BDO Unibank 2019 Annual Report B
BDO Unibank 2019 Annual Report B
06 Our Purpose
Corporate Mission
Corporate Vision
Core Values
Corporate Profile
08 Message from the Chairperson
11 Q&A with the President and
Chief Executive Officer
14 2019 at a Glance
16 Financial Highlights
18 Market Overview
20 Our Strategy
21 Risk Management
24 Performance Review and Report
on Operations
32 Corporate Governance
67 Corporate Social Responsibility
76 Financial Statements
Statement of Management’s
Responsibility for Financial
Statements
Statements of Financial Position
Statements of Income
79 Products and Services
80 Awards and Recognition
83 BDO Group of Companies
86 Organizational Structure
87 Board and Management Directory
92 Corporate Information
Our Purpose
Corporate Mission
To be the preferred bank in every market we serve.
Corporate Vision
To be the leading Philippine bank and financial services company
that empowers customers to achieve their goals and aspirations,
combining our entrepreneurial spirit, international perspective,
and intense customer focus to deliver a personalized banking
experience that is easy, straightforward, and convenient, while taking
pride in building long-term relationships and finding better ways to
deliver offerings of the highest standard.
Core Values
Commitment to Customers. We are committed to delivering
products and services that surpass customer expectations in value
and every aspect of customer service, while remaining prudent and
trustworthy stewards of their wealth.
CHAIRPERSON
Our overall objective was twofold. First, Our loan portfolio is categorized into three
we needed to sustain the good quality major segments: Large corporate loans,
growth appropriate for our franchise without representing about 47% of the total; middle
12
Q&A with the President and Chief Executive Officer
market loans, including SMEs, about 31%; and We rebranded our rural bank subsidiary,
consumer loans, which make up the remaining the primary vehicle for reaching micro-SME
22%. The middle market and consumer borrowers, as BDO Network Bank. It was a
segments are where the sustainable growth is, move to capitalize on the name recognition of
especially in the provincial areas. This is where the Unibank.
our efforts are focused.
Q: Can you give an example of
The underserved segment is relatively small product market expansion?
at the moment but we expect it to be a
meaningful contributor in the future. In the area of wealth management, for
example, we have expanded our foreign
Q: And what has been the outcome in currency investment options and increased
that area? the number of licensed investment
practitioners. We segmented our servicing
We are very pleased with the growth in our effort to cater to the high net worth (HNW),
middle market and consumer portfolios. Our the mass affluent, and the digitally-savvy
middle market segment grew their business emerging affluent in different ways with
by 10%, while consumer loans increased by different value propositions. Further, we
15%, capitalizing on opportunities in high reorganized BDO Securities into a full-service
growth areas. Activity in those segments is brokerage firm to provide clients with an
reflective of how the real economy is doing, expanded product suite to include non-
especially in the areas outside of Metro equity securities.
Manila. The regions outside Metro Manila have
consistently grown faster than the Capital Q: What challenges did the bank face
over the last five years, indicating more in executing its strategies?
local activity and broader-based growth.
Large corporate loans are growing as well, Like the rest of the economy, we were
but at a slower pace given the measured affected by the delay in approval of the
implementation of public and private government’s budget at the beginning of
sector-initiated infrastructure projects. the year. The resulting uncertainty was felt
throughout, and the effect was a slowdown
Q: What other initiatives are you in the rate of economic activity. BDO
undertaking to improve your market consequently experienced a slowdown in the
coverage and expand market share? growth of loans.
We have doubled our micro-SME coverage As well, given the rapid evolution of the
areas. We increased coverage of new markets industry with regards to technology and
with the deployment of 127 branches and changing customer preferences, the challenge
offices nationwide. To complement our was how to stay nimble and flexible to cope
branch and ATM network, we also expanded with these technological changes. That is
our touchpoints with Cash Agad and why we continue to invest in technology and
digital capabilities to provide our clients analytics to make us more agile, smarter
with more venues for cash fulfillment and in understanding our clients and more
banking transactions. responsive to market changes.
13
Strongest
Bank in the
Philippines
Over P3 trillion LARGEST
DISTRIBUTION
NETWORK
Total Resources
#1 1,436 total
Total Resources branches
Customer Loans and banking offices,
including foreign branches in
Deposits Singapore and Hong Kong
Capital
4,466 ATMs
Assets Under
Management
24 million students
2.3 million OFWs
ADVOCACIES IN ACTION
140,000 soldiers
60 homes built and civilian personnel of the armed forces
for Typhoon Yolanda survivors
2,208
2,800 2,000
3,022
2,020
2,668
1,755
2,100 1,500
2,325
1,482
2,031
1,279
1,400 1,000
700 500
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
10.7% 15.6%
2,420
371
2,000 320
2,121
328
1,905
298
1,500 240
1,664
218
200
1,000 160
500 80
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Net Income*
(in billion Php)
45
5-Year CAGR
44.2
36
14.1% NET INCOME
P44.2 billion
32.7
27
28.1
26.2
24.9
2019
18
9 P32.7 billion
2018
0
2015 2016 2017 2018 2019
Financial Highlights
Financial & Operating Highlights
CONSOLIDATED PARENT BANK
2019 2018 Change 2019 2018 Change
BALANCE SHEET (in billion Php)
Resources 3,188.9 3,022.2 6% 3,063.1 2,891.8 6%
Trading and Investment Securities 435.9 385.2 13% 345.3 304.3 13%
Liquid Assets 886.6 919.6 -4% 789.3 825.8 -4%
Gross Customer Loans 2,208.1 2,020.1 9% 2,157.9 1,966.5 10%
Deposits 2,485.2 2,420.0 3% 2,438.7 2,362.3 3%
Equity1/ 370.6 328.1 13% 369.2 327.6 13%
INCOME STATEMENT (in billion Php)
Net Interest Income 119.9 98.3 22% 114.5 93.9 22%
Non-Interest Income 60.6 49.7 22% 43.1 35.8 20%
Gross Operating Income 180.5 148.0 22% 157.6 129.7 22%
Operating Expenses 115.2 98.0 17% 94.3 81.8 15%
Pre-provision Profit 65.4 49.9 31% 63.3 47.9 32%
Allowance for Credit Losses 6.2 6.3 -2% 5.7 5.7 0%
Net Profit2/ 44.2 32.7 35% 44.2 32.7 35%
FINANCIAL PERFORMANCE INDICATORS
Profitability
Return on Average Common Equity 12.8% 10.7% 12.8% 10.7%
Return on Average Equity 12.6% 10.6% 12.7% 10.6%
Return on Average Assets 1.4% 1.1% 1.5% 1.2%
Margins and Liquidity
Net Interest Margin 4.2% 3.6% 4.1% 3.7%
Gross Customer Loans to Deposit Ratio 88.8% 83.5% 88.5% 83.2%
Liquid Assets to Total Assets 27.8% 30.4% 25.8% 28.6%
Liquidity Coverage Ratio3/ 108.4% - 109.2% -
Net Stable Funding Ratio3/ 116.7% - 117.4% -
Cost Efficiency
Cost to Income Ratio 63.8% 66.3% 59.8% 63.1%
Cost to Average Assets Ratio 3.7% 3.4% 3.2% 3.0%
Asset Quality
NPL to Gross Customer Loans 1.2% 1.0% 1.1% 0.9%
NPL Cover4/ 164.7% 183.1% 174.2% 198.1%
Capital and Leverage
CET 1 Ratio5/ 12.7% 12.1% 12.2% 11.7%
Tier 1 Ratio5/ 12.9% 12.4% 12.4% 11.9%
Capital Adequacy Ratio5/ 14.2% 13.8% 13.7% 13.3%
Countercyclical Buffer6/ 0.0% 0.0%
Basel III Leverage Ratio 10.0% 9.3% 9.6% 8.9%
Assets to Equity 8.6x 9.2x 8.3x 8.8x
DISTRIBUTION NETWORK AND MANPOWER
Branches 1,436 1,309 10% 1,173 1,126 4%
ATMs 4,466 4,325 3% 4,225 4,097 3%
Employees 38,510 36,387 6% 32,631 31,370 4%
SHAREHOLDER INFORMATION
Market Value
Share Price (in Php) 158.00 130.80 21%
Market Capitalization (in billion Php) 692.26 572.13 21%
Valuation
Earnings per Share (in Php) 10.02 7.40 35%
Book Value per Share (in Php) 83.03 73.67 13%
Price-Earnings Ratio 15.8x 17.7x
Price to Book Value 1.9x 1.8x
Dividends
Cash Dividends Paid to Common Shareholders 5.3 5.2
(in billion Php)
Cash Dividends per Common Share (in Php) 1.20 1.20
Dividend Payout Ratio7/ 11.9% 15.9%
Dividend Yield8/ 0.8% 0.9%
1/
Total capital accounts, inclusive of minority interest and preferred shares
2/
Net Income attributable to shareholders of the parent bank
3/
Public disclosure required by BSP beginning 2019
4/
Per BSP Circular 1011
5/
Based on audited financial statements
6/
Currently set at 0% by the BSP per Circular 1024 Section 1
7/
Cash dividends paid during the year divided by net profit for the year
8/
Cash dividends per common share paid during the year divided by average daily closing price for the year
Market Overview
Economic Environment
The Philippine economy grew by 5.9% in 2019, among the highest in the region, as growth
recovered in 2H 2019. The year began slowly, following high inflation and interest rates in late
2018 that spilled over to 1H 2019. This was further aggravated by the delayed passage of the
government’s national budget and the midterm election ban on public spending that dampened
economic activity in 1H 2019. The ramp-up in government spending and the healthy recovery in
private consumption on the back of decelerating inflation and easing monetary policies allowed
the economy to regain its growth momentum in 2H 2019.
