PBCOM Tower, 6795 corner V.A. Rufino Street, 1226 City Tel. No.: 830-7000 e-mail: [email protected] www.pbcom.com.ph PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT 2001 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

The New PBCOM Logo : 3,000 years in the making

The Chinese coin represents more than 3,000 years of history, not only China, but of the whole world. Coinage was invented in China as early as 1027 BC (and so was the paper

PHILIPPINE BANK OF COMMUNICATIONS currency some 2,000 years later). Back ANNUAL REPORT 2001 when other people used barter goods, cowrie OUR COVER shells or stones as medium of exchange, the concept of minting precious metals for trade A story of dynamic transitions and transformations, our cover features was more than revolutionary. It was an idea PBCOM’s new logo as a “circle of life” that would change the world. And its still the encapsulating a collage of powerful images : the new PBCOM building, TABLE OF CONTENTS same idea that inspires the new logo of the actual photos of bank personnel and new PBCOM. We retained the basic clients, a stylized topshot of Ayala DISCUSSION OF LOGO 1 elements of the symbol you've grown familiar Avenue, our new home. These images project the effective changes FINANCIAL HIGHLIGHTS 2 with, just as we've preserved the values that and upbeat spirit that embody our made us your stable partner over the years, new PBCOM. MESSAGE TO STOCKHOLDERS 3 like prudence, honesty and integrity. Even The backdrop is almost a watermark CORPORATE GOVERNANCE 7 the colors are of the same hue. Only much image upon which this collage rests. improved. From somber blue to the livelier, Generic currency grain – striations REVIEW OF OPERATIONS 9 of curves and grooves – found in more dynamic blue purple. From pale yellow almost all currencies all over the world FINANCIAL STATEMENTS 19 to the richer, everlasting gold. We only added depict PBCOM’s continued the white background representing our clearer confidence in its fabric of integrity BOARD OF DIRECTORS 30 and tradition. vision for the future. So, we're not exactly MANAGEMENT TEAM 32 different. Only brighter, bigger and better. For it's true that the world changes, but the LIST OF SENIOR OFFICERS 35 essentials should remain the same. Besides, BRANCHES 37 only forgettable logos are completely changed. And why change a symbol that BANK SERVICES 39 took 3,000 years to make?

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The change in government early in 2001 led to an improved political climate that effectively halted the erosion of business confidence and shifted policy focus back to economic development. The promise of better governance cushioned the impact FOR THE YEAR 2001 2000 1999 1998 1997 of a global economic slowdown as well (In Million Pesos) as the far-reaching effects of the Luy Kim Guan September 11 terrorist attacks in the US of attractive investment opportunities that CHAIRMAN and other internal domestic problems. could yield superior returns kept foreign Total Income 4,326.50 3,638.50 3,662.70 4,554.60 4,005.20 investors at bay. Meanwhile, consumer Total Expenses 4,088.40 3,483.50 3,555.00 4,495.90 3,656.10 In the face of all these difficulties, the spending and demand softened amidst Net Income 238.10 155.00 107.70 58.70 349.10 Philippine economy managed to achieve an uncertain employment environment. remarkable gains. Gross Domestic Product grew by 3.4% in 2001 led by a The banking industry was one of the AT YEAR-END robust agricultural sector and the ever- sectors that bore the economic brunt. (In Million Pesos) resilient services sector. It is significant Non-performing loan levels reached new to note that the economic expansion, heights with most industries succumbing though slower than in the previous year, to anemic demand and the increased Resources 40,340.40 38,787.90 40,127.00 34,528.50 31,587.20 was realized despite the contraction in competition brought about by globalization. Loans 17,619.30 19,760.80 21,173.80 19,753.00 23,010.60 exports and the weak performance of the Meanwhile, margins narrowed as interest industrial sector. Overall, the policies of rates remained depressed amidst a highly Deposits 30,323.20 22,640.00 29,452.20 23,904.50 22,560.80 the new administration kept the Philippine liquid market. Furthermore, increasing Capital Funds 6,315.80 4,790.20 4,775.80 4,174.50 3,778.70 economy on the growth track. competition exacerbated the situation. Isidro C. Alcantara, Jr. PRESIDENT & CEO The financial sector, meanwhile, remained Against this backdrop, the Philippine Bank (In Pesos) uncertain and almost stagnant. Although of Communications made significant Earnings per share 5.22 4.91 3.41 1.86 14.33 monetary authorities were able to attain strides as it drew on its inherent strengths and manage relative stability, a lackluster to vigorously pursue a strategic investment outlook persisted mirroring a transformation that started in 2000. global economic trend. The seeming lack PBCOM emerged as a stable and resilient institution laying the groundwork to become a dynamic and competitive medium-sized commercial bank of choice among entrepreneurs. The transfer of head office from Binondo to the new PBCOM Tower at the heart of the country’s premiere

