2022 Annual Report

Annual Report 2022
TABLE OF CONTENTS
OUR VISION ____________________________________________________ 3
OUR BUSINESS __________________________________________________ 4
FINANCIALS AND OPERATING HIGHLIGHTS ______________________________ 7
BUSINESS REVIEW AND CLIENT TESTIMONIAL ____________________________ 8
CORPORATE GOVERNANCE ________________________________________ 10
OPERATING MANAGAMENT _______________________________________ 23
INTERNAL AUDIT AND CONTROL ____________________________________ 24
RISK MANAGEMENT _____________________________________________ 25
COMPLIANCE __________________________________________________ 41
SUSTAINBILITY FINANCE FRAMEWORK ________________________________ 43
OVERVIEW OF THE MAJOR STOCKHOLDERS ____________________________ 48
EXECUTIVE MANAGEMENT ________________________________________ 49
SENIOR MANAGEMENT __________________________________________ 51
PRODUCT AND SERVICES__________________________________________ 52
BRANCH DIRECTORY _____________________________________________ 53
CORPORATE INFORMATION ________________________________________ 61
2022 AUDITED FINANCIAL STATEMENTS _______________________________ 62
3
OUR VISION
Building a better Philippines, one family, one community at a
time.
OUR MISSION
We are the trusted financial partner of the masang
Pilipino, giving them a better life today and nurturing their
future, through easy access to affordable financial solutions.
4
OUR BUSINESS
BPI Direct BanKo, Inc. (or BanKo) is a wholly owned subsidiary and the microfinance arm of the Bank of
the Philippine Islands (BPI). Since 2016, it has endeavored to strengthen the financial capacities of
thousands of Filipino Self-Employed Micro-Entrepreneurs (SEMEs) nationwide by creating an enabling
business environment for them. True to its mission of empowering the Negosyanteng Pinoy, BanKo has
provided access to easy, convenient and affordable loan products to fund their operations, and provided
them with an opportunity to grow and expand their businesses.
Through its core product NegosyoKo Loan, BanKo was able to release a total of ₱10.61 billion loans to
almost 150,000 SEMEs in 2022, growing it loan portfolio by 21%. The bank continues to be the country’s
second largest microfinance bank, with a 20% market share in microfinance loans among Philippine
banks. To further address the unique needs of the SEMEs, BanKo introduced additional cutting-edge
financing innovations, including:
• JFC Agri Loan Financing, a financing mechanism specifically designed for small-scale farmers with
an incentivized collective loan repayment interest rate
• NegosyoKo Lite, an affordable and accessible loan product for as low as PHP 10,000
When Typhoons Carding and Paeng struck parts of Luzon, Visayas, and Mindanao, BanKo was quick on
its feet to offer moratorium to qualified borrowers.
While micro-enterprises remain to be the core target market, BanKo has expanded its reach to include
the salaried and informal workers and address their savings and payment needs. As champion of
financial inclusion, the bank enhanced its digital account opening, allowing individuals to open a savings
account in real-time, and without having to go to a physical branch.
BanKo looks to continue expanding and strengthening its customer touchpoints to further promote
inclusive growth across the country. As of year-end 2022, BanKo has grown its network to 317 branches
and branch-lite units nationwide – 99% of which are in the provinces. BanKo is in 74 out of 81 provinces,
with branches in 117 cities and 192 municipalities, BanKo being the sole representative of BPI in 152 of
these areas. BanKo also has a network of 800 Cash Agents doors providing its clients the ease of cashing
in and out and making loan repayment and make these networks loan referral centers for the bank.
BanKo has over 1,700 loan officers and associates dubbed as “BanKoMares” and “BanKoPares”, who
have established direct customer relationships and who are trained to conduct financial literacy
discussions during the release of loan proceeds. Their warm and friendly service can be seen in the way
they explain banking products in a simple manner that clients can easily understand. That is the bank’s
brand of service: Maaasahan, Malalapitan, Nagtitiwala.
In doing its business, BanKo get to empower the market it serves, and fulfill its mission of becoming the
trusted partner of the masang Pilipino, giving them a better life today, and tomorrow, through easy
access to affordable financial solutions.
5
BanKo’s Product Overview
BanKo serves its clients and the communities where it operates through products and services that
promote financial inclusion, sustainable development, and nation-building.
NEGOSYOKO LOAN
BanKo’s core product is NegosyoKo Loan, a micro-business loan for SEMEs with loan amount of ₱25,000
up to ₱300,000.00 and tenor ranging from 6 to 36 months. Through NegosyoKo Loan, the bank serves
the SEMEs from C and D classes who are looking for easy and convenient access to additional working
capital or solution business expansion needs. The SEMEs’ microbusinesses fall under the following
categories: wholesale and retail trading (market stalls, sari-sari stores), manual services (hairdressers,
auto repair shop owners, tailors), food services (mini-eateries and bakeries), manufacturing (furniture,
handicrafts), and agriculture (animal product farming).
BanKo, as champion of financial inclusion, provides holistic solutions to its customers. The bank bundled
NegosyoKo Loan with a microinsurance product, Secure Assist that provides cash assistance for damaged
properties caused by flooding.
NEGOSYOKO LITE
In 2022, BanKo introduced a digitally assisted loan and through NegosyoKo Lite. NegosyoKo Lite caters
to SEMEs who need a small amount of cash or enough funds to operate their existing businesses. With
this product, applicants may avail themselves of a loan amount of ₱10,000, ₱15,000, or ₱25,000 with
tenor of 2 to 6 months with 0% interest through the BanKo Mobile app, allowing prospective applicants
to apply for a loan with, without leaving their homes/business location.
FOR THE FARMERS
JFC Agri Loan Financing is an innovative financing mechanism specifically designed for small-scale
farmers who formally act as suppliers to BPI corporate client Jollibee Foods Corporation. Through this
product, small farmers (working on an average land size of 0.6 hectares) are given access to more
affordable financing (vs other lenders), as incentivized by a collective repayment rate that rewards on-
time payment of amortization. As of 2022, BanKo has released a total of PHP 4.28 million in loans to 58
small onion farmers. All of these were disbursed one to two months ahead of planting season, giving the
farmers ample time to source, purchase, and plant their farm inputs such as seeds and fertilizers,
especially at a precarious time when onion supply in the Philippines is scant.
PONDOKO SAVINGS ACCOUNT
PondoKo Savings is an app-based, interest-bearing basic deposit account with no maintaining balance
that enables clients to build up their funds and manage their cash flow. Through PondoKo Savings, clients
can also conveniently conduct banking transactions such as Buy Load, Send Money, Pay Bills, and Pay
Loan via BanKo Mobile.
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TODO SAVINGS
BanKo also launched TODO Savings, for Filipino individuals who want to start their savings journey. TODO
Savings is a high-interest digital savings account that gives an interest of 4% per annum with deposits up
to ₱50,000, which is 60x higher than a regular savings account. To make it more accessible to every
Filipino, it allows opening an account through the BanKo Mobile app in just five (5) minutes with only
one (1) valid government ID.
BANKO MOBILE APP
The pandemic still poses mobility restrictions and amplifies the accessibility challenge of the market
BanKo serves. To help customers cope, BanKo enhanced the functionalities of its BanKo Mobile app,
which provides customers with 24/7 access to their accounts. The enhanced BanKo Mobile app allowed
borrowers to pay their loans even during lockdowns when they could not visit the branch or when
collectors could not visit them in their stores.
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FINANCIALS AND OPERATING HIGHLIGHTS

2022 2021 Change
BALANCE SHEET (in Php mn)

Assets 22,448 18,477 21.5%
Treasury Assets 5,487 6,066 -9.6%
Net Loans 15,679 10,967 43.0%
Deposits 16,792 14,277 17.6%
Equity 4,181 3,202 30.6%
INCOME STATEMENT (in Php mn)
Net Interest Income 3,958 3,261 21.4%
Non-Interest Income 657 556 18.2%
Net Revenues 4,615 3,817 20.9%
Operating Expenses 2,604 2,648 -1.7%
Pre-Provision Profit 2,011 1,169 72.0%
Impairment Losses 701 570 23.2%
Net Income 978 349 180.2%
FINANCIAL INDICATORS
Profitability
Return on Equity 25.3% 11.7% 117.4%
Return on Assets 5.1% 1.8% 182.4%
Margin and Liquidity
Net Interest Margin 22.9% 19.1% 19.9%
Net Loans to Deposit Ratio 93.4% 76.8% 21.6%
Leverage Ratio 16.30% 14.40% 1.90%
Liquidity Coverage Ratio 248.70% 308.80% -60.10%
Net Stable Funding Ratio 1.37 1.68 -0.31%
Cost Efficiency
Cost to Income Ratio 56.4% 69.4% 18.7%
Cost to Average Asset Ratio 13.7% 13.8% -0.8%
Asset Quality
NPL Ratio 8.6% 11.3% -23.9%
NPL Cover 90.8% 88.0% 3.1%
Capital Leverage
CET1 Ratio 17.7% 17.1% 3.4%
Capital Adequacy Ratio 18.4% 17.8% 3.4%
DISTRIBUTION NETWORK AND
MANPOWER
Branches/Branch - Lite Units 317 307 3.3%
Employees 2,580 2,727 -5.4%
Officers 709 726 -2.62%
Staff 1,871 2,001 -6.40%
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BUSINESS REVIEW AND CLIENT TESTIMONIAL
FINANCIAL PERFORMANCE
Total Resources of the Bank increased by 21.49% or P18.47Bn to P22.45Bn in 2022.
Loans and Receivables expanded by 43% with loans booking growing by 49% contributed by our
Personal and Microfinance loans.
Deposit increased by 18% or P14.28Bn to P16.79Bn year on year.
Net interest income increased 21.4% or P697Mn with interest income coming from loans growing by
20% or P669Mn as a result of growing loan portfolio.
As of the end of 2022, consolidated common equity tier 1 ratio stood at 17.7% and capital adequacy
ratio was at 18.4%. These ratios are well above minimum regulatory requirements, with an adequate
buffer to support the Bank’s operations.
NPL levels were reported in accordance with BSP relief guidelines, Circular 941.
Overcoming limitations through digitalization.
Digitalization empowered BanKo to overcome limitations and revolutionize the BanKo experience. By
leveraging innovative technologies and digital platforms, BanKo transcended geographical boundaries,
bringing financial services to customers beyond physical branches. Convenience is elevated as customers
can access banking services anytime, anywhere, through BanKo Mobile App. Manual processes are
replaced by automation, streamlining operations, reducing errors, and enhancing efficiency. Real-time
data sharing enables faster decision-making, personalized offerings, and improved customer
experiences. Ultimately, digitalization paves the way for a future where BanKo products and services are
accessible, efficient, secure, and tailored to individual needs, driving positive change and transforming
the BanKo experience as we know it.
In 2022, BanKo unlocked a seamless banking experience with Straight Through Onboarding. Clients can
open BanKo accounts in 5 minutes with just one valid ID. They can access the different services of BanKo
like send money to other banks, pay bills, buy load, and pay their NegosoKo Loans through the BanKo
Mobile App. No more paperwork and physical visit to the branch. BanKo will continue to deliver
convenience, security, and digital excellence to our clients.
With TODO Savings, our clients have the option to grow their savings faster with its 4% interest feature.
Clients can maximize their earnings while enjoying convenience and security.
We also launched our interest-free loan product, NegosyoKo Lite. Clients can borrow Php 10,000, Php
15,000 or Php 25,000 with flexible payment terms up to 6 months. No interest and no hassle. Clients will
just apply through our BanKo Mobile App to avail of the loan.
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CLIENT TESTIMONIAL
A TASTE OF INCLUSIVE BANKING
Elizabeth “Laza” Arocena has been in business for most of her life, assisting her parents with their
enterprise as a young girl.
Eventually, Laza and her husband put up their own chicharon business. She recalls selling their bicycle
and pet dog to be able to buy a whole pig. They also shared her mother’s small stall space inside the
public market of Camiling, Tarlac to sell their chicharon products. The couple eventually got their own
space.
It was business as usual since then until her products were featured by a morning show on national
television, triggering a surge in orders and the need for additional capital to meet the spike in demand
from newfound customers.
Laza, then, turned to informal lenders. They would easily give her the money she needs, but there was
a catch – payments had to be made everyday – which restricted her cash flow.
One day, she learned of BanKo from fellow market vendors, who were bank clients. Upon expressing
interest, a team from BanKo’s Camiling branch visited her stall. Laza was delighted by the terms of
BanKo’s loan compared to that of informal lenders.
“Once a week lang ang hulog, napapa-ikot ko pa yung pera,” Laza says. Laza certainly welcomed this
development since it gives her liquidity, considering that sales are not always high daily.
On top of the payment terms, she favors BanKo’s loan terms over that of other banks – a testament to
how BanKo champions financial inclusion, especially in the countryside.
“Malaki rin ‘yung unang binigay sa akin ng BanKo. Natutuwa ako kasi walang collateral ‘tsaka mura lang
ang hulog. Kasi kung sa ibang bangko ‘yan, ‘yung collateral, sabi nila titulo ng lupa o sasakyan.
Siyempre, ang hirap naman,” she says.
Since signing up, Laza has availed four loans from BanKo.
With BanKo’s support, Laza has become more motivated to give her best to customers, including those
in Metro Manila, where she gets 70 kilos of orders twice a month. She also is considering putting up
another branch in Tarlac City.
BanKo Driven by Sustainability and Excellence
The microfinance loans business of BanKo contributes to Sustainability Development Goal 8, or the
provision of decent work and economic growth among Filipinos, by providing affordable source of
additional capital for the micro-businesses of borrowers, spurring growth, and increasing their number
of employees. In 2022, BanKo facilitated additional investment to 149,138 businesses, which is 11%
higher compared to 2021. Of the total businesses who benefited from the BanKo NegosyoKo Loan
program, 75% are owned by women. BanKo’s customers also include farmers to support their
agricultural needs.
The continuous drive of BanKo for excellence has been recognized for the past years. Most recently, the
government-managed Home Development Mutual Fund, commonly known as the Pag-IBIG Fund,
awarded the Top Three Employer for Short Term Loan (STL) and Top Employer for STL to BanKo on
December 16, 2021, and December 09, 2022, respectively.
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CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PHILOSOPHY
The Board of Directors and Management, employees and shareholders of BPI Direct BanKo, Inc., A
Savings Bank (BanKo) believe that a sound and effective corporate governance is the cornerstone of its
strength and long-term existence. It subscribes to a philosophy of adhering to honesty, integrity, and
professionalism in the conduct of its business, exercising prudence in arriving at decisions, enforcing
internal discipline and a system of checks and balances in its operating processes, and providing
transparency to its various publics regarding basic management policies and practices, major business
strategies and decisions and its operating results.
The Board of Directors and Management, commit themselves to the principles and practices of the
corporate governance philosophy of the bank. They shall also undertake every effort necessary to
create the necessary awareness of these principles and practices within the organization in order to
ensure proper internalization by every member of the organization.
GOVERNANCE STRUCTURE
Board of Directors
The Board of Directors (the Board) bears the primary responsibility for creating and enhancing the long-
term shareholder value of BanKo and ensuring that this objective is achieved in all its business activities.
It must ensure BanKo’s ability to satisfy the needs of its customers, sustain its leadership and
competitiveness, and uphold its reputation in order to maintain BanKo’s long term success and viability
as a business entity. Its mandate consists of setting the strategic business directions of BanKo, appointing
its senior executive officers, confirming its organizational structure, approving all major strategies and
policies, overseeing all major risk-taking activities, monitoring the financial results, measuring and
rewarding the performance of management, and generating a reasonable investment return to
shareholders. It shall also provide an independent check on management.
Term limits of Independent Directors
An independent director may only serve as such for a maximum cumulative term of nine (9) years. After
which, the independent director shall be perpetually barred from serving as independent director, but
may continue to serve as a regular director.
Policy on Directorships
Directors are bound by BanKo’s Director’s Code of Conduct to take into account their individual
circumstances and the nature, scale and complexity of the Bank’s activities in showing full commitment
to the Bank - devoting the time, schedule and attention necessary to its business interests, to properly
and effectively perform their duties and responsibilities and to avoid conflicts of interest.
A rigorous nomination process to ascertain fitness and propriety of candidate directors and examine
their principal commitments is also done every year, prior to the Annual Stockholders Meeting. Board
and committee attendance is closely monitored and reported. The Board also conducts an annual
performance evaluation of itself, its committees and directors, which includes an affirmative
determination of time commitments.
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Powers of the Board of Directors
The corporate powers of a bank shall be exercised, its business conducted and all its property controlled
and held, by its board of directors. The power of the board of directors as conferred by law are original
and cannot be revoked by the stockholders. The directors hold their office charged with the duty to
exercise sound and objective judgment for the best interest of the bank.
Duties and Responsibilities
The position of a Bank director is a position of trust. A director assumes certain responsibilities to
different constituencies or stakeholders, i.e., the bank itself, its stockholders, its depositors and other
creditors, its management and employees, the regulators, deposit insurer and the public at large. These
constituencies or stakeholders have the right to expect that the institution is being run in a prudent and
sound manner. The board of directors is primarily responsible for approving and overseeing the
implementation of the Bank’s strategic objectives, risk strategy, corporate governance and corporate
values. Further, the board of directors is also responsible for the selection of key members of senior
management and control functions as well as monitoring and overseeing the performance of senior
management as the latter manages the day to day affairs of the institution.
Selection
Our shareholder may recommend candidates for board membership for consideration by the
Nominations Committee. Such recommendations are sent to the Committee through the Office of the
Corporate Secretary. Candidates recommended by shareholder are evaluated in the same manner as
Director Candidates identified by any other means. The Committee itself may identify and recommend
qualified individuals for nomination and election to the Board. For this purpose, the Committee may
utilize professional search firms and other external groups to search for qualified candidates.
The Nominations Committee pre-screens the candidates and prepares a final list of candidates prior to
the Annual Stockholders Meeting. Only nominees whose names appear on the final list of candidates
are eligible for election to the Board.
No other nomination shall be entertained after the final list of candidates are drawn up. No nomination
shall be entertained or allowed on the floor during the Annual Stockholders Meeting.
Board members are elected by BanKo stockholders who are entitled to one vote per share at the Bank’s
Annual Stockholders Meeting, where votes may be cumulated as provided for in the Corporation Code.
The nominees receiving the highest number of votes are declared elected and hold office for one year
until their successors, qualified in accordance with the by-laws, are elected at the next Annual
Stockholders Meeting.
Board Composition and Qualification
Pursuant to Sections 15 and 17 of R.A. No. 8791, and the Bank’s Amended By-Laws, there is a maximum
of nine (9) members of the Board who are elected by the stockholders entitled to vote at the annual
meeting, and shall hold office for one (1) year and until their successors are elected and qualified in
accordance with the Bank’s By-Laws.
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Marie Josephine M. Ocampo

Position: Chairman
Tenure: Appointed Chairman – 2020 to present

Appointed Non-Executive Director – November 2018 to December 2019
Age: 61, born 1962
Nationality: Filipino
Ms. Ocampo currently heads the Mass Retail Segment of BPI where she oversees BPI’s credit, debit and
prepaid card businesses as well as personal and micro finance loans. She is a member of the Board of
BPI Payments Holdings Inc., Global Payments Asia Pacific Philippines, Inc., AF Payments Inc., and CARD
MRI Rizal Bank Inc. Ms. Ocampo started her career in BPI as Vice President for Marketing and Sales of
BPI Credit Cards in 1996. She soon took the position of President for BPI Card Corporation, the BPI’s
credit card subsidiary where she won the prestigious Agora Award-2000 Marketing Company of the Year.
In 2005, Ms. Ocampo was then cross-posted to BPI’s Consumer Banking Group as Head of Kiosk Banking
and Head of Personal Banking. She also became the Chief Marketing Officer of BPI from 2008 until 2014
where she was responsible for retooling the Bank’s data warehouse and customer analytics capabilities
into its distinct competitive advantage. Ms. Ocampo also developed the Bank’s CRM initiatives on top of
driving the BPI’s advertising and digital initiatives across the breadth of products, channels and services.
In 2015, she became the Payments and Remittance group head, and was tasked to grow fee revenue via
expanding existing businesses and developing new payment platforms.
Prior to joining BPI, Ms. Ocampo gained over 10 years of marketing experience in Procter & Gamble and
Johnson & Johnson Australia and the Philippines, where she led the expansion of J&J’s Health Care, Baby
Care, and Sanitary Protection business. Ms. Ocampo graduated magna cum laude and received her
Bachelor of Science in Business Management, Honors Program at Ateneo de Manila University. She also
completed the Advanced Management Program at the Harvard Business School in 2007.
Gerardo C. Ablaza, Jr.

Position: Non-Executive Director
Tenure: Appointed Non-Executive Director – June 22, 2022

Age: 69, born 1953
Mr. Ablaza was elected as Director of BPI Direct BanKo, Inc., A Savings Bank in June 2022. He is a member
of BanKo’s Audit Committee and Risk Management Committee and a Director of BPI Asset Management
and Trust Corporation Doing Business under the Trade Name and Style of BPI Wealth - A Trust
Corporation.
He is currently a Management Consultant at the Ayala Corporation and a member of the Board of
Directors in a number of Ayala’s subsidiaries including Asiacom Philippines, Inc., AC Energy, AC Health,
AC Infrastructures and Ayala Foundation.
Previously, he served as a Director of BPI Family Savings Bank, Inc. from 2017-2021 and BPI Capital
Corporation from 2017-2021. From 2010 to 2017, Mr. Ablaza was the President and CEO of Manila Water
Company. He was responsible for overseeing the financial and operational growth within Manila Water’s
service areas in the Metro Manila East Zone and in its expansion areas. From 1998 to April 2009, he was
President and CEO of Globe Telecom, Inc. During this period, he took the company from being the fourth-
ranked mobile services provider to the second-largest full-service telecom operator with a subscriber
base of 25 million in 2008.
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In 2004, Mr. Ablaza was recognized by CNBC as the Asia Business Leader of the Year, making him the
first Filipino CEO to win the award. He was also awarded by Telecom Asia as the Best Asian Telecom CEO.
In 2013, he was recognized for his consistent leadership and innovation across the banking, investment,
telecommunications and utility service industries through the Citi Distinguished Alumni Award for
Leadership and Ingenuity. He was the first Filipino to be awarded with such an honor. In June 2015, he
became a member of the International Advisory Panel of the Institute for Water Policy under the Lee
Kuan Yew School of Public Policy in Singapore. In 2017, he became a member of the Board of Directors
and Executive Committee of Advance Info Services, PLC based in Thailand.
Mr. Ablaza graduated summa cum laude from the De La Salle University in 1974 with a degree in Liberal
Arts, major in Mathematics (Honors Program).
Ignacio R. Bunye
Position: Independent Director
Tenure: Appointed Independent Director – June 2018 to present

Age: 78, born 1945
Mr. Bunye is the Chairman of the Bank’s Corporate Governance and Related Party Committee. He is a
member of the Bank’s Risk Management Committee. He serves as an Independent Director of Bank of
the Philippine Islands, BPI Capital Corporation and BPI Asset Management & Trust Corporation (also
known as BPI Wealth). Mr. Bunye was a member of the Monetary Board of the Bangko Sentral ng
Pilipinas from 2008 to 2014. He previously held the positions of Presidential Political Adviser in 2008,
Presidential Spokesperson in 2003, and Press Secretary in 2002.
Mr. Bunye is a member of the Philippine Integrated Bar. He obtained his Bachelor of Arts degree and
Bachelor of Laws degree from Ateneo de Manila University in 1964 and 1969 respectively. He passed
the Philippine Bar Examination in 1969. Significant awards and recognition received by Mr. Bunye
include the Asian Institute of Management Honor and Prestige Award, the Bangko Sentral Service
Excellence Medal, the Gran Oden de Isabela Catolica, and the Order of Lakandula.
Cezar P. Consing
Tenure: Appointed Non-Executive Director – April 2021 to present

Age: 63, born 1959
Mr. Consing was elected as regular director of the Bank in April 2021. He served as President and Chief
Executive Officer of BPI from 2013 to 2021. He also serves as member of the board of directors of Bank
of the Philippine Islands, BPI Asset Management and Trust Corporation (also known as BPI Wealth) and
BPI Capital Corporation.
Mr. Consing is the chairman of Philippine Dealing System Holdings and its three operating subsidiaries,
a position he has held since 2019. Mr. Consing is currently the President and CEO of Ayala Corporation,
and Vice Chairman of Globe Telecom and AC Energy, all publicly listed companies. He is also a director
of the Singapore-listed Yoma Strategic Holdings Ltd. and the Myanmar-listed First Myanmar Investment
Public Company Limited. He likewise served as the chairman and president of the Bankers Association of
the Philippines from 2019-2021. He was the president of Bancnet, Inc. from 2017-2021
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Mr. Consing received an A.B. Economics degree (Accelerated Program), Magna Cum Laude, from De La
Salle University, Manila, in 1979. He obtained an M.A. in Applied Economics from the University of
Michigan, Ann Arbor, in 1980.
Jose Ferdinand B. De Luzuriaga

Tenure: Appointed Independent Director – February 2017 to present

Age: 61, born 1962
Mr. De Luzuriaga is the Chairman of the Bank’s Risk Management Committee and member of the Audit
Committee and the Nominations Committee. Mr. De Luzuriaga is the Group Investment Officer, Group
Chief Finance Officer and Business Development Committee Chairman of Inquirer Group of Companies
as well as the President of LINQ Information Entertainment Quadrant Corporation (Philippines). He
serves as an Independent Director of Ayala Plans Inc., BPI Century Tokyo Lease and Finance Corporation
and BPI BPI Century Tokyo Rental Corporation.
Mr. De Luzuriaga graduated with a BS Management degree from the University of the Philippines in
1983.
Jerome B. Minglana
Position: Executive Director, President
Tenure: Appointed President – January 2017 to present

Age: 49, born 1973
Mr. Minglana previously served as President of BPI Globe BanKO from 2015-2016. He also took on other
roles in BPI, such as Vice President and Division Head of Retail Banking Group and served as Area
Business Director of extreme North Luzon area.
Mr. Minglana obtained his Bachelor of Science in Accountancy and BS Commerce major in Management
degrees from St. Louis University in 1994 and 1995 respectively.
Aurelio R. Montinola III

Tenure: Appointed Non-Executive Director – February 2017 to present

Age: 71, born 1951
Mr. Montinola is a member of the Bank’s Personnel and Compensation Committee, Nomination
Committee and Corporate Governance Committee. He served as President and Chief Executive Officer
of BPI for eight years from 2005 to 2013, and BPI Family Savings Bank, Inc. for 12 years from 1992 to
2004. Mr. Montinola is the Chairman of the Board of Far Eastern University and an Independent
Director of Roxas and Company, both listed companies. He is also the Chairman of the Nicanor Reyes
Educational Foundation Inc., Roosevelt College, Inc., East Asia Computer Center Inc. and Amon Trading
Corporation. He is also a member of the Board of Trustees of BPI Foundation Inc., a director of Bank of
the Philippine Islands and BPI Capital Corporation.
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Among the significant awards received by Mr. Montinola include Management Man of the Year 2012
(Management Association of the Philippines), Asian Banker Leadership Award (twice), and Legion
d’Honneur (Chevalier) from the French Government. He obtained his degree in Bachelor of Science in
Management Engineering from the Ateneo de Manila University in 1973 and his MBA from Harvard
Business School in 1977.
Jesus V. Razon, Jr.

Tenure: Appointed Independent Director – February 2016 to present

Age: 77, born 1946
Mr. Razon is the Chairman of the Bank’s Audit Committee and a member of the Corporate Governance,
Nomination and Personnel and Compensation committees. Mr. Razon was the Senior Vice President of
the Consumer Banking Group and Human Resources Management Group at BPI. He also previously
served as a Director of various Bank of the Philippine Island subsidiaries.
Mr. Razon received his Master in Management from the Asian Institute of Management in 1990 and his
degree in AB Economics from the Ateneo de Manila University in 1967.
Jaime Alfonso Antonio E. Zobel de Ayala

Tenure: Appointed Non-Executive Director – February 2020 to present

Age: 31, born 1990
Mr. Zobel de Ayala is the Head of Business Development of Ayala Corporation. He is also a Director of
Ace Exenor, Inc., MCT Berhad, BPI Capital Corporation, Ayala Land Logistics Holdings Corp., AC Energy
International, Inc. and AC Ventures Holdings Corporation.
Mr. Zobel de Ayala graduated from Harvard in 2013 with a Degree in Primary Concentration in
Government and completed his MBA from Columbia University in 2019.
Corporate Secretary
Maria Lourdes P. Gatmaytan, Filipino, 54 years old, was appointed Corporate Secretary on June 22, 2022.
She is concurrently the Co-Head of Legal/ Head of Corporate Legal Affairs and Corporate Secretary of
Bank of the Philippine Islands. She also serves as Corporate Secretary of BPI Asset Management and
Trust Corporation, BPI Investment Management, Inc., and BPI/MS Insurance Corporation.
Atty. Gatmaytan earned her Juris Doctor degree from the Ateneo de Manila School of Law, graduating
with honors in 1993. She received her Bachelor of Science degree in Legal Management from the Ateneo
de Manila University in 1989.
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Board Committees
Chairman Marie Josephine M. Ocampo
Natividad N. Alejo*
Gerardo C. Ablaza, Jr**
Ignacio R. Bunye (Independent)
Cezar P. Consing
Members Jose Ferdinand B. De Luzuriaga (Independent)
Jerome B. Minglana
Jesus V. Razon, Jr. (Independent)
Jaime Alfonso Antonio E. Zobel de Ayala
*Board member until 22 June 2022

**Elected as Board member effective 22 June 2022
Audit Committee
The Audit Committee monitors and evaluates the adequacy and effectiveness of the Bank’s system of
internal control systems, risk management, and governance practices. It provides oversight on the
integrity of the Bank’s financial statements and financial reporting process, performance of the internal
and external audit functions and compliance with bank policies, applicable laws, and regulatory
requirements. This Committee also reviews the external auditor’s annual audit plan and scope of work,
and assesses its overall performance and effectiveness. In consultation with management, this
Committee also approves the external auditor’s terms of engagement and audit fees.
Chairman Jesus V. Razon, Jr. (Independent)
Natividad N. Alejo*
Members Gerardo C. Ablaza, Jr**
Jose Ferdinand B. De Luzuriaga (Independent)
* Committee member until 22 June 2022
**Committee member effective 22 June 2022
Corporate Governance Committee
The Corporate Governance Committee assists the Board in fulfilling its corporate governance
responsibilities, and ensures the Board’s effectiveness and due observance of sound corporate
governance principles and guidelines, as embodied in the Manual of Corporate Governance.
It also performs the function of a Related Party Transaction Committee and is charged with ensuring
that the Bank’s dealings with the public and various stakeholders are imbued with the highest standards
of integrity. In conjunction with the Audit, Risk, and Corporate Governance Committees, this Committee
endeavors to ensure compliance with Bangko Sentral regulations and guidelines on related party
transactions. The committee independently reviews, vets, and endorses significant and material related
party transactions—above and beyond transactions qualifying under directors, officers, shareholders,
and related interest restrictions—such that these transactions are dealt on terms no less favorable to
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the Bank than those generally available to an unaffiliated third party under the same or similar
circumstances.
Chairman Ignacio R. Bunye (Independent)
Jesus V. Razon Jr. (Independent)

Members Aurelio R. Montinola III
Nomination Committee
The Nomination Committee ensures that the Board of Directors is made up of individuals of proven
integrity and competence, and that each member possesses the ability and resolve to effectively oversee
the Bank in his capacity as board member and member in their respective board committee. This
Committee also reviews and evaluates the qualifications of all persons nominated to the Board.
Jose Ferdinand B. De Luzuriaga (Independent)

Members
Personnel and Compensation Committee
The Personnel and Compensation Committee directs and ensures the development and implementation
of long-term strategies and plans for the Bank’s human resources, in alignment with the Board’s vision
for the organization.

Members
Jesus V. Razon Jr. (Independent)
Risk Management Committee
The Board appoints from its members a Risk Management Committee (RMCom) composed of at least
three (3) Directors, of which majority must be Independent, including the Chairperson. Committee
members should possess a range of knowledge and expertise on risk management issues and best
practices. The Chairperson shall not be the Chairperson of the Board or of any other board-level
committee.
The Risk Management Committee is tasked with nurturing a culture of risk management across the
enterprise. It supports the Board by overseeing and managing the Bank’s exposures to financial and non-
financial risks, assesses new and emerging risk issues across the Bank, regularly reviews the Bank’s risk
management appetite, policies, structures and metrics, and monitors overall liquidity and capital
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adequacy, in order to meet and comply with regulatory and international standards on risk
measurement and management.
Chairman Jose Ferdinand B. De Luzuriaga (Independent)
Natividad N. Alejo*
Members Gerardo C. Ablaza, Jr**
Ignacio R. Bunye (Independent)
* Committee member until 22 June 2022
**Committee member effective 22 June 2022
Meetings and Attendance
The BPI Direct BanKo Board meets regularly for the effective discharge of its obligation. Regular board
meetings are convened monthly, held every fourth Wednesday of the month. Board of Directors
meetings are set immediately after the Annual Stockholder Meeting to cover the full term of the newly
elected or re-elected members of the Board, reckoned from the date of the current year’s Annual
Stockholder Meeting to that of the following year. Special meetings may be called for as needed.
Discussions during the board meetings and open independent views are given due consideration. Board
reference materials are made available to the directors at least five days in advance of the scheduled
meeting. Independent and Non- Executive Directors of the Bank also meet at least once a year without
the presence of the executive director or management.
The Board’s full-year attendance at the 2022 Board Meetings and Committee Meetings are outlined as
follows:
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Performance Evaluation and Self-Assessment
Monitoring of governance by the Board requires a continuous review of the internal structure of the
Bank to ensure that there are clear lines of accountability for management throughout the organization.
In this regard, the Board, under the guidance of the Corporate Governance Committee, annually
conducts a self-assessment to ascertain the alignment of leadership fundamentals and issues, validate
the Board’s and Senior Management’s appreciation of its roles and responsibilities and confirm that the
Board and Senior Management possesses the right mix of background and competencies. Performance
of the Board and Senior Management is measured on the basis of what it delivers and how it delivers,
how it meets its responsibilities to all BPI Direct BanKo stakeholders, and how it addresses issues that
impact the Board’s and Senior Management ability to effectively fulfill its fiduciary duties.
Succession Planning and Talent Management
Financials services today face many transformative factors – regulation, market disruption, new
technologies and business models, competition- that affect the business in major and long-term ways.
Our Board understands that the Bank must continually evolve, adapt, and even restructure the business
to remain ahead of strategic, market, technology and regulatory shifts. The Board, through its Personnel
and Compensation Committee, manages the talent pipeline and assembles the required personnel
capable of navigating such changes.
In consultation with the President, the Personnel and Compensation Committee reviews the Bank’s
talent development process for proper management. Senior management provides a report to this
Committee on the results of its talent and performance review process for key management positions
and other high-potential individuals. Aside from ensuring that there is a sufficient pool of qualified
internal candidates to fill senior leadership positions, this review process identifies opportunities,
performance gaps, and proactive measures in the Bank’s executive succession planning. And as part of
the same executive planning process, the Committee as a whole or a part thereof, in consultation with
the Board and the President, evaluates and nominates potential successors to the President and the
Senior Management.
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Induction and Director Education
Board members acquire appropriate skills at appointment, and thereafter remain abreast of relevant
new laws, regulations, and changing commercial risks through in-house training and external courses.
New Directors are briefed on BPI Direct BanKo’s background. Organizational structure, and, in
compliance with Bangko Sentral Circular No. 758, the general and specific duties and responsibilities of
the Board.
They also receive briefings on relevant policies and rules governing their roles as Directors. They are
given an overview of the industry, regulatory environment, business of banking, strategic plans of the
Bank, its governance framework, i.e. Manual of Corporate Governance, Director’s Code of Conduct,
Board operations (schedules, procedures and processes), including support from the Corporate
Secretary and senior management. Continuing education of Board members includes internal meetings
with senior executives and operational or functional heads, dedicated briefings, on specific areas of
responsibility within the business and special presentations on current issue or regulatory initiatives with
respect to Data Privacy, Cyber Risk, and Cyber Security, the Anti- Money Laundering and Terrorist
Financing Prevention Program, Foreign Account Tax Compliance Act, Securities Regulations Code, SEC
memorandum circulars, and Bangko Sentral regulations, among others. The Bank brings technical,
subject matter experts as needed. Other in-bank courses on anti- money laundering, business continuity
management, conflict of interest, risk management overview, and information security awareness.
Board members also regularly attend governance conferences, and summits.
Remuneration
Our remuneration decisions for the Board and management are aligned with risk incentives and support
sustainable, long-term value creation. Apart from ensuring that Board and management pay
appropriately reflects industry conditions and financial performance, the Bank likewise rebalances
returns back to shareholders through dividend declaration.
The shareholders approve the level of remuneration and/or benefits for directors sufficient to attract
and retain directors and compensate them for their time commitments and responsibilities of their role.
Our Personnel and Compensation Committee (PerCom) recommends to the Board the fees and other
compensation for directors, ensuring that compensation fairly remunerates directors for work required
in a company of BanKo’s size and scope. As provided by our Amended By-Laws and pursuant to approval
by the stockholders, each director is entitled to receive fees and other compensation for his services as
director.
Board members receive per diems for each occasion of attendance at meetings of the Board or of a
board committee. All fixed or variable remuneration paid to directors may be given as approved by
stockholders during the Annual Stockholders Meeting, upon recommendation of the PerCom. Other
than the usual per diem arrangement for Board and Committee meetings and the aforementioned
compensation of Directors, there is no standard arrangement as regards compensation of directors,
directly or indirectly, for any other service provided by the directors for the last completed fiscal year.
Board members with executive responsibilities within the BPI group are compensated as fulltime officers
of the company, not as Executive Directors or Non-Executive Directors. No director participates in
discussions of the remuneration scheme for himself or herself. The remuneration policy is reviewed
annually to ensure that it remains competitive and consistent with the Bank’s high performance culture,
objectives, and long-term outlook, risk assessment and strategies.
The Board, through the PerCom, annually approves the remuneration payable to the President and
Senior Management who have the authority and responsibility for the Bank’s overall direction and
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strategy execution. The PerCom monitors and assesses how the remuneration was implemented each
year and ensures that it corresponds to the remuneration policy.
Code of Business Conduct and Ethics
BanKo’s core values encapsulate what we believe in and what we stand for. All Directors and Employees
are expected to observe the highest standards of accountability, performance, punctuality, honesty,
integrity, courtesy, and teamwork, and thus contribute to the achievement of the Bank’s goals of
customer satisfaction, excellence and profitability.
Whistleblower Policy
The Whistleblower Program is the Bank’s mechanism for preventing and detecting fraud or misconduct,
and enabling fast and coordinated incident responses and avenues for establishing cause, remedial
actions, and damage control procedures.
Under the Policy, it is the responsibility of all personnel, including the Board, Officers and employees, to
comply with the rules and regulations of the Bank and to report violations or suspected violations in
accordance with the Whistleblower Policy. Any person who knowingly aids, abets, or conceals or
otherwise deliberately permits the commission of any irregular or fraudulent act directed against the
Bank shall be considered as guilty as the principal perpetrators of the fraud or irregularity. Hence, all
personnel, including the Board, Officers and employees, have a duty to cooperate with investigations
initiated under the policy.
Anti-Bribery and Anti-Corruption Policy
The Bank puts the highest premium on sound, responsible and effective corporate governance and does
not tolerate bribery, corruption or improper acts of any kind in all business dealings. As such, it has
enabled and equipped the Bank’s officers and Employees, with the requisite policies, programs and
guidance through its Code of Business Conduct and Ethics and Standards on Conflict of Interest to
combat risks in corruption and bribery.
Remuneration Structure and Policies
Remuneration for the President and Senior Management is set in the same way as for all officers,
employees and staff, being contractually fixed, based on the role, the skills and experience of the
individual, and reviewed annually with reference to relevant market benchmarks. Remuneration for
Senior Management, as reflected in the ratio between fixed and variable components of their total
compensation, changes according to performance, rank and function.
• The PerCom ensures that Senior Management remuneration and incentives reflect prudent risk-
taking and effective control.
• Salary reviews (covering fixed and variable compensation) are done annually to ensure market
competitiveness of the senior officer’s total remuneration. The Bank also participates in Executive
and Total Remuneration Surveys to benchmark on its market positioning.
The remuneration of the Head of Risk Management and Head of Compliance Department are reviewed
and endorsed by the Risk Management Committee and Audit Committee respectively and subsequently
approved by the Board. The performance of control functions, (Audit, Compliance and Risk) are assessed
independently from the business units they support to prevent any conflicts of interests.
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These principles of paying competitively and paying for performance applies equally to our Board, Senior
Management, Officers and staff. Senior management and staff remuneration must reflect the interest
of the shareholder and the Company, and is structured to encourage the long-term commitment of the
employee as well as long term outlook and plans of the Company.
Retirement Policy
The best interests of BanKo are served by retention of directors that make very meaningful contributions
to the Board and the organization, regardless of age. It is the Bank’s strong view that with age often
comes unmatched wisdom and experience, expert business judgement, invaluable industry and
community relations and authority, and deeply ingrained appreciation of the principles of corporate
governance.
The Bank believes that imposing uniform and fixed limit on director tenure is counter-productive as it
may force the arbitrary retirement of valuable directors.
Retirement of senior management is done with the requisite succession planning and in accordance with
the Bank’s policies and implementing guidelines of its retirement plan for all employees, the Bank’s
Amended By-Laws, Labor Code and the Corporation Code of the Philippines. Currently, the retirement
age for employees of the Bank is set at 60 years of age.
Related Party Transactions
As part of the Bank’s effort to ensure that transactions with related parties are normal banking activities
and are done at arm’s length, vetting is done either by the BanKo Management Vetting Committee, the
Board-level Corporate Governance Committee or the BPI Related Party Transaction Committee,
depending on materiality, prior to implementation.
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OPERATING MANAGEMENT
The following is an overview of the Bank’s principal activities and its functional organization
(as of December 31, 2022):
TABLE OF ORGANIZATION
Board of Directors
Corporate
Secretary
Audit BanKo Audit Risk

