equivalent to 200% of the basic monthly salary of the employee at the time
of his retirement for each year of service, if he has rendered at least 10 years of service, or to 150% of his basic monthly salary, if he has
rendered less than 10 years of service. For voluntary retirement, the benefit is equivalent to 112.50% of the employees basic monthly
salary for a minimum of 10 years of service with the rate factor progressing to a maximum of 200% of basic monthly salary for service years
of 25 or more. Death or disability benefit, on the other hand, shall be determined on the same basis as in voluntary retirement.
2014
Amount
Debt securities
Equity securities
Others
5,940
5,177
16
11,133
Consolidated
Parent
2014
2013
2013
%
%
Amount
%
Amount
%
Amount
(In Millions of Pesos Except for Rates)
4,890
53
5,306
52
53
4,309
52
4,262
47
4,933
48
47
4,006
48
13
22
17
9,165
100
10,261
100
100
8,332
100
The net defined benefit cost and contributions to be paid by the entities within the BPI Group are determined by an independent actuary.
Plan assets are held in trusts, governed by local regulations and practice in the Philippines.
Non-life insurance subsidiary
BPI/MS has a separate trusteed defined benefit plan. Under the plan, the normal retirement age is 60 years or the employee should have
completed at least 10 years of service, whichever is earlier. The normal retirement benefit is equal to 150% of the final basic monthly salary
for each year of service for below 10 years and 175% of the final basic monthly salary for each year of service for 10 years and above.
Death or disability benefit for all employees of the non-life insurance subsidiary shall be determined on the same basis as in normal or
voluntary retirement as the case may be.
(81)
2014 Annual Report
(82)
Pension plan assets of the unified retirement plan include investment in BPIs common shares with carrying amount of P958 million
(2013 - P1,232 million) and fair value of P2,365 million at December 31, 2014 (2013 - P2,750 million). Realized and unrealized gains
coming from BPIs common shares amount to P489 million and P1,407 million in 2014, respectively (2013 - P474 million and
P1,518 million). The actual return on plan assets of the BPI Group was P1,040 million in 2014 (2013 - P257 million). An officer of the Parent
Bank exercises the voting rights over the plans investment in BPIs common shares.
The movement in the present value of defined benefit obligation is summarized as follows:
At January 1
Present value of defined benefit obligation for transferred
employees from a subsidiary
Current service cost
Past service cost
Interest cost
Benefit payments
Remeasurement - changes in financial assumptions
At December 31
166
Consolidated
Parent
2014
2014
2013
2013
11,495
9,277
10,909
8,702
759
611
(1,110)
(214)
11,541
764
(11)
720
(1,158)
271
11,495
95
621
497
(897)
(95)
9,498
The projected maturity analysis of retirement benefit payments as at December 31 are as follows:
Consolidated
Less than a year
Between 1 to 5 years
Over 20 years
2014
868
3,485
4,829
8,623
12,962
74,609
2013
865
3,327
4,370
6,768
10,463
47,518
2014
637
2,709
4,000
7,558
10,873
54,499
2013
692
2,516
3,392
5,905
8,722
36,697
Parent
618
574
(866)
249
9,277

Less than a year
Over 20 years
The BPI Group has no other transactions with the plan other than the contributions presented above for the years ended
December 31, 2014 and 2013.
The sensitivity of the defined benefit obligation as at December 31 to changes in the weighted principal assumptions follows:
(b)
Consolidated
Expense recognized in the statement of income
Current service cost

Net interest cost
Past service cost
Consolidated
Parent
2014
2014
2013
2012
2013
759
621
764
816
618
67
49
33
216
21
(11)
826
670
786
1,032
639
2012
657
165
822
2014
5.31%
5.00%
2013
5.31%
4.00%
Assumptions regarding future mortality and disability experience are based on published statistics generally used for local actuarial
valuation purposes.
The defined benefit plan typically exposes the BPI Group to a number of risks such as investment risk, interest rate risk and salary risk. The
most significant of which relate to investment and interest rate risk. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. A decrease in government bond
yields will increase the defined benefit obligation although this will also be partially offset by an increase in the value of the plans fixed income
holdings. Hence, the present value of defined benefit obligation is directly affected by the discount rate to be applied by the BPI Group.
However, the BPI Group believes that due to the long-term nature of the pension liability and the strength of the BPI Group itself, the mix of debt
and equity securities holdings of the plan is an appropriate element of the BPI Groups long term strategy to manage the plan efficiently.
The BPI Group ensures that the investment positions are managed within an asset-liability matching framework that has been developed to
achieve long-term investments that are in line with the obligations under the plan. The BPI Groups main objective is to match assets to the
defined benefit obligation by investing primarily in long-term debt securities with maturities that match the benefit payments as they fall due. The
asset-liability matching is being monitored on a regular basis and potential change in investment mix is being discussed with the trustor, as
necessary to better ensure the appropriate asset-liability matching.
The average remaining service life of employees under the BPI unified retirement plan as at December 31, 2014 is 12 years
(2013 - 20 years). The BPI Group contributes to the plan depending on the suggested funding contribution as calculated by an independent
actuary. The expected contribution for the year ending December 31, 2015 for the BPI Group and Parent amounts to P968 million and
P797 million, respectively.
(83)
Discount rate
Salary growth rate
Change in
assumption
0.5%
1.0%
Impact on defined benefit obligation

Increase in
assumption
Decrease in assumption
Decrease by 0.94%
Increase by 1.52%
Increase by 3.92%
Decrease by 1.60%
Change in
assumption
0.5%
1.0%

Increase in
assumption
Decrease by 1.66%
Increase by 3.02%
Increase by 7.13%
Decrease by 2.57%
Change in
assumption
0.5%
1.0%

