PSBank annual report 2013 by Writers Edge

For the Real Stuff

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A n n u a l

R e p o r t

Contents Philippine Savings Bank (PSBank) first opened its doors to the public on September 26, 1960 and became the first publicly listed thrift bank in the Philippines in 1994. PSBank caters mainly to the retail and consumer markets with a wide range of products and services such as deposits, loans, treasury and trust. It continues to reach out to more customers through its 224 branches and 551 in-branch and offsite ATMs as of end-2013.

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Saving for the rainy days has been a familiar concept to Filipinos who grew up hearing the story of the grasshopper and the ant. The good news is that even the younger generation of Filipinos is still actively and confidently saving for the future, according to recent consumer surveys. As one of the country’s leading consumer banks, PSBank knows how to make your money work hard for you — whether it’s for helping your children learn the value of saving, buying your own home or car, or growing your business. We help you make sure you’re financially safe and secure when it counts. We help you save up FOR THE REAL STUFF.

PSBank belongs to GT Capital Holdings, Inc., the publicly listed holding firm of the family of George S.K. Ty, founder of Metropolitan Bank and Trust Company (Metrobank). GT Capital has diverse investments in established companies that are dominant in their respective markets. These include Metrobank, Federal Land, Toyota Motor Philippines Corp., Global Business Power Corp., and Philippine AXA Life Insurance. For more information about PSBank, log on to www.psbank.com.ph

VISION To be the country’s consumer and retail bank of choice.

MISSION As an INSTITUTION: To conform to the highest standards of integrity, professionalism and teamwork. For our CLIENTS: To provide superior products and reliable, top-quality services responsive to their banking needs. For our EMPLOYEES:

NEED STOCK PHOTOS FOR THE BACKGROUND CHALK AND BLACKBOARD

To place a premium on their growth, and nurture an environment of teamwork where outstanding performance is recognized. For our SHAREHOLDERS: To enhance the value of their investments.

CORE VALUES In realizing our mission and vision, we will be: PROACTIVE in serving our customers. PERFORMANCE-driven and recognized, reinforced, and rewarded accordingly. PROFESSIONAL to the highest standards and in all respects. PEOPLE-ORIENTED in our dealings with our internal and external customers alike.

Message from the Chairman President’s Report Operational Highlights Money Matters

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PSBank Online, a secure 24/7 Internet channel, is an alternative channel that extends the PSBanking experience to users anywhere in the world.

About Our Theme

Financial Highlights

Teach kids how to save Time to save for your goals Manage your loans Make your savings grow

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Corporate Social Responsibility

Statement of Management’s Responsibility

Risk Management Corporate Governance Audit Committee Report Board of Directors Senior Officers Profiles of Senior Officers CFO’s Report Management’s Discussion and Analysis

50 Independent Auditor’s Report 52 Audited Financial Statements 146 Branches 156 Offsite ATMs 166 Billers 167 Metrobank Group 168 Products and Services 172 Shareholders Information

Financial Highlights Total Assets

Statements Of Condition

Total Loans and Receivables

December 31 2013

Total Deposits

2012 (restated)

December 31 As of 1 Jan 2012 (restated)

Capital Funds

(in Php billion)

December 31 2009

2008

13,584,367,666

9,099,722,803

5,941,771,647

3,586,560,000 26,231,240,458 53,207,635,160

5,900,000,000 23,282,265,995 47,308,237,957

750,000,000 19,505,842,607 41,603,346,112

829,873,755 2,107,316,622 2,772,308,932 1,830,166,668 104,149,469,261

788,310,337 1,985,474,732 2,582,767,705 2,141,050,112 93,087,829,641

369,951,789 1,765,934,385 2,776,144,811 1,923,728,112 74,636,719,463

ASSETS Cash and Other Cash Items 19,050,497,768 14,328,336,240 11,960,957,295 Interbank Loans Receivable and Securities Purchased Under Resale Agreements 14,527,000,000 6,100,000,000 10,480,000,000 Investments 5,833,670,642 16,992,863,926 31,061,722,100 Loans and Receivables 82,917,120,994 70,412,582,319 58,190,152,155 Investments in an Associate and a Joint Venture 1,346,142,412 1,237,181,758 1,237,381,423 Property and Equipment 2,389,780,404 2,412,337,390 2,382,152,118 Investment Properties 2,589,408,311 2,622,918,872 2,802,259,434 Other Assets 1,372,254,218 2,054,743,793 2,141,677,462 130,025,874,749 116,160,964,298 120,256,301,986

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2010

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Net Income

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LIABILITIES AND EQUITY Liabilities Deposit Liabilities Subordinated Notes and Bills Payable Other Liabilities

(in Php billion) Equity Common Stock Capital Paid in Excess of Par Value Surplus Reserves and Surplus Net Unrealized Gains and Cumulative Translation Adjustment

106,518,503,910

94,624,286,307

101,550,335,610

87,518,809,267

77,390,211,286

61,678,482,921

2,972,366,024 4,271,929,336 113,762,799,270

2,969,797,342 3,539,642,323 101,133,725,972

0 3,178,134,260 104,728,469,870

1,977,141,032 3,044,441,571 92,540,391,870

1,973,881,534 2,711,598,326 82,075,691,146

2,208,541,621 2,276,970,219 66,163,994,761

2,402,524,910

2,818,083,506 11,240,640,144

2,818,083,506 9,753,666,282

2,818,083,506 8,055,688,371

2,818,083,506 6,090,406,392

2,818,083,506 5,087,136,893

2,818,083,506 4,027,311,845

(198,173,081) 16,263,075,479 130,025,874,749

52,963,628 15,027,238,326 116,160,964,298

2,251,535,329 15,527,832,116 120,256,301,986

298,062,583 11,609,077,391 104,149,469,261

704,393,186 11,012,138,495 93,087,829,641

(775,195,559) 8,472,724,702 74,636,719,463

Years ended December 31 2011 2010 8,976,586,827 7,913,097,318

2009 7,529,532,086

2008 6,129,607,034

Statements Of Income Earnings Per Share

(in Php billion)

Loans

(in Php billion)

INTEREST INCOME

2013 9,027,235,611

2012 (restated) 8,786,264,360

INTEREST EXPENSE

2,340,415,810

3,114,474,095

3,267,133,019

2,900,694,510

2,696,054,957

2,420,109,373

NET INTEREST INCOME

6,686,819,801

5,671,790,265

5,709,453,808

5,012,402,808

4,833,477,129

3,709,497,661

NET SERVICE FEES AND COMMISSION INCOME

962,558,457

878,624,324

732,878,178

691,681,482

596,241,357

534,365,260

12,174,960,104

9,265,356,796

7,684,799,588

8,236,537,847

6,271,337,230

4,937,458,499

8,175,866,491

6,445,422,508

5,688,672,802

5,624,905,692

4,942,951,461

3,843,526,649

109,569,160

(18,323)

8,271,646

41,563,417

45,129,698

46,820,603

PROVISION FOR (BENEFIT FROM) INCOME TAX 1,180,173,965

545,332,076

(24,360,250)

845,080,234

133,501,051

200,600,860

2,274,583,889

2,028,758,682

1,808,115,339

1,240,014,416

940,151,593

TOTAL OPERATING INCOME OTHER EXPENSES SHARE IN NET EARNINGS OF AN ASSOCIATE AND A JOINT VENTURE

NET INCOME

2,928,488,808

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2013 Annual Report | 3

Message from the Chairman

have worn many hats — first an entrepreneur, then an economic manager, a long-time civil servant, philanthropist and civic leader, and always a family man. Like everyone, I view the world through the lens of my experiences. And so I’ll talk about a few things I’ve learned along the way, hoping that our customers at PSBank might be able to relate or pick up valuable lessons from my personal life journey, and understand why we are committed to helping them secure their future. When I was eight years old, I had to earn my school allowance by delivering telephone directories to homes and got 50 centavos per delivery. In my early days as an entrepreneur, I supplied banana ketchup to Max’s Restaurant from the back of my house. I also ran a small feed mill, a broiler farm, and delivered chickens. In 1983, when the country was in a deep crisis, I started the 7-11 convenience store chain. Now, at 74, I serve as either Chairman of the Board or Director of a total of 18 companies.

business performance in the past years has opened up many opportunities — for our shareholders, in the form of higher dividends; and for our customers, through product and service enhancements. These opportunities were made possible by the strong dedication and commitment of talented and motivated PSBankers in our branches all over the country, led by a strong and experienced management team. In this regard, I want to personally thank our former President, Pascual M. Garcia III, for his leadership and commitment that have sustained PSBank’s growth in the past 12 years. His belief that our success depends on the success of customers continues to guide our strategy and is increasingly embedded in the culture of the Bank. Our gratitude also goes to former Director David T. Go for helping us uphold good corporate governance principles in our Board.

