2012 Pse Annual R PT

WHATS BEYOND THE NUMbERS
2012 Annual Report
PSE 2012 ANNUAL REPORT
Beyond outlook. Beyond records.

The stock market affects everyonefrom big multinational companies to the regular
Contents
Juans. In its most successful year to date, the Philippine Stock Exchange claimed a number of record highs, including being cited as one of the world's best performing stock markets by the World Federation of Exchanges. Now, the country's high-performing stock market is proud to contribute to the nation's growth and share its success with the hardworking Filipino. With these accomplishments, the PSE draws closer to its visiona
(in thousand Php) RESULTS OF OPERATIONS: OPERATING REVENUES Listing fees, maintenance & processing fees Trading fees Service fees Regulatory fees Others TOTAL EXPENSES Cost of services General and administrative expenses OTHER INCOME Income BeFore Income Tax Net income aFter Income Tax YEAR-END FINANCIAL CONDITION: TOTAL ASSETS Cash and cash equivalents Financial assets at fair value through prot or loss Short-term available-for-sale investments Long-term available-for-sale investments 2,525,126 1,051,355 274,585 327,847 498,382 250,427 240,902 9,525 2,274,699 2,285,611 1,041,644 207,882 42,343 167,407 520,109 235,538 228,325 7,212 2,050,073 239,515 9,711 66,703 (42,343) 160,440 (21,727) 14,889 12,577 2,313 224,626 10.48 0.93 32.09 (100.00) 95.84 (4.18) 6.32 5.51 32.06 10.96 1,143,787 562,040 198,695 316,377 45,260 21,415 505,134 176,954 328,180 163,768 802,421 624,166 14,585 440,593 167,795 272,798 99,251 559,422 406,192 6,830 64,541 9,159 55,383 64,517 242,999 217,974 46.83 14.65 5.46 20.30 65.00 43.44 53.66 900,764 429,289 202,856 254,034 243,023 132,751 (4,161) 62,343 26.98 30.92 (2.05) 24.54 2012 2011
The Philippine Stock Exchange, Inc. and Subsidiaries

Change Amount %
Financial Highlights
3 4 6
Foreword
premier exchange with world-class standards for trading securities and raising capital that serves as a strong engine for a robust economy.
Chairmans Message Presidents Message
30
17
Stock Market Performance

Operational Highlights

Listed Companies and Listed issues as of Yearend 2012
34 44 50 52
Gallery of Officers
Securities Clearing Corporation of the Philippines Capital Markets Integrity Corporation Information Required by the Securities Regulation Code Report of the Audit Committee Statement of the Management's Responsibility for Financial Statements Financial Statements Active Trading Participants Directory
54 56 57 58 108
Property and equipment TOTAL LIABLITIES Current liabilities Retirement liabilities EQUITY
Table 1
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4 | PSE 2012 ANNUAL REPORT
Beyond
numbers.
As the local stock market continued its breathtaking ascent en route to another record-breaking run, the markets performance in 2012 will most likely be remembered several years from now, not just by the gaudy numbers written and reported about it but rather, as a turning point in the history of Philippine capital markets. Historic changes were seen in the domestic nancial markets and on a broader scale, the national economy, as the country looked to nally take off and fulll decades of unmet expectations.
These key changes locally, as it turned out, proved to be meaningful in driving the market forward even as ongoing uncertainties overseas continued to limit global economic recovery. Strong local macroeconomic fundamentals provided a sturdy platform for the Philippines to rise above the external challenges, igniting serious consideration of regaining its tiger economy status it once proudly held not too long ago, a stark contrast from the sick man of Asia title it carried for the better part of a decade.
The record highs of the stock market may have helped capture the attention and imagination of people here and abroad. But beyond this, the stock market has
Palengke ng Quiapo by Emar G. Lacorte Acrylic on Canvas Finalist, Sining PSE: 2012 National Art Competition "The market has always been a microcosm of what is happening in Philippine society. By sunrise, vendors must have displayed their goods as consumers arrive on time. In the market, perseverance, honesty, and entrepreneurship are seen and practiced."
emerged as a potent engine for supporting and sustaining the countrys progress.
MessaGe FroM the ChairMan | 5
Dear Shareholders, Behind the backdrop of a growing economy and enhanced condence of the market in the countrys good governance initiatives, the stock market broke new ground with record milestones and accomplishments. The impressive performance of the market gave the country more prominence in the global arena as a sound and attractive investment destination. But even as the market served as a barometer of economic activity, 2012 also highlighted the role of the Exchange as a driver for the expansion of the economy. The past year will denitely go down our annals as one of the most successful years of the Philippine stock market and the Philippine Stock Exchange, Inc. (PSE). The PSE index (PSEi) record highs, all 38 of them in one year, have captured the attention of many Filipinos and the international community alike. The signicant increase in the number of accounts and the increase in foreign inows support our view that even casual observers of the market have now become active participants in stock market trading. The ability to raise capital in the Exchange remains one of the direct mechanisms by which the stock market helps our economy grow. It directly provides the opportunity for listed companies to expand their businesses and make more jobs available. So when we manage not only to break but actually double the previous record level for capital raising activities in the Exchange, we believe that we have also helped in doubling the business activities of our listed companies and doubled our impact to economic expansion. The good business and economic environment, supported by the reforms we have undertaken in the past year, have helped produce a very successful year for your Exchange. All these have taken place serendipitously in the year when we celebrated and looked back at our achievements in the past 20 years as a unied Philippine Stock Exchange. All eyes on us The PSEi continued to outperform other markets, closing the year as one of the top three best performing benchmark indices in the world as reported by the World Federation of Exchanges (WFE). Our growth levels in terms of market capitalization and trading value turnover have also been ranked third and fourth-best among the 50 members of the WFE. Capital-raising activities were at a record high at P219.07 billion in 2012. We have seen for the rst time company offerings going over and beyond the one-billion U.S. dollar level, afrming the capacity of our market to absorb capital in amounts comparable with fund raising levels in more developed markets abroad. Foreign investors were also net buyers in the amount of P109.98 billion, almost twice the amount recorded the previous year. Daily trading values reached another record level at P7.26 billion, 27.1 percent higher than the level in 2011. International banks and analysts have thus begun mentioning the Philippine market in the same breadth that the BRIC (Brazil, Russia, India and China) countries were recognized a decade ago. Together with other Asean economies like Indonesia, we are now being dubbed as the next economic tigers. International rating agencies have once again taken steps to upgrade our sovereign credit rating closer to investment grade level. In 2012, all the three major ratings agenciesStandard and Poors, Fitch and Moodyshave placed us just a notch below investment grade with Fitch moving ahead in putting us at investment grade status in March 2013. We believe these are all well deserved. Structural reforms that enhance condence in the market While the market performance greatly benetted from the strong growth and fundamentals of the economy, your Board also moved to institute reforms and implement programs which helped sustain the expansion of the stock market. One of the key structural changes introduced in 2012 was to extend trading hours into the afternoon. After several attempts in the past to graduate from a half-trading day schedule, your Board extended trading hours in 2012 until 3:30 in the afternoon. With extended trading, our market has adopted global best practice and has opened up opportunities for more foreign investments. Your Board also strongly supported developing an online trading platform as a follow-through to its acquisition of a stateof-the-art trading system from the New York Stock Exchange in 2010. This will allow brokers, who used to be constrained by technology and system costs, to adopt online trading and to offer this service to their investors. With this development, the Exchange envisions the retail investor population base to continue its upward trajectory. Digital media and technological innovations have whetted the need and desire of todays breed of investors for more information. In 2012, the PSE completed the migration to a new website with enhanced design and user-friendly features that aim to better serve investor demand for timely stock market information. The PSE is also now present in Facebook and Twitter to actively communicate relevant market information to existing and prospective investors. The PSE also established a recognition program for companies and trading participants who have subscribed to higher corporate governance standards through the rst ever PSE Bell Awards. Through the Bell Awards, the process of creating a cluster of listed rms that will be ready for a potential listing in a corporate governance segment has started. And as a landmark move in line with our good governance effort, the Capital Markets Integrity Corporation has nally become fully operational after the Securities and Exchange Commission handed them the license to operate. We believe that with the spin-off of the regulatory functions over trading participants given to another independent company, we have reinforced our call for transparency and independence while allowing us to focus on further deepening our market base and product offerings. Growth as a product of a legacy of unication The PSE has come a very long way since both the Manila and Makati Stock Exchanges agreed to unify on December 23, 1992. With the reforms and initiatives we have been undertaking, investors have rewarded the stock market with greater condence and record-breaking levels. The legacy of unication goes beyond PSEs 20 years. Coinciding with this anniversary, your Board also approved the construction of a unied state-of-the-art headquarters for the PSE in Bonifacio Global City. This marks another union of the two trading oors in Ortigas and Makati. As a rst step, the PSE entered into a preliminary agreement with Ayala Land, Inc. for the planned relocation of the PSE ofces to its new headquarters in Bonifacio Global City. We continue to adapt and innovate amid the changing domestic and global investment landscape. While our initiatives have been directed to expand liquidity and broaden the depth of the market, we recognize that there are more challenges ahead as we compete against other markets in the region and in the world. We have come a long way together, but there is still the long road ahead. We need to introduce more products in the Exchange and collectively intensify market education to raise awareness about the stock market as a credible and preferred avenue of building wealth. We need to heed the call of the times and reach out to younger investors who are hungry for information and can afford to have a larger appetite for risk. We need registered corporations to utilize the stock market as a rst-choice venue for raising funds that will support their growth plans. We need the government to continue supporting the capital markets as we share the same vision of institutionalizing a culture of transparency and integrity in the way we do business. All these, I am proud to announce, are the key elements by which we have formulated the strategic plan of the exchange for the next three years. We invite everyone to continue to join hands with us as we embark on new targets for the market. Let us join forces in building a better PSE that is more accessible to the public and in building a better economy ready to take on new challenges and opportunities in an energetic landscape. Finally, I would like to take this opportunity to thank all our partners and stakeholders who have all contributed to the milestones of the market. I would like to thank especially the members of the Board of Directors for their hard work and perseverance to push the market to the levels we have achieved in 2012. The Most Admired Board of Directors Award conferred by the prestigious Asia CEO Forum in 2012 serves as an inspiration for all of us to keep nding ways to innovate and enhance the condence of investors in our market. Thank you very much.
Message from the Chairman
JOSE T. PARDO Chairman
MessaGes FroM the president | 7
My Fellow Shareholders, For three years now, the Philippine stock market has emerged as one of the best performing markets in the world. We have set once again, new all-time highs across the key metrics by which investors and analysts measure our market. A solid economic landscape, combined with listed companies prot growth outperforming the expansion of the economy, has been among the biggest drivers of this performance. As we continue to post these milestones for our market, a developing story behind these numbers is how we, as an Exchange, are also setting our mark in contributing to the growth of our economy. We believe that the wheels that have been set to motion by the Philippine Stock Exchange, Inc. (PSE) in 2012 are helping the market sustain its gains and lay the groundwork for further growth. In the process, we have also set milestones for the PSE as a company and further improved shareholder value. Answering the demands of an economy taking off The Philippines is indeed in a sweet spot. Low interest and ination rates, coupled with strong consumer spending and a steady scal environment, have invited more investors to pursue the Philippines as a viable destination. This has been well reected in the net foreign inows and capital raising gures that have more than doubled in 2012 from the previous year. As we welcomed seven new companies at the Exchange, we also saw for the rst time follow-on offerings exceeding well beyond the one-billion U.S. dollar level. With the index setting new highs combined with more listing activity, the size of the total market capitalization has, for the rst time, breached the P10-trillion mark during the second quarter of 2012. The extension of trading hours has been very timely given the rise in trading activity brought about by this newfound interest in our economy. Investors from Europe and the Middle East now have the chance to trade in our market as we remain open just when they are about to open their ofces. But even as net foreign inows breached the P100 billion-mark for the rst time, the local bid has also grown at a much faster pace cornering 55 percent of trading activity and showing their condence in the increased economic activity they are seeing rst hand. The reimposition of the minimum public ownership rule has also provided more shares to be traded in the market. In addition, this move has not only added liquidity in the market, but has also reinforced our good governance drive as companies have become more democratized in the process. Good governance driving growth As the Aquino administration pushes for governance reforms to curb corruption and cut bureaucracy in business processes, the Exchange is cognizant that we need to be among the primary drivers of good governance. Following our efforts to clean up the roster of listed companies two years ago with the delisting of delinquent companies and increasing the capitalization requirements of broker-dealers, we launched in 2012 our campaign to recognize companies adhering to higher governance standards with the conduct of the rst PSE Bell Awards for Corporate Governance. Another landmark program is the creation of an independent regulatory company called the Capital Markets Integrity Corporation which demonstrates our commitment to undertake extensive reforms to enhance investor condence in our market. Your Exchange has also stepped up the improvement of services by enhancing operational efciencies, sustaining market education, and upgrading market technologies to better serve investors. The PSE has also enhanced the organizational structure to support the demands of a growing market by appointing a new Chief Operating Ofcer and an Investor Relations Ofcer. More product offerings The Exchange has undertaken signicant milestones in our efforts to expand our product offerings and services to the market. In 2012, we saw the setting of the regulatory framework for exchange traded funds drawing closer to completion with the Securities and Exchange Commission (SEC) issuing their own rules and the PSE submitting its own rules for approval. We are also expanding access to investors through facilities that will be offered to trading participants via the PSETradex which is an online trading platform that can be offered by trading participants to their clients. In relation to this, the PSE also nalized its rules to govern direct market access trading and is working closely with the SEC to ensure that the parameters in the rules are akin to the needs of users. The Board has also approved revisions to the listing rules for approval by the SEC to simplify the criteria for companies wanting to list in the Exchange while also enhancing the prole of small, medium, and emerging companies that want to access the stock market for listing. A stronger organization to propel us to greater heights Our nancial performance in 2012 demonstrates that the foundations we have built together to expand the market are bearing fruit for the company. This, in turn, has allowed us to undertake more programs to further drive trading and listing activity. In 2012, we are happy to report that the operating revenues of the company grew by 27.0 percent to P1.14 billion in 2012 from P900.76 million the previous year. This was largely driven by new listings at the stock market which resulted to a jump in listing-related income by 30.9 percent to P562.04 million in 2012 from P429.29 million in 2011. As total value turnover for 2012 registered a new record high reaching P1.77 trillion or 24.5 percent higher than the P1.42 trillion registered the previous year, tradingrelated revenues in turn, increased to P557.33 million from P456.89 million in 2011. These include revenues from service fees generated by the Securities Clearing Corporation of the Philippines, a whollyowned subsidiary of PSE, which expanded by 24.5 percent to P316.38 million from P254.03 million. Meanwhile, behind the rational and efcient use of resources, we managed to cap the rise in total expenses to just 14.6 percent. Total expenses stood at P505.13 million at the end of 2012 from P440.59 million in 2011. As a result of these factors, net income posted a record high for 2012 growing by a remarkable 53.7 percent to P624.17 million from P406.19 million in 2011. Setting higher targets The stock markets performance in 2012 rewrote the record books in a big way, as seen in the new highs we have experienced across almost all market indicators. Investor condence in Philippines, Inc. is also at an all-time high, and this can only serve to strengthen our market as we tackle new challenges and opportunities together in 2013. As we close the chapter on the LEVEL-UP agenda we embarked on in the last ve years, we now look ahead at refocusing on our goal to become a world-class exchange by transforming the organization into a full-service Exchange capable of offering more than just an equities platform. We are excited about the medium-term horizon as we exert all our efforts to launch more products and services. When we look at our accomplishments as an Exchange in the past year, we see that we have indeed become more formidable behind good nancial results and renewed investor condence in the market. We believe we have enough tools to pave the way for a bolder and stronger stock exchange that is ready to take on new challenges and launch new revenue streams. Let me also take this opportunity to point out that as a result of all the initiatives we have undertaken and the companys strong nancial results, the PSEs stock price has soared by 82.5 percent to P416.00 per share in 2012. This serves as proof that investors do recognize the impact of the activities that the Exchange has done and the companys revenue-generating potential as we continue to expand the business. These factors have made it possible for our shareholders to become richer, and at the same time still remain excited about the growth prospects of the company. We thank our Board of Directors for their continued support and guidance, the management and staff for their commitment to bring us to new heights, all the stakeholders that have been contributing to promote our market and to you, the shareholders, for your support and push to set even greater milestones for the Exchange. Thank you very much.
Message from the President
HANS B. SICAT President and Chief Executive Ofcer
10 | PSE 2012 ANNUAL REPORT 10 | PSE 2012 ANNUAL REPORT
JANUARY
PSE extends trading hours until 3:30 PM BSP cuts rates by 25 basis points (bps) Economy posts weak growth in 2011 at 3.7%
FEBRUARY
Dow Jones Industrial Average closes above 13,000 for the rst time since 2008 Greece receives US$172 billion in new bailout from EU and IMF
MARCH
BSP cuts rates by 25 bps for the second time World Bank maintains 4.2% GDP forecast for PH
APRIL
ADB maintains 4.8% GDP forecast for PH
MAY
Moody's upgrades PH credit rating outlook to positive Local GDP grows by 6.4% in the rst quarter Greece threatens eurozone exit Impeachment of Chief Justice Renato Corona
JUNE
Fitch Ratings afrms BB+ credit rating and stable outlook for PH US Fed extends Operation Twist program Spain and Cyprus seek bank bailouts from EU and IMF
JULY
S&P raises PH credit rating to BB+ with a stable outlook World Bank raises GDP forecast for PH to 4.6% BSP cuts rates by 25 bps for the third time Government releases new mining policy (EO 79)
AUGUST
Local GDP slows to 5.9% in the second quarter Philippine government releases IRR of EO 79
SEPTEMBER
PH jumps 10 places to 65th in World Economic Forum's Global Competitiveness Report
OCTOBER
ADB and World Bank raise PH GDP forecast to 5.5% and 5.0%, respectively IMF maintains 4.8% GDP forecast for PH EU establishes US$648 billion European Stability Mechanism Moody's raises PH credit rating to Ba1 with a stable outlook BSP cuts rates by 25 bps for the fourth time
NOVEMBER
EU and IMF reach deal to reduce Greek debt Local GDP surges by 7.1% in the third quarter
DECEMBER
US Congress passes measure to avert "scal cliff" World Bank raises GDP forecast for PH to 6.0% S&P raises PH credit rating outlook to positive PSEi posts 38th record high at 5,832.83, becoming 2nd best performer in Asia
Stock Market Performance
PSEi in 2012
Figure 1
Whats
A rising economy, a changing landscape
Beyond
the numbers?
only 87 percent of the full-year programmed ceiling of P279.11 billion, brought about by the gradual disbursement of government funds and lower-thanprogrammed debt service payments. The full year scal balance widened to P242.83 billion from the P197.75 billion decit incurred in 2011. The ination environment remained benign throughout the year. Headline ination rate for 2012 averaged at 3.2 percent, the lowest level in ve years and 140 basis points (bps) lower than the 2011 average of 4.6 percent. This favorable backdrop allowed the Bangko Sentral ng Pilipinas
It's Philippines, Inc. as a vibrant and viable investment destination