Increase in
assumption
Decrease by 0.95%
Increase by 1.55%
Increase by 3.99%
Decrease by 1.61%
Change in
assumption
0.5%
1.0%

Increase in
assumption
Decrease by 1.69%
Increase by 3.13%
Increase by 7.39%
Decrease by 2.61%
2013
The principal assumptions used for the actuarial valuations of the unified plan of the BPI Group are as follows:
Discount rate
Future salary increases
2014
Discount rate
Salary growth rate
167
Parent
2014
Discount rate
Salary growth rate
2013
Discount rate
Salary growth rate
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the
projected unit credit method at the end of the reporting period) has been applied as when calculating the retirement liability recognized
within the statement of condition.
2014 Annual Report
(84)
Note 29 - Trust Assets

At December 31, 2014, the net asset value of trust and fund assets administered by the BPI Group amounts to P619 billion
(2013 P580 billion).
Government securities deposited by the BPI Group and the Parent Bank with the BSP in compliance with the requirements of the General
Banking Act relative to the trust functions follow:
Consolidated
Parent
2014
2014
2013
2013
9,425
5,386
6,702
6,650
Note 30 - Related Party Transactions
In the normal course of the business, the Parent Bank transacts with related parties consisting of its subsidiaries and associates. Likewise, the
BPI Group has transactions with Ayala Corporation (AC) and its subsidiaries (Ayala Group). AC has a significant influence over the BPI Group
as at reporting date.
These transactions such as loans and advances, deposit arrangements, trading of government securities and commercial papers, sale of
assets, lease of bank premises, investment advisory/management, service arrangements and advances for operating expenses are made in
the normal banking activities and have terms and conditions that are generally comparable to those offered to non-related parties or to similar
transactions in the market.
Loans and advances from:

Subsidiaries
Associates
AC
Subsidiaries of AC
Key management personnel
Deposits from:
Subsidiaries
Associates
Ayala Group
The Parent Bank has a Related Party Transactions Committee that reviews and endorses all related party transactions, including those
involving DOSRI, which shall require final Board approval. The Committee consists of four directors, two of whom are independent directors
including the Chairman.
168
Significant related party transactions and outstanding balances as at and for the years ended December 31 are summarized below
(transactions with subsidiaries have been eliminated in the consolidated financial statements):
Consolidated

Subsidiaries
Associates
AC
Subsidiaries of AC
Other related parties
Deposits from:
Subsidiaries
Associates
Ayala Group
2014
Outstanding
balances
Transactions
(163)
8,000
56,464
863
31
14,250
72,529
863
65,164
87,673
(910)
317
10,232
1,707
6,026
989
31,391
2,721
11,346
(85)

Subsidiaries
Associates
AC
Subsidiaries of AC
2013
Outstanding
balances
Transactions
(202)
11,403
-
194
6,250
16,065
-
11,201
22,509
2,885
613
(17,910)
704
6,936
672
21,159
1,014
(13,708)
29,781
2012
Outstanding
balances
Transactions
(1,285)
1,750
4,460
-
396
6,250
4,662
-
4,925
11,308
724
16
21,216
(32)
4,051
59
39,069
310
21,924
43,489
Terms and conditions

These are loans and advances granted to
related parties that are generally secured
with interest rates ranging from 0.99% to
5.49% and with maturity periods ranging
from 23 days to 10 years. Additional
information on DOSRI loans are discussed
below.
Deposits from:
Subsidiaries
Associates
Ayala Group

below.
These are demand, savings and time
deposits bearing the following average
interest rates:
Demand - 0.28% to 0.36%
Savings - 0.70% to 0.98%
Time
- 2.20% to 3.25%

169

below.
interest rates:
Demand - 0.40% to 0.55%
Savings - 0.95% to 1.06%
Time
- 3.45% to 3.71%

interest rates:
Demand - 0.23% to 0.24%
Savings - 0.83% to 0.86%
Time
- 1.70% to 1.76%
41,127
2014 Annual Report
(86)
Parent
2012
2014

Subsidiaries
Associates
AC
Subsidiaries of AC
Deposits from:
Subsidiaries
Associates
Ayala Group
Outstanding
Transactions
balances
(163)
8,000
56,464
863
31
14,250
72,529
863
65,164
87,673
647
303
9,286
1,454
5,945
975
30,445
2,468
11,690
39,833

below.
interest rates:
Demand - 0.21% to 0.23%
Savings - 0.77% to 0.80%
Time
- 0.78% to 0.94%

Subsidiaries
Associates
AC
Subsidiaries of AC
Deposits from:
Subsidiaries
Associates
Ayala Group
(87)
194
6,250
16,065
-
11,847
22,509
1,955
613
(17,910)
704
5,298
672
21,159
1,014
(14,638)
28,143
6,250
4,412
-
779
10,662
277
16
21,216
(342)
3,343
59
39,069
310
21,167
42,781

below.
interest rates:
Demand - 0.39% to 0.55%
Savings - 0.92% to 1.05%
Time
- 2.87% to 3.18%
Consolidated
Outstanding
Transactions
balances
194
11,653
-
Deposits from:
Subsidiaries
Associates
Ayala Group
(1,681)
(1,750)
4,210
-
The aggregate amounts included in the determination of income before income tax that resulted from transactions with each class of related
parties are as follows:
2013
170

Subsidiaries
Associates
AC
Subsidiaries of AC
Outstanding
Transactions
balances

below.
interest rates:
Demand - 0.26% to 0.35%
Savings - 0.64% to 0.92%
Time
- 1.42% to 2.61%
2014
Interest income
Subsidiaries
Associates
AC
Subsidiaries of AC
Other income
Subsidiaries
Associates
AC
Subsidiaries of AC
Interest expense
Subsidiaries
Associates
Ayala Group
2013
2012
171