Government spending (comprising 12% of GDP) surged in 4Q 2019 to cap the full year with a
10.5% expansion, serving as the major growth engine on the demand side. Resilient consumer
spending (up 5.8% and accounts for 68% of GDP), benefitting from easing consumer prices in
2H 2019, also contributed to the country’s positive performance. Growth in capital formation
(investments) was flat, while net trade posted a 5% drop year-on-year amid escalating US-China
trade tensions.
Meanwhile, the services sector (58% of GDP), which rose by 7.1% on the back of retail trade
(up 8.0%) and financial services (up 10.4%), as well as the industry sector (up 5.4%, fueled by the
7.7% rise in construction) led growth on the supply side.
The inflation rate eased to 2.5% in 2019, within the BSP’s 2%-4% inflation target and lower
than the 5.2% average recorded in 2018. From a high of 4.4% in January 2019, the inflation rate
decelerated, hitting a low of 0.8% in October 2019 on effective measures to address supply-side
disruptions, stabilizing oil prices as well as base effects.
With inflation well-managed and to support economic activity, the BSP unwound the tightening
measures in 2018 with a series of policy rate cuts in May, August, and September 2019, bringing
the key policy rate down to 4.0% from a ten-year high of 4.75%. As well, the BSP implemented
on a staggered basis 400 bps cuts in banks’ deposit reserve requirements (RR) over the year
to bring the RR to 14% by end 2019. Meanwhile, the peso rallied towards year-end to close
at P50.74/USD from P52.72/USD in 2018, on the back of the improvement in the Balance of
Payments (BOP) to a surplus underpinned by Overseas Filipino Worker (OFW) remittances,
business process outsourcing (BPO) income and tourism revenues.
19
Market Overview
Regulatory Environment
The BSP continued the implementation of Basel III reforms during the year as part of its
macro-prudential measures to better monitor risks and ensure financial stability. These include:
the Net Stable Funding Ratio (NSFR) requiring banks to fund their assets and activities with
long-term and more stable funding sources; the Liquidity Coverage Ratio (LCR) mandating banks
to hold sufficient level of high quality liquid assets to allow them to withstand a 30 day-liquidity
stress scenario; and re-evaluation of Domestic Systemically Important Banks (D-SIB) guidelines
by raising the weights of size and interconnectedness instead of equal weights previously for
all four (4) categories (besides size and interconnectedness, the other two are substitutability
and complexity).
After more than two (2) decades of sustained economic expansion, the Philippines is
expected to post a contraction in GDP growth as the economy absorbs the adverse effects of
COVID-19 and ECQ. Among others, these include: disrupted business activities and increased
unemployment; reduced Overseas Filipino Workers (OFW) remittances resulting from the
repatriation of OFWs; and a slump in tourism revenues due to mobility and travel restrictions.
Amid this backdrop, the government’s P1.7 trillion stimulus and relief measures to provide
emergency support to vulnerable groups, expand medical and health resources and resume
infrastructure projects should set the stage for an economic rebound in 2021.
Our Strategy
BDO’s overall strategy focuses on building a strong business franchise to achieve diversity and
sustainability of earnings over the long-term.
▪▪ Building a diversified and sustainable earnings stream on the back of strong businesses, wide
market coverage and a strong client acquisition and service culture;
▪▪ Creating operating leverage by building an operating platform that supports growth and
scalability, complemented by digital enablers; and
▪▪ Prudently managing its balance sheet by conservatively provisioning for risk assets, managing
the mix of current and long-term funding sources and ensuring sufficient capital to
support growth.
1 Build a diversified
and sustainable
earnings stream
2 Create operating
leverage
3 Prudently manage
the balance sheet
Risk Management
With its culture of managing risk prudently within its capacity Risk Management
and capabilities, the BDO Unibank Group will pursue its Principles
strategy and business plans to provide consistent quality
service to its customers, to achieve its desired long-term
target returns to its shareholders, and satisfy or abide by
the needs of its other stakeholders, including its depositors
SOUND LIQUIDITY
and regulators.
MANAGEMENT
The Bank ensures that credit, market, interest rate, and liquidity
risks are within Board-approved operating limits. Operational,
legal, regulatory, and reputational risks are invariably managed
by the development of both a strong “control culture” and an
effective internal control system that constantly monitors and
updates operational policies and procedures with respect to the
Bank’s activities and transactions.
22
Risk Management
Risk Management
Risk Management Process
The evaluation, analysis, and control performed by the Risk
Function, in conjunction with the Risk Takers, constitute the
risk management process. The risk management process is
applied at three levels: the transaction level, the business
unit level, and the portfolio level. This framework ensures that
risks are properly identified, quantified, and analyzed in the
light of its potential effect on the Bank’s business. The goal of
the risk management process is to ensure rigorous adherence
to the Bank’s standards for precision in risk measurement
and reporting and to make possible, in-depth analysis of the
deployment of capital and the returns that are delivered to
the shareholders.
Performance Review and
Report on Operations
Net interest income rose to P119.9 billion, with Net Interest Margin (NIM)
improving on continued Current Account/Savings Account Deposits
(CASA) growth and improving loan mix in favor of consumer and middle
Over
market customers. Customer loans went up by 9% to P2.2 trillion,
while total deposits increased by 3% to P2.5 trillion, bolstered by
P3 trillion
Total Assets
the 8% increase in low-cost CASA deposits that comprised 73% of
total deposits.
1,434
reserves at BDO Life). In 2019, BDO opened 127 new domestic branches
and banking offices nationwide, bringing the consolidated branch
network to 1,434. Total Operating
Branches
BDO maintained its conservative credit and provisioning policies, Nationwide
setting aside P6.2 billion in provisions, even as gross non-performing
loan (NPL) ratio was steady at 1.2% and NPL cover remained high at
164.7%.