(BSP) enough elbow room to fuel economic growth, cutting key interest rates four times during the year for a cumulative reduction of 100 bps. The last monetary policy adjustment on October 25 brought the overnight borrowing and lending rates to record lows of 3.5 percent and 5.5 percent, respectively. Trades at the foreign exchange market likewise continued to be robust. Tagged as the second best performing currency against the greenback in Asia, the Philippine peso gained by 6.8 percent in 2012, trailing behind the Korean wons 7.8 percent expansion. The Philippine peso ended the year at P41.05 per US dollar from P43.84 per US dollar in 2011. The local currency hit a 57-month high of P40.85 per dollar on December 5, propelled by the inux of foreign investments in the country. Foreign investments owed into the Philippines with foreign direct investments (FDI) in 2012 expanding by 9.8 percent to US$2.03 billion from US$1.85 billion in 2011. The signicant increase in FDI was driven by the impressive 141 percent growth in equity capital. Business activity also mirrored foreign investor condence as evidenced by the rise in earnings of listed companies. In the nine months ending September, the combined net income of listed domestic companies rose by 18.4 percent to P388.20 billion from P327.75 billion in the same period in 2011. The countrys signicant macroeconomic gains and sound scal management convinced global credit rating agencies to upgrade the Philippines investment rating and outlook, with the latest improvement coming on October 29 when Moodys Investors Service (Moodys) upgraded its Philippine sovereign debt ratings. Both Fitch Ratings and Moodys also maintained a stable outlook while Standard and Poors raised the countrys outlook to positive. With these developments, all three global rating agencies now have the Philippines at one notch below the much sought-after investment grade status.
The overall economic environment remained favorable throughout the year as it consistently outperformed expectations from various nancial institutions such as the Asian Development Bank and the World Bank, which revised upwards their gross domestic product (GDP) forecasts for the Philippines several times throughout the year. For the full year 2012, the local economy expanded by 6.6 percent from 3.9 percent last year, boosted by the sustained strong performances across the agriculture, industrial and services sectors. On the demand side, increased external trade, government spending as well as higher investments in construction contributed to the GDP expansion. The countrys scal balance was also kept at bay albeit geared more towards lending support to boost the economy. For the full year, the budget gap accounted for
Market stability tested by challenges, risks While all these developments painted a resilient Philippine economy, persistent headwinds in the Eurozone and the United States threatened to impede the stock markets upward course. Difculties encountered by Greece to meet its bailout obligations fuelled fears of its exit from the Eurozone. Greeces continued access to the 240 billion bailout fund was dependent on conditions such as the success of key economic reforms. Further aggravating the Eurozone troubles were the requests of Spain and Cyprus for bank bailouts. These adverse developments prompted the Euro to decline to a two-year low of 1.21 against the greenback on July 23. In response to the sustained nancial difculties of European Union (EU) nations, the European Stability Mechanism (ESM) was inaugurated on October 8 to provide nancial stability support. The ESM, which has a lending capacity of 500 billion, was empowered to issue bonds or other debt instruments and raise capital to provide nancial assistance to EU members. Further aiding debt-stricken Greece was the agreement on a program by EU and the International Monetary Fund on November 27 to reduce Greek debt by 44.6 billion. This would effectively reduce Greeces debtto-GDP ratio to 124% of GDP by 2020 and below 110% of GDP by 2022. The deal also included a 100 bps rate cut on interest rates charged to Greece by other EU states. On the other side, the still-weak US economy prompted the US Federal Reserve (Fed) to make its third attempt at quantitative easing (QE3) in September. QE3 entailed the purchase of US$40 billion worth of mortgage-backed securities monthly, while short-term interest rates would be kept at exceptionally low levels until mid2015. Adding pressure to the struggling US economy was its vulnerability to the looming scal cliff or more than US$600 billion worth of tax increases and spending cuts which will be implemented at the start of 2013. The worlds largest economy was able to avert the "scal cliff" at the last minute when the US Congress passed a legislation neutralizing middle class tax increases and spending cuts, just hours before nancial markets opened in 2013. The mixed external developments throughout the year somehow managed to mitigate the volatility in the commodities
market. At the New York Mercantile Exchange (NYMEX), crude oil nished the year at US$91.82 per barrel, down by 7.1 percent from the 2011 close of US$98.83. The price of gold traded at the US Commodity Exchange meanwhile, settled at US$1,675.80 per ounce, 7.0 percent more than the US$1,565.80 per ounce closing price in 2011. Spotlight shifts to the stock market The exciting Philippine story afrmed investor condence in the country, which propelled the stock market to exceptional heights and brought it closer to the precipice of becoming a truly viable investment destination. The Philippine stock market opened the year on a momentous note with the full implementation of extended trading hours. Augmenting the usual morning schedule with an afternoon session, the market easily broke previous highs in trading activity and supported the rise of the benchmark Philippine Stock Exchange, Inc. (PSE) index to record closing levels. The main index re-wrote new highs at an unprecedented 38 times in 2012, reaching its peak level for the year on December 26 at 5,832.83 points. By yearend, the PSE index (PSEi) rallied 1,440.77 points to close at 5,812.73 points, 33.0 percent higher than its end-2011 level, making it the second-best performing index in Asia and fth in the world. Five of the six PSE sector indices registered positive growths in 2012 led by the Financials index, which surged by 57.5 percent. This was followed by the Property index, which rose by 55.6 percent. The Holding Firms, Industrial and Services counters likewise expanded by 47.0 percent, 25.5 percent and 6.7 percent, respectively. Conversely, the Mining & Oil index fell by 17.4 percent. The broader All Shares index, meanwhile, increased by 21.5 percent to end at 3,698.98 points from 3,045.04 points a year earlier. More companies took advantage of the opportunities presented by the
PSEi vs Select Asian Indices
Figure 2
Sectoral Indices Performance (in %)
PSEi Composition
stock markets remarkable performance. Fund-raising activities in the market reached another record high at P219.07 billion, more than double the previous years record of P107.50 billion. Seven new companies joined PSEs roster of listed rms during the year. Five of them conducted initial public offerings (IPO) as GT Capital Holdings, Inc., East West Banking Corporation, Calata Corporation, Coal Asia Holdings Incorporated, and D&L Industries, Inc. raised a combined P23.99 billion from the market. On the other hand, Rockwell Land Corporation and Yehey! Corporation listed their shares by way of introduction. The number of new company listings in the Exchange was the highest since 2008. Meanwhile, capital proceeds from follow-on offerings, which amounted to P92.64 billion, were bolstered by the landmark San Miguel Corporation preferred shares offering worth P80.03 billion, the highest in local stock market history. Aggregate stock rights offerings valued at P52.07 billion were driven by the massive P43.51 billion offer of BDO Unibank, Inc., while various private placement transactions led by Ayala Land, Inc., Bloomberry Resorts Corporation, and SM Investments Corporation totaled P50.38 billion. Trading activity in the stock market continued to grow at a rapid pace with the value of trading transactions pushing to its highest level at P1.77 trillion in 2012, eclipsing the previous years P1.42 trillion level by 24.5 percent. Meanwhile, average daily turnover rose to P7.26 billion, a 27.1 percent increase from P5.71 billion in 2011. Foreign investors displayed condence in the Philippine stock market as they represented 44.9 percent of total trades, up by 7.1 percentage points from their 37.8 percent share in 2011. Total foreign transactions netted a buying of P109.98 billion, the highest recorded level in the Exchanges history. This was an increase of 94.6 percent from the P56.52 billion net foreign buying gure in 2011. Total foreign buying amounted to P850.16 billion, while total foreign selling came in at P740.18 billion. Total market capitalization likewise soared to a record level rising by 25.7 percent to P10.93 trillion from its year ago level of P8.70 trillion. Domestic market capitalization, which excludes foreign rms Sun Life Financial Inc. and Manulife Financial Corporation, expanded by 30.1 percent to a new record of P9.42 trillion from P7.24 trillion in 2011. The Industrial sector accounted for the highest share of domestic market capitalization at 28.6 percent or P2.70 trillion.
As of March 12, 2012
1 2 3 4 5 6 7 8 9
As of September 10, 2012

1 2 3 4 5 6 7 8 9
Aboitiz Equity Ventures, Inc. Aboitiz Power Corporation Alliance Global Group, Inc. Ayala Corporation Ayala Land, Inc. BDO Unibank, Inc. Bank of the Philippine Islands Belle Corporation Cebu Air, Inc.
Aboitiz Equity Ventures, Inc. Aboitiz Power Corporation Alliance Global Group, Inc. Ayala Corporation Ayala Land, Inc. BDO Unibank, Inc. Bank of the Philippine Islands Belle Corporation DMCI Holdings, Inc.
Figure 3
10 DMCI Holdings, Inc. 11 Energy Development Corporation 12 First Gen Corporation 13 Globe Telecom, Inc. 14 International Container Terminal Services, Inc. 15 JG Summit Holdings, Inc. 16 Jollibee Foods Corporation 17 Manila Electric Company 18 Manila Water Company, Inc. 19 Megaworld Corporation 20 Metro Pacic Investments Corporation 21 Metropolitan Bank & Trust Company 22 Philex Mining Corporation 23 Philippine Long Distance Telephone Company 24 Robinsons Land Corporation 25 San Miguel Corporation 26 Semirara Mining Corporation 27 SM Development Corporation 28 SM Investments Corporation 29 SM Prime Holdings, Inc. 30 Universal Robina Corporation
Table 2
10 Energy Development Corporation 11 First Gen Corporation 12 Globe Telecom, Inc. 13 International Container Terminal Services, Inc. 14 JG Summit Holdings, Inc. 15 Jollibee Foods Corporation 16 Manila Electric Company 17 Manila Water Company, Inc. 18 Megaworld Corporation 19 Metro Pacic Investments Corporation 20 Metropolitan Bank & Trust Company 21 Petron Corporation 22 Philex Mining Corporation 23 Philippine Long Distance Telephone Company 24 Robinsons Land Corporation 25 San Miguel Corporation 26 Semirara Mining Corporation 27 SM Development Corporation 28 SM Investments Corporation 29 SM Prime Holdings, Inc. 30 Universal Robina Corporation
Select PSE Market Indicators

Market Indicator PSE index (PSEi), yearend close Total value traded (in billion Php) Average daily value traded (in billion Php) Foreign buying (in billion Php) Foreign selling (in billion Php) Net foreign buying/(selling) (in billion Php) Total foreign (in billion Php) Share of foreign trading to total trading Capital raised (in billion Php) Initial public offerings (in billion Php) Additional listings (in billion Php) Market capitalization, yearend (in billion Php) Domestic rms (in billion Php) Foreign rms (in billion Php) No. of listed companies, yearend Domestic Foreign No. of listed issues, yearend Domestic Foreign Total market Dividend yield Price-earnings ratio
Table 3
2008 1,872.85 763.90 3.11 361.00 383.17 (22.16) 744.17 48.71% 31.55 1.95 29.60 4,072.16 2,476.99 1,595.17 246 244 2 316 314 2 5.49 8.95
2009 3,052.68 994.15 4.11 329.28 314.37 14.92 643.65 32.37% 38.77 0.02 38.75 6,032.22 3,995.07 2,037.15 248 246 2 318 316 2 3.52 23.26
2010 4,201.14 1,207.38 4.95 477.38 441.76 35.62 919.13 38.06% 84.94 12.78 72.16 8,866.11 6,892.21 1,973.90 253 251 2 328 326 2 2.64 21.32
2011 4,371.96 1,422.59 5.71 565.86 509.35 56.52 1,075.21 37.79% 107.50 9.04 98.46 8,696.96 7,238.99 1,457.97 253 251 2 326 324 2 2.91 16.54
2012 5,812.73 1,771.71 7.26 850.16 740.18 109.98 1,590.35 44.88% 219.07 23.99 195.08 10,930.09 9,416.31 1,513.78 254 252 2 294 292 2 2.33 19.09
2012 vs 2011 % change 32.95 24.54 27.09 50.24 45.32 94.59 47.91 7.09 103.79 165.44 98.13 25.68 30.08 3.83 0.40 0.40 0.00 -9.82 -9.88 0.00 -19.83 15.38
2012 Top 25 Companies by Trading Frequency

(Regular Market)
Rank Company Name Code Number of Trades
2012 Top 25 Companies by Market Capitalization

(Common Shares)
Market Capitalization (in Php)
2012 Top 25 Companies by Value Traded

(Regular Market)
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Company Name Philippine Long Distance Telephone Company Metropolitan Bank & Trust Company SM Investments Corporation Alliance Global Group, Inc. Ayala Corporation BDO Unibank, Inc. Ayala Land, Inc. Megaworld Corporation DMCI Holdings, Inc. SM Prime Holdings, Inc. Universal Robina Corporation Energy Development Corporation Bank of the Philippine Islands Security Bank Corporation Aboitiz Power Corporation Metro Pacic Investments Corporation Manila Electric Company International Container Terminal Services, Inc. Bloomberry Resorts Corporation GT Capital Holdings, Inc. Puregold Price Club, Inc. Philex Mining Corporation Lepanto Consolidated Mining Company Aboitiz Equity Ventures, Inc. San Miguel Corporation Code TEL MBT SM AGI AC BDO ALI MEG DMC SMPH URC EDC BPI SECB AP MPI MER ICT BLOOM GTCAP PGOLD PX LC AEV SMC
Value Traded (in Php)
2012 Top 25 Price Gainers

(Common Issues)
2012 Close (in Php) 2011 Close (in Php) Rank Issue Code % Change
1 2
Alcorn Gold Resources Corporation Manchester International Holdings Unlimited Corporation A Manchester International Holdings Unlimited Corporation B Maybank ATR KimEng Financial Corporation Victorias Milling Company, Inc. Cirtek Holdings Philippines Corporation Philex Petroleum Corporation RFM Corporation Philippine Seven Corporation MJC Investments Corporation Imperial Resources, Inc. B Pepsi-Cola Products Philippines, Inc. LT Group, Inc. EEI Corporation Philippine Estates Corporation Ever-Gotesco Resources & Holdings, Inc. Vivant Corporation Jolliville Holdings Corporation PNOC Exploration Corporation A Paxys, Inc. Vitarich Corporation Lafarge Republic, Inc. iPeople, Inc. House of Investments, Inc. Rizal Commercial Banking Corporation
APM MIH
0.145 12.12
0.015 1.38
866.67 778.26
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Table 5
Company Name
Manulife Financial Corporation Sun Life Financial Inc. SM Investments Corporation Philippine Long Distance Telephone Company San Miguel Brewery, Inc. Ayala Land, Inc. Bank of the Philippine Islands Ayala Corporation Manila Electric Company Aboitiz Equity Ventures, Inc. SM Prime Holdings, Inc. Aboitiz Power Corporation JG Summit Holdings, Inc. BDO Unibank, Inc. San Miguel Corporation Metropolitan Bank & Trust Company Universal Robina Corporation Alliance Global Group, Inc. Globe Telecom, Inc. International Container Terminal Services, Inc. DMCI Holdings, Inc. Bloomberry Resorts Corporation Energy Development Corporation LT Group, Inc. Metro Pacic Investments Corporation
Code
MFC SLF SM TEL SMB ALI BPI AC MER AEV SMPH AP JGS BDO SMC MBT URC AGI GLO ICT DMC BLOOM EDC LTG MPI
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Table 4
Megaworld Corporation Alliance Global Group, Inc. Metropolitan Bank & Trust Company SM Prime Holdings, Inc. Energy Development Corporation Ayala Land, Inc. Bloomberry Resorts Corporation BDO Unibank, Inc. Lepanto Consolidated Mining Company NiHAO Mineral Resources International, Inc. Metro Pacic Investments Corporation Ayala Corporation Bank of the Philippine Islands Calata Corporation Philex Mining Corporation Dizon Copper Silver Mines, Inc. Philippine Long Distance Telephone Company Puregold Price Club, Inc. Alcorn Gold Resources Corporation DMCI Holdings, Inc. Manila Electric Company Oriental Peninsula Resources Group, Inc. Universal Robina Corporation Aboitiz Power Corporation First Philippine Holdings Corporation
MEG AGI MBT SMPH EDC ALI BLOOM BDO LC NI MPI AC BPI CAL PX DIZ TEL PGOLD APM DMC MER ORE URC AP FPH
164,937 150,705 149,605 142,711 140,974 138,048 135,593 129,031 121,716 112,601 107,796 104,611 101,070 97,875 95,914 93,816 88,680 83,165 81,141 80,606 77,953 77,936 75,224 73,900 73,570
105,239,500,830 77,080,080,575 76,659,018,985 60,414,277,272 56,637,149,313 53,474,108,037 51,672,087,997 46,123,801,250 38,541,293,603 38,153,678,468 36,606,866,168 34,097,034,765 31,610,746,567 30,392,301,847 30,353,076,950 28,741,232,910 27,904,030,676 23,366,227,865 23,253,890,735 22,280,535,366 21,771,709,649 21,313,842,020 20,067,369,070 19,812,142,198 19,675,666,008
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Table 7
MIHB MAKE VMC CHIPS PXP RFM SEVN MJIC IMPB PIP LTG EEI PHES EVER VVT JOH PEC PAX VITA LRI IPO HI RCB
12.00 24.60 1.39 25.80 29.95 5.00 92.00 5.74 33.00 6.52 13.38 10.10 0.65 0.40 9.01 5.70 55.00 2.96 0.94 11.70 9.30 6.29 60.00
1.37 4.20 0.29 5.69 7.02 1.19 22.52 1.52 10.00 2.06 4.40 3.44 0.233 0.15 3.81 2.42 24.00 1.36 0.44 5.50 4.40 3.08 30.10
775.91 485.71 379.31 353.07 326.64 320.17 308.49 277.63 230.00 216.50 204.09 193.60 178.97 166.67 136.48 135.54 129.17 117.65 113.64 112.73 111.36 104.22 99.34
919,818,581,165.00 593,959,113,835.00 549,463,614,840.00 546,621,110,750.00 451,527,033,528.00 363,732,575,455.20 337,853,836,435.00 306,901,070,047.00 293,722,068,198.40 292,383,112,921.95 286,665,683,040.00 271,900,429,143.65 268,489,070,451.50 260,687,723,878.40 250,039,664,071.20 215,361,373,734.00 182,918,937,082.05 172,122,316,928.04 144,581,515,260.00 143,735,591,640.00 143,263,901,300.00 139,785,367,339.20 126,562,500,000.00 120,170,983,334.82 109,530,180,696.40
23 24 25
Table 6
Total Market Capitalization and Trading Value by Sector

(in billion Php)
Market Capitalization 2010 Financials Sector Banks Other Financial Institutions Industrial Sector Electricity, Energy, Power & Water Food, Beverage & Tobacco Construction, Infrastructure & Allied Services Chemicals Electrical Components & Equipment* Other Industrials* Holding Firms Sector Property Sector Services Sector Media Telecommunications Information Technology Transportation Services Hotel & Leisure Education Casinos & Gaming* Retail* Other Services* Mining & Oil Sector Mining Oil SME Total Market 2,807.52 783.95 2,024.05 2,510.47 930.45 1,292.61 169.07 12.32 1,277.81 752.50 1,116.04 60.86 691.07 37.72 258.65 10.81 14.09 401.23 347.39 53.83 0.55 8,866.11 2011 2,328.38 803.47 1,525.56 2,458.48 908.84 1,317.05 134.28 12.52 1,364.04 815.94 1,222.50 47.93 767.50 35.87 245.30 18.37 20.42 506.90 417.77 89.13 0.71 8,696.96 2012 2,892.28 1,300.41 1,592.32 2,695.09 1,059.12 1,334.57 221.46 19.47 18.75 41.71 2,110.73 1,262.37 1,430.35 60.28 695.36 30.51 235.16 5.14 26.23 185.45 129.40 62.95 538.68 371.16 167.52 0.59 10,930.09 % change 24.2 61.9 4.4 9.6 16.5 1.3 64.9 55.5 54.7 54.7 17.0 25.7 -9.4 -14.9 -4.1 -72.0 28.5 6.3 -11.2 88.0 -17.8 25.7 % share 26.5 11.9 14.6 24.7 9.7 12.2 2.0 0.2 0.2 0.4 19.3 11.5 13.1 0.6 6.4 0.3 2.2 0.0 0.2 1.7 1.2 0.6 4.9 3.4 1.5 0.0 100.0 2010 159.90 156.00 3.90 375.98 276.28 89.97 7.79 0.42 231.10 171.80 192.72 8.26 108.71 8.46 62.88 1.27 0.16 75.88 75.08 0.81 0.001 1,207.38 2011 170.15 162.80 7.35 374.09 226.51 137.57 7.20 1.07 288.73 150.23 235.89 1.94 132.10 16.05 56.14 15.39 0.39 203.49 199.02 4.47 0.01 1,422.59 Value Traded 2012 282.98 273.72 9.26 419.11 196.72 171.63 24.30 3.27 2.06 21.14 400.48 244.18 287.07 17.59 136.61 14.85 39.85 7.33 0.62 22.70 25.16 22.36 137.88 118.94 18.94 0.01 1,771.71 % change 66.3 68.1 26.0 12.0 -13.2 24.8 237.4 204.3 38.7 62.5 21.7 805.0 3.4 -7.5 -29.0 -52.4 57.9 -32.2 -40.2 323.9 130.7 24.5 % share 16.0 15.4 0.5 23.7 11.1 9.7 1.4 0.2 0.1 1.2 22.6 13.8 16.2 1.0 7.7 0.8 2.2 0.4 0.0 1.3 1.4 1.3 7.8 6.7 1.1 0.0 100.0
Figure 5
It's providing capital for growth