10
384
582
16
992
5
127
368
500
76
3
119
88
286
817
37
798
1,652
1,018
577
16
(75)
1,536
973
370
22
62
1,427
10
2
118
20
150
5
3
68
5
81
21
301
2
324
2014 Annual Report
(88)
2013
2012
101
116
277
494
1,003
175
42
1,220
905
132
49
1,086
58
33
39
673
69
701
57
556
51
2014
Other expenses
Subsidiaries
Associates
AC
Subsidiaries of AC
Retirement benefits
Salaries, allowances and other short-term benefits
Directors remuneration
Parent
2013
2014
Interest income
Subsidiaries
Associates
AC
Subsidiaries of AC
172
2012
Other income
Subsidiaries
Associates
AC
Subsidiaries of AC
384
582
16
983
127
368
497
56
3
119
82
260
585
577
(131)
1,031
577
370
947
708
729
1,437
Interest expense
Subsidiaries
Associates
Ayala Group
Other expenses
Subsidiaries
Associates
AC
Subsidiaries of AC
Retirement benefits
Salaries, allowances and other short-term benefits
Directors remuneration
9
2
115
15
141
5
3
68
5
81
7
301
2
310
45
116
51
212
900
175
42
1,117
343
132
49
524
49
29
36
570
61
570
50
487
38
Other income mainly consists of rental income and revenue from service arrangements with related parties. Also, in November 2014, an
investment property was sold to a related party for P1.59 billion resulting in a gain of P729 million. In March 2013, a loss arising from sale of
an impaired investment property was recognized.
Other expenses mainly consist of rental expenses and management fees.
There were no provisions recognized against receivables from related parties. Also, no additional provision was recognized during the year.
Details of DOSRI loans are as follows:
Outstanding DOSRI loans
% to total outstanding loans and advances

% to total outstanding DOSRI loans
Unsecured DOSRI loans
Past due DOSRI loans
Non-performing DOSRI loans
Consolidated
Parent
2014
2014
2013
2013
21,458
21,428
6,871
6,837
In percentages (%)
Consolidated
Parent
2014
2014
2013
2013
2.65
3.41
1.07
1.42
17.26
0.05
0.04
28.23
0.15
0.14
17.28
0.05
0.04
28.23
0.15
0.14
At December 31, 2014 and 2013, the BPI Group is in full compliance with the General Banking Act and the BSP regulations on DOSRI
loans.
Note 31 - Commitments and Contingencies
At present, there are lawsuits, claims and tax assessments pending against the BPI Group. In the opinion of management, after reviewing all
actions and proceedings and court decisions with legal counsels, the aggregate liability or loss, if any, arising therefrom will not have a material
effect on the BPI Groups financial position or financial performance.
BPI and some of its subsidiaries are defendants in legal actions arising from normal business activities. Management believes that these
actions are without merit or that the ultimate liability, if any, resulting from them will not materially affect the financial statements.
In the normal course of business, the BPI Group makes various commitments (Note 3.1.4) that are not presented in the financial statements.
The BPI Group does not anticipate any material losses from these commitments.
Note 32 - Events After the Reporting Date
BPI entered into an agreement to sell its merchant acquiring business to Global Payments Asia Pacific-Philippines, Inc. (GPAP) and to
subscribe to primary shares of GPAP for a 49% stake in the entity. The transaction is currently pending regulatory approval and is expected to
be completed in the second quarter of 2015.
Note 33 - Supplementary information required by the Bureau of Internal Revenue
Supplementary information required by Revenue Regulations No. 15-2010
On December 28, 2010, Revenue Regulations (RR) No. 15-2010 became effective and amended certain provisions of RR No. 21-2002
prescribing the manner of compliance with any documentary and/or procedural requirements in connection with the preparation and submission
of financial statements and income tax returns. Section 2 of RR No. 21-2002 was further amended to include in the Notes to Financial
Statements information on taxes, duties and license fees paid or accrued during the year in addition to what is mandated by PFRS.
Below is the additional information required by RR No. 15-2010 that is relevant to the Parent Bank. This information is presented for purposes
of filing with the Bureau of Internal Revenue (BIR) and is not a required part of the basic financial statements.
(i)
Documentary stamp tax

Documentary stamp taxes paid for the year ended December 31, 2014 consist of:
Deposit and loan documents
Trade finance documents
Mortgage documents
Others
Amount
2,749
178
90
4
3,021
A portion of the amount disclosed above was passed on to the counterparties.
(89)
2014 Annual Report
(90)
173
(ii)
Withholding taxes
Withholding taxes paid/accrued and/or withheld for the year ended December 31, 2014 consist of:
Income taxes withheld on compensation
Final income taxes withheld on interest on deposits and yield on deposit
substitutes
Creditable income taxes withheld (expanded)
Final income taxes withheld on income payment
Fringe benefit tax
VAT withholding tax
Paid
1,835
Amount
Accrued
199
Total
2,034
903
706
606
35
26
4,111
116
85
25
30
10
465
1,019
791
631
65
36
4,576
(iii) All other local and national taxes

All other local and national taxes paid/accrued for the year ended December 31, 2014 consist of:
Paid
2,310
116
83
34
2,543

Gross receipts tax
Real property tax
Municipal taxes
Others
174
Amount
Accrued
259
259
Total
2,569
116
83
34
2,802
(iv) Tax cases and assessments

As at reporting date, the Parent Bank has outstanding cases filed in courts against local government units contesting certain local tax
assessments and with the tax authorities for various claims for tax refund. Management is of the opinion that the ultimate outcome of
these cases will not have a material impact on the financial statements of the Parent Bank. Also, the taxable years 2011, 2012 and
2013 remain open, for which no assessment has yet been received.
Statements Required by Rule 68, Part I, Section 4