Looking Ahead
BDO’s robust business franchise, strong balance sheet, and culture of
resilience will allow the Bank to rise above the challenging environment
and put it in a solid position once the economy bounces back from the
COVID-19 health crisis.
Business Lending
8% High interest rates in the first half of 2019, spilling over from the
Year-on-Year
Loan Growth BSP’s rate hikes in late 2018, coupled with the delayed passage of the
national budget and construction ban during the mid-term elections,
weighed on GDP growth and demand for loans. Consequently, the
Institutional Banking Group (IBG) posted slower loan growth in the
first semester.
As IBG looks forward to 2020 and beyond, the Group will leverage
its branch footprint and expertise in the middle-market segment, as
well as continue to expand the client base in provincial areas. On the
corporate side, IBG will leverage on its experience and knowledge in
project financing, to tap opportunities coming from infrastructure,
tourism and the manufacturing sectors.
Consumer Lending
High interest rates and slower construction activity in early 2019
weighed on credit growth and tempered demand for mortgages and
auto loans. Consumer loan growth, however, picked up in the second
half with better consumer confidence and affordability as inflation
decelerated and interest rates declined.
By the end of 2019, the Consumer Lending Group (CLG) grew its loan CONSUMER
portfolio by 15% and maintained its market share, as it effectively LENDING GROUP
managed opportunities in high-growth provincial areas while leveraging
on the Bank’s extensive branch network and tie-ups with property
developers and auto dealers. Further, CLG was rebranded as Consumer
15%
Portfolio Growth
Banking Group (CBG) to better reflect the Group’s product offerings
to include not just consumer loans but also payment products,
among others.
Microfinance
BDO NETWORK
BANK BDO Network Bank, Inc. (BDONB) bounced back after a difficult 2018.
BDONB’s total loans increased by 24% year-on-year, following the
13% to 263 branches and offices, in line with its expansion in underserved
communities across the country.
CASA Deposit
Growth
28
Performance Review and Report on Operations
Treasury TREASURY
Among the notable deals and transactions led by BDO Capital are
the syndicated term loan facility for Bloomberry Resorts and Hotel,
Inc. and Sureste Properties and the PSE listing of Fruitas Holdings,
Inc. and Kepwealth Property Philippines, Inc. IPOs. BDO Capital also
had a lead role in the debt financing for various solar and wind
power projects owned and operated by the Vena Energy Group and
29
Earlier this year, BDO Capital created a separate M&A team to focus on
financial advisory and M&A advisory services, particularly for mid-tier
clients to prepare them for entry into the capital markets. Additionally,
BDO Capital will leverage on its strong institutional relationships to
maximize deal opportunities.
BDO PRIVATE BANK 2019 was another successful year for BDOPB, as its net income
increased to P878 million from P301 million in 2018, on favorable capital
P878 market conditions following the BSP’s monetary easing and low inflation
in the second half of 2019. The balance sheet was trimmed to reduce
million
dependence on high cost time deposits as a source of funds. To better
focus on its clients’ needs, BDOPB also created a Wealth Management
Net Income Group with more seasoned advisors, and a Corporate Services Group, to
help existing and prospective clients with family office operations.
For this year, BDOPB will continue to target HNW and UHNW markets
as it leverages on its open architecture to deliver bespoke, customized,
and best-in-class investment and wealth solutions.
TRUST AND The Trust & Investments Group (TIG) performed well in 2019 with
INVESTMENTS Assets under Management (AUM) expanding by 15% to reach
GROUP P979 billion, the largest in the industry and equivalent to 25% market
share. This feat was achieved with initiatives to simplify and strengthen
P979 client engagement and portfolio diversification. Returns on investment
funds also improved, with most funds outperforming their benchmarks
billion and ranking in the top quartile compared to their peers.
Assets under For 2020, TIG will further broaden its investment products, pursue
Management automation and create multiple client touchpoints, while streamlining
current processes to raise operational efficiency and enhance
customer experience.
30
Performance Review and Report on Operations
BDO Nomura continued to build its customer base, exceeding the BDO NOMURA
300,000-customer mark in 2019 after just three years of operations,
as it continued to make online trading simpler, fast and convenient for
retail investors. Notably, the BDO Nomura platform, with its straight- 300,000
through account opening process, enables a new client to open his customers
first account and invest in five easy steps within five minutes. This
market-leading customer interface was recognized as the Online
Securities Platform of the Year – Philippines by Asian Banking & Finance
at the 2019 Retail Banking Awards.
5%
tie-ups with global remittance partners which contributed to TBG’s
performance in terms of transaction volume and growth.
Growth in
In 2020, TBG will continue to execute a four-pronged strategy that Remittance
involves refining the organizational structure for functional and market Volumes
coverage; driving innovation across products and channels; targeting
investments for cost-efficient and highly stable operating platforms;
and maximizing revenue pools and improving sales productivity.
For 2020, BDO Life intends to further tap the customer base of the
Parent Bank through optimized Financial Advisor (FA) branch coverage.
As well, digitalization initiatives will be sustained to drive productivity
and scale up operations through improved back office processes to
efficiently serve its customers.
Corporate Governance
Corporate Governance
Responsibility for good governance lies with the Board. It 2 Females
is responsible for providing effective leadership and overall
direction to foster the long-term success of the Bank. 2 International
It oversees the business affairs of the Bank, reviews the
strategic plans and performance targets, financial plans and
budgets, key operational initiatives, capital expenditures,
acquisitions and divestments, annual and interim financial DIRECTOR AGE
statements, and corporate governance practices. It oversees
management performance, the enterprise risk management, 1 50-59
internal control systems, financial reporting and compliance,
related party transactions, continuing director education, 4 60-69
and succession plans for the Board and CEO. It considers
sustainability issues related to the environment and social
6 70+
factors as part of its sustainable banking practices.
During the year, the Board reviewed and approved the Bank’s budget
and business targets, quarterly declaration of dividends and the
release of the 2018 audited financial statements within 60 days from
year end. Its oversight functions include the review of operational and
financial performance of senior management and work of the various
committees in accordance with their mandates.
Corporate Governance
to pass a valid corporate act. The revised articles and by-laws shall be
endorsed to the Stockholders for approval and ratification.
Remuneration
Our Remuneration policy is geared towards attracting, retaining and
motivating employees and members of the Board. The remuneration
framework for senior management includes fixed pay, bonuses and
the Employee Stock Option Plan (ESOP) as a long term incentive
program. A claw back mechanism is in place, where the benefits
and rights accruing from the ESOP can be revoked or forfeited, if
the eligible employee is terminated from service for cause or in the
event of imposition of an administrative or disciplinary sanction or
penalty against the eligible employee at any time during and after the
vesting period prior to exercise. It is linked to corporate and individual
performance, based on an appraisal of senior management. The five
(5) most highly compensated officers are the President & CEO, and
four (4) Senior Executive Vice Presidents. All qualified employees
may be entitled to an annual merit increase in salary, based on their
performance for the immediately preceding year. This has a long-term
and compounding effect to the fixed pay, which serves as basis for
their retirement benefit. Non-Executive Directors (NEDs) receive per
diem for attending board and committee meetings. In addition, the
Bank grants director fees other than per diem in accordance with law
to ensure that the remuneration is commensurate with the effort,
time spent and responsibilities of NEDs. There is no distinction on the
director’s fee for a committee chairman or member.