2 3 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

Efforts were also devoted to addressing financial center dramatized our resolve to problem loan accounts and managing risks. achieve this transformation. Use of the We empowered our Special Accounts new corporate logo and installation of Management Group to closely monitor and attractive signages in the distribution address delinquent and potential problem centers signified the transformation of accounts. An Asset Disposal Committee PBCOM from a low-key, Chinatown-based was, likewise, formed to institutionalize a bank into a modern and highly competitive systematic and transparent asset disposal Outlook for 2002 commercial bank. process. Furthermore, the Risk Management Group was reorganized as a Such resolve was also personified by the Looking forward, we expect the Philippine in desired sites in Luzon and expanded distinct and independent unit covering four Bank’s stockholders who renewed their economy to sustain its growth in the year our reach in , the Visayas and major risk areas: Credit, Treasury, unwavering commitment to this vision by ahead as the business environment slowly Mindanao. Operations and Trust. This move is improves and the confidence in the new infusing the balance of the P2.6 billion in expected to establish a stronger risk fresh capital they committed in 2000. This administration remains. At PBCOM, we The successful launching of new deposit management process and culture within raised the Bank’s capital to P6.32 billion, shall endeavor to build up on our past products and the build-up of our distribution the Bank. much more than the prescribed successes and strive to realize our network immediately reaped rewards for capitalization and the second highest transformation into a dynamic and the Bank. With an improved ability to serve These strategic initiatives resulted in among commercial banks without uni- competitive bank. our clients, we were able to generate P7.7 encouraging financial results. Net interest banking licenses. The larger capital base, Billion in additional deposits that effectively revenues increased by 10.1% despite likewise, increased the Bank’s capital to In particular, we will be focusing on improving increased our deposit base by 34% to narrowing margins and a deliberate risk assets ratio from 12.61% as of end- the bank’s profitability. This we intend to P30.3 billion. From some 53,462 deposit contraction in our loan portfolio as a result 2000 to 16.01%, well above the minimum achieve through better spread management accounts in 2000, our branches increased of our selective and cautious lending policy. requirements set by the Bangko Sentral. and building stable revenue streams by the number of deposit accounts by 119% As a compensatory measure against means of expanding our earning asset base. to 117,176. This growth came at the thinning spreads, we sought new avenues The continued support of our stockholders For the past months, we have hired expense of other banks; total deposits in to generate more fee-based or non-interest and management’s determination enabled seasoned marketing professionals to the commercial banking sector during the revenues. Foremost was to increase our the Bank to pursue key initiatives critical establish a foothold in the corporate finance year grew by a mere 4.2%. participation in the securities dealership market and to further push our Treasury to the achievement of our vision. In just business which brought in a much higher over four months after acquiring the and Trust banking businesses. Our A major thrust was to generate new trading income of P314.5 million. We also necessary regulatory approvals, Consumer marketing personnel will also be working businesses. The marketing force was actively engaged in the US Dollar bond Savings Bank (CSBI) was seamlessly closely with our branches which we have augmented for Treasury and Trust trading market and pushed our traditional integrated with PBCOM bringing the Bank’s tasked to be active channels for cross- operations. Fully staffed, our Treasury trust business. These initiatives contributed branch network to 64. More importantly, selling other products. Through aggressive Segment – aggressively yet systematically to the 73% increase in non-interest income the merger gave us immediate presence sales and marketing of new products, trading in securities and taking positions to P641.3 million. Consequently, our net in foreign commercial paper and bonds – income increased by over 50% to P238.1 contributed P314 million in income in 2001, million in 2001 marking yet another compared with just P9 million in 2000. profitable year for us.

4 5 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

strictly monitor expenses through periodic reviews. Similarly, we will be more judicious and selective in authorizing capital expenditures. We will further improve operating efficiency through manpower rationalization and complete automation of PBCOM by the end of 2002.

we will increase leverage and deposit-taking As we march towards the attainment of our capabilities, especially lower-cost funds. objectives, we will continue to rely on our PBCOM subscribes to the basic principles Given our success last year, we shall also traditional strengths for which we have built of corporate governance as espoused by continue to maximize our earnings from our up our name. The multi-generational the Institute of Corporate Directors. fee-based business and carve out ways to relationships we have formed and nurtured PBCOM’s overall corporate governance is in our traditional markets shall serve us in further monetize or generate revenues from the primary responsibility of the Bank’s non-earning assets. good stead as we tread new markets of opportunities. Similarly, we expect that the Board of Directors. As the highest policy- Our strategies to improve profits will be hard and painful measures we have been making body in the Bank, the Board pursued together with the full implementation taking for the past two years will eventually approves the overall corporate philosophy of risk management processes and bear us out in the longer term. and mission statement; management’s standardization of all processes. Moreover, strategy and business plan and budget; In closing, we would like to take this The management of the Bank is delegated Corporate governance best practices will be investments and capital expenditures; opportunity to thank our Board of Directors by the Board to the President/CEO and a adopted to ensure that interests of a wide appointment of senior officers; range of stakeholders are taken into account. for their guidance and the management and team of senior officers handling various compensation policies; other programs and staff for their dedication and hard work. segments within the organization. Several Lastly, we wish to extend our deepest policies affecting business operations; and To fund the growth in the asset base, we working committees have also been formed intend to bolster our fund-sourcing capabilities gratitude to you our stockholders for your material transactions outside the banking to address various concerns and formulate through the acquisition of 20 to 30 branches. continuing trust in our organization as well business. The Board also monitors the policies in different aspects of bank Most of these will be in Metro Manila which as your steadfast commitment to the vision Bank’s business performance through we have set forth. operations. still accounts for a substantial portion of the detailed financial and other operational economy’s money supply. The capital region reports submitted by management during is also where opportunities for ancillary In this report, the Bank wishes to affirm regular monthly board meetings. businesses are most abundant. some initial, basic principles of corporate The Board, likewise, ensures that the Bank Luy Kim Guan governance with focus on optimizing returns On the back of last year’s initiatives to fully complies with existing laws and CHAIRMAN to shareholders, and with a view to excelling improve operational efficiency and streamline regulations. the workforce, we expect to see an in an industry that serves a broad public improvement in our cost structure. To exercise and helps drive economic growth. The greater control on overhead costs, we will Isidro C. Alcantara, Jr. initial, basic principles include the following: PRESIDENT & CEO