(SLA with BPI) President Committee Committee
Risk
Compliance
Management
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INTERNAL AUDIT AND CONTROL

The enterprise Internal Audit Division is an independent body that supports the BPI and its subsidiaries’
respective Audit Committees, such as BanKo’s, in fulfilling its oversight responsibilities by providing an
independent, objective, assessment on the adequacy and effectiveness of the Bank’s risk management,
internal controls, and governance processes through well- established risk-based audit plans. Internal
Audit also ensures that the Bank’s operating and business units adhere to internal process and
procedures and to regulatory and legal requirements.
It collaborates with other assurance providers such as 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.
The internal audit function as empowered by the Internal Audit Charter includes free access to all
records, properties and personnel. In this respect, the Audit Committee reviews the internal audit
function, including its independence and the authority of its reporting relationship. The Internal Audit
Division continuously improves the capabilities of its auditors through continuous education on
specialized areas knowledge, auditing techniques, regulations, and banking products and services.
The enterprise Internal Audit Division 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 assessment 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. This unit maintains its “generally conforms” ratings on both internal
and external assessment, which indicate that its activities have continuously conformed to professional
standards, code of ethics, and other internal standards.
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RISK MANAGEMENT
Comprehensive Framework
BanKo, under the centralized Enterprise Risk Management (ERM) of BPI, pursues best practices across
its businesses and processes. We have an established ERM and capital management framework that
enables the Bank to identify, measure, control, and monitor significant financial and non-financial risk
exposures, ensure adequate liquidity, and set aside sufficient amounts of capital to cover and mitigate
such risks. The framework covers traditional risks that the Bank is exposed to such as credit, market, and
operational and information technology (IT) risks, as well as emerging risks such as environmental and
social risks (refer to ESRMS under Sustainability Agenda).
The framework reflects the Bank’s internal standards as guided by the regulatory directives issued by
the BSP in promoting effective risk management governance, implementing robust business continuity
and operational resiliency standards that are regularly tested, and performing the internal capital
adequacy assessment and other risk management processes. (Recommendation 2.11, 12.4 SEC CG Code
for PLCs)
Risk management in BanKo follows a top-down approach, with risk appetite setting and overall risk
strategy emanating from the Board of Directors (Board). The Board fulfills its risk management function
through the Risk Management Committee (RMCom). The RMCom defines risk appetite statements at
functional risk areas and reviews risk management structures, metrics, limits, and issues of the Bank,
and directs the Bank’s risk strategy framework anchored on sound risk management governance, value-
enhancing risk methods and processes, and risk-intelligent data and technology. It oversees and
manages risks and monitors regulatory and internal capital adequacy vis-à-vis risk exposures. It promotes
a strong risk culture and exercises oversight through the Bank’s Risk Management Office. It manages
risks through clearly-delineated functions to ensure effective risk management governance and control
processes across the Bank using the “three lines of defense” model. This model defines the risk
management responsibilities of each unit owning and managing the risk (1st line), overseeing risk
management function (2nd line), or providing independent assurance on the quality and effectiveness
of risk management and internal controls (3rd line).
Our risk culture is anchored on our vision of transparency and integrity in the workplace, creation of
sustainable value, and delivery of maximum returns to stakeholders. In order to achieve our
responsibilities to clients, employees, stakeholders, regulators and country, it exercises proactive and
prudent risk management.
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Chief Risk Officer (CRO). The CRO of the BPI Group, thru the Bank’s Company Risk Officer, leads the
formulation of risk management policies and methodologies in line with overall business strategy. The
CRO thru the BanKo Risk Officer, who is primarily responsible for the overall management of the Bank’s
total risk, ensures that risks are prudently and rationally taken, within our risk appetite, and
commensurate with returns on capital. Our risk appetite is a careful measure of the amount of risk it is
willing to assume in order to achieve business objectives. Risk appetite statements are regularly
reviewed and approved by the Board through the RMCom.
The CRO and the Company Risk Officer is supported by the Risk Management Office (RMO), a team of
skilled risk managers dedicated to identifying, measuring, controlling, and monitoring the BPI Group’s
risk exposures. Our risk managers keep abreast of industry developments, emerging risks, and risk
management best practices through continuous and adequate training. The CRO and the RMO actively
engage the RMC, Management, and business units to effectively communicate through various internal
channels the Bank’s risk culture, risk awareness campaigns and learning programs, and risk management
best practices. (Recommendation 12.5 of the SEC CG Code for PLCs).
We identify risks according to three major classifications:

• Credit Risk (including concentration)
• Market (including foreign exchange, interest rate, and equity price risks) and Liquidity Risks
• Operational and Information Technology (IT) Risks
Credit risk refers to the risk of default on obligations that may arise if a borrower fails to make required
payments such as principal and/or interest on an agreed date; market risk due to price
movements/fluctuations in trading and distribution activities of credit securities, foreign exchange, and
derivative instruments (as allowed by regulation); liquidity risk from the management of the Bank’s cash
flows and balance sheet; and operational and IT risks from inadequate or failed internal processes,
people, information technology and systems, and threats from external events that pose risks of financial
losses and damage to the Bank’s reputation. We are likewise cognizant of other emerging risks (e.g.,
environmental, social, and geopolitical risks) that it may be exposed to in its day-to-day business
operations and these are identified, measured, controlled, and monitored accordingly.
We have established risk management processes and controls and uses various methodologies, metrics,
tools, and systems to identify, measure, control, and monitor its risk exposures. We continuously invest
in risk technologies and business-enabling systems, and enhance its processes to ensure completeness
and accuracy of data, 360o risk perspective, and timely reporting. With the implementation of the Risk
Data Architecture system leveraging on the Bank’s Enterprise Big Data platform, the availability of
automated risk data not only supports the Bank’s risk management activities, but also enables risk data
servicing of the various business units and support units of the Bank.
In compliance with BSP Circular 989 (Conduct of Stress Testing Exercises), the RMO together with the
Strategy & Finance Group have employed a formal integrated risk and capital stress testing framework,
with forward looking assessment of risks under given stressed scenarios identified or developed by the
Bank’s experts, to assess financial and capital impact of such scenarios, and to facilitate the development
of contingency and recovery plans.
Independent reviews are regularly conducted by our Internal Audit, external auditors, and regulatory
examiners to ensure that controls and risk mitigation are in place and functioning as intended. We also
engage various risk management experts to independently assess our risk maturity covering areas such
as business continuity, cyber and information security, and ERM.
All these efforts have been undertaken and conscientiously practiced in recognition of BSP Circular 971
(Risk Governance), as well as benchmarked to the Committee of Sponsoring Organization’s (COSO) ERM
integrated framework. These have likewise proven indispensable with our reliance and belief in our
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established risk management system to ensure continued delivery of value to its stakeholders during
unprecedented uncertainties such as the most recent pandemic.
Credit Risk
The Credit Risk Unit in coordination with BPI’s Credit Policy and Risk Management (CPRM) Division is
responsible for the overall management of the Bank’s Credit Risk. The Credit Risk Unit is accountable to
the RMCom in managing the bank’s Credit Risk appetite and in the RMCom’s oversight function on Credit
Risk and asset quality. In addition, Credit Risk Units supports Senior Management in ensuring the quality
of our loan portfolio by adopting proper risk control strategies and adequate monitoring and reporting.
Credit Risk Unit and CPRM ensures that our prudent underwriting standards and rating parameters are
complied with through the conduct of independent business portfolio and product credit reviews.
In 2022, we experienced an increase in loan volumes with notably improved Non-Performing Loan ratio
as compared to the previous year, amidst the lingering COVID-19 pandemic. We were able to manage
overall Credit Risk and maintain good asset quality, in general compliance with regulatory and prudential
requirements relating to credit risk management (e.g., DOSRI and RPT compliance, single borrower’s
limits, credit concentration, and stress testing, amongst others). We continue to serve the self-employed
micro-entrepreneurs diversified as to geographic location. We continue the personal loan which the
bank has significant credit concentration which are offered to individuals with diversified occupations.
We regularly review the sufficiency of loan loss provisioning which is based on expected credit loss (ECL)
model developed for each loan portfolio. We adopted a credit score card to assess the borrowers’ credit
worthiness. The credit scorecard model undergoes model enhancement and independent validation to
ensure maintain predictive power and performance.
We fully implemented Philippine Financial Reporting Standards 9 (PFRS 9)-based policies, models, and
ECL methodologies for all our credit portfolios, rendering it compliant to both the BSP and accounting
standards on PFRS 9 implementation. Loss provisioning are based on ECL, which is a function of the
probability of default, loss given default, and exposure at default.
We measure credit risk exposures in terms of regulatory capital requirements using the standardized
approach in compliance with Basel III and BSP standards on minimum capital requirements. Using this
approach, credit exposures are risk-weighted and allows for the use of eligible collaterals (cash, financial
instruments, and guarantees) to mitigate credit risk.
We continuously enhance our credit policies, processes, guidelines, and lending programs to conform
with sound credit risk management including practices that conform to the Bank’s sustainability agenda
not only to manage environmental and social risks, but also to pursue opportunities that would add
and/or enable value for the Bank’s various stakeholders by positively impacting the environment and
society. Existing credit manuals are regularly revisited and updated to reflect new developments and are
aligned with the Bank’s customer delight programs and business sustainability practices.
We regularly conduct stress tests on our loan portfolio to determine the impact of changes in various
macroeconomic and/or industry scenarios, surface any undue credit concentration risk, and to comply
with regulatory reporting. Assessment of stress testing impact to the Bank’s financials is also performed
simultaneously. In the most recent exercise, results showed that the Bank’s capital adequacy ratio (CAR)
and common equity tier 1 ratio (CET1) generally remain above or at about the minimum regulatory
capital requirements, even with assumed write-downs on the Bank’s portfolios, and even with the
economic scenario analyses of rising interest and inflation rates and Peso depreciation affecting the
Bank’s borrowers.
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All these efforts have been undertaken in recognition of BSP Circular 855 (Sound Credit Risk
Management Practices), BSP Circular 1085 (Sustainable Finance Framework), BSP Circular 1128
(Environmental and Social Risk Management Framework), and related standards.
Market, Interest Rate in the Banking Book (IRRBB), and Liquidity Risks
Risk Management Office exercises its market, IRRBB, and liquidity risk management duties and
responsibilities through its Market, IRRBB and Liquidity Risk Management (MRM) Division. The Division
employs various risk metrics commensurate to the size and sophistication of its business operations
which guide us to effectively manage the risks arising from position-taking, trading and investing
strategies. Our risk exposures are continuously monitored against approved risk limits which are
regularly reviewed and updated to align with our business objectives, strategies, and overall risk
appetite. We also conduct forwardlooking scenario analyses, risk simulations, and stress tests to
complement our risk metrics to provide a broader and holistic risk perspective to the RMCom and
Management. For 2022, despite the heightened market volatility and uncertainties brought about by
factors such as the tightening monetary environment and geopolitical risks and developments, our
market, IRRBB, and liquidity risk exposures were adequately managed and controlled within the RMCom-
approved limits.
The bank is not actively trading and thus has no trading portfolio. We closely monitor the risk exposures
on non-trading portfolios. Assets are marked-to-market and the resulting gains and losses are recognized
through profit or loss. Market risk exposures from these portfolios are measured using the historical
simulation Value-at-Risk model complemented by several risk metrics such as Stop Loss and dollar
duration (DV01).
IRRBB is the current and prospective risk to our capital and earnings arising from adverse movements in
interest rates that affect its banking book positions. Since excessive levels of interest rate risks in the
banking book can pose a significant threat to the Bank’s earnings and capital base, we have established
adequate risk management policies and procedures, appropriate risk measurement models, risk limit
structures, and a robust risk management system to manage our IRRBB.
Interest rate banking book activities are measured through (a) Earnings-at-Risk (EaR), or the potential
deterioration in net interest income over the short- to medium- term horizon (i.e., those occurring in the
next one to three years) due to adverse movements in interest rates, and (b) Balance sheet Value-at-
Risk (BSVaR), or the impact on the economic value of future cash flows in the banking book due to
changes in interest rates. The EaR is calculated using the parametric approach for the short- to medium-
term horizon (i.e., one to three years) at a 99% confidence level. The BSVaR, on the other hand, is
measured using the historical simulation approach based on the daily year-on-year rate movements in
the historical window at a 99% confidence level. BSVaR considers both principal and interest payments
while EaR considers principal payments only. Both are built on the repricing profile of the balance sheet
and utilize certain behavioral assumptions such as for deposit accounts which do not have specific
maturity dates (i.e., current and/or savings accounts). IRRBB levels are against RMC approved limits and
regularly reported to the RMC and Senior Management.
We ensure adequate liquidity levels at all times and contingency plans are in place in the event of
liquidity stress. Our liquidity profile is measured and monitored through its internal metrics – the
Minimum Cumulative Liquidity Gap (MCLG), and Intraday Liquidity Buffer Ratio (ILBR), and the regulatory
metrics – Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The MCLG measures the
smallest net cumulative cash inflow (if positively gapped) or the largest net cumulative cash outflow (if
negatively gapped) over the next three months. This indicates the biggest funding requirement in the
short term and the degree of liquidity risk present in the current cash flow profile of the Bank. In view of
further strengthening our liquidity risk management, we implemented in 2022 the ILBR which was
designed to promote the Bank’s resilience against intraday liquidity risk by ensuring that adequate
29
liquidity buffers are in place to meet unexpected outflows throughout the day without significantly
affecting our funds or reserves management. The LCR determines the short-term resilience of the Bank’s
liquidity risk profile, requiring financial institutions to hold adequate level of high-quality liquid assets to
cover net cash outflows in the next 30 days. We, on a solo and consolidated basis, maintain adequate
levels of liquidity to provide a sufficient buffer for critical liquidity situations. Th NSFR complements the
LCR by limiting the overreliance on short-term wholesale funding and promoting enhanced assessment
of funding risk across all on- and off-balance sheet accounts.
We perform regular stress testing activities to determine our ability to withstand and evaluate the
impact of financial crises and other types of stress events. We conduct price stress tests in both the
trading and banking books using a variety of interest rate shock scenarios to identify the impact of
adverse movements in interest rates on our economic value and earnings and non-interest income. The
design of the price and EaR stress tests includes various scenarios such as steepening and flattening yield
curves, parallel up/down and short rate up/down, forward-looking and other notable stressed events
that have occurred in the financial industry. The interest rate shocks applied are calibrated for all
significant currencies in which we have significant positions. We also conducts liquidity stress tests using
different risk events, scenario types, and stress horizons to assess our liquidity position and determine
potential liquidity shortfalls during stress events. Scenario analyses and simulations are also performed
to provide forward-looking liquidity conditions and anticipate potential liquidity and funding
requirements.
The results of the stress tests are presented to the RMC and Senior Management to integrate them to
the overall risk management process of the Bank. In 2022, we conducted various portfolio and risk
simulations to evaluate the impact of possible strategies and actions to address changing market
conditions. All these initiatives were undertaken to ensure that the relevant market, IRRBB, and liquidity
risks are identified and controlled.
We have in place escalation procedures in handling potential and/or actual limit breaches in our market,
IRRBB and liquidity risk metrics, enabling timely identification and reporting of risks and the formulation
of appropriate action plans and strategies to prudently manage such risks and contain them at
acceptable levels.
The risk management process, including its various components, is subject to regular monitoring and
periodic independent review (i.e., internal/regulatory audit and model validation), and consistently
calibrated to ensure accuracy, propriety, and timeliness of data and assumptions employed.
Operational and Information Technology Risks
The Bank’s Operational Risk Management Units together with BPI Operational Risk Management (ORM)
Division monitors risks arising from inadequate or failed internal processes, people, and systems or from
external events such as natural disasters that damage physical assets and electrical or
telecommunication failures that disrupt our operations. Operational risk is inherent in all banking
products and services, and may include risks that give rise to adverse legal, tax, regulatory, or
reputational consequences. Information Technology (IT) is a significant risk factor assumed in
conjunction with operational risk, given the highly automated nature of the Bank’s processes and
services. We define IT risk as the risk of any potential adverse outcome arising from the use of or reliance
on IT (i.e., computer hardware, software, devices, systems, applications, and networks). IT risk includes,
but is 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 BSP’s
guidelines on Information Technology Risk Management.
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One of the significant resources that we employ are Business Risk Officers (BRO). We have over 20 BROs
coordinating with and overseeing key functional areas and business units across the organization. Our
BROs are responsible for promoting a sound risk management culture, implementing risk management
practices best practices, and ensuring timely submission of operational and other risk reports in the first
line of defense.
We have an established operational risk management framework that clearly defines responsibilities
related to the performance of the risk management function, as well as the accountabilities, processes,
and tools employed to identify and mitigate operational and IT risks in our operating units. Our tools
include Key Risk Indicators (KRIs) that we regularly monitor, loss events reporting and analysis, Risk &
Control Self-Assessment (RCSA), and operational risk management awareness and appreciation
programs. KRIs are used to monitor risk profiles, trigger early-warning alerts, and instigate mitigating
actions. Operational loss events data collection and analysis provide meaningful information in
effectively managing risks. Operating units are required to conduct regular self-assessments to identify,
assess, and mitigate risks, which include the assessment of inherent and residual risks, identification of
controls, and the assessment of the design and performance effectiveness of these controls. To help us
in the aggregation and reporting process, we also have set up risk categories and instituted the use of
our risk and control library that provides an aligned taxonomy of risks and controls.
To support the Bank’s Environmental, Social, and Governance (ESG) initiatives, we have integrated E&S
risks in our tools. Our risk library was expanded to tag Operational Risk titles with potential E&S-related
risks. Operational loss events monitoring captures actual occurrence of E&S risks that has resulted to, or
has the potential to result to, a financial or regulatory impact. In coordination with our ESRMS unit,
efforts to establish key metrics to provide the RMCom and ORMC visibility over E&S risks are ongoing.
With our drive for digitalization, alignment on the implementation of the ORM System (ORMS) that fully
integrates tools and processes on Loss Events, Metrics/KRIs, Incident Management, Risk and Control
Self-Assessment (RCSA) and Risk Aggregation is on-going. Through digitalization, manual processes will
be minimized and correlation with all tools is will be made possible, thereby providing better visibility to
Management and enabling them to make data-driven decisions.
Our exposure to operational risks is identified, assessed, and monitored as an integral part of the risk
assessment processes. The Bank currently uses the Basel II regulatory basic indicator approach to
quantify operational risk-weighted assets, using the historical total annual gross income as the main
measure of risk.
We regularly perform operational risk stress tests, through scenario analysis, to support the internal
capital assessment for operational and IT risks, as part of the Bank’s initiatives to advance risk
management methodologies. Through a series of stress scenarios, the Bank 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 is captured during risk assessment, especially those not yet reflected in
the Bank’s existing historical loss data.
Our risk management processes are ingrained in all our business activities such as new product
development and service offerings, process changes/enhancements, outsourcing, new markets,
amongst others. From inception to launch, these business activities, as well as its related processes and
systems, are subjected to rigorous risk assessments, design and testing activities aimed at safeguarding
both us and our clients from the risks of economic loss, operational disruption, or compromise of
personal or financial data.
The Board-level RMC is regularly apprised of the operational and IT risks through monthly reports and
quarterly meetings.
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We continue to closely monitor established measurements and limits on risk indicators and implement
mitigating measures in view of increasing cyber-related risks and risks related to the COVID-19 pandemic,
primarily on the health and safety of our employees and continuity of operations with the significant
portion of the work force on work-from-home arrangements. Our strategic initiatives on digitalization,
improvements on IT infrastructure and cybersecurity technology, and availability of business recovery
sites enable the continued delivery of products and services to our clients.
For personnel safety and welfare, we fully complied with health and medical guidelines from the
Department of Health (DOH) and Department of Labor and Employment (DOLE). Our participation in the
Ayala Vaccine and Immunization Program (AVIP) resulted in the majority of our employees and their
dependents being fully vaccinated. The administration of vaccination for minors and booster shots have
also commenced as we continue to work towards 100% vaccination rate either via AVIP, Ayala – Local
Government Unit (LGU), or LGU programs.
Business Continuity Risk
The Bank maintains its business continuity capability and organizational resilience by means of an
effective and sustainable Business Continuity Management (BCM) program. This program was self-
assessed by the Bank, aligned with ISO 22301 and BSP Circular 951 (Business Continuity Management).
Within this program are Business Impact Analysis (BIA) methodology, prioritization of products and
services, recovery plans, and a response structure to provide adequate level of services until normal
operations resume. The BIA methodology identifies products, services, processes, and resources that
should be prioritized during a disruption. Risk Assessment for Business Continuity (RABCon) identifies
the most probable threats to us, assesses the likelihood of their occurrences and their impact to key
areas. Business Recovery Plan (BRP) provides a suitable solution that focuses on the impact of events
and the timely restoration of building, equipment and supplies, technology and vital documents, human
resources, and third-party vendors.
Resiliency structure is in place and functional areas have been identified to meet business continuity
objectives and to support the agreed recovery solution. Each functional area has a designated Functional
Business Continuity Coordinator who handles localized risk events impacting business units in the
functional areas, with the support and guidance of tactical teams such as the Incident Management
Teams and the Corporate BCM Unit. For incidents that rise to the level of a true crisis, the Crisis Resiliency
Committee (CRC) central in BPI parent, composed of senior officers which includes senior officers of
BanKo, is convened to establish command and control.
To further improve the Bank’s resilience, BPI BCM team have set up alternate command centers in Metro
Manila and in provincial areas, which also provides additional seats that can be used for business
recovery. The team have also designated various evacuation sites, equipped with food, blankets, and
other supplies, to assist employees during natural calamities.
Since the pandemic, we have transitioned our employees to hybrid remote working, equipped with
necessary access and tools that allow a flexible work arrangement. With the Bank’s digital
transformation journey, we were also able to digitize BCM processes, business recovery plans, and other
BCM documentations through the Bank’s workflow management tool. It also provides us an online
collaboration platform that allows our BCM/BCP Coordinators to work together and have BCM
huddles/meetings. These reduce manual handling and physical presence, further ensuring business
continuity when the availability of the human workforce is put at risk. Along with our foundational
capabilities, which includes experiences, relationships, robust frameworks, and data, these allowed us
to be resilience in the face of the disruptions not only during natural disasters, but also during the
pandemic.
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Information and Physical Security Risks
Digitalization has significant information security implications. As Bank aligned with BPI parent continues
to transform customer experience through digitalization of customer interfaces, adoption of data
analytics and upgrading of back-office processes, we make sure that customer information and other
information assets in our possession or control remain secure. We maintain an information security
management system of people, processes and technology that seeks to achieve the confidentiality,
integrity, and availability of these information assets. We continuously identify, assess, treat, and
monitor information security risks guided by information security and data privacy programs that are
benchmarked against industry standards and best practices, and adhere to applicable laws and
regulations such as the Data Privacy Act and relevant BSP Circulars on customer protection, information
security, and risk management.
In view of the increasing cyber-related risks, the Bank piggy-back on BPI parent as the parent continue
to invest in the enhancement of our security infrastructure and technical controls to secure both our
physical and computing environments. This includes a broad range of prevention, detection, and
recovery mechanisms to mitigate and immediately respond to threats and incidents. Annual review and
simulation testing of the computer security incident response plan to ensure its workability and
effectiveness are also conducted. The Bank has also an established third-party and vendor risk
management program to address third-party risks there is increasingly utilize outsourced services to
support our business goals and operations. Stringent vetting process to service providers and IT suppliers
is being observed as well as the regularly monitoring of their performance to determine compliance with
the data privacy and information security requirements.
Information security awareness campaigns for customers to help them protect their personal
information and combat online banking fraud which is likely to rise in frequency and sophistication due
to the increased adoption of online services is in place. These campaigns are conducted via social media,
website, press releases, and email bulletins. The awareness program and campaigns are persistent and
updated regularly to keep our employees and customers abreast on current cybercrimes, emerging risks
and trends, and the mitigating measures to protect the bank and themselves against these threats.
BPI’s Facilities Services Group (FSG) is at the forefront of ensuring a safe and secure environment within
which our clients and personnel can conduct business at their convenience. Being the unit responsible
in ensuring the structural integrity, resilience, adeptness and efficacy of all BPI and BanKo branches and
offices, as well as the physical security and safety of not just the areas but of clients and stakeholders,
FSG implements a proactive and integrated approach to people, infrastructure, and security to address
the increasingly sophisticated needs of all physical sites, people and clientele with continuous
enhancement on strengthening the Bank’s physical security hard points to address varying threats on
financial products and service fulfillment. In line with our sustainability agenda, physical enablers to
reduce the impact of climate change such as calamity-proofing initiatives to selected typhoon prone
branches as well as undertakings on renewable energy are well underway. Facilities security and
monitoring are constantly evaluated and enhanced to achieve more advanced, dynamic, and resilience
designs integrating traditional physical security system with value engineering of more advanced tools
to stay ahead of the evolving physical and financial security landscape. Reinforcing this effort is capability
development through physical security monitoring systems improvement coupled with strengthened
coordination with national and local law enforcement agencies. With the foregoing and the established
Physical Security Response Plan in handling all types of emergencies and calamities that is further
supported by trained personnel and physical & technological assets, FSG is ready for the robust demands
of the future and any kind of eventualities and emergencies.
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Legal and Tax Risks
The Bank outsourced the legal services to BPI. BPI has two specialized legal services divisions composed
of highly-trained legal professionals with experience in banking and corporate law and litigation that
serve as BPI Group’s main legal resource. These two legal divisions play critical roles that enable us to
carry out our operations while minimizing legal issues and risks.
The BPI Corporate Legal Affairs Unit composed of the Documentation, Legal Advisory, Legal Risk, Tax
Compliance, Tax Advisory and Tax Risk Management units provide proactive guidance and support to
effectively manage the Bank’s legal and tax risks. The Documentation and Legal Advisory units ensure
that the Bank’s rights and obligations are protected in its contractual relations, and that the Bank is
abreast of legal developments and requirements, respectively. It also conducts a legal risk assessment
of potential claims against the Bank and recommends legal risk mitigation measures. It further
empowers the Bank units by issuing legal and tax advisory bulletins and providing supporting training
seminars that highlight legal and tax issues, new laws, and regulatory fiats that impact the Bank’s
products and services, and promote awareness of initiatives of various regulatory agencies.
With the ongoing pandemic, our Corporate Legal Affairs continued to provide legal direction and
support, working closely with Management, Risk and Compliance Offices, and the various business
segments in monitoring, interpreting, and implementing laws, government regulations, and pandemic-
related issuances.
The Dispute Resolution and Litigation unit plays a significant role in protecting our rights and interests
and in avoiding losses when the Bank is involved in disputes arising from client complaints before
regulatory bodies to full blown litigation in all levels of the judicial proceedings as well as from trial courts
to the Supreme Court. We handle cases that involve large enterprise loans, retail loans, and trade
financing. The other units specialize in criminal cases, cybercrime cases, and administrative cases
(including BSP and SEC cases) filed on behalf of or against the Bank. We likewise handle defensive cases
filed by any party against the Bank for any reason and play a significant role in the Bank’s AMLA
Compliance and the Labor Relations Compliance.
Reputational Risk
The Bank defines reputational risk as the risk of potential negative public perception or uncontrollable
events and developments to have an adverse impact on the Bank’s brand and reputation that can affect
the ability to maintain existing or establish new business relationships and continued access to sources
of funding.
We regard the Bank’s reputation as a very valuable asset, especially for a financial institution since a
negative reputation harms client and investor trust, erodes customer base, and hinder sales. Poor
reputation also correlates with increased costs for hiring and retention which degrades operating
margins and prevents higher returns. Furthermore, reputational damage increases liquidity risk which
impacts stock price and ultimately slashes market capitalization.
We have an established reputational risk management framework that provides consistent standards
for the identification, assessment, and management of reputational risk issues. While all our employees
have a responsibility to protect our reputation, which forms part of our Code of Business Conduct and
Ethics, the primary responsibility for managing and reporting reputational risk matters lies with our
business and operating units in the first line of defense. The Corporate Affairs and Communications unit,
on the other hand, is the risk control owner of reputational risk, promoting awareness and application
of our policies and standards regarding reputational risk and encouraging business units to take account
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of our reputation in all decision-making activities, as well as dealings with clients, suppliers, co-
employees, and all other stakeholders.
Our policies ensure reputational risk matters are managed in a consistent manner and aligned with our
strategic priorities. We have established risk indicators for reputational risks that are regularly monitored
and reported. These include events and developments related to products and services, channels,
financial performance, human resources, and corporate social responsibility that are further amplified
through traditional and social media coverage.
Model Risk
BPI’s Risk Models Validation (RMV) Department is responsible for conducting the independent model
validation activities of BanKo’s risk, valuation, and stress testing models. The independent validation of
these models is governed by model risk management policy and governance framework, aimed at
ensuring an active and effective model risk management across the enterprise. RMV conducts an annual
inventory of the Bank's models to ensure relevance, comprehensiveness, and usability across functional
risk areas. Given the increased regulatory expectations on model risk management, independent
validation, and the and the Bank’s focus on data-driven analytics and decision-making, RMV continuously
tests the quality and robustness of our risk models, benchmarks our risk models to global best practices
on model risk management, considers the impact of the COVID-19 pandemic to latest modeling
methodologies employed, and ensures that proper emphasis is placed on models supporting financial
inclusion and sustainability initiatives.
Environmental and Social Risks
Under the ERM framework and guided by BSP Circulars 1085 and 1128, we established the Bank’s
general policy on ESRMS which integrates E&S risk management in our risk governance structure and
promotes the updating and/ or establishment of policies, processes, methods, and tools that integrate
E&S risk management in our main business activities and decision-making processes. It is designed to
support the two sustainability pillars of Responsible Banking and Responsible Operations and is critical
in achieving our strategic sustainability objectives and targets.
We define E&S risks as potential negative financial, legal, and/or reputational effects from E&S issues
affecting our key business activities.
• Environmental risks can be categorized as either physical or transition. Physical risk is the
potential loss or damage to tangible assets arising from climate change, weather-related
disturbances, and other environmental hazards. This can either be acute events which are event-
driven risks that have an immediate adverse impact, or chronic events which are shifts in climate
patterns that are long-term in nature. Transition risk is the potential economic adjustment cost
resulting from policy, legal, technology, and market changes to meet climate change mitigation
and adaptation requirements.
• Social risks are potential negative social impacts including, amongst others, hazards to human
health, safety and security, as well as threats to communities, biodiversity, and cultural heritage.
We recognize that E&S risks can influence and/or aggravate the Bank’s existing traditional financial and
non-financial risks such as credit, operational, and reputational risks. Enhancements to our internal
policies, standards and processes are ongoing to integrate the identification, assessment and
management of E&S risks with our other existing functional key risk areas.
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E&S considerations are embedded in our lending activities and day-to-day operations to maintain our
longstanding commitment to integrate our sustainability strategy and principles in the delivery of
products and services, as well as in the resilience of our operations.
Environmental and Social Risk Assessment
Environmental Risk Assessment (ERA) is a pioneer mitigation tool to assess physical risk exposures,
introduced by BPI to the Philippine banking industry, amidst the Philippines’ location in the Typhoon Belt
and the Pacific Ring of Fire. For BanKo through DOSTPHIVOLCS’ Hazard Hunter PH system, we we’re able
to assess risk exposure of Bank branches, vis-a-vis the following climate risks.
• Flooding
• Typhoons/severe wind
• Storm surge
• Rain-induced landslides
ERA serves to mitigate traditional risks involve in branch operations concerning environmental and social
risk, as such, it has already been integrated to the Bank’s processes, preventing potential losses not just
in terms of income, but also more importantly in terms of human lives of the Branch employees and
clients.
Mitigated Risk Solutions

• Integration of risk data from the mapping of branch location vis-à-vis natural
hazards to the clients’ business such as flooding.
• Advisory on risk-mitigating measures
Credit Risk º Project relocation
º Engineering interventions aimed at damage prevention, resilience,
and compliance
º Insurance coverage
• Application of risk-mitigating measures
º Relocation
º Engineering interventions aimed at damage prevention, resilience, and
compliance
Operational Risk
º Insurance coverage
• Enhancement of Business Continuity Plans to ensure uninterrupted,
resilient, and reliable operations amidst natural disasters
º Focus areas
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> Employee health and safety

> Asset protection
> Timely restoration of building, equipment, and technology
º Additional preventive measures
> Regular evacuation drills
> Hazard protection guidelines
> Hazard awareness seminars
Capital Adequacy
The Bank’s Financial Management Unit together with Risk Management Office and in coordination with
BPI Unibank Planning and Capital Management under the Strategy and Finance Group oversee the
management of the Bank’s capital adequacy. Capital adequacy ratio, or CAR, is a measure of the Bank’s
total qualifying capital relative to its risk-weighted assets, and indicates the ability of its capital funds to
cover various business risks. These division also ensures compliance with regulatory capital adequacy
requirements, as well as internal capital thresholds, referred to as the Bank’s internal minimum Common
Equity Tier 1 (CET1) ratio, or IMCET1, and the CET1 management action trigger, or CET1MAT, which
incorporate the Bank’s internal capital buffers and limit triggers, and capture risks beyond Pillar 1 (credit,
market, and operational). Furthermore, these divisions are responsible for assessing and raising the
strategic capital needs of the Bank, as well as initiating approvals for dividend payments to shareholders.
Dividend Policy
BanKo may declare dividends subject to the discretion of the Board. However, the SEC may direct BanKo
to declare dividends when its retained earnings is in excess of 100% of its paid-in capital stock, except:
● When justified by definite corporate expansion projects or programs approved by the Board;
● When BanKo is prohibited under any loan agreement with any financial institution or creditor,
whether local or foreign, from declaring dividends without its consent, and such consent has not
been secured;
● When it can be clearly shown that such retention is necessary under special circumstances
obtaining, such as when there is a need for a special reserve for probable contingencies.
For 2022, BanKo did not declare dividends.
Sound Capital Management
Effective capital management supports the Bank’s assets and absorbs losses that may arise from credit,
market and liquidity, operational and IT, and other risk exposures. Our capital management framework
ensures that on standalone, there are sufficient capital buffers at all times to support the respective risk
profiles of the various businesses of the Bank, as well as changes in the regulatory and accounting
standards and other future events.
BanKo together with BPI submits a comprehensive internal capital adequacy assessment process, or
ICAAP, document annually to the Bangko Sentral ng Pilipinas, in accordance with the Pillar 2 guidelines
of the Basel framework.
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As of December 31, 2022, the Bank’s CET1 and CAR Ratio stood at 18.42% and 17.73% respectively, both
higher than the minimum regulatory requirements.
The table below shows the Bank’s CAR components for 2022 and 2021:
Risk Regulatory Capital