I learned to work hard ever since at a young age and because of this I have always known the value of hard-earned money. Even when I became an investor, I still strived to live below my means, looked closely at my values, and examined what I’m spending my money on. So my best financial advice to PSBank customers is: live simply. Save up only FOR THE REAL STUFF.

It’s a pleasure to welcome Vicente Cuna, Jr. to his new role as PSBank President. Having served as Vice Chairman in our Board, Bliz brings to his role a deep knowledge of our business and his vast experience working in many global, as well as local, financial institutions. Our Board is also privileged to welcome a new Director, Jeanne Frances T. Chua.

I agree, money matters can get overwhelming – whether you’re running a small business or a large enterprise, or simply paying your credit card bills or your kids’ tuition fees. That’s why you need a partner you can trust with your hard-earned money, help you make it grow, and keep you financially secure, now and in the future.

As your Board of Directors, we will work closely with Bliz and his management team in a shared commitment to grow the Bank, work more efficiently for customers, and capitalize on our strengths in the consumer market.

At At PSBank, we invest in knowing our customers better, coming up with products that suit their practical needs, offering convenience, and ultimately, making life simple. Our role goes beyond banking. By helping our customers save money, we enable them to secure their future. By helping them grow their business, we nurture their entrepreneurial ideas. In so doing, they spark economic growth, and this benefits us all. We saw this happening in 2013. While growth in other neighboring economies, except for China, was slowing, the Philippine economy remained vibrant, rising 7.2% in 2013 from 6.8% in the previous year. Our country obtained three investment upgrades from the major credit rating agencies, and this lured local and international investors to our Philippine Stock Exchange, which closed at record highs almost every day in the first quarter. The combination of strong growth and low inflation also lifted most corporate earnings. Remittances from overseas Filipino workers and the business process outsourcing industry sustained their steady stream, and this flowed into the retail, real estate, banking, leisure and tourism, food, and other sectors. As one of the country’s leading consumer bank, PSBank benefited from this heady growth. And it excites us to see that our robust

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The Philippines remains a bright spot in Asia, and we see this upswing lasting beyond 2014. While there is reason for guarded optimism, largely due to the expected volatility of the global markets, we remain confident and excited about what can be accomplished in the year ahead. We remain true to our commitment of serving our customers better and we will seize potential opportunities that may arise as our business grows. It has been a privilege to serve on the Board of Directors and to enjoy ing your trust and confidence. I hope you will continue to depend rely on us to take accompany you through your personal financial journey.

Jose T. Pardo

2013 Annual Report | 5

Presidentâ&#x20AC;&#x2122;s Report

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Juan dela Cruz Chairman

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2013 Annual Report | 7

Operational Highlights Lorem ipsum dolor sit amet, consectetu adipisi cing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute ir ure dolor in repr ehenderit in volu ptate velit esse cillum dolore eu fugiat nulla pa riatur. Excep teur sint occ aecat BRANCH BANKING

E-CHANNELS

We showed a significant increase in acquiring new customers and opening new deposit accounts last year. Total deposits grew by 13% year on year. We opened 4 branches and put up 19 additional ATMs in 2013. To better serve our customers, we were also able to renovate 28 branches, with 30 more due for renovation in 2014.

LARGE ENTERPRISE Our large enterprise portfolio held up amidst very competitive market rates. We posted new bookings of more than Php 2.5 billion and ended the year with a portfolio level of Php 10.4 billion (change with ADB figure in end-2013 FS– request this from Finance Group’s Sir Noel Ang). We were able to establish new lending relationships with an upcoming real estate firm and a holding company with interests in electric utilities, in addition to our participation in the foreign secondary market for Philippine corporate bonds.

DIRECT SALES We were able to grow the number of our new deposit customers and improve our sales productivity through our Direct Sales, a channel comprised of sales teams geared towards soliciting and acquiring new CASA customers. This was accomplished through a well-defined training program, a focus on deposit-select products and a motivated sales organization. for Philippine corporate bonds.

INDIRECT SALES Our total consumer loans sustained their uptrend in 2013, with our Auto Loans increasing by more than 24% and our Home Loans rising by 27% compared to the previous year. This was achieved through Indirect Sales Channel’s faster loan processing, improved coverage for auto dealers and effective tie-ups with real estate companies. Indirect Sales Channel is the group that solicits mortgage, auto and personal loans via third party channels like car dealers, real estate developers, and sales agencies. ISC creates and maintains good business relationships with these third party channels by providing innovative product features and excellent services including quality coverage of their business areas.

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2013 Annual Report | 9

Operational Highlights TREASURY

TRUST DIVISION

In 2013, we upgraded our SEC GSED license from dealer to dealer-broker, enabling the Bank to engage in the business of buying and selling securities for retail clients. Our treasury business posted significant gains from the sale of government securities and generated higher deposit levels.

After obtaining regulatory approval for our first Unit Investment Trust Fund, we made preparations to launch the fund in early 2014 to provide an opportunity for individual or corporate investors to earn relatively higher yields compared to regular savings and time deposit accounts. This investment option offers flexibility as it allows investors to easily access their funds and its earnings any time after the minimum 30-day holding period without any charges or penalties. It also offers convenience since interested investors need not administer or manage the funds themselves. A professional team will manage the funds for them.

LOANS OPERATIONS

OPERATIONS

We became the first thrift bank and second among all banks to have an extension office of the Land Registration Authority (LRA) extension office in its premises. The extension office facilitates verifications of Transfer Certificate Title which has greatly reduced our turn-around-time to only 3 days. Other services include the processing of simultaneous requests for E-titles and the handling of requests for a copy and printing of Certified True Copy of Titles anywhere straight from the LRA Database.

PSBank, together with parent bank Metrobank, are the first banks in the country to initiate steps and invest heavily in the EMV-enabled ATMs to provide heightened ATM security features to our clients. This is our first step in providing full protection to our clients against the global issue of ATM card skimming. This is also in line with the requirement to upgrade the security features of all ATMs in the country to address this concern. To further protect our customers, we installed PIN pad shields in ATMs to prevent the occurrence of card skimming and CCTVs for additional security. Our ATMs are also now equipped with a card-return-on-power-failure feature to minimize, if not eliminate, incidents of card capture.

INTERNAL AUDIT

RISK MANAGEMENT

We completed our risk-based audit plan that covered assurance reviews of branches, sales desks, ATM hubs, head office units and application systems. We likewise enhanced our policies and procedures for a more efficient management of our audit activities.

We implemented a facility risk rating model for our SME loans in 2013 as an additional tool to our existing borrower risk rating model and qualitative assessment for credit extension.

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Operational Highlights CREDIT ADMINISTRATION

INFORMATION TECHNOLOGY

We sustained efforts to deliver fast decisions on auto, mortgage and personal loans. Our loan processing system was enhanced through efficient handling of requests for reconsideration, elimination of time wastages during routing of accounts and the automated capture of borrower income profiles.

IT continued to improve the Bank’s information systems and upgrade technology infrastructure to provide faster, reliable and more secure banking transactions for our customers. PSBank Online, our 24/7 online banking facility, was migrated to a new and better platform in anticipation of an increase in enrollment and online transactions. We also enhanced our branch document imaging facility, designed and implemented a customer acquisition and tracking system that will improve monitoring of new clients and customer information, and activated the UITF module to support Trust’s activities. We also improved on the following areas: implemented a return mail tracking system to monitor and improve our mailing services and effectively update client information on return mails and transferred the Bank’s deposits and ATM hardware and network infrastructure to a more secure and improved location.

BUSINESS INFORMATION MANAGEMENT SYSTEMS We recently acquired a profiling and predictive analytics tool to address our customers’ changing needs under different business environments. This allows us to understand customers further and anticipate ways to be of better service to them. We also upgraded our monitoring systems for enhanced coverage, improved quality and greater timeliness of reports.

HUMAN RESOURCES

MARKETING COMMUNICATIONS

We installed a new system in our Human Resources Group to more efficiently monitor and track employee data for payroll management and accounting. As part of our internal campaign to safeguard the environment, 100 PSBank volunteers participated in Metrobank’s Tree Planting activity in Mt. Makiling, Los Banos, Laguna.