Securities Regulation Code (SRC),
As Amended on October 20, 2011
Bank of the Philippines Islands
BPI Building, Ayala Avenue
Makati City
We have audited the financial statements of the Bank of the Philippine Islands, as at and for the year
ended December 31, 2014, on which we have rendered the attached report dated February 20, 2015.
The supplementary information shown in the Reconciliation of Retained Earnings Available for Dividend
Declaration, Map of the Conglomerate or Group of Companies within which the Bank of the Philippine
Islands belongs and the Schedule of Philippine Financial Reporting Standards effective as at
December 31, 2014, as additional components required by Part I, Section 4 of Rule 68 of the Securities
Regulation Code, and Schedules A, B, C, D, E, F, G and H, as required by Part II, Section 6 of Rule 68 of
the Securities Regulation Code, is presented for the purposes of filing with the Securities and Exchange
Commission and is not a required part of the basic financial statements. Such supplementary information
is the responsibility of management and has been subjected to the auditing procedures applied in the audit
of the basic financial statements. In our opinion, the supplementary information has been prepared in
accordance with Rule 68 of the Securities Regulation Code.
Isla Lipana & Co.
John-John Patrick V. Lim

Partner
CPA Cert. No. 83389
P.T.R. No. 0007706, issued on January 6, 2015, Makati City
SEC A.N. (individual) as general auditors 0050-AR-3, Category A; effective until January 17, 2016
SEC A.N. (firm) as general auditors 0009-FR-3; effective until August 15, 2015
TIN 112-071-386
BIR A.N. 08-000745-17-2013, issued on April 4, 2013; effective until April 3, 2016
BOA/PRC Reg. No. 0142, effective until December 31, 2016
Makati City
February 20, 2015
Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines
T: +63 (2) 845 2728, F: +63 (2) 845 2806, www.pwc.com/ph
Isla Lipana & Co. is a Philippine member firm of the PwC network. PwC refers to the Philippine member firm, and may sometimes refer to the PwC network. Each member
firm is a separate legal entity. Please see www.pwc.com/structure for further details.
(91)
2014 Annual Report
175
RECONCILIATION OF RETAINED EARNINGS FOR DIVIDEND DECLARATION

Financial Indicators
As of December 31, 2014

2014
2013
Liquidity Ratio
60.89%
73.39%
Debt-to-Equity Ratio
22.90%
25.04%
Asset-to-Equity Ratio
1006.64%
1143.52%
337.90%
353.93%
13.75%
18.05%
1.44%
1.87%
Cost to Income Ratio
53.70%
50.86%
Cost to Assets Ratio
2.39%
2.66%
Capital to Assets Ratio
9.93%
8.74%
Net Interest Margin
3.03%
3.32%
Interest Rate Coverage Ratio

Return on Equity Ratio
Return on Assets
176

BPI Building, 6768 Ayala Avenue, Corner Paseo de Roxas
Makati City
Unappropriated Retained Earnings, based on audited financial statements,
December 31, 2013
Add: Net income actually earned/realized during the period
Less: Non-actual/unrealized income net of tax
Equity in Net income of associate/joint venture
Unrealized foreign exchange gain - net (except Cash and Cash Equivalents)
Unrealized actuarial gain
Unrealized trading gain
Fair value adjustment of Investment Property resulting to gain
Adjustment due to deviation from PFRS/GAAP-gain
Other unrealized gains or adjustments to the retained earnings as a result of
certain transactions accounted for under PFRS
Subtotal
Add: Non-actual losses
Depreciation on revaluation increment (after tax)
Adjustment due to deviation from PFRS/GAAP - loss
Loss on fair value adjustment of investment property (after tax)
Subtotal
32,053
13,270
1,114
349
1,463
177
11,807
Net income actually earned during the period

Add (Less):
Dividend declarations during the period
Appropriations of Retained Earnings during the period
Reversals of appropriations
Effects of prior period adjustments/others
Treasury shares
(3,538)
(398)
(3,936)
Total Retained Earnings, End

Available for Dividend
39,924
2014 Annual Report

SCHEDULE OF PHILIPPINE FINANCIAL REPORTING STANDARDS
Effective as at December 31, 2014
BPI FAMILY SAVINGS BANK,

INC. 100%
BPI DIRECT SAVINGS BANK,

INC. 100%
BPI COMPUTER SYSTEMS

CORP. 100%
BPI FOREIGN EXCHANGE

CORP. 100%
The following table summarizes the effective standards and interpretations as at December31,2014:
ADOPTED
BPI CARD FINANCE

CORP. 100%
BPI OPERATIONS MGT.

CORP. 100%
BPI INVESTMENT & MGT.,

INC. 100%
AYALA PLANS
98.67%
AUTOMATED FARE
COLLECTION SERVICES INC.
20%
FEB SPEED INTL.

100%
FEBSTOCK BROKERS INC.

100%
FIRST FAR EAST DEVT.

CORP. 100%
BPI EXPRESS
REMITTANCE CORP
USA 100%
BPI EXPRESS
REMITTANCE SPAIN
S.A. 100%
GREEN ENTERPRISES
S.R.L IN LIQUIDATION
100%
(formerly BPI Express
Remittance Europe,
S.p.A.)
BPI EXPRESS
REMITTANCE CORP
NEVADA 100%
BPI CAPITAL CORP

100%
178
BPI SECURITIES
CORP 100%
BPI CENTURY TOKYO LEASE & FINANCE CORP

(formerly BPI Leasing Corp) 51%
VICTORIA 1522
INVESTMENTS, LP 35%
BPI CENTURY TOKYO

RENTAL CORP 100%
(formerly BPI Rental Corp)
BPI INTL FINANCE LIMITED

100%
BPI EXPRESS REMITTANCE

CENTER HK 100%
BPI GLOBE BANKO,

INC. 40%
FGU INSURANCE CORP

94.62%
AF CAPITAL FUND Sdn,

Bnd 49%
BPI/MS INSURANCE CORP

9.45%
CITYTRUST SECURITIES
CORP 100%
BPI/MS INSURANCE CORP

41.40%
FCS INSURANCE AGENCY
24.92%
SANTIAGO LAND DEVT

CORP. 100%
HILLDALE CO. LTD.
100%
BPI NOMINEES LTD

100%
BEGARA CO. LTD.