6 7 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

Rights of Shareholders

PBCOM believes that shareholders should be given sufficient information about any major proposed changes in the bank's directions and operations, sufficiently early, TREASURY to allow them to make an informed judgment and exercise their voting rights. Treasury proved to be a major revenue contributor in 2001 as it intensified its trading Equitable Treatment of Shareholders activities. Its domestic treasury operations posted a substantial increase in securities dealership income on the back of its timely PBCOM believes that all shareholders should A significant part of Treasury’s success in and accurate reading of market developments be treated equitably and that the rights of 2001 can also be attributed to the build-up and the movement of interest rates. Similarly, all investors, including minority and foreign of the competency level of the group. The Treasury’s international operations registered shareholders, should be protected. hiring of seasoned and professional market substantial trading gains as the group practitioners provided the experience needed aggressively engaged in US dollar bond Role of Stakeholders in Corporate by the group to recognize and deal with the trading. Efficient liquidity management by Governance intricacies of volatile local and international the group, enabled the bank to satisfactorily markets. On the other hand, all of Treasury’s meet its financial obligations and loan PBCOM believes that active cooperation trading personnel underwent various training commitments at the least cost. Likewise, between it and its stakeholders is essential activities to further hone their competencies the installation of a new electronic dealing in maintaining financially sound operations, in the trading business. generating employment, and serving clients system in the previous year was also instrumental as it enhanced the group’s properly and efficiently. In the year ahead, Treasury intends to be trading capabilities. more aggressive in securities and foreign PBCOM affirms that performance-enhancing exchange trading and positioning which mechanisms promote employee participation remains to be profitable activities. The group and align shareholder and stakeholder also plans to widen its customer base by interests. These include broad-based aggressively cross-selling other bank products employee profit-sharing programs. in tandem with new and existing Treasury instruments.

8 9 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

BRANCH BANKING processing was centralized while branch personnel In 2001, Branch Banking broadened its market functions were reevaluated to clearly define base by ensuring the smooth integration of functional lines. Branch Banking also conducted Consumer Savings Bank’s (CSBI) 19 branches loan portfolio reviews to improve loan quality. In with PBCOM’s network. The group also 2002, Branch Banking will continue evaluating opened two new branches – Corinthian branch sites to ensure the continued profitability Gardens in San Juan City and Congressional of PBCOM’s branch network as well as to sustain Branch in Quezon City, using the Bank’s its competitive edge. incentive privilege to relocate redundant branches owing to the merger with CSBI. Together with CSBI’s branches, this brought CORPORATE BANKING Billion in additional deposits in 2001. Initially, PBCOM’s branch network to 64. Branch Branch Banking launched the Premium 5, a five- banking, likewise, sustained efforts to renovate Corporate Banking participated more actively been a source of strength for PBCOM. The year time deposit with tax-free interest targeting more existing branches to sport the new in the corporate finance market while Group also sought opportunities to cross-sell individuals in search for higher-yielding corporate design as well as the revitalized maintaining a prudent and selective lending the new deposit products that were launched instruments. The product also provides clients logo. Not only is this reflective of our strategic stance. Credit lines of worthy clients were by Branch Banking during the year. with a credit line of up to 90% of the outstanding transformation but it is also indicative of our renewed while new lines were established for deposit. desire to build a strong corporate image. clients in industries with strong growth For 2002 and beyond, the Corporate Banking opportunities, such as telecommunications and Group is developing an even more efficient Premium 5 is the first of an extensive product line To broaden the range of PBCOM’s product information technology. cash management system to support its that Branch Banking will be pushing as it pursues line and build more stable sources of funds, marketing objectives. At the same time, the the implementation of Silverlake’s Integrated Retail Branch Banking initiated the development of Meanwhile, the Group continued to build on Group will establish a stronger presence in the Banking System, a new branch front-end delivery new term products thereby generating P5.1 existing relationships in the Chinese-Filipino middle market, which could provide more system. Stand-alone PBCOM branches will business community, which consistently has business opportunities especially for a mid- eventually be connected on-line which is critical sized bank like PBCOM.To achieve these in providing total quality service. objectives, the Group is equipping its account officers with marketing and salesmanship skills Branch Banking also implemented several that will increase their effectiveness as measures to improve operational efficiency and relationship managers. control in the branches. Credit review and