Dividends
The Bank recognizes the importance of providing a stable and
sustainable dividend stream consistent with its commitment to
shareholders. The Bank has been paying a regular cash dividend of
P0.30 per share per quarter, or an annual equivalent of P1.20 per share
and will endeavor to do so while maintaining financial flexibility. The
payment of dividends entails prior board approval of the amount,
record and payment dates as recommended by Management based
on the BSP, PSE, and SEC rules on declaration of cash dividends.
Upon Board approval, necessary disclosures are made in compliance
with regulatory requirements. Upon disclosure of a cash dividend
declaration, a trading blackout on BDO shares is imposed upon BDO
directors and Officers. Dividends are paid within 30 days from date
of declaration. The full dividend policy statement is published in the
corporate website.
Related Party Transactions 37
The Bank has established policies and procedures on related party
transactions (RPTs) in accordance with BSP and SEC regulations.
Corporate Governance
These include definition of related parties, coverage of RPT policy,
guidelines in ensuring arm’s-length terms, identification and prevention
of management potential or actual conflicts of interest, adoption
of materiality thresholds, internal limits for individual and aggregate
exposures, whistle-blowing mechanisms, and restitution of losses
and other remedies for abusive RPTs. The RPT Committee reviews
and endorses to the Board for final approval all material RPTs. The
Related Party Transactions policy applies to BDO Unibank, Inc. and its
subsidiaries and affiliates, as applicable, to ensure that every related
party transaction is conducted in a manner that will protect the Bank
from any potential conflict of interest. The policy also covers the
proper review, approval, ratification and disclosure of transactions
between the Bank and any of its related parties in compliance with
legal and regulatory requirements. The policy also requires that
any member of the RPT Committee who has a potential interest in
any related party transaction shall abstain from the discussion and
endorsement of the related transaction. Likewise, any member of
the Board who has interest in the transaction must abstain from the
deliberation and approval of such related party transaction. Related
party transactions, whose value may exceed 10% of the Bank’s total
assets, require review of an external independent party to evaluate
the fairness of its terms and conditions and approval of 2/3 vote of
the Board, with at least a majority of the independent directors voting
affirmatively. The full version of the Related Party Transactions Policy
is published in our corporate website at www.bdo.com.ph/corporate
governance/company policies.
SY FAMILY
Felicidad Sy, Teresita Sy, Elizabeth Sy, Henry Sy Jr., Hans Sy, Herbert Sy, Harley Sy
SM INVESTMENTS CORPORATION
100%
Corporate Governance
Title of Class Name Citizenship Percentage
Common and Preferred SM Investments Corp. Filipino 39.02%*
Common PCD Nominee Corp. (Non-Filipino) Foreign 26.26%
Common and Preferred Sybase Equity Investments Corporation Filipino 12.90%*
Common PCD Nominee Corp. (Filipino) Filipino 11.69%**
Common Multi-Realty Development Corporation Filipino 5.95%*
*
Inclusive of PCD-lodged shares
**
Exclusive of PCD-lodged shares of SM Investments Corporation, Multi-Realty Development Corporation and Sybase
Equity Investments Corporation
Every stockholder is entitled to one (1) vote for each share of stock outstanding in his name on
the books of BDO Unibank, unless the law provides otherwise. Cumulative voting shall be used
in the election of the members of the Board of Directors.
Total No. of
Direct (D) and Percent to
Indirect (I) Shares Total
Position/Type No. of Years as of December 31, Outstanding
Name of Director of Directorship as Director 2019 Shares
Teresita T. Sy Chairperson/ 1st term: 28 394,947 (D) 0.0081%
Non-Executive Director 2nd term: 12
Jesus A. Jacinto, Jr. Vice Chairman/ 23 502 (D) 0.0000%
Executive Director
Nestor V. Tan President & CEO/ 21 11,661,794 (D) 0.2382%
Executive Director
George T. Barcelon Independent Director 0.67 1,001 (D) 0.0000%
Christopher A. Bell-Knight Non-Executive Director 1st term: 5 123 (D) 0.0000%
2nd term: 6
Jose F. Buenaventura Independent Director 6 1 (D) 0.0000%
Jones M. Castro, Jr. Lead Independent 7 1 (D) 0.0000%
Director
Vicente S. Pérez, Jr. Independent Director 0.67 5,000 (D) 0.0001%
Dioscoro I. Ramos Independent Director 4 203,800 (D) 0.0042%
Josefina N. Tan Non-Executive Director 1st term: 4 596,458 (D) 0.0122%
2nd term: 12
Gilberto C. Teodoro, Jr. Independent Director 5 1 (D) 0.0000%
40
Corporate Governance
Board of Directors
Teresita T. Sy has been a member of the Board of Directors
of BDO Unibank, Inc. (BDO) since 1977, and currently serves
as Chairperson of the Board. Concurrently, she serves as
the Chairperson and/or director of various subsidiaries
and affiliates of BDO: BDO Private Bank, Inc., BDO Leasing
& Finance, Inc., BDO Finance Corporation, BDO Capital &
Investment Corporation, BDO Foundation, Inc., and BDO Life
Assurance Company, Inc. Ms. Sy also serves as Advisor to
the Board of BDO Network Bank, Inc.
Jesus A.
Jacinto, Jr.
Vice Chairman
Executive Director
Filipino, 72 years old
41
Corporate Governance
Nestor V. Tan is the President and CEO of BDO Unibank, Inc.
He was elected to the Board of Directors on June 27, 1998.
He concurrently holds the Chairmanship of the following
BDO Unibank Subsidiaries: BDO Strategic Holdings, Inc.
and BDO Network Bank, Inc. He also concurrently holds
vice chairmanships and/or directorships in the following
subsidiaries of BDO Unibank, Inc.: BDO Leasing and
Finance, Inc., BDO Finance Corporation, BDO Capital &
Investment Corporation, BDO Insurance Brokers, Inc., BDO
Life Assurance Company, Inc., BDO Private Bank, Inc., BDO
Remit (USA), Inc., and SM Keppel Land, Inc. He is also a
Trustee of BDO Foundation, Inc. and Chairman of the De La
Salle University Board of Trustees. He is also the Chairman
of Bancnet, the operator of the electronic payment system,
InstaPay, and the ATM switching utility for Philippine banks.
Nestor V. Tan He previously served as President and Director of the
President & Chief Bankers Association of the Philippines, in addition to being
Executive Officer the previous Chairman and Director of Philippine Dealing
Executive Director System Holdings Corporation.
Filipino, 61 years old Prior to joining BDO Unibank, Mr. Tan was Chief Operating
Officer of the Financial Institutions Services Group of
BZW, the investment banking subsidiary of the Barclays
Group. His banking career spans nearly four decades
and includes posts at global financial institutions, among
them Mellon Bank (now BNY Mellon) in Pittsburgh, PA;
Bankers Trust Company (now Deutsche Bank) in New York,
NY; and the Barclays Group in New York and London. He
holds a bachelor’s degree in Commerce from De La Salle
University and an MBA from the Wharton School, University
of Pennsylvania.
42
Corporate Governance
Corporate Governance
Jose F. Buenaventura was elected to the Board of Directors
of BDO Unibank, Inc. on April 19, 2013. Since 1976, he has
been a Senior Partner at Romulo Mabanta Buenaventura
Sayoc & de los Angeles Law Offices. He is President
and Director of Consolidated Coconut Corporation,
Gladtobehome Inc., Glimpse of Negros Holdings, Inc., and
Kahigayonan Corp.; and Director and Corporate Secretary
of 2B3C Foundation, Inc., and Peter Paul Philippines
Corporation. He sits on the Board of the following
companies: BDO Securities Corporation (Independent
Director), BDO Finance Corporation (Independent Director),
Eximious Holdings, Inc., Cebu Air, Inc., GROW, Inc., GROW
Holdings, Inc., Hicap Properties Corporation, Himap
Properties Corporation, La Concha Land Investment
Corporation, Philippine First Insurance Co., Inc., Philplans
Jose F. First, Inc., Techzone Philippines, Inc., Total Consolidated
Buenaventura Asset Management, Inc., Turner Entertainment Manila, Inc.,
Phosephene Holdings, Inc., and Clinquant Holdings, Inc.
