BANK OF THE PHILIPPINE ISLANDS Financial Indicators As at December 31, 2016 and 2015 2016 2015 Liquidity Ratio 62.44% 66.71% Debt-to-Equity Ratio 37.53% 13.93% Asset-to-Equity Ratio 1,045.03% 1,009.00% Interest Rate Coverage Ratio 292.58% 298.97% Return on Equity Ratio 13.77% 12.33% Return on Assets 1.39% 1.30% Cost to Income Ratio 52.50% 53.69% Cost to Assets Ratio 2.21% 2.27% Capital to Assets Ratio 9.57% 9.91% Net Interest Margin 2.85% 2.98% A84
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Reconciliation of Retained Earnings Available for Dividend Declaration For the Year Ended December 31, 2016 (In Millions of Pesos) BANK OF THE PHILIPPINE ISLANDS BPI Building 6768 Ayala Avenue, Corner Paseo de Roxas Makati City Unappropriated Retained Earnings, based on audited financial statements, December 31, 2015 42,401 Add: Net income actually earned/realized during the period 20,885 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 516 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 - 516 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 - Net income actually earned during the period 20,369 Add (Less): Dividend declarations during the period (7,087) Appropriations of Retained Earnings during the period (103) Reversals of appropriations - Effects of prior period adjustments/others - Treasury shares - Total Retained Earnings, End Available for Dividend (7,190) 55,580 A86
BANK OF THE PHILIPPINE ISLANDS BPI FAMILY SAVINGS BANK, INC. 100% BPI DIRECT BANKO, INC. a SAVINGS BANK 100% BPI COMPUTER SYSTEMS CORP. 100% BPI FOREX CORP. 100% BPI CARD FINANCE CORP. 100% BPI OPERATIONS MGT. CORP. 100% BPI INVESTMENT & MGT., INC. 100% AYALA PLANS. 98.67% AF PAYMENTS, INC 20% FEB SPEED INT L 100% FEB STOCK BROKERS INC. 100% FIRST FAR EAST DEV T CORP. 100% BPI EXPRESS REMITTANCE CORP USA 100% BPI EXPRESS REMITTANCE SPAIN S.A. 100% GREEN ENTERPRISES S.R.L in LIQUIDATION 100% BPI ASSET MANAGEMENT and TRUST CORPORATION 100% BPI CAPITAL CORP 100% BPI CENTURY TOKYO LEASE & FINANCE CORP 51% BPI SECURITIES CORP 100% BPI CENTURY TOKYO RENTAL CORP. 100% CITYTRUST SECURITIES CORP. 100% BPI INT L FINANCE LIMITED 100% FGU INSURANCE CORP 94.62% BPI/MS INSURANCE CORP. 41.40% BPI/MS INSURANCE CORP. 9.45% FCS INSURANCE AGENCY 24.92% BPI REMITTANCE CENTRE HK, LTD. 100% AF CAPITAL FUND Sdn, SDN, BHD. Bhd. 49% SANTIAGO LAND DEV T CORP. 100% Hilldale Co. Limited 100% BPI Nominees Limited 100% Begara Co. Limited 100% BPI EUROPE PLC 100% FILINVEST ALGO FINANCIAL CORP. 100% AF HOLDINGS & MANAGEMENT CORP 100% CITYTRUST REALTY CORP. 40% BEACON PROPERTY VENTURES, INC. 20% GLOBAL PAYMENTS ASIA- PACIFIC PHILIPPINES INC. 49% BPI PHILAM LIFE ASSURANCE CORPORATION 47.67% NATIONAL REINSURANCE CORP. OF THE PHILIPPINES 13.69% A87
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 The following table summarizes the effective standards, amendments and interpretations as at December 31, 2016: Applicable 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 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 Sharebased Payment Transactions Amendments to PFRS 2: Measurement of Cashsettled Share-based Payment Transactions* PFRS 3 Business Combinations A88