10 11 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

SPECIAL ACCOUNTS MANAGEMENT TRUST

SAMG’s efforts in 2001 underscored PBCOM’s Trust Group emerged as another management’s determination to improve the significant revenue contributor. The establishment Bank’s overall asset quality. Tasked to handle of a Makati Trust Center at the new head office problem loan accounts and implement asset to complement the Binondo Trust Center brought recovery measures, SAMG successfully new opportunities that served the Bank’s asset restructured P1.1 billion in non-performing loans management business well. Despite the distance last year. The group, likewise, worked to improve Disposal Committee which institutionalized a between the two Centers, efficiency was quickly OPERATIONS AND INFORMATION the bank’s collateral position specially in big- systematic and transparent asset disposal achieved as on-line technology enabled instant TECHNOLOGY ticket items. In cases where the ability of clients approval process. In the same manner, the mutual access and close coordination in their to liquidate their loans have been weakened, creation of a comprehensive and accurate operations. The Operations and Information Technology SAMG made recoveries through cash collections acquired asset database for proper monitoring Segment implemented key structural changes in and dacion en pago. of such assets proved beneficial. As a result This year, the Trust Group is priming itself to be 2001 to improve operational efficiency. These of these, SAMG was able to generate P258 a more aggressive player in the market with the included the establishment of the Makati and Where such recovery options are no longer Million in sales of repossessed properties. launching of more common trust fund products Binondo Clearing Centers, a Centralized Check possible, SAMG resolved to foreclose on as well as a personal trust fund. These new Verification Unit and a Statement Rendition Unit attached properties. This primarily accounted Aside from undertaking remedial measures, products which offer prospective clients a variety at the Makati Clearing Center. The group, likewise, for the P2.3 Billion increase in the Bank’s Real SAMG similarly established a monitoring of choices are aimed at widening the customer established in two separate branch locations the and Other Property Owned or Acquired system to ensure that credit quality is base. A new automation system is also in the Visayas and Mindanao Processing Centers, a (ROPOA). The swift disposal of such properties preserved. By closely monitoring past due drawing board to enable faster product delivery move that effectively streamlined loan and trade has been enhanced by the formation of an Asset and potential problem accounts, lending and turn-around time. Once fully operational, the transaction bookings by branches within the two officers were able to immediately implement new system will, likewise, provide branches the regions. recovery and remedial plans should a specific capability to cross-sell Trust products. account become past due. Furthermore, divisional functions were rationalized and operational processes were streamlined. A review of key transactional processes was conducted to see where improvements could be made. These resulted in the elimination of processes that are being duplicated thereby

12 13 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

significantly improving overall productivity. Forms for some transactions were, likewise, simplified and reduced in an effort to make certain transactions less cumbersome for clients. CONTROLLERSHIP

The group, likewise, performed the documentation The consolidation of the books of Consumer Savings of procedures for new products launched by the Bank with the Bank proper proved to be one of the been designated as the Bank’s new head office. Bank. Various efforts were also exerted to improve more challenging tasks for Controllership in 2001. A major structural change was also implemented The bank, likewise, embarked on upgrading its transaction control thus ensuring that all transactions Prior to actual consolidation, the group had to go with the alignment of branch accounting communications infrastructure, both at the head comply with existing policies and conform with through an integration process that involved responsibilities with Controllership, a move that office and the branches that will allow unified established quality service standards. implementing a uniform accounting treatment in all strengthened internal accounting control. Branch messaging for voice, data, fax and e-mail across branches for reports preparation, tax-handling reports were also centralized at the head office all units. At the head office, an integrated voice In the area of Information Technology, the Misys procedures and inter-office accounting system. ensuring their timely and accurate submission. and data structured cabling was installed together OPICS system was implemented in record time. With such tedious preparation, Controllership with an IP-based Telephony system to support the This will support Treasury in its securities trading successfully consolidated the books of CSB. Controllership also pursued the integration of the Bank’s communication requirements including activities as well as in aggressively marketing its Management Performance Report (MPR) with the allowing direct local calls from the branches. foreign exchange and money market products and On top of this, Controllership also successfully General Ledger core application system resulting services. effected the transfer of Head Office books from in a more timely and accurate reporting of the Traditional point-to-point leased lines from the Binondo to the Makati Banking Center which has performance of the different units of the Bank. branches were replaced with a frame relay Forecasting models were simultaneously infrastructure that provides bigger bandwidth but implemented to aid management in its decision reduced recurring costs. This translates to more making. services that can be made available to the branches as well as to its clients. This also supports the Together with Operations, a zero-float policy was Bank’s plans in implementing Silverlake’s Integrated effected by way of timely reconciliation statements Retail Banking solution that will put all PBCOM and investigation of float items. Enhancements in branches online as well as streamline the branches’ the reconciliation programs and processes were front and back office operations. also made.

14 15 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

HUMAN RESOURCES RISK MANAGEMENT

In 2001, Human Resources successfully managed PBCOM’s risk mission is to develop risk awareness the integration of the 205-strong manpower and risk/return consciousness in the organization complement of Consumer Savings Bank (CSB) in order to protect deposits, preserve capital and with the PBCOM workforce. The group took on the ensure adequate return on capital. Toward this challenge of aligning employee ranks and end, the Risk Management Group was reorganized compensation and benefit packages. The task also The centralization of back-office operations as well in October 2001 into a distinct and independent involved the delicate process of placing the right as the implementation of automation and process unit covering four major risk management areas: people in the right jobs based on each individual’s simplification projects enabled the Bank to reduce Credit, Treasury, Operations, and Trust. The Risk experiences and skills. The Group’s determination the overall manpower complement by 127 to 1,061 Management Committee was also reorganized with in accomplishing its tasks were critical in speeding from the level after the integration of CSB the President, several Board Directors and senior In 2002, the Risk Management Group intends to up the whole process of integration which took just employees. Meanwhile, manpower gaps were filled executives actively overseeing the Bank’s risk institute a strong risk management process and a little over four months after securing regulatory by the hiring of 19 well-experienced and seasoned management processes. culture within the Bank by adopting several approvals. officers for various critical positions. In terms of measures. Foremost is the creation of a Risk manpower development, the Group conducted Management Manual that will serve as a guide to Aside from the merger, the Group was also various in-house seminars and sent key personnel officers and staff within the four risk management preoccupied with streamlining and developing the to professional certification programs conducted areas mentioned above. The group will, likewise, competency of the PBCOM workforce. by reputable learning institutions. These moves utilize widely accepted risk measurement tools to eventually brought about significant cost savings measure and monitor the Bank’s risk exposures and resulted in a leaner and more effective specially in the four risk areas mentioned above. organization. The implementation of a fully-functioning Risk Asset Review and Loss Provisioning System will also be Amidst all the dynamic changes in the past year, vigorously pursued. the Group’s Corporate Communications unit maximized internal information channels to effectively communicate management’s thrusts and guide the people through the transformation process.