To highlight PSBank as a provider of easy and simple ways to save money, we launched a campaign on our deposit products that featured top celebrity-endorsers in the Philippines today. We also launched the PSBank Kiddie and Teen Savers Accounts through print, TV and radio advertisements targeting parents and their children, and organized events in college campuses to tap the teen market. for Philippine corporate bonds.

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2013 Annual Report | 13

MONEY MATTERS: Teach kids to save

Raising kids with a high ‘FQ’

Rose Fres Fausto is a former investment banker who left her financially fulfilling career to become a full-time homemaker. Aside from finding greater fulfillment in raising her sons Martin, 23; Enrique, 21; and Anton, 17, Rose is also an online newspaper columnist and author of the book, “Raising Pinoy Boys.” She is married to investment banker Marvin Fausto. Saving and investing is part of the financial literacy journey of a person. And teaching this skill starts at a young age. After all, you teach your kids how to read or write right away, so why not teach them how to deal with money right away? Let me share with you some things we did to raise our children with a high “FQ” (financial intelligence quotient):

1. Start them early.

As soon as they were born, we opened savings accounts where we deposited the cash gifts they received. By the time they were old enough to start asking about money, they already have financial security.

2. Start small then show them how to grow their own money.

So they understand money better, we label their savings as “small account” and “big account.” The small amount goes into a “treasure box.” Once this reaches P1,000, they deposit it into their bank account. When it goes beyond the minimum balance, they transfer it into a “big account,” which can be time deposits or fixed-income instruments. They know they are giving the bank time to invest their money so if the bank invests it well, they will have their share of the earnings through interest.

3. Time is money.

We show our kids the “magic” of compounding: how the weekly savings from their allowance can turn them into a millionaire even at the age of 12

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if they save religiously. In accumulating wealth, the biggest factor is time — and time is what the youth have an abundance of.

4. Make it a habit.

It only takes 21 days to form a habit, especially if you have the will. We teach our kids to be conscious about their regular expenses or the little things they buy. We prescribed a minimum of 20% for savings. As they get into the habit and earn more, they will be able to save up more.

5. Impart the values.

Kids these days are exposed to a lot of peer pressures that’s why it’s important for us to raise our children with a healthy self-esteem. They know they don’t have to buy expensive stuff just to be “cool” or just to belong. When we go into a store, we don’t tell them, “We’re not buying that because it’s too much.” This way, they’ll know it’s not the money or not having the money that determines the purchase. We don’t want them to grow up thinking that once they can already afford it, they can just go and buy. Whenever you teach money, you teach it with the right values. If you don’t, they’ll just become reckless when they get rich. Set a good example for your kids when it comes to money. Values are better caught than taught. Everything they’ll learn in life starts at home.

Raising money smart kids From keeping piggy banks, the four children of Maria Joselita Ang trooped to the nearest PSBank branch to open their own Kiddie Savers and Teen Savers accounts. The kids three boys and the only girl like keeping save much of from their weekly allowance so why not put the money in the bank and get them keep individual passbooks, , says their mother, who has been a PSBank client since 2011. So she thought: why not put the money in the bank and keep their individual passbooks? The younger ones, ages 7, 9, and 11, opened a Kiddie Savers Account, which is for ages 0-12 years. The eldest, now at 13, got a Teen Savers Account, which is for teens 13-18 years old. These accounts do not require an initial deposit or maintaining balance. The children’s savings accounts, boasting of an increasing balance, also serve as a new “home” to for their the cash gifts and prizes they get from their grandparents, relatives, and godparents. She and her husband feel that financial discipline should be taught to children, along with spiritual, social, academic, and personal values. “We want to teach them the importance of financial sense,” she adds. The family is big on saving, both for the proverbial rainy day as well as for sunny days, such as holidays. The children’s toys and gadgets are mostly presents from relatives and friends so which means that extra funds can go to sports activities and equipment. The children are also taught to share. They have little cans ready for donation in to their schools’ charity drives and disaster relief operations in school. “We are teaching our children to spend wisely, save diligently, and share their blessings so they will grow up to be money smart,” a proudly beaming Mrs. Ang says.

2013 Annual Report | 15

MONEY MATTERS: Time to save for your goals

Time to rethink your view of money

Vic F. Garcia is a known motivational guru who trains people how to achieve success in various aspects of their life. After being saddled in debt in the early years of his marriage, he drew from his wealth of experience and has been motivating people to become financially wise through his company, Unleash International Corporation. With wife Avelynn, he has written a series of books on financial management. We Filipinos practice isang kahig, isang tuka (from hand to mouth). Most of us go on a shopping spree as soon as we get our salary, even buying things we don’t need. Some of us find it unwise to keep money in the bank. This leaves us with no savings at all – some even buried in debt. It’s time to rethink the way we view money. Here are some helpful tips:

1. Learn the true value of money.

In my books, I talked about the Piso ‘Yan and Kurot principles. The Piso ‘Yan Principle makes us realize the value of every peso; you can’t have P100 with one peso missing. Filipinos have this notion that one peso is too small a value. When you see the value of every peso, it will be harder for you to spend it. The Kurot Principle reminds us to spend only a small part of the budget and keep the rest for the rainy days. Sometimes, we unknowingly buy things we don’t need. Keeping these two principles in mind will teach you the true value of money.

2. Follow the 70-20-10 principle.

It’s not wise to use all your money to buy things all at once. So set aside 70% of your monthly salary for paying for necessary expenses, 20% for savings, and use the remaining 10% on giving back to others. Following this principle

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will not only teach you to prioritize necessary expenses over other needs and wants, but will also give you a nudge to save up and share your blessings with those in need.

3. Consistency is quality.

In my programs, I always tell the trainees to be “ma-AGA”: A stands for Alamin – determine your problems. Which aspects of your life leave you with no savings? Point those out, list them down, and decide on how to improve it. G stands for Gawin: now that you have determined the problems and have probable solutions in mind, put those into action. Devise your personal timeframe and stick to it. Lastly, A is for Araw-araw. Make it a daily habit to spend wisely and stick to your plans. If you go back to your old ways, the effort you put into being financially stable today might be put into waste tomorrow.

4. Change your perception towards banks.

Where will you keep all those money you saved? Don’t put it under your pillow. Choose a bank that offers a good time deposit product and put your savings there so your money can grow. Keeping a safe distance from your own money by keeping it in a good bank will not only earn you a hefty interest in the long run, it will also be a firewall from your spending spree ways.

Photo to follow Time well saved Viviano Cruz, 75, considers himself both a saver and a spender. “I wish I could say I’m more of the former, but I’m not. If I’m interested in a new TV set and I have the money for it, or I can use my credit card, I go ahead and buy it,” he admits. The father of two and grandfather of three, however, puts a premium on saving up for the future. As a US veteran living in San Pablo, Laguna, he was able to save most of his retirement pensions, mainly through time deposit placements. A loyal customer of PSBank, Mr. Cruz even keeps a journal of all his time deposits and keeps track of the maturities and interest rates. Instead of making new investments, like buying stocks or bonds, he likes to stick to what the Bank has to offer. “I’ve known people whose financial losses have taken a toll on their lives. I’m more into dealing with the bank – if the product sounds good, I go for it and hope to make something out of it,” he says. He is very discriminating when it comes to choosing a bank. “I have savings accounts in different banks, but I’m happiest with PSBank,” he adds. “When you come into their branch, they take a personal interest in you and are always ready to serve you. They look after you.” Mr. Cruz, who lives with his wife and enjoys a light daily routine (including doing the groceries as a couple), highlights his relationship with his bank manager as one of the reasons he has stuck it out with PSBank. “It’s nice to know there is always someone willing to lend me a helping hand and takes the time to help me out with anything. I go in there and come out with a big smile on my face because I like the way they operate,” he says.