(Php million) 2022 2021
Credit Risk 13,773 9,942
Market Risk 55 55
Operational Risk 6,743 5,567
Total 20,571 15,565
Capital Adequacy
(Php Mn) 2022 2021
CET1/Net Tier1 ¹∕ 3,648 2,668
T2/Net Tier2 ²∕ 141 104
Total QC ³∕ 3,789 2,772
Total CRWA 4∕ 13,773 9,942
Total MRWA 5∕ 55 55
Total ORWA 6∕ 6,743 5,567
TRWA 7∕ 20,571 15,565
Ratios (%)
CET1 17.73 % 11.03 %
CAR 18.42 % 11.79 %
¹∕ Common Equity Tier 1 Capital/Net Tier 1
²∕ Tier 2 Capital/Net Tier 2
³∕ Qualifying Capital
4∕ Credit risk-weighted assets
5∕ Market risk-weighted assets
6∕ Operational risk-weighted assets
7∕ Total risk-weighted assets
The bank's types and level of risk it is willing to assume in order to achieve business objectives is
conveyed through the risk appetite statements approved by the Risk Management Committee. This
covers each important risk identified.
Risk Area BanKo Risk Appetite Statements
1. Enterprise Risk The Bank adopts an overall low risk appetite for the Bank’s aggregated
and total financial and non-financial risk exposures.
2. Credit Risk The Bank shall ensure to maintain a moderate level of non-performing
loans (NPLs), and make certain that the amounts of loss reserves are
(portfolio quality)
sufficient to cover the NPL and ROPA levels
3. Credit Risk
(Regulatory Limits, Credit The Bank has low appetite for non-compliance to regulatory limits
Counterparty Risk & and ceilings on credit risk, particularly on credit portfolio
Credit Concentration) concentration and credit test results
The Bank shall ensure to maintain a moderate level of non-

performing loans (NPLs), and make certain that the amounts of loss
reserves are sufficient to cover the NPL on the acquired Personal
4. Credit Risk Loan Portfolio
(Portfolio Acquisition - The Bank manages the risks on non-performing loans by closely
Personal Loan) monitoring the exposure and trends on personal loan portfolio.
Strictly implements outsourcing agreement related to the processes
and portfolio management.
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5. Credit Risk
The Bank shall ensure to observe a moderate level of test programs
(Test Program for SEME) running at any single time.
The Bank has low appetite for losses from the day-to-day trading
6. Market Risk activities, which are monitored against the Bank’s profit-and-loss
(P&L and comprehensive income levels.
The Bank has low appetite for losses from the day-to-day trading
7. Liquidity Risk activities, which are monitored against the Bank’s profit-and-loss
(P&L and comprehensive income levels.
The bank has low appetite for losses due to adverse movements in
8. Interest Rate Risk the interest rates as measured by the impact on the Bank’s net
interest income and underlying value of assets, liabilities and off-
balance sheet instruments
The Bank has a moderate appetite for the financial losses due to the
9. Model Risk use of risk models that are work in progress in absence of a stable
model in the industry.
The Bank has low appetite for losses to earnings or capital, whether
10. Business Strategic Risk current or prospective, due to adverse business decisions, improper
implementation of decisions or lack of responsiveness to industry
changes in business conditions.
The Bank has a very low appetite for reputational risk and takes
11. Reputational Risk immediate action to resolve clients' complaints, local and overseas
regulatory concerns and high risk issues.
The Bank has zero tolerance for incidents involving improper
12. Conduct Risk business practices. The Bank nurtures a culture of high ethical and
moral standards among employees where the tone is set at the top
for conducting business with honesty, decency, fairness and integrity
The Bank strive to mitigate risks with annual aggregated operational
risk losses not to exceed 1% of gross income per year. The Bank have
13. Operational Risk zero tolerance for any loss incident of catastrophic proportions. The
bank has very low appetite for reputational risk and takes immediate
action to resolve client’s complaints, local and overseas regulatory
concerns, and high-risk issues.
The Bank aims to achieve 99.5% availability of critical customer-
A. Operational Risk facing services. The Bank employs a pragmatic and flexible approach
to enhance its ability to withstand, adapt to and recover from
(Run the Bank)
events, which could cause significant operational failures or wide-
scale disruptions.
1. Business Process The Bank has a low operational risk appetite for process failure and
Execution Failure low tolerance for high risk internal audit issues.
The Bank has zero tolerance for incidents involving improper
2. Improper Business business practices. The Bank nurtures a culture of high ethical and
Practices moral standards among its employees where the tone is set at the
top of conducting business with integrity and transparency.
The Bank has a low appetite for legal action against it with assessed
3. Regulatory and unfavorable outcome. The Bank aims to maintain compliance with
Compliance regulatory requirements and to address any breach within the time
provisions of regulators
4. Damage to Physical and The Bank employs adequate tools and processes, to ensure its
Intangible Assets, preparedness in handling and lessening the impact of disruptive
Technology Failures and event. The Bank pursues to have effective and tested business
Damages continuity plans, responding to cover mission-critical products /
services and making these available within two (2) to four (4) hours.
5. Vendor Failures and The Bank does not tolerate failure from providers of critical
Damages outsourced services and requires adequate measures to ensure
continues delivery of services.
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6. Trade Counterparty The Bank has a low appetite for counterparty failures. The Bank
Failures exercises due diligence when dealing with counterparties and
correspondent banks.
The Bank applies industry standards in securing our assets, including
physical and financial assets, customer data and other highly
B. Operational Risk sensitive data and human resources.
(Secure the Bank) The Bank strives to mitigate emerging risks with zero tolerance for
data confidentiality and integrity breaches leading to financial loss,
reports to regulators and/or media reports.
The Bank has zero appetite for events and work activities that
1. Employment Practices compromise the health and safety and well-being of employees,
and Workplace Safety causing serious illness or injuries or loss of life. The Bank gives
utmost priority to providing adequate safety equipment to prevent
any accident in the workplace
The Bank aims to employ sufficient, suitably skilled and experienced
2. Internal Theft and staff with clearly defined roles and responsibilities. The Bank has
Fraud zero appetite for any fraudulent activity, and all potential conflicts of
interest shall be avoided and disclosed.
The Bank invests in learning the latest fraud trends and work
3. External Theft and towards deploying security measures in minimizing theft and fraud
Fraud incidence in the Bank. The Bank strives to have zero occurrence of
robberies and burglaries in any of the bank and branch premises
The Bank has zero appetite for any misconduct or employees,
clients, and third parties such as bribery and corruption or activities
related to money laundering or terrorist financing. The Bank is
committed to combating financial crime and ensuring that offered
4. Financial Crime products and services are not misused for the purpose of money
laundering, terrorism financing and fraud events. The Bank cultivates
a culture of high ethical standards among its employees where the
tone is set at the top for conducting business with honesty, decency,
fairness and integrity.
The Bank will innovate by adopting and customizing new, market-
C. Operational Risk
tested technologies with the key objective of providing our
(Build the Bank) customers with the best banking experience and with minimum
security risks.
The Bank has a moderate appetite for IT project failures. The Bank
IT Project Failures uses established industry practices to deliver projects with minimal
time, budget and quality variances.
RELATED PARTY TRANSACTIONS
In the normal course of business and under the overall purview of the Related Party Transactions
Committee (RPTCom) of the Board, the Bank transacts with related parties which include its directors,
officers, stockholders and related interest, subsidiaries and affiliates (including those under the Ayala
Group of Companies), as well as other related parties defined in our internal policy.
Controls are in place to ensure compliance with Related Party Transactions (RPT) processes, a basic
element of which are RPT guidelines published in the Bank’s policy databases as further communicated
through briefing sessions and regular advisories. Another control mechanism requires the RPTC
Secretariat to verify if there is prior vetting of RPT proposals submitted for Board-level approval and/or
prior to implementation of the transaction. Moreover, post-verification of vetted RPTs is conducted by
both Internal Audit and Compliance Office, results of which are reported to the RPTCom. Review of RPTs
is likewise part of the external audit assurance process.
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RPTs are monitored through various reports such as the regulatory and internal limits monitoring for
related party (RP) exposures, reports on RPTs reviewed by the vetting committees, as well as the
regulatory reporting for material RPTs.
The Bank maintains a registry of related parties (RPs) which is regularly updated based on the results of
RP analyses, as part of the Know-Your-Customer process, conducted by the business units. Likewise,
regular updating is done following the (a) annual preparation of the BPI and Ayala Group’s conglomerate
map and (b) any Board composition changes effected during the Annual Stockholders’ Meeting and/or
intra-year Board changes. Updates are also sourced from other information gathered from internal bank
units and reputable external sources. Updating of the RP database for the BPI officers’ data is regularly
conducted in coordination with the Bank’s Human Resource Management Group for proper tagging in
the system. The Bank’s RP database is accessible to business units to serve as a tool in the RP
identification process across the Group.
Vetting is done prior to implementation either by the BPI BPI Related Party Transaction Committee
(RPTC), BanKo Corporate governance Committee (CGCom), or the Management Vetting Committee
(MVCom), depending on set materiality thresholds, to ensure that transactions with RPs are normal
banking activities and are done at arm’s length basis particularly on terms and conditions comparable to
those offered to non-RPs or to similar transactions in the market. In line with this, the Bank continues to
review and enhance its vetting process by defining standardized terms and/or parameters for select
transactions applicable to both RPs and non-RPs alike, as approved by management and subjected to
vetting by the RPTCom, thereby strengthening non-preferential treatment to its RPs.
The BPI RPTC, a Board-level committee of the BPI Parent, is the highest vetting committee for BanKo’s
related party transactions involving BPI Parent, Affiliates, Subsidiaries and other Related Parties.
The BanKo CGCom is composed of three Non-Executive Directors, majority of whom are independent
directors including the Chairperson. The RPTCom Secretariat, which is part of the Risk Management
Office, assists the Committee in carrying out its role and responsibilities as defined in the CGCom Charter,
particularly on strengthening corporate governance and RPT practices. The MVCom, on the other hand,
is composed of the President and Senior Management of the Bank.
The Bank is committed in ensuring strict compliance with laws, regulations, and reporting requirements
relating to DOSRI and RPTs by instituting rigorous vetting processes and establishing adequate controls
and oversight mechanisms. Improvements in the RPT framework are continuously pursued with the aim
of enhancing corporate governance measures including greater information awareness initiatives.
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COMPLIANCE
Regulatory Compliance
The Bank views compliance to mean not only adherence to laws, regulations, and standards but, more
importantly, the consistent conduct of the affairs of the Bank within a culture of high integrity, bounded
by conformity to ethical business practice, abiding by the principles of fair dealing, accountability and
transparency. This ensures that in all our areas of activity, the Bank and its stakeholders are protected
from regulatory and business risks as comprehensively as possible.
Oversight of the management of the Bank’s regulatory and business risks and implementation of its
compliance function is the responsibility of our Board of Directors, through the Audit Committee. At the
management level, the compliance function is carried out by the Compliance Office, led by our
Compliance Officer.
Anti-Money Laundering Compliance

The prevention of financial crimes is a top priority of BanKo, not only because they pose a significant
threat to our reputation, but because they weaken the integrity of the global financial system. Hence,
our Compliance Office extends its ambit beyond the Bank, its policies, and its employees to ensure that
our clients also act within the law and do not use the Bank for illegal activities.
The Compliance Office’s Anti-Money Laundering Department is responsible for monitoring customer
and counterparty transactions in compliance with the Anti-Money Laundering Law, its implementing
rules and regulations, and BSP Circular No. 706 and all other amendments thereto. The Bank’s Money
Laundering and Terrorist Financing Prevention Program (MTPP) aims to implement sound anti-money
laundering practices and combat terrorist financing and other financial crimes.
Financial Consumer Protection Framework
The Bank has a financial consumer protection governance structure that aims to establish a business
environment that protects the interest of financial consumers and create an institutional culture of fair
and responsible treatment of customers through good governance exercised by the Board and governing
bodies, and reinforced by the various functions that own, manage, oversee, or provide independent
assurance over consumer protection activities.
BanKo Customer Care Unit in coordination with other units and BanKo Compliance Office has established
a Financial Consumer Protection Program aimed at preventing or reducing regulatory violations and
42
protecting customer from harm or loss associated with non-compliance. There is a mechanism for
elevating cases, when needed, including those referred to the Bank by the Bangko Sentral ng Pilipinas
(BSP).
The bank handles customer inquiries and complaints through its Customer Care Unit, which provides
reports to BPI Parent’s Customer Experience Management Office (CXMO) regularly. This is to ensure that
customer feedback are captured and addressed accordingly and aligned with the Bank’s Consumer
Protection Policies.
Aside from our contact center and the branches, clients may also relay their queries and concerns to the
bank via the bank’s website and Facebook page. As part of the bank’s program, all BanKo employees
undergo annual training on consumer protection.
For 2022, the Bank tracked and monitored customer issues and feedback concerning its products and
services action plans were implemented to ensure that the most pressing and important issues raised
by customers were resolved within the committed turn-around times.
Statistics of Concerns Received
BPI Direct BanKo has its own Contact Center, catering to the concerns of both BanKo and non-BanKo
Clients. For 2022, the ratio of complaints over the number of concerns received has significantly been at
a low level of 1%. On the otherhand, the majority of concerns received are inquiries on BanKo products
and services.
Number of Concerns Received 32,365

Number of Complaints 257
% of Complaints vs Concerns Received 1%
Number of Transactions 8,919,762
Complaints Resolved 100%
To ensure that our customers are empowered to make informed financial decisions, that we protect
their rights across all transactions with the Bank, and that we provide them with an avenue to express
their concerns about the Bank’s products and services, BanKo’s Customer Experience Management
Office (CXMO) has established a Financial Consumer Protection Policy, providing guidelines on the fair
and responsible treatment of customers, as aligned with the Bangko Sentral ng Pilipinas (BSP) regulations
on financial consumer protection. All employees are required to take a mandatory Financial Consumer
Protection Program training course annually.
A Customer Assistance Officer (CAO) is assigned to address customer concerns in accordance with Bank
policies.
Data Privacy
BanKo has a strong Data Privacy Policy in place, which describes to whom the policy applies to, what
personal data the Bank collects and how such data is collected, how the Bank may use personal data for
core business and marketing purposes, how the Bank may disclose and share such personal data, how
such personal data is stored and retained, and how such data can be accessed or corrected. The Data
Privacy Policy is posted on the company website and complies with the requirements of the Data Privacy
Act and the National Privacy Commission.
43
SUSTAINBILITY FINANCE FRAMEWORK

BanKo, with its products PondoKo, NegosyoKo Loan, and NegosyoKo Lite, is dedicated to achieving
Sustainable Development Goal (SDG) UN 8: Decent Work and Economic Growth for all. Since its launch
in 2016, Banko has been committed to responsible banking, incorporating Environmental, Social, and
Governance (ESG) principles.
Its unique sustainability formula, ESG+E₂, emphasizes the importance of achieving Economic Benefits
(E₂) alongside sustainability initiatives. BanKo's Sustainability Agenda guides its integration of
sustainability principles into strategic objectives, corporate governance, and risk management
frameworks. It serves the unbanked and underbanked, providing sustainable financial solutions for
microbusinesses, farmers, fishermen, and individuals in the C and D sectors.
BanKo's flagship product, the NegosyoKo Loan, supports micro-entrepreneurs in expanding their
businesses. Additionally, Banko embraces digitalization, offering the PondoKo Savings account through
a mobile app for financial inclusion and convenient cash flow management."
Through our extensive network of 317 branches, BanKo actively reaches out to unbanked and
underserved markets, promoting internationally recognized sustainability practices while advancing
financial inclusion in support of UN Sustainable Development Goal (SDG 8) of fostering decent work and
economic growth.
One notable collaboration is a test program with a leading restaurant chain that relies on agricultural
produce from local farmers, where BanKo, in partnership with BPI Institutional Banking, provides
affordable financing options to local farmer-suppliers. This initiative ensures their sustainability and
success. By offering favorable loans to small onion farmer-suppliers, BanKo supports their investments,
production, and expansion, while securing a stable supply chain for their restaurants. The project
achieved a remarkable 100% repayment rate among the 58 farmer borrowers from the three
participating cooperatives.
This outstanding performance validates the effectiveness of the financing program and the trust
established between the cooperatives and the project partners. Furthermore, the farmers were able to
supply the restaurant chain with a total of 348,000 kilos of onions, contributing to their sourcing
requirements during a time of onion scarcity. This highlights how the innovation facilitated a reliable and
sustainable supply chain for the chain, benefiting both the farmers and the company.
The project's success paves the way for its potential scalability, with plans to expand the program to the
chain's 330 farmer cooperatives, encompassing other crops and amounting to a potential of PHP 440
million. Additionally, there is an opportunity to extend the collaboration to other BPI IB clients and
potentially reach 2.9 million small Filipino farmers. Overall, the project's results demonstrate its tangible
impact, successful achievement of objectives, and significant potential for future growth and financial
inclusion.
44
SUPPLEMENTARY SCHEDULES ON CAPITAL AND RISK MANAGEMENT

DISCLOSURES PURSUANT TO THE BANKO SENTRAL’S MEMORAMDUM
M-2017-011
Capital Structure
The Bank’s qualifying capital for the years ended 2022 and 2021 were Php3.65 billion and Php2.67 billion,
respectively. The Bank’s total qualifying capital for 2022 and 2021 were largely composed of CET1 capital
and Tier1 at 96.0% and 96.0%, respectively.
The table below shows the composition of the Bank’s capital structure and total qualifying capital.
31-Dec-22 31-Dec-21
Capital Structure (Php Mn) CET1/ Tier1 Tier 2 TOTAL CET1/ Tier1 Tier 2 TOTAL
Core Capital 4,166 141 4,307 3,202 104 3,307

Paid-up common stock 1,406 - 1,406 1,406 - 1,406
Additional paid-in capital
Retained earnings 1,795 - 1,795 1,454 - 1,454
Undivided profits 995 - 995 371 - 371
Net unrealized gains or losses on
AFS securities
Cumulative foreign currency
translation
Remeasurements of Net Defined
(30) - (30) (29) - (29)
Benefit Liability (Asset)
Minority interest ¹∕
General loan loss provision 2∕ - 141 141 - 104 104
Deductions 517 - 517 534 - 534
Total O/S unsecured credit
accommodations 3∕
Deferred tax assets 487 - 487 507 - 507

Other intangible assets 3 3 2 2
Defined benefit pension fund assets 27 - 27 25 - 25
Investments in equity 5∕
Significant minority investments 6∕
Other equity investments 7∕
TOTAL QUALIFYING CAPITAL 3,649 141 3,790 2,668 108 1,680
96% 4% 100% 96% 4% 100%
¹∕ Minority interest in subsidiary banks, which are less than wholly-owned
2∕ General loan loss provision, limited to a maximum of 1% 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
3∕ Total outstanding unsecured credit accommodations, both direct and indirect, to directors, officers, stockholders and their related interests (DOSRI)
4∕ Total outstanding unsecured loans, other credit accommodations and guarantees granted to subsidiaries and affiliates
5∕ Investments in equity of unconsolidated subsidiary banks and quasi-banks, and other financial allied undertakings
(excluding subsidiary securities dealers/brokers and insurance companies), after deducting related goodwill, if any (for solo basis only and as applicable) and Investments in equity of unconsolidated subsidiary securities dealers/brokers
and insurance
companies after deducting related goodwill, if any (for both solo and consolidated bases and as applicable)
6∕ Significant minority investments (10%-50% of voting stock) in securities dealers/brokers and insurance companies, after deducting related goodwill, if any (for both solo and consolidated bases)
7∕ Other equity investments in non-financial allied undertakings and non-allied undertakings
45
Credit risk-weighted assets. Using the Basel regulatory standardized approach, our total credit risk-
weighted assets as of December 31, 2022 amounted to Php14.11 billion, and composed of on-book
credit exposures after risk mitigation of Php13.77 billion.
The table below provides a summary of the Bank’s credit risk-weighted assets for 2022 and 2021:
Amount
Credit RWAs (Php Mn) 2022 2021

14,112 10,449
Total RWA (On-balance sheet) 0/
0 0
Total RWA (Off-balance sheet) 0/
0 0
Total counterparty RWA (banking book) 1/
Total counterparty RWA (trading book) 0 0
Total RWA credit-linked notes (banking book) - -
Total Gross RWA 14,112 10,449
339
Deductions: General loan loss provision 2/
506
Total Credit RWAs 13,773 9,943
0/ Risk-weighted assets
1/ For derivatives and repo-style transactions
2/ In excess of the amount permitted to be included in upper Tier 2
Schedule A
December 31, 2022 Exposure RISK WEIGHTS
after risk Total
P -mn mitigants 0% 20% 50% 75% 100% 150% CRWA 1/
Cash on hand 249 249 - - - - - 249
Checks and other cash items 1 - 1 - - - - 1
Due from BSP 4,336 4,336 - - - - - 4,336
Due from other banks 767 - 767 0 - 767
Available-for-sale (AFS) 0 - - - - 0 - 0
Held-to-maturity (HTM) - - - - - - - 0
UDSCL 2/ - - - - - - - 0
Loans and receivables 16,149 - - 6,648 - 9,214 287 16,149
Loans and receivables - Others 3/ 136 136 - - - - - 136
Sales contract receivables - - - - - - - 0
ROPA 4/ 52 - - - - 52 52
Sub-total 21,690 4,721 1 7,415 0 9,214 339 21,690
Other assets 682 - - - - 682 - 0
Total exposure, plus other assets 22,372 4,721 1 7,415 0 9,895 339 21,690
Total risk-weighted OBSA (no CRM) 0/5 / 0 3,708 0 9,895 509 14,112
Total risk-weighted OBSA (with CRM)5 / - - - - 0 -
Total RWA (On-Balance Sheet) 0 3,708 0 9,895 509 14,112
46
Exposure
December 31, 2021 after risk RISK WEIGHTS Total
P -mn mitigants 0% 20% 50% 75% 100% 150% CRWA 1/
Cash on hand 287 287 - - - - - 287
Checks and other cash items 2 - 2 - - - - 2
Due from BSP 4,327 4,327 - - - - - 4,327
Due from other banks 1,089 - 1,037 52 - 1,089

Available-for-sale (AFS) - - - - - - - -
Held-to-maturity (HTM) - - - - - - - -
UDSCL 2/ - - - - - - - -
Loans and receivables 11,578 - - 5,573 - 5,634 371 11,578
Loans and receivables - Others 3/ 363 363 - - - - - 363

Sales contract receivables - - - - - - - -
ROPA 4/ 58 - - - - 58 58
Sub-total 17,703 4,977 2 6,610 - 5,686 429 17,703
Other assets 815 - - - - 815 - 815
Total exposure, plus other assets 18,518 4,977 2 6,610 - 6,500 429 18,518
Total risk-weighted OBSA (no CRM) 0/5 / - 3,305 - 6,500 643 10,449
Total risk-weighted OBSA (with CRM)5 / - - - - - -
Total RWA (On-Balance Sheet) - 3,305 - 6,500 643 10,449

1
/ 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
Market risk-weighted assets. In terms of capital usage using the Basel standardized approach, total
market risk-weighted assets stood at Php55 million as of end-2022, of which foreign exposures
accounted for more than half, followed by interest rate exposures and equity exposures, respectively.
The table below presents the breakdown of the Bank’s market risk-weighted assets for 2022 and 2021:
MARKET RWA (Php Mn) 2022 2021
Using standardized approach
Interest rate exposures - -
Foreign exposures 55 55
Equity exposures - -
TOTAL MARKET RWA / 0 55 55
0
/ Risk-weighted assets
47
Operational risk-weighted assets. 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. In 2022, the Bank’s total operational risk-weighted assets stood at Php6,743 million.
The table below presents the breakdown of the Bank’s operational risk-weighted assets for 2022 and
2021:
AMOUNT
OPERATIONAL RWA (Php Mn)
2022 2021
Gross income (a) 3,330 2,110
Capital requirement 1/ 500 316
Average capital requirement (b) 2/ 540 445
Adjusted capital charge (c) / 3 674 557
TOTAL OPERATIONAL RWA / / 0 4 6,743 5,567
0/ Risk-weighted assets
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
48
OVERVIEW OF THE MAJOR STOCKHOLDERS

The following is an overview of the Bank’s major stockholders, including nationality, percentage of
stockholdings and voting status (as of December 31, 2022):
49
EXECUTIVE MANAGEMENT
Rodolfo K. Mabiasen Jr.
Senior Vice President
Business Head, Financial Inclusion and Microfinance Solutions
Filipino, 48 years old, Mr. Mabiasen is the head of the bank’s financial inclusion and microfinance
solutions which oversees all microfinance businesses of the bank including loans, deposits and
insurance. As such, he oversees departments in charge of client and product management, marketing,
branch and BLU channels network, cash agency network, field sales, business development, digital
platform management and business MIS.
Mr. Mabiasen has more than 26 years of banking experience. He has been assigned in branch banking
operations and sales in BPI Family Bank and BPI since 1997. Prior to his secondment from BPI to Banko
in 2017, he held the role of Area Business Director for North Luzon Branches under BPI’s Retail Banking
Group.
Mr. Mabiasen graduated with degrees of BS Accountancy and BS Commerce Major in Economics,
graduating as Magna cum Laude in both degrees from St. Louis University, Baguio City in 1995. He
passed the CPA Licensure Examination in 1996.
Ma. Cynthia Leticia S. De Jesus

Vice President and Compliance Officer
Filipino, 54 years old, Ms. De Jesus is the Compliance Officer and Head of the Bank’s Compliance Office
which oversees the implementation of the Bank’s compliance programs and is composed of the following
units: Regulatory Compliance, AML Compliance, Compliance Testing and Data Privacy.
Ms. De Jesus has more than 31 years of banking experience. She has been involved in various aspects of
banking from marketing, product development, account management, support services, remittances
and compliance. Prior to her secondment from BPI to Banko in May 2020, she held the role of Group
Compliance Officer for Unsecured Lending and Cards.
Ms. De Jesus graduated with a degree of BS Economics, with Dean’s Medal for Academic Excellence,
from the University of the Philippines Diliman in 1990. She completed the Certificate Course in Strategic
Compliance for the Banking Industry at the Center for Professional Development in Business of the De
La Salle University in 2015.
Maria Angelica G. Florentino

Vice President
Head, Enterprise Services
Filipino, 56 years old, Ms. Florentino is the current head of the bank's Enterprise Services which includes
oversight on Human Resource and Training, Premises, Centralized Operations, Customer Care and the
newly formed Affiliate Business and Customer Experience Management Office (CXMO). She is also a
director of BPI Payments Holdings, Inc. (BPHI).
Ms. Florentino has more than 29 years of banking experience most of which was spent in the Unsecured
Lending and Cards Group (ULCG) which includes Credit Cards, Debit Card, Prepaid Payments and
Personal Loans. During her stint with this group, she was assigned to head various teams from Credit
50
Initiation, Sales Distribution, Channel Management, Provincial Card Banking, Emerging Markets,
Regional Marketing, Regional Merchant Acquiring and Market & Strategy Development. Prior to her
secondment from BPI to BanKo in November 2022, she held the role of ULCG Customer Care and
Analytics Head.
Ms. Florentino graduated with a degree of BS Business Administration from the University of the
Philippines Diliman in 1987. She completed her masteral degree in Business Administration also from
the University of the Philippines Diliman in 1994.
Francisca R. Dimaala
Senior Manager and Company Risk Officer
Filipino, 42 years old, Ms. Dimaala is the Company Risk Officer and Head of the Bank’s Risk Management
Office primarily responsible for the integration, monitoring, and overall management of the Bank’s total
risk and ensuring that all relevant financial and non-financial risks are identified, measured, monitored,
and controlled within the Bank’s approved risk appetite and limits.
Ms. Dimaala is a Certified Public Accountant with more than 20 years of work experience specializing on
Internal Audit, Know Your Customer Process, and Risk Management within financial institutions.
Ms. Dimaala obtained her Bachelor of Science in Accountancy from Philippine Christian University in
2001 with academic award.
Annie B. Alanano
Senior Manager and Treasurer
Filipino, 50 years old, Ms. Alanano is the Company Treasurer/Finance & Business MIS Head of the bank.
Prior joining BanKo, Ms. Alanano worked with RCBC (Rizal Commercial Banking Corporation) for 15 years.
She managed Rizal MicroBank Microfinance Arm of RCBC for 4 years as Chief Finance Officer and
Accounting Head under Controllership for 11 years. She held various positions in Accounting and
Controllership for over 20 years in the banking industry.
Ms. Alanano graduated with a degree of Bachelor of Science in Accountancy from Lyceum of the
Philippines.
51
SENIOR MANAGEMENT
PRESIDENT
Jerome B. Minglana
SENIOR VICE PRESIDENT

Rodolfo K. Mabiasen, Jr. - Financial Inclusion and Microfinance Solutions
VICE PRESIDENT
Ma. Cynthia Leticia S. De Jesus - Compliance
Maria Angelica G. Florentino – Enterprise Services
ASSISTANT VICE PRESIDENT

Anne A. delos Reyes – Client Solutions
Reubhen Joseph Maxpher S. Paran – Digital Channels
Gabriel Lorenzo A. Posadas – Agency Distributions and Partnerships
SENIOR MANAGER
Annie B. Alanano – Treasurer, Finance & Business MIS
Rey Martin T. Belida – Mindanao Region Head
Eduardo Roberto V. Bondame – Credit
Charmaine M. Camus – Customer Experience
Francisca R. Dimaala – Risk Management
Jasper T. Dipaling – Visayas Region Head
Cynthia M. Dobles – Collections
Ma. Cecilia A. Garrido – Quality Assurance
Ethel Jennifer C. Mabunay – Channel Services
Dennis N. Marcelino – Technology
Marlo John P. Maroon – HR & Training Head
Joseph Carlo F. Ragaza – South Luzon Region Head
Jhoel R. Sanga – North Luzon Region Head
52
PRODUCT AND SERVICES

DEPOSITS
Peso
Checking Account
Savings Account
Time Deposits Account
Foreign Currency
Savings Account
Microfinance
PondoKo Savings
LOANS
Consumer
Auto Loans
Housing Loans
Microfinance
NegosyoKo Loan
ELECTRONIC CHANNELS
BanKo Mobile
53
BRANCH DIRECTORY
A Branch refers to any permanent office other than the Head Office where the Bank may perform
activities and provide products and services that are within the scope of its authority and relevant
license.
Branch Lite Unit (BLU) refers to any permanent office or place of business of the Bank, other than its
Head Office or a branch. It performs limited banking activities and records its transactions in the books
of the Head Office or the branch to which it is annexed to.
Count Location Branch Type Address

1 Head Office/Greenhills , NCR Branch 220 Ortigas Avenue BanKo Center, North Greenhills, San Juan
City
2 Naga , Camarines Sur Branch Unit 302 Level 3, Nagaland E-mall Elias Angeles Street San
Francisco Naga City, Camarines Sur
3 Dumaguete, Negros Oriental Branch Unit K-12 Twin Arcade Building, Perdices Street, Dumaguete
City, Negros Oriental
4 Davao, Davao Del Sur Branch Door 110 JLF Parkway Bldg., Magallanes corner Tomas
Claudio Sts., Davao City
5 Angeles, Pampanga Branch Romercial Purok 5, San Francisco St. Lourdes North West,
Angeles City, Pampanga
6 Caloocan, NCR Branch G/F 98 A. Mabini Street Maypajo, Caloocan City, Metro
Manila
7 Cainta, Rizal Branch RSJ-0104B RS City Square Ortigas Avenue Extension Cainta
Rizal
8 Lipa, Batangas Branch Kapitan Simeon Luz, Barangay 4 Lipa City, Batangas
9 Iloilo, Iloilo Branch 161 Fuentes Street, San Jose, Iloilo City
10 General Santos, South Cotabato Branch Santiago Blvd., General Santos City South Cotabato
11 Legazpi, Albay Branch 2/F Hotel Rex Building, Aguinaldo corner Penaranda Sts.
Legaspi City, Albay
12 San Fernando, Pampanga Branch G/F EKO Building. Consunji St. Barrio Sto. Rosario, San
Fernando City, Pampanga
13 Tabaco , Albay Branch-Lite Unit VSP Building Riosa Street, Divino Rostro, Tabaco City, Albay
14 Iriga, Camarines Sur Branch-Lite Unit Tansylit Commercial Building, Zone 4 Alfelor St., San Roque,
Iriga City, Camarines Sur
15 Apalit, Pampanga Branch-Lite Unit St. Jude Commercial Bldg., along MacArthur Highway, Brgy.
San Vicente, Apalit, Pampanga
16 Guagua, Pampanga Branch-Lite Unit G/F 174 Lapid Bldg., Sto. Nino, Guagua, Pampanga
17 Sta. Ana, Pampanga Branch-Lite Unit Corner Gamboa St., and A. Dizon St., San Joaquin, Sta. Ana,
Pampanga
18 Guihulngan, Negros Oriental Branch-Lite Unit Nesto Commercial Space, ML Quezon St., Guihulngan, Negros
Oriental
19 Tanjay , Negros Oriental Branch-Lite Unit Josephine Building, Lot 642, Opao Barrio Poblacion, Tanjay
City, Negros Oriental
20 Bayawan, Negros Oriental Branch-Lite Unit Cor. Bollos and J. P. Rizal St., Brgy. Boyco, Bayawan City
21 Digos, Davao Del Sur Branch-Lite Unit 2094 Rizal Avenue, Zone II, Digos City, Davao Del Sur
22 Panabo, Davao Del Norte Branch-Lite Unit Asaje Realty Corporation Property, Prk. Tambis, Sto. Nino,
Panabo City
23 Tagum, Davao Del Norte Branch-Lite Unit DCC Building, Dalisay-Gante Road Prk. Bayanihan, Magugpo
West, Tagum City
24 Mati, Davao Oriental Branch-Lite Unit Lot 12, Blk 13, Asaje Building, Rizal Ext., Barangay Central City
of Mati, Davao Oriental
25 Pili, Camarines Sur Branch-Lite Unit Guevarra St., Old San Roque, Pili, Camarines Sur
26 Butuan, Agusan Del Norte Branch Purok 7, Brgy. Limaha 14, Langihan Road, Butuan City, Agusan
Del Norte
27 Iligan, Lanao Del Norte Branch Door #4 Alco Building, Gregorio T. Lluch, Sr Ave. corner F. B.
Laya St. Iligan City, Lanao Del Norte
28 Santa Maria, Bulacan Branch J. C. De Jesus St., Poblacion, Santa Maria, Bulacan
29 Tanauan, Batangas Branch-Lite Unit Almeda Space Rental, Burgos St., Poblacion 7, Tanauan City,
Batangas
30 Ozamis , Misamis Occidental Branch-Lite Unit G/F Chua Hong Building, Rizal Avenue Corner Don Anselmo
Bernard Avenue, Carmen (Annex) Ozamis City, Misamis
Occidental
54