16 17 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

COMPLIANCE

In close coordination with the Risk Management Group, the Compliance Group ensured that the Bank fully complied with all regulatory requirements INTERNAL AUDIT including the creation of a Revised Compliance Program. The Group, likewise, developed an anti- The Internal Audit Group expanded the coverage money-laundering program as required by the newly of its audit reviews in 2001 to ensure the propriety passed Anti-Money-Laundering Law of 2001. In of transactions being conducted and the compliance 2002, the Group will be creating a Compliance of different units with institutional and regulatory Manual that will serve as a guide to various units policies. Internal Audit also rendered oversight in ensuring that all procedures comply with existing services on the adequacy of control processes with rules and regulations set by regulatory authorities. respect to the various automated solutions the Bank acquired and developed. Post-implementation reviews will also be eventually conducted on such systems. Meanwhile, the Group will be sending its auditors on an extensive training program on information systems auditing to further build up their competency on conducting systems audit.

This year, the Group will also be adopting the risk- based audit approach and accordingly introduce a risk-focused audit rating system. This will make the audit reviews more relevant specially in light of changing business practices.

18 19 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

Henry Y. Uy DIRECTOR

Enrique T. Luy Carlos Chung Bunsit DIRECTOR DIRECTOR

Luy Kim Guan Chung Tiong Tay CHAIRMAN VICE CHAIRMAN

Edwin L. Luy DIRECTOR

Ernesto T. Luy Atty. Bi Yong So Chungunco DIRECTOR DIRECTOR

Ralph Nubla, Jr. Isidro C. Alcantara, Jr. VICE CHAIRMAN PRESIDENT & CEO Peter C. Lim DIRECTOR

30 31 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

From left From left Roberto B. Reyes Virgilio J. Katigbak First Vice President Senior Vice President Edmundo L. Tan Arthur D. Chung Corporate Secretary Senior Vice President Arnaldo L. Cruz Evangelina P. Samonte First Vice President Senior Vice President Serafin L. Bernardo IV Isidro C. Alcantara, Jr. First Vice President PRESIDENT & CEO Dante T. Fuentes First Vice President

32 33 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

CHAIRMAN Luy Kim Guan

VICE CHAIRMEN Chung Tiong Tay Ralph Nubla, Jr.

VICE CHAIRMAN - EXECUTIVE COMMITTEE Henry Y. Uy

PRESIDENT & CEO FIRST VICE PRESIDENTS Isidro C. Alcantara, Jr. Felimon F. Baltazar Serafin L. Bernardo IV Arnaldo L. Cruz EXECUTIVE VICE PRESIDENT Raul C. Diaz Angel M. Corpus Juan B. Estioko Rafael G. Flameño Dante T. Fuentes SENIOR VICE PRESIDENTS James Y. Go Jose R. Chanyungco Melvin C. Lim Arthur D. Chung Aurora C. Manguerra Virgilio J. Katigbak Evangeline Y. Qua Edgardo T. Nallas Roberto B. Reyes Edgardo T. Nallas Serafin L. Bernardo IV Arthur D. Chung Virgilio J. Katigbak Evangelina P. Samonte Edgardo R. Sancho Senior Vice President First Vice President Senior Vice President Senior Vice President Robert T. Tan Chai Sen D. Uy Angel M. Corpus Raul C. Diaz Arnaldo L. Cruz Executive Vice President First Vice President First Vice President Armando Ma. T. Velasquez Roberto B. Reyes Edmundo L. Tan Armando Ma. T. Velasquez Juan B. Estioko Evelyn D. Vinluan First Vice President Corporate Secretary First Vice President First Vice President Jose R. Chanyungco Evangelina P. Samonte Evelyn D. Vinluan Dante T. Fuentes Senior Vice President Senior Vice President First Vice President First Vice President Isidro C. Alcantara, Jr. President & CEO