2013 Annual Report | 17

MONEY MATTERS: Manage your loans

The road to financial wellness

Rowena “Ro” Suarez started showing her entrepreneurial spirit as a child selling knick-knacks brought from family travels to her classmates. While attending college at De La Salle University, she opened Ritratto, a fashion retail store, which she ran until she shifted to a career in financial planning in 2004. As a Certified Wealth Manager, she has offered a range of financial advice to over 500 clients. When people come to me for financial advice, they usually say, “I am not rich.” They’ll ask how to build their wealth so they can afford retirement, medical expenses, travel, or sending their kids to school. A financial advisor is like a doctor. When you go to a doctor, you tell them how you’re feeling and they give you a prescription. It’s the same with financial advisors: we tell you how to reach financial wellness. Those in their 20s who realize the need for financial advice are lucky. Usually, people start thinking about it only in their late 30s. Building your personal wealth is just like building a house — it takes time. Here are some helpful tips to consider:

1. Make a commitment.

When it comes to money, it takes discipline. Review your budget and spending habits and then set your financial goals. And when it comes to savings, it takes serious commitment, just like in a marriage. Sign up for an automatic savings plan.

2. Be money alert.

Be on the look out for financial opportunities to make your money grow. Read up on the latest financial instruments out in the market.

3. Not all loans are created equal.

There are good loans and there

18 | PSBank

are bad loans. The best loans are mortgage loans because property values appreciate. Bad loans are those that fund expenses such as credit cards, or things you buy that don’t add up to your net worth. For example, some borrow to buy appliances — these things depreciate.

4. Do your homework.

When taking out a bank loan, do some computations first. Borrowing entails risks. If you’re borrowing for your business needs, make sure that your business plan takes into account the loan amount that your company can absorb and pay with earnings. If you’re borrowing for personal needs, check first if you can afford the loan, or for larger amounts, if it’s better to own instead of rent/lease.

5. Think of the proverbial rainy days.

A common mistake among OFWs is keeping little amount of money for themselves and sending everything to their families back home. Their families, however, spend mindlessly. When OFWs retire, they usually end up going home without savings. Whether or not you’re an OFW, you should always save at least 20% of your income and not touch it. Have an emergency fund that’s good for 3-6 months or longer, in case something happens and you have to stop working.

Your traveling companion For veterinarian and savvy entrepreneur Maritess Amante, convenience is key in banking. Mrs. Amante is among the first to open an account in PSBank Quezon Avenue Branch in 2004. Over the past ten years, this relationship has grown: she now has a PSBank Premium Checking account for her SME business, and is also a three-time client of PSBank Auto Loan. Her husband and son also maintain personal savings accounts in PSBank. Both licensed veterinarians, the Amantes built Medeqqs Trading, a thriving veterinary drug supply enterprise. She also has an orchid farm in Marilao, Bulacan and uses the Hyundai Starex she got from one of her auto loans for safely transporting her orchids. Mrs. Amante also bought a new pickup truck for Medeqqs Trading, which supplies to Bulacan and Tarlac, and a third car for her elderly father’s personal use. The Amantes’ passion for animals also spawned their newest venture: duck egg production. “We are looking for a new facility that can support our expansion goals,” she says. Mrs. Amante says what drew her to PSBank is convenience. “I no longer busy myself looking for a reliable agent of whatever vehicle I want. PSBank has the connections, and the processing is fast and easy,” she enthuses. The loyal PSBank client also enjoys long drives out of town along with her extended family, including her uncles and cousins. And in all these adventures, PSBank is there for the journey.

2013 Annual Report | 19

MONEY MATTERS: Invest in the future

Making your money grow

Efren Ll. Cruz is chairman and president of his own company, Personal Finance Advisers Philippines Corporation. He set up his own company after his position in a foreign bank in the country was declared redundant during the 2008 global financial crisis. Prior to setting up his own company, Efren had over 25 years of experience in financial services, 18 years of which was in mutual funds. During this time, he wrote two bestselling books, “Pwede Na! The Complete Pinoy Guide to Personal Finance” and “Pwede Na! The Complete Pinoy Guide to Retirement and Estate Planning”. Efren devotes his time to promoting financial literacy through personal finance trainings and writing for various publications, including the Philippine Daily Inquirer. There are typically two categories of people who approach me: those who want to preserve their wealth, and those who have yet to create and grow theirs. I always say that money is but a tool, never a goal. To make the most out of money, you should save and invest it in the best way to achieve your goal. I know a janitor who was able to send all his children to school, own a home and a car, even set up his own business. How was he able to do it? He saved whatever he could and invested it in small pieces of property. Over time, his investments grew large enough to afford him and his family a comfortable life.

many investment outlets, also known as diversification. Don’t put all your eggs in one basket. With some investments like pooled funds, diversification is required by regulators. Mutual funds and unit investment trust funds, for example, cannot invest more than 15% of their net assets in any one investee company.

5. Monitor performance.

To know if you are on track with your goals and your desired risk levels, continually monitor your investment performance. Initially, you will need to do this frequently, like monthly. Eventually, as you get the hang of it, you could monitor more infrequently, like quarterly or even semi-annually. But always keep your eyes on your goals and not the tool, which is money.

Here are some practical tips to make your money grow:

1. Know your goals and risk appetite.

Your goals can be measured. Compare the future cost of your goals with what you have to start with and what you can afford to add periodically. With little math, you can determine how much your money will need to earn to reach your goals. Such returns will also have to be balanced with the level of risks you are willing to take.

2. Ask yourself if you are all SET to invest directly.

Whether in financial securities or in a business, investing requires that you have the Size of funds, Expertise in investing and Time to manage your investments directly 24/7. Otherwise, you should invest indirectly by hiring a fund manager (i.e. buying into pooled funds) or hiring a business manager.

3. Before you invest, investigate.

Even the Securities and Exchange Commission (SEC) advises knowing first about an investment before plunking in your hard-earned savings. Shop around; there may be many types of investment to choose from. Match also the return and risk profiles of the investment with your own profile.

I always say investing is like growing a tree you should have started planting it many years ago.

4. Manage risks.

The best way to manage risk is to spread your investment over

20 | PSBank

2013 Annual Report | 21

Corporate Social Responsibility

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22 | PSBank

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sandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

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2013 Annual Report | 23

Risk Management

Responsibility for managing risks rests on every PSBank employee. Our Board and senior management are actively involved in planning, approving, reviewing, and assessing risks through various committees.

In 2013, we implemented a facility

risk rating model for our SME loans as an additional tool to our existing borrower risk rating model and qualitative assessment for credit extension. We also enhanced stress testing models and implemented stress limits for consumer loans.

RISK MANAGEMENT STRUCTURE

The Board of Directors takes the lead in all major initiatives. It approves broad risk management strategies and policies, and ensures that these are consistent with the Bank’s overall objectives. The Risk Oversight Committee (ROC) is comprised of at least three members of the Board, including at least one independent director, and a chairperson who is a non-executive member. They possess expertise and knowledge of the Bank’s risk exposures, which enable them to develop appropriate strategies for preventing or minimizing the impact of losses. The Board may also appoint nonDirectors to the ROC as part of the Metrobank Group’s risk oversight measures. However, only Bank Directors shall be considered as voting members of the ROC. Nonvoting members are appointed in an advisory capacity. Overall responsibility for the Bank’s risk management process rests with the ROC. It formulates policies and strategies to identify, measure, manage and limit the Bank’s risks. The ROC ensures that the system of limits approved by the Board remains effective. It also makes certain that limits are observed and that immediate corrective actions are taken whenever needed. The Risk Management Office (RMO), together with the

24 | PSBank

President, various committees and management, support the ROC in the fulfillment of its duties and responsibilities.

measures; and t SFQPSUJOH PO B SFHVMBS CBTJT UP 4FOJPS Management and the Board the results of assessment and monitoring.

RMO is independent from executive functions and business line responsibilities, operations and revenue-generating functions. It reports directly to the Board through the ROC.