31 Baliuag, Bulacan Branch-Lite Unit J & U Bldg., 321 B.S Aquino Ave., Bagong Nayon, Baliuag
Bulacan
32 Dagupan , Pangasinan Branch #20 Burgos St., Brgy. Tapuac, Dagupan City, Pangasinan
33 Urdaneta, Pangasinan Branch-Lite Unit Lot 357-B Mac Arthur Highway Poblacion, Urdaneta City,
Pangasinan
34 Marilao, Bulacan Branch-Lite Unit 2nd Floor 208, Poblacion 2, Marilao, Bulacan
35 Gingoog , Misamis Oriental Branch-Lite Unit Princity Bldg., Barangay 19 Gingoog City, Misamis Oriental
36 Toril, Davao Del Sur Branch-Lite Unit Purok 8 Vdlr Street, Lower Portion, Brgy. Bayabas Crossing,
Toril District, Davao City
37 Kidapawan, North Cotabato Branch-Lite Unit Armando Realty Corp., Padilla St., Brgy. Poblacion,
Kidapawan, North Cotabato
38 San Jose De Buenavista, Antique Branch-Lite Unit Bantayan Road, Funda-Dalipe, San Jose De Buenavista,
Antique
39 Silang, Cavite Branch-Lite Unit 01 Yakal St. Brgy. San Miguel I, Silang, Cavite
40 Iba, Zambales Branch-Lite Unit 2nd Floor, Camara Bldg., National Road Zone I, Iba, Zambales
41 Mandaue, Cebu Branch-Lite Unit Unit 1B Zion Center, A. Del Rosario St. Brgy. Guizo, Mandaue
City Cebu
42 Concepcion, Tarlac Branch-Lite Unit Arthur Go Bldg., L. Cortez St., Brgy. San Jose, Concepcion,
Tarlac
43 Tarlac City, Tarlac Branch NP Magbag Bldg. F. Tanedo corner Sapiro St. San Nicolas,
Tarlac City
44 Binangonan, Rizal Branch-Lite Unit GMG Bldg. Blk 1 Lot 1 Branch Lite Uniteridge Village, Brgy.
Tagpos, Binangonan Rizal
45 Ilagan, Isabela Branch-Lite Unit Rizal St., San Vicente, Ilagan City, Isabela
46 Baguio, Benguet Branch First Floor L3-F1 Kayang Business Center, Kayang Cor.
Chugum St., Brgy. AZCKO, Baguio City
47 Balanga, Bataan Branch Capinpin Road, Market Site San Jose, Balanga City, Bataan
48 Tuguegarao, Cagayan Branch Rizal Street, Centro 08, Tuguegarao City, Cagayan
49 Santa Rosa, Laguna Branch-Lite Unit #94, J.P. Rizal Blvd., Tagapo, Santa Rosa Laguna
50 Gumaca, Quezon Branch-Lite Unit J. P. Rizal St., Brgy. Penafrancia, Gumaca, Quezon
51 Kalibo, Aklan Branch-Lite Unit Door F. Barrios Building Roxas Ave., Ext. Andago, Kalibo,
Aklan
52 Estancia, Iloilo Branch-Lite Unit E. Reyes Ave., Poblacion Zone 2, Estancia, Iloilo
53 Paniqui, Tarlac Branch-Lite Unit GF Patricia Anne Bldg. M. H. Del Pilar St. Brgy. Estacion,
Paniqui Tarlac
54 Tanay, Rizal Branch-Lite Unit Sampaloc Rd., Brgy. Plaza Aldea, Tanay Rizal
55 Kabankalan, Negros Occidental Branch-Lite Unit G. Cordova St., Brgy. 3, Kabankalan City, Negros Occidental
56 San Francisco, Agusan Del Sur Branch-Lite Unit Unit 4, Romana-Paul Tan Building, Bonifacio Street,
Poblacion, Brgy. 4, San Francisco, Agusan Del Sur
57 Malaybalay, Bukidnon Branch-Lite Unit Moreno St., Barangay 05, Malaybalay City , Bukidnon
58 Cagayan De Oro, Misamis Oriental Branch Door#2, Anthony Tion Bldg., Hayes St. Nazareth, Cagayan De
Oro City
59 La Trinidad, Benguet Branch-Lite Unit Rose Buan Bldg., KM 4 Balili, La Trinidad, Benguet
60 Puerto Princesa, Palawan Branch GSK Bldg., Lacao St. Puerto Princesa City, Palawan
61 Cabatuan, Iloilo Branch-Lite Unit Morales Bldg., Rizal St., Cabatuan Iloilo
62 Antipolo, Rizal Branch-Lite Unit Lot 64-66, Cogeo Trade Hall, Sitio Kasapi, Bagong Nayon,
Antipolo City
63 Bacolod, Negros Occidental Branch Door 5 Ava Arcade San Sebastian Gatuslao St., Brgy. 13,
Bacolod City, Negros Occidental
64 Malolos, Bulacan Branch-Lite Unit #31 Tanjeco St., San Vicente, Malolos City, Bulacan
65 San Jose, Nueva Ecija Branch-Lite Unit #126 Maharlika Highway, Brgy. Malasin, San Jose City, Nueva
Ecija
66 Gapan, Nueva Ecija Branch-Lite Unit Maharlika Hiway, JC Ramirez Bldg., Brgy. San Vicente, Gapan
City, Nueva Ecija
67 San Carlos , Negros Occidental Branch-Lite Unit JL Tourist Inn, S. Carmona St., Brgy. IV, San Carlos City, Negros
Occidental
68 San Carlos, Pangasinan Branch-Lite Unit #38 Rizal Ave., San Carlos City, Pangasinan
69 Cauayan, Isabela Branch-Lite Unit King Street Mall, Rizal Ave., District III, Cauayan City, Isabela
70 Santiago, Isabela Branch-Lite Unit A and A Musngi Bldg., City Road Centro East, Santiago City,
Isabela
71 Tacloban, Leyte Branch Cor. P. Zamora S. P. Paterno Sts., Brgy. 26 Tacloban City,
Leyte
72 Catarman, Northern Samar Branch-Lite Unit Corner Quirino Street, Barangay Jose P. Rizal, Catarman,
Northern Samar
73 Surigao, Surigao Del Norte Branch Borromeo Cor. Magallanes St., Brgy. Washington, Surigao
City, Surigao Del Norte
74 Vigan, Ilocos Sur Branch Sky 1 Bldg., Del Pilar St., Barangay VIII, Vigan City
75 Calamba, Laguna Branch 106 Commerce Center, Parian, Calamba City, Laguna
55

76 Candelaria, Quezon Branch-Lite Unit Del Valle St., Poblacion, Candelaria Quezon
77 Polomolok, South Cotabato Branch-Lite Unit Cannery Road, Sanchez Subd., Brgy. Poblacion, Polomolok,
South Cotabato
78 Tacurong, Sultan Kudarat Branch-Lite Unit Jose Abad Santos Street, Poblacion, Tacurong City, Sultan
Kudarat
79 Balayan, Batangas Branch-Lite Unit Lot 356-A #123 Damballelos St. Brgy 4 Balayan, Batangas
80 Roxas, Capiz Branch Roxas Avenue, Brgy. VIII, Roxas City, Capiz
81 Ligao, Albay Branch-Lite Unit 1 Door 10 Dy - OK Bldg., Legazpi St., Guilid, Ligao City, Albay
82 Masbate, Masbate Branch Good Star Bldg., Corner Cortidor & Zurbito Sts., Bapor,
Masbate City
83 Lapu-Lapu, Cebu Branch-Lite Unit Ompad St. Poblacion, Lapu-Lapu City, Cebu
84 Ormoc , Leyte Branch-Lite Unit Gr. FI Lam Bldg., Cor. Carlos Tan & Mabini St., District 23,
Ormoc City, Leyte
85 Laoag, Ilocos Norte Branch 2nd Floor, Conching Bldg., Rizal St., Brgy 16, Laoag City, Ilocos
Norte
86 Bangued, Abra Branch-Lite Unit McKinley St. Zone 2, Bangued, Abra
87 San Jose Del Monte, Bulacan Branch-Lite Unit MASJ Building Unit D&E Carriedo St., Muzon, San Jose, Del
Monte, Bulacan
88 Tagbilaran, Bohol Branch 6R's Bldg. Belderol St., Cogon, Tagbilaran City, Bohol
89 Cebu City, Cebu Branch Unit 6, The Eden, Colon St., Kalubihan, Cebu City
90 Danao, Cebu Branch-Lite Unit Rizal St., Poblacion, Danao City, Cebu
91 Maasin, Southern Leyte Branch-Lite Unit Oppus St., Tunga Tunga, Maasin City, Southern Leyte
92 Sagay, Negros Occidental Branch-Lite Unit Avancena St. cor. Osmena St., Poblacion 1, Sagay City, Negros
Occidental
93 Silay, Negros Occidental Branch-Lite Unit Prince Hypermart, Cor. Antonio Luna and Rizal St., Brgy. I
Silay City, Negros Occidental
94 Solano, Nueva Vizcaya Branch 1 De Luna Bldg. Espino St., Brgy. Quirino, Solano, Nueva
Vizcaya
95 Binan, Laguna Branch-Lite Unit Bonifacio St., Canlalay, Binan, Laguna
96 Santa Cruz , Laguna Branch-Lite Unit 1618 J. Falcon St., Poblacion 5, Sta. Cruz Laguna
97 Lucena, Quezon Branch 29A Quezon Avenue cor. Ravanzo St., Brgy. I, Lucena City,
Quezon
98 Calapan, Oriental Mindoro Branch J.P. Rizal St., San Vicente Central, Calapan, Oriental Mindoro
99 Polangui, Albay Branch-Lite Unit Sapalicio St., Basud, Polangui, Albay
100 Baler, Aurora Branch Purok 2, Sitio Kinalapan, Brgy. Pingit, Baler, Aurora
101 Cabanatuan City, Nueva Ecija Branch Cor. Burgos and Sanciangco Sts., Brgy. Fatima, Cabanatuan
City Nueva Ecija
102 Valencia, Bukidnon Branch NVM Mall, Guinoyan Road, P-4, Poblacion, Valencia City,
Bukidnon
103 San Jose , Occidental Mindoro Branch-Lite Unit Capt. Cooper St., Poblacion, Brgy. IV, San Jose, Occidental
Mindoro
104 Olongapo, Zambales Branch GF 1995 Ave., West Bajac Bajac, Olongapo City, Zambales
105 San Fernando , La Union Branch-Lite Unit BHF Bldg., 147 P. Burgos St., Ilocanos Sur, San Fernando City
La Union
106 Virac, Catanduanes Branch-Lite Unit Brgy. Concepcion, Virac, Catanduanes
107 Batangas City, Batangas Branch-Lite Unit H. C. Tomson Commercial Bldg., D. Silang St. Poblacion 015,
Batangas City
108 Sorsogon, Sorsogon Branch Quezon St., Polvorista, Sorsogon City, Sorsogon
109 Bacoor, Cavite Branch No. 369 Gen. E. Aguinaldo Hi-way, Talaba IV, Bacoor Cavite
110 Koronadal, South Cotabato Branch-Lite Unit Salanga Bldg., Morales Ave., Brgy. Gen. P. Santos, Koronadal
City, South Cotabato
111 Cadiz, Negros Occidental Branch-Lite Unit Magsaysay Ext., Andrea Village, Poblacion 3, Cadiz City,
Negros Occidental
112 Roxas , Isabela Branch-Lite Unit Bethany Hotel Bldg., Osmena St., Brgy. Bantug, Roxas, Isabela
113 Brooke's Point, Palawan Branch-Lite Unit NT Bldg., Poblacion District II, National Highway, Brooke's
Point, Palawan
114 Tigbauan, Iloilo Branch-Lite Unit Tupas St., Brgy. 7 Poblacion, Tigbauan, Iloilo
115 Pinamalayan, Oriental Mindoro Branch-Lite Unit Amando Marciano Bldg., cor. Mabini and Quezon St., Zone III,
Pinamalayan, Oriental Mindoro
116 Rodriguez, Rizal Branch #50 E. Rodriguez Hi-way corner Kalantas St., Brgy. San Jose,
Rodriguez, Rizal
117 Trece Martires, Cavite Branch-Lite Unit 13 Martyrs St., Mariden Bldg. Brgy. San Agustin, Trece
Martires, Cavite
118 Consolacion, Cebu Branch-Lite Unit Westside Properties, 803 V & G Subdivision, Brgy. Nangka,
Consolacion, Cebu
119 Lingayen, Pangasinan Branch-Lite Unit 41 C. Avenida Rizal, East Poblacion, Lingayen, Pangasinan
120 Rosales, Pangasinan Branch CSC Bldg., General Luna St., Zone III, Poblacion, Rosales,
Pangasinan
56

121 Boac, Marinduque Branch Del Mundo St. Cor. Madrigal St., Brgy. Malusak, Boac,
Marinduque
122 Minglanilla , Cebu Branch-Lite Unit 1316 Natalio B. Bacalso, South National Highway, Poblacion
Ward I, Minglanilla, Cebu
123 Dasmariñas, Cavite Branch-Lite Unit Unit 6 Ground Floor AVM Building, Isidro Mangubat St., Brgy.
Zone IV, Dasmarinas, Cavite
124 Pototan, Iloilo Branch-Lite Unit #5008 SRG Bldg., Villa Cecilia Subd., Brgy. Malusgod, Pototan,
Iloilo
125 Talisay, Cebu Branch-Lite Unit Talisay Town Center Unit 12, Victoria St., Bgy. Tabunok,
Talisay City, Cebu
126 Cubao, NCR Branch St. Anthony Bldg., Aurora Blvd., Brgy. E. Rodriguez, Cubao,
Quezon City
127 Cavite City , Cavite Branch-Lite Unit P. Burgos Avenue, Caridad, Cavite City, Cavite
128 GMA, Cavite Branch-Lite Unit Door 4 Umerez Properties Bldg., Bgy. San Gabriel, GMA
formerly Carona, Cavite
129 Rosario, Cavite Branch-Lite Unit #248 Abutin Bldg., Gen. Trias Drive, Tejeros Convention Bgy.
Tejeros, Rosario, Cavite
130 Sariaya, Quezon Branch-Lite Unit Maharlika Highway, cor. Pablo St., Sariaya, Quezon
131 Lemery, Batangas Branch-Lite Unit Miranda Building, Ilustre Avenue, District 3, Lemery, Batangas
132 Guimaras, Guimaras Branch-Lite Unit Zemkamps Chalet Bldg. Stall 5 & 6, New Site, San Miguel,
Jordan, Guimaras
133 Daet, Camarines Norte Branch Bagasbas Road cor. Diego Linan St., Bgy. 6, Daet, Camarines
Norte
134 Plaridel, Bulacan Branch-Lite Unit JMET's Building 215 J. Garcia St., Banga 1st, Plaridel, Bulacan
135 General Trias, Cavite Branch-Lite Unit 9026 C.M. Delos Reyes St., Bgy. Manggahan, General Trias
City, Cavite
136 Talavera, Nueva Ecija Branch-Lite Unit Maharlika Highway, Esguerra District, Talavera, Nueva Ecija
137 Imus, Cavite Branch-Lite Unit R. Nuguid & Sons, Inc., Building, Emilio Aguinaldo Highway,
Brgy. Tanzang Luma 3, Imus, Cavite
138 Bago, Negros Occidental Branch-Lite Unit 2nd St., Marhil Subdivision, Poblacion, Bago City, Negros
Occidental
139 Bayambang, Pangasinan Branch-Lite Unit Rizal Avenue, Poblacion Sur, Bayambang, Pangasinan
140 Lucban, Quezon Branch-Lite Unit Quezon Avenue, Lucban, Quezon
141 Carcar, Cebu Branch San Vicente St., Poblacion 1, Carcar City, Cebu
142 Floridablanca, Pampanga Branch-Lite Unit Sta. Maria St., Poblacion, Floridablanca, Pampanga
143 Mangaldan, Pangasinan Branch-Lite Unit 602 Rizal St., Brgy. Poblacion, Mangaldan, Pangasinan
144 Nasugbu, Batangas Branch-Lite Unit Brias St., Barangay 9, Nasugbu, Batangas
145 San Juan, Batangas Branch-Lite Unit Gen. Luna St., Poblacion, San Juan, Batangas
146 Bogo, Cebu Branch-Lite Unit J. Almerante St., Brgy. San Vicente, Bogo City, Cebu
147 Baybay, Leyte Branch-Lite Unit Prince Town Baybay Unit N-24 A. Bonifacio St., Baybay City,
Leyte
148 Ubay , Bohol Branch-Lite Unit Tan Nene St., Poblacion, Ubay, Bohol
149 Pagadian, Zamboanga Del Sur Branch-Lite Unit J. Ariosa St., San Francisco District, Pagadian City, Zamboanga
del Sur
150 Calinog, Iloilo Branch-Lite Unit Cor. Rizal-Osmena St., Poblacion Centro, Calinog, Iloilo
151 Labo, Camarines Norte Branch-Lite Unit Don Juan Building 2, Brgy. Masalong, Labo, Camarines Norte
152 Guimba, Nueva Ecija Branch-Lite Unit Onjianco St., Brgy. Sta. Veronica, Guimba, Nueva Ecija
153 Mariveles, Bataan Branch-Lite Unit Lot 1B, Jonalyn's Bldg., Paguio St., Poblacion, Mariveles,
Bataan
154 Magalang, Pampanga Branch-Lite Unit Acejo, Arnel B. Bldg., Sta. Cruz, Magalang, Pampanga
155 Bayugan, Agusan Del Sur Branch-Lite Unit Libres St., Taglatawan, Bayugan, Agusan del Sur
156 Maramag, Bukidnon Branch-Lite Unit Jacob, Juanity Bldg. P-2 South Poblacion, Maramag, Bukidnon
157 Candon, Ilocos Sur Branch-Lite Unit De Guia Building, Brgy. San Juan, Candon City, Ilocos Sur
158 Sto. Tomas, Batangas Branch-Lite Unit Sierra Makiling Bldg., Maharlika Highway, Brgy. San Antonio,
Sto. Tomas, Batangas
159 Dipolog, Zamboanga Del Norte Branch-Lite Unit Quezon Avenue, Brgy. Central, Dipolog City, Zamboanga del
Norte
160 Irosin, Sorsogon Branch-Lite Unit St. Vincent Building, Bgy. San Julian, Irosin, Sorsogon
161 Jagna, Bohol Branch-Lite Unit 7S Shopping Center, Looc, Jagna, Bohol
162 Dumanjug, Cebu Branch-Lite Unit Gaisano Grand Mall Dumanjug Unit DMG-ARS-03 G/F Arcade
Villa St., cor. G. Gica St., Poblacion, Dumanjug, Cebu
163 Toledo, Cebu Branch-Lite Unit V & U Bldg., corner Rafols and Poloyapoy St., Toledo City,
Cebu
164 Mabalacat, Pampanga Branch-Lite Unit Clark Gateway Commercial Complex, L 290 & 292 Velasquez
St., San Francisco, Mabalacat, Pampanga
165 Porac, Pampanga Branch-Lite Unit General Luna St., Bgy. Cangatba, Porac, Pampanga
57

166 Capas, Tarlac Branch-Lite Unit Sto. Cristo St., Brgy. Sto. Rosario, Capas, Tarlac
167 Hilongos, Leyte Branch-Lite Unit C.V Alcuino St., Brgy. Central Pob. Hilongos, Leyte
168 Allen, Northern Samar Branch-Lite Unit Rizal St., Brgy. Sabang 1, Allen, Northern Samar
169 Calbayog, Samar Branch-Lite Unit Rosales Blvd., Bgy. Central, Calbayog City, Samar
170 Catbalogan, Samar Branch 2nd Floor, Casa Cristina Hotel Building, 152 San Roque St.,
Bgy. Poblacion 11, Catbalogan City, Samar
171 Borongan, Eastern Samar Branch-Lite Unit Brgy. Songco, Borongan City, Eastern Samar
172 Hinigaran, Negros Occidental Branch-Lite Unit Rizal B St., Bgy. 4, Poblacion, Hinigaran, Negros Occidental
173 Alaminos, Pangasinan Branch-Lite Unit BHF Branch Lite Unite Horizon Building, Quezon Avenue,
Poblacion, Alaminos, Pangasinan
174 Villanueva, Misamis Oriental Branch-Lite Unit NVCDC Building 1, National Highway, Katipunan, Villanueva,
Misamis Oriental
175 Tandag, Surigao Del Sur Branch-Lite Unit Cabrera St., Purok Maligaya, Bag-ong Lungsod, Tandag City,
Surigao del Sur
176 Agoo, La Union Branch-Lite Unit 56 National Highway, San Miguel, Agoo, La Union
177 Pagbilao, Quezon Branch-Lite Unit Corner Alvarez, Bonifacio St., Bgy. Del Carmen, Pagbilao,
Quezon
178 Nabunturan, Davao De Oro Branch-Lite Unit Arellano St., Puro 5, Poblacion, Nabunturan, Compostela
Valley
179 Cotabato, Maguindanao Branch Ground Floor, Happy King Hotel and Restaurant, Jose Lim Sr.
Street., Cotabato City
180 Rosario , Batangas Branch-Lite Unit 26 Carandang St. Brgy. C, Rosario, Batangas
181 Oroquieta, Misamis Occidental Branch-Lite Unit John Paul Co. Bldg., Barrientos St., Poblacion 2, Oroquieta
City, Misamis Occidental
182 Sindangan, Zamboanga Del Norte Branch-Lite Unit Gov. Lim St., cor. Mabini St., Poblacion, Sindangan,
Zamboanga del Norte
183 Molave, Zamboanga Del Sur Branch-Lite Unit Rizal Ave., cor Quezon St., Purok Bulawanon, Bgy. Madasigon,
Molave, Zamboanga del Sur
184 Zamboanga City, Zamboanga Del Branch Jilron Bldg., La Purisima St. Zone II, Zamboanga City,
Sur Zamboanga del Sur
185 Ipil, Zamboanga Sibugay Branch-Lite Unit Ipil Citi Suites Hotel Building Purok San Francisco, Poblacion,
Ipil, Zamboanga Sibugay
186 Goa, Camarines Sur Branch-Lite Unit Rizal St. Brgy. Panday, Goa, Camarines Sur
187 San Miguel, Bulacan Branch-Lite Unit Tecson St., Bgy. San Jose, San Miguel, Bulacan
188 Hagonoy, Bulacan Branch-Lite Unit #2 Emilio Perez St., Purok 4, Bgy. Sto. Nino, Hagonoy, Bulacan
189 City Of Naga, Cebu Branch-Lite Unit National Highway, South Poblacion, City of Naga, Cebu
190 Tanza, Cavite Branch-Lite Unit Antero Soriano Highway, Poblacion 4, Tanza, Cavite
191 Victorias, Negros Occidental Branch-Lite Unit Lot 51-54 Blk 1 Osmena Avenue, Brgy. 13, Victorias City,
Negros Occidental
192 San Marcelino, Zambales Branch-Lite Unit Delta Building, National Highway, Bgy. Consuelo Sur, San
Marcelino, Zambales
193 Malasiqui, Pangasinan Branch-Lite Unit JB Realty Calle Montemayor, Bgy. Poblacion, Malasiqui,
Pangasinan
194 Pozorrubio, Pangasinan Branch-Lite Unit Poblacion, District IV, Pozorrubio, Pangasinan
195 Tayug, Pangasinan Branch-Lite Unit Corner Magtali St. and Bonifacio St., Bgy. Poblacion B, Tayug,
Pangasinan
196 Los Baños, Laguna Branch-Lite Unit Ocho Miembros Bldg., Brgy. Maahas, National Highway, Los
Banos, Laguna
197 San Pablo, Laguna Branch-Lite Unit A. Flores St., Bgy. 7-C, San Pablo City, Laguna
198 San Pedro, Laguna Branch-Lite Unit 14-E Luna St., Poblacion, San Pedro, Laguna
199 Oton, Iloilo Branch-Lite Unit J.C. Zulueta St., Poblacion South, Oton, Iloilo
200 Passi , Iloilo Branch-Lite Unit Padernilla St., Poblacion, Passi City, Iloilo
201 Norzagaray, Bulacan Branch-Lite Unit Roadside View Subdivision, Bgy. Partida, Norzagaray, Bulacan
202 Arayat, Pampanga Branch-Lite Unit Pistahan Building, Bgy. Plazang Luma, Arayat, Pampanga
203 Tumauini, Isabela Branch-Lite Unit #49 National Highway, Bgy. San Pedro, Tumauini, Isabela
204 Zaragoza, Nueva Ecija Branch-Lite Unit Biak na Bato, Del Pilar East, Zaragoza, Nueva Ecija
205 Cuyapo, Nueva Ecija Branch-Lite Unit Aguila St., District 1, Cuyapo, Nueva Ecija
206 Rizal, Nueva Ecija Branch-Lite Unit Aglipay St., Poblacion Sur, Rizal, Nueva Ecija
207 Lubao, Pampanga Branch-Lite Unit #31 JP Rizal St., Sta. Cruz, Lubao, Pampanga
208 Sipalay, Negros Occidental Branch-Lite Unit Corner Lacson, Alvarez St., Bgy. 1, Poblacion, Sipalay, Negros
Occidental
209 Alicia, Isabela Branch-Lite Unit LM Building, Magsaysay, Alicia, Isabela
210 Cabadbaran, Agusan Del Norte Branch-Lite Unit A. Curato St., Corner Garame St., Bgy. 4, Poblacion,
Cabadbaran City, Agusan del Norte
58

211 Manolo Fortich, Bukidnon Branch-Lite Unit Prince Hypermart Bgy. Tankulan, Manolo Fortich, Bukidnon
212 Compostela , Davao De Oro Branch-Lite Unit Purok 9 Magsaysay St., Poblacion, Compostela, Compostela
Valley
213 M'lang, North Cotabato Branch-Lite Unit M.H. Del Pilar St., Poblacion, M’lang, North Cotabato
214 Bantayan, Cebu Branch-Lite Unit Ticad, Bantayan, Cebu
215 Daanbantayan, Cebu Branch-Lite Unit Osmena St., Poblacion, Daanbantayan, Cebu
216 Naic, Cavite Branch-Lite Unit Corner Public Market Road, Poblete St., Ibayo, Silangan, Naic,
Cavite
217 Siquijor, Siquijor Branch-Lite Unit St. Francis Assisi Convent New Building, Poblacion, Siquijor,
Siquijor
218 Aparri, Cagayan Branch-Lite Unit EH Chua Bldg., 68 De Rivera St., Centro 14, Aparri, Cagayan
219 Bambang, Nueva Vizcaya Branch-Lite Unit Maharlika Highway, Brgy. Banggot, Bambang, Nueva Vizcaya
220 Aritao, Nueva Vizcaya Branch-Lite Unit Purok Payao, Poblacion, Aritao, Nueva Vizcaya
221 San Ildefonso, Bulacan Branch-Lite Unit National Highway, Sapang Putol, San Ildefonso, Bulacan
222 Guiguinto, Bulacan Branch-Lite Unit GD Plaza, Mc Arthur Hiway, Ilang-ilang, Guiguinto, Bulacan
223 Manaoag, Pangasinan Branch-Lite Unit Ground Floor JCJ Bldg. Soriano St., Poblacion, Manaoag,
Pangasinan
224 Cabagan, Isabela Branch-Lite Unit Ugad, Cabagan, Isabela
225 Cabarroguis , Quirino Branch-Lite Unit Purok 2, Gundaway, Cabarroguis, Quirino
226 Bauang, La Union Branch-Lite Unit Blade Building, National Highway, Qinavite, Bauang, La Union
227 Midsayap, North Cotabato Branch-Lite Unit Corner Quezon Ave., National Highway, Poblacion 3,
Midsayap, Cotabato
228 Surallah, South Cotabato Branch-Lite Unit Poblacion, Surallah, South Cotabato
229 Bauan, Batangas Branch-Lite Unit Sta. Cruz St. Poblacion IV, Bauan, Batangas
230 San Jose , Batangas Branch-Lite Unit Macalintal Ave., Brgy. Sto. Cristo, San Jose, Batangas
231 Calumpit, Bulacan Branch-Lite Unit St. Peter Commercial Bldg. Mc Arthur Hi-way, Corazon,
Calumpit, Bulacan
232 Balagtas, Bulacan Branch-Lite Unit National Highway, Balagtas, Bulacan
233 Meycauayan , Bulacan Branch-Lite Unit Meycauayan College Mc Arthur Highway, Calvario,
Meycauayan, Bulacan
234 Murcia, Negros Occidental Branch-Lite Unit Corner Dinsay, Arimas St., Bgy. Zone IV, Murcia, Negros
Occidental
235 Narvacan, Ilocos Sur Branch-Lite Unit Old National Highway St., San Jose, Narvacan, Ilocos Sur
236 Santa Cruz, Ilocos Sur Branch-Lite Unit Gabor Norte, Sta. Cruz, Ilocos Sur
237 Bansalan, Davao Del Sur Branch-Lite Unit R. Delos Cientos St., Poblacion Dos, Bansalan, Davao Del Sur
238 Samal, Davao Del Sur Branch-Lite Unit P-1 Sitio Pantalan, Brgy. Miranda-Pichon, Island Garden City
of Samal, Davao del Norte
239 Santo Tomas, Davao Del Norte Branch-Lite Unit FDR District 3, National Highway, Sto. Tomas, Davao del
Norte
240 Buug, Zamboanga Sibugay Branch-Lite Unit National Highway, Buug, Zamboanga Sibugay
241 Solana, Cagayan Branch-Lite Unit #054 Rizal St., Bgy. Centro Southeast, Solana, Cagayan
242 Bislig , Surigao Del Sur Branch-Lite Unit Door 2 Sia Bldg., RB Castillo St., Mangagoy, District II, Bislig,
Surigao del Sur
243 Lopez, Quezon Branch-Lite Unit 10 Rosario Corner Judge Olega St. Brgy. Gomez, Lopez,
Quezon
244 Kabacan, North Cotabato Branch-Lite Unit Rizal Avenue, Poblacion, Kabacan, Cotabato
245 Calabanga, Camarines Sur Branch-Lite Unit San Antonio, Poblacion, Calabanga, Camarines Sur
246 Bongabon, Nueva Ecija Branch-Lite Unit #5 Bgy. Mantile, Bongabon, Nueva Ecija
247 Science City Of Munoz, Nueva Ecija Branch-Lite Unit Poblacion East, City of Science of Munoz, Nueva Ecija
248 Carmen, Bohol Branch-Lite Unit Poblacion Sur, Carmen, Bohol
249 Pilar, Sorsogon Branch-Lite Unit Cor. Milleza St., Main Road and Prieto St., Poblacion, Dao,
Pilar, Sorsogon
250 Gerona, Tarlac Branch-Lite Unit Poblacion 1, Gerona, Tarlac
251 San Mateo, Isabela Branch-Lite Unit Barangay 1, Purok 3, National Highway, San Mateo, Isabela
252 Mambajao, Camiguin Branch-Lite Unit J.P. Rizal St., Poblacion, Mambajao, Camiguin
253 Infanta, Quezon Branch-Lite Unit Rizal Street, Poblacion 1, Infanta, Quezon
254 Lebak, Sultan Kudarat Branch-Lite Unit Door #7 Dimar's Building, Poblacion 1, Lebak, Sultan Kudarat
255 Kapatagan, Lanao Del Norte Branch-Lite Unit Prince Hypermart, Poblacion, Kapatagan, Lanao del Norte
59

256 Calamba, Misamis Occidental Branch-Lite Unit Matunog St., Southwestern Poblacion, Calamba, Misamis
Occidental
257 Liloy, Zamboanga Del Norte Branch-Lite Unit Baybay, Liloy, Zamboanga del Norte
258 San Miguel , Zamboanga Del Sur Branch-Lite Unit Purok Meliton, Poblacion, San Miguel, Zamboanga del Sur
259 Zarraga, Iloilo Branch-Lite Unit Gomez St., Barangay Poblacion, Ilaud, Zarraga, Iloilo
260 Carigara, Leyte Branch-Lite Unit Real St., Brgy. Baybay, Carigara, Leyte
261 Sablayan , Occidental Mindoro Branch-Lite Unit National Highway, Brgy. Buenavista, Sablayan, Occidental
Mindoro
262 Roxas , Oriental Mindoro Branch-Lite Unit SMH Bldg., Morente Ave., Bagumbayan, Roxas, Oriental
Mindoro
263 Lala , Lanao Del Norte Branch-Lite Unit Purok Apitong, Maranding, Lala, Lanao del Norte
264 Libmanan, Camarines Sur Branch-Lite Unit Nik Nok Farm Realty Corp. Palo St., Poblacion, Libmanan,
Camarines Sur
265 Talibon, Bohol Branch-Lite Unit CPG Avenue, Poblacion, Talibon, Bohol
266 Tubigon, Bohol Branch-Lite Unit Centro, Tubigon, Bohol
267 Moncada, Tarlac Branch-Lite Unit Poblacion 1, Moncada, Tarlac
268 Guiuan, Eastern Samar Branch-Lite Unit Concepcion St., Brgy. 7, Guiuan, Eastern Samar
269 Taytay, Rizal Branch-Lite Unit Unit 9 & 10 Leoncio Commercial, National Road, Brgy. San
Juan, Taytay, Rizal
270 Bolinao, Pangasinan Branch-Lite Unit Don Agustin Cacho St., Concordia Poblacion, Bolinao,
Pangasinan
271 Alubijid, Misamis Oriental Branch-Lite Unit National Highway, Purok 2, Poblacion, Alubijid, Misamis
Oriental
272 Batac, Ilocos Norte Branch-Lite Unit Washington St., Brgy. 2 Ablan, Batac City, Ilocos Norte
273 Montevista, Davao De Oro Branch-Lite Unit 1022 Valderama St., Purok 6A, Poblacion, Montevista,
Compostela Valley
274 Narra, Palawan Branch-Lite Unit National Highway, Panacan 2, Narra, Palawan
275 Banate, Iloilo Branch-Lite Unit Union St., Brgy. Bularan, Banate, Iloilo
276 Santa Rosa , Nueva Ecija Branch-Lite Unit 328 Bgy. Cojuangco. Sta. Rosa, Nueva Ecija
277 Cabiao, Nueva Ecija Branch-Lite Unit #15 San Juan South, Cabiao, Nueva Ecija
278 Argao, Cebu Branch-Lite Unit Albarracin St., Poblacion, Argao, Cebu
279 Tuburan, Cebu Branch-Lite Unit National Highway, Brgy. 3 Tuburan, Cebu
280 Orani, Bataan Branch-Lite Unit National Highway, Bgy. Mulawin, Orani, Bataan
281 Camiling, Tarlac Branch-Lite Unit Quezon Ave., Poblacion I, Camiling, Tarlac
282 Sogod, Southern Leyte Branch-Lite Unit L. Regis St., Zone 5, Sogod, Southern Leyte
283 Naval, Biliran Branch-Lite Unit BZL Building, Vicentillo St., Smo, Rosario, Naval, Biliran
284 Mangatarem, Pangasinan Branch-Lite Unit #30 Burgos St., Poblacion, Mangatarem, Pangasinan
285 Bayombong, Nueva Vizcaya Branch-Lite Unit Galamay Bldg., National Road, Poblacion, District IV,
Bayombong, Nueva Vizcaya
286 Santa Maria , Ilocos Sur Branch-Lite Unit Poblacion Sur, Sta. Maria, Ilocos Sur
287 Malungon, Sarangani Branch-Lite Unit Purok Waling Waling, National Highway, Malandag,
Malungon, Sarangani Province
288 Isulan , Sultan Kudarat Branch-Lite Unit National Highway, Kalawag 3, Isulan, Sultan Kudarat
289 Odiongan, Romblon Branch-Lite Unit J.P. Laurel St., Cocoville, Dapawan, Odiongan, Romblon
290 Culasi, Antique Branch-Lite Unit National Highway, Centro Poblacion, Culasi, Antique
291 Pontevedra , Capiz Branch-Lite Unit Isagani St., Poblacion, Ilawod, Pontevedra, Capiz
292 Mambusao, Capiz Branch-Lite Unit Villareal Highway, Poblacion, Mambusao, Capiz
293 Cataingan, Masbate Branch-Lite Unit Quezon Extension, Poblacion, Cataingan, Masbate
294 Moalboal, Cebu Branch-Lite Unit 2nd Floor Gaisano Grand Mall, Poblacion East, Moalboal,
Cebu
295 Indang, Cavite Branch-Lite Unit A. Mabini St., Poblacion 1, Indang, Cavite
296 Cabuyao, Laguna Branch-Lite Unit Unit 1112 Sala Commercial Bldg., National Highway, Brgy.
Sala, Cabuyao, Laguna
297 Nagcarlan, Laguna Branch-Lite Unit General Luna St., Bgy. 1, Nagcarlan, Laguna
298 Mamburao, Occidental Mindoro Branch-Lite Unit Rizal St. Corner Mercene St. Bgy. 3, Mamburao, Occidental
Mindoro
299 Victoria, Oriental Mindoro Branch-Lite Unit National Highway, Poblacion 1, Victoria, Oriental Mindoro
300 Malay, Aklan Branch-Lite Unit National Road, Caticlan, Malay, Aklan
301 San Juan , Ilocos Sur Branch-Lite Unit EJGS Commercial Building, Brgy. Bannuar San Juan, Ilocos
Sur
302 Umingan, Pangasinan Branch-Lite Unit #3 Zamora St., Poblacion West, Umingan, Pangasinan
303 Gattaran, Cagayan Branch-Lite Unit National Highway Centro Sur Gattaran, Cagayan
304 Tabuk, Kalinga Branch-Lite Unit Purok 1, Bulanao, Tabuk City, Kalinga
305 Infanta, Pangasinan Branch-Lite Unit 2nd Floor National Highway, Brgy. Poblacion Infanta
Pangasinan
306 Limay, Bataan Branch-Lite Unit 2nd Floor Charis Bldg., Dinna Ave. Brgy. Limay Bataan
307 Panglao Bohol Branch-Lite Unit P-7 Tawala, Panglao, Bohol
60

308 Bocaue, Bulacan Branch-Lite Unit National Highway, Brgy. Lolomboy, Bocaue, Bulacan
309 Coron, Palawan Branch-Lite Unit National Highway, Brgy. 5, Coron, Palawan
310 Nasipit, Agusan del Norte Branch-Lite Unit Arcadia Business Center, Brgy. Triangulo, Nasipit Agusan del
Norte
311 Cantilan, Surigao del Sur Branch-Lite Unit Purok 6, Lininti-an, Cantilan, Surigao del Sur
312 Linamon, Lanao del Norte Branch-Lite Unit Purok 5A, Poblacion, Linamon, Lanao del Norte
313 Sipocot, Camarines Sur Branch-Lite Unit San Juan Avenue, South Centro, Sipocot, Camarines Sur
314 Panganiban, Catanduanes Branch-Lite Unit Sta. Maria, Panganiban, Catanduanes
315 Isabel, Leyte Branch-Lite Unit Osmena Street, Brgy. Sto. Nino (Pob.), Isabel, Leyte
316 La Carlota, Negros Occidental Branch-Lite Unit Prince Hypermart, Yunque St., Brgy II Poblacion
(Commercial), La Carlota City, Negros Occidental
317 Cuartero, Capiz Branch-Lite Unit Brgy. Poblacion Takas, Cuartero, Capiz
*BanKo Binan is temporarily co-located with BanKo Cabuyao

61
CORPORATE INFORMATION
BPI Direct BanKo, Inc., A Savings Bank
BanKo Center
220 Ortigas Avenue, North Greenhills,
San Juan City 1503
(632) 7754-9980
www.banko.com.ph
Customer Inquiries
(632) 8819-6728
(632) 8654-7758
+63917 814-9305 (duo) 75067172
+63917 814-6306
+63917 820-2418
+63917 820-2257
+63919 076-4943
+63919 076-4942
Email
Banko_ContactCenter@bpi.com.ph
Facebook Page
www.facebook/magbankona
BanKo is regulated by the Bangko Sentral ng Pilipinas

https://www.bsp.gov.ph
62
2022 AUDITED FINANCIAL STATEMENTS

www.pwc.com/ph
BPI Direct
BanKo, Inc.,
A Savings Bank
(Formerly BPI Direct Savings
Bank, Inc.)
Financial Statements
As at and for the years ended December 31, 2022 and 2021
Independent Auditor’s Report
To the Board of Directors and Shareholder of

(Formerly BPI Direct Savings Bank, Inc.)
G/F BanKo Center Building
Ortigas Avenue, North Greenhills
San Juan, Metro Manila
Report on the Audits of the Financial Statements
Our Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of BPI Direct BanKo, Inc., A Savings Bank (the “Bank”) as at December 31, 2022 and 2021, and its
financial performance and its cash flows for the years then ended in accordance with Philippine Financial
Reporting Standards (PFRSs).
What we have audited
The financial statements of the Bank comprise:
• the statements of condition as at December 31, 2022 and 2021;

• the statements of income for the years ended December 31, 2022 and 2021;
• the statements of comprehensive income for the years ended December 31, 2022 and 2021;
• the statements of changes in capital funds for the years ended December 31, 2022 and 2021;
• the statements of cash flows for the years ended December 31, 2022 and 2021; and
• the notes to the financial statements, which include a summary of significant accounting policies.
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Bank in accordance with the Code of Ethics for Professional Accountants in the
Philippines (Code of Ethics), together with the ethical requirements that are relevant to our audit of the
financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and Code of Ethics.
Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines
T: +63 (2) 8845 2728, F: +63 (2) 8845 2806, www.pwc.com/ph
Isla Lipana & Co. is the 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.
Page 2
Other Information
Management is responsible for the other information. The other information comprises the Annual Report,
but does not include the financial statements and our auditor’s report thereon. The Annual Report is
expected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and we will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with PFRSs, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Bank’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Bank or to cease operations,
or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Page 3
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Bank to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Page 4
Report on the Supplementary Information Required by the Bangko Sentral ng Pilipinas

(BSP) and the Bureau of Internal Revenue (BIR)
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken
as a whole. The supplementary information required under BSP Circular No. 1074 in Note 24 and BIR
Revenue Regulations No. 15-2010 in Note 25 to the financial statements is presented for the purposes of
filing with the BSP and the BIR, respectively, and is not a required part of the basic financial statements.
Such information is the responsibility of management of the Bank. The information has been subjected to
the auditing procedures applied in our audits of the basic financial statements. In our opinion, the
information is fairly stated, in all material respects, in relation to the basic financial statements taken as a
whole.
Isla Lipana & Co.
Ruth F. Blasco
Partner
CPA Cert No. 112595
P.T.R. No. 0018519, issued on January 9, 2023, Makati City
SEC A.N. (individual) as general auditors 112595-SEC, Category A; valid to audit 2020 to 2024
financial statements
SEC A.N. (firm) as general auditors 0142-SEC, Category A; valid to audit 2020 to 2024
TIN 235-725-236
BIR A.N. 08-000745-133-2020, issued on June 5, 2020; effective until June 4, 2023
BOA/PRC Reg. No. 0142, effective until November 14, 2025
Makati City
March 22, 2023
Statements of Condition
December 31, 2022 and 2021
(All amounts in Philippine Peso)
Notes 2022 2021
RESOURCES
Cash and other cash items 2 250,147,358 288,788,443

Due from other banks 2 767,097,024 1,088,893,413
Interbank loans receivable 2,3 135,594,884 362,630,232
Due from Bangko Sentral ng Pilipinas 2,4 4,334,661,084 4,326,564,677
Investment security at fair value through other
comprehensive income 5 14,939 17,123
Loans and advances, net 6 15,679,134,887 10,966,782,236
Assets held for sale 77,880,288 89,666,684
Bank premises, furniture, fixtures and equipment, net 7 496,808,502 598,285,340
Deferred income tax assets, net 8 490,516,905 505,013,516
Other resources, net 9 216,515,286 250,325,170
Total resources 22,448,371,157 18,476,966,834
LIABILITIES AND CAPITAL FUNDS
Deposit liabilities 10 16,792,441,424 14,277,235,315

Accrued taxes, interest and other expenses 11 345,969,454 223,239,533
Other liabilities 12 1,129,339,083 773,669,248
Total liabilities 18,267,749,961 15,274,144,096
CAPITAL FUNDS 13
Share capital 1,405,572,100 1,405,572,100
Accumulated other comprehensive loss (29,772,580) (29,151,745)
Other reserves (269,815,403) (269,815,403)
Surplus 3,074,637,079 2,096,217,786
Total capital funds 4,180,621,196 3,202,822,738
22,448,371,157 18,476,966,834
(The notes on pages 1 to 58 are an integral part of these financial statements.)