Independent Director
Atty. Buenaventura holds Bachelor of Arts and Bachelor
Filipino, 85 years old
of Laws degrees from Ateneo de Manila University, and a
Master of Laws from Georgetown University Law Center in
Washington, D.C.
44
Corporate Governance
Corporate Governance
Vicente S. Pérez, Jr. was elected Independent Director
of BDO Unibank, Inc. on April 22, 2019. He is currently
an Independent Director of BDO Leasing and Finance,
Inc. (BDOLF), BDO Finance Corporation, BDO Capital &
Investment Corporation, and DoubleDragon Properties
Corp. He is also a Non-Executive Director of Singapore
Technologies Telemedia Pte. Ltd. Mr. Pérez is currently the
Chairman of Alternergy Group, which operates companies
engaged in renewable (wing, hydro and solar) power
generation in the Philippines. He was Philippine Energy
Secretary from 2001 to 2005. Mr. Pérez briefly served
in early 2001 as Undersecretary at the Department of
Trade and Industry and as Managing Head of the Board
of Investments. Prior to his government service, Mr. Pérez
had 17 years banking experience, first in Latin American
Vicente S. debt restructuring at Mellon Bank in Pittsburgh, and later
Pérez, Jr. in debt capital markets in emerging countries at Lazard in
London, New York and Singapore. At 35, he became General
Independent Director
Partner at New York Investment Bank Lazard Fréres as Head
Filipino, 61 years old
of its Emerging Markets Group. He was Managing Director
of Lazard Asia in Singapore from 1995 until 1997, when he
co-founded Next Century Partners, a private equity firm
based in Singapore. In 2005, he was briefly a government
appointed director of Philippine National Bank until its
privatization. Mr. Pérez obtained his Masters in Business
Administration from the Wharton Business School of the
University of Pennsylvania in 1983 and a Bachelor’s degree in
Business Economics from the University of the Philippines
in 1979. He was a 2005 World Fellow at Yale University where
he lectured an MBA class at the Yale School of Management.
46
Corporate Governance
Dioscoro I. Ramos
Independent Director
Filipino, 61 years old
Corporate Governance
Gilberto C. Teodoro, Jr. was elected to the Board of
Directors of BDO Unibank, Inc. on April 25, 2014. He is
the Chairman of Sagittarius Mines, Inc. and Indophil
Resources Philippines, Inc. He was formerly Chairman
of Suricon Resources Corporation and PNP Foundation,
Inc. He is also a member of the Board of Directors of
Philippine Geothermal Production Company, Inc., Alphaland
Corporation, and Canlubang Sugar Estate. He served as
Secretary of National Defense from 2007 to 2009 and
was a member of the Philippine House of Representatives
from 1998 to 2007. He continues to advise public sector
agencies and is currently the Chairman of the Philippine
Air Force Multi-Sectoral Governance Council and sits in
a similar capacity at the Philippine Navy. He is a recipient
of the Philippine Legion of Honor with the rank of Grand
Gilberto C. Commander. He trained under former Solicitor General
Teodoro, Jr. Estelito P. Mendoza, Esq., and was involved in a wide
range of issues — constitutional, corporate, criminal, civil,
Independent Director
and administrative — and in pro-bono work to assist
Filipino, 55 years old
various indigent litigants from 1990 to 1997. Mr. Teodoro
holds a Bachelor of Science degree in Commerce, Major
in Management of Financial Institutions, from De La Salle
University; a Bachelor’s in Law degree (LLB) from the
University of the Philippines; and a Masters in Law degree
(LLM) from Harvard Law School. He placed first in the
Philippine Bar Examinations of 1989 and was admitted to
the State Bar of New York.
48
Corporate Governance
CORPORATE SECRETARY
Atty. Tan is the Managing Partner of Tan Acut Lopez & Pison
Law Offices (1993 up to present). He was formerly Senior
Partner in Ponce Enrile Cayetano Reyes & Manalastas Law
Offices, a Partner in Angara Abello Concepcion, Regala &
Cruz Law Offices, and an Associate in Cruz Villarin Ongkiko
Academia & Durian Law Offices. Atty. Tan holds a Bachelor of
Arts degree from De La Salle College, Bacolod and Bachelor’s
degree in Law from the University of the Philippines.
Corporate Governance
Joseph Albert L. Gotuaco Rolando C. Tanchanco Walter C. Wassmer
Head, Central Operations Group Head, Consumer Banking Group Head, Institutional Banking Group
The relevant qualifications/experience, age and nationality of senior management officers may be found in SEC Form 17-A:
Annual Report that is posted on our website: www.bdo.com.ph/company-disclosures/sec-filings.
51
Corporate Governance
Board Committees
The Board has established nine (9) committees to help in discharging its duties and
responsibilities. These committees derive their authority from and report directly to the Board.
Their mandates and scopes of responsibility are set forth in their respective Terms of Reference,
which are subjected to annual review and may be updated or changed in order to meet the
Board’s needs or for regulatory compliance. The number and membership composition of
committees may be increased or decreased by the Board as it deems appropriate, consistent
with applicable laws or regulations specifically on the majority membership and chairmanship
of independent directors in various committees. As of December 31, 2019, eight of the nine
board-level committees are chaired by independent directors.
Executive Committee
FUNCTIONS: Chairperson:
▪▪ Exercises the power of the Board in the management and Teresita T. Sy
direction of the affairs of the Bank.
Members:
▪▪ Acts as the main approving body for loans, credits, advances
or commitments and property-related proposals. Antonio N. Cotoco
Jesus A. Jacinto, Jr.
▪▪ Reviews and recommends for Board approval major credit
Guia C. Lim
policies, including delegation of credit approval limits.
Mario B. Palou
until April 22, 2019
During the year, it approved loans and credit facilities, leases and
Edmundo S. Soriano
sale of acquired assets, credit policies, write-offs, resolutions of
Josefina N. Tan
remedial/problem accounts, leases and acquisitions of branch
Nestor V. Tan
sites within its Board-delegated authority.
No. of Total
In December 2018, the Executive Committee was tasked as Executive Meetings No. of
the Oversight Committee for the implementation of the Bank’s Committee Attended Meetings
Sustainability Framework. Teresita T. Sy 47 50
Antonio N. Cotoco 45 50
Jesus A. Jacinto, Jr. 47 50
Guia C. Lim 46 50
Mario B. Palou 12 12
Edmundo S. Soriano 48 50
Josefina N. Tan 49 50
Nestor V. Tan 43 50
52
Corporate Governance
Corporate Governance
In this context, the following were done during the year:
Corporate Governance
The BAC reports its evaluation of the effectiveness of the
internal controls, financial reporting process, risk management
systems and governance processes of the Bank based on the
report and unqualified opinion obtained from the External
Auditor, the overall assurance provided by the Chief Internal
Auditor and additional reports and information requested
from Senior Management, and found that these are generally
adequate across BDO.
Trust Committee
FUNCTIONS: Chairman:
▪▪ Reviews and approves transactions between trust Dioscoro I. Ramos
and/or fiduciary accounts, accepts and closes trust and (Independent Director)
other fiduciary accounts, and approves the investment, commencing April 22, 2019
reinvestment and disposition of funds or property. Antonio C. Pacis
until April 22, 2019
▪▪ Evaluates trust and other fiduciary accounts at least once
a year. Members:
▪▪ Reviews the Trust and Investment Group’s overall performance, Ador A. Abrogena
profile of funds and assets under its management, industry until January 31, 2019
position, and the risk management reports. Rafael G. Ayuste, Jr.