VARIOUS TYPES OF RISK

The RMO supports the ROC in carrying out its responsibilities by: t "OBMZ[JOH DPNNVOJDBUJOH implementing and maintaining the risk management policies approved by the ROC and the Board; t 4QFBSIFBEJOH UIF SFHVMBS SFWJFX PG the Bank’s risk management policies and elevating recommendations that enhance the risk management process to the ROC and the Board, for their approval; and t &OTVSJOH UIBU UIF SJTLT BSJTJOH from the Bank’s activities are identified, measured, analyzed, reported and understood by risk takers, management, and the Board. It analyzes limit exceptions and recommends enhancements to the limits structure. Risk Management is responsible for: t JEFOUJGZJOH UIF LFZ SJTL FYQPTVSFT and assessing and measuring the extent of risk exposures of the bank and its trust operations; t NPOJUPSJOH UIF SJTL FYQPTVSFT BOE determining the corresponding capital requirement in accordance with the Basel III capital adequacy framework and based on the Bank’s internal capital adequacy assessment on an ongoing basis; t NPOJUPSJOH BOE BTTFTTJOH decisions to accept particular risks whether these are consistent with Board-approved policies on risk tolerance and the effectiveness of the corresponding risk mitigation

Credit Risk This is the risk where a counterparty fails to meet its contractual obligation. PSBank’s lending business follows credit policy guidelines set by the Board, ROC, and RMO. These guidelines serve as the Bank’s minimum standards for extending credit. Everyone engaged in the credit process are required to understand and adhere to these policies. PSBank’s product manuals contain business plans and define the business parameters by which credit activity is to be performed. Before extending a loan, the Bank observes a system of checks and balances, including the approval of at least two credit officers through the Credit Committee (Crecom), Executive Committee (Excom), or the Board. The ROC reviews the Bank’s business strategies and ensures that revenue-generating activities meet risk standards. PSBank holds regular audit across the organization. Its Board – through the Excom, Crecom, and ROC – ensures that all business segments follow sound credit policies and practices. The Bank manages risk concentration by type of individual or group of borrowers, by geographical region, and by industry sector. It assesses the credit quality of financial assets using the Bangko Sentral ng Pilipinas’ (BSP) credit classifications. The Bank uses credit scoring models and decision systems for consumer loans, and borrower risk rating and facility risk rating models for SME loans, as approved by the Board.

2013 Annual Report | 25

Risk Management The Bank carries out stress testing analyses using Board-approved statistical models relating the default trends to macroeconomic indicators. In 2013, enhanced stress testing models and stress limits were implemented for consumer loans.

Market Risk

This covers the areas of trading, interest rate, and liquidity risks. Trading market risk is the risk to earnings and capital arising from changes in the value of traded portfolios of financial instruments. Interest rate risk arises from movements in interest rates. Liquidity risk is the inability to meet obligations when they fall due without incurring unacceptable losses. The Bank’s market risk policies and implementing guidelines are regularly reviewed by the Assets & Liabilities Committee (ALCO), ROC and the Board to ensure that these are up-to-date and in line with changes in the economy, environment and regulations. The ROC and the Board set the comprehensive market risk limit structure and define the parameters of market activities that the Bank can engage in. The Bank utilizes various measurement and monitoring tools to ensure risk-taking activities are managed within instituted market risk parameters.

Trading Market Risk

PSBank’s trading portfolios are currently composed of peso and dollardenominated sovereign debt securities that are marked-to-market daily. PSBank uses Value-at-Risk (VaR) to measure the extent of market risk exposure arising from these portfolios. VaR is a statistical measure that calculates the maximum potential loss from a portfolio over a holding period, within a given confidence level.

26 | PSBank

Our current VaR model is based on a historical simulation methodology with a one-day holding period and a 99% confidence level.

while remaining flexible to interest rate movements and changes in economic conditions. RMO and ROC review and oversee its interest rate risks.

The Bank also performs back testing to validate the VaR model, and stress testing to determine the impact of extreme market movements on our portfolios. It has established position limits for its trading portfolios and closely monitors its daily profit and loss against loss triggers and stop-loss limits.

Liquidity Risk

To a certain extent, the Bank also carries foreign exchange (FX) risk. It is the Bank’s policy to maintain exposures within approved position, stop loss, loss trigger, VaR limits and to remain within regulatory guidelines. The Bank also uses VaR to measure market risk arising from its FX exposure. The Bank uses its BSP-approved Type 3 Derivative License for plain vanilla FX forwards to manage its FX risk against adverse exchange rate movements.

Structural Interest Rate Risk

The interest rate sensitivity gap report measures interest rate risk by identifying gaps between repricing dates of assets and liabilities. The Bank’s sensitivity gap model calculates the effect of possible rate movements on its interest rate profile. PSBank uses the sensitivity gap model to estimate its Earnings-At-Risk (EAR) should interest rates move against our interest rate profile. Our EAR limits are based on a percentage of PSBank’s projected earnings and capital for the year. We also perform stress-testing analysis to measure the impact of various scenarios based on interest rate volatility and shift in the yield curve. The ALCO is responsible for managing PSBank’s structural interest rate exposure. Its goal is to achieve a desired overall interest rate profile

In managing its liquidity position, the Bank ensures that it has more than adequate funds to meet its maturing obligations. PSBank uses the Maximum Cumulative Outflow (MCO) Model to measure liquidity risk arising from the mismatches of its assets and liabilities. The Bank administers stress testing to assess its funding needs and strategies under different conditions. Stress testing enables the Bank to gauge its capacity to withstand both temporary and long-term liquidity disruptions. The Liquidity Contingency Funding Plan (LCFP) helps the Bank anticipate how to manage a liquidity crisis under various stress scenarios. Liquidity limits for normal and stress conditions cap the projected outflows on a cumulative and per tenor basis. PSBank discourages dependence on Large Funds Providers (LFPs) and monitors the deposit funding concentrations so that it will not be vulnerable to a substantial drop in deposit level should there be an outflow of large deposits. ALCO is responsible for managing the liquidity of PSBank while RMO and ROC review and oversee the Bank’s overall liquidity risk management.

Operational Risk

Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. To mitigate these, PSBank constantly strives to maintain our strong “control culture,” prudent use of technology and effective internal control system, which are key factors towards continuous self-improvement under a “no-surprise”

operating environment. PSBank’s Board-approved bankwide organizational chart clearly establishes areas of management responsibility, accountability and reporting lines for all its senior officers. Operational risk management policies and frameworks are continuously reviewed and updated, subject to ROC and Board approvals to ensure that they remain relevant and effective. The Bank’s products and operating manuals, policies and procedures spell out internal controls implemented by its business and operating support units. Its Internal Audit Group (IAG) provides independent reasonable assurance on control adequacy and compliance with these manuals. PSBank continually identifies and assesses operational risks across the organization and develops controls to mitigate and manage them as part of continuing efforts to enhance its Operational Risk Management Framework. To ensure that the Bank manages all operational risks adequately, specialized functions are engaged in risk management. These include Information Technology, Information Security, Systems Quality Assurance, Financial Control, Legal, Compliance, Human Resources and Security Command. IAG regularly reports to the Board’s Audit Committee on the effectiveness of internal controls. The Bank likewise has a Business Continuity Plan and a Disaster Recovery Program that are reviewed and tested annually on a per segment and bankwide basis to ensure their effectiveness in case of business disruptions, system failures and disasters.

Technology Risk

Technology risk is the risk to earnings

or capital arising from deficiencies in systems design, implementation, maintenance of systems or equipment and the failure to establish adequate security measures, contingency plans, testing and auditing standards. To provide simpler, faster, more convenient and secured banking services to its growing clientele and to avail of an advanced management information system that enables the Bank to make fast and well-informed business decisions, it continually invests in Information Technology by venturing into core business process automations, key system enhancements, and information security solutions. Given this heavily automated operating environment, PSBank makes sure that it continuously identifies and quantifies risks to the greatest extent possible and establishes controls to manage technology-associated risks through effective planning, proper implementation, periodic measurement and monitoring of performance.

Legal Risk

Legal risk is the potential loss due to nonexistent, incomplete, incorrect, and unenforceable documentation that the Bank uses to protect and enforce its rights under contracts and obligations. A legal review process, which its Legal Department performs, is the primary control mechanism for this type of risk to ensure that the Bank’s contracts and documentation adequately protects its interests and complies with applicable legal and regulatory requirements.

Regulatory Risk

Regulatory Risk, also known as Compliance Risk, covers the potential loss from non-compliance with laws, rules and regulations, policies and

procedures, and ethical standards. PSBank recognizes that compliance risk can diminish its reputation, reduce its franchise value, limit its business opportunities, and reduce its potential for expansion. Thus, PSBank, guided by its Compliance Office, continuously promotes a culture of compliance.

Strategic Risk

Strategic risk is the current and prospective impact on earnings or capital arising from adverse business decisions, improper resolution of conflicts, and slow response to industry changes. Strategic risk can influence the Bank’s long-term goals, business strategies, and resources. Thus, the Bank utilizes both tangible and intangible resources to carry out its business strategies. These include communication channels, operating systems, delivery networks, and managerial capacities and capabilities.