Statements of Income
For the years ended December 31, 2022 and 2021
Notes 2022 2021

INTEREST INCOME
Loans and advances 6 3,974,308,405 3,304,862,303
Deposits with BSP and other banks 2,4 56,409,435 63,759,145
Interbank loans receivable 3 13,739,745 15,620,275
4,044,457,585 3,384,241,723
INTEREST EXPENSE ON DEPOSITS 10 86,929,058 122,864,229
NET INTEREST INCOME 3,957,528,527 3,261,377,494
PROVISION FOR IMPAIRMENT 6,9,20 702,356,232 570,502,619
NET INTEREST INCOME AFTER
PROVISION FOR IMPAIRMENT 3,255,172,295 2,690,874,875
OTHER INCOME
Service fee income 526,085,439 455,415,974
Profit on assets sold 7,484,831 4,283,824
Miscellaneous income 14 123,814,886 96,391,640
657,385,156 556,091,438
OTHER EXPENSES
Compensation and fringe benefits 17,18 984,514,746 1,035,000,497
Occupancy and equipment-related
expenses 983,805,225 1,104,097,458
Other operating expenses 15 635,624,168 509,389,668
2,603,944,139 2,648,487,623
INCOME BEFORE PROVISION FOR
INCOME TAX 1,308,613,312 598,478,690
PROVISION FOR INCOME TAX 16
Current 327,101,725 93,177,678
Deferred 8 3,092,294 156,419,133
330,194,019 249,596,811
NET INCOME FOR THE YEAR 978,419,293 348,881,879

Statements of Comprehensive Income

Note 2022 2021

NET INCOME FOR THE YEAR 978,419,293 348,881,879
OTHER COMPREHENSIVE INCOME (LOSS) 13
Item that will be subsequently reclassified to profit or loss
Change in fair value reserve on debt securities at fair value
through other comprehensive income, net of tax -
Items that will not be subsequently reclassified to profit or loss
Change in fair value reserve on equity securities at fair
value through other comprehensive income, net of tax (2,184) 7,209
Remeasurement (loss) gain on retirement benefit obligation,
net of tax (618,651) 11,692,400
Total other comprehensive (loss) income (620,835) 11,699,609
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 977,798,458 360,581,488
(The notes on pages 1 to 58 are an integral part of the financial statements.)

Statements of Changes in Capital Funds

Accumulated
other
comprehensive
Share capital income (loss) Other Surplus
(Note 13) (Note 13) reserves (Note 13) Total
BALANCE, JANUARY 1, 2021 905,572,100 (40,851,354) (269,815,403) 1,747,335,907 2,342,241,250
TRANSACTION WITH OWNER
Additional capital contributions 500,000,000 - - - 500,000,000
COMPREHENSIVE INCOME
Net income for the year - - - 348,881,879 348,881,879
Other comprehensive income - 11,699,609 - - 11,699,609
Total comprehensive income for the
year - 11,699,609 - 348,881,879 360,581,488
BALANCE, DECEMBER 31, 2021 1,405,572,100 (29,151,745) (269,815,403) 2,096,217,786 3,202,822,738
COMPREHENSIVE INCOME
Net income for the year - - - 978,419,293 978,419,293
Other comprehensive loss (620,835) - - (620,835)
Total comprehensive income (loss)
for the year - (620,835) - 978,419,293 977,798,458
BALANCE, DECEMBER 31, 2022 1,405,572,100 (29,772,580) (269,815,403) 3,074,637,079 4,180,621,196
(The notes on pages 1 to 58 are an integral part of the financial statements.)

Statements of Cash Flows

Notes 2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES
Income before provision for income tax 1,308,613,312 598,478,690
Adjustments for:
Interest income (4,044,457,585) (3,384,241,723)
Interest expense on deposit and lease liabilities 10,19 104,526,498 159,490,390
Depreciation and amortization 7 326,863,466 364,079,635
Profit on assets sold (7,484,831) (4,596,429)
Retirement benefit expense 17 22,443,240 56,688,229
Provision for impairment 6,9,20 702,356,232 570,502,619
Interest received 3,892,925,729 3,366,848,363
Interest paid (85,808,182) (180,300,709)
Increase in:
Loans and advances (5,258,769,789) (796,273,684)
Assets held for sale 19,271,227 1,763,228
Other resources 39,792,109 126,586,522
Increase (Decrease) in:
Deposit liabilities 2,515,206,109 (3,570,851,947)
Accrued taxes, interest and other expenses 257,045,498 26,651,222
Other liabilities 320,704,643 (624,958,569)
Net cash from (used in) operations 113,227,676 (3,290,134,163)
Retirement plan contributions 17 (23,947,095) (44,700,923)
Income tax paid (480,017,613) (75,837,842)
Net cash used in operating activities (390,737,032) (3,410,672,929)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in:
Bank premises, furniture, fixture, and equipment 7 (48,256,312) (140,063,608)
Net cash used in investing activities (48,256,312) (140,063,608)
CASH FLOWS FROM FINANCING ACTIVITIES
Receipt of additional capital contribution from
Parent Bank 13 - 500,000,000
Payment of principal portion of lease liabilities 19 (140,383,071) (121,340,642)
Net cash (used in) from financing activities (140,383,071) 378,659,358
NET DECREASE IN CASH AND CASH EQUIVALENTS (579,376,415) (3,172,077,179)
CASH AND CASH EQUIVALENTS
January 1 6,066,876,765 9,238,953,944
December 31 2 5,487,500,350 6,066,876,765
December 31 2 5,125,184,005 9,952,4 07,411

Notes to the Financial Statements

(In the notes, all amounts are shown in Philippine Peso unless otherwise stated)
Note 1 - General information
1.1 Business information
BPI Direct BanKo, Inc., A Savings Bank (the “Bank”) was incorporated in the Philippines and registered with
the Securities and Exchange Commission (SEC) on March 17, 1956 primarily to engage in and carry on the
general business of savings and mortgage banking.
The Bank is a wholly-owned subsidiary of Bank of the Philippine Islands (“BPI” or the “Parent Bank”),
a domestic commercial bank with an expanded banking license, which is also its ultimate parent.
The Bank’s registered office address, which is also its principal place of business, is BanKo Center Building,
Ortigas Avenue, North Greenhills, San Juan, Metro Manila.
The Bank has 2,376 regular employees as at December 31, 2022 (2021 - 2,727).
Coronavirus (COVID-19) pandemic
As the Philippine economy fully reopens and society shifts into its new normal, the Bank’s business model and
operating environment have now fully integrated various business continuity plans enacted during the
pandemic. These include, but are not limited to, changes in the workforce arrangements and set-up of
corporate offices, allowing for hybrid schedules, split operations, and alternative work sites, all duly supported
by the use of mobility tools and virtual communications. The Bank’s accelerated digital transformation has also
ensured continuous client service through its various distribution platforms while maintaining back-office
efficiency. The Bank’s robust risk management continues to guard against increasing cybersecurity risks
heightened by remote and virtual work arrangements.
The Bank upholds a stringent credit process while also enhancing aspects of its underwriting, monitoring, and
collections, in consideration of the changes in regulatory, economic, and competitive environment, and
customer behaviors post-crisis. Monitoring vulnerable industries and sectors that have been affected by
COVID-19 and having regular conversations with clients also continues.
Thus, the Bank’s asset quality has remained resilient and more favorable than industry averages, displaying an
improving trend across key metrics. The Bank’s robust capital and liquidity levels also serve as sufficient
buffers for any adverse scenario post-pandemic.
1.2 Approval of the Bank’s financial statements
These financial statements have been approved and authorized for issuance by the Board of Directors (BOD)
on
March 22, 2023.
Note 2 - Cash and cash equivalents
The account as at December 31 consists of:
Notes 2022 2021

Cash and other cash items 250,147,358 288,788,443
Due from other banks 767,097,024 1,088,893,413
Interbank loans receivable 3 135,594,884 362,630,232
Due from BSP 4 4,334,661,084 4,326,564,677
5,487,500,350 6,066,876,765
For the year ended December 31, 2022, interest income earned on Due from other banks amounts to P1,086,593
(2021 - P582,352).
Cash and cash equivalents are classified as current as at December 31, 2022 and 2021.
Note 3 - Interbank loans receivable
The account at December 31, 2022 consists of transactions with the BSP amounting to P135,594,884.
Interbank loans receivable maturing within 90 days from the date of acquisition are classified as cash
equivalents in the statement of cash flows (Note 2).
Government bonds are pledged by the BSP as collaterals 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.
Average interest rate on interbank loans receivable in 2022 is 6% (2021 - 2%). Total interest earned on interbank
loans receivable amounts to P13,739,745 (2021 - P15,620,275) for the year ended December 31, 2022.
Interbank loans receivable is classified as current.
Note 4 - Due from BSP
2022 2021
Special deposit accounts 1,485,661,084 3,850,000,000
Clearing accounts 2,849,000,000 476,564,677
4,334,661,084 4,326,564,677
Special deposit accounts classified as cash equivalents are fixed-term demand Philippine Peso deposits
maintained mainly for liquidity purposes and in compliance with the simplified minimum reserve requirements
of the BSP
(Note 10).
Clearing accounts represent temporary deposit accounts wherein funds flow from cleared checks are credited
against or debited for.
As at December 31, 2022, Due from BSP includes special deposit placements of P2.85 billion (2021 - P3.85
billion) with maturities of not more than 28 days. Average interest rate on due from BSP at December 31, 2022 is
6.16% (2021 - 1.73%). Total interest earned on due from BSP amounts to P55,303,611 for the year ended
December 31, 2022 (2021 - P63,175,760).
Due from BSP is classified as current as at December 31, 2022 and 2021.
(2)
Note 5 - Investment security at fair value through other comprehensive income (FVOCI)
The account consists of listed equity security which amounts to P14,939 as at December 31, 2022
(2021 - P17,123).
Movements in investment security at FVOCI for the years ended December 31 are as follows:
2022 2021
At January 1 17,123 9,914
Fair value adjustment (2,184) 7,209
At December 31 14,939 17,123
Investment security at FVOCI as at December 31, 2022 and 2021 is classified as current.
Note 6 - Loans and advances, net
2022 2021
Retail customers
Real estate mortgagers 1,275,017,499 1,484,945,818
Auto loans 368,324 595,216
Others 15,693,634,928 10,975,891,900
Corporate entities
Large corporate customers 58,246,232 -
Small and medium enterprises 7,252,624 -
17,034,519,607 12,461,432,934
Accrued interest receivable 543,880,208 393,451,158
Unearned discount (54,475) (54,475)
17,578,345,340 12,854,829,617
Allowance for impairment (1,899,210,453) (1,888,047,381)
15,679,134,887 10,966,782,236
Average effective interest rate on loans and advances is 14.66% at December 31, 2022 (2021 - 32.48%). Interest
income from loans and advances amounts to P3,974,308,405 for the year ended December 31, 2022
(2021 - P3,304,862,303).
Maturity profile of loans and advances, net of accrued interest receivable and unearned discount as at
December 31 follows:
2022 2021
Current (within 12 months) 8,500,364,660 4,859,043,593
Non-current (over 12 months) 9,077,980,680 7,995,786,023
17,578,345,340 12,854,829,617
(3)
Movements in allowance for impairment for the years ended December 31 are as follows:
2022 2021
Balance, January 1 1,888,047,381 2,041,531,797
Provision for loan impairment 696,846,189 573,079,294
Write-offs (684,478,998) (725,332,651)
Transfers/other movements (1,204,119) (1,231,059)
Balance, December 31 1,899,210,453 1,888,047,381
In 2022, the Bank purchased the personal loan portfolio of its Parent Bank amounting to P3,623,586,925
(2021 - P3,771,385,733).
Note 7 - Bank premises, furniture, fixtures and equipment, net
The movements in the account for the years ended December 31 are summarized as follows:
2022
Leasehold
Furniture, Leasehold rights and
fixtures, and rights and Computer improvements
equipment improvement equipment in progress Buildings Total
Cost
January 1, 2022 483,501,301 711,705,546 56,413,600 - 553,637,270 1,805,257,717
Additions 13,050,661 21,207,966 2,003,152 11,745,784 179,111,487 227,119,050
Pre-termination (212,389) - - - (4,085,142) (4,297,531)
December 31, 2022 496,339,573 732,913,512 58,416,752 11,745,784 728,663,615 2,028,079,236
Accumulated depreciation
and amortization
January 1, 2022 378,524,617 444,285,657 45,807,422 - 338,354,681 1,206,972,377
Depreciation and
amortization 68,440,042 126,697,550 6,085,188 123,740,928 324,963,708
Pre-termination (212,289) - - - (453,062) (665,351)
December 31, 2022 446,752,370 570,983,207 51,892,610 - 461,642,547 1,531,270,734
Net book value,
December 31, 2022 49,587,203 161,930,305 6,524,142 11,745,784 267,021,068 496,808,502
2021
Leasehold
Furniture, Leasehold rights and
fixtures, and rights and Computer improvements
equipment improvement equipment in progress Buildings Total
Cost
January 1, 2021 387,725,983 691,097,466 41,998,321 2,034,811 521,150,271 1,644,006,852
Additions 95,775,317 20,608,080 14,415,279 (2,034,811) 32,486,999 161,250,865
Pre-termination - - - - - -
December 31, 2021 483,501,301 711,705,546 56,413,600 - 553,637,270 1,805,257,717
Accumulated depreciation
and amortization
January 1, 2021 256,322,145 315,455,227 37,531,680 - 218,363,759 827,672,811
Depreciation and
amortization 122,202,472 128,830,430 8,275,742 - 119,990,922 379,299,566
Pre-termination - - - - - -
December 31, 2021 378,524,617 444,285,657 45,807,422 - 338,354,681 1,206,972,377
Net book value,
December 31, 2021 104,976,684 267,419,889 10,606,178 - 215,282,589 598,285,340
(4)
Effective January 1, 2019, the Bank has recognized right-of-use assets from the long-term leases of spaces for its
main office and branches (Note 19).
Depreciation and amortization is included in Occupancy and equipment-related expenses in the statement of
income.
Bank premises, furniture, fixtures and equipment are all considered non-current assets.
Note 8 - Deferred income tax assets, net
Deferred income tax assets and liabilities at December 31 consist of:
2022 2021
Deferred income tax assets
Allowance for impairment 479,104,440 475,107,667
Expense accruals and provisions 12,671,005 15,730,730
Amortization of past service cost 20,472,887 20,420,061
512,248,332 511,258,458
Deferred income tax liabilities
Retirement benefit asset 21,731,427 6,244,942
Deferred income tax assets, net 490,516,905 505,013,516
Movements in the net deferred income tax assets for the years ended December 31 are summarized below:
2022 2021
At January 1 505,013,516 716,192,409
Amounts charged to statement of income (3,092,295) (156,419,133)
Amounts charged to other comprehensive income (11,404,316) (5,497,583)
Recognition of MCIT - (49,262,177)
At December 31 490,516,905 505,013,516
The deferred tax credit in the statement of income for the years ended December 31 comprises the following
temporary differences:
2022 2021
Allowance for impairment (3,996,773) 157,149,474
Net operating loss carry-over (NOLCO) - 3,829,196
Others 7,089,068 (4,559,537)
3,092,295 156,419,133
(5)
Note 9 - Other resources, net
The account at December 31 consists of:
Notes 2022 2021

Accounts receivable 22,958,088 68,072,562
Rental deposits 33,383,616 31,932,832
Pension asset 17 27,321,996 24,979,767
Prepaid expenses 17 34,838,920 23,997,921
Injunction bond 44,111,052 8,604,565
Membership shares 2,500,000 2,500,000
Accrued interest receivable 1,528,191 471,898
Computer software 2,909,569 1,944,656
Miscellaneous 62,586,283 98,951,910
232,137,715 261,456,111
Allowance for impairment (15,622,429) (11,130,941)
216,515,286 250,325,170
Other resources are expected to be realized as follows:
2022 2021
Current 202,193,901 232,031,688
Non-current 29,943,814 29,424,423
232,137,715 261,456,111
Accounts receivables mainly include employee cash advances, commissions and other receivables.
Miscellaneous assets include returned checks and float items which are expected to clear in one to two days.
Allowance for impairment pertains to accounts receivables that are doubtful of collection.
The movements in the allowance for impairment as at December 31 are as follows:
2022 2021
At January 1 11,130,941 15,697,166
Provision for (reversal of) impairment 4,491,488 (4,566,225)
At December 31 15,622,429 11,130,941
Reversal of impairment in 2021 is due to collections of previously impaired accounts receivables.
Note 10 - Deposit liabilities
2022 2021
Demand 512,886,649 504,554,170
Savings 12,464,620,234 12,772,789,716
Time 3,814,934,541 999,891,429
16,792,441,424 14,277,235,315
(6)
Deposit liabilities are expected to be settled as follows:
2022 2021
Current 12,977,506,883 13,277,344,886
Non-current 3,814,934,541 999,890,429
16,792,441,424 14,277,235,315
Related interest expense on deposit liabilities for the years ended December 31 is broken down as follows:
2022 2021
Demand 319,820 1,545,476
Savings 61,260,369 84,692,592
Time 25,348,869 36,626,161
86,929,058 122,864,229
Under current and existing BSP regulations, the Bank should comply with a minimum reserve requirement.
Further, BSP requires all reserves be kept at the central bank.
In 2019, the reserve ratio decreased to 4% from 8% following the BSP’s decision to reduce the requirements. In
2020, the BSP approved the further reduction in reserves which brought the requirement down to 3% for thrift
banks effective July 31, 2020 by virtue of BSP Circular No. 1092. The same reserve requirement is applicable
for 2022 and 2021.
The required reserve as reported to BSP as at December 31, 2022 amounts to P486,830,544 (2021 - P421,937,252),
which is included in Due from BSP (Note 4). The Bank is in full compliance with the reserve requirement as at
December 31, 2022 and 2021.
Note 11 - Accrued taxes, interest and other expenses
2022 2021
Accrued expenses 139,569,620 131,510,962
Accrued income tax 171,109,462 17,340,120
Accrued taxes and licenses 34,938,418 16,321,620
Accrued interest 351,954 58,066,831
345,969,454 223,239,533
Accrued expenses mainly pertain to accruals for utilities, penalties and outsourced services by the Bank.
The above accrued expenses are all considered current.
Note 12 - Other liabilities
The account at December 31 consists of:
Note 2022 2021

Accounts payable 805,587,216 485,403,347
Lease liabilities 19 284,416,142 238,062,374
Withholding taxes payable 5,517,507 4,936,093
Miscellaneous 33,818,218 45,267,434
Total 1,129,339,083 773,669,248
(7)
The lease liabilities are measured at the present value of the remaining lease payments using an incremental
borrowing rate applied by the Bank (Note 19).
Miscellaneous liabilities mainly include mandatory contributions payable to SSS, Medicare and Philhealth, and
float items which are expected to clear in one to two days.
Other liabilities are considered current, except for the non-current portion of the lease liabilities disclosed in
Note 19.
Note 13 - Capital funds
Details of share capital at December 31, 2022 and 2021 are as follows:
Authorized Issued and outstanding

Number of Number of
shares Amount shares Amount
Common shares, at P100 par value per share
Class A 37,400,000 3,740,000,000 13,455,721 1,345,572,100
Class B 2,000,000 200,000,000 600,000 60,000,000
39,400,000 3,940,000,000 14,055,721 1,405,572,100
Preferred shares, at P100 par value per share,
12% cumulative, participating and redeemable
Class A 200,000 20,000,000 - -
Class B 400,000 40,000,000 - -
600,000 60,000,000 - -
40,000,000 4,000,000,000 14,055,721 1,405,572,100
The Class A (common and preferred) shares are available only to Philippine nationals while the Class B
(common and preferred) shares may be issued to non-Filipinos. The Bank, at its option, may redeem the
preferred shares after ten years from issue date.
On December 29, 2020, the SEC approved the Bank's increase in authorized capital stock from P470 million in
2019 to P4 billion in 2020. On September 30, 2020, the Bank received P500 million from the Parent Bank as a
capital infusion to strengthen the Bank's capital position against the economic effects of the COVID-19
pandemic.
In March 2021, the Bank received additional capital infusion from the Parent Bank amounting to P500 million
to assist on its capital requirements. The said capital infusion has been duly approved by the BSP.
Surplus
As at December 31, 2022, the Bank has surplus in excess of its paid-up capital amounting to P1,669,067,527
(2021 - P690,645,686.) The Bank intends to use its excess surplus for future branch expansions which are
expected to materialize within the next twelve months after year end.
(8)
Other comprehensive income
The movements in the account for the years ended December 31 are summarized below:
2022 2021
Fair value reserve on investment securities at FVOCI
At January 1 711 (6,498)
Unrealized fair value (loss) gain before tax (2,184) 7,209
Deferred income tax effect - -
At December 31 (1,473) 711
Remeasurement (loss) gain on defined benefit plan, net
At January 1 (29,152,456) (40,844,856)
Remeasurement (loss) gain before tax (824,867) 14,809,038
Deferred income tax effect 206,216 (3,116,638)
At December 31 (29,771,107) (29,152,456)
(29,772,580) (29,151,745)
Note 14 - Miscellaneous income
The account for the years ended December 31 consists of:
2022 2021
Recoveries 132,798,796 103,438,791
Other income 312,006 193,564
Gross receipts tax (9,295,916) (7,240,715)
123,814,886 96,391,640
The Bank was able to recover collections on personal loans purchased from the Parent Bank and the amounts
received were recognized as income for the years ended December 31, 2022 and 2021.
Note 15 - Other operating expenses
The account for the years ended December 31 consists of:
Note 2022 2021

Shared operating costs 18 231,044,941 192,189,972
Stationery and supplies used 101,346,043 47,687,567
Travel and communications 98,081,887 81,176,524
Insurance 55,284,809 63,292,108
Taxes and licenses 46,866,065 24,703,446
Fines, penalties, and other charges 26,336,485 11,192,466
Advertising and publicity 11,079,739 10,098,279
Litigation expenses 3,898,231 7,429,269
Membership fees 5,993,620 5,957,470
Regulatory examination fees 4,706,098 5,210,688
Others 50,986,250 60,451,879
635,624,168 509,389,668
Other operating expenses pertain mainly to professional fees, representation and entertainment, freight expenses
and other outsourced service costs.
(9)
Note 16 - Income taxes
A reconciliation between the provision for income tax at the statutory income tax rate to the actual provision for
income tax for the years ended December 31 is presented below:
2022 2021
Amount % Amount %
Statutory income tax 327,153,328 25.00 149,619,672 25.00
Effect of items not subject to statutory tax rate
Income subject to lower tax rates (3,536,578) (0.27) (83,347,378) (13.93)
Effect of change in tax rates - - 121,509,857 20.30
Others 6,577,269 0.50 61,814,660 10.34
Provisions for income tax 330,194,019 25.23 249,596,811 41.71
Others mainly consist of various permanent and temporary non-deductible differences.
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act which provides for lower corporate
income tax rates and rationalized fiscal incentives had been signed into law by the President of the Philippines
on March 26, 2021 and with a retroactive effect of July 1, 2020. As a result of the CREATE Act, the Bank
recognized an adjustment in 2021 pertaining to the December 31, 2020 balances which resulted in a net
increase of
P121.5 million.
Note 17 - Retirement plan
BPI and its subsidiaries, which include the Bank, have a trustee, non-contributory retirement benefit plans
covering all qualified officers and employees.
Effective January 1, 2016, the Bank implemented a defined contribution plan which is accounted for as a
defined benefit plan with minimum guarantee. The description of the plans follows:
Under the 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 up 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
employee’s 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.
For the defined contribution plan, the defined benefit minimum guarantee is equivalent to a certain
percentage of the monthly salary payable to an employee at normal retirement age with the required credited
years of service based on the provisions of Republic Act (RA) No. 7641. All non-unionized employees hired on
or after
October 1, 2016 are automatically under the new defined contribution (DC) plan. Employees hired prior to
October 1, 2016 shall have the option to elect to become members of the new DC plan.
The net defined benefit cost and contributions to be paid by the Bank are determined by an independent
actuary.
Plan assets are held in trusts, governed by local regulations and practice in the Philippines.
(10)
Following are the amounts recognized that relate to the Bank based on the recent actuarial valuation reports:
Defined benefit retirement plan
(a) Pension asset as at December 31 recognized under Other resources in the statement of condition follows:
2022 2021
Fair value of plan assets 48,311,534 52,075,799
Present value of defined benefit obligation (11,603,395) (13,095,439)
Surplus 36,708,139 38,980,360
Effect of the asset ceiling (9,386,143) (14,000,593)
Pension asset recognized in the statement of condition 27,321,996 24,979,767
The movements in plan assets for the years ended December 31 are summarized as follows:
2022 2021
At January 1 52,075,799 49,839,130
Asset return at net interest cost 2,590,444 1,993,664
Contributions 1,247,650 440,526
Benefits paid from plan assets (2,926,550) -
Remeasurement loss (4,675,809) (197,521)
At December 31 48,311,534 52,075,799
The carrying value of the plan assets as at December 31, 2022 is equivalent to its fair value of P48 million
(2021 - P52 million).
The plan assets at December 31 are comprised of the following:
2022 2021
Amount % Amount %
Debt securities 25,121,998 52% 32,432,808 62%
Equity securities 18,358,383 38% 14,018,805 27%
Others 4,831,153 10% 5,624,186 11%
48,311,534 100% 52,075,799 100%
The plan assets of the unified retirement plan include investment in BPI’s common share with aggregate
fair value of P159 million at December 31, 2022 (2021 - P485 million). An officer of the Parent Bank
exercises the voting rights over the plan’s investment in BPI’s common shares.
The movements in the present value of defined benefit obligation for the years ended December 31 are
summarized as follows:
2022 2021
At January 1 13,095,439 14,232,590
Current service cost 1,630,094 1,218,984
Past service cost 163,696 -
Interest cost 645,605 563,611
Benefits paid from plan assets (2,926,550) -
Remeasurement gain (loss)
Changes in financial assumptions (1,129,797) (1,153,055)
Changes in demographic assumptions (186,487)
Experience adjustments 124,908 (1,580,204)
At December 31 11,603,395 13,095,439
(11)
The Bank has no further transactions with the plan other than the contributions for the years ended
The retirement benefit expense recognized in the statement of income for the year ended December 31, 2022
amounts to P538,795 (2021 - retirement benefit expense of P263,009).
The principal assumptions used for the actuarial valuations of the defined benefit plan of the Bank at December
31 are as follows:
2022 2021
Discount rate 7.15% 4.93%
Salary increase rate 6.00% 5.00%
Discount rate
The discount rate is determined by reference to PHP Bloomberg Valuation (BVAL) rates and adjusted to
reflect the term similar to the estimated term of the benefit obligation as determined by the actuary as at the
end of the reporting period as there is no deep market in high quality corporate bonds in the Philippines.
Future salary rate increases
This is the expected long-term average rate of salary increase taking into account inflation, seniority,
promotion and other market factors. Salary increases comprise of the general inflationary increases plus a
further increase for individual productivity, merit and promotion. The future salary increase rates are set by
reference over the period over which benefits are expected to be paid.
Demographic assumptions
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 Bank 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 risks. 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 plan’s fixed income holdings. Hence, the present value of defined benefit obligation is directly
affected by the discount rate to be applied by the Bank. However, the Bank believes that due to the long-term
nature of the pension liability and the strength of the Bank itself, the mix of debt and equity securities holdings
of the plan is an appropriate element of the Bank’s long term strategy to manage the plan efficiently.
The Bank 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
Bank’s 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, 2022
is 27 years (2021 - 24.1 years). The Bank contributes to the plan depending on the suggested funding contribution
as calculated by an independent actuary. The expected contributions for the year ending December 31, 2023 for the
Bank amount to P3,939,807.
The weighted average duration of the defined benefit obligation as at December 31, 2022 is 7.72 years
(2021 - 8.55 years).
(12)
The projected maturity analysis of retirement benefit payments as at December 31 is as follows:
2022 2021
Between 1 to 5 years 1,736,508 3,172,237
Between 5 to 10 years 11,020,253 14,026,752
Between 10 to 15 years 18,841,942 -
Between 15 to 20 years 40,242,881 -
Over 20 years 363,372,960 17,198,989
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions follows:
Impact on defined benefit obligation

Change in Increase in Decrease in
December 31, 2022 assumption assumption assumption
Discount rate 1.0% Decrease by 8.2% Increase by 7.1%
Salary growth rate 1.0% Increase by 8.2% Decrease by 7.3%
Impact on defined benefit obligation
Change in Increase in Decrease in
December 31, 2021 assumption assumption assumption
Discount rate 0.5% Decrease by 8.0% Increase by 9.1%
Salary growth rate 1.0% Increase by 9.0% Decrease by 8.1%
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 benefit obligation recognized
within the statement of condition.
Defined contribution retirement plan subject to the requirements of RA No. 7641
2022 2021
Fair value of plan assets 158,575,093 141,918,792
Present value of defined benefit obligation under RA No. 7641 (59,503,334) (58,008,911)
Deficit 99,071,759 83,909,881
Effect of asset ceiling (99,071,759) 83,909,881
Pension liability recognized in the statement of condition - -
The movements in the present value of the defined benefit obligation for the years ended December 31 follow:
2022 2021
At January 1 58,008,911 102,853,859
Current service cost 18,282,644 41,130,456
Past service cost 4,022,005 -
Interest cost 2,854,038 4,062,727
Benefits paid from plan assets (7,087,565) (2,910,906)
Remeasurement gain (loss)
Changes in financial assumptions (18,480,523) (12,856,774)
Changes in demographic assumptions - (21,951,758)
Experience adjustments 1,903,824 (52,318,693)
At December 31 59,503,334 58,008,911
(13)
The movements in the fair value of plan assets for the years ended December 31 follow:
2022 2021
At January 1 141,918,792 89,024,300
Benefits paid (7,087,565) (2,910,906)
Asset return at net interest cost 7,382,608 4,297,919
Contributions 22,699,445 44,260,397
Remeasurement gain - return on plan assets (6,338,187) 7,247,082
At December 31 158,575,093 141,918,792
Total retirement benefit expense for the year ended December 31, 2022 under the defined contribution plan
amounts to P21,904,445 (2021 - P56,425,220).
The principal assumptions used for the actuarial valuation of the defined contribution plan of the Bank at
December 31 are as follows:
2022 2021
Discount rate 7.38% 4.92%
Salary increase rate 6.00% 5.00%
The major categories of plan assets as a percentage of the fair value of total plan assets at December 31 follow:
2022 2021
Amount % Amount %
Debt securities 87,216,301 55% 79,403,564 56%
Equity securities 63,430,037 40% 60,102,608 42%
Others 7,928,755 5% 2,412,620 2%
158,575,093 100% 141,918,792 100%
The asset allocation of the plan is set and reviewed from time to time by the plan trustees taking into account
the membership profile, the liquidity requirements of the plan and risk appetite of the plan sponsor.
Contributions are determined on the plan provisions. The expected contributions of the Bank for the year
ending December 31, 2023 amount to P40,893,295.
(14)
Note 18 - Related party transactions
In the ordinary course of business, the Bank has transactions with its directors, officers, stockholders and related
interests (DOSRI) and with its Parent Bank such as cash deposit arrangements, purchase of investment securities
and outsourcing of certain services, primarily loans operations, branch operations and human resource-related
functions.
Significant related party transactions are summarized below:
As at and for the year ended December 31, 2022
Transactions for Outstanding Terms and conditions

the year balance
Deposits to:
Parent Bank (267,624,606) 740,107,032 These are demand, savings and time
Fellow subsidiary deposits bearing the following
average interest rates:
Savings - 0.66% to 1.11%
Time - 1.68% to 2.83%
Deposits from:
Fellow subsidiary 2,500,000,000 2,500,000,000 These are time deposits bearing
average interest rates of 5.25% to
5.75%.
Accounts receivable:
Parent Bank - - - Unsecured, unguaranteed and
non-interest bearing advances
Accounts payable:
Parent Bank 310,713,395 769,227,467 - Shared operating costs, occupancy
Fellow subsidiary - - and equipment related costs and
office rental
- Unsecured, unguaranteed and non-
interest bearing
- Payable in cash at gross amount
and on demand but not later than
12 months from reporting period
Refer to Notes (a), (b) and (c)
below
(15)
As at and for the year ended December 31, 2021
Transactions for Outstanding

the year balance Terms and conditions
Deposits to:
Parent Bank 252,031,831 956,238,552 These are demand, savings and time
Fellow subsidiary 14,021,013 51,493,086 deposits bearing the following
average interest rates:
Savings - 0.66% to 1.11%
Time - 1.68% to 2.83%
266,052,844 1,007,731,638
Deposits from: These are time deposits bearing
Fellow subsidiary (1,700,000) - average interest rates of 1.13% to
1.14%.
(1,700,000) -
Accounts receivable:
Parent Bank 2,621,091 2,621,091 - Unsecured, unguaranteed and non-
interest bearing advances
2,621,091 2,621,091
Accounts payable:
Parent Bank 528,954,661 458,514,072 - Shared operating costs, occupancy
Fellow subsidiary 31,546,437 and equipment related costs and
office rental
- Unsecured, unguaranteed and non-
interest bearing
- Payable in cash at gross amount and
on demand but not later than 12
months from reporting period
Refer to Notes (a), (b) and (c) below
560,501,098 458,514,072
(16)
The aggregate amounts included in the determination of income before income tax for the years ended
December 31 that resulted from transactions with each class of related parties are as follows:
Notes 2022 2021