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 Page 2 Applicable PFRS 4 Insurance Contracts PFRS 5 Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts Amendments to PFRS 4: Implementation of PFRS 9* 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 Amendments to PAS 39 and PFRS 7: Reclassification of Financial 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: Transition Disclosures* Amendments to PFRS 7: Disclosures - Hedge Accounting* PFRS 8 Operating Segments PFRS 9 Financial Instruments* Amendments to PFRS 9: Transition Disclosures* PFRS 10 Consolidated Financial Statements Amendments to PFRS 10, PFRS 12 and PAS 28: Application of the Consolidation Exception for Investment Entities Amendments to PFRS 10 and PAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture* PFRS 11 Joint Arrangements Amendments to PFRS 11: Acquisition of an Interest in a Joint Operation A89
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 Page 3 Applicable PFRS 12 Disclosure of Interests in Other Entities Amendments to PFRS 10, PFRS 12 and PAS 28: Application of the Consolidation Exception for Investment Entities PFRS 13 Fair Value Measurement PFRS 14 Regulatory Deferral Accounts PFRS 15 Revenue from Contracts with Customers* Amendment to PFRS 15: Identifying Performance Obligations, Licenses of Intellectual Property, and Principal versus Agent Assessment* PFRS 16 Leases* Philippine Accounting Standards PAS 1 Presentation of Financial Statements Amendment to PAS 1: Capital Disclosures 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 Amendments to PAS 1: Disclosure Initiative PAS 2 Inventories PAS 7 Statement of Cash Flows Amendments to PAS 7: Disclosure Initiative* PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors PAS 10 Events after the Reporting Period PAS 11 Construction Contracts PAS 12 Income Taxes Amendment to PAS 16 - Deferred Tax: Recovery of Underlying Assets Amendments to PAS 12: Recognition of Deferred Tax Assets for Unrealized Losses* A90
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 Page 4 Applicable PAS 16 Property, Plant and Equipment Amendments to PAS 16 and PAS 38: Acceptable Methods of Depreciation and Amortization Amendments to PAS 16 and PAS 41: Bearer Plants PAS 17 Leases PAS 18 Revenue PAS 19 PAS 20 Employee Benefits Amendments to PAS 19: Contributions from Employees or Third Parties Accounting for Government Grants and Disclosure of Government Assistance PAS 21 The Effects of Changes in Foreign Exchange Rates Amendment to PAS 21: Net Investment in a Foreign Operation PAS 23 Borrowing Costs PAS 24 Related Party Disclosures PAS 26 Accounting and Reporting by Retirement Benefit Plans PAS 27 PAS 28 Separate Financial Statements Amendments to PAS 27: Use of Equity Method in Separate Financial Statements Investments in Associates and Joint Ventures Amendments of PFRS 10, PFRS 12 and PAS 28: Application of the Consolidation Exception for Investment Entities Amendments to PFRS 10 and PAS 28: Sale or Contributions of Assets between an Investor and its Associate or Joint Venture* PAS 29 Financial Reporting in Hyperinflationary Economies A91
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 Page 5 Applicable PAS 32 Financial Instruments: 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 PAS 33 Earnings per Share PAS 34 Interim Financial Reporting PAS 36 Impairment of Assets Amendment to PAS 36: Recoverable Amount Disclosures PAS 37 Provisions, Contingent Liabilities and Contingent Assets PAS 38 Intangible Assets Amendments to PAS 16 and PAS 38: Acceptable Methods of Depreciation and Amortization PAS 39 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 Amendments to PAS 39: Eligible Hedged Items Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets - Effective Date and Transition A92