100%
BPI EUROPE PLC

100%
FILINVEST ALGO FINANCIAL

CORP. 100%
BPI EXPRESS REMITTANCE

UK PLC 100%
AF HOLDINGS AND MNGT

CORP 100%
CITYTRUST REALTY CORP

40%
BPI PHILAM LIFE

ASSURANCE, INC. 47.67%
BEACON PROPERTY
VENTURES, INC. 20%
NATIONAL REINSURANCE
CORP. 13.69%
Framework for the Preparation and Presentation of Financial Statements

Conceptual Framework Phase A: Objectives and qualitative characteristics
PFRSs Practice Statement Management Commentary
Philippine Financial Reporting Standards
PFRS 1
First-time Adoption of Philippine Financial Reporting Standards
(Revised) Amendments to PFRS 1 and PAS 27: Cost of an Investment in a
Subsidiary, Jointly Controlled Entity or Associate
Amendments to PFRS 1: Additional Exemptions for First-time
Adopters
Amendment to PFRS 1: Limited Exemption from Comparative PFRS
7 Disclosures for First-time Adopters
Amendments to PFRS 1: Severe Hyperinflation and Removal of
Fixed Date for First-time Adopters
Amendments to PFRS 1: Government Loans
PFRS 2
Share-based Payment
Amendments to PFRS 2: Vesting Conditions and Cancellations
Amendments to PFRS 2: Group Cash-settled Share-based Payment
Transactions
PFRS 3
Business Combinations
(Revised)
PFRS 4
Insurance Contracts
Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts
PFRS 5
Non-current Assets Held for Sale and Discontinued Operations
PFRS 6
Exploration for and Evaluation of Mineral Resources
PFRS 7
Financial Instruments: Disclosures
Amendments to PAS 39 and PFRS 7: Reclassification of Financial
Assets
Assets - Effective Date and Transition
Amendments to PFRS 7: Improving Disclosures about Financial
Instruments
Amendments to PFRS 7: Disclosures - Transfers of Financial Assets
Amendments to PFRS 7: Disclosures Offsetting Financial Assets
and Financial Liabilities
Amendments to PFRS 7: Mandatory Effective Date of PFRS 9 and
Transition Disclosures
PFRS 8
Operating Segments
PFRS 9
Financial Instruments
Amendments to PFRS 9: Mandatory Effective Date of PFRS 9 and
Transition Disclosures
PFRS 10
Consolidated Financial Statements
Amendments to PFRS 10, 12 and PAS 27: Consolidation for
investment entities
PFRS 11
Joint Arrangements
PFRS 12
Disclosure of Interests in Other Entities
PFRS 13
Fair Value Measurement
PFRS 14
Regulatory Deferral Accounts
PFRS 15
Revenue from Contracts with Customers
2014 Annual Report
NOT
ADOPTED
NOT
APPLICABLE
P
P
P
P
P
P
P
P
P
P
P
P
179
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P


ADOPTED
Philippine Accounting Standards
PAS 1
Presentation of Financial Statements
(Revised) Amendment to PAS 1: Capital Disclosures
PAS 2
PAS 7
PAS 8
PAS 10
PAS 11
PAS 12
180
PAS 16
PAS 17
PAS 18
PAS 19
(Revised)
PAS 20
PAS 21
PAS 23
(Revised)
PAS 24
(Revised)
PAS 26
PAS 27
(Amended)
PAS 28
(Amended)
PAS 29
PAS 31
PAS 32
PAS 33
PAS 34
PAS 36
PAS 37
PAS 38
Amendments to PAS 32 and PAS 1: Puttable Financial Instruments

and Obligations Arising on Liquidation
Amendments to PAS 1: Presentation of Items of Other
Comprehensive Income
Inventories
Statement of Cash Flows
Accounting Policies, Changes in Accounting Estimates and Errors
Events after the Reporting Period
Construction Contracts
Income Taxes
Amendment to PAS 12 - Deferred Tax: Recovery of Underlying
Assets
Property, Plant and Equipment
Leases
Revenue
Employee Benefits
Accounting for Government Grants and Disclosure of Government
Assistance
The Effects of Changes in Foreign Exchange Rates
Amendment: Net Investment in a Foreign Operation
Borrowing Costs
Related Party Disclosures
NOT
ADOPTED
NOT
APPLICABLE
PAS 39
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Accounting and Reporting by Retirement Benefit Plans

Separate Financial Statements
Investments in Associates and Joint Ventures
Financial Reporting in Hyperinflationary Economies

Interests in Joint Ventures
Financial Instruments: Disclosure and Presentation
Amendments to PAS 32 and PAS 1: Puttable Financial Instruments
and Obligations Arising on Liquidation
Amendment to PAS 32: Classification of Rights Issues
Amendments to PAS 32: Offsetting Financial Assets and Financial
Liabilities
Amendments to PAS 32: Financial Instruments Assets and Liability
Offsetting
Earnings per Share
Interim Financial Reporting
Impairment of Assets
Amendment to PAS 36: Impairment of assets - Recoverable amount
disclosures
Provisions, Contingent Liabilities and Contingent Assets
Intangible Assets
ADOPTED
P
P
P
P
P
P
P
P
P
P
P
P
P
Financial Instruments: Recognition and Measurement