Amidst the compelling valuations and the continued growth of businesses in a thriving economy, seven companies listed at the Exchange in 2012, ve of which emanated from the Exchanges efforts through continuous company engagements and discussions. The year started with a bangthe successful initial public offering of GT Capital Holdings, Inc., a major, highly diversied Philippine conglomerate with interests in banking, real estate development, power generation, the automotive industry, and life insurance. The other companies which raised capital through the Exchange were: Eastwest Banking Corporation, one of the countrys fastest growing banks; Calata Corporation, one of the biggest distributor of agro chemical products, feeds, fertilizers and veterinary medicines; Coal Asia Holdings, Inc., an investment holding company engaged in the exploration and mining of coal and other energy-related businesses; and D&L Industries, Inc., the countrys leading food ingredients manufacturer. Rockwell Land Corporation, one of the premier real estate development companies in the Philippines, and Yehey! Corporation, a company engaged in digital marketing solutions and services, are the two companies which listed by way of introduction this year. It was also a historic year for listings as we saw two companies conducting at least a US$1 billion offering. The rst was conducted by Banco de Oro through its stock rights offering in July 2012 amounting to P43.5 million followed by the biggest offering in history by San Miguel Corporation when it listed its preferred shares series offering amounting to P80 billion.
Operational Highlights
International roadshows To further the exposure of our listed companies at the international arena, the Exchange successfully conducted two international roadshows in 2012. In February, the PSE and the Bank of America Merrill Lynch held a three-day international roadshow in Hong Kong dubbed as the Philippine Corporate Day which featured one-on-one investor meetings between 32 participating listed companies from the Philippines and 41 international investment funds. A one-day roadshows dubbed Eye on the Philippines was also conducted in Singapore in March in partnership with Bloomberg. It featured listed companies from the Philippines and was attended by leading fund managers, hedge funds, investment advisors, investment banks and other institutional investors based in Singapore.
What's beyond the numbers? A growing company. What does going public mean? EastWest Bank CEO Antonio Moncupa shares that its about future opportunities and possible acquisitions. But beyond the technical, it means theyve proved the reputation theyve built as a bank.
* Per CN-No. 2012-0026, these subsectors were created effective July 2. Table 8
2012 Market Activity
(All Issues)
Banking is a business of trust, Moncupa says. And that trust has come a long way. The efforts of the past ve years to reach this one goal have been well worth it as going public also completes the nal requirement of EastWest to get their universal banking license. We are prepared to be under public scrutiny, Moncupa says with condence. EastWest Bank was one of ve companies that conducted an initial public offering in 2012. It raised P2.6 billion from the IPO to fund among others its expansion.
Figure 4
New listings in 2012

(IPO-Initial Public Offering, LBWI-Listing by Way of Introduction)
Company GT Capital Holdings, Inc. Code GTCAP GTCAP GTCAP East West Banking Corporation EW EW EW Rockwell Land Corporation First Gen Corporation Series G Preferred Shares ROCK FGENG FGENG Calata Corporation San Miguel Corporation Preferred Series 2A San Miguel Corporation Preferred Series 2B San Miguel Corporation Preferred Series 2C Yehey! Corporation Coal Asia Holdings Incorporated STI Education Systems Holdings, Inc. CAL SMC2A SMC2B SMC2C YEHEY COAL STI STI STI D&L Industries, Inc. DNL DNL Type of Offering IPO IPO IPO IPO IPO IPO LBWI Follow-on Follow-on IPO Follow-on Follow-on Follow-on LBWI IPO Follow-on Follow-on Follow-on IPO IPO Offered Shares Primary Secondary Secondary Primary Secondary Secondary Primary Primary1 Primary Primary Primary Primary Primary Primary Primary1 Secondary Primary Primary
1 1 1
Listing Date 20-Apr-12 20-Apr-12 20-Apr-12 07-May-12 07-May-12 07-May-12 11-May-12 18-May-12 18-May-12 23-May-12 28-Sep-12 28-Sep-12 28-Sep-12 18-Oct-12 23-Oct-12 07-Nov-12 07-Nov-12 07-Nov-12 12-Dec-12 12-Dec-12
Offer Price (in Php) 455.00 455.00 455.00 18.50 18.50 18.50 1.46* 100.00 100.00 7.50 75.00 75.00 75.00 1.00* 1.00 0.90 0.90 0.90 4.30 4.30
No. Of Shares Offered 33,000,000 8,217,300 6,182,590 141,056,800 104,259,400 36,797,400 70,000,000 30,000,000 36,012,000 721,012,400 90,428,200 255,559,400 800,000,000 2,627,000,000 273,000,000 105,209,527 1,071,429,000 160,714,000
Offer Proceeds (in Php) 15,015,000,000.00 3,738,871,500.00 2,813,078,450.00 2,609,550,800.00 1,928,798,900.00 680,751,900.00 7,000,000,000.00 3,000,000,000.00 270,090,000.00 54,075,930,000.00 6,782,115,000.00 19,166,955,000.00 800,000,000.00 2,364,300,000.00 245,700,000.00 94,688,574.30 4,607,144,700.00 691,070,200.00 116,627,855,700.00 9,256,189,324.30
Board Upon Listing First Board
First Board
First Board
Screenshots of PSE online presence
Listing programs and seminars

Second Board
Second Board First Board
The Exchange conducted listing seminars in partnership with government and industry groups to introduce to listed companies the advantages of going public. At least four major seminars were conducted in separate partnership with the Cebu Chamber of Commerce and Industry, Inc., Chamber of Mines of the Philippines, The Department of Trade and Industry Board of Investments and the Philippine Retailers Association. These programs were targeted at different business segments which were identied to have high potential and needs for listing. These forums gathered close to 1,300 participants and prospective listed companies.
All the marketing efforts of the PSE reached out to 150,000 individuals in 2012 by capitalizing on the popularity of the internet, social sites, free media exposure, as well as strategic alliances. This number doubles the total number of individuals that participated in our marketing activities the previous year. PSE Integrated Viral Education Strategy or PSE InVESt! PSE InVESt! is the nucleus of the bourses market education programs. This emanated from the concept of viral marketing, which is the internet term for word-of-mouth-advertising. PSE InVESt! harnesses the efciency and mass education prowess of the internet, social sites, and other online campaigns. It complements the high-impact conventional off-line learning sessions such as investing seminars, stock market courses, and traditional marketing and promotional campaigns. It targets both the retail and local institutional investors as well as the academe, which is made up of students and educators. PSE Academy Website The PSE Academy is the companys market education website designed to provide a comprehensive, interactive, and practical web-based investor education for market participants, wouldbe equity investors, and the public in general. Logging in at www.pseacademy.com.ph gives individuals access to free downloadable reading materials and video books ranging from basic to more advanced topics that allow users to enhance their knowledge on stock investing and eventually acquire valuable
trading skills. There are also materials that furnish market practitioners with information on securities licensure examinations, stock market courses and trainings. The total number of visitors from January to December 2012 stood at 151,984, and total page views exceeded 620,000. This site was viewed in 43 different countries including top professional Overseas Filipino destinations including the US, Canada, Saudi Arabia, Australia, United Arab Emirates, Singapore, and Hong Kong. Social Media Campaigns Digital media and technology have increased the need and desire of todays breed of investors for more information. To support its market education and corporate governance campaigns, the PSE has taken advantage of social media platforms Facebook and Twitter to communicate news,events, latest developments, programs, disclosure headlines and market information at the start, middle and end of trading sessions. The PSEs Facebook and Twitter pages were launched in January 2010. In 2012, PSE's Facebook page had 9,174 likes which signicantly increased from 3,608 in 2011. PSEs Facebook page also had an average weekly organic and viral reach of 10,738 page views, a growth of 597 percent versus 1,539 the previous year. The PSE also utilized social media as a platform to promote the local stock market and communicate reports disclosed by its listed companies. In 2012, the PSE started posting daily corporate disclosure headlines as well as market statistics, press releases, trading holidays and other announcements. As a result, by the end of 2012, our Twitter
First Board
TOTAL INITIAL AND FOLLOW-ON PUBLIC OFFERING PROCEEDS (Primary Shares) TOTAL INITIAL AND FOLLOW-ON PUBLIC OFFERING PROCEEDS (Secondary Shares)
Listing Price 1 Over-allotment Table 9
*
It's having more investors grow with the market

As we achieved great milestones in 2012, we know that our progress can only be more fullling if more and more Filipinos enjoy the benets of investing in the stock market.
Summary of 2012 Capital Raising Activities
Php
219.07B
Php
The performance of the market in 2012 has served as a compelling reason for more Filipinos to start investing in the market as shown by the 48.3 percent increase in online investor accounts representing more than 30,000 new online accounts opened.
23.99B
IPO
Php
Private Placements
50.38B
Php
Stock Rights Offering
52.07B
Php
Follow-On Offering
92.64B
Figure 6
To maximize the opportunities presented by the market environment, the PSE continued its market education efforts to support the interest that is generated by the increased trading activity.
followers have reached 7,700, or an almost four-fold increase from 2,000 followers at the end of 2011. PSE also had promotional partnerships with top investment bloggers in the Philippines like Pinoy Money Talk, Manila Finance, Stock Market Pilipinas, Traders Pizza, and Traders Info Exchange. These blog sites have unique investors of up to 3 million individuals. Improved Website Recognizing the internet as the doorway to new markets and opportunities, the PSE nalized enhancements to a new website under www.pse.com.ph in 2011 and completed the migration to the new website in 2012. The new website, with its enhanced design and user-friendly features, serves the need of investors for timely stock market information. The website has navigation bars located at the left frame of each page. It provides a snapshot of the website's structure and enables the user to browse and access their desired information with lesser clicks. It has a charting tool that can display all types of indicators that can be viewed simultaneously. The new website is powered by advanced technologies that can easily integrate third party systems and new products. PSE also now has a dedicated webpage on Investor Relations as a quick reference for shareholders of the PSE. PSE Cebu Marketing Ofce The Exchange launched in September 2011 its rst satellite ofce in Cebu City to serve as the staging ground for various capital market developmental activities directed at the Visayas and Mindanao regions. In 2012, the Cebu Ofce held orientations and stock market seminars for a total of 4,225 individuals, almost 10 percent of whom actually opened accounts with brokers. Industry and Economic Briengs Industry and economic briengs were conducted to apprise market practitioners, the investing community, and other stakeholders about the PSE, stock market, and the economy. Quarterly industry briengs were also accomplished in four different industries, such as the Renewable Energy, Islamic Finance, Securities Lending in Asia and the Emerging Markets and Capital Markets Outlook.
CERTIFIED SEcURITIEs SPEcIALIsT COURsE:
BY THE NUMbERs In 2012:
79 RUns OF
GRA DUA TEs
the course
THE cAPITAL
nURTURE
AIM TO
MARKETs
The PSE also served as a major partner of the Bangko Sentral ng Pilipinas and the Institute for Development and Econometric Analysis for the conduct of its semi-annual economic briengs held last March 6, July 16 and November 23. The economic and industry briengs gathered over 1,000 participants. Financial Literacy Roadshows In 2012, the PSE conducted four major nancial literacy roadshows, which were attended by more than 1,000 participants. These roadshows were conducted in key cities nationwide including Cebu, Davao, Cagayan de Oro, and Iloilo. The roadshow seminars were attended by high net worth individuals and businessmen who have interest in listing their companies in the PSE. Trading participants with branch ofces in roadshow destinations also conducted marketing activities and consultation sessions with prospective investors during the events.
ScHOOLs
First batch of graduates of the PSE-LPU MBA with Specialization in Capital Markets Program
7th Capital Markets Investment Teaching Accreditation Program (CMITAP) PSE and the Capital Markets Institute of the Philippines (CMIP) jointly conducted the 7th Capital Markets Investment Teaching Accreditation Program (CMITAP) from May 28 to June 1 at the Achievers Core Training Centre in Dasmarias, Cavite. This program was a weeklong intensive training course focused on the instruction of capital market investments covering subjects such as capital markets, equities, bonds, statistics of investments, portfolio management, fundamental, technical analysis, ethics and good corporate governance, risk management, and securities regulation, among others. CMITAP offers full scholarship to deserving nance educators inclusive of full board, lodging, materials and transportation for the duration of the program. The graduation ceremony of the 24 successful participants was held on June 1 at the PSE Ayala Trading Floor in Makati City. Capital Markets Resource Learning Centers and Book Drives The PSE supported the University of the Philippines Visayas College of Management and the CMIP in launching the Iloilo City Capital
Market Investment Resource Center on September 14. It serves as an investment laboratory for students and the investing public and a staging ground for various capital market developmental activities. It is the rst ever learning and training hub in Visayas dedicated to capital market investments. Similar centers were established earlier by PSE and CMIP in partnership with the host schools such as Lyceum of the Philippines University Laguna, San Beda College Mendiola, University of Manila, and Southville International Schools and Colleges in Las Pias. The PSE also worked closely to establish Capital Markets Learning Centers around the Philippines. Together with the PSE Foundation, Inc. (PSE Foundation) and CMIP, a Nationwide Book Drive was undertaken. Finance- and investment-related books were collected from charitable institutions, industry associations and foundations and distributed to various schools nationwide. During the rst national convention of the CMIP, more than 150 teachers received a book package consisting of stock investing primers, videobooks, reference books, and other learning materials which may be used to set up an integrated capital markets section in libraries of recipient schools. Aside from the PSE Foundation, book and educational materials donors
include Bangko Sentral ng Pilipinas, Citibank N.A., First Metro Asset Management, Inc., Philippine Deposit Insurance Corporation, Chartered Financial Analysts Society of the Philippines, Colayco Foundation, Inc., and High-Heeled Traders. PSE Certied Securities Specialist Course A total of four runs of the PSE Certied Securities Specialist Course were conducted with academe partners Ateneo Graduate School of Business Center for Continuing Education, University of Santo Tomas Center for Professional Education and Development, and University of the Philippines Development Center for Finance. PSE-Lyceum of the Philippines University MBA with Specialization in Capital Markets Program The PSE-Lyceum of the Philippines University Masters of Business Administration with Specialization in Capital Markets Program (PSE-LPU MBA Program) is the rst and only post graduate program with specic focus on the eld of capital market in the country. Twentyone participants, mostly from the nance and brokerage industries, graduated from the PSE-LPU MBA Program in commencement rites held on April 21 at the Philippine International Convention Center in Manila. A special culminating ceremony was also held on May 30 at the PSE Ayala Trading Floor in Makati City.
What's beyond the numbers? A course for the future.

Despite already nishing college, something was still missing for Rachel Espejo. Fortunately, her dream of working in the stock market came to fruition, thanks to the PSE Certied Securities Specialist Course. It provided Espejo with the essential concepts and tools. She applied everything she learned and thus gained an advantage in all her job interviews. Today, Espejo is a professional but she has new dreams. She wishes to one day establish her own stock brokerage company. And shes on the right track. I guarantee that the course will be worth the time and money you will invest in it, she says. Rachel was one of 34 who graduated from the Ateneo run of the PSE Certied Securities Specialist Course.
PSE Academe Week 2012 The PSE Academe Week 2012 was conducted from December 3 to 7. On its second year, it gathered more than 1,850 participants nationwide, a jump of 31 percent compared to its rst launch in 2011. The event also received formal endorsement from Department of Education Secretary Bro. Armin Luistro. The PSE Academe Week 2012 activities were as follows: Conduct of the first ever PSE Academy Student Congress on December 3 at the Adamson University Amphitheater in Manila A three-segment lecture series conducted for different academic sectors during the week-long event
A stock market update and outlook seminar conducted on December 4 at the PSE Tektite Trading Floor in Ortigas Center A two-part stock investing basics seminar and learning workshops for high school students and educators held on December 5 at the Alumni Hall of the biggest secondary education institution Rizal High School, in Pasig City The 3rd Stock X Challenge, a nationwide stock trading tournament in partnership with First Metro Investment Corporation and the Catholic Educators Association of the Philippines Economics and Capital Markets Quiz Bee for College and High School Students The PSE Academe Week 2012 was co-organized by the Exchange with student organizations Junior Philippine Economics Society, Junior Confederation of Finance Associations-Philippines, Junior Capital Markets Institute of the Philippines, Junior Financial Executives and Business Economics Society of Adamson University, Bedan Business Spectrum and Bedan Volunteers of San Beda College, and the apprentice group PSE Blue Chip Club.
PSE-FMIC-CEAP Stock X Challenge The 2nd PSE-FMIC-Catholic Educators Association of the Philippines (CEAP) Stock X Challenge concluded with a simple awarding ceremony on June 14 at the PSE Ayala Brokers Lounge in Makati City. The 3rd PSE-FMIC-CEAP Stock X Challenge was launched on October 15 with more than 180 teams from various colleges and universities nationwide. Champion: Team X2_NINJA of UP Diliman 2nd Place: Team X2_ALPS of UP Diliman 3rd Place: Team X2_UCLAMP of the University of the Cordilleras BPI Clash of the Universities 2012 Another nationwide competition was conducted in partnership with BPI Investment Management and Trust group on July 31 and participated by 85 teams from 21 colleges and universities nationwide. The ceremony was held at the PSE Brokers Lounge with PSE and BPI executives in attendance. Champion: Team BPI_bulls of San Beda College 1st Place: Team BPI_X44 of Ateneo de Davao University 2nd Prize: Team BPI_BETS of University of the Immaculate Conception Davao
process of creation and redemption and the requirement of market-makers to promote the liquidity of ETFs. The proposed rules also provide for transparency and investor safeguards and are adherent to the International Organization of Securities Commissions principles for regulation of ETFs and best practices in other jurisdictions. Shariah Compliant Securities Project PSE has embarked on a project which will allow the trading of Shariah compliant products, to facilitate capital ow from Middle East, Malaysia and even nonIslamic countries to the Philippine stock market. The project aims to tap the global and local Islamic investors and give them access to the local equity market without compromising their religious beliefs. The PSE solicited the support of the National Commission on Muslim Filipinos to collaborate with the Exchange in introducing Islamic Finance in the Philippines, primarily for the capital markets. Accordingly, the PSE conducted a roundtable discussion on Islamic nance entitled Assessing Islamic Finance Opportunities in the Philippine Stock Market on July 26, 2012 which paved the way for the formation of a Shariah Technical Working Group for Capital Markets. PSETradex The PSE online trading platform The rapid growth of online trading in the Philippines is reective of the growing awareness about stock market investing among Filipinos.Based on a PSE study, online investor accounts grew by a remarkable 48.3 percent in 2012, the highest percentage growth since the PSE initiated its survey in 2007. Leveraging on this trend, the PSE has embarked on setting up PSETradex, the PSE online trading platform, to allow brokers who used to be constrained by technology and system costs, to now offer this service to their investors. With the PSETradex, trading participants can enlist with the PSE to use the system which was developed by N2N Global Solutions Sdn. Bhd, one of the leading online trading system providers in Southeast Asia. Direct Market Access Rules The PSE Board approved the proposed Direct Market Access (DMA) Rules which was submitted to SEC for approval. DMA is
an arrangement that allows investors to enter orders into the Exchanges trading system, the PSEtrade for execution without manual intervention of the trading participant. The proposed DMA Rules seek to provide the regulatory framework for the provision by trading participants of DMA services and lay down certain requirements that trading participants and clients must comply with in order to address the potential risks associated with DMA trading. The PSE submitted the proposed DMA Rules to the SEC on October 15.
be delisted from the Exchange registry if it remains non-compliant after the suspension period. Enhancements to reporting requirements To enhance the timely reporting of the public oat data of listed companies, the Exchange amended the MPO rule on September 28 by requiring all listed companies to establish procedures for monitoring their public oat. The quarterly Public Ownership Report (POR) of companies are now required to be posted in the PSE website. In addition, if a companys public ownership falls below 12 percent, it is now required to submit a POR on a monthly basis until such time that its oat level goes back up beyond 12 percent. To complement this rule change, the Exchange started regularly posting
on its website the list of non-compliant companies. Reduction of non-compliant companies Out of the 45 companies which were noncompliant with the MPO requirement when it took effect in 2010, only ten companies remained non-compliant as of December 31, while eight companies delisted voluntarily. These eight companies which opted for voluntary delisting conducted tender offers to provide an exit mechanism for their minority shareholders prior to delisting. The Exchange imposed a trading suspension on the shares of the remaining non-compliant companies effective January 2, 2013.
It's the commitment to integrity and good governance