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 Page 6 Applicable Amendments to IFRIC 9 and PAS 39: Embedded Derivatives Amendments to PAS 39: Novation of Derivatives Amendments to PAS 39: Hedge Accounting PAS 40 Investment Property Amendment to PAS 40: Transfers of Investment Property* PAS 41 Agriculture Amendments to PAS 16 and PAS 41: Bearer Plants 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 10 Interim Financial Reporting and Impairment 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 IFRIC 14: Prepayments of a Minimum Funding Requirement IFRIC 15 Agreements for the Construction of Real Estate* 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 A93
Bank of the Philippine Islands Schedule of Philippine Financial Reporting Standards Effective as at December 31, 2016 Page 7 IFRIC 19 IFRIC 20 Applicable Extinguishing Financial Liabilities with Equity Instruments Stripping Costs in the Production Phase of a Surface Mine IFRIC 21 Levies IFRIC 22 Foreign Currency Transactions and Advance Consideration* SIC-7 Introduction of the Euro SIC-10 Government Assistance - No Specific Relation to Operating Activities SIC-15 Operating Leases - Incentives SIC-25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease SIC-29 Service Concession Arrangements: Disclosures SIC-31 Revenue - Barter Transactions Involving Advertising Services SIC-32 Intangible Assets - Web Site Costs The standards, amendments and interpretations marked with an asterisk (*) have been issued but are not yet effective for December 31, 2016 financial statements. Unless otherwise stated, these standards, amendments and interpretations have not been early adopted. The standards, amendments and interpretations that are labeled as Applicable are already effective as at December 31, 2016 but will never be relevant/applicable to the Bank or are currently not relevant to the Bank because it has currently no related transactions. A94
BANK OF THE PHILIPPINE ISLANDS As of December 31, 2016 Schedule Annex A - - Financial Assets (in Millions of Pesos) Number of shares or principal amount of bonds Amount shown in the and notes balance sheet Due from Bangko Sentral ng Pilipinas 239,514 Due from other banks 23,037 Interbank loans receivable and Securities purchase under agreements to resell 15,236 Sub-total 277,787 Financial assets at fair value through profit or loss - Trading securities (*) 14,603 Financial assets at fair value through profit or loss - Derivative financial assets 2,993 Income received and accrued Sub-total 17,596 180 Available-for-sale securities (*) 24,301 469 Held-to-maturity securities (*) 268,483 8,746 Loans and advances, net 1,040,720 48,843 Others 4,255 - TOTAL 1,633,142 60,297 (*) Please refer succeeding pages for the detailed information on these financial assets. 2,059 A95
BANK OF THE PHILIPPINE ISLANDS As of December 31, 2016 (In Millions of Pesos) Schedule B: Amounts Receivable from Directors, Officers, Employees, Related Parties and Principal Stockholders (Other than Related Parties) Name and Designation of debtor Balance at beginning of period Additions Amounts collected Amounts written off Current Current Balance at end of period ALI COMMERCIAL CENTER INC. 25 12 - - 37-37 ALI MAKATI HOTEL PROPERTY INC 3,324 1,434 1,531-163 3,064 3,227 AMAIA 18-9 - 9-9 ARVO COMMERCIAL CORPORATION 165-9 - 9 147 156 ASIAN I-OFFICE PROPERTIES INC 1,276 378 469-448 737 1,185 AVIDA 13 1,795 13-1,795-1,795 AYALA CORP 14,108-8,143-1,800 4,165 5,965 AYALA LAND INC 2,286 4,917 1,694-3,749 1,760 5,509 AYALA PROPERTY MANAGEMENT CORPORATION 14-14 - - - - BONIFACIO HOTEL VENTURES INC 414 409 414-21 388 409 BPI SECURITIES 72-72 - - - - CEBU HOLDINGS, INC. 89-89 - - - - CRESTVIEW E-OFFICE CORPORATION 42 34 42-34 - 34 ELTA INDUSTRIES INC 25 17 25-17 - 17 ENCHANTED KINGDOM INC 350 200 58-259 233 492 GNPOWER KAUSWAGAN LTD. CO. 