Interest income 2
Parent Bank 1,082,881 393,402
Fellow subsidiaries - 16,187
Interest income 1,082,881 409,589
Interest expense
Fellow subsidiaries - -
Shared operating costs [Refer to Note (a) below]
Parent Bank 231,044,941 191, 962, 466
15 231,044,941 192,189,972
Occupancy and equipment related costs [Refer to
Note (b) below]
Parent Bank 147,186,032 298,541,468
Office rental [Refer to Note (c) below]
Parent Bank 7,812,673 9,306,833
7,812,673 9,896,174
Other income
Fellow subsidiaries 2,469,250 3,096,712
Other expense
Parent Bank 17,687,452 29,143,894
Fellow subsidiaries 32,825,820 30,729,589
50,513,272 59,873,483
Retirement benefits 634,820 642,173
Salaries, allowances and other short-term benefits
Key management personnel 10,259,443 8,267,126
Directors’ remuneration 5,550,000 5,850,000
(a) Shared operating costs
These pertain to the Parent Bank’s outsourcing of services relating to anti-money laundering services, accounting
and securities administration services, loan operations, treasury operations, human resource-related functions
and information systems. Shared operating costs are billed based on rate and terms agreed by the parties. The
agreement remains in force unless terminated by the parties.
(b) Occupancy and equipment related costs
These pertain to the Parent Bank’s services relating to shared technology costs. It is billed based on rate and
terms agreed by the parties. The agreement remains in force unless terminated by the parties.
(c) Office rental
In 2017, the Bank transferred its office premise at BPI Greentop Condominium building, a property of the Parent
Bank, for a lease period of 5 years from December 1, 2014 to November 30, 2019. The rent shall increase by 5%
yearly starting on the second year and by 7% on the fourth year thereafter. The security deposit in relation to the
lease is presented as part of Other resources, net in the statement of condition. The lease was renewed for another
5 years with the same terms and conditions.
The Bank has no DOSRI loans at December 31, 2022 and 2021.
(17)
The Bank is in full compliance with the General Banking Act as at December 31, 2022 and 2021.
Personal loans were purchased from the Parent to support unsecured lending system and the core business of
the Bank.
Note 19 - Other commitments and contingent liabilities
As a result of the merger that took place in 2016, the existing lease agreements by BanKo was assumed by the
Bank effective December 29, 2016. The lease term of the Bank’s main office space commenced on December 1,
2014 and ended on November 30, 2019 but was renewed thereafter. Likewise, the branch office spaces have
various lease agreements that are renewable under certain terms and conditions. The rent is subject to 5% to
10% escalation rate. This agreement requires the Bank to pay security deposit which is presented at Other
resources, net in the statement of condition.
Lease terms are negotiated either on a collective or individual basis and contain a wide range of different terms
and conditions. The lease agreements do not impose any covenants other than the security interests in the leased
assets that are held by the lessor. Leased assets cannot be used as security for borrowing purposes.
The balances arising from these leases are presented below:
a) Right-of-use assets and lease liabilities (PFRS 16)
The Bank has recognized right-of-use assets and lease liabilities from its long-term leases.
Details of right-of-use assets and lease liabilities at December 31 are as follows:
Notes 2022 2021

Right-of-use assets
(included in Bank premises, furniture and equipment, net 7
under Building) 267,021,068 215,282,589
Lease liabilities (included in Other liabilities) 12
Current 32,105,608 19,918,646
Non-current 252,310,534 218,143,728
284,416,142 238,062,374
Additions to the right-of-use assets in 2022 aggregated P179 million (2021 - P32 million) (Note 7).
Movements in lease liabilities for the years ended December 31 are as follows:
2022 2021
Balance, January 1 238,062,374 330,620,134
Additions during the year
Lease liabilities on contracts entered 190,499,762 28,396,648
Interest accretion on lease liabilities 17,597,440 20,598,803
Pre-terminated lease (3,880,928) -
Payments during the year
Principal portion of lease liabilities (140,383,071) (121,340,642)
Interest on lease liabilities (17,479,435) (20,212,569)
Balance, December 31 284,416,142 238,062,374
Total cash outflow for leases in 2022 amounted to P157.9 million (2021 - P141.6 million).
(18)
Amounts recognized under Occupancy and equipment-related expenses in the statement of income for the years
ended December 31 relating to leases:
2022 2021
Depreciation expense
Building (Note 7) 123,740,928 119,990,922
Interest expense on lease liabilities 17,597,440 20,598,803
Expenses relating to low-value leases 17,437,212 16,876,749
158,775,580 157,466,474
Note 20 - Critical accounting estimates and judgments
The Bank makes judgments, estimates and assumptions that affect the reported amounts of resources and
liabilities. Judgments, estimates and assumptions 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
judgments, estimates and assumptions made at reporting date and could result in the adjustment to the carrying
amount of affected assets and liabilities.
20.1 Critical accounting estimates
(i) Measurement of the expected credit loss (ECL) allowance
The measurement of the ECL for loans and advances is an area that requires the use of complex models and
significant assumptions about future economic conditions and credit behavior (e.g. the likelihood of customers
defaulting and the resulting losses).
A number of significant judgements are also required in applying the accounting requirements for measuring
ECL, such as:
• Determining criteria for significant increase in credit risk (SICR);

• Choosing appropriate models and assumptions for the measurement of ECL;
• Establishing the number and relative weightings of forward-looking scenarios for each type of product and
the associated ECL; and
• Establishing groups of similar financial assets for the purposes of measuring ECL.
Forward-looking scenarios
Three distinct macroeconomic scenarios (baseline, upside and downside) are considered in the Bank’s estimation
of ECL in Stage 1 and Stage 2. These scenarios are based on assumptions supported by economic theories and
historical experience. The downside scenario reflects a negative macroeconomic event occurring within the first
12 months, with conditions deteriorating for up to two years, followed by a recovery for the remainder of the
period. This scenario is grounded in historical experience and assumes a monetary policy response that returns
the economy to a long-run, sustainable growth rate within the forecast period. The probability of each scenario
is determined using expert judgment and recession probability tools provided by reputable external service
providers. The baseline case incorporates the Bank’s outlook for the domestic and global economy. The best and
worst case scenarios take into account certain adjustments that will lead to a more positive or negative economic
outcome.
Other forward-looking considerations not otherwise incorporated within the above scenarios, such as the
impact of any regulatory, legislative or political changes is likewise considered, if material.
(19)
The Bank has performed historical analyses and identified the key economic variables impacting credit risk and
ECL for each portfolio. The most significant period-end assumptions used for the ECL estimate at December 31
are set out below. The scenarios “base”, “upside” and “downside” were used for all portfolios.
2022
Base Scenario Upside Scenario Downside Scenario
Next 12 2 to 5 years Next 12 2 to 5 years Next 12 2 to 5 years
Months (Average) Months (Average) Months (Average)
Real GDP growth (%) 5.5% 5.1% 6.7% 6.8% 4.3% 3.45
Inflation Rate (%) 3.9% 2.8% 2.9% 1.5% 5.0% 4.0%
PDST-R2 5Y (%) 7.3% 5.8% 5.1% 3.2% 9.4% 8.4%
US Treasury 5Y (%) 5.5% 4.2% 3.4% 1.5% 7.6% 6.8%
Exchange Rate 56.73 56.55 56.38 53.16 57.07 60.15
2021
Base Scenario Upside Scenario Downside Scenario
Next 12 2 to 5 years Next 12 2 to 5 years Next 12 2 to 5 years
Months (Average) Months (Average) Months (Average)
Real GDP growth (%) 7.4% 6.3% 8.4% 7.3% 4.4% 3.3%
Inflation Rate (%) 3.5% 3.2% 2.5% 2.2% 4.5% 4.2%
PDST-R2 5Y (%) 4.6% 3.7% 4.3% 3.4% 6.1% 5.2%
US Treasury 5Y (%) 1.5% 2.8% 1.2% 2.3% 1.8% 3.0%
Exchange Rate 52.50 55.23 51.92 53.93 53.10 56.59
Sensitivity analysis
The Bank’s loan portfolio has different sensitivities to movements in macroeconomic variables (MEVs), so the
above three scenarios have varying impact on the ECL of the Bank’s portfolio. The allowance for impairment is
calculated as the weighted average of ECL under the baseline, upside and downside scenarios. The impact of
weighting these multiple scenarios was an increase in the allowance for impairment by P0.0047 million from the
baseline scenario as at December 31, 2022 (2021 - P0.68 million).
Transfers between stages
Transfers from Stage 1 and Stage 2 are based on the assessment of SICR from initial recognition. The impact of
moving from 12 months ECL to lifetime ECL, or vice versa, varies by product and is dependent on the expected
remaining life at the date of the transfer. Stage transfers may result in significant fluctuations in ECL. Assuming
all Stage 2 accounts are considered as Stage 1, allowance for impairment would have decreased by P1.4 million as
at December 31, 2022 (2021 - P2.2 million).
(ii) Fair value of financial instruments (Note 21.6)
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 BOD 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 Bank 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.
(20)
(iii) Pension liability on defined benefit plan (Note 17)
The Bank 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 17 and include, among others, the discount rate and future salary increases. The Bank
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
benefit obligation.
The present value of the defined benefit obligation of the Bank at December 31, 2022 and 2021 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 Bank’s assumptions are reflected as remeasurements in other comprehensive income. The Bank’s
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 17.
(iv) Valuation of assets held for sale
In determining the fair value of assets held for sale, the Bank 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 provision for impairment in the statement of income.
In 2022, the Bank has recognized provision for impairment loss on its foreclosed assets amounting to
P801,586 (2021 - P728,103) as a result of the decline in fair market values of properties.
The Bank considers that it is impracticable to disclose with sufficient reliability the possible effects of
sensitivities surrounding the fair value of assets held for sale.
(v) Useful lives of bank premises, furniture, fixtures and equipment (Note 7)
The Bank determines the estimated useful lives of its bank premises, furniture, fixtures and equipment based
on the period over which the assets are expected to be available for use. The Bank annually reviews the
estimated useful lives of bank premises, furniture, fixtures and equipment based on factors that include asset
utilization, internal technical evaluation, technological changes, environmental and anticipated use of assets
tempered by related industry benchmark information. It is possible that future results of operations could be
materially affected by changes in these estimates brought about by changes in the factors mentioned.
The Bank considers that it is impracticable to disclose with sufficient reliability the possible effects of
sensitivities surrounding the carrying values of bank premises, furniture, fixtures and equipment.
(vi) Determination of incremental borrowing rate (Note 19)
To determine the incremental borrowing rate, the Bank:

• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held
which do not have recent third-party financing, and
• makes adjustments specific to the lease, (e.g. term, currency and security).
The Bank’s weighted average incremental borrowing rates applied to the lease liabilities range from 2.97% to
7.71% (2021 - 2.58% to 4.68%).
(21)
The Bank considers that it is impracticable to disclose with sufficient reliability the possible effects of sensitivities
surrounding its lease liabilities.
20.2 Critical accounting judgments
(i) Determining the lease term (Note 19)
In determining the lease term, the Bank considers all facts and circumstances that create an economic
incentive to exercise an extension option. Extension options are only included in the lease term if the lease is
reasonably certain to be extended.
(ii) 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.
(iii) Realization of deferred income tax assets (Note 8)
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.
Note 21 - Financial risk and capital management
Risk management in the Bank 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 BOD is the Bank’s
principal risk and capital manager, and the Bank’s only strategic risk taker. The BOD provides written policies for
overall risk management, as well as written procedures for the management of credit risk, foreign exchange risk,
interest rate risk, equity risk, liquidity risk, and contingency risk, among others.
The primary objective of the Bank is the generation of recurring acceptable returns to shareholders’ capital. To
this end, the Bank’s 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.
To generate acceptable returns to its shareholders’ capital, the Bank understands that it has to bear risk, that
risk-taking is inherent in its business. Risk is understood by the Bank 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 possibility of incurring losses is, however, compensated by the possibility of earning more than expected
income. Risk-taking is, therefore, not entirely a bad step to be avoided. Risk-taking presents opportunities if risks
are accounted, deliberately taken, and are kept within rationalized limits.
The most important financial risks that the Bank manages are credit risk, liquidity risk and market risk.
(22)
21.1 Credit risk
The Bank takes on exposure to credit risk, which is the risk that may arise if a borrower or counterparty fails to
meet its obligations in accordance with agreed terms. Credit risk is the single largest risk for the Bank’s business;
management therefore carefully manages its exposure to credit risk as governed by relevant regulatory
requirements and international benchmarks.
Credit risk may also arise due to substantial exposures to a particular counterparty which the Bank manages by
adopting proper risk controls and diversification strategies to prevent undue risk concentrations from excessive
exposures to particular counterparties, industries, countries or regions.
The most evident source of credit risk is loans and advances; however, other sources of credit risk exist
throughout the activities of the Bank, including in credit-related activities recorded in the banking, investment
securities in the trading books and off-balance sheet transactions.
21.1.1 Credit risk management
The Credit Policy and Risk Management division of the Parent Bank supports the Credit Committees in
coordination with various business lending and operations units in managing credit risk, and reports are
regularly provided to the Bank’s Senior Management and the BOD. A rigorous control framework is applied in
the determination of ECL models. The Parent Bank has policies and procedures that govern the calculation of
ECL and such policies are consistently being observed by the Bank. All ECL models are regularly reviewed by
the Risk Management Office to ensure that necessary controls are in place and the models are applied
accordingly.
The review and validation are performed by groups that are independent of the team that prepares the
calculations, e.g., Risk Models Validation and Internal Auditors. Expert judgements on measurement
methodologies and assumptions are reviewed by a group of internal experts from various functions.
The Bank employs a range of policies and practices to mitigate credit risk. The Bank monitors its portfolio
based on different segmentation to reflect the acceptable level of diversification and concentration. Credit
concentration arises from substantial exposures to particular counterparties. Concentration risk in credit
portfolios is inherent in banking and cannot be totally eliminated. However, said risk may be reduced by
adopting proper risk control and diversification strategies to prevent undue risk concentrations from excessive
exposures to particular counterparties, industries, countries or regions.
The Bank 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 deemed necessary. Limits
on large exposures and credit concentration are approved by the BOD through the Risk Management
Committee (RMC).
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.
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 Bank’s market transactions on any single day. For certain securities, the introduction of the
delivery versus payment facility in the local market has brought down settlement risk significantly.
The Bank employs a range of policies and practices to mitigate credit risk. Some of these specific control and
risk mitigation measures include collateral or guarantees.
(23)
Collateral or guarantees
One of the most traditional and common practice in mitigating credit risk is requiring security particularly for
loans and advances. The Bank implements guidelines on the acceptability of specific classes of collateral for
credit risk mitigation. The Bank assesses the valuation of the collateral obtained as part of the loan origination
process. This assessment is reviewed periodically. The common collateral types for loans and advances are:
• Mortgages over physical properties (e.g., real estate and personal) and
• Mortgages over financial assets (e.g., guarantees).
In order to minimize credit loss, the Bank seeks additional collateral from the counterparty when impairment
indicators are observed for the relevant individual loans and advances.
The Bank’s policies regarding obtaining collateral have not significantly changed during the reporting period
and there has been no significant change in the overall quality of the collaterals held by the Bank since the
prior period.
21.1.2 Credit risk rating
The Bank uses internal credit risk gradings that reflect its assessment of the probability of default (PD) of
individual counterparties. The Bank uses internal rating models tailored to the various categories of
counterparty. Borrower and loan specific information collected at the time of application (such as disposable
income, and level of collateral for retail exposures; and turnover and industry type for wholesale exposures) is
fed into this rating model. In addition, the models enable expert judgement from the Credit Review Officer to
be fed into the final internal credit rating for each exposure. This allows for considerations which may not be
captured as part of the other data inputs into the model.
The Bank has put in place a credit classification system to promptly identify deteriorating exposures and to
determine the appropriate credit losses. Classification is being done on the basis of Bank’s existing internal
credit risk rating system, credit models or determined using reputable external rating agencies. The following
are the considerations observed by the Bank in classifying its exposures:
• Standard monitoring refers to accounts which do not have a greater-than-normal risk and do not possess the
characteristics of special monitoring and defaulted loans. The counterparty has the ability to satisfy the
obligation in full and therefore minimal loss, if any, is anticipated.
• Special monitoring are accounts which need closer and frequent monitoring to prevent any further
deterioration of the credit. The counterparty is assessed to be vulnerable to highly vulnerable and its capacity
to meet its financial obligations is dependent upon favorable business, financial, and economic conditions.
• Default refers to accounts which exhibit probable to severe weaknesses wherein possibility of non-repayment
of loan obligation is ranging from high to extremely high severity.
The mapping of internal credit risk ratings with the Bank’s standard account classification is shown below:
(a) Loans and advances
The Bank’s internal credit risk rating system comprises a 30-scale rating with eighteen (18) ‘pass’ rating levels for
large corporate accounts; and 14-scale rating system with ten (10) ‘pass’ rating grades for loans mapped based on
reputable external rating agency.
The Bank uses automated scoring models to assess the level of risk for retail accounts. Behavioral indicators are
considered in conjunction with other forward-looking information (e.g., industry forecast) to assess the level of risk
of a financial asset. After the date of initial recognition, the payment behavior of the borrower is monitored on a
periodic basis to develop a behavioral score which is mapped to a PD.
(24)
Self-employed and
Classifications PL, Auto, Housing microentrepreneurs
Standard monitoring Current to 30 dpd Current to 7 dpd
Special monitoring 31-90 dpd -
Default >90, IL, Loss 8 dpd and up
(b) Treasury and debt securities
Investments in high grade securities 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 level of credit risk for treasury and other
investment debt securities and their associated PD are determined using reputable external ratings and/or
available and reliable qualitative and quantitative information. In the absence of credit ratings, a comparable
issuer or guarantor rating is used. Should there be a change in the credit rating of the chosen comparable,
evaluation is made to ascertain whether the rating change is applicable to the security being assessed for
impairment.
Classifications Credit Risk Grade following S&P or its equivalent

Standard monitoring Investment Grade (AAA to BBB-)
Special monitoring Non-Investment Grade (BB+ to C)
Default Default (D)
(b) Other financial assets
For other financial assets (accounts receivable and rental deposits), the Bank applies the simplified approach,
as permitted by PFRS 9, in measuring ECL which uses a lifetime ECL methodology. These financial assets are
grouped based on shared risk characteristics and aging profile. For some of these, impairment is assessed
individually at a counterparty level.
21.1.3 Maximum exposure to credit risk
The following tables contain an analysis of the credit risk exposure of each financial instrument for which an ECL
allowance is recognized. The gross carrying amount of financial assets below also represents the Bank’s maximum
exposure to credit risk on these assets at December 31.
Credit quality of loans and advances, net
2022
ECL Staging
Stage 1 Stage 2 Stage 3
12-month ECL Lifetime ECL Lifetime ECL Total
Credit grade
Standard monitoring 15,485,282,898 65,390,924 - 15,550,673,822
Special monitoring 579,435 170,832,187 - 171,411,622
Default - - 1,856,259,904 1,856,259,904
Gross carrying amount 15,485,862,333 236,223,111 1,856,259,904 17,578,345,348
Loss allowance (528,110,999) (7,088,513) (1,364,010,949) (1,899,210,461)
Carrying amount 14,957,751,334 229,134,598 492,248,955 15,679,134,887
(25)
2021
ECL Staging
Credit grade
Standard monitoring 10,700,783,295 128,926,894 - 10,829,710,189
Special monitoring 1,493,113 165,298,127 - 166,791,240
Default - - 1,808,328,188 1,808,328,188
Gross carrying amount 10,702,276,408 294,225,021 1,808,328,188 12,804,829,617
Loss allowance 404,708,603 10,578,351 1,422,760,434 1,838,047,388
Carrying amount 11,106,985,011 304,803,372 3,231,088,622 14,642,877,005
Treasury and other investment securities
Credit risk exposures relating to treasury and other investment securities at December 31 are as follows:
2022 2021
Due from other banks 767,097,024 1,088,893,413
Interbank loans receivable 135,594,884 362,630,232
Due from BSP 4,334,661,084 4,326,564,677
5,237,352,992 5,778,088,322
Credit quality of other financial assets
2022
ECL Staging
Credit grade
Standard monitoring
Due from other banks 767,097,024 - - 767,097,024
Interbank loans receivables 135,594,884 - - 135,594,884
Due from BSP 4,334,661,084 - - 4,334,661,084
Gross carrying amount 5,237,352,992 - - 5,237,352,992
Loss allowance - - - -
Carrying amount 5,237,352,992 - - 5,237,352,992
2021
ECL Staging
Credit grade
Standard monitoring
Due from other banks 1,088,893,413 - - 1,088,893,413
Interbank loans receivables 362,630,232 - - 362,630,232
Due from BSP 4,326,564,677 - - 4,326,564,677
Gross carrying amount 5,778,088,322 - - 5,778,088,322
Loss allowance - - - -
Carrying amount 5,778,088,322 - - 5,778,088,322
The Bank’s other financial assets generally arise from transactions with various unrated counterparties with
good credit standing. The Bank applies the simplified approach, as permitted by PFRS 9, in measuring ECL
which uses a lifetime expected loss methodology for other financial assets.
(26)
To measure the ECL, other financial assets have been grouped based on shared credit risk characteristics and the
days past due. The expected loss rates are based on the payment profiles of receivables over a period of 36 months
and corresponding historical credit losses experienced within the said period. The impact of forward-looking
variables on macroeconomic factors is considered insignificant in calculating ECL provisions for other financial
assets.
21.1.4 Credit impaired loans and advances
The Bank closely monitors collateral held for financial assets considered to be credit-impaired, as it becomes
more likely that the Bank will take possession of collateral to mitigate potential credit losses. Financial assets
that are credit-impaired and related collateral held at December 31 in order to mitigate potential losses are
shown below:
2022 2021
Impairment Carrying Impairment Carrying
Gross exposure allowance amount Gross exposure allowance amount
Credit-impaired assets
Corporate entities 50,000,000 (50,000,000) - 50,000,000 (50,000,000) -
Retail customers 1,806,259,904 (1,314,010,949) 492,248,955 1,656,162,074 (944,002,872) 712,159,202
Total credit-impaired assets 1,856,259,904 (1,364,010,949) 492,248,955 1,706,162,074 (994,002,872) 712,159,202
Fair value of collateral 114,072,466 157,870,509
As at December 31, 2022, the Bank acquired assets by taking possession of collaterals held as security for loans
and advances with carrying amount of P434,124,317 (2021 - P8,063,567). The related foreclosed collaterals at
December 31, 2022 have aggregate fair value of P114,072,466 (2021 - P9,694,350).
As at December 31, 2022, the allowance for impairment of foreclosed collateral amounts to P2,534,137
(2021 - P4,172,149). Foreclosed collaterals include real estate (land, building, and improvements) and chattel.
Repossessed properties are sold as soon as practicable and are classified as assets held for sale in the statement of
condition.
21.1.5 Loss allowance
The loss allowance recognized in the period is affected by a variety of factors, as described below:
• Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing significant increases
(or decreases) of credit risk or becoming credit-impaired in the period, and the consequent “step up” (or
“step down”) between 12-month and lifetime ECL;
• Additional allowances for new financial instruments recognized during the period, as well as releases for
financial instruments de-recognized in the period;
• Impact on the measurement of ECL due to changes in PDs, Exposure at Default (EAD) and Loss Given
Default (LGD) in the period;
• Impact on the measurement of ECL due to changes made to models and assumptions;
• Foreign exchange retranslations for assets denominated in foreign currencies and other movements; and
• Financial assets derecognized during the period and write-offs of allowances related to assets that were
written off during the period.
The following table summarizes the changes in the loss allowance for loans and advances between the
beginning and the end of the annual period.
(27)
For the year ended December 31, 2022

Loss allowance, beginning 413,613,075 10,578,351 1,463,855,956 1,888,047,382
Movements with P&L impact
Transfers:
Transfer in (out of) Stage 1 (395,113,286) 4,708,841 660,281,397 269,876,952
Transfer in (out of) Stage 2 721,708 (33,472,370) 46,388,601 13,637,939
Transfer in (out of) Stage 3 1,048,843 472,798 (16,486,703) (14,965,062)
New financial assets originated 714,490,301 - - 714,490,301
Financial assets derecognized during the year (238,989,657) (1,143,426) (104,255,590) (344,388,672)
Changes in assumptions and other movements
in provision 42,172,483 25,943,012 (9,920,765) 58,194,732
124,330,392 (3,491,145) 576,006,940 696,846,187
Write-offs and other movements (927,996) 1,307 (684,756,427) (685,683,116)
Loss allowance, ending 537,015,472 7,088,513 1,355,106,468 1,899,210,453
For the year ended December 31, 2021

Loss allowance, beginning 639,026,984 33,767,765 1,368,737,048 2,041,531,797
Movements with P&L impact
Transfers:
Transfer in (out of) Stage 1 (287,086,253) 3,499,818 471,327,980 187,741,545
Transfer in (out of) Stage 2 1,289,368 (20,957,305) 36,733,077 17,065,140
Transfer in (out of) Stage 3 7,105,715 2,355,433 (105,437,615) (95,976,467)
New financial assets originated 523,354,755 - - 523,354,755
Financial assets derecognized during the year (367,213,830) (3,772,425) (178,541,744) (549,527,999)
Changes in assumptions and other movements
in provision (96,869,300) (3,126,717) 590,418,338 490,422,321
(219,419,545) (22,001,196) 814,500,035 573,079,294
Write-offs and other movements (5,994,365) (1,188,218) (719,381,127) (726,563,710)
Loss allowance, ending 413,613,075 10,578,351 1,463,855,956 1,888,047,382
No movement analysis of allowance for impairment for other financial assets subject to impairment as the related
loss allowance is deemed insignificant for financial reporting purposes.
Write-off policy
The Bank writes off financial assets when it has exhausted all practical recovery efforts and has concluded there
is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include
(i) ceasing enforcement activity and (ii) where the Bank’s recovery method is foreclosing on collateral and the
value of the collateral is such that there is no reasonable expectation of recovering in full.
The Bank may write-off financial assets that are still subject to enforcement activity. The write-off of loans is
approved by the Board of Directors in compliance with the BSP requirements. Loans written-off in 2022 and
2021 are fully covered with allowance.
(28)
21.1.6 Concentration of financial assets with credit exposure
The Bank’s main credit exposures based on carrying amounts and categorized by industry sectors are
summarized below:
Business
Financial services and Private Less -
Institutions Manufacturing real estate households Others Allowance Total
At December 31, 2022
Due from other banks 767,097,024 - - - - - 767,097,024
Due from BSP - - - - 4,334,661,084 - 4,334,661,084
Loans and advances,
net 66,263,112 489,299,468 1,298,628,773 - 15,724,153,987 (1,899,210,453) 15,679,134,887
Other resources, net - - - - 104,480,947 (15,622,429) 88,858,518
833,360,136 489,299,468 1,298,628,773 - 20,163,296,018 (1,914,832,882) 20,869,751,513
Business
Financial services and Private Less -
Institutions Manufacturing real estate households Others Allowance Total
At December 31, 2021
Due from other banks 1,088,893,413 - - - - - 1,088,893,413
Due from BSP - - - - 4,326,564,677 - 4,326,564,677
Loans and advances,
net 71,386,554 472,440,216 1,472,008,909 - 10,838,993,938 (1,888,047,380) 10,966,782,237
Other resources, net - - - - 101,075,260 (6,522,387) 94,552,873
1,160,279,967 472,440,216 1,472,008,909 - 15,266,633,875 (1,894,569,767) 16,476,793,200
21.2 Market risk
The Bank 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 Risk Management Office and
confirmed by the BOD.
Market risk management
Market risk management is incumbent on the Board of Directors through its Risk Management Committee.
Market risk management in the Bank 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
Bank’s market risk exposure is managed by Risk Management Office, headed by the Bank’s Chief Risk Officer
who reports directly to the Risk Management Committee. In addition, Internal Audit is responsible for the
independent review of risk assessment measures and procedures and the control environment.
The Bank reviews and controls market risk exposures of both its trading and non-trading portfolios. Trading
portfolios include those positions arising from the Bank’s market-making transactions. Non-trading portfolios
primarily arise from the interest rate management of the Bank’s retail and commercial banking assets and
liabilities.
Value-at-Risk (VaR) measurement is an integral part of the Bank’s 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 Bank’s positions.
To control the risk, the RMC sets risk limits for trading portfolios which are consistent with the Bank’s goals,
objectives, risk appetite, and strategy.
(29)
Stress tests indicate the potential losses that could arise in extreme conditions that would have detrimental
effect to the Bank’s positions. The Bank periodically performs stress testing (price risk and liquidity risk) to
assess the Bank’s condition on assumed stress scenarios. Contingency plans are frequently reviewed to ensure
the Bank’s preparedness in the event of real stress. Results of stress tests are reviewed by senior management
and by the RMC.
The average daily VaR for the trading portfolios in 2022 is at 501,054 (2021 - 342).
21.3 Interest rate risk
There are two types of interest rate risk - (i) fair value interest rate risk and (ii) cash flow interest rate 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 Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on both
its fair value and cash flow risks. Interest margins may increase as a result of such changes but may also result in
losses in the event that unexpected movements arise.
The BOD sets limits on the level of mismatch of interest rate repricing that may be undertaken, which is
monitored daily by the RMO.
Interest rate risk in the banking book arises from the Bank’s core banking activities. The main source of this type
of interest rate risk is repricing risk, which reflects the fact that the Bank’s assets and liabilities are of different
maturities and are priced at different interest rates.
Over 1 year and Over

Up to 1 year up to 3 years 3 years Non-repricing Total
As at December 31, 2022
Financial assets
Cash and other cash
items - - - 250,147,358 250,147,358
Due from other banks - - - 767,097,024 767,097,024
Due from BSP - - - 4,334,661,084 4,334,661,084
Financial assets at
FVOCI - - - - -
Loans and advances,
net 893,089,329 392,718,091 (8,193,392) 14,401,520,811 15,679,134,839
Other resources, net - - - 104,480,947 104,480,947
Total financial assets 893,089,329 392,718,091 (8,193,392) 19,857,907,224 21,135,521,252
Financial liabilities
Deposit liabilities 16,736,971,030 55,470,394 - - 16,792,441,424
Accrued interest and
other expenses - - - 223,239,533 223,239,533
Other liabilities - - - 773,669,248 773,669,248
Total financial liabilities 16,736,971,030 55,470,394 - 996,908,781 17,789,350,205
Total interest gap (15,843,881,701) 337,247,697 (8,193,392) 18,860,998,443 3,346,185,986
(30)
Over 1 year and Over
Up to 1 year up to 3 years 3 years Non-repricing Total
As at December 31, 2021
Financial assets
Cash and other cash
items - - - 288,788,443 288,788,443
Due from other banks - - - 1,088,893,413 1,088,893,413
Due from BSP - - - 4,326,564,677 4,326,564,677
Financial assets at - - - - -
FVOCI
Loans and advances, net 1,157,092,053 249,702,102 104,799,488 11,343,290,448 12,854,884,092
Other resources, net - - - 101,075,260 101,075,260
Total financial assets 1,157,092,053 249,702,102 104,799,488 17,148,612,241 18,660,205,885
Deposit liabilities 7,493,037,073 4,142,020,075 6,213,030,113 - 17,848,087,261
Accrued interest and
other expenses - - - 223,239,533 223,239,533
Other liabilities - - - 773,669,248 773,669,248
Total financial liabilities 7,493,037,073 4,142,020,075 6,213,030,113 996,908,781 18,844,996,042
Total interest gap (6,335,945,020) (3,892,317,973) (6,108,230,625) 16,151,703,460 (184,790,157)
The Bank uses a simple version of the Balance Sheet VaR (BSVaR) whereby only the principal and interest
payments due and relating to the banking book as at particular valuation dates are considered. The BSVaR
assumes a static balance sheet, i.e., it is assumed that there will be no new transactions moving forward, and no
portfolio rebalancing will be undertaken in response to future changes in market rates.
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.
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 marking-to-market, the probable loss (that may be exceeded
1% of the time) that is indicated by the BSVaR is not realized in accounting income.
The cumulative BSVaR for the banking or non-trading book in 2022 amounts to P197,000,000 (2021 - P59,000,000).
(31)
21.4 Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future cash flows of financial instrument will fluctuate
because of changes in foreign exchange rates. It arises on financial instruments that are denominated in a foreign
currency other than the functional currency which they are measured.
The Bank 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 Bank’s exposure to foreign currency exchange
rate risk relative to its financial assets and liabilities denominated in United States Dollar (US Dollar) at
December 31.
2022 2021
Financial assets
Due from other banks 196,509,221 212,954,468
Other resources 145,082 121,230
196,654,303 213,075,698
Deposit liabilities 174,735,563 193,480,673
Accrued interest - -
174,735,563 193,480,673
Net foreign exchange exposure 21,918,740 19,595,025
At December 31, 2022, if the Philippine Peso had weakened/strengthened by 5% (2021 - 5%) against the US
Dollar based on historical information in the last five years with all other variables held constant, net income as
at and for the year ended December 31, 2022 would have been P821,958 higher/lower (2021 –
P756,007higher/lower), mainly as a result of foreign exchange gains/losses on translation of US Dollar-
denominated deposits with other banks and deposit liabilities.
21.5 Liquidity risk
Liquidity risk is the risk that the Bank is 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.
The Bank’s liquidity profile is observed and monitored through its metric, the Minimum Cumulative Liquidity
Gap (MCLG). The MCLG is the smallest net cumulative cash inflow (if positive) or the largest net cumulative
cash outflow (if negative) over the next three (3) months. The MCLG indicates the biggest funding requirement
in the short term and the degree of liquidity risk present in the current cash flow profile of the Bank. The
MCLG is computed monthly and reported in the RMC meetings. A red flag is immediately raised and reported
to management and the RMC when the MCLG level projected over the next 3 months breaches the RMC
prescribed MCLG limit.
(32)
21.5.1 Liquidity risk management process
The Bank’s liquidity management process, as carried out within the Bank and monitored by the RMC and the
RMO includes:
• day-to-day funding, which includes replenishment of funds as they mature or are borrowed by customers,
managed by monitoring future cash flows to ensure that requirements can be met;
• maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any
unforeseen interruption to cash flow;
• monitoring balance sheet liquidity ratios against internal and regulatory requirements;
• managing the concentration and profile of debt maturities; and
• performing periodic liquidity stress testing on the Bank’s 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 those projections is an analysis
of the contractual maturity of the financial liabilities and the expected collection date of the financial assets.
The Bank 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 (if any).
Liquidity Coverage Ratio (LCR)
Pursuant to BSP Circular No. 905 issued in 2016, the Bank is required to hold and maintain an adequate level
of unencumbered High Quality Liquid Assets (HQLA) that are sufficient to meet its estimated total cash
outflows over a 30 calendar-day period of liquidity stress. The LCR is the ratio of HQLAs to total net cash
outflows which should be no lower than 100% on a daily basis. It is designed to promote short-term resilience
of the Bank’s liquidity risk profile to withstand significant liquidity shocks that may last over 30 calendar days.
HQLA represent the Bank’s stock of liquid assets that qualify for inclusion in the LCR which consist mainly of
cash, regulatory reserves and unencumbered high-quality liquid securities. HQLAs therefore, serve as defense
against potential stress events.
The main drivers of the Bank’s LCR comprise the changes in the total stock of HQLA as well as changes in net
cash outflows related to deposits, unsecured borrowings and commitment facilities, if any.
Net Stable Funding Ratio (NSFR)
On January 1, 2019, the Bank adopted BSP Circular No. 1007 issued in 2018 regarding the NSFR requirement.
The NSFR is aimed at strengthening the Bank’s long-term resilience by maintaining a stable funding in relation
to its assets and off-balance sheet items as well as to limit the maturity transformation risk of the Bank. The
NSFR is expressed as the ratio of available stable funding and the required stable funding and complements
the LCR as it takes a longer view of the Bank’s liquidity risk profile. The Bank’s capital and retail deposits are
considered as stable funding sources whereas the Bank’s assets including, but not limited to, performing and
non-performing loans and receivables, HQLA and non-HQLA securities as well as off-balance sheet items form
part of the required stable funding. The Bank’s NSFR is well-above the regulatory minimum of 100%.
The Bank maintains a well-diversified funding base and has a substantial amount of core deposits, thereby
avoiding undue concentrations by counterparty, maturity, and currency. The Bank manages its liquidity
position through asset-liability management activities supported by a well-developed funds management
practice as well as a sound risk management system. As part of risk oversight, the Bank monitors its liquidity
risk on a daily basis, in terms of single currency and significant currencies, to ensure it is operating within the
risk appetite set by the BOD and to assess ongoing compliance with the minimum requirement of the liquidity
ratios. Furthermore, the Bank has a set of policies and escalation procedures in place that govern its day-to-day
risk monitoring and reporting processes.
(33)
The table below shows the actual liquidity metrics of the Bank as at December 31:
2022 2021
Liquidity coverage ratio 231.13% 286.33%
Net stable funding ratio 137% 165%
Leverage ratio 16.30% 14.41%
Total exposure measure 22,381,413,480 18,518,081,801
21.5.2 Funding approach
Sources of liquidity are regularly reviewed by the Bank to maintain a wide diversification by currency,
geography, counterparty, product and term.
21.5.3 Non-derivative cash flows
The table below presents the maturity profile of non-derivative financial instruments at December 31 based on
undiscounted cash flows, including interest, which the Bank uses to manage the inherent liquidity risk. The
analysis takes into account the maturity grouping 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.
Over 1 up to
Up to 1 year 3 years Over 3 years Total
2022
Financial assets
Cash and other cash items 250,147,358 - - 250,147,358
Due from other banks 767,097,024 - - 767,097,024
Interbank loans 135,594,884 - - 135,594,884
Due from BSP 4,334,661,084 - - 4,334,661,084
Investment securities at FVOCI 14,939 - - 14,939
Loans and advances 893,089,329 392,718,091 (8,193,392) 1,277,614,028
Other resources 238,337,853 - - 238,337,853
Total financial assets 6,618,942,471 392,718,091 (8,193,392) 7,003,467,170
Deposit liabilities 16,736,971,030 55,470,394 - 16,792,441,424
Accrued interest and other
Expense 331,803,210 - - 331,803,210
Other liabilities - - 1,151,157,628 1,151,157,628
Total financial liabilities 17,068,774,240 55,470,394 1,151,157,628 18,275,402,262
Total maturity gap (10,449,831,769) 337,247,697 (1,159,351,020) (11,271,935,092)
(34)
Over 1 up to
Up to 1 year 3 years Over 3 years Total
2021
Financial assets
Cash and other cash items 288,788,443 - - 288,788,443
Due from other banks 1,088,893,413 - - 1,088,893,413
Interbank loans 362,630,232 - - 362,630,232
Due from BSP 4,326,564,677 - - 4,326,564,677
Investment securities at FVOCI 17,123 - - 17,123
Loans and advances 1,157,092,053 249,702,102 11,448,089,937 12,854,884,092
Other resources 264,020,980 - - 264,020,980
Total financial assets 7,488,006,921 249,702,102 11,448,089,937 19,185,798,960
Deposit liabilities 7,493,037,073 4,142,020,075 6,213,030,113 17,848,087,262
Expense 208,171,365 - - 208,171,365
Other liabilities - - 773,669,250 773,669,250
Total financial liabilities 7,701,208,438 4,142,020,075 6,986,699,363 18,829,927,877
Total maturity gap (213,201,517) (3,892,317,973) 4,461,390,574 355,871,083
The maturity gap is being managed through the minimum cumulative liquidity gap.
21.6 Fair values of financial assets and liabilities
The table below summarizes the carrying amounts and fair values of those financial assets and liabilities at
December 31 not presented in the statement of condition at fair value.
Carrying value Fair value