The PSE continued to promote good governance as a means to support the growth and development of our capital markets and to sustain investor condence in the stock market and the brokerage industry. Amended Rule on Minimum Public Ownership (MPO) The SEC approved on December 19, 2011, the PSE Amended Rule on Minimum Public Ownership (Amended MPO Rule) that gave listed companies a grace period until December 31 to comply with the Exchanges 10 percent MPO requirement. The SEC declared the Amended MPO Rule effective starting on January 1, 2012. This is in line with the Philippine Capital Market Development Plan, which aims to provide a fair and efcient facility for price discovery and to ensure that sufcient liquidity exists. This is also aligned with the PSEs goal to be at par with other exchanges in the region and to address liquidity issues in the local capital markets. Under these Amended MPO Rules, listed companies must comply with the MPO requirement by the end of 2012. Companies which remain non-compliant after this deadline shall be suspended at the start of 2013. The suspension will only be lifted upon a companys compliance provided that such suspension will be imposed for a maximum period of six months, or only until June 30, 2013. If the company remains non-compliant, the company shall be automatically delisted from the Exchange registry. Further, any company which becomes non-compliant on or after January 1, 2013 shall be suspended from trading for a maximum period of six months. The company shall
It's about new products and services offered to investors

Exchange Traded Fund On October 22, the SEC released the Rules and Regulations on Exchange-Traded Funds (ETFs). Under the SECs ETF rules, the shares of stock of ETFs are required to be listed on and traded at a registered Exchange. An ETF is an open-end investment fund that is similar to a mutual fund. It is composed of underlying assets representative of the index it tracks. Unlike a mutual fund, an ETF is traded on a stock exchange real-time during trading hours similar to stocks. The PSE rules on ETFs were released to the public for comments on January 9, 2013. Among the signicant provisions of the proposed PSE Rules on ETFs include the shelf-listing of ETF shares to facilitate the
Stock Trading Tournaments

Three nationwide stock trading tournaments were conducted during the year in partnership with First Metro Investment Corporation (FMIC) and BPI Asset Management and Trust Group.
New Rules for Listing under the Main Board and Small, Medium and Emerging (SME) Companies Board In line with the Exchanges thrust to ensure the suitability of companies applying for listing and enhance investor safeguards, the Exchange amended its listing board rules. The amendments consist of two parts: (i) the consolidation of the First and Second Boards into a new listing board called the Main Board with a new set of listing criteria; and (ii) the reinvention of the SME Board, which shall now be intended for small, medium and emerging companies and shall have more stringent listing requirements than those previously required for small and medium enterprises. The consolidation of the listing boards is aligned with international best practices on dual-trading boards of bourses in the region. It also provides a clearer classication of listed stocks that will help investors evaluate business prospects of companies belonging to these listing boards. Under the proposed rules, companies that will list on what will be called the Main Board must have an authorized capital stock of at least P500 million, and at least three years of operating history. These companies should also have cumulative earnings before income tax, depreciation and amortization (EBITDA) of at least P50 million for the last three years prior to listing. They must also have positive stockholders equity for the immediately preceding scal year. Currently, companies that want to list via the rst and second boards should have an authorized capital stock of P400 million and P100 million, respectively. The rst board requires at least a three-year track record of protable operations, while the second board requires at least a one-year operating history prior to the listing application. The proposed rules are also geared towards transforming the current SME Board to represent emerging companies. Such companies should have a minimum authorized capital stock of P100 million and at least three years of operating history. To accommodate more potentially viable emerging companies to list, the protability test was adjusted under these new rules. Companies should have positive earnings for at least two of the last three years and a positive stockholders equity for the immediately preceding scal year. The requirement for cumulative earnings (EBITDA) of at least P15 million for the last three years is also prescribed.
At present, companies that will list on the SME Board are required to have at least P20 million in authorized capital stock. SME companies are also subject to a one-year operating history prior to their application for listing. The Exchange believes that the new criteria in the SME Board will achieve the objective of striking a balance between the Exchanges role as a venue for capitalraising even for smaller-sized companies and the need of investors to have access to companies that have the track record to back up their growth prospects. The Exchange also formalized in the proposed rules its policy of requiring all listed companies to have an effective investor relations program, which must include, among others, a corporate website that contains, at a minimum, information about the companys operations, financials, plans, senior management, controlling stockholders and investor services. This program must ensure that information affecting the company are communicated effectively to investors. Business Continuity Management Framework A comprehensive Business Continuity Management Policy was approved by the Board of Directors as the framework for strengthening the Exchanges process of identifying, assessing, monitoring and responding to risks which may affect its operations. This is intended to be part of a broader enterprise-wide risk management system that would strengthen the Exchanges internal corporate governance. As an integral element of the overall business continuity framework, the PSE also embarked on safety awareness programs for the employees, brokers, trading participants, contractual staff, visitors and guests of the Exchange, with the support of the Pasig and Makati Bureau of Fire Department. An emergency evacuation plan framework was also enhanced. The PSE 2012 Bell Awards For Corporate Governance Launched on December 7, 2011, the PSE Bell Awards aims to promote good governance practices by recognizing both listed companies and trading participants which excelled in their corporate governance practices and rule compliance. The rst PSE Bell Awards for Corporate Governance were awarded to ve listed companies and six Trading Participants during the
PSEs 20th Anniversary Gala Dinner on December 3. List of winners of the 2012 Bell Awards Large Trading Participants CLSA Philippines, Inc. COL Financial Group, Inc. Macquarie Securities (Philippines), Inc. Small Trading Participants Armstrong Securities, Inc. PCIB Securities, Inc. Tri-State Securities, Inc. Listed Companies Ayala Land, Inc. China Banking Corporation Globe Telecom, Inc. Manila Water Company, Inc. SM Prime Holdings, Inc. The Bell Awards is one of PSEs important initiatives to raise awareness and standards of corporate governance and foster best practices in our markets in order to sustain the Philippines attractiveness as an investment destination. The distinguished Bell Awards panel of judges was composed of the following senior government ofcials and business leaders selected for their independence, integrity and commitment to corporate governance: 1. Honorable Teresita Herbosa SEC Chairperson and Chair of the 2012 Bell Awards Panel of Judges 2. Ms. Judith Lopez Chairperson and Senior Partner of Isla Lipana & Co./PricewaterhouseCoopers 3. Secretary Cesar Villanueva Head of the Governance Commission for GOCCs 4. Ambassador Stephen Lillie UK Ambassador to the Philippines 5. Justice Estela Perlas-Bernabe Associate Justice, Supreme Court of the Philippines 6. Mr. Jesse Ang Resident Representative for the Philippines, International Finance Corporation 7. Mr. Antonio Garcia, Jr. President and CEO of the Capital Markets Integrity Corporation (CMIC)
It's the legacy of unication towards a more progressive market
The PSEs unication in 1992 marked a signicant milestone in the history of the countrys capital markets. It allowed the countrys stock exchange to create operational efciencies in the capital markets and make the stock market more competitive in an increasingly globalizing environment. The unication offered many benets. Primarily, it lowered the cost of raising equity capital in the Philippines by broadening access to foreign investors and creating a single price for stocks listed on both exchanges. It also consolidated listing rules, making the Philippine capital markets more efcient and paved the way for a modernized trading system, a far cry from the days that bids and offers were called out and executed using chalks, green boards, and vocal chords gone hoarse from all the shouting. This unication also set the stage for the professionalization of the industry and opened the market to more foreign brokerages to transfer their systems and processes to the country. In 2012, the PSE celebrated the 20 years of the Exchange as the unied form of the Manila and the Makati Stock Exchanges. In a tting manner, the celebration highlighted the progress and successes that have been achieved since the unication.
The PSE also used the arts to convey this tradition of progress of the Exchange even as it commemorates the role the Exchange has played in national growth in the past two decades. The Exchange's anniversary celebrations marked its origins and major milestones which led to its establishment, starting with its incorporation in July 1992. The celebrations culminated in December and were highlighted by the PSEs rst Bell Awards for Corporate Governance.
1992 1927
One of the rst stock exchanges in Asia was established in Binondo, Manila the Manila Stock Exchange.
The Philippine Stock Exchange, Inc. was incorporated on July 14 by the following incorporators: Robert Coyiuto, Jr., Victor Say Hipek, Eduardo C. Lim, Juan B. Francisco and Cesar E.A. Virata. On December 23, MSE and MkSE issued a joint declaration on the unification of the countrys two bourses under the Philippine Stock Exchange, Inc.
1995
The Unified Trading System was launched on November 13 using the single order-book system on a MakTrade software where all orders are posted and matched in one computer.
2000
Republic Act No. 8799 or the Securities Regulation Code was signed into law on July 19 and took effect on August 8.
2003
On December 15, the PSE shares were listed by way of introduction, opening at P100 per share.
2010-2011
The PSEs new trading system was launched on July 26, 2010 and in January 2012, branded as PSEtrade, which was acquired from NYSE Technologies.
1963
1994
The SEC granted the PSE its license to operate as a securities exchange on March 4.
1998
On June 29, President Fidel V. Ramos handed over the SEC certificate that conferred the SRO status to the PSE.
2001
On August 3, the PSE demutualized, transforming from a non-stock, membergoverned entity into a stock, shareholderbased organization.
2004
The SCCP became a wholly-owned subsidiary of PSE and a new clearing and settlement system was acquired.
Figure 7 Figure 7
PSE Timeline
The Makati Stock Exchange was established, being the second stock exchange in the Philippines.
2012
The PSE extended trading hours up to 3:30 in the afternoon. The CMIC received its provisional Self-Regulatory Organization status on February 2 and subsequently began operations in March. The PSE reached 38 record highs, the most number of times the Exchange has recorded in a years operation.
Sining PSE: National Art Competition The PSE launched the rst Sining PSE National Art Competition, which adhered to the philosophy of investing in the creative talents of budding Filipino masters. The PSEs 20th anniversary was depicted in the competitions theme, Nagkakaisang Pilipino Para sa Maunlad at Masigasig na Kalakalan (United Filipino People for Progressive and Active Trade). Sining PSE engaged amateur artists 21 years old and above to depict the theme using either painting or sculpture as the media. The competitions winners showcased provincial winners. Of the total 146 submissions from all over the country, a 28-year old Ilocano and an overseas Filipino worker clinched the grand prizes. Turning Tables, a painting by Bryan Teves of Sta. Lucia, Ilocos Sur, took home the top plum in the Painting category. In the sculpture category, the grand prize went to Natalio G. Alob, Jr. for his sculpture, Gear Up Pinoys. Alob lived and studied ne arts in Bacolod prior to working in Riyadh, Saudi Arabia. Before joining Sining PSE, he has had the chance to present his illustrated works to royalties in Saudi Arabia. On top of the P100,000 cash prize, each rst place winner received a trophy created by multi-awarded sculptor Juan Sajid Imao. Made of brass, the Sining PSE trophy featured a unique sculptural palette to symbolize the contests painting and sculpture categories. The trophys bold, uid shape and lines formed a palette to emphasize PSEs strong support for young Filipino artists. The Sining PSE contest gathered some of the countrys top artists, among them the Hon. Benedicto "BenCab" Cabrera and Hon. Abdulmari Imao to lead the panel of judges. Joining the panel for the painting category were Dr. Jaime Laya, Ms. Felice Sta. Maria, Mr. Raul Isidro, and Mr. Alfred Esquillo, Jr. On the other hand, sculptors Mr. Eduardo Castrillo and Mr. Jose Mendoza joined Mr. Imao as jurors in the sculpture category.
Former President Ramos leading the launch of the 20th Anniversary Celebration
Performers during the 20th Anniversary launch
Launch of 20th Anniversary in July The PSE kicked off the celebrations commemorating the Exchanges 20th anniversary last July 27. Former President Fidel V. Ramos was the guest of honor and keynote speaker given his vital role in the unication of the PSEs predecessor boursesthe Manila and Makati stock exchanges. Various CEOs of listed rms and heads of government were one with the PSE during its kick off anniversary bell ringing ceremony. 20th Anniversary Thanksgiving Dinner The anniversary celebration culminated in a Thanksgiving Gala Dinner held at the Makati Shangri-La on December 3. The event was attended by no less than President Benigno S. Aquino, III
and also attended by former President Fidel V. Ramos, former President Joseph Ejercito Estrada and Vice President Jejomar C. Binay. Cabinet Secretaries and heads of government agencies, together with leaders in the business community and trading participants also joined the PSE in the special event. In his keynote speech, President Aquino cited the gains of the market at the governance front including the vital role of the PSE in promoting investments in the country. As the President congratulated the Exchange on its milestones, he expounded saying There is no more tting context in which to celebrate your 20th anniversary than the one we have today: characterized by optimism for our prospects, a commitment to integrity, and the drive to move this country forward.
Unication of PSE Ofce On April 25, the PSE Board of Directors approved the relocation of PSE offices to an ofce building in Bonifacio Global City which will be developed by Ayala Land, Inc. (ALI) and or its afliates. The said relocation intends to unify the trading operations of the PSE that are currently located at PSE Plaza, Ayala Triangle, Makati City and PSE Centre, Exchange Road, Pasig City. On May 3, PSE, ALI and Fort Bonifacio Development Corporation (FBDC) entered into a preliminary agreement concerning the intended relocation on a lot situated along 28th Street, Bonifacio Global City, Taguig City. PSE, ALI and FBDC are now discussing the terms of the nal agreement.
What's beyond the numbers? Inspiration that drives a vision. Overseas Filipino Workers as modern day heroesthis is the subject of Turning Tables, the grand prize winner in the painting category of the rst Sining PSE National Art Competition. The artist, Bryan Teves, whose career has likewise turned for the better, shares, I was given hope to be able to continue, because I was already thinking of quitting. With the theme of United Filipino People for Progressive and Active Trade, submitted works were judged by a panel led by National Artists BenCab and Abdulmari Imao. Brian Teves' "Turning Tables" was one of the 110 entries submitted in the Painting category of the Sining PSE National Art Competition.
It's cultivating an inspired and healthy workforce

The PSE believes that a healthy, trained and inspired workforce produces more output and results for the company. At a time when the Philippines is getting more and more attention from local and international investors, the PSE management and staff must be up to speed both technically and physically. Towards this end, the PSE provided various training and seminars to its employees to enhance technical competencies and promote health and wellness. The PSE conducted investment seminars with the Colayco Foundation and Banco de Oro, Health Fair & Wellness Seminar with Slimmers World, a Flu Awareness Lecture with Intellicare and seminar on unhealthy lifestyle, among others. The PSE also continued to administer Hepatitis B Vaccine and anti-u vaccines to all employees, dependents and interested trading participants. To complement these efforts, the PSE also continued its sports programs for employees, including the annual basketball, badminton and bowling tournaments spread throughout the year. These activities also served as effective bonding activities among employees. The PSE also provided opportunities for employees to give back to the community by facilitating the participation of employees in packing relief goods at the GMA Kapuso Foundation for the benet of typhoon victims and packing of school supplies for the benet of indigent students nationwide. As 2012 marked the 20th anniversary of the Exchange, employees also formed a big part of the celebration. The PSE held the 20th Anniversary Family Day last October 6 at the La Mesa Ecopark in Quezon City. A special Anniversary shirt was also given to all employees which they wore every Friday from October to December.
PSE with SEC Chairperson Teresita Herbosa and Sining PSE panel of judges awarding winners of the Painting category
PSE Foundation donating P1 million to PBSP for the Typhoon Pablo victims
It's the capacity to share our gains