Amendments to PAS 39: Transition and Initial Recognition of
Financial Assets and Financial Liabilities
Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast
Intragroup Transactions
Amendments to PAS 39: The Fair Value Option
Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts
Assets
Assets - Effective Date and Transition
Amendments to Philippine Interpretation IFRIC - 9 and PAS 39:
Embedded Derivatives
Amendment to PAS 39: Eligible Hedged Items
Amendment to PAS 39: Financial Instruments: Recognition and
Measurement - Novation of Derivatives and Hedge Accounting
PAS 40
Investment Property
PAS 41
Agriculture
Philippine Interpretations
IFRIC 1
Changes in Existing Decommissioning, Restoration and Similar
Liabilities
IFRIC 2
Members Share in Co-operative Entities and Similar Instruments
IFRIC 4
Determining Whether an Arrangement Contains a Lease
IFRIC 5
Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds
IFRIC 6
Liabilities arising from Participating in a Specific Market - Waste
Electrical and Electronic Equipment
IFRIC 7
Applying the Restatement Approach under PAS 29 Financial
Reporting in Hyperinflationary Economies
IFRIC 8
Scope of PFRS 2
IFRIC 9
Reassessment of Embedded Derivatives
Amendments to Philippine Interpretation IFRIC - 9 and PAS 39:
Embedded Derivatives
IFRIC 10
Interim Financial Reporting and Impairment
IFRIC 11
PFRS 2- Group and Treasury Share Transactions
IFRIC 12
Service Concession Arrangements
IFRIC 13
Customer Loyalty Programmes
IFRIC 14
The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
Amendments to Philippine Interpretations IFRIC - 14, Prepayments
of a Minimum Funding Requirement
IFRIC 16
Hedges of a Net Investment in a Foreign Operation
IFRIC 17
Distributions of Non-cash Assets to Owners
IFRIC 18
Transfers of Assets from Customers
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine
IFRIC 21
Levies
SIC-7
Introduction of the Euro
SIC-10
Government Assistance - No Specific Relation to Operating Activities
2014 Annual Report
NOT
ADOPTED
NOT
APPLICABLE
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
181

ADOPTED
SIC-12
SIC-13
SIC-15
SIC-25
SIC-27
SIC-29
SIC-31
SIC-32
Consolidation - Special Purpose Entities

Amendment to SIC - 12: Scope of SIC 12
Jointly Controlled Entities - Non-Monetary Contributions by
Venturers
Operating Leases - Incentives
Income Taxes - Changes in the Tax Status of an Entity or its
Shareholders
Evaluating the Substance of Transactions Involving the Legal Form
of a Lease
Service Concession Arrangements: Disclosures
Revenue - Barter Transactions Involving Advertising Services
Intangible Assets - Web Site Costs
NOT
ADOPTED
NOT
APPLICABLE
P
P
P
P
P
P
P
P
P
The standards and interpretations that are labelled as Not Applicable are already effective as at December 31, 2014 but will never be
relevant/applicable to the Bank or are currently not relevant to the Bank because it has currently no related transactions.
The standards, amendments and interpretations that have been issued but not yet effective and not early adopted as at December 31, 2014
are marked as Not Adopted.
183
182
2014 Annual Report
PRODUCTS AND SERVICES
DEPOSITS
Peso deposits
Checking
Savings
Time
Foreign Currency Deposits
Savings
Time
Deposit Substitute
LOANS
Commercial Loans
Revolving Credit
Term Loans
Trade Finance
Fleet and Floor Stock Financing
Project Finance
Receivables Financing
Property Equity Credit Line
Franchising Loans
184
Sustainable Energy Financing

Energy Efficiency Loans
Renewable Energy Loans
Consumer Loans
Auto Loan
Housing Loan
Ka-Negosyo Business Loans
Ka-Negosyo Franchising Loan
Ka-Negosyo Term Loan
Ka-Negosyo Credit Line
Agribusiness Loans
Piggery
Poultry
Post-Harvest
Leasing
Finance Lease
Operating Lease
Full Service Operating Lease
Lease Syndication
Trade Receivable Discounting
Microfinance
Microsavings
Microloans
Personal loans
Retailer loans
Multipurpose
Business loans
Microinsurance
Global Investment/Wealth Management

Services (Hong Kong)
Multi-Currency Time Deposits
Consumer Loans
Global Securities (Broker/Dealer) Account
Foreign Currency Bonds
Foreign Currency Investment Funds
Foreign Currency Equities
Investment Management Account
Foreign Exchange
PAYMENTS & SETTLEMENT SERVICES
Self-Service Banking Channels
Express Phone
Express Online
Express Online Kiosks
Express Mobile
Express Teller ATM
Express Deposit Machines
BPI Trade
Cards and Payments
Debit Cards
Credit Cards
Prepaid Cards
Merchant Payment Facilities
Payment and Settlement Facilities
Bills Payment
Funds Transfer
Remittance
Cash Remittance
Credit to Direct account Cash
Pick-Up at accredited outlets Cash
Pick-Up at BPI/BPI Family Bank
Branch
Door-to-Door
Credit to Other Banks Account Gift
Remittance
Prepaid Reloading
International Wire Payments
Corporate Cash Management
ExpressLink
Collections
Disbursement
Account and Liquidity Management,
Trade and Loan Inquiry
FI Depository Services
Peso Vostro Services
ASSET MANAGEMENT & TRUST