700 3,240 700-7 3,233 3,240 GREENHAVEN PROPERTY VENTURES INC 400 380 400-20 360 380 HILLSFORD PROPERTY CORPORATION 66-12 - 54-54 HLC DEVELOPMENT CORPORATION 1,391-180 - 179 1,032 1,211 MDC 100, INC. 380-190 - 190-190 MEDICAL CENTER TRADING CORP. 130 13 75-68 - 68 MERCURY GROUP OF COMPANIES 479-475 - 4-4 NORTH TRIANGLE DEPOT COMMERCIAL 1,944-85 - 119 1,740 1,859 NORTHGATE HOTEL VENTURES INC 125-2 - 6 117 123 PHILIPPINE INTEGRATED ENERGY 1,730-88 - 88 1,554 1,642 PHILUSA CORP. 38 78 32-84 - 84 SOUTHCREST HOTEL VENTURES INC 180-2 - 9 169 178 SUBIC BAY TOWN CENTER INC 788-96 - 692-692 SUNNYFIELD E-OFFICE CORPORATION 98-18 - 80-80 TELSTAR MANUFACTURING CORP 14 9 14-9 - 9 TROPICAL HUT FOODMARKET INC. 30 30 30-30 - 30 VARIOUS MANPOWER LOANS 159 72 18-89 123 213 VARIOUS CREDIT CARD LOANS 52 3 - - 54-54 ALVEO LAND CORP - 189 - - 189-189 BPI FOREX - 75 - - 75-75 GLOBAL PAYMENTS ASIA-PACIFIC - 45 - - 45-45 AYALA LAND INTERNATIONAL SALES INC - 12 - - 12-12 AYALA PROPERTY MANAGEMENT CORP. - 1 - - 1-1 LAGUNA TECHNOPARK, INC. - 18 - - 18-18 MAKATI DEVELOPMENT CORPORATION - 159 - - 159-159 30,925 13,519 15,000-10,622 18,823 29,445 A96
BANK OF THE PHILIPPINE ISLANDS As of December 31, 2016 Schedule C. Amounts Receivable from Related Parties which are Eliminated during the Consolidation of Financial Statements. (in Millions of Pesos) Name and Designation of debtor Balance at beginning of period Additions Amounts Collected Amounts writtenoff Current Current Balance at end of period BANK OF THE PHILIPPINE ISLANDS 11-7 - 4-4 BPI CAPITAL CORP. 3 9 4-8 - 8 BPI CENTURY TOKYO LEASE AND FINANCE CORP. 6 1 - - 7-7 BPI CENTURY TOKYO RENTAL CORP. 7-3 - 4-4 BPI DIRECT SAVINGS BANK, INC. 1-1 - - - - BPI FAMILY SAVINGS BANK, INC. 217-138 - 79-79 BPI INVESTMENT MANAGEMENT INC. 3 6 - - 9-9 BPI SECURITIES CORP. 2 8 - - 10-10 AYALA PLANS 2 - - - 2-2 252 24 153-123 - 123 Schedule D. Intangible Assets (in Millions of Pesos) Description Beginning balance (net of allowance for impairment) Additions at cost Charged to cost and expenses Charged to other accounts Other changes additions (deductions) Ending balance (net of allowance for impairment) Contractual customer relationship 1,458-278 - - 1,180 Others 364 925 407 - - 882 Total 1,822 925 685 - - 2,062 Schedule E. Long-term Debt (in Millions of Pesos) Title of issue and type of obligation Amount shown under caption Current portion of long-term debt Amount authorized by in related balance indenture sheet hing to report. Amount shown under caption Long-term debt in related balance sheet Schedule F. Indebtedness to Related Parties (Long-Term Loans from Related Companies) (in Millions of Pesos) Name of related party Balance at beginning of period Balance at end of period hing to report. Schedule G. Guarantees of Securities of Other Issuers (in Millions of Pesos) Name of Issuing entity of securities guaranteed by the company for which this statement is filed Title of issue of each class of securities guaranteed hing to report. Total amount guaranteed and outstanding Amount owned by person for which statement is filed Nature of guarantee Schedule H. Capital Stock (in Millions of Pesos) Title of Issue * Shares granted but not yet exercised Number of Shares Authorized Number of shares issued and outstanding as shown under related balance sheet caption Number of shares reserved for options, warrants, conversion and other rights * Number of shares held by related parties Directors, officers and employees Others Common Shares 4,900,000,000 3,937,043,603 9,100,000 2,038,075,111 22,598,211 1,876,370,281 Preferred A Shares 60,000,000 - - - - A97