Philippine Stock Exchange Foundation, Inc. As the market continued to soar to new heights under the bull market, The Philippine Stock Exchange Foundation, Inc. (PSE Foundation) remained mindful that gains must be shared with others particularly those who have been affected by calamities that took place in 2012. Through its corporate social responsibility (CSR) mandate, the PSE Foundation granted the following donations: P1,000,000 for the victims of Typhoon Pablo, through the Philippine Business for Social Progress (PBSP). The donation is intended for the purchase of food packs which could feed families of six for ve days. The PSE donated another P1,000,000 through Caritas Manila. P500,000 for the victims of Habagat in August 2012, through the campaigns of the ABS-CBN Foundation, Inc. Sagip Kapamilya and GMA Kapuso Foundation, Inc., P250,000 of which were covered by a counterpart donation of the PSE. P50,000 donation to the Philippine Business for Education, for the benet of its Scholarship Fund for 1,000 Teachers.
Under its mandate to educate and increase awareness of the investing public on the stock market, the PSE Foundation undertook the following projects: PSE commercial gap interstitials on Business Nightly on ANC when the PSEi hit the 5,000 mark and the awarding for the rst time of the PSE Bell Awards for listed companies and trading participants; Listed company CEO 10-minute interviews on Mornings at ANC every Wednesday; 30-minute documentary on the 20th Anniversary of the unied PSE, which was aired three times in December on ANC; Sponsored the First Prize winners of the Painting and Sculpture categories of the Sining PSE; Co-sponsored the PSE Bull-Run 2012 with a donation of P100,000, a yearly commitment of the PSE Foundation in helping raise public awareness on the stock market; Donated P90,000 to the FINEX- Capital Markets Development Council (CMDC) as its share in the operating expenses of the CMDC secretariat.
Second prize winner for Sculpture category by Joji Limayo
National Artists Hon. BenCab and Hon. Abdulmari Imao leading the Sining PSE launch
Grand prize winner for the Sculpture category by Natalio Alob, Jr.
Display of the top winners of Sining PSE during the awards night on November 9
It's the opportunity to grow the company and maximize its resources to further expand the market
Financial Performance The stock markets sterling performance enabled the PSE to deliver signicantly improved nancial results for the year. A number of major initiatives implemented by the stock exchange in 2012 also contributed to the expansion of the companys existing revenue lines, while at the same time providing more room for growth and creating new opportunities to take advantage of the generally positive business conditions. The overall vibrancy of the market was highlighted by the robustness of capital-raising activities, as companies went to the stock exchange to secure funding for their expansion programs. The PSE welcomed seven new rms to its roster of listed companies, with ve conducting initial public offerings while two listed by way of introduction. Existing listed companies also utilized the stock exchange to the hilt as additional listings surged and a few companies set record-breaking stock offerings. As a result, listing fees earned by the Exchange went up by 51.9 percent to P356.74 million, accounting for 31.2 percent of total operating revenues. On an aggregate basis, listing-related fees, which include annual listing maintenance fees and processing fees, improved by 30.9 percent to P562.04 million in 2012. Investors both local and foreign saw the attractiveness of local equities and traded shares actively, as evidenced by the surge in daily average trading, which grew by 27.1 percent year-on-year. The heightened preference for emerging market investments such as the Philippines was further supported by the PSEs decision to add an afternoon session to its trading hours, allowing the Exchange to reach out to investors in different time zones and effectively align itself with the operating hours of other exchanges in the region. The implementation of the 10 percent minimum public ownership rule also had a big impact in increasing trading activity as companies released more of their shares into freely-tradable space to comply with the rule. This initiative enabled a larger set of companies to become more broadly-held and entice individuals who were looking to diversify their portfolios. Trading-related fees, service fees and regulatory fees embodied this newfound interest in Philippine-listed issues, collectively rising by 22.6 percent to P560.33 million. The remarkable showing of operating revenues was further augmented by the 65 percent improvement in the PSEs Other Income account, which benetted from the more than seven-fold increase in mark-to-market gain on nancial assets at fair value through prot or loss. This account mainly comprised of externally managed funds that also had its share of substantial gains due to the market's rally. Despite challenges posed by capitalintensive investments in technology infrastructure and higher spending to fast-track the development of critical initiatives, the PSE successfully exercised prudent cost management as expenses increased at a slower pace compared to revenues. A signicant portion of the increase in expenditures was brought about by manpower costs, which incidentally also accounted for the largest share in total expenses. Salary increases and additional personnel to fortify the CMIC drove manpower expenses to rise by 25.8 percent to P145.69 million. Extended trading hours also brought higher usage of utilities, contributing to the 7.5 percent jump in occupancy costs. To temper the nancial impact of these expanded cost items, the Exchange managed to substantially reduce expenses in areas such as professional fees, foreign travel and communications, and collect recoveries on costs incurred from conducting securities courses with partner universities.
The favorable combination of resurgent revenue lines and controlled cost outlays allowed the organization to record a very protable year for the Exchange, as net income for 2012 grew by an impressive 53.7 percent year-on-year to P624.17 million. This notable showing reafrms the exciting upside of the PSE as a an income-generating institution, and helps build momentum towards another rewarding year as the company looks to outdo itself once again in 2013. As a result of PSE's impressive nancial performance, the Board of Directors declared cash dividends amounting to a total of P9.00 per share on March 13, 2013, and subsequently declared a 20 percent stock dividend on April 10, 2013. New market data products Launched in May 2012, the Corporate Announcements Feed data products satises investors' need for timely and easy access to information about listed companies, making it a salient aid in identifying and maximizing investment opportunities. Further, in the development pipeline were products to tap the retail market such as providing market data through SMS technology and mobile web. The Exchange also adopted policies that would open up the use of its proprietary index for the creation of derivative products, as well as generate more awareness and use of its main index, the PSEi. The existing business model for market data products was further enhanced to align with peer exchanges' best practice, as well as the Exchange's new offerings such as an online trading platform, the PSETradex. All these helped strengthen the viability of the market data business of the Exchange as a provider of information for investment decisions and a steady contributor to its operations.
the savings generated last year in 2011 through similar efforts. 2. Rationalization of procurement of common supplies, including newspaper and magazine subscriptions of various PSE ofces andmedical supplies both for Ayala and Tektite clinics. 3. Reconciliation of PSE Property and Equipment (P&E) which resulted to improvement in asset inventory and write off of non-existing P&E amounting to P9.67 million that have been fully depreciated. 4. Implementation of PSE-AX Purchase Order and Inventory Management which will rationalize the steps in purchasing and procurement and establish controls on purchasing of items only to designated Divisions that should lead to better supply chain management. The program was started in 2012 and will be rolled-out in 2013. Ofce Reconguration As the Exchange continues to nd ways to better its services, reconguring the space requirements and ofces was also deemed necessary. In 2012, the PSE Library space was expanded and relocated at the 27th oor. It is adjacent to the CMIC, which was also moved physically outside of the premises as a complementary effort to signal the independence of the operations of CMIC from the PSE. Other Divisions were also relocated and recongured to provide a better workplace for employees and to open up space for the group that will operate the PSETradex initiative. Organizational Structure Rationalization The Ofces of the Chief Operating Ofcer (COO) and the Internal Audit Group were reinstated and the Corporate Planning and Investor Relations as well as Human Resources and Administration were realigned to become Divisions given their functions. The Ofce of the COO has been providing complementary support to the Ofce of the President to further push the attainment of the companys targets from an operational standpoint. The PSE also created and appointed a new Investor Relations Ofcer.
Highlights of Financial Results

(In thousand Php)
Figure 8
It's the product of enhancements and efciencies in the workplace

Procurement Enhancement In 2012, PSE continued to improve its operational efciency by implementing savings generating efforts in procurement, including the following initiatives and projects: 1. Enhanced systems monitoring and efcient utilization of ofce equipment which generated savings amounting to P1.95 million which is three times
Where it counts
It's fullling our role to be an engine for economic growth

Strategic Planning The year 2012 marked the fth and nal year of the Exchanges strategic agenda called LEVEL UP, with each letter representing critical reforms the Exchange outlined to help attain its vision of becoming one of the preferred investment destinations in the region. In July, the Exchange engaged the services of PricewaterhouseCoopers Financial Advisors, Inc. (PwCFA) to assist in the planning for a new strategic agenda. The PSE kicked off the strategic planning by reviewing its mission and vision vis-vis the present economic environment. Key representatives from the Exchange, together with PwCFA, conducted consultative meetings with various stakeholders. The results were used as data in identifying critical issues that need to be addressed by the PSE. Workshops were then held to conrm these issues and formulate key initiatives that will push the Exchange to become more competitive globally.
The end result of the process was a three-year plan focused on launching essential products and services that will lay the groundwork for transforming the PSE into a world-class exchange. The focus on new products and services would be supported by efforts to raise the level of the Exchanges preparedness in three critical areas systems and processes, technology, and human resources. The critical reforms embodied in the new strategic plan are designed to quickly take advantage of the prevailing good business climate, and to strengthen the Exchange against internal and external risks. The new strategic agenda of the PSE holds the key to pushing our market even closer to global standards. Focused on introducing new products, we shall exert all our efforts in continuing our goal to become a world-class exchange that plays a vital role in making the economy more progressive and vibrant.
listed issues and CoMpanies | 35
Issue Maybank ATR KimEng Financial Corporation1 Medco Holdings, Inc. National Reinsurance Corporation of the Philippines
Code MAKE MED NRCP SLF PSE V
Par Value 1.00 1.00 1.00 1.00 1.00
Website www.maybank-atrke.com www.medco.com.ph www.nrcp.com.ph www.sunlife.com www.pse.com.ph www.ivantage.ph
Certication on Compliance with Manual on Corporate Governance
Listed Issues & Companies
Sun Life Financial Inc.
As of Yearend 2012
Data on website and certication on compliance with Corporate Governance manual dated as of February 2013
The Philippine Stock Exchange, Inc. Vantage Equities, Inc. INDUstriaL SeCtor Electricity, Energy, Power & Water Certication on Compliance with Manual on Corporate Governance Aboitiz Power Corporation Alsons Consolidated Resources, Inc. Calapan Ventures, Inc. Energy Development Corporation First Gen Corporation
AP ACR H2O EDC FGEN FPH MER MWC PCOR PNX SPC TA VVT
1.00 1.00 1.00 1.00 1.00 10.00 10.00 1.00 1.00 1.00 1.00 1.00 1.00
www.aboitizpower.com www.acr.com.ph www.h2o.com www.energy.com.ph www.rstgen.com.ph www.fphc.com www.meralco.com.ph www.manilawater.com www.petron.com www.phoenixphilippines.com no corporate website www.transasia-energy.com www.vivant.com.ph
Issue
Code
Par Value
Website
FiNaNCiaLs SeCtor Banks Asiatrust Development Bank, Inc. Bank of the Philippine Islands BDO Unibank, Inc. China Banking Corporation Citystate Savings Bank, Inc. East West Banking Corporation Export and Industry Bank, Inc. A Export and Industry Bank, Inc. B Metropolitan Bank & Trust Company Philippine Bank of Communications Philippine National Bank Philippine Savings Bank Philippine Trust Company Rizal Commercial Banking Corporation Security Bank Corporation Union Bank of the Philippines Other Financial Institutions Bankard, Inc. BDO Leasing and Finance, Inc. COL Financial Group, Inc. 1 Filipino Fund, Inc. First Abacus Financial Holdings Corporation I-Remit, Inc. Manulife Financial Corporation
1
ASIA BPI BDO CHIB CSB EW EIBA EIBB MBT PBC PNB PSB PTC RCB SECB UBP
10.00 10.00 10.00 10.00 10.00 10.00 0.25 0.25 20.00 100.00 40.00 10.00 10.00 10.00 10.00 10.00
no corporate website www.bpi.com.ph www.bdo.com.ph www.chinabank.ph www.citystatesavings.com www.eastwestbanker.com no corporate website no corporate website www.metrobank.com.ph www.pbcom.com.ph www.pnb.com.ph www.psbank.com.ph www.philtrustbank.com www.rcbc.com www.securitybank.com.ph www.unionbankph.com
First Philippine Holdings Corporation Manila Electric Company Manila Water Company, Inc. Petron Corporation Phoenix Petroleum Philippines, Inc. SPC Power Corporation Trans-Asia Oil and Energy Development Corporation Vivant Corporation Food, Beverage & Tobacco AgriNurture, Inc. Alliance Select Foods International, Inc. Bogo-Medellin Milling Company, Inc. Central Azucarera de Tarlac, Inc. Cosmos Bottling Corporation D&L Industries, Inc. Ginebra San Miguel, Inc. Jollibee Foods Corporation
ANI FOOD BMM CAT CBC DNL GSMI JFC LFM LTG PCKH PIP RFM RCI ROX SMB
1.00 1.00 10.00 10.00 1.00 1.00 1.00 1.00 10.00 1.00 1.00 0.15 1.00 1.00 1.00 1.00
www.ani.com.ph www.allianceselectfoods.com no corporate website www.cat-luisita.com www.cosmosbottling.com.ph www.dnl.com.ph www.ginebrasanmiguel.com www.jollibee.com.ph www.libertygroup.com.ph www.tanduay.com www.pancakehouse.com.ph www.pepsiphilippines.com www.rfmfoods.com www.roxascompany.com.ph www.rhi-cadp.com.ph www.sanmiguelbrewery.com.ph
BKD BLFI COL FFI FAF I MFC
0.55 1.00 1.00 1.00 1.00 1.00 -
www.rcbcbankard.com www.bdo.com.ph/business/leasingnancing/about-us www.colnancial.com no corporate website www.rstabacusnancial.com www.myiremit.com www.manulife.com