Reputational Risk

Reputational risk is the current and prospective impact on earnings or capital arising from negative public opinion. This affects PSBank’s ability to establish new relationships or services, or manage existing relationships. The risk may expose the Bank to litigation, financial loss, or a decline in customer base. All employees are responsible for building PSBank’s reputation and exercising an abundance of caution when dealing with customers and communities. For a complete discussion of PSBank’s capital details, please refer to the Supplementary Management Discussion and Notes to the Financial Statements on Financial Risk Management Policies and Objectives.

2013 Annual Report | 27

Corporate Governance

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BOARD OF DIRECTORS Corporate Governance Committee

Trust Committee

Compliance

Trust Audit Committee

Executive Committee

Internal Audit

Nominations Committee Related Party Transactions

Risk Oversight Committee Compensation/Remunerations Committee

Compliance

RMO PRESIDENT Management Committees Credit Committee Assets and Liabilities Committee Anti-Money Laundering Compliance Committee Outsourcing Oversight Committee IT Steering Committee Emergency Committee Policy Committee

28 | PSBank

All Business, Finance, Operations, Security, and other support groups

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2013 Annual Report | 29

Corporate Governance PSB Regular and Special Board Meeting Attendance Year 2013 Board of Directors Name

Meeting Attended

Number of Meetings

ASM

Jose T. Pardo,

Arthur V. T,

Samson C. Lim,

David T. Go*

N/A

Benedicto Jose R. Arcinas,

Joaquin Aligguy

Ma. Theresa G. Barretto

Margaret Ty Cham

Chairman, Independent Director Vice Chairman Independent Director Independent Director Independent Director

Pascual M. Garcia III*

N/A

Vicente R. Cuna, Jr.**

Jeanne Frances T. Chua***

* Term expired in April 2013 ** Appointed as Director / President in April 2013 *** Appointed as Member in April 2013

30 | PSBank

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Executive Committee Name

Meeting Attended

Number of Meetings

Arthur V. T,

Vicente R. Cuna, Jr.

Margaret Ty Cham

Ma. Theresa G. Barretto*

Rosanna F. De Vera,

Maris Lou S.Velicaria,

Paul Roderick Ysmael,

Chairman

Metrobank Representative PSBank Representative Secretary * Term expired in November 2013 ** Excludes 31 special routing of accounts for 2013

enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui

2013 Annual Report | 31

Corporate Governance

Risk Oversight Committee Name

Meeting Attended

Number of Meetings

Benedicto Jose R. Arcinas,

Pascual M. Garcia III*

Vicente R. Cuna, Jr.**

David T. Go*

Joaquin Aligguy

Bernardito M. Lapuz

Edmund A. Go

Chairman, Independent Director

* Term expired in April 2013 ** Appointed as Member in April 2013

32 | PSBank

runt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus,

omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis

Audit Committee Name

Meeting Attended

Number of Meetings

Jose T. Pardo,

Samson C. Lim,

Chairman, Independent Director Independent Director

Joaquin Aligguy

Emma B. Co,

Secretary, Chief Audit Executive

autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem

2013 Annual Report | 33

Corporate Governance Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

34 | PSBank

Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupidi-

tate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Trust Committee Name

Meeting Attended

Number of Meetings

Samson C. Lim,

Jose T. Pardo,

David T. Go*

Jeanne Frances T. Chua**

Chairman, Independent Director Independent Director

Joaquin Aligguy

Gilbert L. Nunag,

Secretary, Chief Compliance Officer * Term expired in April 2013 ** Appointed as Member in April 2013

Meeting Attended

Number of Meetings

Jose T. Pardo

Benedicto R. Arcinas,

Joaquin Aligguy

Emma B. Co,

Chairman, Independent Director Independent Director

Chief Audit Executive

Gilbert L. Nunag, Secretary, Chief Compliance Officer

Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem

Number of Meetings

David T. Go*,

Benedicto Jose R. Arcinas**,

Ma. Theresa G. Barretto

Pascual M. Garcia III*

Vicente R. Cuna, Jr.***

Jeanne Frances T. Chua***

eum fugiat quo voluptas nulla pariatur?

Edmund A. Go

Stella A. Sampayan,

Reuel R. Javier****,

Chairman, Independent Director

Name

Meeting Attended

Chairman

Corporate Governance Committee

Related Party Transactions (RPT) Committee

Adviser

Secretary, Trust Officer Secretary, Trust Officer

* Term expired in April 2013 ** Appointed as Chairman in April 2013 *** Appointed as Member in April 2013 **** Replaced Stella A.Sampayan in September 2013

2013 Annual Report | 35

Nominations Committee Name

Meeting Attended

Number of Meetings

Samson C. Lim,

Jose T. Pardo,

Arthur V. Ty

Chairman, Independent Director Independent Director

Audit Committee Report Compensation & Remuneration Committee Name

Meeting Attended

Number of Meetings

Jose T. Pardo,

Benedicto R. Arcinas,

Arthur V. Ty

Chairman, Independent Director Independent Director

impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur?

The Audit Committee is responsible for providing assistance to the Board in fulfilling its oversight of the Bankâ&#x20AC;&#x2122;s financial reporting process; governance, risk management, and control processes; internal and external audit functions; and monitoring of compliance with Bank policies, applicable laws, rules, regulations and code of conduct. Management is responsible for the preparation, integrity, and fair presentation of the Bankâ&#x20AC;&#x2122;s financial statements prepared in accordance with Philippine Financial Reporting Standards. For 2013, the Audit Committee composed of three members, two of whom are independent directors, performed the following in their monthly meetings: t %JTDVTTFE BOE BQQSPWFE CPUI UIF *OUFSOBM "VEJU Group (IAG) and Sycip Gorres and Velayoâ&#x20AC;&#x2122;s (SGVâ&#x20AC;&#x2122;s) overall audit scope and plans; t 3FWJFXFE BOE EJTDVTTFE UIF ZFBS FOE ĂśOBODJBM statements with SGV, who are responsible for expressing an independent opinion on the audited financial statements and their conformity with Philippine Financial Reporting Standards; t 3FWJFXFE XJUI *"( UIF SFTVMUT PG JUT FWBMVBUJPO on the adequacy and effectiveness of the Bankâ&#x20AC;&#x2122;s governance, risk management, and control processes and the Bankâ&#x20AC;&#x2122;s compliance with policies, laws, and regulations with the managementâ&#x20AC;&#x2122;s action plans for the implementation of recommendations to improve the operations of the branches and head office units including the information systems and security; t &WBMVBUFE UIF QSPDFTT JO BTTFTTJOH UIF TJHOJĂśDBOU risks and related-risk mitigation efforts of the Bank;

t %JTDVTTFE BOE BQQSPWFE UIF SFTVMU PG UIF BOOVBM internal quality assessment of IAGâ&#x20AC;&#x2122;s conformance with the International Standards for the Professional Practice of Internal Auditing; t .POJUPSFE BOE BTTFTTFE UIF #BOL T DPNQMJBODF with applicable laws, rules, regulations, code of conduct as well as the adequacy and effectiveness of internal control system; and t 3FWJFXFE UIF $PNNJUUFF T FĂ˛FDUJWFOFTT UISPVHI self-assessment process. Based on the reviews and discussions undertaken and subject to the limitations on the roles and responsibilities provided for in the Audit Committee Charter, the Committee recommends that the audited financial statements be included in the Annual Report for the year ended 31 December 2013, for filing with the Securities and Exchange Commission and other regulatory bodies.

JOSE T. PARDO Chairman

SAMSON C. LIM Member

t 3FWJFXFE BQQSPWFE BOE FOEPSTFE UP UIF #PBSE the revised Audit Committee Charter; t 3FWJFXFE UIF BEFRVBDZ PG SFTPVSDFT TUBĂ˛ competencies, activities, and effectiveness of the IAG;

JOAQUIN ALIGGUY Member

At vero eos et accusamus et iusto odio dignissimos ducimus

36 | PSBank

2013 Annual Report | 37

Board of Directors

ADVISERS

DR. GEORGE S.K. TY Senior Adviser

EDMUND A. GO Adviser

JOSE T. PARDO

ARTHUR V. TY

VICENTE R. CUNA, JR.

MARGARET TY CHAM

Chairman / Independent Director

Vice Chairman

Director / President

Director

Chairman since 2003. Chairman/ Independent Director, Philippine Stock Exchange, Securities Clearing Corporation of the Philippines, Bank of Commerce. Chairman, EC Pay Network Inc., Franchise Investment Holdings Inc., De La Salle University, Inc., ECOP Council of Business Leaders, PCCI Council of Business Leaders, Philippine Business Center Inc., Foundation for Crime Prevention, Assumption (Antipolo), EDSA People Power Foundation, Philippine-Japan Vocational Technical Foundation. Co-Chairman, De La Salle Philippines. Vice Chairman, EDSA People Power Commission, Office of the President. Independent Director, JG Summit Holdings, Inc. Director, National GRID Corporation of the Philippines and ZNN Radio Veritas. First graduate of the Harvard-DLSU Advisory Program. BS CommerceAccountancy and MBA, De La Salle University.