▪▪ Approves offering of new products and services, commencing February 1, 2019
establishment and renewal of lines and limits with financial Christopher A. Bell-Knight
institutions, and investment outlets and counterparties. Josefina N. Tan
commencing April 22, 2019
▪▪ Annually, the Committee evaluates the performance of the
Trust Officer. Nestor V. Tan
No. of Total
Significant matters taken up by the Committee included, among
Trust Meetings No. of
others, amendments on BDO Trust’s various manuals as well Committee Attended Meetings
as approval of new investment outlets and accreditation of Dioscoro I. Ramos 10 10
additional counterparties. The Committee approved the revised Ador A. Abrogena 2 2
table of organization of BDO Trust, appointment of the new Trust Rafael G. Ayuste, Jr. 7 8
Officer, rationalization of the BDO Unit Investment Trust Funds Christopher A. 10 10
Bell-Knight
and the implementation of PFRS 9.
Josefina N. Tan 5 6
Nestor V. Tan 10 10
Antonio C. Pacis 3 4
57
Corporate Governance
Risk Management Committee
FUNCTIONS: Chairman:
▪▪ Is responsible for the development and oversight of the risk Jones M. Castro, Jr.
management program of the Bank. (Lead Independent Director)
Corporate Governance
Nominations Committee
FUNCTIONS: Chairman:
▪▪ Leads the process of identifying candidates for election Vicente S. Pérez, Jr.
and appointment of Directors and all other positions (Independent Director)
requiring appointment of the Board of Directors, giving full commencing April 22, 2019
Compensation Committee
FUNCTIONS: Chairman:
▪▪ Provides oversight on directors’ compensation and Gilberto C. Teodoro, Jr.
remuneration of senior management and other key (Independent Director)
personnel, ensuring that the compensation scheme is commencing April 22, 2019
consistent with the Bank’s culture and strategy, effectively Jimmy T. Tang
(Independent Director)
aligned with prudent risk taking and commensurate with
until April 22, 2019
corporate and individual performance.
▪▪ Ensures consistency of the compensation policies and Members:
practices across the Group. Jesus A. Jacinto, Jr.
Teresita T. Sy
In 2019, the Committee recommended for approval of the
Josefina N. Tan
Board the compensation policy of the Bank and the increase
in loan limits under the fringe benefit program for staff No. of Total
and officers. Compensation Meetings No. of
Committee Attended Meetings
Gilberto C. Teodoro, Jr. 2 2
Jesus A. Jacinto, Jr. 3 3
Teresita T. Sy 3 3
Josefina N. Tan 3 3
Jimmy T. Tang 1 1
Information Technology
Steering Committee
FUNCTIONS: Chairman:
▪▪ Provides oversight and governance over the Bank’s IT George T. Barcelon
functions, including approvals of information technology- (Independent Director)
related policies and practices of the Bank and commencing April 22, 2019
Corporate Governance
Related Party Transactions Committee
FUNCTIONS: Chairman:
▪▪ Assists the Board in its oversight of the conduct of all George T. Barcelon
Related Party Transactions (RPTs) to protect the interests of (Independent Director)
the Bank and its stakeholders. commencing April 22, 2019
Dioscoro I. Ramos
▪▪ Ensures proper disclosure of all approved RPTs in
(Independent Director)
accordance with applicable legal and regulatory until April 22, 2019
requirements and confirmation by majority vote at the
Annual Stockholders’ meeting the Bank’s significant Members:
transactions with related parties. Jose F. Buenaventura
(Independent Director)
On a monthly basis, the RPTC carefully reviews the material
Jones M. Castro, Jr.
related party transactions being proposed by Management. (Lead Independent Director)
The revision of the Bank’s policy on related party transactions Jimmy T. Tang
is one of its most significant accomplishments in 2019. The (Independent Director)
revised policy encapsulates the requirements of the Securities until April 22, 2019
and Exchange Commission on the approval of related party
Advisor:
transactions whose value exceed 10% of the Bank’s assets. The
policy ensures that material RPTs falling under the definition of Jesus A. Jacinto, Jr.
the SEC shall require prior review of an independent external
Related Party No. of Total
party and approval of at least 2/3 vote of the Board with a Transactions Meetings No. of
majority of the independent directors voting in favor of it. Committee Attended Meetings
George T. Barcelon 6 7
Jose F. Buenaventura 11 11
Independent Control Functions Jones M. Castro, Jr. 12 12
Jimmy T. Tang 4 5
Internal Audit
The Internal Audit Function covers the entire Group including
foreign and local subsidiaries and offices. It adheres to the
principles required by the ISPPIA (International Standard for
the Professional Practice of Internal Auditing), COSO Internal
Control -Integrated Framework, COBITS (Control Objectives
for Information and Related Technology), the Internal Audit
Definition and Code of Ethics.
63
Corporate Governance
It provides assurance and a systematic, disciplined approach CONSUMER ASSISTANCE
to evaluate and improve effectiveness of risk management, MANAGEMENT SYSTEM
internal control, and governance processes. Upholding a
commitment to integrity and accountability, Internal Audit
provides value to senior management and governing bodies as
objective source of independent advice.
CONSUMER
CONCERNS
Internal Audit reports to the Board of Directors through the
Board Audit Committee (BAC) (parent bank and respective
subsidiaries). It seeks BAC approval for the annual audit plan, CHANNELS
provides updates on accomplishments, reports results of audit PHONE
conducted and tracks resolution of audit findings. Metro Manila (+632) 8631-8000
International Toll-Free Nos.
IAC 800-8-631-8000
Data Privacy
The Bank has in place a Data Privacy Management Program
(DPMP), which serves as the framework for protecting the
data privacy rights of the Bank’s data subjects, to ensure
compliance with the Philippine Data Privacy Act (PDPA).
The Bank appointed a Data Protection Officer (DPO) who
is registered with the National Privacy Commission (NPC).
Compliance Officers for Privacy (COPs) in each business
and support units (BSUs) were appointed to ensure proper
coordination in the implementation of any initiatives related
to the DPMP. The required data processing systems were
also registered with the NPC. The Data Privacy Policy, Privacy
Statement, and Breach Reporting Procedures were established,
including the templates for Consent, Data Sharing Agreement,
and Outsourcing Agreement. Furthermore, conduct of
Privacy Impact Assessments (PIAs) by critical units were
completed to assess privacy risks in order to ensure that
the necessary security measures are in place to mitigate
risks to personal data and uphold data privacy rights of
individuals. Privacy risk monitoring were also enhanced using
the existing risk management tools of the Bank. Currently,
the Bank is completing the PIAs for the rest of the units and
implementation of necessary security measures is being
monitored. To ensure continuous education within the Bank,
the Data Privacy Training and Awareness Program has been
rolled out, consisting of regular conduct of classroom and
e-learning courses as well as breach reporting exercises/drills.
Corporate Governance
Compliance with the SEC Code of
Corporate Governance
Publicly-listed companies are required to disclose in their
Annual Report the company’s compliance with the Code of
Corporate Governance and where there is non-compliance, to
identify and explain the reason for such issue. We confirm that
as of December 31, 2019, the Bank has substantially complied
with the recommendations of the Code except for the
following: 1) Policy on retirement age of directors; 2) Disclosure
of board and executive remuneration on an individual basis.
Looking Ahead
The Bank is now in the era of digital transformation and we are
looking at ways to optimize the use of the new technologies to
strengthen our corporate governance practices while remaining
vigilant on the risk of digitization to our business operations.