34 35 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

H E A D O F F I C E Elcano Padre Rada SHC Tower S &U Building VICE PRESIDENTS PBCOM Tower, 6795 Ayala Avenue 613 Elcano Street, 953 Juan Luna near corner corner V.A Rufino Street, 1226 Makati City San Nicolas, Manila Padre Rada Street, Tondo, Manila Rene C. Alejandrino Tel. No.: 830-7000 Tel . Nos.: 242-7809; 242-3573 Tel. Nos.: 245-2265; 245-2354 Evelyn C. Choa - Manager Brenda L. Ong - Manager Domingo S. Aure M E T R O M A N I L A Enrique R. Bartolome, Jr. Greenhills Parañaque Ayala - Alabang Quadstar Building, Ortigas Avenue, Stall Nos. 3 & 4, Kingsland Building Editha N. Bautista Mapfre Asian Corporate Center Greenhills, San Juan Dr. A. Santos Avenue, Sucat, Acacia Avenue, Madrigal Business Park Tel. Nos.: 721-2601; 725-6482 Parañaque City Daniel C. Brion Ayala Alabang, Muntinlupa City Danilo Y. Garcia - Vice President Tel. Nos.: 820-0901; 829-2424 Tel. Nos.: 809-4341; 722-5748 Lazaro T. Averilla - Manager Rodolfo M. Carlos, Jr. ASSISTANT VICE PRESIDENTS Loran S. Abanilla - Manager Kalookan 359-365 Rizal Avenue Extension, Pasay Mary Jane T. Cuatico Froilan G. Alcantara BMA Grace Park, Kalookan City 92 Taft Avenue Extension, Web-Jet Building Tel. Nos.: 366-2785; 361-3416 Pasay City Rose Margaret T. Cuatico Rizalee G. Angeles BMA Street corner Quezon Avenue, Zaida R. Sevilla - Senior Assistant Manager Tel. Nos.: 831-0329; 831-0395 Quezon City Antonio Q. Beltran - Assistant Vice President Romeo G. De la Rosa Jorge P. Arboleda Tel. Nos.: 712-3527; 412-4503 Legaspi Village Teresita M. Nebrida - Assistant Vice President G/F, Vernida 1 Condominium Pioneer Marina U. Francisco Virginia P. Basaca 120 Amorsolo St., Legaspi Village, RFM Corporate Center Danilo Y. Garcia Antonio Q. Beltran Binondo Banking Center Makati City Pioneer corner Sheridan Street, 214-216 Juan Luna Street, Tel. No.: 813-2506; 812-9582 Mandaluyong City Gloria Elena H. Go Fernando V. Carpio Binondo, Manila Cezar M. De Guzman, Jr. - Senior Manager Tel. Nos.: 637-8927; 637-8933 Tel. Nos.: 242-8710; 244-6413 Ma. Ofelia F. Ferrera - Senior Manager Juanito P. Gonzales, Jr. Marie Antoinette L. Dela Cruz Ester P. Lim - Vice President Mabini 1336-1350 Mabini Street, Quezon Avenue Lolita Giok Pen G. Leh Danilo Dominguez Coastal Mall Ermita, Manila APC Building Block 26, Units 5-7, Phase II Tel . Nos.: 523-0568; 523-0401 1186 Quezon Avenue, Ester P. Lim Ma. Rosario Lourdes S. Garcia G/F Uniwide Coastal Mall, Tambo, Vergel L. Pabillon - Senior Manager Quezon City Parañaque City Tel. Nos.: 371-2940; 371-1776 Roberto C. Mangligot Emmanuel C. Geronimo Tel. Nos.: 879-0071; 879-0102 Makati Banking Center Annabel C. Lee - Assistant Vice President Reynaldo V. Zapanta - Senior Assistant Manager PBCOM Tower, 6795 Ayala Avenue Elizabeth T. Mercado Ma. Rosario C. Geronimo corner V.A Rufino Street, 1226 Makati City Sen. Christopher B. Mutuc Julie N. Go Congressional Tel. Nos.: 810-2324; 817-3492 Unit 104 Pacific Star Building G/F Cherry Foodarama Complex Arturo S. Martinez - Assistant Vice President Sen. Gil Puyat corner Leo Manuel L. Peñala Rene H. Gochangco Congressional Avenue, Makati City Quezon City Malabon Tel. Nos.: 843-9287; 843-9311 Caesar D. Ramirez Eulogio S. Hangsitang, Jr. Tel. Nos.: 925-9847; 925-9849 123 Gov. Pascual Avenue, Edgardo R. Aquino - Manager Mariching B. Miranda - Assistant Manager Acacia, Malabon City Victor A. Veloro Mario Agaton I. Ignacio Tel. Nos.: 446-0381; 446-0429 Shaw Boulevard Corinthian Gardens Alicia S. Yu - Assistant Vice President 146 Shaw Boulevard, Deogracias A. Vicente Reynaldo M. King Sanso St., Corinthian Gardens, corner San Roque, Pasig City Quezon City Marikina Tel. Nos.: 634-1430; 636-5759 Leo P. Villanueva Annabel C. Lee Tel. Nos: 687-7088; 687-7087 34 J. P. Rizal Street, Mario Agaton I. Ignacio - Assistant Vice President Jocelyn D. Lim - Senior Assistant Manager Calumpang, Marikina City Carolina O. Yu Betsy Y. Lim Tel. Nos.: 645-2637; 645-8024 Sta. Elena Crossroad Dante P. Abacan - Senior Assistant Manager Hin Long Building Jacinto M. Marquez N-3 & N-4 Crossroad Arcade 715-717 Ylaya near corner Crisostomo L. Martin Greenhills Commercial Complex Masangkay Sta. Elena Street, Manila San Juan 1004-1006 G. Masangkay Street, Tel. Nos.: 242-9079; 242-9066 Arturo S. Martinez Tel. Nos.: 721-6708; 727-7119 Binondo, Manila Vanessa S. Cheng - Assistant Manager Tel. Nos.: 244-8751; 244-8761 Sta. Mesa Teresita M. Nebrida Melly C. Tan - Senior Assistant Manager 440-A G. Araneta Avenue Cubao corner Bayani Street, Sta. Mesa, Ma. Socorro I. Santos RC-27D Rustan’s Superstore Building MERALCO Avenue Quezon City Araneta Center, Cubao, Quezon City C-1 Horizon Condominium Tel. Nos.: 749-0265; 781-4947 Grace M. Suarez Tel. Nos.: 912-2943; 913-4912 Meralco Avenue, Pasig City Feligunda T. Ascaño - Manager Rene H. Gochangco - Assistant Vice President Tel. Nos.: 632-0418; 637-2858 Carmencita L. Tan Rodrigo D. Joaquin, Jr. - Senior Manager Sto. Cristo Echague 705 Sto. Cristo Street, Alicia S. Yu 88-90 Carlos Palanca, Novaliches Binondo, Manila corner Isla del Romero Street, 860 Quirino Highway, Brgy. Gulod Tel. Nos.: 242-3194; 242-3197 Quiapo, Manila Novaliches, Quezon City Carmencita L. Tan - Assistant Vice President CORPORATE SECRETARY Tel. Nos.: 736-0121; 735-4380 Tel. Nos.: 938-1701; 938-1703 Elizabeth C. Ngan - Assistant Manager Nemesio C. Barrantes - Manager T. Alonzo Edmundo L. Tan Ground Floor, Tan Kiang Building Ongpin 665 T. Alonzo Street, Sta. Cruz, Manila Ongpin corner S. Padilla Street, Tel. Nos.: 733-1529; 733-1520 Sta. Cruz, Manila George L. Cu - Manager Tel. Nos.: 733-1346; 733-1165 List of Officers as of May 1, 2002 Lolita Giok Pen G. Leh - Vice President