1 2
Liberty Flour Mills, Inc. LT Group, Inc. 2 Pancake House, Inc. Pepsi-Cola Products Philippines, Inc. RFM Corporation Roxas and Company, Inc. Roxas Holdings, Inc. San Miguel Brewery, Inc.
Formerly ATR KimEng Financial Corporation (ATRK) Formerly Tanduay Holdings, Inc ("TDY")
Formerly CitisecOnline.com, Inc.
Issue San Miguel Corporation San Miguel Pure Foods Company, Inc. Swift Foods, Inc. Universal Robina Corporation Victorias Milling Company, Inc. Vitarich Corporation Construction, Infrastructure & Allied Services Asiabest Group International Inc. 1 Concrete Aggregates Corporation A Concrete Aggregates Corporation B EEI Corporation Federal Resources Investment Group, Inc. Holcim Philippines, Inc. Lafarge Republic, Inc.
2
Code SMC PF SFI URC VMC VITA
Par Value 5.00 10.00 1.00 1.00 10.00 1.00
Website www.sanmiguel.com.ph www.sanmiguelpurefoods.com no corporate website www2.urc.com.ph www.victoriasmilling.com www.vitarich.com
Certication on Compliance with Manual on Corporate Governance Ionics, Inc.
Issue
Code ION PMPC
Par Value 1.00 1.00
Website www.ionicsgroup.com www.panasonic.com.ph
Panasonic Manufacturing Philippines Corporation Other Industrials Alphaland Corporation Filsyn Corporation A Filsyn Corporation B Picop Resources, Inc.
ALPHA FYN FYNB PCP SPH STN
1.00 5.00 5.00 1.00 1.00 1.00
www.alphaland.com.ph www.lsyncorp.com www.lsyncorp.com no corporate website www.splash.com.ph no corporate website
ABG CA CAB EEI FED HLCM LRI MMI MWIDE PNC PHN CMT SRDC T VUL
1.00 10.00 10.00 1.00 1.00 1.00 1.00 0.02 1.00 10.00 10.00 0.35 1.00 1.00 1.00
no corporate website www.cac.com.ph www.cac.com.ph www.eei.com.ph www.federalchemicals.com.ph www.holcim.com.ph www.lafarge.com.ph www.mariwasa.com www.megawide.com.ph www.pncc.ph www.phinmacorp.com.ph no corporate website www.supercity.com.ph www.tkcsteel.com www.vulcanminingandpetroleum.webs.com
Splash Corporation Steniel Manufacturing Corporation HoLDiNG Firms SeCtor A. Soriano Corporation Abacus Consolidated Resources and Holdings, Inc. Aboitiz Equity Ventures, Inc. Alcorn Gold Resources Corporation Alliance Global Group, Inc. Anglo Philippine Holdings Corporation Asia Amalgamated Holdings Corporation ATN Holdings, Inc. A ATN Holdings, Inc. B Ayala Corporation BHI Holdings, Inc. DMCI Holdings, Inc. F & J Prince Holdings Corporation A
ANS ABA AEV APM AGI APO AAA ATN ATNB AC BH DMC FJP FJPB FC FDC FPI GTCAP HI JGS JOH KPH KPHB LIHC LPZ MHC MARC MPI MIC
1.00 1.00 1.00 0.01 1.00 1.00 1.00 1.00 1.00 50.00 100.00 1.00 1.00 1.00 1.00 1.00 1.00 10.00 1.50 1.00 1.00 1.00 1.00 0.10 1.00 1.00 1.00 1.00 1.00
www.anscor.com.ph www.abacusconsolidated.com www.aboitiz.com www.alcorngold.com www.allianceglobalinc.com www.anglophil.com no corporate website www.atnholdings.com www.atnholdings.com www.ayala.com.ph www.bhi-holdings.com www.dmciholdings.com www.fjprince.com www.fjprince.com no corporate website www.linvestgroup.com no corporate website www.gtcapital.com.ph www.hoi.com.ph www.jgsummit.com.ph www.joh.ph no corporate website no corporate website no corporate website www.lopez-holdings.ph www.mabuhayholdingscorp.com www.marcventuresholdings.com www.mpic.com.ph no corporate website
Mariwasa Siam Holdings, Inc. Megawide Construction Corporation Philippine National Construction Corporation Phinma Corporation Southeast Asia Cement Holdings, Inc. Supercity Realty Development Corporation TKC Steel Corporation Vulcan Industrial & Mining Corporation Chemicals Chemical Industries of the Philippines Chemrez Technologies, Inc. Euro-Med Laboratories Philippines, Inc. LMG Chemicals Corporation Mabuhay Vinyl Corporation Manchester International Holdings Unlimited Corporation A
3
CIP COAT EURO LMG MVC MIH MIHB MAH MAHB PPC
10.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
www.chemphil.com.ph www.chemrez.com www.euromedlab.net www.chemphil.com.ph/main_lmg.htm www.mvc.com.ph www.pharmaindustries.com www.pharmaindustries.com no corporate website no corporate website www.prycegardens.com
F & J Prince Holdings Corporation B Fil-Estate Corporation Filinvest Development Corporation Forum Pacic, Inc. GT Capital Holdings, Inc. House of Investments, Inc. JG Summit Holdings, Inc. Jolliville Holdings Corporation Keppel Philippines Holdings, Inc. A Keppel Philippines Holdings, Inc. B Lodestar Investment Holdings Corporation
Manchester International Holdings Unlimited Corporation 3 B Metro Alliance Holdings & Equities Corporation A Metro Alliance Holdings & Equities Corporation B Pryce Corporation Electrical Components & Equipment Cirtek Holdings Philippines Corporation Greenergy Holdings Incorporated Integrated Micro-Electronics, Inc.
1 2
CHIPS GREEN IMI
1.00 0.01 1.00
www.cirtekholdings.com www.ghi.com.ph www.global-imi.com
Lopez Holdings Corporation Mabuhay Holdings Corporation Marcventures Holdings, Inc. Metro Pacic Investments Corporation Minerales Industrias Corporation
Formerly AGP Industrial Corporation (AGP) Formerly Republic Cement Corporation (RCM) 3 The new coprorate name is "Melco Crown (Philippines) Resorts Corporation" as approved by the Securities and Exchange Commission on March 5, 2013
Issue MJC Investments Corporation Pacica, Inc. Prime Media Holdings, Inc. Prime Orion Philippines, Inc. Republic Glass Holdings Corporation Seafront Resources Corporation Sinophil Corporation SM Investments Corporation Solid Group, Inc. South China Resources, Inc. Synergy Grid & Development Phils., Inc. Unioil Resources & Holdings Company, Inc. Wellex Industries, Inc. Zeus Holdings, Inc. PropertY SeCtor A Brown Company, Inc. Anchor Land Holdings, Inc. Araneta Properties, Inc. Arthaland Corporation Ayala Land, Inc. Belle Corporation Cebu Holdings, Inc. Cebu Property Venture & Development Corporation A Cebu Property Venture & Development Corporation B Century Properties Group Inc. City & Land Developers, Inc. Cityland Development Corporation Crown Equities, Inc. Cyber Bay Corporation Empire East Land Holdings, Inc. Eton Properties Philippines, Inc. 1 Ever-Gotesco Resources & Holdings, Inc. Filinvest Land, Inc. Global-Estate Resorts, Inc. Gotesco Land, Inc. A Gotesco Land, Inc. B Highlands Prime, Inc.
1
Code MJIC PA PRIM POPI REG SPM SINO SM SGI SOC SGP UNI WIN ZHI
Par Value 1.00 0.005 1.00 1.00 1.00 1.00 1.00 10.00 1.00 1.00 1.00 1.00 1.00 1.00
Website no corporate website no corporate website no corporate website www.primeorion.com www.repglass.net www.seafrontresources.com.ph no corporate website www.sminvestments.com www.solidgroup.com.ph www.southchinaresourcesinc.com.ph no corporate website no corporate website www.wellex.com.ph www.zeusholdingsinc.com
Certication on Compliance with Manual on Corporate Governance IRC Properties, Inc. 1
Issue
Code IRC KEP MC MCB MEG MRC PHES RLT TFC PMT PRMX RLC ROCK SMP SHNG SMDC SMPH SLI STR SUN UW VLL
Par Value 1.00 1.00 0.01 0.01 1.00 0.20 1.00 1.00 1.00 1.00 1.00 1.00 1.00 10.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Website www.interportresources.com www.keppelland.com no corporate website no corporate website www.megaworldcorp.com www.mrcallied.com www.phes.net www.philrealtycorp.com no corporate website no corporate website www.primexcorporation.com www.robinsonsland.com www.e-rockwell.com www.sanmiguelproperties.com.ph www.shangproperties.com www.smdevelopment.com www.smprime.com www.stalucialand.com.ph www.starmallsinc.com.ph www.suntrusthomedevelopers.com www.uni-wide.com www.vistaland.com.ph
Keppel Philippines Properties, Inc. Marsteel Consolidated, Inc. A Marsteel Consolidated, Inc. B Megaworld Corporation MRC Allied, Inc. Philippine Estates Corporation Philippine Realty and Holdings Corporation Philippine Tobacco Flue-Curing and Redrying Corporation Primetown Property Group, Inc. Primex Corporation Robinsons Land Corporation Rockwell Land Corporation San Miguel Properties, Inc. Shang Properties, Inc.
BRN ALHI ARA ALCO ALI BEL CHI CPV CPVB CPG LAND CDC CEI CYBR ELI ETON EVER FLI GERI GO GOB HP
1.00 1.00 1.00 0.18 1.00 1.00 1.00 1.00 1.00 0.53 1.00 1.00 0.10 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
www.abrown.ph www.anchorland.com.ph www.aranetaproperties.com www.arthaland.net www.ayalaland.com.ph www.bellecorp.com www.cebuholdings.com www.cpvdc.com www.cpvdc.com www.century-properties.com www.citylandcondo.com www.citylandcondo.com www.crownequitiesinc.com no corporate website www.empire-east.com delisted no corporate website www.linvestland.com www.global-estate.ph no corporate website no corporate website www.highlandsprime.com
SM Development Corporation SM Prime Holdings, Inc. Sta. Lucia Land, Inc. Starmalls, Inc. 2 Suntrust Home Developers, Inc. Uniwide Holdings, Inc. Vista Land & Lifescapes, Inc. SerViCes SeCtor Media ABS-CBN Corporation GMA Network, Inc. Manila Bulletin Publishing Corporation Manila Broadcasting Company
ABS GMA7 MB MBC
1.00 1.00 1.00 1.00
http://ir.abs-cbn.com www.gmanetwork.com www.mb.com.ph www.manilabroadcasting.com
delisted
Telecommunications Globe Telecom, Inc. Liberty Telecoms Holdings, Inc. Philippine Telegraph and Telephone Corporation Philippine Long Distance Telephone Company Information Technology DFNN, Inc. Imperial Resources, Inc. A Imperial Resources, Inc. B IP Converge Data Center, Inc.
1 2
GLO LIB PTT TEL
50.00 1.00 1.00 5.00
www.globe.com.ph no corporate website www.ptt.net.ph www.pldt.com.ph
DFNN IMP IMPB CLOUD
1.00 5.00 5.00 1.00
www.dfnn.com no corporate website no corporate website no corporate website
Delisted on January 2, 2013
Formerly Interport Resources Corporation Formerly Polar Property Holdings Corporation (PO)
Issue IPVG Corporation 1 Island Information & Technology, Inc. ISM Communications Corporation Nextstage, Inc. PhilWeb Corporation Touch Solutions, Inc. Transpacic Broadband Group International, Inc. Yehey! Corporation Transportation Services 2GO Group, Inc. 2 Asian Terminals, Inc. Cebu Air, Inc. International Container Terminal Services, Inc. Lorenzo Shipping Corporation Macroasia Corporation PAL Holdings, Inc. Hotel & Leisure Acesite (Philippines) Hotel Corporation Boulevard Holdings, Inc. Grand Plaza Hotel Corporation Waterfront Philippines, Inc. Education Centro Escolar University Far Eastern University, Inc. iPeople, Inc. Casinos & Gaming Berjaya Philippines, Inc. Bloomberry Resorts Corporation IP E-Game Ventures, Inc. Leisure & Resorts World Corporation Manila Jockey Club, Inc. Pacic Online Systems Corporation Philippine Racing Club, Inc. Premiere Horizon Alliance Corporation 4 Retail Calata Corporation Philippine Seven Corporation
1 2 3
Code IP IS ISM NXT WEB TSI TBGI YEHEY
Par Value 1.00 0.01 1.00 1.00 1.00 1.00 1.00 1.00 www.ipvg.com
Website
Certication on Compliance with Manual on Corporate Governance Puregold Price Club, Inc. Other Services APC Group, Inc.
Issue
Code PGOLD
Par Value 1.00
Website www.puregold.com.ph
no corporate website www.ismcomm.com no corporate website www.philweb.com.ph www.touchgroup.net www.tbgi.net.ph www.yeheydigitalgroup.com
APC ECP PORT ICTV PAX PHC STI
1.00 1.00 1.00 1.00 1.00 1.00 0.50
www.apcaragorn.net www.easycall.com.ph www.g900.com.ph www.ictv.ph www.paxys.com www.philcomsat.com.ph www.stiholdings.com
Easycall Communications Philippines, Inc. Globalport 900, Inc. Information Capital Technology Ventures, Inc. Paxys, Inc. Philcomsat Holdings Corporation STI Education Systems Holdings, Inc. 1
2GO ATI CEB ICT LSC MAC PAL
1.00 1.00 1.00 1.00 1.00 1.00 1.00
www.2go.com.ph www.asianterminals.com.ph www.cebupacicair.com www.ictsi.com www.lorenzoshipping.com www.macroasiacorp.com www.philippineairlines.com
MiNiNG & OiL SeCtor Mining Abra Mining and Industrial Corporation Apex Mining Company, Inc. A Apex Mining Company, Inc. B Atlas Consolidated Mining and Development Corporation Atok-Big Wedge Company, Inc. Benguet Corporation A AR APX APXB AT AB BC BCB CPM COAL DIZ GEO LC LCB MA MAB NIKL NI OM ORE PX SCC UPM 0.01 1.00 1.00 8.00 1.00 3.00 3.00 1.00 1.00 1.00 1.00 0.10 0.10 0.01 0.01 0.50 1.00 1.00 1.00 1.00 1.00 0.01 www.abramining.com www.apexmines.com www.apexmines.com www.atlasphilippines.com www.atokbigwedge.com www.benguetcorp.com www.benguetcorp.com www.centurypeakmetals.com www.coalasiaholdings.com www.dizonmines.com www.geograce.com www.lepantomining.com www.lepantomining.com www.manilamining.com www.manilamining.com www.nickelasia.com www.nihaomining.com http://203.177.6.3/omico.com.ph/ www.orientalpeninsula.com www.philexmining.com.ph www.semiraramining.com www.unitedparagon.com
ACE BHI GPH WPI
1.00 0.10 10.00 1.00
www.waterfronthotels.com.ph www.boulevardholdings.com www.grandplazahotelcorp.com www.waterfronthotels.com.ph
Benguet Corporation B Century Peak Metals Holdings Corporation Coal Asia Holdings Incorporated Dizon Copper Silver Mines, Inc. GEOGRACE Resources Philippines, Inc.
CEU FEU IPO
1.00 100.00 1.00
www.ceu.edu.ph www.feu.edu.ph www.ipeople.com.ph
Lepanto Consolidated Mining Company A Lepanto Consolidated Mining Company B Manila Mining Corporation A Manila Mining Corporation B
BCOR BLOOM EG LR MJC LOTO PRC PHA
1.00 1.00 0.01 1.00 1.00 1.00 1.00 0.25
www.pgpi.com.ph www.activeallianceinc.com www.e-games.com.ph www.lrwc.com.ph www.manilajockey.com www.loto.com.ph www.santa-ana-park.com www.pepinc.ph
Nickel Asia Corporation NiHAO Mineral Resources International, Inc. Omico Corporation Oriental Peninsula Resources Group, Inc. Philex Mining Corporation Semirara Mining Corporation United Paragon Mining Corporation Oil Basic Energy Corporation
BSC OPM OPMB PERC
0.25 0.01 0.01 1.00
www.basicenergy.ph no corporate website no corporate website www.petroenergy.com.ph
CAL SEVN
1.00 1.00
www.calatacorp.com www.7-eleven.com.ph
Oriental Petroleum and Minerals Corporation A Oriental Petroleum and Minerals Corporation B PetroEnergy Resources Corporation
1
The new corporate name is "Millenium Global Holdings, Inc," as approved by the Securities and Exchange Commission on March 5, 2013 Formerly ATS Consolidated (ATSC), Inc. (ATS) 3 Formerly Active Alliance, Inc. (AAI) 4 Formerly Premiere Entertainment Philippines, Inc. (PEP)
Formerly JTH Davies Holdings, Inc. (JTH)
Issue Philex Petroleum Corporation PNOC Exploration Corporation A PNOC Exploration Corporation B The Philodrill Corporation PreferreD Allied Banking Corporation - 15% Cumulative Convertible Preferred A Ayala Corporation Preferred Class A Shares Ayala Corporation Preferred Class B Shares Benguet Corporation - 8% Cumulative Convertible Preferred A DMCI Holdings, Inc. - Cumulative Convertible Preferred First Gen Corporation Series F Preferred Shares First Gen Corporation Series G Preferred Shares First Philippine Holdings Corporation - Preferred Globe Telecom, Inc. - Preferred A Petron Corporation - Preferred Philippine Bank of Communications - Preferred PLDT 10% Cumulative Convertible Preferred Series HH San Miguel Corporation - Preferred Series 1 San Miguel Corporation Series 2 Preferred Shares - Subseries 2-A San Miguel Corporation Series 2 Preferred Shares - Subseries 2-B San Miguel Corporation Series 2 Preferred Shares - Subseries 2-C San Miguel Pure Foods Company, Inc. - Preferred Swift Foods, Inc. Convertible Preferred PhiLippiNe Deposit ReCeipts ABS-CBN Holdings Corporation - Philippine Deposit Receipts GMA Holdings, Inc. - Philippine Deposit Receipts WarraNts IRC Properties, Inc. Warrants 2 Megaworld Corporation - Warrants1 Megaworld Corporation - Warrants2 SmaLL & MeDiUm ENterprises iRipple, Inc. Makati Finance Corporation
1 2
Code PXP PEC PECB OV
Par Value 1.00 1.00 1.00 0.01
Website no corporate website www.pnoc-ec.com.ph www.pnoc-ec.com.ph www.philodrill.com
ABC ACPA ACPR BCP DMCP FGENF FGENG FPHP GLOPA PPREF PBCP TLHH SMCP1 SMC2A SMC2B SMC2C PFP SFIP
1,000.00 100.00 100.00 3.44 1.00 10.00 10.00 100.00 5.00 1.00 25.00 10.00 5.00 5.00 5.00 5.00 10.00 1.00
www.alliedbank.com.ph www.ayala.com.ph www.ayala.com.ph www.benguetcorp.com www.dmciholdings.com www.rstgen.com.ph www.rstgen.com.ph www.fphc.com www.globe.com.ph www.petron.com www.pbcom.com.ph www.pldt.com.ph www.sanmiguel.com.ph www.sanmiguel.com.ph www.sanmiguel.com.ph www.sanmiguel.com.ph www.sanmiguelpurefoods.com no corporate website
ABSP GMAP
0.10 1 0.05
1
www.abs-cbnpdr.com www.gmanetwork.com
IRW MEGW1 MEGW2
1.00 1 1.00
1
www.ircproperties.com www.megaworldcorp.com www.megaworldcorp.com
1.00 1
RPL MFIN
1.00 1.00
www.iripple.com www.makatinance.ph
Exercise Price Formerly Interport Resources Warrants
Behind the Exchange
13 15 4 3 5 6 7 9 16 10
17
12
11
14
Board of Directors
1. Jose T. Pardo, Chairman-Independent Director 2. Hans B. Sicat, President and Chief Executive Ofcer; Director 3. Eddie T. Gobing, Director 4. David O. Chua, Director 5. Anabelle Lim-Chua, Director 6. Dakila B. Fonacier, Independent Director 7. Robert G. Vergara, Director 8. Amor C. Iliscupidez, Director 9. Eusebio H. Tanco, Director 10. Emmanuel O. Bautista, Director 11. Ma. Vivian Yuchengco, Director 12. Cornelio T. Peralta, Independent Director 13. Francis Chua, Director 14. Alejandro T. Yu, Director 15. Edgardo G. Lacson, Director 16. Aissa V. Encarnacion, Corporate Secretary 17. Omelita J. Tiangco, Treasurer
46 | PSE 2012 2012 ANNUAL REPORT REPORT
Department Heads
From Left to Right: Roel M. Villanueva Head, Market Control Department Sheryl J. Lopez Assistant Head, Broker Systems Support and Certication Department Sheryl V. Perillo Head, Trading Development Department Marvin M. Refuerzo Head, Trading Operations Department Jose Antonio S. Vilar Head, Marketing Services Department
Management Ofcers
Executive Officers
3 1
5 2 6 7
8 10
11
From Left to Right: Eliza S. Rodriguez Head, Accounting Department Mark Frederick V. Visda Head, Corporate Planning and Research Department Jose Valeriano B. Zuo, III Ofcer-In-Charge, Listing Department Jose Cecilio G. Peaor Assistant Head, Market Education Department Janet A. Encarnacion Head, Disclosure Department Jo Ann G. Bautista Head, Business Development Department Herbert G. Vergara Head, Administrative Services Department
12
1. Hans B. Sicat, President and Chief Executive Ofcer 2. RoelA. Refran, Senior Vice President and Chief Operating Ofcer 3. Buenaventura S. Sanguyo, Jr.,Assistant Vice President and General Counsel 4. Marsha Angelyn M.Resurreccion, Assistant Vice President and Head, Issuer RegulationDivision 5. J. Argel G. Astudillo, Vice President,Compliance Ofcer, and Head, Governance, Risk and Compliance 6. Marietta U. Tan, Vice President and Head, Controllershipand Treasury Division 7. Jinky A. Alora, Assistant VicePresident and Head, Internal Audit Group 8.Sebastian E. Olaivar, Jr. Assistant Vice President and Head, HumanResources and Administration Division 9. Rachelle C. Blanch, Vice President and Head, MarketOperations Division 10. Tristan G. Gillego, Assistant Vice President and Head, TechnologyDivision 11. John Benette B. Mamagun, Assistant VicePresident, Investor Relations Ofcer and Head, Corporate Planning andInvestor Relations Division 12. Precilla S.Sandoval, Assistant Vice President and Head, Market Data BusinessDepartment
From Left to Right: Maria Elizabeth S. Lacson Head, Public and Investor Relations Department Zaldy P. Rocero Head, Network and Telecommunications Department Elisa L. Benavidez Head, Budget and Treasury Department Adonis H. Gildore Head, Systems and Database Department Josielyn S. Arellano Head, Materials Management and Procurement Services Department Geossiel A. Cotoco Deputy General Counsel
Securities Clearing Corporation of the Philippines Board of Directors & Officers
Capital Markets Integrity Corporation Board of Directors & Officers
Front Row: Jose T. Pardo, Chairman-Independent Director, Hans B. Sicat, President and Chief Executive Ofcer, Director Top row (from left to right) Francis Chua, Director, Cornelio T. Peralta, Independent Director, Alejandro T. Yu, Director, Anabelle Lim-Chua, Director, Eddie T. Gobing, Director, Amor C. Iliscupidez, Director, Jose Luis S. Javier, Independent Director, Dakila B. Fonacier, Director, Emmanuel O. Bautista, Director, Aissa V. Encarnacion, Corporate Secretary, Omelita J. Tiangco, Treasurer, Renee D. Rubio, Chief Operating Ofcer
From Left to Right: Dakila B. Fonacier, Director, Antonio Garcia, Jr., President and Chief Executive Ofcer, Jose Luis S. Javier, Chairman, Alfonso B. Cruz, Director, Cornelio T. Peralta, Director Not in picture: Nestle C. Lizardo, Corporate Secretary
Rules and Operating Procedures Governing Settlement Restrictions The SCCP Board of Directors approved managements proposed rules and operating procedures for settlement restrictions to be imposed on trades of a particular issue or issues, referred to as Identied Security or Securities, if such identied security or securities are the subject of unusual trading activities or are determined to be excessively volatile or risky, and on such other cases which would justiably warrant settlement restrictions. Likewise, the SCCP Board of Directors approved the imposition of settlement restrictions on the trades of particular clearing member or members, referred to as identied clearing member or members." The settlement restrictions may be imposed under any of the following circumstances: a. If the identied clearing member has been determined by the CMIC as having engaged in unusual trading activities or possible trading-related irregularities as provided for under Article XI of the CMIC rules on trading irregularities; b. When SCCP deems that the trades of an identied clearing member will pose undue risk to the clearing fund; and c. Such other instances that will affect the identied clearing members ability to continue to carry out its responsibilities and obligations to SCCP as a clearing member. The settlement restrictions may be in the form of: i. Early delivery of securities ,in the case of net selling brokers; ii. Early delivery of cash ,in the case of net buying brokers; iii. Delivery of 100 percent cash collateral should the securities not be available for early delivery; or iv. Such other settlement restrictions as may be deemed necessary by the SCCP Board of Directors. The rules prohibit an identied clearing member from coursing its transactions through another trading participant (donethroughs) to circumvent the early delivery requirement. Clearing members found to be violating any of the rules on settlement restrictions shall be subject to penalties. The rules and operating procedures
governing settlement restrictions are subject to the approval of the Securities and Exchange Commission (SEC). Revision to Rules and Operating Procedures on SCCPs Fails Management System During its meeting held on June 28, the SEC approved the following amendments to SCCPs Rules and Operating Procedures governing the Fails Management System The revisions are summarized as follows: 1. Should a clearing member be suspended due to its failure to settle its cash or securities obligation, the notice of suspension of the clearing member shall be published by SCCP on the electronic board as well as on the website of the PSE. 2. SCCP management, at its discretion, may accept cash as collateral no later than 5:00PM on T+3 upon failure by a clearing member to deliver securities for reasons beyond the clearing members control. The defaulting clearing member shall be given until 10:00AM of the following trading day within which to deliver the securities or face suspension. In case of failure to deliver the securities upon the lapse of the deadline, SCCP management is authorized to use the cash submitted as collateral to purchase securities during the buy-in process. 3. The commission approved the reduction of the penalty fee for late cash or securities settlements made after the 12:00NN deadline but no later than 2:00PM on the same day from previously P1,000 + of 1 percent or 0.0025 of the cash fail or securities fail to P1,000 + 1/8 of 1 percent or 0.00125 of the value of the cash fail or securities fail. The penalty for settlement fails made after 2:00PM on settlement date or not made at all remains unchanged at P1,000 + of 1 percent or 0.0025 of the value of the cash or securities fail. The complete wording of the revised penalty fee for late settlements can be found in Annex 7: Schedule of Fees, Fines and Penalties of the SCCP Rules posted in the PSE website. Upgrade of the CCCS Web Servers In line with the objective of improving the accessibility of SCCPs Central Clearing and Central Settlement (CCCS) system to the clearing members, SCCP worked with the PSE Technology Division for the upgrade of the web servers of CCCS. Phase 1 of the project
was completed last December 2011 with the purchase and migration of two servers for the production site. Phase 2 of the project which involved the purchase and migration of two more servers for the disaster recovery site was completed and deployed last March 16. Depository Project On February 4, 2013, the SEC resolved to grant a provisional license to SCCP to operate as a securities depository subject to several conditions. SCCPs depository model is a multi-depository framework which will allow several entities to perform depository functions in the same market. However, since the clearing and settlement system is designed such that a security can reside in only one depository, issuers have to select the depository where all its shares will be lodged. The SCCP will be able to provide the equities market participants with a central system performing both the depository and clearing and settlement functions that would enable an end-to-end processing of equities trades. The integration of the clearing and depository functions within the SCCP will result in seamless electronic connectivity between the settlement, clearing, and depository processes and help minimize the risks attendant to the current back and forth transmission of data and procedures between the clearing and settlement house and the depository. SCCP depository offers to reduce friction costs of its depository participants through lower depository maintenance fees and securities transfer transaction fees. PSEs Trade Amendment System Project In line with the project of the Exchange to enable trading participants to execute their own requests for amendments, SCCP actively participated in the series of testing facilitated by the PSE Market Operations Division to ensure the integrity and correctness of the trade le provided to SCCP. The tail end of the testing consisted of SCCP providing the trading participants with their amended obligation reports. SCCPs Contribution to the Clearing and Trade Guaranty Fund In order to demonstrate its commitment as a central counterparty to all PSE trades, SCCP has appropriated P30 million of its retained earnings as its contribution to the Clearing and Trade Guaranty Fund. The use of the funds will be restricted to the settlement of trade obligations of defaulting clearing members.
Reports of Subsidiaries
SECURITIES CLEARING CORPORATION OF THE PHILIPPINES