In ensuring that the Bank stays as the market leader in the
Philippine financial services industry, we are focused on
maximizing the effectiveness of our corporate governance
practices as a business enabler and driver of our performance
in the proper context of risks and rewards, opportunities and
prospects for the Bank. This is essential going forward as
we continue to compete and remain relevant to our various
stakeholders. Globally, there is also an increasing call for
companies to support the UN Sustainable Development Goals
as part of sustainable business performance with emphasis
on strategies that promote economic growth, environmental
protection, efforts that address a range of social needs and
a governance model that considers sustainability issues.
BDO continues to be mindful of these and creating a positive
impact on sustainability.
Corporate Social Responsibility
Finding ways
to improve the
welfare and financial
well-being of Filipinos
It was a remarkable year for BDO
Foundation. On the last year of
the decade, the corporate social
responsibility arm of BDO Unibank
developed and implemented
programs for the benefit of
underserved sectors of society.
Backed by the BDO Unibank
community, the foundation touched
the lives of Filipinos through its
financial inclusion and disaster
response, rehabilitation and
rebuilding advocacies.
PROGRAMS
DepEd will set guidelines for the integration of financial education
concepts in learning areas across all grade levels. The M&E framework,
on the other hand, will enable DepEd to assess the gains of the financial 24
education program and identify opportunities for growth.
million
To increase awareness and further push the goals of the program, BDO students in
Foundation sponsored Sineliksik, the video-making competition of 47,000 public
DepEd’s annual National Festival of Talents. The contest tasked students schools
to produce original videos on topics like saving, budgeting and spending. nationwide
The foundation committed to award winning entries in ceremonies
scheduled in 2020. The sponsorship resulted in the development of
more than 60 learner-generated and learner-appropriate videos that will
800,000
public school
be added to DepEd’s library of learning resources. teachers and non-
As the program was deployed nationwide, BDO Foundation, DepEd teaching personnel
and BSP launched the initiative in 15 regions all over the Philippines.
At the events, the foundation donated LED television sets and USB 900,000
memory drives containing financial literacy videos to public schools. civil servants
The deployment of the program gained more momentum as DepEd
secretary Leonor Magtolis Briones issued DepEd Memoranda 32 and 107,
series of 2019, announcing the dissemination of financial literacy learning
2.3
resources in all public schools across the country. million
OFWs
In 2019, BDO Foundation—in collaboration with BSP, OWWA, CSC, the
Philippine Army and AFP—launched financial education programs
for overseas Filipino workers (OFWs) and their families, civil servants, 140,000
soldiers and civilian employees of the army, and the uniformed and soldiers and civilian
civilian personnel of the entire armed forces. The programs paved the personnel of the
way for new interventions and the mainstreaming of financial literacy in armed forces
the capacity building programs of OWWA, CSC, the Philippine Army and
AFP. Aimed at strengthening existing financial literacy initiatives, the
partnership projects were designed to equip the target audience with
the tools, knowledge and resources to achieve financial independence.
provided aid in provinces placed under a state of calamity in Altavas Rural Health 26,098
Unit, Aklan
2019. Using data from the National Disaster Risk Reduction and
Cabugao Rural Health 38,529
Management Council and reports from BDO offices, the foundation Unit and Lying-in Clinic,
immediately organized relief operations, mobilizing volunteers from Ilocos Sur
BDO and BDO Network Bank branches all over the country. Led by Zarraga Rural Health and 24,089
Birthing Center, Iloilo
their region, area and branch heads, bank officers and staff trooped
Panglao Rural Health Unit, 37,400
to evacuation sites to distribute relief goods containing food, rice Bohol
and drinking water. Baclayon Rural Health Unit 21,301
and Birthing Center, Bohol
In some instances, BDO volunteers mounted relief operations Nagbukel Rural Health 5,443
even as they themselves were affected by the typhoons and Unit, Ilocos Sur
earthquakes. According to the employee-volunteers, the relief Total 453,776
work gave them an opportunity to be a blessing to others, make
a difference in the lives of disaster-hit families and be part of a
worthy cause. For them, serving the community in the spirit of
bayanihan was a rewarding experience. BDO Foundation
In areas inaccessible to volunteers, BDO Foundation’s partners has rehabilitated 83
generously extended assistance. Police personnel, the Philippine
Navy and a group of concerned citizens led by Fr. Zenki Manabat
rural health units
helped the foundation conduct relief operations after earthquakes since 2012 for a
battered Batanes. In quake-stricken Cotabato and Davao del Sur,
the Philippine Army and two non-governmental organizations—
total of 4.9 million
Ako ang Saklay and the Philippine Rural Reconstruction beneficiaries.
Movement—helped distribute relief packs in far-flung barangays.
With their support, aid reached the indigenous people living in the
mountains of Cotabato.
For BDO Foundation, the improvement of the healthcare delivery near ground zero of the
system is necessary as it enables doctors, nurses and midwives to Marawi siege
provide primary and maternal health services with greater efficiency.
Moreover, the program helps the health centers get good assessment
scores from the Department of Health and accreditation from 1 technical-
PhilHealth. Most importantly, the rehabilitation of rural health units
helps improve the health and well-being of Filipinos who cannot afford
vocational
to go to hospitals. facility
in Mati City, Davao Oriental
Building environments conducive
to learning Initial no. No. of
of student classrooms
When fighting ensued between government forces and a militant group School beneficiaries built
in Marawi City, Lanao del Sur, BDO Foundation immediately mounted Lake Lanao 481 4
relief operations, facilitated donations and funded medical missions National
for the benefit of thousands of Filipinos affected by the armed High School
conflict. After the fighting ended, the foundation sustained its efforts, Harat 220 4
Medina
implementing programs to support the people and the rebuilding of Central
their war-stricken city. Elementary
School
In 2019, BDO Foundation constructed two school buildings near ground
zero of the Marawi siege—one in Lake Lanao National High School
and another in Harat Medina Central Elementary School. Responding
to the need for environments conducive to learning, the foundation
constructed new classrooms complete with blackboards, electric fans,
desks for teachers and chairs for students. The new classrooms enabled
the schools to accept students displaced by the fighting in Marawi.
“We hope this humble gift helps improve the capability of the schools
in Lake Lanao and Harat Medina to accommodate more learners,
especially those from schools that have not yet reopened. Moreover,
we hope the new school buildings inspire the teachers to teach and the
children to learn,” BDO Foundation president Mario Deriquito remarked.
third consecutive year that BDO Foundation received the highest honor given by the Singapore-
based finance publication to corporate foundations. The award was presented in Singapore at the
Although much has been achieved in the past, more needs to be done in the future. As the
foundation implements current programs in the areas of financial inclusion, disaster response,
rehabilitation and reconstruction, it will make inroads into new initiatives to fulfill its advocacies
and contribute to the achievement of the United Nations Sustainable Development Goals. To
achieve these goals, BDO Foundation will collaborate with partners and leverage the support
of the BDO Unibank community. The challenges are great, but they are surmountable with
stakeholder support.
The mission to serve the people continues. Moving forward to the next decade, the corporate
social responsibility arm of BDO Unibank will continue to find ways for the Filipino.
Financial Statements
In preparing the financial statements, management is responsible for assessing the BDO
Unibank Group and the Parent 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 BDO Unibank Group and the Parent Bank or
to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the BDO Unibank Group and the Parent
Bank’s financial reporting process.
The Board of Directors reviews and approves the financial statements including the schedules
attached therein, and submits the same to the stockholders or members.
Punongbayan & Araullo, the independent auditor appointed by the stockholders, has audited
the financial statements of the BDO Unibank Group and the Parent Bank in accordance with
Philippine Standards on Auditing, and in its report to the stockholders or members, has
expressed its opinion on the fairness of presentation upon completion of such audit.