36 37 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

Tektite San Fernando – Pampanga M I N D A N A O Unit W-1802 ABC, 18th Flr. West Tower MacArthur Highway, Dolores, PSE Tower Condominium San Fernando, Pampanga Cagayan De Oro - Hayes Exchange Road, Ortigas Center, Tel. Nos.: (045) 963-6784; 963-6786 Tiano Bros. corner Hayes Street, Pasig City Segundo G. Basa - Senior Manager Cagayan de Oro City Tel. Nos.: 637-1717; 637-6523 Tel. Nos.: (08822) 724-190; 726-519 Aron B. Bugalon - Senior Manager San Jose Del Monte Shan Shan N. Chu - Senior Assistant Manager DEPOSIT Bagong Buhay Drive, San Martin I, Tutuban Sapang Palay, San Jose del Monte Cagayan De Oro – Lapasan Unit Nos. PL-LS07 & PL-LSO8 Bulacan Lapasan Highway, Regular Peso Savings Account Tutuban Center Prime Block Tel. Nos.: (0979) 773-7940 Cagayan de Oro City Quick Cash ATM C. M. Recto Avenue, Tondo, Manila (0912) 403-0466 Tel. Nos.: (08822) 729-217; Tel. Nos.: 252-4954; 252-5069 Rogelio D. Drio, Jr. - Manager (088) 856-3380 Foreign Currency Deposit Account (US$ and Euro) Alice A. Cheng - Senior Manager Helen N. Dagalea - Manager Regular Peso Checking Account San Pedro Valenzuela G/F Mega Building Davao - Matina Automatic Fund Transfer 246 MacArthur Highway, National Highway, Landayan, Peacenest Building Value Check (Interest-bearing Checking Account) Karuhatan, Valenzuela City San Pedro, Laguna No. 36 R. Quimpo Boulevard, Tel. Nos.: 291-5196; 291-0708 Tel. Nos.: 868-7364; 868-7365 Ecoland Subdivision, Matina, Peso and Dollar Time Deposit Ma. Rosario C. Geronimo - Assistant Vice President Elsa l. Hatulan - Senior Assistant Manager Davao City Premium Certificate of Deposit Tel. Nos.: (082) 296-1297; 296-1301 L U Z O N Sta. Rosa Luis U. Nucum - Senior Manager Premium 5 Brgy. Dila, National Highway, Angeles Sta. Rosa, Laguna Davao - Monteverde No. 878 Henson Street, Tel. Nos.: (049) 534-2928; 534-2927 41 Monteverde Avenue, REMITTANCES Brgy. Northwest, Sonny R. Jacinto - Assistant Manager Davao City Angeles City Tel. Nos.: (082) 221-2140; 221-2141 Tel. Nos.: (045) 888-9855; 322-9751 Narda Y. Lu - Manager Foreign and Domestic Remittances Dolores S. Laquindanum - Manager. V I S A Y A S (Incoming / Outgoing) via: Davao - Quirino Batangas Bacolod 111 E. Quirino Avenue, ANCILLARY Hilltop Plaza, National Road, 6th Street corner Hilado Street, Davao City • Society of Worldwide Interbank Financial Batangas City Capitol Shopping Center, Tel. Nos.: (082) 222-4160; 222-4162 Telecommunications (SWIFT) Tel. Nos.: (043) 723-4207; 723-7801 Bacolod City Liza Delos Reyes - Manager Deposit Pick-up Ma. Socorro C. Uson - Manager Tel. Nos.: (034) 433-0404; 433-0911 • Philippine Domestic Dollar Transfer System Elsa L. Peregil - Manager General Santos (PDDTS) through: Safe Deposit Boxes Dagupan Santiago Boulevard, • End-of-Day Netting (EOD) transmission Gift Cheques FIB Building, M. H. del Pilar, Cebu - Magallanes General Santos City Managers’ Cheques Dagupan City Magallanes near corner Tel. Nos.: (083) 552-8166; 552-8167 • Gross Settlement Real-Time (GSRT) transmission Tel. Nos.: (075) 515-2097; 523-6862 Manalili Street, Cebu City Edgardo R. Tan - Manager • Cable Norma C. Palma - Manager Tel. Nos.: (032) 253-2740; 253-2761 TRADE RELATED SERVICES Myrna T. Lim - Senior Manager Kidapawan • Western Union Money Transfer Dasmarinas Quezon Boulevard, Kidapawan City, Brgy. San Agustin, Aguinaldo Highway Cebu - Mango North Cotabato Dasmariñas, Cavite General Maxillom (Mango) Avenue, Tel. Nos.: (064) 288-5296; 288-5297 Import and Domestic Letters of Credit Tel. Nos.: (046) 416-5031; 416-5032 