Institutional Fund Management
Fund Management Solutions
Corporate and Institutional Funds
Corporations
Educational Institutions
Religious Organizations
Foundations
Pension and Provident Funds
Other Fiduciary Solutions
Mortgage Trust Indenture
Escrow Agency
Securities Custody Account
Asset or Mortgage-Backed Security
Facility Agency or Bond Trusteeship
Wealth Management
Living Trust/Long-Term Living Trust
Investment Management Account/LongTerm Investment Management Account
Securities Custody Account
Regular Subscription Plan
Personal Equity and Retirement
Account (PERA)
Investment Funds
BPI Investment Funds
BPI Short Term Fund
BPI Money Market Fund
BPI Premium Bond Fund
BPI Balanced Fund
BPI Philippine High Dividend
Equity Fund
BPI Equity Value Fund
BPI Global Philippine Fund
BPI Global Bond Fund-of-Funds
BPI Global Equity Fund-of-Funds
Odyssey Funds
Odyssey Peso Cash Management Fund
Odyssey Peso Income Fund
Odyssey Peso Bond Fund
Odyssey Diversified Capital Fund
Odyssey Diversified Balanced Fund
Odyssey Philippine Equity Fund
Odyssey Philippine High Conviction
Equity Fund
Odyssey Emerging Market Bond Fund
Odyssey Philippine Dollar Bond Fund
Odyssey Asia Pacific High Dividend
Equity Fund
Odyssey Tax Exempt Peso Fixed
Income Fund
Odyssey Tax Exempt Philippine
Equity Fund
BPI Index Funds

ABF Philippines Bond Index Fund
BPI Philippine Equity Index Fund
Philippine Stock Index Fund*
Philippine Dollar Bond Index Fund
BPI US Equity Index Feeder Fund
BPI European Equity Index Feeder Fund
Mutual Funds*
ALFM Money Market Fund
ALFM Peso Bond Fund
ALFM Euro Bond Fund
ALFM Dollar Bond Fund
ALFM Growth Fund
Other Mutual Funds managed and
distributed by BIMI
Ekklesia Mutual Fund
Bahay Pari Solidaritas Fund
INVESTMENT BANKING
Capital Raising
Debt Underwriting
Equity Underwriting
Loan Syndication
Project Finance
Acquisition Financing
Securitization
Structured Debt
Financial Advisory
Mergers & Acquisitions
Capital Restructuring
Liability Management
Business Divestment
Strategic Legal Advisory
Dealership & Brokerage
Equities
Fixed Income Securities
Proprietary Investments
Merchant Banking
Philippine Sovereign Debt Instruments
Treasury Bills and Notes
Retail Treasury Bonds
Republic of the Philippines Bonds
Selected Sovereign Bonds
Private Securities
Bank Issues
Commercial Paper
Corporate Promissory Notes and Bonds
Equities
Broker/Dealer of Philippine Equities

Online Trading
Broker Assisted Trading
Broker Assisted Advisory
Securities Custodianship and Warehousing
Corporate Actions
Initial Public Offering
Follow-on Offering/ Secondary
Offering
Tender Offering (Voluntary/
Mandatory)
Stock Rights Offering
Stock Split
Stock Dividend
Cash Dividend
Property Dividend
Warrants
Fundamental Research
Investment Research
Foreign Exchange
Foreign Exchange Spot
Foreign Exchange Forward
Non-deliverable Forward
Foreign Exchange Swaps
Foreign Exchange Sales
Hedging Advisory
Corporate Accounts
Group Term Life
Group Accident
Group Credit Life
Group Critical Illness
Non-Life
Fire
Motor
Engineering
Marine & Aviation
Bonds
Personal Accident
Casualty
Trade Credit
ANCILLARY SERVICES
Contact Center Services
Economic Research
Derivatives
Interest Rate Swaps
Cross Currency Swaps
Non Deliverable Swaps
INSURANCE SERVICES
Life
Individual Accounts
Variable Life/Unit Linked Plans
Invest Plus Dollar
Invest Plus Peso
Build Plus Peso
Life Extreme Protect
Traditional/Ordinary Life
HealthSave 10
Life Protect
Life Protect Health
Accident Guard
Direct Marketing/Telemarketing
Accidental Protection Plan
Savings Protection Plan
Credit Secure
Life Secure Plus
Hospital Protection Plan
Pinoy Family Protect
Critical Protection Plan
*BPI Investment Management Inc., a wholly-owned subsidiary of BPI, is the fund manager and principal
distributor of the ALFM Mutual Funds, including the Philippine Stock Index Fund, Bahay Pari Solidaritas
Fund and Ekklesia Mutual Fund. BPI serves as investment advisor to all the mutual funds managed and
distributed by BPI Investment Management Inc.
2014 Annual Report
185
GROUP DIRECTORY

6768 Ayala Avenue
Makati City 1226
(632) 818 5541 to 48
www.bpiexpressonline.com
BPI/MS Insurance Corporation

11/F Ayala Life-FGU Center
6811 Ayala Avenue, Makati 1226
(632) 840 9000
www.bpims.com
BPI Family Savings Bank

102 Paseo de Roxas
Makati City 1226
(632) 818 5541 to 48
BPI Forex Corporation

Head Office
6/F Ayala Wing, BPI Building
6768 Ayala Avenue, Makati City 1226
(632) 845 5538, 845 5255

8/F BPI Building
6768 Ayala Avenue
Makati City 1226
(632) 816 9277
[email protected]
BPI Securities Corporation
3/F BPI Building
6768 Ayala Avenue
Makati City 1226
(632) 816 9189, 816 9724, 845 5617
www.bpitrade.com
[email protected]
186
BPI Century Tokyo Lease &