Financial Statements
(Amounts in Millions of Philippine BDO
Pesos)
UNIBANK, INC. AND SUBSIDIARIES
STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2019 AND 2018
(Amounts in Millions of Philippine Pesos)
RESOURCES
EQUITY 21
Attributable to:
Shareholders of the Parent Bank 368,932 327,372 369,210 327,621
Non-controlling Interests 1,655 777 - -
78
Statements of Income
BDO UNIBANK, INC. AND SUBSIDIARIES
BDO UNIBANK, INC. AND SUBSIDIARIES STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017
(Amounts in Millions of Philippine Pesos Except Per Share Data)
(Amounts in Millions of Philippine Pesos Except Per Share Data)
IMPAIRMENT LOSSES - Net 9, 14, 15 6,166 6,286 6,537 5,699 5,700 5,809
Attributable to:
Shareholders of the Parent Bank P 44,194 P 32,708 P 28,070
Non-controlling Interests ( 26 ) ( 69 ) 35
MIDDLE EAST
BDO Unibank, Inc.
DIFC Representative Office
Unit 1303-B Level 13,
North Tower
Emirates Financial Towers
DIFC, PO Box 644347
Dubai +971 (4) 279-0733
Organizational Structure
BOARD OF DIRECTORS
Corporate Secretary
Internal
Audit Risk Trust and
President
Management Investments
Compliance
Central Legal
Maria Theresa L. Tan* Regina G. Caynap Florencia Maria Carina Elena D. Mariano
Federico P. Tancongco Susie S. Cham P. Esguerra Rosano B. Marpuri
Reynaldo A. Leandro M. Chan, Jr. Marie Celeste L. Esma Thelma D. Mazo
Tanjangco, Jr. Francis L. Chiu Elizabeth G. Estrada Abigail P. Melicor
Edna R. Tarroza Abigail Kathryn L. Marirose A. Fernando Maria Paz L. Mendoza
Dante R. Tinga, Jr.* Chiw* Bernard M. Florencio Proceso Z.
Agnes C. Tuason Arlene Y. Chong Sixto S. Gaddi Mendoza, Jr.
Myla R. Untalan Albert N. Chu Caroline H. Garcia Anthony R. Milan
Edward G. Wenceslao Aileen R. Chua Cheryll B. Gaviño* Edelwina Victoria E.
Edwin L. Chua Marcelita I. Millan
First Vice Presidents
Keith H. Chua Geollegue** Dalisay S. Molas*
Donabel R. Aala
Ruby A. Chua Sarah Kathryn T. Mary Ann C. Muñoz
Jeffrey R. Abacan
Salva Fe S. Cirilos Geronimo Francis Jay F. Nacino*
Edna C. Agajan
Luisa J. Co Katherine L. Go Ma. Concepcion Q.
Jocelyn D. Agas
Sonia C. Co Yolanda M. Go Narciso**
Dulce Amor E.
Ma. Cristina Barbara V. Renato S. Gongora Sarah Jessica M.
Alimbuyuguen*
Concepcion Maria Carmela M. Navarro
Carlos S. Alindogan
Maria Cristina P. Guerrero Glenn Birch G. Ong
Milagros R. Alindogan
Cordero Bremel Peter R. Guiao Sophia O. Ong
Susan G. Almendral
Rosario C. Joyleen Vivienne O. Arnaldo Emerito E.
Jose Virgilio O. Alvarez
Crisostomo* Ho Palad
Leticia L. Ang Ley
Edna Christine P. Cruz Lily C. Huang Eva M. Paz
Stanley A. Ang*
Lolita L. Damasco Jasper M. Jimenez* Yolanda A. Pilapil
Laurence S. Antonio
Cesario C. Dayego Anabelle F. Kabigting Cyrus M. Polloso
Apolinario E. Aquino
Iris Suzanne F. Ernesto L. Ladrido IV Jose Eduardo A.
Roland P. Arcadio
De Guzman Cirila S. Lao Quimpo II*
Onofre D. Avellanosa
Joyce B. De Leon Grace G. Lastimosa Alberto O. Quiogue*
Maria Cecilia M. Avila
Ma. Cecilia B. De Paz* John Angelo T. Maria Teresa (Marisa)
Janet B. Bagnes
Priscilla R. De Villa Limcangco M. Quiogue
Jose Luis F. Bautista
Lamberto B. John Emmanuel M. Edlyn L. Quiroz*
Pedro C. Bautista, Jr.
Del Fonso, Jr. Lizares Amaneci Grace V.
Lilli Ann D. Bautista*
Ma. Victoria F. Peter S. Lo, Jr. Ramos
Barbara May M.
Dela Cruz Hannah Regina H. Eduardo C. Ramos
Billano*
Mario A. Deriquito* Lopez Gilbert P. Ramos
Ismael C. Billena, Jr.
Ma. Dina B. Michael Christopher Jonathan L. Ravelas
Manuel Patricio J.
Desembrana B. Lualhati Concepcion G. Reyes
Bondad
Rolando L. Dillague Gertrudes J. Lumain Rose Mary T. Reyes
Ernesto F. Borlado, Jr.
Alvin S. Dimla Maria Pia L. Maceda Gerardo Clemente C.
Adelo C. Brabante
Pollyanna B. Diokno* Francis Jay T. Magboo Rivera*
Maria Eleanor B.
Angela Veronica M. Maria Dolores P. Maritess D. Rivera
Briones
Dulalia Magsalin Lily T. Roxas
Rolino C. Bucao, Jr.
Maria Fe H. Dy Ronald M. Manalastas Luisito S. Salazar
Mary Grace R. Caguioa
Rolando A. Embrador Jesus A. Mañego, Jr. Bernard Q. Santos
Michael R. Cahigas*
Armina C. Empeño Martha Maria Ma. Cecilia S. Santos
Jose Rene C. Carlos*
Joel M. Escala Magdalena H. Roberto P. Sarile
Aurora M. Castro
Maranan
89
BRANCHES AND ATMs The Bank will provide, without charge, a copy
For the complete list of BDO branches and of the 2019 Annual Report and Financial
ATM locations, please refer to the Bank’s Statements to its stockholders upon receipt
official website at www.bdo.com.ph. of a written request addressed to the
Corporate Secretary.
STOCKHOLDER INQUIRIES BDO Corporate Secretary
BDO Unibank, Inc.’s common stock is listed 14/F North Tower
and traded in the Philippine Stock Exchange BDO Corporate Center
under the symbol “BDO”. 7899 Makati Avenue
Makati City 0726
Inquiries regarding dividend payments,
Philippines
account status, address change, stock
certificates, and other pertinent matters
should be addressed to the company’s INVESTOR INQUIRIES
transfer agent: BDO Unibank, Inc. welcomes inquiries
from analysts, investors, and the financial
Stock Transfer Service, Inc. community. Please visit www.bdo.com.ph
34/F Unit D Rufino Pacific Tower or contact BDO Investor Relations &
6784 Ayala Avenue Corporate Planning.
Makati City 1200
Philippines BDO Investor Relations &
Telephone: +63 (2) 8403-2410; Corporate Planning
+63 (2) 8403-3433 4/F South Tower
Facsimile: +63 (2) 8403-2414 BDO Corporate Center
7899 Makati Avenue
Makati City 0726
Philippines
Telephone: +63 (2) 8840-7000 local 36069
Email: [email protected]
The 2019 Annual Report and the Financial Supplements can be viewed and
downloaded online at www.bdo.com.ph/company-disclosures/financial-report.
Thrift, Commerce, and Industry
Vicente Manansala
Oil on canvas, 1942
From the BDO Art Collection