Cebu City Proceso T. Peligrino - Senior Assistant Manager PAYMENT AND COLLECTION SERVICES Foreign & Domestic Stand-by Letters of Credit Marieta G. Camahalan - Manager Tel. Nos.: (032) 253-1419; 254-3157 Bank Guaranty/Shipside Bond Pelagi C. Uy - Senior Assistant Manager Koronadal Imus General Santos Drive, BIR Payments Trust Receipts P. Nueño Street corner Gaerlan Street, Cebu Mandaue - Basak Koronadal, South Cotobato Export Bills Purchase Imus, Cavite Co Tiao King Building Tel. Nos.: (083) 228-3917; 228-3919 SSS Payments Tel. Nos.: (046) 471-4349; 471-5245 Cebu North Road, Basak , Derwin B. Tolosa - Manager SSS Pension Accounts Clean and Documentary Collections Eulogio S. Hangsitang, Jr. - Assistant Vice President Mandaue City, Metro Cebu Import Bills/Customers Liabilities under Acceptances Tel. Nos.: (032) 346-2709; 422-9146 Tagum Clearing of Foreign Bank Checks & Out-of-Town Checks La Union Michele Y. Rull - Junior Assistant Manager Pioneer Avenue, Tagum, Demand Draft (US$ and Major 3rd Currencies) Final Duties Ortega Street, San Fernando, Davao del Norte La Union Cebu Mandaue – National Highway Tel. Nos.: (084) 217-3900; 217-3901 Tel. Nos.: (072) 888-2044; 888-2741 National Highway, Mandaue City, Alan Q. Brigoli - Assistant Manager TREASURY Mariquita P. Ortega - Manager Metro Cebu Tel. Nos.: (032) 346-5110; 346-1076 Zamboanga Lucena Dinah S. Tiu - Manager Ground Floor, Interco Building Government Securities Merchan Street, N. S. Valderrosa Street, Zamboanga City Money Market Placements Lucena City Iloilo - Ledesma Tel. Nos.: (062) 992-6437; 992-6438 Tel. Nos.: (042) 373-6462; 373-6464 Ledesma corner Valeria Street, Raquel T. Bangayan - Vice President Commercial Paper Victorina L. Tan - Manager Iloilo City Purchase and Sale of Foreign Exchange Tel. Nos.: (033) 337-3668; 336-8989 Marilao Efren T. Hudtohan - Senior Assistant Manager Foreign Securities Trading Cecilia Commercial MacArthur Highway, Abangan Norte, Iloilo – Valeria Marilao, Bulacan Valeria Extension, Iloilo City Tel No.: (044) 711-3408; 711-2850 Tel. Nos.: (033) 336-9889; 336-9887 Librada M. Tomagan - Manager Ceciro M. Kapunan - Assistant Manager

List of Branches as of May 1, 2002

38 39 PHILIPPINE BANK OF COMMUNICATIONS ANNUAL REPORT

CREDIT AND LOAN FACILITIES

Commercial Loans Industrial Loans Foreign Currency Loans Rediscounting Export Packing Credit Loans TRUST AND INVESTMENT SERVICES Trust Receipt Financing Consumer Lending Employee Benefit Trust • Real Estate Development Loan Investment Management Accounts • Real Estate Receivables Financing Group Investment Plan • Trade Receivables Financing Escrow Agency • Multi-Purpose Loans Corporate Trust Specialized Lending Personal Trust • Small Business Guarantee & Pre-need Trust Finance Corporation (SBGFC) Estate Planning - SME Funding Access Custodianship for Short Term Loans (SME-FAST) PBCom Dollar Fund - SME Financing Reach for Exporters through PBCom Dragon Fund* Network Development (SME-FRIEND) PBCom Power Fund* - SME Funding for Investments in Regional Markets (SME-FIRM) • Social Security Systems (SSS) - Hospital Financing Program - Joint Housing Loan Program - Housing Development Loan Program - Housing Loan for Repair and/or Improvement - Individual Housing Loan Program - Financing Program for Educational Institutions - Special Financing Program for Vocational and Technical School - Financing Program for Tourism Projects (KASAPI IV) - Dormitory/Apartment Loan Program - SSS Special Financing Program (Joint Program with GSIS) - SSS Industry Loan Program Credit Inquiries

*Soon to be available

40