Finance Corporation
15/F Buendia Card Center
372 Sen. Gil Puyat Avenue, Brgy. Bel-Air
Makati City 1209
(632) 845 5418
[email protected]
BPI Century Tokyo Rental Corporation
15/F Buendia Card Center
372 Sen. Gil Puyat Avenue, Brgy. Bel-Air
Makati City 1209
632) 845 5418
[email protected]
BPI Foundation
16/F BPI Building
6768 Ayala Avenue
Makati City 1226
(632) 845 5710, 816 9288
[email protected]
BPI Direct Savings Bank
8/F BPI Card Center
8753 Paseo de Roxas, Makati 1226
(632) 816 9770
www.bpidirect.com
Ayala Plans Inc.
11/F Ayala Life-FGU Center
1-800-188-89100 (PLDT)
0917-8910000 or 0918-8910000
[email protected]
Main Station
G/F BPI Main Branch, BPI Building
6768 Ayala Avenue
Makati City 1226
(632) 816 9369
Quezon Avenue Delta Station
Quezon Ave., Brgy. West Triangle
Quezon City, Philippines
(632) 504 5605
Mabini Station
Mabini St. corner Sta. Monica
Ermita, Malate 1004
(632) 623 7667
BPI International Finance Limited
23/F Entertainment Building
30 Queens Road Central, Hong Kong
(852) 2521 1155
AFFILIATES
BPI Philam Life Assurance Corporation
15/F Ayala Life-FGU Center Building
(632) 888 5433
[email protected]
www.bpi-philam.com
BPI Globe BanKO Inc.
220 Ortigas Avenue, BanKO Center
North Greenhills, San Juan City 1500
(632) 754 9980
FOREIGN OFFICES
BPI (Europe) Plc
Via dei Mille, 32, 00185
Rome, Italy
(+39) 06-4452641
Piazza del Duomo, 17, 20121
Milan, Italy
(+39) 02-83427962
26A & 27A Earls Court Gardens
London SW5 0SZ, United Kingdom
(+44) 207-8350088
Remittance Centers
BPI Express Remittance Corp.
850 Campus Dr. Unit 222
Daly City, California 94015, USA
+1-650-438-1278
BPI Remittance Centre
Hong Kong Ltd.
Worldwide Branch
115 / 116 Worldwide House,
19 Des Voeux Road, Central Hong Kong
(852) 2522 7105, 2521 5366
[email protected]
Hung Hom Branch
Shop D7-D8 Planet Square Bldg.
No. 1-15 Tak Man St., Hung Hom
Kowloon, Hong Kong
(852) 2954-4833
[email protected]
Tsuen Wan Branch
Shop 176 1/F, Lik Sang Plaza
No. 269 Castle Peak Road, Tsuen Wan
New Territories, Hong Kong
(852) 2684 9088
[email protected]
187
Yuen Long Branch

Shop 18 B2 2nd floor, Tung Yik Building
Yu King Square, Yuen Long, Hong Kong
(852) 2443 5377
[email protected]
BPI Express Remittance Spain S.A.
Calle Joaquin Costa, 50
08001 Barcelona Spain
(003493) 301-1537
[email protected]
Representative Offices
BPI Japan Representative Office
Imperial Roppongi 2 Building
Room 403, 5-16-52 Roppongi
Minato-ku, Tokyo 106-0032 Japan
(81) 80-3593-0988
BPI United Arab Emirates
Representative Office
Shop No. 1 Al Diyafah Building
Al Mankhool Road Al Hudaiba
Dubai, UAE
(9714) 354-2977
INVESTOR RELATIONS AND SHAREHOLDER SERVICES

BPI Stock Transfer Office
16/F BPI Building, 6768 Ayala Avenue, Makati City 1226
(632) 816 9898, 816 9068, 816 9067
[email protected]
BPI Investor Relations Office
16/F BPI Building, 6768 Ayala Avenue, Makati City 1226
(632) 845 5245, 816 9557
[email protected]
Office of the Corporate Secretary
19/F BPI Building, 6768 Ayala Avenue, Makati City 1226 PH
(632) 816 9705
4F, 28/29 Threadneedle St.

London EC2R 8AY, United Kingdom
(+44) 207-6389100
2014 Annual Report

6768 Ayala Avenue
Makati City 0720 Philippines

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2014 Annual Report

THE BPI CREDO

About the Cover

Bank of the Philippine Islands

Bank of the Philippine Islands

Shareholders & Owners

Message from the Chairman

Bank of the Philippine Islands

2014 Annual Report

Shareholders & Owners

As of December 31, 2014, Ayala Corporation and its affiliates

AYALA DBS HOLDINGS INC.

ROMAN CATHOLIC ARCHBISHOP OF MANILA

* Ayala Corporation owns 73.8% of Ayala DBS Holdings, giving it an

DIVIDENDS PER SHARE

EARNINGS PER SHARE

NET INTEREST MARGIN

Bank of the Philippine Islands

2014 Annual Report

(Implemented January 2014)

Alpha Southeast Asia

BRANCH, ATM AND CDM NETWORK

Social Security System

ATMs and CDMs*

The Asset Triple A

*Cash deposit machines

The Asian Banker

BPI Express Mobile,

Our market share

Bank of the Philippine Islands

The Digital Filipino.com Club

BPI Securities more

2014 Annual Report

Message from the Chairman

2014 Annual Report

Message from the Chairman

Jaime Augusto Zobel de Ayala

Bank of the Philippine Islands

Irene and Edmund Felix

Franchise business owner

Irene and Edmund Felix saved up for their first home

The couple then acquired a lot in a subdivision in

Raised by a mother who always had her hand in business,

Irene and Edmund Felix

Those who talked to us were really very accommodating.

Irene and I are now open to

With that initial loan, the Felix couple was able to

Bank of the Philippine Islands

Since my first loan with BPI,

Jinas hard work paid offher salon enjoyed good business,

2014 Annual Report

Maria Socorro Oca

Thirty-four kilometers south of Metro Manila, in an

A marketing major with an interest in architecture, Grant

In the late 1990s, Grants mother asked his help to renovate a

The Seamens Village is designed as a community of

First, he set up a 30 sq m store in their Mandaluyong City

I have big dreams, an

in San Juan, available for P3 million. Grant knew it would