Vice Chairman since 2001. Chairman, Metropolitan Bank and Trust Company; GT Capital Holdings Inc.; GT Metro Foundation Inc.; Metropolitan Bank (China) Ltd.; and Ferum Cee Inc. Chairman/ President, Nove Ferum Holdings, Inc. Chairman/Director, Grand Titan Capital Holdings, Inc. and Global Treasure Holdings, Inc. Vice Chairman, Metrobank Foundation, Inc. and Great Mark Resources Corporation. Vice Chairman/ Director, First Metro Investment Corporation. President/ Director, Horizon Royale Holdings, Inc. and Philippine Securities Corporation. Director, Federal Land, Inc. BS Economics, University of California-Los Angeles. MBA, Columbia University.

Director/ President since 2013. Director, First Metro Investment Corporation. Senior Executive Vice-President, Metrobank - Institutional Banking Sector. A.B Economics, De La Salle University. MBA (coursework completed, pending thesis requirement), Ateneo de Manila Graduate School of Business. Angeles. MBA, Columbia University.

Director since 2004. Director, Orix Metro Leasing Corp. and Federal Land Inc. Director/ President, Glam Holdings Corp. Chairman/ President, Glamore Holdings Corp. Vice President, Great Mark Resources Inc., Global Treasure Holdings Inc., and Grand Titan Capital Holdings Inc. Corporate Sercretary, Metrobank Foundation. Vice President/ Corporate Secretary, Norberto and Tytana Ty Foundation. Trustee/Vice President/Corporate Secretary, GT Metro Foundation. Assistant Corporate Secretary, GT Capital Holdings, Inc. BS Humanities, De La Salle University.

JOAQUIN ALIGGUY Director Director since 2009. Corporate Secretary, Manila Doctors Hospital. President, KNBO Management Consultants Inc. Director, Writers Union of the Philippines, and Philippine Association of Chinese Studies. Adviser, Metrobank Foundation. Trustee, Angelo King Foundation. Consultant, Asiaticus Management Corp. AB Philippine Literature, University of the Philippines .

38 | PSBank

BENEDICTO JOSE R. ARCINAS

MA. THERESA G. BARRETTO

JEANNE FRANCES T. CHUA SAMSON C. LIM

POCHOLO V. DELA PENA

Director

Independent Director

Corporate Secretary

Independent Director

Director since 2006. Director, Endel Enterprises Corp. and Rural Bank of Candelaria, Inc. BS Commerce, Assumption College. Curso de Estudios Hispanicos, La Universidad de Madrid in Spain.

Director since 2013. Vice President, Legaspi Import & Export Corp. B.S. Finance, Santa Clara University, USA

Director since 2008. President, Blims Fine Furniture and Corporate Secretary since 2011. First Vice President, Canadian Tourism & Hospitality Institute. Chairman, Metrobank. BS Commerce major in Accounting, Automatic Appliances Inc., Collins International Trading University of Santo Tomas. Corporation and Francorp Philippines . Chairman/ Tourism Committee, Philippine Chamber of Commerce and Industry. Chairman Emeritus/ International Relation, Philippine Franchise Association. Chairman Emeritus, Philippine Retailers Association. BS Liberal Arts, Cum Laude, Ateneo de Manila University. Masters in Business Economics, University of Asia and the Pacific. Exchange Student, Sophia University Tokyo , Japan . Special Training on International Business, Institute of International Studies and Training, Fujinomia , Japan . Top Management Program, Asian Institute of Management.

Director since 2012. Director, Arcinas Freres, Inc. BS Business Economics, University of the Philippines, Diliman. Master of Science in Management (Graduation with Distinction), Arthur D. Little Management Education Institute (now Hult International Business School). Certificate Courses in Small Enterprise Management, Operations Research, Economics, Computer Programming, Harvard University, Cambridge, Massachusetts.

2013 Annual Report | 39

7IRMSV 3J多GIVW

JOSE VICENTE L. ALDE Executive Vice President VICENTE R. CUNA, JR. President

NEIL C. ESTRELLADO First Vice President

PERFECTO RAMON Z. DIMAYUGA, JR. Senior Vice President

NOLI S. GOMEZ Senior Vice President

FRANCIS C. LLANERA First Vice President

JOSE MARTIN A. VELASQUEZ First Vice President

JOSE JESUS B. CUSTODIO Senior Vice President

LEAH M. ZAMORA First Vice President

MA. PATRICIA L. CASTANEDA First Vice President

ANDRE MANUEL L. ABELLANOSA Vice President

NORBERTO M. CORONEL III First Vice President

PATRICK P. ARCE Vice President

RAYE CLAUDINE Q. BARON Vice President

MINDA L. CAYABYAB Vice President

EMMA B. CO Vice President

DAN JOSE D. DUPLITO Vice President

DONABEL S. ARCILLA Vice President

MARY MYLEEN M. MASANQUE Vice President

ANTONIO JUDE MARTIN P. MONTINOLA Vice President

GILBERT L. NUNAG Vice President

MARIS LOU S. VELICARIA Vice President

PABLITO C. VELORIA Vice President

EDEZA A. QUE Vice President

MELISSA F. TONG Vice President

ANTONELL S. INTERINO Vice President

MARY JANE M. VALERO Vice President

40 | PSBank

MA. RITA ROSETTE R. VILLAMIN Vice President

2013 Annual Report | 41

4VS¿PIW SJ 7IRMSV 3J¿GIVW VICENTE R. CUNA, JR. President (See write-up in Board of Directors) JOSE VICENTE L. ALDE Executive Vice President Joined the Bank in October 2007. Member, Assets and Liabilities, Credit, IT Steering and Personnel Committees. Former Vice President, Treasury at ABN AMRO Bank. Held various positions in treasury and branch banking in BA Savings Bank. Had stints in sales management at Johnson & Johnson and IT with World Health Organization. Bachelor in Computer Science with honors, University of the Philippines. Masters in Business Management, Asian Institute of Management. PERFECTO RAMON Z. DIMAYUGA, JR. Senior Vice President Joined the Bank in January 2006. Head, Finance Group. Member, Assets and Liabilities, IT Steering, Personnel, Outsourcing Oversight and Retirement Committees. Held various treasury positions in Development Bank of Singapore (DBS) Phils., Inc. , Bank of the Philippine Islands, Mindanao Development Bank, Citytrust Banking Corp. and Rizal Commercial Banking Corp. AB in Economics, Ateneo de Manila University. Masters in Business Management, University of the Philippines. NOLI S. GOMEZ Senior Vice President Joined the Bank in October 2001. Head, Operations Group. Member, Assets and Liabilities, Policy, Personnel, Outsourcing Oversight, Emergency and Retirement Committees. Former Chief Risk Officer and Head of Systems and Methods, DBS Bank Phils. and Systems Management Officer, Bank of the Philippine Islands. BS Civil Engineering, Mapua Institute of Technology. Licensed Civil Engineer with distinction. JOSE JESUS B. CUSTODIO First Vice President Joined the Bank in December 2001. Head, Indirect Sales Channel. Member, Assets and Liabilities Committee. Former Head of Auto Loans-Retail Sales, Citytrust Banking Corp. Former Fleet and Floorstock Department Head, BPI Family Savings Bank. BS Business Management, Ateneo de Manila University. MA. PATRICIA L. CASTANEDA First Vice President Joined the Bank in August 2005. Head, Risk Management Office. Member, Assets and Liabilities Committee. Member, Anti-Money Laundering Committee. Former Market Risk Officer, BDO Private Bank. Former Corporate Finance Manager, TA Bank. Former Risk Management Officer, Bank of the Philippine Islands. BS Business Economics with honors, University of the Philippines. NORBERTO M. CORONEL III First Vice President Joined the Bank in December 2007. Head, Large Enterprise Group. Member, Assets and Liabilities and Credit Committees. Former FVP and Head of Equity Underwriting and Placements, Investment & Capital Corp. of the Philippines. Former AVP of Investment Banking Division, United Coconut Planters Bank. BS Business Management, Ateneo de Manila University. MBA, University of the Philippines.