2022 2021 2022 2021
Financial assets
Cash and other cash items 250,147,358 288,788,443 250,147,358 288,788,443
Due from other banks 767,097,024 1,088,893,413 767,097,024 1,088,893,413
Interbank loans receivable 135,594,884 362,630,232 135,594,884 362,630,232
Due from BSP 4,334,661,084 4,326,564,677 4,334,661,084 4,326,564,677
Loans and advances, net 15,679,134,887 10,966,782,236 15,679,134,887 10,966,782,236
Other resources, net 238,337,853 264,020,980 238,337,853 264,020,980
Deposit liabilities 16,792,441,424 14,277,235,315 16,792,441,424 14,277,235,315
expenses 331,803,210 208,171,365 331,803,210 208,171,365
Other liabilities 1,129,339,083 773,669,250 1,129,339,083 773,669,250
Cash and other cash items, due from BSP and other banks and interbank loans receivable
The fair value of floating rate placements and overnight deposits approximates their carrying amounts. 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.
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.
(35)
The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is
the amount repayable on demand.
The estimated fair value of fixed interest-bearing deposits is based on discounted cash flows using interest
rates for new debts with similar remaining maturity.
Other resources and other liabilities
Carrying amounts of other resources and other liabilities which have no definite repayment dates are assumed
to be their fair values.
21.6.1 Fair value hierarchy
The following table presents the fair value hierarchy of the Bank’s financial assets and liabilities at December 31:
Fair value
2022 Level 1 Level 2 Total
Recurring measurements
Financial asset at FVOCI
Equity security 14,939 - 14,939
14,939 - 14,939
Non-recurring measurements
Assets held for sale, net - 77,880,288 77,880,288
Fair value
Financial assets
Cash and other cash items - 250,147,358 250,147,358
Due from other banks - 767,097,024 767,097,024
Due from BSP - 135,594,884 135,594,884
Loans and advances, net - 15,679,134,887 15,679,134,887
Other resources, net - 238,337,853 238,337,853
Deposit liabilities - 16,792,441,424 16,792,441,424
Accrued interest and other expenses - 331,803,210 331,803,210
Other liabilities - 1,129,339,083 1,129,339,083
Fair value
Recurring measurements
Financial assets at FVOCI
Equity security 17,123 - 17,123
17,123 - 17,123
Non-recurring measurements
Assets held for sale, net - 90,530,113 90,530,113
(36)
Fair value
Financial assets
Cash and other cash items - 288,788,443 288,788,443
Due from other banks - 1,088,893,413 1,088,893,413
Due from BSP - 4,326,564,677 4,326,564,677
Loans and advances, net - 10,966,782,236 10,966,782,236
Other resources, net - 247,944,225 247,944,225
Deposit liabilities - 14,277,235,315 14,277,235,315
Accrued interest and other expenses - 223,239,533 223,239,533
Other liabilities - 773,669,248 773,669,248
There are no transfers between the fair value hierarchy above for the years ended December 31, 2022 and 2021.
22 Capital management
Capital management is understood to be a facet of risk management. The primary objective of the Bank is the
generation of recurring acceptable returns to shareholder’s capital. To this end, the Bank’s policies, business
strategies and 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 funders and stakeholders.
Cognizant of its exposure to risks, the Bank 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 Bank
further understands that its performance, as well as the performance of its various units, should be measured
in terms of returns generated vis-à-vis allocated capital and the amount of risk borne in the conduct of
business.
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% and 7.5%, respectively. A capital conservation buffer of 2.5%, comprised of CET1 capital, was
likewise imposed. The minimum required capital adequacy ratio (CAR) remains at 10% which includes the
capital conservation buffer.
The table below summarizes the Bank’s CAR under the Basel III framework for the years ended December 31:
2022 2021
Tier 1 capital 4,165,669,372 3,202,409,332
Tier 2 capital 141,119,944 104,489,865
Gross qualifying capital 4,306,789,316 3,306,899,197
Less: Required deductions 517,531,626 534,355,986
Total qualifying capital 3,789,257,690 2,772,543,211
Risk weighted assets 20,571,489,815 15,564,740,408

CET1 17.73% 17.14%
CAR (%) 18.42% 17.81%
The Bank has fully complied with the CAR requirement of the BSP as at December 31, 2022 and 2021.o
(37)
Note 23 - Summary of significant accounting policies
The principal accounting policies applied in the preparation of the Bank’s financial statements are set out below.
These policies have been consistently applied to both years presented, unless otherwise stated.
23.1 Basis of preparation
The financial statements of the Bank have been prepared in accordance with Philippine Financial Reporting
Standards (PFRSs). The term PFRSs in general includes all applicable PFRSs, Philippine Accounting Standards
(PAS), and interpretations of the Philippine Interpretations Committee (PIC), Standing Interpretations
Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC) which have been
approved by the Financial and Sustainability Reporting Standards Council (FSRSC) and adopted by the SEC.
The financial statements comprise the statement of condition, statement of income and statement of
comprehensive income shown as two statements, statement of changes in capital funds, the statement of cash
flows and the notes.
These financial statements of the Bank have been prepared under the historical cost convention, as modified by
the revaluation of investment security at FVOCI and plan assets of the Bank’s pension plans measured at fair
value.
The preparation of these financial statements in conformity with PFRSs requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of applying the
Bank’s 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 Bank. The
areas involving higher degree of judgment or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in Note 20.
23.1.1 Changes in accounting policy and disclosures
(a) Amendments to existing standards adopted by the Bank
The Bank has adopted the following amendments to existing standards effective January 1, 2022:
• Amendment to PAS 16, ‘Property, Plant and Equipment’
The amendment prohibits an entity from deducting from the cost of an item of property, plant and
equipment any proceeds received from selling the items produced while the entity is preparing the asset for
its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it
assesses the technical and physical performance of the asset.
• PAS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’
The amendment clarifies that the direct costs of fulfilling a contract include both the incremental costs of
fulfilling the contract and an allocation of other costs directly related to fulfilling the contract. Before
recognizing a separate provision for an onerous contract, the entity recognizes any impairment loss that
has occurred on assets used in fulfilling the contract.
(38)
• Annual Improvements to PFRSs 2018-2020
The following improvements were finalized in May 2020:
i. PFRS 9, ‘Financial Instruments’, clarifies which fees should be included in the 10% test for
derecognition of financial liabilities.
ii. PFRS 16, ‘Leases’, amendment to remove the illustration of payments from the lessor relating to
leasehold improvements, to remove any confusion about the treatment of lease incentives.
The adoption of the above amendments did not have a material impact on the financial statements of the Bank.
New standards and amendments to existing standards not yet adopted by the Bank
The following new accounting standards and amendments to existing standards are not mandatory for
December 31, 2022 reporting period and have not been early adopted by the Bank:
• Amendments to PAS 1, ‘Presentation of Financial Statements’
The amendments clarify that liabilities are classified as either current or non-current, depending on the
rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the
entity or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). The
amendments also clarify what PAS 1 means when it refers to the ‘settlement’ of a liability.
In addition, PAS 1 requires entities to disclose their material rather than their significant accounting
policies. The amendments define what is ‘material accounting policy information’ and explain how to
identify when accounting policy information is material. They further clarify that immaterial accounting
policy information does not need to be disclosed. If it is disclosed, it should not obscure material
accounting information.
• Amendment to PAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’
The amendment clarifies how companies should distinguish changes in accounting policies from changes
in accounting estimates. The distinction is important, because changes in accounting estimates are applied
prospectively to future transactions and other future events, but changes in accounting policies are
generally applied retrospectively to past transactions and other past events as well as the current period.
• Amendments to PAS 12, ‘Income Taxes
The amendments require entities to recognize deferred tax on transactions that, on initial recognition, give
rise to equal amounts of taxable and deductible temporary differences. They will typically apply to
transactions such as leases of lessees and decommissioning obligations and will require the recognition of
additional deferred tax assets and liabilities. The amendment should be applied to transactions that occur
on or after the beginning of the earliest comparative period presented. In addition, entities should
recognize deferred tax assets (to the extent that it is probable that they can be utilized) and deferred tax
liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary
differences associated with (a) right-of-use assets and lease liabilities, and (b) decommissioning,
restoration and similar liabilities, and the corresponding amounts recognized as part of the cost of the
related assets. The cumulative effect of recognizing these adjustments is recognized in retained earnings, or
another component of equity, as appropriate.
The adoption of the above amendments is not expected to have a material impact on the financial statements of
the Bank.
(39)
23.2 Business combination between entities under common control
Business combinations under common control are accounted for using the predecessor cost method following the
guidance under the PIC Q&A No. 2011-02 and PIC Q&A 2012-01. Under this method, the Bank does not restate
the acquired businesses or assets and liabilities to their fair values. The net assets of the combining entities or
businesses are combined using the carrying amounts of assets and liabilities of the acquired entity. No amount is
recognized in consideration for goodwill or the excess of acquirer’s interest in the net fair value of acquired
identifiable assets, liabilities and contingent liabilities over their cost at the time of the common control
combination.
The financial statements incorporated the net assets and results of operations of the combining entities or
businesses at the date of acquisition. The difference between the consideration given and the aggregate book
value of the assets and liabilities acquired as of the date of the transaction are included in “Other reserves” under
the equity account.
23.3 Financial assets
23.3.1 Classification
Th Bank classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value through profit or loss (FVTPL);

• those to be measured subsequently at FVOCI; and
• those to be measured at amortized cost.
The classification depends on the Bank’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether Bank has made an
irrevocable election at the time of initial recognition to account for the equity investment at FVOCI.
The Bank reclassifies debt investments when and only when its business model for managing those assets
changes.
In the determination of the business model, the Bank considers its past experience on how the cash flows for
these assets were collected, how the assets’ performance are evaluated and how risks are assessed and
managed.
23.3.2 Recognition
Regular way purchases and sales of financial assets are recognized on trade date, the date on which the Bank
commits to purchase or sell the asset.
23.3.3 Measurement
The classification requirements for debt and equity instruments are described below:
At initial recognition, the Bank measures a financial asset at its fair value plus, in the case of a financial asset
not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
The Bank classifies its debt instruments at amortized cost. As at December 31, 2022 and 2021, the Bank did not
have any debt instruments classified and measured at FVTPL or FVOCI.
Assets that are held for collection of contractual cash flows where those cash flows represent SPPI, and that are
not designated at FVTPL, are measured at amortized cost. The carrying amount of these assets is adjusted by
any ECL allowance recognized and measured. Interest income from these financial assets is included in
‘Interest income’ using the effective interest rate method.
(40)
Financial assets at amortized cost at December 31, 2022 and 2021 include cash and other cash items, due from
BSP, due from other banks, interbank loans receivables, loans and advances, and other resources.
Cash and cash equivalents consist of cash and other cash items, due from BSP and other banks and interbank
loans receivable with maturities of less than three months from the date of acquisition and that are subject to
insignificant risk of changes in value.
Securities sold subject to repurchase agreements 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 rate method. Securities purchased under agreements to resell are recorded as loans and advances to
other banks and customers and included in the statement of condition under “Interbank loans receivable.”
Securities lent to counterparties are also retained in the financial statements.
Business model: The business model reflects how the Bank manages the assets in order to generate cash flows.
That is, whether the Bank’s objective is solely to collect the contractual cash flows from the assets or is to
collect both the contractual cash flows and cash flows arising from the sale of assets. If neither of these is
applicable, then the financial assets are classified as part of ‘other’ business model and measured at fair value
through profit or loss. Factors considered by the Bank in determining the business model for a group of assets
include past experience on how the cash flows for these assets were collected, how the asset’s performance is
evaluated and reported to key management personnel, how risks are assessed and managed and how managers
are compensated.
SPPI: Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash
flows and sell, the Bank assesses whether the financial instruments’ cash flows represent solely payments of
principal and interest (the ‘SPPI test’). In making this assessment, the Bank considers whether the contractual
cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time
value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending
arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a
basic lending arrangement, the related financial asset is classified and measured at FVTPL.
The Bank reclassifies debt investments when and only when its business model for managing those assets
changes. The reclassification takes place from the start of the first reporting period following the change. Such
changes are expected to be very infrequent and none occurred during the period.
Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is,
instruments that do not contain a contractual obligation to pay and that evidence a residual interest in the
issuer’s net assets.
The Bank subsequently measures equity investments at FVTPL, except where the Bank’s management has
elected, at initial recognition, to irrevocably designate an equity investment at FVOCI. The Bank’s policy is to
designate equity investments as FVOCI when those investments are held for purposes other than to generate
investment returns. When this election is used, fair value gains and losses are recognized in other
comprehensive income and are not subsequently reclassified to profit or loss, even on disposal. Impairment
losses and reversal of impairment losses, if any, are not reported separately from other changes in fair value.
Dividends, when representing a return on such investments, continue to be recognized in profit or loss as other
income when the Bank’s right to receive payments is established.
The Bank’s investment in a listed equity security at December 31, 2022 and 2021 is measured at FVOCI.
(41)
23.3.4 Impairment of financial assets at FVOCI and at amortized costs
The Bank assesses impairment as follows:
• individually for loans that exceed specified thresholds - where there is an objective evidence of impairment,
individually assessed provisions will be recognized; and
• collectively for loans below the specified thresholds noted above or if there is no objective evidence of
impairment. These loans are included in a group of loans with similar risk characteristics and collectively
assessed for impairment. If there is objective evidence that the group of loans is collectively impaired,
collectively assessed provisions will be recognized.
The Bank assesses on a forward-looking basis the ECL associated with its debt instruments carried at
amortized cost and FVOCI and with the exposure arising from loan commitments. The Bank recognizes a loss
allowance for such losses at each reporting date. The measurement of ECL reflects:
• An unbiased and probability-weighted amount that is determined by evaluating a range of possible

outcomes;
• The time value of money; and
• Reasonable and supportable information that is available without undue cost or effort at the reporting date
about past events, current conditions and forecasts of future economic conditions.
PFRS 9 outlines a ‘three-stage’ model for impairment based on changes in credit quality since initial recognition
as summarized below:
• A financial instrument that is not credit-impaired on initial recognition is classified in “Stage 1” and has its
credit risk continuously monitored by the Bank.
• If a SICR since initial recognition is identified, the financial instrument is moved to “Stage 2” but is not yet
deemed to be credit-impaired. The Bank determines SICR based on prescribed benchmarks approved by the
Board of the Directors.
• If the financial instrument is credit-impaired, the financial instrument is then moved to “Stage 3”.
• Financial instruments in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL
that results from default events possible within the next 12 months. Instruments in Stages 2 or 3 have their
ECL measured based on ECL on a lifetime basis.
• A pervasive concept in measuring ECL in accordance with PFRS 9 is that it should consider forward-
looking information.
The Bank assesses on a forward-looking basis the ECL associated with its debt instrument assets carried at
amortized cost and FVOCI. The Bank recognizes a loss allowance for such losses at each reporting date.
The following diagram summarizes the impairment requirements under PFRS 9 (other than purchased
originated credit-impaired financial assets):
Change in credit quality since initial recognition

(Initial recognition) (Significant increase in credit (Credit-impaired assets)
risk since initial recognition)
12-month expected credit losses Lifetime expected credit losses Lifetime expected credit losses
For ECL provisions modelled on a collective basis, a grouping of exposures is performed on the basis of shared
risk characteristics, such that risk exposures within a group are homogeneous.
(42)
Determination of SICR
The Bank compares the probabilities of default occurring over its expected life as at the reporting date with the
probability of default occurring over its expected life on the date of initial recognition to determine significant
increase in credit risk. Since comparison is made between forward-looking information at reporting date
against initial recognition, the deterioration in credit risk may be triggered by the following factors:
• substantial deterioration in credit quality as measured by the applicable internal or external ratings, credit
score or shift from investment grade category to non-investment grade category;
• adverse changes in business, financial and/or economic conditions of the borrower;
• early warning signs of worsening credit where the ability of the counterparty to honor his obligation is
dependent upon favorable business or economic condition;
• the account has become past due beyond 30 days where an account is classified under special monitoring
category; and
• expert judgment for the other quantitative and qualitative factors which may result to SICR as defined by
the Bank.
Measuring ECL - Inputs, assumptions and estimation techniques
The ECL is measured on either a 12-month or lifetime basis depending on whether a significant increase in
credit risk has occurred since initial recognition or whether an asset is considered to be credit-impaired. ECLs
are the discounted product of the PD, EAD and LGD, defined as follows:
• The PD represents the likelihood that the borrower will default (as per “Definition of default and credit-
impaired” above), either over the next 12 months (12M PD), or over the remaining life (lifetime PD) of the
asset.
• EAD is based on the amounts the Bank expects to be owed at the time of default, over the next 12 months
(12M EAD) or over the remaining life (lifetime EAD). For example, for a revolving commitment, the Bank
includes the current drawn balance plus any further amount that is expected to be drawn up to the current
contractual limit by the time of default, should it occur.
The 12-month and lifetime EADs are determined based on the expected payment profile, which varies by
product type.
• For amortizing products and bullet repayment loans, this is based on the contractual repayments owed
by the borrower over a 12-month or lifetime basis.
• For committed credit lines, the exposure at default is predicted by taking current drawn balance and
adding a “credit conversion factor” which allows for the expected drawdown of the remaining limit by
the time of default.
• LGD represents the Bank’s expectation of the extent of loss on a defaulted exposure. LGD varies by type of
counterparty, type and seniority of claim and availability of collateral or other credit support. LGD is
expressed as a percentage loss per unit of exposure at the time of default.
The LGDs are determined based on the factors which impact the recoveries made post-default.
• For secured products, this is primarily based on collateral type and projected collateral values,
historical discounts to market/book values due to forced sales, time to repossession and recovery costs
observed.
• For unsecured products, LGDs are typically set at product level due to the limited differentiation in
recoveries achieved across different borrowers. These LGDs are influenced by collection strategies and
historical recoveries.
(43)
The ECL is determined by multiplying the PD, LGD and EAD together for each individual exposure or
collective segment. This effectively calculates an ECL for each future year, which is then discounted back to the
reporting date and summed. The discount rate used in the ECL calculation is the original effective interest rate
or an approximation thereof.
The lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile looks
at how defaults develop on a portfolio from the point of initial recognition throughout the life of the loans. The
maturity profile is based on historical observed data and is assumed to be the same across all assets within a
portfolio and credit grade band.
Forward-looking economic information is also included in determining the 12-month and lifetime PD. These
assumptions vary by product type.
The assumptions underlying the ECL calculation such as how the maturity profile of the PDs and how collateral
values change are monitored and reviewed regularly.
The Bank’s forward-looking, point-in-time PD models are driven by internal forecasts of MEVs over the next
five years. These models were previously recalibrated annually, but in view of the COVID-19 pandemic, more
frequent review and update of these models were conducted starting April 2020 as MEV forecasts were revised
quarterly in response to changing macroeconomic conditions. Furthermore, the pandemic was expected to
dampen demand for auto and real estate collaterals and thus decrease market prices, so appropriate haircuts
were applied on estimated recoveries from collaterals. These haircuts, however, did not increase the Bank’s
LGD as these were offset by the Bank’s favorable collection experience.
Forward-looking information incorporated in the ECL models
The Bank incorporates historical and current information, and forecasts forward-looking events and key
economic variables that are assessed to impact credit risk and ECL for each portfolio. Macroeconomic variables
that affect a specific portfolio’s non-performing loan rate(s) are determined through statistical modelling and
the application of expert judgement. The Bank’s economics team establishes possible global and domestic
economic scenarios. With the use of economic theories and conventions, expert judgement and external
forecasts, the economics team develops assumptions to be used in forecasting variables in the next five (5) years,
subsequently reverting to long run-averages. The probability-weighted ECL is calculated by running each
scenario through the relevant ECL models and multiplying it by the appropriate scenario weighting.
The estimation and application of forward-looking information requires significant judgment. As with any
economic forecasts, the projections and likelihood of occurrences are subject to a high degree of inherent
uncertainty and therefore the actual outcomes may be significantly different to those projected. The scenarios
and their attributes are reassessed at each reporting date. Information regarding the forward-looking economic
variables and the relevant sensitivity analysis is disclosed in Note 21.
(44)
Financial assets with low credit risk
Loss allowance for financial assets at amortized cost and FVOCI that have low credit risk is limited to 12-month
ECLs. Management considers “low credit risk” for listed government bonds to be an investment grade credit
rating with at least one major rating agency. Other debt instruments are considered to be low credit risk when
they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations
in the near term.
Definition of default and credit-impaired assets
The Bank considers a financial instrument in default or credit-impaired, when it meets one or more of the
following criteria:
Quantitative criteria
The borrower is more than 90 days past due on its contractual payments (with the exception of credit cards
and micro-finance loans where a borrower is required to be 90 days past due and over 7 days past due,
respectively, to be considered in default).
Qualitative criteria
The counterparty is experiencing significant financial difficulty which may lead to non-payment of loan as may
be indicated by any or combination of the following events:
• The counterparty is in long-term forbearance;

• The counterparty is insolvent;
• The counterparty is in breach of major financial covenant(s) which lead(s) to event of default;
• An active market for the security has disappeared;
• Granting of concession that would not be otherwise considered due to economic or contractual reasons
relating to the counterparty’s financial difficulty;
• It is becoming probable that the counterparty will enter bankruptcy or other financial reorganization; and
• Financial assets are purchased or originated at a deep discount that reflects the incurred credit losses.
The criteria above have been applied to all financial instruments held by the Bank and are consistent with the
definition of default used for internal credit risk management purposes. The default definition has been
applied consistently to model the PD, EAD, and LGD throughout the Bank’s ECL calculations.
The Bank’s definition of default is substantially consistent with non-performing loan definition of the BSP. For
treasury and debt securities, these are classified as defaulted based on combination of BSP and external credit
rating agency definitions.
(45)
23.3.5 Modification of loans
The Bank sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When
this happens, the Bank assesses whether or not the new terms are substantially different to the original terms.
The Bank does this by considering, among others, the following factors:
• If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows
to amounts the borrower is expected to be able to pay.
• Significant extension of the loan term when the borrower is not in financial difficulty.
• Significant change in the interest rate.
• Change in the currency the loan is denominated in.x
• Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated
with the loan.
If the terms are substantially different, the Bank derecognizes the original financial asset and recognizes a ‘new’
asset at fair value and recalculates a new effective interest rate for the asset. The date of renegotiation is
consequently considered to be the date of initial recognition for impairment calculation purposes, including for
the purpose of determining whether a significant increase in credit risk has occurred. However, the Bank also
assesses whether the new financial asset recognized is deemed to be credit-impaired at initial recognition,
especially in circumstances where the renegotiation was driven by the debtor being unable to make the
originally agreed payments. Differences in the carrying amount are also recognized in the statement of income
as a gain or loss on derecognition.
If the terms are not substantially different, the Bank recalculates the gross carrying amount of the financial
asset and recognizes a modification gain or loss in the statement of income. The gross carrying amount of the
financial asset shall be recalculated as the present value of the renegotiated or modified contractual cash flows
that are discounted at the financial asset’s original effective interest rate (or credit-adjusted effective interest
rate for purchased or originated credit-impaired financial assets.
Loan modifications in compliance with Bayanihan Acts 1 and 2, are treated in line with the Bank’s policies
discussed above.
23.3.6 Derecognition of financial assets other than modification
Financial assets, or a portion thereof, are derecognized when the contractual rights to receive the cash flows
from the assets have ceased, or when they have been transferred and either (i) the Bank transfers substantially
all the risks and rewards of ownership, or (ii) the Bank neither transfers nor retains substantially all the risks
and rewards of ownership and the Bank has not retained control.
The Bank derecognizes financial assets if the principal terms and conditions have been modified in accordance
with a new (restructured) agreement setting forth a new plan of payment or a schedule of payment on a
periodic basis. Derecognition of loan is necessary in cases where the deterioration in the financial position of
the borrower is such that the borrower can no longer service his debt, whether principal and/or interest,
according to existing terms and conditions. This would have been brought about by major operating losses
and/or serious and sustained impairment in cash flow, in turn caused by factors such as adverse economic and
industry trends, contraction of markets or revenue sources, heavy debt burden, poor business/financial
management, labor unrest, and product obsolescence which contributed to business financial difficulty.
(46)
The Bank enters into transactions where it retains the contractual rights to receive cash flows from assets but
assumes a contractual obligation to pay those cash flows to other entities and transfers substantially all of the
risks and rewards. These transactions are accounted for as ‘pass through’ transfers that result in derecognition
if the Bank:
(i) Has no obligation to make payments unless it collects equivalent amounts from the assets;
(ii) Is prohibited from selling or pledging the assets; and
(iii) Has an obligation to remit any cash it collects from the assets without material delay.
23.3.7 Write-off policy
The Bank writes off financial assets when it has exhausted all practical recovery efforts and has concluded there
is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include
(i) ceasing enforcement activity and (ii) where the Bank’s recovery method is foreclosing on collateral and the
value of the collateral is such that there is no reasonable expectation of recovering in full.
The Bank may write-off financial assets that are still subject to enforcement activity. The outstanding
contractual amounts of such assets written off during the year ended December 31, 2022 was P684.48 million.
(2021 - P725.33 million). The write-off of loans is being approved by the BOD in compliance with the BSP
requirements.
23.4 Financial liabilities
The Bank classifies its financial liabilities in the following categories: at FVTPL and at amortized cost. The
Bank has only financial liabilities at amortized cost as at December 31, 2022 and 2021.
Financial liabilities at amortized cost pertain to financial instruments not classified at FVTPL and contain
obligations to deliver cash or another financial assets to settle the obligations.
Financial liabilities measured at amortized cost include deposit liabilities, accrued interest and other expenses,
and other liabilities (except tax-related or statutory payables).
23.4.2 Recognition and measurement
Initial recognition and measurement
Financial liabilities at amortized cost are initially recognized at fair value less transaction costs.
Subsequent measurement
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effective interest
rate method.
23.4.3 Derecognition
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).
23.5 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 measurement date.
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.
(47)
Financial instruments
The Bank 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. (PDEX), 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 Bank considers
relevant and observable market prices in its valuations where possible. The Bank has no assets or liabilities
classified under Level 3 as at December 31, 2022 and 2021.
The appropriate level is determined on the basis of the lowest level input that is significant to the fair value
measurement.
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 PDEX and
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 arm’s 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 Bank uses widely recognized valuation models for determining fair values of non-standardized financial
instruments of lower complexity. For these financial instruments, inputs into models are generally market
observable.
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.
(48)
Non-financial assets or liabilities
The Bank uses valuation techniques that are appropriate in the circumstances and applies the technique
consistently. Commonly used valuation techniques are as follows:
• 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 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 the Bank’s foreclosed assets (shown as Assets held for sale) fall under level 2 of the fair value
hierarchy using market approach. The Bank has no non-financial assets or liabilities classified under Level 3 as
at December 31, 2022 and 2021.
23.6 Offsetting of financial instruments
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. As at December 31, 2022 and 2021, there are no
financial assets and liabilities that have been offset.
23.7 Bank premises, furniture, fixtures and equipment
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 asset’s 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
Bank and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit
or loss during the financial year in which they are incurred. Depreciation on furniture, fixtures and equipment
is calculated using the straight-line method to allocate their cost less residual values over the useful lives of
three to five years.
Depreciation on assets is calculated using the straight-line method to allocate cost of each asset less its
residual value over its estimated useful life as follows:
Estimated useful life

Based on lease term or life of the leased item
Leasehold, Rights and Improvements whichever is shorter
Furniture, Fixtures, and Equipment 36 months
FFE-Computer Equipment 36 months
Leasehold rights and improvements in progress are stated at cost. Costs are accumulated in the accounts
until these projects are completed upon which these are classified to the appropriate property accounts and
accordingly depreciated.
(49)
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 asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell or value-in-use.
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.
23.8 Computer software
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use
the specified software. These costs are amortized on a straight-line basis over the expected useful lives of three to
five years. Computer software is included in Other resources, net.
Costs associated with maintaining computer software programs are recognized as an expense as incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
Computer software is derecognized upon disposal or when no future economic benefits are expected from its use
or disposal.
(50)
23.9 Impairment of non-financial assets
Asset that have indefinite useful lives are not subject to amortization and depreciation and are tested annually
for impairment. Assets that have definite useful life 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 asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s 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 is a
separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that
suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
23.10 Foreclosed asset
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.
These foreclosed assets are classified as assets held for sale since it is the intention of the Bank’s management
to principally recover the carrying amount through sale transactions and the sale is considered highly probable.
The sale is expected to be completed within one year from the date of classification. In case events or
circumstances may extend the period to complete the sale beyond one year, the extension of the period to
complete the sale does not preclude the asset from being classified as held-for-sale if the delay is caused by
events or circumstances beyond the Bank’s control and the Bank remains committed to its plan to sell the
asset.
23.11 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 Bank is established.
Accrued expenses and other liabilities are derecognized upon settlement, or when discharged, cancelled or
expired.
23.12 Provisions for legal or contractual obligations
Provisions are recognized when the Bank has a present legal or constructive obligation as a result of past events; it
is probable that an outflow of resources will be required to settle the obligation; and 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 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 provision due to the passage of time is recognized as interest expense.
23.13 Interest income and expense
Interest income and expense are recognized in the statement of income for all interest-bearing financial
instruments using the effective interest rate method.
(51)
When calculating the effective interest rate, the Bank 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 future cash flows for the purpose
of measuring impairment loss.
23.14 Service fee income
The Bank recognized revenue when (or as) the Bank satisfies a performance obligation by transferring a promised
good or service to a customer (i.e. an asset). An asset is transferred when (or as) the customer obtains control of
that asset.
Fees and commissions are generally recognized over time when the service has been provided and the control
over the service is transferred to the customer. The service being rendered by the Bank represents a single
performance obligation.
Fees and commissions, mainly representing service fees, are recognized on an accrual basis when the service
has been provided. Fees and commission arising from loans, deposits and other banking transactions are
recognized as income based on agreed terms and conditions.
23.15 Foreign currency translation
Functional and presentation currency
Items in the financial statements of the Bank are measured using the currency of the primary economic
environment in which it operates (the functional currency). The financial statements are presented in
Philippine Peso, which is the Bank’s functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions or valuations 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 the statement of income.
23.16 Income taxes
The tax expense for the period comprises current and deferred income tax. Tax is recognized in profit or loss,
except to the extent that that it relates to items recognized in other comprehensive income or directly in equity. In
this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
Current income tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
reporting date in the country where the Bank operates and generates taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which the
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
(52)
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 (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. Deferred income tax
liabilities are provided on taxable temporary differences except for deferred income tax liability where the
timing of the reversal of the temporary difference is controlled by the Bank and it is probable that the
temporary difference will not reverse in the foreseeable future.
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.
23.17 Employee benefits
(a) Short-term benefits
The Bank recognizes a liability, net of amount already paid and an expense for services rendered by employees
during the accounting period. Short-term benefits given to its employees include salaries and wages, social
security contributions, short-term compensated absences and bonuses, and
non-monetary benefits.
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
(b) Defined benefit retirement plan
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 an independent actuary 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.
The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan. The amount of pension asset recognized in the books is reduced
by the amount of asset ceiling, as applicable.
Remeasurement 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.
(53)
Past-service costs are recognized immediately in profit or loss.
For individual financial reporting purposes, the unified plan assets are allocated 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.
(c) Defined contribution retirement plan
The Bank also maintains a defined contribution plan that covers certain full-time employees. Under its defined
contribution plan, the Bank pays fixed contributions based on the employees’ monthly salaries. The Bank,
however, is covered under RA No. 7641, otherwise known as The Philippine Retirement Pay Law, which
provides for its qualified employees a defined benefit minimum guarantee. The defined benefit minimum
guarantee is equivalent to a certain percentage of the monthly salary payable to an employee at normal
retirement age with the required credited years of service based on the provisions of RA No. 7641. Accordingly,
the Bank accounts for its retirement obligation under the higher of the defined benefit obligation relating to the
minimum guarantee and the obligation arising from the defined contribution plan.
For the defined benefit minimum guarantee plan, the liability is determined based on the present value of the
excess of the projected defined benefit obligation over the projected defined contribution obligation at the end
of the reporting period. The defined benefit obligation is calculated annually by a qualified independent
actuary using the projected unit credit method. The Bank determines the net interest expense (income) on the
net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the annual period to the net defined benefit liability (asset) and then, it
takes into account any changes in the net defined benefit liability (asset) during the period as a result of
contributions and benefit payments. Net interest expense and other expenses related to the defined benefit
plan are recognized in the statement of income.
The defined contribution liability is measured at the fair value of the defined contribution assets upon which
the defined contribution benefits depend, with an adjustment for margin on asset returns, if any, where this is
reflected in the defined contribution benefits.
Actuarial gains and losses arising from the remeasurements of the net defined contribution liability are
recognized immediately in other comprehensive income.
(d) Profit sharing and bonus plans
The Bank recognizes a liability and an expense for bonuses and profit-sharing, based on a formula that takes
into consideration the profit attributable to the Bank’s shareholder after certain adjustments. The Bank
recognizes a provision where contractually obliged or where there is a past practice that has created a
constructive obligation.
23.18 Share capital; Surplus
Share capital represents common shares.
Incremental costs directly attributable to the issue of new shares are shown in capital funds as a deduction
from the proceeds, net of tax.
Surplus includes current and prior years’ results of operations, with the excess being declared for dividend
payout or reserved for the Bank’s future use.
23.19 Dividends on common shares
Dividends are recognized as a liability in the Bank’s financial statements in the year in which they are approved by
the Board of Directors.
(54)
23.20 Leases
The Bank recognizes leases as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use.
Assets and liabilities arising from long-terms leases are initially measured on a present value basis. The interest
expense is recognized in the statement of income over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each period.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the lease commencement date plus any initial direct costs
incurred, less any lease incentives received. The right-of-use asset is subsequently depreciated on a
straight-line basis over the lease term. The right-of-use asset may be reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the rate implicit in the lease or, if that rate cannot be readily
determined, the Bank’s incremental borrowing rate. Generally, the Bank uses its incremental borrowing rate as
the discount rate. It is remeasured when there is a change in future lease payments arising from a change in an
index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to
be exercised or a termination option is reasonably certain not to be exercised.
Payments associated with leases of low-value assets are recognized on a straight-line basis as an expense in the
statement of income. Low-value assets comprise certain IT-equipment and office furniture.
23.21 Related party relationships and transactions
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.
23.22 Contingencies
Contingent assets are not recognized but are disclosed in the financial statements when an inflow of economic
benefits is probable. Contingent liabilities are not recognized in the financial statements but are disclosed unless
the possibility of an outflow of resources embodying economic benefits is remote.
23.23 Subsequent events (or Events after the reporting date)
Post year-end events that provide additional information about the Bank’s financial position at 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 the financial statements when material.
(55)
Note 24 - Supplementary information required by BSP Circular No. 1074
Presented below are the additional information required by BSP Circular No. 1074 issued on January 8, 2020.
This information is presented for BSP reporting purposes and is not required in the basic financial statements.
(i) Basic quantitative indicators of financial performance
The key financial performance indicators as at December 31 follow:
2022 2021
Return on average equity1 25.33% 11.65%
Return on average assets2 5.14% 1.82%
Net interest margin3 22.88% 19.08%
1Net income divided by average total equity for the period indicated. Average equity is based on the daily average balance of equity for the years ended
2Net income divided by average total assets as at period indicated. Average total assets are based on the daily average balance of total assets as at