Clearing and Settlement Operations
The Securities Clearing Corporation of the Philippines (SCCP), a wholly-owned subsidiary of the Philippine Stock Exchange, Inc. (PSE), enjoyed another record year with net income after tax of P235.52 million, a 47 percent increase over the previous years net income of P160.63 million. The service fees earned by SCCP increased by 25 percent to P316.38 million from P254.03 million in 2011. The bullish investment climate in 2012 resulted in a 27.1 percent increase in average daily value turnover of equity investments, from P5.71 billion in 2011 to P7.26 billion in 2012. Combined with SCCP's continued prudent expense management, all bode well for its nancial results.
Dividend declaration On March 21, the SCCP Board declared cash dividends of P20 million to stockholders of record as of March 31 which were paid on April 10. This was in addition to the cash dividends amounting to P140 million which were approved by the SCCP Board during its meeting on December 14, 2011 and paid on March 7 to stockholders of record as of December 31, 2011. On December 12, the SCCP Board of Directors declared cash dividends amounting to P200 million to stockholders of record as of December 31 payable on March 8, 2013. Extended Operating Hours due to the Extended Trading Hours In line with the implementation of the extended trading hours up to 3:30PM effective January 2, SCCP extended the availability of its central clearing and settlement system (CCCS) to its clearing members from 6:00PM to 7:00PM to give enough time for the processing of the trade le and for the clearing members to be able to view their collateral requirement messages and generate reports. As a result, the end-of-day (EOD) processing and reconcilement with the Philippine Depository & Trust Corp. was also adjusted to start at 7:00PM instead of 6:00PM and to end between 7:45PM and 8:00PM.
Clearing members continued to strictly adhere to the 12:00NN settlement deadline, achieving a compliance rate of 99.98 percent and 99.97 percent for the delivery of cash and securities obligations, respectively, which was an improvement over the previous year. There were no overnight settlement fails during the year. The average time that SCCP released due broker entitlements, both cash and securities, likewise improved during 2012 as these were released by 12:44PM on the average, as compared to 12:50PM in the previous year. This in turn enabled clearing members to release cash and securities entitlements earlier to their investors. Additional Settlement Banks The SCCP Board of Directors approved the request of three banks to undergo the accreditation process for becoming a settlement bank of SCCP. These banks are HSBC, Maybank Philippines Inc. and UnionBank of the Philippines. The process of accreditation entails the applicant bank undergoing a rigid technical testing process as well as the submission of the required documentation by the applicant banks to SCCP. This brings to seven the total number of settlement banks of SCCP. The four previously-accredited settlement banks are BDO Unibank, Deutsche Bank, Metropolitan Bank and Trust Co. and Rizal Commercial Banking Corporation. Settlement banks are needed in the clearing and settlement process since SCCP is not a bank, and clearing members will need to course their cash payments or receive their cash entitlements through an accredited settlement bank. Likewise, clearing members who choose to collateralize their negative exposures through cash collateral will need to open cash collateral accounts with their designated settlement bank.
CAPITAL MARKETS INTEGRITY CORPORATION

The Capital Markets Integrity Corporation (CMIC) was incorporated on March 14, 2011 for the purpose of enhancing market integrity and transparency with the end in view of enhancing the condence of the investing public in the countrys capital markets.
The primary purpose of CMIC is to function as the independent audit, surveillance and compliance unit separate from the Philippine Stock Exchange, Inc. (PSE). With marching orders from the PSE Board of Directors to spinoff the functions of its former Market Regulation Division, CMIC proceeded to organize an autonomous ofce that would eventually be granted a temporary Self Regulatory Organization (SRO) status on February 2 by the Securities and Exchange Commission (SEC). On March 14, the SEC authorized CMIC to discharge its functions. CMIC became fully operational in 2012. The Total Market Surveillance System (TMS), which was customized to be responsive to Philippine stock market conditions, was launched on May 8. On the same occasion, PSE turned over to CMIC its regulatory functions in a ceremony witnessed by, among others, SEC Chairperson Teresita Herbosa and other SEC ofcials.
A complement of auditors, lawyers, surveillance and IT personnel were deployed to perform their assigned tasks. In the process, 174 instances of spot audit were conducted and 84 trading participants were subjected to regular audit of which 35 were penalized. There were 10 cases of investor complaints and surveillance cases which were resolved. On the other hand, 11 cases involving Issuers and benecial owners were processed by CMICs Investigation and Enforcement Department and endorsed to SEC for further investigation, one of which resulted to a criminal case led by the SEC with the Department of Justice for market manipulation under the Securities Regulation Code. All personnel of CMIC are imbued with CMICs values and core standards so that they are constantly made aware to perform their duties within CMICs ethical and legal parameters. As professed in the Code of Ethics, CMIC shall carry out its mandate without fear or favor. It shall do so equitably and fairly, conscious of the important role played by the trading participants to instill condence in the marketplace. Thus, the average rule violation committed has been reduced to one violation per trading participant from three violations early in the year. Another welcome statistic is the reduction in the number of trading participants subjected to spot audit by 80 percent. CMIC recognizes the indispensable contribution of its management and staff in the fulllment of CMICs mandate, as well as its Board of Directors for guiding the company to the right path towards the promotion of integrity and independence in the Philippine market. Indeed, it would be a mark of success for CMIC if there comes a time when there would be no penalties imposed on trading participants because no rule violations are being committed. This would mean that CMIC has done its job as a regulator and accomplished the duty that it has been tasked to do. With this goal in mind, CMIC continues to work towards a more progressive and dynamic capital market industry.
Behind the numbers
Bell ringing ceremony to mark the CMIC's launch of the Total Market Surveillance System
Market information Market for Issuers Common Equity and Related Stockholder Matters Principal market where the registrants common equity is traded: The Capital Markets Integrity Corporation (CMIC) is another wholly-owned PSE subsidiary. It functions as the independent audit, surveillance and compliance unit of the Company, having taken over the Market Regulation Division of the Company. CMIC operates to ensure the integrity of the capital market and has jurisdiction to investigate all violations of the Securities Regulation Code and CMIC Rules by Trading Participants, and investigate trading-related irregularities and unusual trading activities committed by Issuers. The SEC granted CMIC its authority to operate as the independent audit, surveillance and compliance unit of the Company with provisional self-regulatory organization status on February 2, 2012. The Company is also a shareholder of the Philippine Dealing System Holdings Corporation (PDSHC), the holding company of the Philippine Dealing & Exchange Corporation (PDEX), otherwise known as the Fixed Income Exchange (FIE), the Philippine Depository & Trust Corp. (PDTC) and the Philippines Securities Settlement Corporation (PSSC). As of December 31, 2010, the Company is a stockholder of record of 1,311,439 shares, or 20.98%, of all of the issued and outstanding shares. Properties The Company is the registered owner of ofces at the PSE Centre in Ortigas Center, Pasig City, and the PSE Plaza along Ayala Avenue, Makati City. In addition, over a seven-year period beginning January 2005, the outstanding shares of Crescent West Development Corporation (CWDC), a subsidiary of Fort Bonifacio Development Corporation (FBDC) and the registered owner of a 2,182 square meter lot in Bonifacio Global City, will be transferred to the Company. In June 2007, the donation of all remaining CWDC shares was deferred pending negotiations among the Company, FBDC and Ayala Land, Inc. for the joint development of an ofce building in Bonifacio Global City for the relocation of the Companys headquarters, management ofces and unied operations in equities and securities for the National Capital Region. The Company provisionally approved the relocation of its headquarters and ofces to a new building located at Bonifacio Global City to be developed by Ayala Land, Inc. The common stock of the Company is listed in The Philippine Stock Exchange, Inc. Stock Prices The high and low prices of the Companys shares in the stock exchange for each quarter of fiscal years 2011 and 2012 are as follows: 2011 High Q1 P201.50 Low P170.00 P187.50 P204.80 P215.00
2012 High Q1 P500.00
Low P232.20 P342.00 P349.60 P365.00
Q2 P385.00 Q3 P397.00 Q4 P425.00
P7.00 in 2012 broken down as P2.95 regular dividend and P4.05 special cash dividend to stockholders of record as of March 29, 2012 payable on April 18, 2012. Dividend Policy The Company adopts a policy for the declaration of regular cash dividend out of the unrestricted retained earnings equivalent to 50 percent of the Companys audited net income. The declaration of dividends is dependent on the cash ow and nancial condition of the Company. Recent Sale of Unregistered/Exempt Securities The common shares granted to eligible employees pursuant to the Employee Stock Purchase Plan is an exempt transaction under Section 10.2 of the Securities Regulation Code, as stated under Resolution No. 179 Series of 2008 of the Securities and Exchange Commission.
Information reQuired by the Securities Regulation Code

General Nature and Scope of Business of Registrant and Its Subsidiaries The Philippine Stock Exchange, Inc. (PSE or Company) was incorporated on July 14, 1992 as a non-stock corporation. The Company became a stock corporation on August 3, 2001. On December 15, 2003, pursuant to the demutualization mandate of Republic Act No. 8799, or the Securities Regulation Code, the Companys outstanding capital stock was listed by way of introduction. On February 18, 2004, the Company sold 6,077,505 shares from its unissued stock to ve strategic investors by way of private placement that was approved by the Securities and Exchange Commission. The strategic investors were the PLDT Benecial Trust Fund, SMC Retirement Fund, Government Service Insurance System, Kim Eng Investment, Ltd., and KE Strategic Pte. Ltd. The Companys revenues are primarily derived from listingrelated fees. The Company charges listing fees for initial public offerings and additional listings, and for annual listing maintenance. Other sources of revenue are membership, transaction, data feed, and miscellaneous fees, which include service fees. Membership and transaction fees are charged to trading participants while data feed fees are collected from data vendors. Subsidiary and Afliates The Securities Clearing Corporation of the Philippines (SCCP) is a wholly-owned PSE subsidiary organized primarily as a clearance, settlement and depository agency for SCCP-eligible trades executed through the facilities of the PSE. SCCP is responsible for (a) synchronizing the settlement of funds for transactions of clearing members and the transfer of securities through Delivery versus Payment (DVP) clearing; (b) the administration of the Clearing and Trade Guaranty Fund (CTGF) and guaranteeing the settlement of trade through the implementation of its Fails Management System in the event of a Trading Participants default; and (c) performance of Risk Management and Monitoring to ensure nal and irrevocable settlement. Recently, the SEC provisionally granted SCCP the license to operate a depository.
The highest and lowest prices of the Companys shares during the year were P500.00 and P232.20, respectively. The stock price of the Company closed at P451.00 on April 12, 2013. Holders The number of shareholders of record as of April 12, 2013 is 268. Total shares outstanding as of April 12, 2013 is 61,058,721 shares with a par value of P1.00. Dividends Dividends per Share: P20.00 in 2008. P8.00 in 2009. P10.00 in 2010. P12.00 in 2011.
Q2 P269.75 Q3 P264.00 Q4 P245.00
The top 20 holders as of 5 April 2013 are as follows:

Stockholder 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 PCD Nominee Corp. San Miguel Corporation Retirement Plan The First Resources Management and Securities Corp. PCD Nominee Corp. G.D. Tan & Company Inc. Ansaldo Godinez & Company, Inc. Apex Phils. Equities Corporation BDO Securities Corporation Christfund Securities (Phils.), Inc. DBS Vickers Securities (Phils.), Inc. Deutsche Regis Partners, Inc. FEB Stock Brokers, Inc. Goldstar Securities, Inc. Highland Securities Phils., Inc. HSBC Securities (Philippines) Inc. Chan, Vicky L. Chia Kim Teck Chilip, Christopher L. Chong, Jose Cruz, Ismael G. Nationality Filipino Filipino Filipino Other Alien Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Singaporean Filipino Filipino Filipino No. of Shares 40,023,277 6,296,000 5,833,250 4,299,864 201,800 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Amount 40,023,277.00 6,296,000.00 5,833,250.00 4,299,864.00 201,800.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 Percentage 65.51% 10.31% 9.55% 7.04% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33% 0.33%
REPORT OF THE AUDIT COMMITTEE