42 | PSBank

NEIL C. ESTRELLADO First Vice President Joined the Bank in March 2002. Head, Information Technology Division. Member, Outsourcing Oversight, IT Steering and Emergency Committees. Former Project Leader, Oversea-Chinese Banking Corp. Ltd. Former Lead IT Analyst, Development Bank of Singapore. Former Project Manager, DBS Philippines. Former Systems Analyst, Bank of the Philippine Islands. BS Mathematics, Ateneo de Manila University.

MINDA L. CAYABYAB Vice President Joined the Bank in May 1998. Head, Financial Accounting and Services Division. Former Senior Auditor, Isla Lipana & Co., Philippine member firm of PricewaterhouseCoopers. BS Business Administration, Major in Accounting with honors, Pamantasan ng Lungsod ng Maynila. Certified Public Accountant.

FRANCIS C. LLANERA First Vice President Joined the Bank in December 2007. Head, Branch Banking Group. Member, Assets and Liabilities Committee. Former Credit Card Collections Head, Union Bank of the Philippines. Formerly with American International Group’s Credit Risk Management. BS Commerce, University of Santo Tomas.

RAYE CLAUDINE Q. BARON Vice President Joined the Bank in August 2009. Head, Process Management Division. Member, Policy, Outsourcing Oversight and Emergency Committees. Former Senior Assistant Vice President for Project Management and Operations Control Department, AIG PhilAm Savings Bank Inc. BS Business Management, Ateneo de Manila University. MBA, University of the Philippines.

JOSE MARTIN A. VELASQUEZ First Vice President Joined the Bank in September 2004. Head, Treasury Group. Member, Assets and Liabilities, and Retirement Committee. Former Deputy Treasurer, First Metro Investment Corp. Former Senior Dealer, BPI Capital Corp. BA Economics and BS Commerce Major in Management of Financial Institutions and MBA, De La Salle University. Registered Fixed Income Salesman, Securities and Exchange Commission. Treasury Certified Professional, Ateneo Bankers Association of the Philippines. LEAH M. ZAMORA First Vice President Joined the Bank in April 2010. Head, Business Information Management Services Division. Member, Assets and Liabilities and IT Steering Committees. Former Vice President for Financial Planning and Analysis, GE Money Bank Philippines. BS Accounting, De La Salle University. Certified Public Accountant. ANDRE MANUEL L. ABELLANOSA Vice President Joined the Bank in February 2003. Head, Treasury Marketing and Currencies Division. Member, Assets and Liabilities Committee. Former Senior Trader, BPI Capital Corporation. Former Chief Forex Dealer, DBS Forex Corp. BS Management, Colegio de San Juan de Letran. Registered Fixed Income Salesman, Securities and Exchange Commission. Treasury Certified Professional, Ateneo-Bankers Association of the Philippines. DONABEL S. ARCILLA Vice President Joined the Bank in June 2007. Head, Marketing and Communications Group. Member, Assets and Liabilities Committee. Former Assistant Vice President in Marketing for CATS Motors, Inc. Former Senior Manager for Marketing for General Motors Philippines, Inc. Former Senior Manager for Advertising & Promotions, SM Supermalls. Advertising, Miriam College. PATRICK P. ARCE Vice President Joined the Bank in June 2012. Head, Direct Sales Channel. Member, Assets and Liabilities Committee. Former AVP and Sales Director of Direct Sales Personal Loans (Public Loans) Division, Chinatrust Bank (Philippines). Former Channel Head and Senior Manager for Credit Cards and Personal Loans, Standard Chartered Bank. BS Commerce major in Business Management in Entrepreneurship, De La Salle University.

EMMA B. CO Vice President Joined the Bank in December 2001. Chief Audit Executive and Head, Internal Audit Group. Member, Anti-Money Laundering and Related Party Transactions Committees. Former Senior Manager For Audit, Mercator Group. Former IT Audit Officer, Union Bank of the Philippines. BS Commerce, Major in Accounting, University of Santo Tomas. Bachelor of Laws, Lyceum of the Philippines. MS in Information Management, Ateneo de Manila University. Certified Public Accountant and lawyer. DAN JOSE D. DUPLITO Vice President Joined the Bank in March 2005. Head, Information Security Division. Former Information Security Consultant, TIM Corporation and I-Sentry Security Services. BS Mechanical Engineering, University of the Philippines. ANTONELL S. INTERINO Vice President Joined the Bank in August 2010. Head of Forecasting and Analytics Department under the Business Information Management Services Division. Former Compliance Officer, BDO Leasing and Finance, Former Senior Analyst, Financial Planning and Analysis Division, GE Money Bank, BS Accountancy, De La Salle University. Certified Public Accountant. MARY MYLEEN M. MASANQUE Vice President Joined the Bank in November 2011. Head, Collections and Remedial Management Division. Former AVP and Head of Recovery Unit, BDO Unibank. Former Manager, AIG Credit Cards. AB Communication Arts, Miriam College. ANTONIO JUDE MARTIN P. MONTINOLA Vice President Joined the Bank in March 2009. Head, Electronic Channels Group. Member, Assets and Liabilities and Emergency Committees. Former Group Account Director, Harrison Communications Inc. – McCannErickson Philippines. Former Business Unit Director, Arc Worldwide – CRM/Digital Agency of Leo Burnett. BS in Interdisciplinary Studies, Ateneo de Manila University.

GILBERT L. NUNAG Vice President Joined the Bank in February 2008. Chief Compliance Officer. Member, Anti-Money Laundering and Outsourcing Oversight Committees. Former AVP and Compliance Officer, UCPB Savings Bank. Former AVP & Compliance and Risk Management Division Head & Senior Manager and Controllership Head, UCPB Rural Bank. Former Audit Team In-Charge, SyCip Gorres Velayo & Co. BS Accountancy with honors, Ateneo de Cagayan (Xavier University). Certified Public Accountant. EDEZA A. QUE Vice President Joined the Bank in October 2005. Credit Risk Manager, Risk Management Office. Former Credit Risk Manager for Consumer Banking, Standard Chartered Bank. Former Risk Management Officer, American International Group Credit Card Co. Member, Bankers Institute of the Philippines, Inc. BS in Statistics with honors and MS in Statistics, University of the Philippines. MELISSA F. TONG Vice President Joined the Bank in December 2010. Head, Product and Business Development Division. Member, Assets and Liabilities Committee. Former Unit Head for Cash Management Services and Head of Retail Sales and Marketing, BDO Unibank. Former Regional Head for Europe, iRemit. BA in Organizational Communication and BS in Commerce major in Marketing Management, De La Salle University. Management Officer, American International Group Credit Card Co. Member, Bankers Institute of the Philippines, Inc. BS in Statistics with honors and MS in Statistics, University of the Philippines. MARY JANE M. VALERO Vice President Joined the Bank in August 2002. Head, Customer Service Division. Former Front Office Manager, Mandarin Oriental Hotel Manila. Former Duty Manager, Westin Philippine Plaza. BS Psychology and BA Guidance and Counseling, St. Scholastica’s College. MA in Industrial Psychology graduated Cum Laude, University of Sto. Tomas. Currently finishing Ph.D. on Clinical Psychology, University of Sto. Tomas. MARIS LOU S. VELICARIA Vice President Joined the Bank in December 2001. Head, Credit Administration Group. Director, Credit Management Association of the Philippines (CMAP). Former Credit Officer, Development Bank of Singapore, Bank of Southeast Asia, BPI Family Bank and Citytrust Banking Corporation. BA Philippine Studies, University of the Philippines. PABLITO C. VELORIA Vice President Joined the Bank in September 2006. Head, General Services Division. Former Head of Consumer Credit Evaluation, Field Support, Credit Investigation, Housing Loan Evaluation, Share Finance Credit and Mortgage Credit Investigation, BPI Family Savings Bank. BS Civil Engineering, Adamson University. MA. RITA ROSETTE R. VILLAMIN Vice President Joined the Bank in February 2003. Head, Human Resources Group. Member, Personnel and Retirement Committees. Former Senior Manager for Human Resources, SM Supermalls. Training Manager, Litton Mills. BS Hotel and Restaurant Management, University of Sto. Tomas.

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CFOâ&#x20AC;&#x2122;s Report

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44 | PSBank

qua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur? At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis

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Managementâ&#x20AC;&#x2122;s Discussion and Analysis