Net interest income divided by average interest-earning assets. Average interest earning assets is based on the daily average balance of interest earning
assets as at December 31, 2022 and 2021.
(ii) Description of capital instrument issued
The Bank considers its common shares as capital instrument for the purpose of calculating its CAR as at
(iii) Significant credit exposures
Details of the Bank’s loans and advances portfolio as to concentration to industry/economic sector (in %) at
December 31 are as follows:
2022 2021
Private household with employed persons 34.0 46.6
Wholesale and retail trade 29.0 32.3
Real estate, renting and other related activities 8.0 11.5
Manufacturing 19.0 3.6
Others 10.0 6.0
100.0 100.0
(iv) Breakdown of total loans
Details of the Bank’s loans and advances portfolio as to collateral (amounts net of unearned discounts and
accrued interest receivable) at December 31 are as follows:
2022 2021
Secured loans
Real estate mortgage 1,340,516,356 1,157,249,284
Chattel mortgage 313,850 540,741
1,340,830,206 1,157,790,025
Unsecured loans 15,693,634,928 11,303,588,435
17,034,465,134 12,461,378,460
(56)
Non-performing loans, net of allowance for credit losses, at December 31 are as follows:
2022 2021
Non-performing loans (NPL) 1,442,676,019 1,536.971,505
Accounts with specific allowance for credit losses (1,056,756,930) (944,002,872)
Net NPL 385,919,089 592,968,633
BSP Circular 941, Amendments to Regulations on Past Due and Non-Performing Loans, states that loans,
investments, receivables, or any financial asset shall be considered non-performing, even without any missed
contractual payments, when it is considered impaired under existing accounting standards, classified as doubtful
or loss, in litigation, and if there is an evidence that full repayment of principal and interest is unlikely without
foreclosure of collateral. All other loans, even if not considered impaired, shall be considered non-performing if
any principal and/or interest are unpaid for more than ninety (90) days from contractual due date, or accrued
interests for more than ninety (90) days have been capitalized, refinanced, or delayed by agreement.
Microfinance and other small loans with similar credit characteristics shall be considered non-performing after
contractual due date or after it has become past due. Restructured loans shall be considered non-performing.
However, if prior to restructuring, the loans were categorized as performing, such classification shall be retained.
(v) Information on related party loans
The Bank does not have DOSRI loans as at December 31, 2022 and 2021.
(vi) Liabilities and assets pledged as security
There are no loans and advances at December 31, 2022 and 2021 used as security for liabilities.
(vii) Contingencies and commitments arising from off-balance sheet items
The Bank does not have any contingencies and commitments arising from off-balance sheet items as at
Note 25 - Supplementary information required by the Bureau of Internal Revenue (BIR)
Below is the additional information required by Revenue Regulations No. 15-2010 that is relevant to the Bank.
This information is presented for the purposes of filing with the BIR and is not a required part of the basic
financial statements.
(i) Documentary stamp tax
2022 2021
Deposit and loan documents 122,923,600 109,919,951
Others 465,600 11,007,810
123,389,200 120,927,761
(57)
(ii) Withholding taxes
Withholding taxes paid/accrued and/or withheld for the year ended December 31, 2022 consist of:
Paid Accrued Total

Creditable income taxes withheld (expanded) 24,974,359 3,697,063 28,671,422
Final income taxes withheld on interest on deposits
and yield on deposit substitutes 5,019,893 631,120 5,651,013
Income taxes withheld on compensation 20,792,622 1,151,024 21,943,646
Final income taxes withheld on the amount withdrawn
from decedent’s deposit account 47,203 38,300 85,503
Final income taxes withheld on income payment 77,408 - 77,408
50,911,485 5,517,507 56,428,992
Withholding tax payable is presented as part of Accrued taxes, interest and other expenses in the statement of
condition.
(iii) All other local and national taxes
All other local and national taxes paid/accrued for the year ended December 31, 2022 consist of:
Paid Accrued Deferred Total

Gross receipts tax 243,554,562 - 74,212,659 317,767,221
Municipal taxes / Mayor’s permit 26,267,410 - - 26,267,410
Fringe benefits tax 141,446 18,846 - 160,292
Real property tax 1,275,383 - - 1,275,383
Others 69,075 - - 69,075
271,307,876 18,846 74,212,659 345,539,381
Except for the gross receipts tax which is netted against the related income, local and national taxes are presented
as part of taxes and licenses under Other operating expenses in the statement of income.
(iv) Tax cases and assessments
As at reporting date, the Bank has no outstanding tax cases under preliminary investigation, litigation and/or
prosecution in courts or bodies outside the BIR.
(58)
www.pwc.com/ph
BPI Direct
BanKo, Inc.,
A Savings Bank
(Formerly BPI Direct Savings Bank,
Inc.)
Foreign Currency Deposit Unit

G/F BanKo Center Building
Ortigas Avenue, North Greenhills
San Juan, Metro Manila
Report on the Audits of the Financial Statements
Our Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Foreign Currency Deposit Unit (FCDU) of BPI Direct BanKo, Inc., A Savings
Bank (the “Bank”) as at December 31, 2022 and 2021, and its financial performance and its cash flows
for the years then ended in accordance with the reporting guidelines of the Bangko Sentral ng
Pilipinas, as shown in the books maintained in the Philippines.
What we have audited
The financial statements of the Bank comprise:
• the statements of condition as at December 31, 2022 and 2021;

• the statements of income for the years ended December 31, 2022 and 2021;
• the statements of comprehensive income for the years ended December 31, 2022 and 2021;
• the statements of changes in due from regular banking unit for the years ended
December 31, 2022 and 2021;
• the statements of cash flows for the years ended December 31, 2022 and 2021; and
• the notes to the financial statements, which include a summary of significant accounting
policies.
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Bank in accordance with the Code of Ethics for Professional Accountants
in the Philippines (Code of Ethics), together with the ethical requirements that are relevant to our
audit of the financial statements in the Philippines, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and Code of Ethics.
Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines
T: +63 (2) 8845 2728, F: +63 (2) 8845 2806, www.pwc.com/ph
Isla Lipana & Co. is the 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.
Page 2
Emphasis of Matter - Basis of Accounting and Restriction on Use
We draw attention to Note 10 to the financial statements, which describes the basis of accounting. The
financial statements are prepared in accordance with the reporting guidelines prescribed by the
Bangko Sentral ng Pilipinas. As a result, the financial statements may not be suitable for other
purpose. Our report is intended solely for the information and use of the management of the Bank,
and for the purposes of submission to the Bangko Sentral ng Pilipinas and the Bureau of Internal
Revenue and is not intended for any other purpose. Our opinion is not modified in respect of this
matter.
Responsibilities of Management and Those Charged with Governance for the

Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the reporting guidelines of the Bangko Sentral ng Pilipinas, and for such internal
control as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Bank’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Bank or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with PSAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
Page 3
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Bank to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Page 4
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Isla Lipana & Co.
Ruth F. Blasco
Partner
CPA Cert No. 112595
P.T.R. No. 0018519, issued on January 9, 2023, Makati City
SEC A.N. (individual) as general auditors 112595-SEC, Category A; valid to audit 2020 to 2024
SEC A.N. (firm) as general auditors 0142-SEC, Category A; valid to audit 2020 to 2024
TIN 235-725-236
BIR A.N. 08-000745-133-2020, issued on June 5, 2020; effective until June 4, 2023
BOA/PRC Reg. No. 0142, effective until November 14, 2025
Makati City
March 22, 2023
Statements of Condition
December 31, 2022 and 2021
Notes 2022 2021
RESOURCES
Due from other banks 2,7 196,509,221 212,954,469

Total resources 196,527,335 212,959,562
LIABILITIES AND DUE FROM REGULAR BANKING UNIT
Deposit liabilities 3 174,735,563 193,480,673

Accrued interest payable 8,573 83,231
Other liabilities 21,793,806 20,108,899
Total liabilities 196,537,942 213,672,803
Due from regular banking unit (10,607) (713,241)
Total liabilities and due from regular banking unit 196,527,335 212,959,562

Statements of Income
Notes 2022 2021

Interest income 2 754,766 191,890
Interest expense 3 (412,100) (466,382)
Net interest income 342,666 (274,492)
Service fee income 4 139,523 237,938
Miscellaneous expenses 5 (376,017) (647,856)
Income (loss) before income tax 106,172 (684,409)
Income tax expense 6 (116,780) (28,832)
Net loss for the year (10,607) (713,241)

Statements of Comprehensive Income

2022 2021
Other comprehensive income - -
Total comprehensive loss for the year (10,607) (713,241)

Statements of Changes in Due from Regular Banking Unit

2022 2021
Balances at January 1 (713,241) (743,224)
Comprehensive loss
Other comprehensive income - -
Total comprehensive loss for the year (10,607) (713,241)
Transfer to regular banking unit 713,241 743,224
Balances at December 31 (10,607) (713,241)

Statements of Cash Flows

Notes 2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income tax 106,172 (684,409)
Adjustments for:
Interest income on deposits with banks 2 (754,766) (191,890)
Interest received on deposits with banks 741,745 190,212
Interest expense on deposit liabilities 3 412,100 466,382
Interest paid on deposit liabilities (486,758) (383,436)
(Decrease) increase in:
Deposit liabilities (18,745,110) (11,734,538)
Other liabilities 1,684,908 1,096,522
Net cash used in operations (17,041,709) (11,241,157)
Income taxes paid 6 (116,780) (28,832)
Net cash used in operating activities (17,158,489) (11,269,989)
CASH FLOWS FROM FINANCING ACTIVITY
Transfer to regular banking unit 713,241 743,224
NET DECREASE IN CASH (16,445,248) (10,526,765)
CASH 2
January 1 212,954,469 223,481,234
December 31 196,509,221 212,954,469

Notes to the Financial Statements

(In the notes, all amounts are shown in Philippine Peso unless otherwise stated)
Note 1 - General information
1.1 Business information
BPI Direct BanKo, Inc., A Savings Bank (the “Bank”) was incorporated in the Philippines and registered with the
Securities and Exchange Commission (SEC) on September 26, 1986 primarily to engage in and carry on the
general business of savings and mortgage banking.
The Foreign Currency Deposit Unit (FCDU) license was granted to the Bank on October 31, 2008.
The Bank is a wholly-owned subsidiary of Bank of the Philippine Islands (“BPI” or the “Parent Bank”),
a domestic commercial bank with an expanded banking license, which is also its ultimate parent.
The Bank’s registered office address, which is also its principal place of business, is BanKo Center Building,
Ortigas Avenue, North Greenhills, San Juan, Metro Manila.
The Bank has 2,376 regular employees as at December 31, 2022 (2021 - 2,727).
Coronavirus pandemic
As the Philippine economy fully reopens and society shifts into its new normal, the Bank’s business model and
operating environment have now fully integrated various business continuity plans enacted during the
pandemic. These include, but are not limited to, changes in the workforce arrangements and set-up of
corporate offices, allowing for hybrid schedules, split operations, and alternative work sites, all duly supported
by the use of mobility tools and virtual communications. The Bank’s accelerated digital transformation has
also ensured continuous client service through its various distribution platforms while maintaining back-office
efficiency. The Bank’s robust risk management continues to guard against increasing cybersecurity risks
heightened by remote and virtual work arrangements.
The Bank upholds a stringent credit process while also enhancing aspects of its underwriting, monitoring, and
collections, in consideration of the changes in regulatory, economic, and competitive environment, and
customer behaviors post-crisis. Monitoring vulnerable industries and sectors that have been affected by
COVID-19 and having regular conversations with clients also continues.
Thus, the Bank’s asset quality has remained resilient and more favorable than industry averages, displaying an
improving trend across key metrics. The Bank’s robust capital and liquidity levels also serve as sufficient
buffers for any adverse scenario post-pandemic.
1.2 Approval of the Bank’s financial statements
These financial statements have been approved and authorized for issuance by the Board of Directors on
March 22, 2023.
Note 2 - Due from other banks
The account consists of deposits with the Parent Bank and a fellow subsidiary amounting to P196,509,221 at
December 31, 2022 (2021 - P212,954,469).
Interest income recognized on deposits with banks amounts to P754,766 for the year ended
December 31, 2022 (2021 - P191,890).
Due from other banks are classified as current as at December 31, 2022 and 2021.
Note 3 - Deposit liabilities
The account consists of savings deposits amounting to P174,735,563 at December 31, 2022 (2021 - P193,480,673).
All of which are payable on demand.
Interest expense recognized on deposit liabilities amounts to P412,100 for the year ended December 31, 2022
(2021 - P466,382).
Note 4 - Service fee income
The account consists of service charges on deposit accounts for failure to meet minimum balance
requirements which amount to P139,523 for the year ended December 31, 2022 (2021 - P237,938).
Note 5 - Miscellaneous expenses
The account mainly includes allocated costs from the Bank’s regular banking unit (RBU) which amounts to
P376,017 for the year ended December 31, 2022 (2021 - P647,856).
Note 6 - Income taxes
Income subject to tax for the year ended December 31 consists of revenue generated from on-shore transactions
of the FCDU.
A reconciliation between the income tax expense at the statutory income tax rate to the actual income tax
expense for the years ended December 31 are as follows:
2022 2021
Amount Rate (%) Amount Rate (%)
Statutory income tax 26,543 25.00 (171,102) (25.00)
Effects of items not subjected to statutory tax rate
Non-deductible expenses 412,100 388.14 466,382 68.14
Income subjected to lower tax rates (321,863) (303.15) (266,448) (38.93)
Income tax expense 116,780 109.99 28,832 4.21
Note 7 - Related party transactions
In the ordinary course of business, the Bank has transactions with the Parent Bank and other related entities
which are recognized in the FCDU books. These transactions usually arise from normal banking activities such
as deposit arrangements and outsourcing of certain services primarily loans operations, branch operations
and human resource-related functions. These transactions are done on an arm’s length basis and are made
substantially on the same terms and conditions as transactions with unaffiliated individuals and businesses of
comparable risks under the same or similar circumstance.
Significant related party transactions at December 31, 2022 of the FCDU pertain to deposits with the Parent
Bank and a fellow subsidiary amounting to P196,509,221 (2021 - P212,954,469). Related interest income is
disclosed in Note 2.
(2)
Note 8 - Other commitments and contingent liabilities
There are no outstanding commitments and contingent liabilities involving the Bank’s FCDU as at
Note 9 - Financial risk and capital management
Risk management in the Bank, including the FCDU, 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 is the Bank’s principal risk and capital manager and the Bank’s only
strategic risk taker. The Board of Directors provides written policies for overall risk management, as well as
written procedures for the management of foreign exchange risk, interest rate risk, credit risk, equity risk, and
contingency risk, among others.
The primary objective of the Bank is the generation of recurring acceptable returns to shareholder’s capital. To
this end, the Bank’s 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.
To generate acceptable returns to its shareholder’s capital, the Bank understands that it has to bear risk, that
risk-taking is inherent in its business. Risk is understood by the Bank 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 possibility of incurring losses is, however, compensated by the possibility of earning more than expected
income. Risk-taking is, therefore, not entirely a bad step to be avoided. Risk-taking presents opportunities if risks
are accounted, deliberately taken, and are kept within rationalized limits.
The Risk Management Office is responsible for the management of market and liquidity risks. Its objective is to
minimize adverse impact on the Bank’s financial performance due to the unpredictability of financial markets.
Market and credit risks management in the Bank is carried out through policies approved by the Risk
Management Committee and the Board of Directors. In addition, Internal Audit is responsible for the
independent review of risk assessment measures and procedures and the control environment. For risk
management purposes, risks emanating from Treasury activities are managed independently.
The most important risks that the Bank manages are credit risk, liquidity risk, market risk and other operational
risks. Market risk includes currency exchange risk, interest rate and other price risks.
9.1 Credit risk
The Bank, including the FCDU, takes on exposure to credit risk, which is the risk that may arise if a borrower or
counterparty fails to meet its obligations in accordance with agreed terms. Credit risk is the single largest risk for
the Bank’s business; management therefore carefully manages its exposure to credit risk as governed by relevant
regulatory requirements and international benchmarks.
Credit exposure in the FCDU arises principally from financial assets at amortized cost consisting of Due from
other banks. The Credit Policy Group works with the Credit Committee in managing credit risks, and reports are
regularly provided to the Board of Directors.
The maximum credit risk exposure relates to Due from other banks which amounts to P196,509,221 at
December 31, 2022 (2021 - P212,954,469), which are deposited in reputable banks and are considered fully
performing (Note 2). Deposits are made in the reputable banks with good credit ratings. Management has
determined that there is a low risk of default on these deposits and has assessed that the said counterparties
have strong capacity to meet its contractual cash flow obligations in the near term. Low credit risk assets are at
a minimum subject to 12-month expected credit loss (ECL). Based on its assessment, management has
ascertained that the corresponding 12-month ECL is not material for financial reporting purposes as at
(3)
9.2 Market risk
The Bank, including the FCDU, 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 management is incumbent on the Board of Directors through its Risk Management Committee.
9.2.1 Interest rate risk
There are two types of interest rate risk: (i) fair value interest rate risk and (ii) cash flow interest rate 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 Bank, including the FCDU, takes on exposure to the effects of fluctuations in the prevailing levels of market
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 daily by the Risk Management Office.
Interest rate risk in the banking book arises from the Bank’s core banking activities. The main source of this type
of interest rate risk is repricing risk, which reflects the fact that the Bank’s assets and liabilities are of different
maturities and are priced at different interest rates.
The FCDU’s financial assets and liabilities as at December 31 are all non-repricing and are broken down as
follows:
2022 2021
Financial assets
Due from other banks 196,509,221 212,954,469
Total financial assets 196,527,335 212,959,562
Deposit liabilities 174,735,563 193,480,673
Accrued interest payable 8,573 83,231
Total financial liabilities 174,744,136 193,563,904
Total interest repricing gap 21,783,199 19,395,658
9.2.2 Foreign currency exchange risk
Foreign currency exchange risk is being managed on a Bank-wide basis. As at December 31, 2022 and 2021, the
FCDU of the Bank is not engaged in transactions denominated in currencies other than its functional currency,
US Dollar. Accordingly, it has no exposure to foreign currency exchange risk.
9.3 Liquidity risk
Liquidity risk is the risk that the Bank, including the FCDU, is 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.
(4)
The Bank’s liquidity management process, as carried out within the Bank and monitored by the Risk
Management Committee and the Risk Management Office includes:
• day-to-day funding, which includes replenishment of funds as they mature or are borrowed by customers,
managed by monitoring future cash flows to ensure that requirements can be met;
• maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any
unforeseen interruption to cash flow;
• monitoring balance sheet liquidity ratios against internal and regulatory requirements;
• managing the concentration and profile of debt maturities; and
• performing periodic liquidity stress testing on the Bank’s 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 days, weeks
and months as these are key periods for liquidity management. The starting point for those projections is an
analysis of the contractual maturity of the financial liabilities and the expected collection date of the financial
assets.
Sources of liquidity are regularly reviewed by the Bank to maintain a wide diversification by currency,
geography, counterparty, product and term. Assets available to meet all of the liabilities include due from
other banks. The Bank would also be able to meet unexpected net cash outflows by accessing additional
funding sources.
The FCDU’s financial liabilities at December 31, 2022, which consist of savings deposits and accrued interest
payable amounting to P174,735,563 and P8,572, respectively, (2021 - P193,480,673 and P83,231, respectively),
have no stated maturity and are repayable on demand.
The Bank has sufficient liquid assets (mainly Due from other banks) to meet its financial liabilities as at
Liquidity Coverage Ratio (LCR)
Pursuant to Bangko Sentral ng Pilipinas (BSP) Circular No. 905 issued in 2016, the Bank is required to hold
and maintain an adequate level of unencumbered High Quality Liquid Assets (HQLA) that are sufficient to
meet its estimated total cash outflows over a 30 calendar-day period of liquidity stress. The LCR is the ratio of
HQLAs to total net cash outflows which should be no lower than 100% on a daily basis. It is designed to
promote short-term resilience of the Bank’s liquidity risk profile to withstand significant liquidity shocks that
may last over 30 calendar days. HQLA represent the Bank’s stock of liquid assets that qualify for inclusion in
the LCR which consist mainly of cash, regulatory reserves and unencumbered high-quality liquid securities.
HQLAs therefore, serve as defense against potential stress events.
The main drivers of the Bank’s LCR comprise the changes in the total stock of HQLA as well as changes in net
cash outflows related to deposits, unsecured borrowings and commitment facilities, if any.
9.4 Fair values of financial assets and liabilities
The table below summarizes the carrying amounts and fair values of those financial assets and liabilities at
December 31 not presented in the statement of condition at fair value.
Carrying value Fair value

2022 2021 2022 2021
Financial assets
Due from other banks 196,509,221 212,954,469 196,509,221 212,954,469
Other resources 18,114 5,093 18,114 5,093
Deposit liabilities 174,735,563 193,480,673 174,735,563 193,480,673
Accrued interest payable 8,573 83,231 8,573 83,231
(5)
Due from other banks
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.
Deposit liabilities
The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is
the amount repayable on demand. The carrying amount of deposit liabilities approximates their fair value due
to the short-term nature of these instruments.
Other resources/liabilities
Carrying amounts of other resources/liabilities which have no definite repayment dates are assumed to be
their fair values.
9.5 Capital management
Capital management is understood to be a facet of risk management. The primary objective of the Bank,
including the FCDU, is the generation of recurring acceptable returns to shareholder’s capital. To this end, the
Bank’s policies, business strategies and 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 funders and stakeholders.
Cognizant of its exposure to risks, the Bank 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 Bank
further understands that its performance, as well as the performance of its various units, should be measured
in terms of returns generated vis-à-vis allocated capital and the amount of risk borne in the conduct of
business.
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% and 7.5%, respectively. A capital conservation buffer of 2.5%, comprised of CET1 capital, was
likewise imposed. The minimum required capital adequacy ratio (CAR) remains at 10% which includes the
capital conservation buffer.
The table below summarizes the Bank’s CAR (combined FCDU and regular banking books) under the Basel III
framework for the years ended December 31:
2022 2021
Tier 1 capital 4,165,669,372 3,202,409,332
Tier 2 capital 141,119,944 104,489,865
Gross qualifying capital 4,306,789,316 3,306,899,197
Less: Required deductions 517,531,626 534,355,986
Total qualifying capital 3,789,257,690 2,772,543,211
Risk weighted assets 20,571,489,815 15,564,740,408

CET1 17.73% 17.14%
CAR (%) 18.42% 17.81%
The Bank has fully complied with the CAR requirement of the BSP as at December 31, 2022 and 2021.
(6)
Note 10 - Summary of significant accounting policies
The accompanying financial statements reflect the accounts maintained by the FCDU of the Bank. The
principal accounting policies applied in the preparation of the financial statements of the FCDU of the Bank are
set out below. These policies have been consistently applied to both years presented, unless otherwise stated.
10.1 Basis of preparation
The financial statements of the Bank’s FCDU have been prepared in accordance with the reporting guidelines
of the BSP. In general, the said guidelines as they relate to the preparation and presentation of the FCDU
financial statements of banks, include all applicable Philippine Financial Reporting Standards (PFRSs),
Philippine Accounting Standards (PAS), and interpretations approved by the Financial and Sustainability
Reporting Standards Council (FSRSC) and adopted by the SEC, except with respect to the determination and
translation of functional currency as discussed in Note 10.8.
The financial statements of the FCDU of the Bank have been prepared under the historical cost convention.
The preparation of financial statements in conformity with PFRSs requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of applying the
Bank’s 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 Bank’s financial statements therefore present the financial position and results fairly.
There are no areas involving a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the financial statements.
10.1.1 Changes in accounting policy and disclosures
(a) Amendments to existing standards adopted by the Bank’s FCDU
The Bank’s FCDU has adopted the following amendments to existing standards effective January 1, 2022:
• Amendment to PAS 16, ‘Property, Plant and Equipment’
The amendment prohibits an entity from deducting from the cost of an item of property, plant and
equipment any proceeds received from selling the items produced while the entity is preparing the asset
for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when
it assesses the technical and physical performance of the asset.
• PAS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’
The amendment clarifies that the direct costs of fulfilling a contract include both the incremental costs
of fulfilling the contract and an allocation of other costs directly related to fulfilling the contract. Before
recognizing a separate provision for an onerous contract, the entity recognizes any impairment loss that
has occurred on assets used in fulfilling the contract.
• Annual Improvements to PFRSs 2018-2020
The following improvements were finalized in May 2020:
i. PFRS 9, ‘Financial Instruments’, clarifies which fees should be included in the 10% test for
derecognition of financial liabilities.
ii. PFRS 16, ‘Leases’, amendment to remove the illustration of payments from the lessor relating to
leasehold improvements, to remove any confusion about the treatment of lease incentives.
The adoption of the above amendments did not have a material impact on the financial statements of the Bank’s
FCDU.
(7)
(b) Amendments to existing standards not yet adopted by the Bank’s FCDU
The following new accounting standards and amendments to existing standards are not mandatory for
December 31, 2022 reporting period and have not been early adopted by the Bank’s FCDU:
• Amendments to PAS 1, ‘Presentation of Financial Statements’
The amendments clarify that liabilities are classified as either current or non-current, depending on the
rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the
entity or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). The
amendments also clarify what PAS 1 means when it refers to the ‘settlement’ of a liability.
In addition, PAS 1 requires entities to disclose their material rather than their significant accounting
policies. The amendments define what is ‘material accounting policy information’ and explain how to
identify when accounting policy information is material. They further clarify that immaterial accounting
policy information does not need to be disclosed. If it is disclosed, it should not obscure material
accounting information.
• Amendment to PAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’
The amendment clarifies how companies should distinguish changes in accounting policies from changes
in accounting estimates. The distinction is important, because changes in accounting estimates are applied
prospectively to future transactions and other future events, but changes in accounting policies are
generally applied retrospectively to past transactions and other past events as well as the current period.
• Amendments to PAS 12, ‘Income Taxes
The amendments require entities to recognize deferred tax on transactions that, on initial recognition, give
rise to equal amounts of taxable and deductible temporary differences. They will typically apply to
transactions such as leases of lessees and decommissioning obligations and will require the recognition of
additional deferred tax assets and liabilities. The amendment should be applied to transactions that occur
on or after the beginning of the earliest comparative period presented. In addition, entities should
recognize deferred tax assets (to the extent that it is probable that they can be utilized) and deferred tax
liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary
differences associated with (a) right-of-use assets and lease liabilities, and (b) decommissioning,
restoration and similar liabilities, and the corresponding amounts recognized as part of the cost of the
related assets. The cumulative effect of recognizing these adjustments is recognized in retained earnings,
or another component of equity, as appropriate.
The adoption of the above amendments is not expected to have a material impact on the financial statements
of the Bank’s FCDU.
10.2 Business combination between entities under common control
Business combinations under common control are accounted for using the predecessor cost method following
the guidance under PIC Q&A No. 2011-02 and PIC Q&A 2012-01. Under this method, the Bank does not restate
the acquired businesses or assets and liabilities to their fair values. The net assets of the combining entities or
businesses are combined using the carrying amounts of assets and liabilities of the acquired entity. No amount is
recognized in consideration for goodwill or the excess of acquirer’s interest in the net fair value of acquired
identifiable assets, liabilities and contingent liabilities over their cost at the time of the common control
combination.
The financial statements incorporated the net assets and results of operations of the combining entities or
businesses at the date of acquisition.
(8)
10.3 Financial assets
The Bank, including the FCDU, classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value through profit or loss (FVTPL);

• those to be measured subsequently at fair value through other comprehensive income (FVOCI); and
• those to be measured at amortized cost.
The classification depends on the Bank’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in equity instruments that are not held for trading, this will depend
on whether the Bank, including the FCDU, has made an irrevocable election at the time of initial recognition
to account for the equity investment at FVOCI.
10.3.2 Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade date, the date on which the Bank
commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Bank has transferred substantially all
the risks and rewards of ownership.
10.3.3 Measurement
The classification requirements for debt and equity instruments are described below:
At initial recognition, the Bank, including the FCDU, measures a financial asset at its fair value plus, in the
case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
Based on these factors, the Bank, including the FCDU, classifies its debt instruments into one of the following
three measurement categories:
Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s
perspective, such as loans, government and corporate bonds and trade receivables purchased from clients in
factoring arrangements without recourse. Subsequent measurement of debt instruments depends on the
FCDU’s business model for managing the asset and the cash flow characteristics of the asset. The FCDU only
has debt instrument measured at amortized cost. The FCDU does not hold any debt instruments measured at
FVOCI and at FVTPL as at December 31, 2022 and 2021.
• Amortized cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest (‘SPPI’), and that are not designated at FVTPL, are measured at
amortized cost. The carrying amount of these assets is adjusted by any expected credit loss allowance
recognized and measured. Interest income from these financial assets is included in ‘Interest income’
using the effective interest rate method.
Amortized cost financial assets of the FCDU as at December 31, 2022 and 2021 include due from other
banks (Note 2) and other resources.
Cash and cash equivalents consist of deposits with the Parent Bank and with a fellow subsidiary.
(9)
Business model: The business model reflects how the Bank, including the FCDU, manages the assets in order
to generate cash flows. That is, whether the Bank’s objective is solely to collect the contractual cash flows from
the assets or is to collect both the contractual cash flows and cash flows arising from the sale of assets. If
neither of these is applicable, then the financial assets are classified as part of ‘other’ business model and
measured at FVTPL. Factors considered by the Bank, including the FCDU, in determining the business model
for a group of assets include past experience on how the cash flows for these assets were collected, how the
asset’s performance is evaluated and reported to key management personnel, how risks are assessed and
managed and how managers are compensated.
SPPI: Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash
flows and sell, the Bank, including the FCDU, assesses whether the financial instruments’ cash flows represent
solely payments of principal and interest (the ‘SPPI test’). In making this assessment, the Bank, including the
FCDU, considers whether the contractual cash flows are consistent with a basic lending arrangement
i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a
profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce
exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset
is classified and measured at fair value through profit or loss.
The FCDU reclassifies debt investments when and only when its business model for managing those assets
changes. The reclassification takes place from the start of the first reporting period following the change. Such
changes are expected to be very infrequent and none occurred during the period.
Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is,
instruments that do not contain a contractual obligation to pay and that evidence a residual interest in the
issuer’s net assets.
The FCDU does not hold equity instruments as at December 31, 2022 and 2021.
10.3.4 Impairment and write-off
The Bank, including the FCDU, assesses on a forward-looking basis the expected credit losses (ECL) associated
with its debt instrument assets carried at FVOCI and amortized cost. The Bank, including the FCDU, recognizes a
loss allowance for such losses at each reporting date. The measurement of ECL reflects:
• An unbiased and probability-weighted amount that is determined by evaluating a range of possible

outcomes;
• The time value of money; and
• Reasonable and supportable information that is available without undue cost or effort at the reporting date
about past events, current conditions and forecasts of future economic conditions
The FCDU’s financial assets pertain to due from other banks and other resources. The FCDU applies the
simplified approach, as permitted by PFRS 9, in measuring ECL which uses a lifetime expected loss allowance for
other financial assets.
To measure the expected credit losses, other financial assets have been grouped based on shared credit risk
characteristics and the days past due. The expected loss rates are based on the payment profiles of receivables
over a period of 36 months and corresponding historical credit losses experienced within this periods. The
forward-looking information on macroeconomic factors are considered insignificant in calculating impairment of
the FCDU’s financial assets.
Write-off
Financial assets are written-off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
with the FCDU and a failure to make contractual payments for a period of greater than 120 days past due.
(10)
10.4 Financial liabilities
The Bank, including the FCDU, classifies its financial liabilities in the following categories: financial liabilities
at FVTPL, and financial liabilities at amortized cost. As at December 31, 2022 and 2021, the Bank has no
financial liabilities classified at FVTPL.
Financial liabilities measured at amortized cost include deposit liabilities and accrued interest payable.
10.4.2 Recognition and measurement
Initial recognition and measurement
Financial liabilities at amortized cost are initially recognized at fair value less transaction costs.
Subsequent measurement
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effective interest
rate method.
10.4.3 Derecognition
A financial liability is removed from the statement of condition when it is extinguished, i.e., when the obligation
is discharged or is canceled or expires.
10.5 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.
The fair value of a non-financial asset is measured based on its highest and best use. The asset’s current use is
presumed to be its highest and best use.
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 Bank, including the FCDU, 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).
• 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 Bank
considers relevant and observable market prices in its valuations where possible. The FCDU has no assets
or liabilities classified under Level 3 as at December 31, 2022 and 2021.
The appropriate level is determined on the basis of the lowest level input that is significant to the fair value
measurement.
(11)
10.6 Offsetting of financial instruments
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. The legally enforceable right must not be contingent
on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the entity or the counterparty.
As at December 31, 2022 and 2021, there are no financial assets and liabilities that have been offset in FCDU
books.
10.7 Interest income and expense
Interest income and expense are recognized in the statement of income for all interest-bearing financial
instruments using the effective interest rate method.
When calculating the effective interest rate, the Bank, including the FCDU, 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 future cash flows for the purpose
of measuring impairment loss.
10.8 Foreign currency translation
Functional and presentation currency
Items in the financial statements are measured using the currency of the primary economic environment in
which the FCDU operates (the functional currency). In accordance with BSP Circular 601, series of 2008, the
functional currency of the FCDU is US Dollar while the financial statements are presented in Philippine Peso
(the presentation currency).
For financial reporting purposes and following the requirements under Section 84 of the Manual of
Regulations on Foreign Exchange Transactions (MORFXT), the functional currency of the Bank’s FCDU is the
US Dollar. The FCDU accounts are translated into their equivalent amounts in Philippine Peso. In
determining the presentation currency of the FCDU, the Bank’s management considered the primary users of
these financial statements. These financial statements are prepared mainly for submission to the BSP and for
filing with the Bureau of Internal Revenue along with the annual income tax return of the FCDU, which is also
presented in Philippine Peso. Consistent with the provision of PAS 21, The Effects of Changes in Foreign
Exchange Rates, the Bank’s FCDU adopts Philippine Peso as its presentation currency.
The results and financial position of the FCDU are translated into Philippine Peso as follows:
• resources and liabilities are translated at closing rate at year-end;

• income and expenses are translated at exchange rates at the dates of the transactions; and
• all resulting exchange differences are taken to statement of comprehensive income under cumulative
translation adjustment.
Management assessed that the impact of the translation adjustment is insignificant and decided not to present
the cumulative translation adjustment separately in the FCDU’s financial statements as at December 31, 2022
and 2021.
(12)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. 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.
10.9 Service fee income
The Bank, including the FCDU, recognizes revenue when (or as) the Bank satisfies a performance obligation by
transferring a promised good or service to a customer (i.e. an asset). An asset is transferred when (or as) the
customer obtains control of that asset.
Fees and commissions are generally recognized over time when the service has been provided and the control
over the service is transferred to the customer. The service being rendered by the Bank represents a single
performance obligation.
Fees and commissions, mainly representing service fees, are recognized on an accrual basis when the service
has been provided. Fees and commission arising from loans, deposits and other banking transactions are
recognized as income based on agreed terms and conditions.
10.10 Income taxes
Income earned by the FCDU is taxed as follows: (a) offshore income is tax-exempt, (b) gross onshore income is
taxed at 10%, and (c) all other income not classifiable as onshore or offshore subject to the regular corporate
tax rate of 25% of net taxable income.
Income derived by the FCDU from foreign currency transactions with local commercial banks, including
branches of foreign banks authorized by the BSP to transact business with the FCDU is subject to 10% final tax.
Also, interest earned on deposits with foreign currency denominated units of other banks is subject to 15% final
tax.
10.11 Transfer to RBU
Transfer to RBU comprises actual transfer of net results of FCDU to the RBU, excluding unrealized foreign
exchange gains and losses.
10.12 Expense allocation
Certain expenses of the Bank are allocated to the FCDU which takes into consideration the specific transactions
of the FCDU.
10.13 Related party relationships and transactions
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.
10.14 Events after the reporting date
Post year-end events that provide additional information about the Bank’s financial position at 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 the financial statements when material.
(13)

2022 Annual Report

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Annual Report 2022

BanKo’s Product Overview

FOR THE FARMERS

PONDOKO SAVINGS ACCOUNT

BANKO MOBILE APP

FINANCIALS AND OPERATING HIGHLIGHTS

BALANCE SHEET (in Php mn)

BUSINESS REVIEW AND CLIENT TESTIMONIAL

Total Resources of the Bank increased by 21.49% or P18.47Bn to P22.45Bn in 2022.

Deposit increased by 18% or P14.28Bn to P16.79Bn year on year.

Overcoming limitations through digitalization.

BanKo Driven by Sustainability and Excellence

Term limits of Independent Directors

Powers of the Board of Directors

Duties and Responsibilities

Board Composition and Qualification

Marie Josephine M. Ocampo

Tenure: Appointed Chairman – 2020 to present

Gerardo C. Ablaza, Jr.

Tenure: Appointed Non-Executive Director – June 22, 2022

Tenure: Appointed Independent Director – June 2018 to present

Tenure: Appointed Non-Executive Director – April 2021 to present

Jose Ferdinand B. De Luzuriaga

Tenure: Appointed Independent Director – February 2017 to present

Tenure: Appointed President – January 2017 to present

Aurelio R. Montinola III

Tenure: Appointed Non-Executive Director – February 2017 to present

Jesus V. Razon, Jr.

Tenure: Appointed Independent Director – February 2016 to present

Jaime Alfonso Antonio E. Zobel de Ayala

Tenure: Appointed Non-Executive Director – February 2020 to present

Chairman Marie Josephine M. Ocampo

*Board member until 22 June 2022

Chairman Jesus V. Razon, Jr. (Independent)

Corporate Governance Committee

Chairman Ignacio R. Bunye (Independent)

Jesus V. Razon Jr. (Independent)

Chairman Marie Josephine M. Ocampo

Jose Ferdinand B. De Luzuriaga (Independent)

Personnel and Compensation Committee

Chairman Marie Josephine M. Ocampo

Aurelio R. Montinola III

Risk Management Committee

Chairman Jose Ferdinand B. De Luzuriaga (Independent)

Meetings and Attendance

Performance Evaluation and Self-Assessment

Succession Planning and Talent Management

Induction and Director Education

Code of Business Conduct and Ethics

Anti-Bribery and Anti-Corruption Policy

Remuneration Structure and Policies

Related Party Transactions

Audit BanKo Audit Risk

INTERNAL AUDIT AND CONTROL

We identify risks according to three major classifications:

Operational and Information Technology Risks

Business Continuity Risk

Information and Physical Security Risks

Legal and Tax Risks