The Audit Committee is the body tasked with assisting the Board of Directors in the performance of its supervision and control over the Exchanges nancial reporting process, system of internal controls, audit process, and monitoring of the Exchanges compliance with applicable laws, rules and regulations. The Audit Committee directly exercises oversight authority over the Exchanges nancial management functions, as well as oversight and direct interface functions with the Exchanges internal and external auditors. It is composed of six members and chaired by an independent director. In accordance with the mandate of the Audit Committee, the Committee conrms that: The Committee had a total of 15 meetings during the year, in which a majority of the members were present; The Committee recommended to the Board of Directors the reappointment of SGV & Co. to act as the Exchanges independent external auditor for the year 2012, after an evaluation of their qualications and past performance, and taking into consideration the recommendation of management; The Committee reviewed and approved the audit scope and approach of SGV & Co., assessed their performance in relation to their engagement, and approved all audit services rendered for 2012, including the related fees for such services after concluding that such services do not impair their independence; The Committee approved the creation of an in-house internal audit group, discussed and approved the scope, frequency
and audit plan of the Exchanges internal auditors, reviewed the reports and recommendations of the internal auditors, which were based on a comprehensive and detailed review of the Exchanges operations, including the information technology area and the new trading system PSEtrade, and ensured communication to management for appropriate and timely corrective action; The Committee reviewed and discussed with management and SGV & Co. the annual consolidated nancial statements of the Exchange, and its subsidiaries, the Securities Clearing Corporation of the Philippines and the Capital Market Integrity Corporation, as of December 31, 2012, before submission to the Board. These activities were performed in the following context: Management retains primary responsibility for the nancial statements and reporting process of the Exchange; SGV & Co. is responsible for expressing an opinion on the conformity of the Exchanges annual audited consolidated nancial statements with Philippine Financial Reporting Standards. In keeping with the mandate of the Audit Committee, and based on the reviews and discussions undertaken, the Committee recommended to the Board of Directors of the Exchange (i) the inclusion of the Exchanges audited consolidated nancial statements as of December 31, 2012 in the Annual Report to the Stockholders and (ii) the ling of the audited consolidated nancial statements with the Securities and Exchange Commission.
April 10, 2013.
Cornelio T. Peralta Anabelle L. Chua Dakila Fonacier Committee Chairman Member Member
Amor C. Iliscupidez Eusebio H. Tanco Alejandro T. Yu Member Member Member
SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines Phone: (632) 891 0307 Fax: (632) 819 0872 www.sgv.com.ph BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015 SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015
SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines Phone: (632) 891 0307 Fax: (632) 819 0872 www.sgv.com.ph
-2-
BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015 SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015
The Stockholders and the Board of Directors The Stock Exchange, The Philippine Stockholders and the BoardInc. of Directors PSE Plaza, Ayala Triangle The Philippine Stock Exchange, Inc. Ayala Avenue, Makati City PSE Plaza, Ayala Triangle Ayala Avenue, Makati City We have audited the accompanying consolidated financial statements of The Philippine Stock Exchange, Inc. and Subsidiaries, which comprise the consolidated balance sheets of asThe at December 2012 and 2011, We have audited the accompanying consolidated financial statements Philippine 31, Stock Exchange, and the of comprehensive income, statements ofat changes in equity and and 2011, Inc. and consolidated Subsidiaries, statements which comprise the consolidated balance sheets as December 31, 2012 statements of cash flows for each the three years in the period ended December 31, 2012, and a and the consolidated statements ofof comprehensive income, statements of changes in equity and summary ofof significant accounting policies and years other in explanatory statements cash flows for each of the three the periodinformation. ended December 31, 2012, and a summary of significant accounting policies and other explanatory information. Managements Responsibility for the Consolidated Financial Statements Managements Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements inis accordance with Philippine Financial Standards, and for such internal control as Management responsible for the preparation and Reporting fair presentation of these consolidated financial management is necessary to enable theReporting preparation of consolidated statements statements indetermines accordance with Philippine Financial Standards, and forfinancial such internal controlthat as are free from material misstatement, whether due to fraud or error. management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We ouris audits in accordance with Standards on Auditing. Thosebased standards require Our conducted responsibility to express an opinion on Philippine these consolidated financial statements on our audits. that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require about whether consolidated financial statements areperform free from material that we complythe with ethical requirements and plan and the audit tomisstatement. obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the including An audit involves performing procedures to obtain audit evidence about theauditors amounts judgment, and disclosures in the the assessment of thestatements. risks of material of the consolidated financial statements, due consolidated financial The misstatement procedures selected depend on the auditors judgment, whether including to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the the assessment of the risks of material misstatement of the consolidated financial statements, whether due entitys fair presen tation of the consolidated financial statements order to design audit to fraud preparation or error. In and making those risk assessments, the auditor considers internalin control relevant to the procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on entitys preparation and fair presentation of the consolidated financial statements in order to design audit the effectiveness of appropriate the entitys in internal control. An audit also includes evaluating the appropriateness of procedures that are the circumstances, but not for the purpose of expressing an opinion on accounting policies used and the reasonableness of accounting estimates made by management, as well as the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of evaluating the overall presentation of the consolidated financial statements. accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Philippine Stock Exchange, Inc. and Subsidiaries as at December 31, 2012 and 2011, and their financial performance and their cash flows for each of the three years in the period ended December 31, 2012 in accordance with Philippine Financial Reporting Standards. SYCIP GORRES VELAYO & CO.
Belinda T. Beng Hui Partner CPA Certificate No. 88823 SEC Accreditation No. 0943-A (Group A), March 18, 2010, valid until March 17, 2013 Tax Identification No. 153-978-243 BIR Accreditation No. 08-001998-78-2012, June 19, 2012, valid until June 18, 2015 PTR No. 3669663, January 2, 2013, Makati City March 13, 2013
A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited
December 31 2012 ASSETS Current Assets Cash and cash equivalents (Notes 4, 5 and 6) Financial assets at fair value through profit or loss (Notes 4, 5 and 7) Short-term available-for-sale investments (Notes 4, 5 and 8) Receivables (Notes 4, 5 and 9) Other current assets Total Current Assets Noncurrent Assets Long-term available-for-sale investments (Notes 4, 5 and 8) Property and equipment (Note 10) Investment in an associate (Note 11) Retirement asset (Note 23) Deferred tax assets - net (Note 22) Other noncurrent assets (Notes 4, 5 and 12) Total Noncurrent Assets = P 1,051,355,197 274,585,220 87,089,598 25,402,349 1,438,432,364 327,847,291 498,382,519 211,518,573 9,308,988 6,268,915 33,366,945 1,086,693,231 = P 2,525,125,595 = P 1,041,644,459 207,881,747 42,342,741 72,441,797 33,198,310 1,397,509,054 167,407,020 520,108,725 172,745,546 7,666,168 9,149,513 11,025,035 888,102,007 = P 2,285,611,061 OTHER INCOME (EXPENSES) Interest income (Note 17) Equity in net income of an associate (Note 11) Mark-to-market gain on financial assets at fair value through profit or loss (Note 7) Dividend income Gain on sale of available-for-sale investments (Note 8) 2011 REVENUES Listing-related fees: Listing Listing maintenance Processing Service fees (Note 25) Trading-related fees (Note 25): Transaction Block sales Data feed Subscription Regulatory fees Other revenues (Notes 25 and 29) 2012
Years Ended December 31 2011
2010
= P 356,741,822 203,398,245 1,900,000 316,376,987 101,279,075 30,632,267 50,314,730 16,469,264 45,259,770 21,415,136 1,143,787,296
= P 234,786,035 193,553,103 950,000 254,034,164 120,029,889 22,229,243 45,600,353 14,996,700 14,584,415 900,763,902
= P 230,624,139 169,422,761 1,840,000 215,604,239 97,486,442 23,251,314 38,633,431 16,658,219 28,931,365 822,451,910
COST AND EXPENSES Cost of services (Note 18) General and administrative expenses (Note 19)
176,954,411 328,179,753 505,134,164
167,795,456 272,797,542 440,592,998
130,727,295 276,467,823 407,195,118
LIABILITIES AND EQUITY Current Liabilities Accounts payable and other current liabilities (Notes 4, 5 and 13) Income tax payable Deferred fees and others (Note 14) Total Current Liabilities Noncurrent Liability Retirement liability (Note 23) EQUITY Capital stock (Notes 1 and 16) Additional paid-in capital (Notes 1, 16 and 28) Treasury stock (Note 16) Retained earnings (Note 16): Unappropriated Appropriated Donated capital (Note 15) Net unrealized gains on available-for-sale investments (Note 8) Total Equity = P 176,027,968 31,454,623 33,419,693 240,902,284 9,524,520 61,258,130 1,038,100,114 (68,000,012) 771,459,300 71,000,000 387,637,585 13,243,674 2,274,698,791 = P 2,525,125,595 See accompanying Notes to Consolidated Financial Statements. = P 159,547,623 45,456,302 23,321,548 228,325,473 7,212,481 61,208,733 1,018,810,564 (68,000,012) 574,354,178 71,000,000 387,637,585 5,062,059 2,050,073,107 = P 2,285,611,061
54,770,920 38,773,027 65,108,656 5,115,543 163,768,146 802,421,278 178,255,144 624,166,134
59,761,719 30,064,062 7,415,146 2,010,485 99,251,412 559,422,316 153,230,159 406,192,157
78,593,045 26,581,660 31,200 36,947,135 142,153,040 557,409,832 139,912,541 417,497,291
INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX (Note 22) NET INCOME OTHER COMPREHENSIVE INCOME Net unrealized gain (loss) on available-for-sale investments (Note 8) TOTAL COMPREHENSIVE INCOME Basic/Diluted Earnings Per Share (Note 24) See accompanying Notes to Consolidated Financial Statements.
8,181,615 = P 632,347,749 = P 10.23
(11,157,082) = P 395,035,075 = P 6.65
(25,516,750) = P 391,980,541 = P 6.83
Total = P 2,050,073,107 624,166,134 8,181,615 632,347,749 19,338,947 (427,061,012) = P 2,274,698,791
= P 2,021,090,393 406,192,157 (11,157,082) 395,035,075 (5) (366,052,356) = P 2,050,073,107
= P 1,915,414,603 417,497,291 (25,516,750) 391,980,541 18,245,309 (304,550,060) = P 2,021,090,393
Net Unrealized Gain on Available for-Sale Investments (Note 8) = P 5,062,059 8,181,615 8,181,615 = P 13,243,674
= P 16,219,141 (11,157,082) (11,157,082) = P 5,062,059
= P 41,735,891 (25,516,750) (25,516,750) = P 16,219,141
2012 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation (Notes 10, 18 and 19) Interest income (Note 17) Dividend income Equity in net income of an associate (Note 11) Retirement expense (Note 23) Mark-to-market gain on financial assets at fair value through profit or loss (Note 7) Amortization of computer software (Note 12) Gain on sale of available-for-sale investments Loss (gain) on disposal of property and equipment Loss on asset write-off (Note 12) Share-based payment expense (Note 28) Recovery of impairment losses (Notes 8 and 9) Income before working capital changes Changes in operating assets and liabilities: Decrease (increase) in: Receivables Other current assets Increase (decrease) in accounts payable and other current liabilities Cash generated from operations Interest received Income taxes paid Benefits paid (Note 23) Cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale/maturities of: Available-for-sale investments Property and equipment Acquisitions of: Available-for-sale investments (Note 8) Financial assets at fair value through profit or loss Property and equipment (Note 10) Computer software (Note 12) Decrease (increase) in other noncurrent assets Dividends received Contribution to plan assets (Note 23) Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share-based payments (Note 28) Acquisition of treasury stock (Note 16) Dividend payments (Note 16) Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR See accompanying Notes to Consolidated Financial Statements. = P 802,421,278 77,327,729 (54,770,920) (5,115,543) (38,773,027) 20,736,146 (65,108,656) 3,388,474 2,560,331 742,665,812 (15,427,744) 7,795,961 24,989,239 760,023,268 55,550,863 (191,770,405) (971,080) 622,832,646
Years Ended December 31 2011 = P 559,422,316 75,117,275 (59,761,719) (2,010,485) (30,064,062) 16,587,999 (7,415,146) 5,108,493 (2,206,760) 554,777,911 5,597,673 (12,789,688) (12,803,861) 534,782,035 71,861,438 (159,179,824) (7,453,588) 440,010,061
2010 = P 557,409,832 52,998,347 (78,593,045) (31,200) (26,581,660) 10,824,369 5,085,741 (36,947,135) 291,688 13,692,355 6,463,639 (9,000) 504,603,931 (64,354,370) (1,763,726) 58,646,175 497,132,010 112,974,745 (116,244,171) (745,767) 493,116,817
Donated Capital (Note 15) = P 387,637,585 = P 387,637,585
= P 387,637,585 = P 387,637,585 = P 71,000,000 = P 71,000,000 = P 564,718,740 406,192,157 406,192,157 (366,052,356) (30,504,363) = P 574,354,178 (= P 68,000,007) (5) (= P 68,000,012) = P 1,018,810,564 = P 1,018,810,564
Retained Earnings
Appropriated (Note 16) = P 71,000,000 = P 71,000,000
Unappropriated (Note 16) = P 574,354,178 624,166,134 624,166,134 (427,061,012) = P 771,459,300
Treasury Stock (Note 16) (P =68,000,012) (P =68,000,012)
Additional Paid-in Capital (Notes 1, 16 and 28) = P 1,018,810,564 19,289,550 = P 1,038,100,114
= P 1,000,614,613 18,195,951 = P 1,018,810,564
(= P 68,000,007) (= P 68,000,007)
= P 451,771,509 417,497,291 417,497,291 (304,550,060) = P 564,718,740
= P 71,000,000 = P 71,000,000
= P 387,637,585 = P 387,637,585
42,433,802 6,289,670 (149,955,537) (1,594,817) (61,891,198) (24,637,095) (1,093,284) 5,115,543 (20,066,927) (205,399,843) 19,338,947 (427,061,012) (407,722,065) 9,710,738 1,041,644,459 = P 1,051,355,197
826,243,352 12,419,885 (82,523,235) (200,466,601) (37,329,088) 58,186,479 2,010,485 578,541,277 (5) (366,052,356) (366,052,361) 652,498,977 389,145,482 = P 1,041,644,459
477,404,381 4,126,914 (504,230,452) (118,549,865) (13,770,880) (34,291,223) 31,200 (22,117,243) (211,397,168) 18,245,309 (304,550,060) (286,304,751) (4,585,102) 393,730,584 = P 389,145,482
Capital Stock (Notes 1 and 16) = P 61,208,733 49,397 = P 61,258,130
= P 30,655,012 49,358 = P 30,704,370 Balances at January 1, 2010 Net income Other comprehensive income Total comprehensive income Share-based payments Cash dividends Balances at December 31, 2010
= P 30,704,370 30,504,363 = P 61,208,733
See accompanying Notes to Consolidated Financial Statements.
Balances at January 1, 2012 Net income Other comprehensive income Total comprehensive income Share-based payments Cash dividends Balances at December 31, 2012
Balances at January 1, 2011 Net income Other comprehensive income Total comprehensive income Acquisition of treasury stock Cash dividends Stock dividends Balances at December 31, 2011
clearing agency subject to its compliance with the requirements of Section 42 of the SRC entitled Registration of Clearing Agency. 1. Corporate Information The Philippine Stock Exchange, Inc. (the Parent Company or the Exchange) was incorporated in the Philippines on July 14, 1992 as a non-stock corporation primarily to provide and maintain a convenient and suitable market for the exchange, purchase and sale of all types of securities and other instruments. On August 8, 2001, the Parent Company was converted from a non-stock corporation to a stock corporation (demutualization) with an authorized capital stock of =36.8 P million divided into 36.8 million shares with a par value of =1.00 P per share as prescribed by Republic Act (RA) No. 8799 entitled Securities Regulation Code (SRC) and pursuant to a conversion plan approved by the Securities and Exchange Commission (SEC). The salient features of the demutualization plan approved by the SEC on August 3, 2001 include, among others, the following: a. Conversion of the Parent Company into a stock corporation by amending its Articles of Incorporation and by-laws; Subscription of each member of 50,000 shares at =1.00 P per share. The remaining balance of the Membership Contributions account of =277.4 P million shall be treated as additional paid-in capital; Issuance of trading rights to brokers in recognition of the existing seat ownership by the brokers; Separation of ownership of shares and right to operate as a trading participant in the Exchange. The trading rights shall be transferable without time limitation; and Imposition of a moratorium on the issuance of the new trading rights. 2. Capital Markets Integrity Corporation (CMIC), a 100% owned subsidiary of the Exchange, is a stock corporation organized on March 14, 2011 to function as the independent audit, surveillance and compliance unit of the Exchange with the authority to adopt, enforce, implement and interpret rules, guidelines and securities laws applicable to the operations and dealings of trading participants and other market participants of the Exchange. The registered office address of the Parent Company is PSE Plaza, Ayala Triangle, Ayala Avenue Makati City. The accompanying consolidated financial statements were authorized for issue by the BOD on March 13, 2013. Basis of Preparation and Consolidation, Changes in Accounting Policies, and Summary of Significant Accounting Policies Basis of Preparation The accompanying consolidated financial statements of the Parent Company and its subsidiaries (collectively referred to as the Group) have been prepared in accordance with Philippine Financial Reporting Standard (PFRS). PFRS includes statements named PFRS, Philippine Accounting Standards (PAS) and Philippine Interpretations of International Financial Reporting Interpretations Committee (IFRIC) issued by the Financial Reporting Standards Council. The accompanying consolidated financial statements have been prepared on a historical cost basis, except for financial assets at fair value through profit or loss (FVPL) and available-for-sale (AFS) investments that have been measured at fair value. The financial statements are presented in Philippine Peso (=), P which is the Groups functional and presentation currency under PFRS. All values are rounded to the nearest peso, except when otherwise indicated. Basis of Consolidation The consolidated financial statements comprise the financial statements of the Parent Company and its wholly-owned subsidiaries, namely SCCP and CMIC. The subsidiaries are fully consolidated from the date of acquisition, being the date on which the Parent Company obtains control, and continue to be consolidated until the date that such control ceases. Control is achieved where the Parent Company has the power to govern the financial and operating policies of an entity so as to obtain benefit from its activities. The financial statements of the subsidiaries are prepared for the same reporting period as the Parent Company, using consistent accounting policies. All intra-group balances, transactions, income and expenses resulting from intra-group transactions are eliminated in full in the consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. Changes in Accounting Policies and Disclosures The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of the following amended PFRSs, which were adopted as at January 1, 2012. The adoption of these standards or interpretations did not have an impact on the financial statements. PFRS 7, Financial Instruments: Disclosures - Transfers of Financial Assets (Amendments) PAS 12, Income Taxes - Deferred Tax: Recovery of Underlying Assets (Amendments)
b.
c. d.
e.
On December 15, 2003, the Parent Companys shares of stock were listed by way of introduction of its outstanding shares to comply with the requirements mandated by the SRC, particularly the conversion of the Parent Company into a stock corporation. On January 28, 2004, the Parent Company offered 6,077,505 unissued shares to the private sector as part of on-going efforts to comply with SRCs mandate regarding the ownership of the Exchange (see Note 16). Gross proceeds from the private placement offering amounted to =726.3 P million, inclusive of additional paid-in capital of =720.2 P million representing premium over the par value of the common stock. Expenses related to the offering amounting to =21.1 P million were recorded as a reduction of the additional paid-in capital. Securities Clearing Corporation of the Philippines (SCCP), a 100% owned subsidiary of the Exchange, is a domestic corporation organized to carry out and strictly implement the following functions: (1) Deliveryversus-Payment trade settlement; (2) fails management and administration of the Clearing and Trade Guaranty Fund (CTGF); and (3) risk monitoring and management. To ensure compliance of trading participants, SCCP is authorized by the SEC to impose fines and penalties and other sanctions as approved by SCCPs Board of Directors (BOD). SCCP was given a temporary license to operate by the SEC and started its commercial operations on January 3, 2000. On January 15, 2002, the SEC approved SCCPs request for a permanent license as a
Standards Issued but not yet Effective Standards issued but not yet effective up to the date of issuance of the Groups consolidated financial statements are listed below. The Group intends to adopt these standards when they become effective. Except as otherwise indicated, the Group does not expect the adoption of these new and amended standards and interpretations to have significant impact on its financial statements. PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments) - These amendments require an entity to disclose information about rights of set-off and related arrangements (such as collateral agreements). The new disclosures are required for all recognized financial instruments that are set off in accordance with PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities. These disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set-off in accordance with PAS 32. The amendments require entities to disclose, in a tabular format unless another format is more appropriate, the following minimum quantitative information. This is presented separately for financial assets and financial liabilities recognized at the end of the reporting period: a. The gross amounts of those recognized financial assets and recognized financial liabilities; b. The amounts that are set off in accordance with the criteria in PAS 32 when determining the net amounts presented in the statement of financial position; c. The net amounts presented in the statement of financial position; d. The amounts subject to an enforceable master netting arrangement or similar agreement that are not otherwise included in (b) above, including: i. Amounts related to recognized financial instruments that do not meet some or all of the offsetting criteria in PAS 32; and ii. Amounts related to financial collateral (including cash collateral); and e. The net amount after deducting the amounts in (d) from the amounts in (c) above. The amendments to PFRS 7 are to be retrospectively applied and are effective for annual periods beginning on or after January 1, 2013. The amendments affect disclosures only and have no impact on the Groups financial position or performance. PFRS 10, Consolidated Financial Statements - PFRS 10 replaces the portion of PAS 27, Consolidated and Separate Financial Statements, that addresses the accounting for consolidated financial statements. It also includes the issues raised in SIC 12, Consolidation - Special Purpose Entities. PFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by PFRS 10 will require management to exercise significant judgment to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the requirements that were in PAS 27. The standard becomes effective for annual periods beginning on or after January 1, 2013. PFRS 11, Joint Arrangements - PFRS 11 replaces PAS 31, Interests in Joint Ventures, and SIC 13, Jointly Controlled Entities - Non-Monetary Contributions by Venturers. PFRS 11 removes the option to account for jointly controlled entities using proportionate consolidation. Instead, jointly controlled entities that meet the definition of a joint venture must be accounted for using the equity method. The standard becomes effective for annual periods beginning on or after January 1, 2013. PFRS 12, Disclosure of Interests in Other Entities - PFRS 12 includes all of the disclosures related to consolidated financial statements that were previously in PAS 27, as well as all the disclosures that were previously included in PAS 31 and PAS 28, Investments in Associates. These disclosures relate to an entitys interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. The standard becomes effective for annual periods beginning on or after January 1, 2013.
PFRS 13, Fair Value Measurement - PFRS 13 establishes a single source of guidance under PFRSs for all fair value measurements. PFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under PFRS when fair value is required or permitted. This standard should be applied prospectively as of the beginning of the annual period in which it is initially applied. Its disclosure requirements need not be applied in comparative information provided for periods before initial application of PFRS 13. The standard becomes effective for annual periods beginning on or after January 1, 2013. PAS 1, Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income or OCI (Amendments) - The amendments to PAS 1 change the grouping of items presented in OCI. Items that can be reclassified (or recycled) to profit or loss at a future point in time (for example, upon derecognition or settlement) will be presented separately from items that will never be recycled. The amendments become effective for annual periods beginning on or after July 1, 2012. PAS 19, Employee Benefits (Revised) - Amendments to PAS 19 range from fundamental changes such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and rewording. The revised standard also requires new disclosures such as, among others, a sensitivity analysis for each significant actuarial assumption, information on asset-liability matching strategies, duration of the defined benefit obligation, and disaggregation of plan assets by nature and risk. The amendments become effective for annual periods beginning on or after January 1, 2013. Once effective, the Group has to apply the amendments retroactively to the earliest period presented.
The Group reviewed its existing employee benefits and determined that the amended standard has significant impact on its accounting for retirement benefits. The Group obtained the services of an external actuary to compute the impact to the financial statements upon adoption of the standard. The effects are detailed below: Parent Company: As at December 31, 2012 Increase (decrease) in: Balance sheet Net defined benefit liability Deferred tax asset Other comprehensive income Retained earnings = P 12,146,411 3,643,924 20,908,298 (29,410,785) 2012 Statement of comprehensive income Retirement expense Provision for deferred income tax Net income Other comprehensive income net of deferred tax Total comprehensive income (= P 1,509,508) 452,852 1,056,656 20,908,298 = P 21,964,954 As at January 1, 2012 = P 43,524,916 13,057,475 (30,467,441)
PAS 27, Separate Financial Statements (as revised in 2011) - As a consequence of the issuance of the new PFRS 10, Consolidated Financial Statements, and PFRS 12, Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in the separate financial statements. The amendment becomes effective for annual periods beginning on or after January 1, 2013. PAS 28, Investments in Associates and Joint Ventures (as revised in 2011) - As a consequence of the issuance of the new PFRS 11, Joint Arrangements, and PFRS 12, Disclosure of Interests in Other
Entities, PAS 28 has been renamed PAS 28, Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates. The amendment becomes effective for annual periods beginning on or after January 1, 2013. Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine - This interpretation applies to waste removal (stripping) costs incurred in surface mining activity, during the production phase of the mine. The interpretation addresses the accounting for the benefit from the stripping activity. The interpretation is effective for annual periods beginning on or after January 1, 2013. This new interpretation is not relevant to the Group. PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities (Amendments) - The amendments clarify the meaning of currently has a legally enforceable right to set-off and also clarify the application of the PAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The amendments affect presentation only and have no impact on the Groups financial position or performance. The amendments to PAS 32 are to be retrospectively applied for annual periods beginning on or after January 1, 2014.
PFRS 1, First-time Adoption of PFRS - Borrowing Costs - The amendment clarifies that, upon adoption of PFRS, an entity that capitalized borrowing costs in accordance with its previous generally accepted accounting principles, may carry forward, without any adjustment, the amount previously capitalized in its opening statement of financial position at the date of transition. Subsequent to the adoption of PFRS, borrowing costs are recognized in accordance with PAS 23, Borrowing Costs. PAS 1, Presentation of Financial Statements - Clarification of the requirements for comparative information - The amendments clarify the requirements for comparative information that are disclosed voluntarily and those that are mandatory due to retrospective application of an accounting policy, or retrospective restatement or reclassification of items in the financial statements. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The additional comparative period does not need to contain a complete set of financial statements. On the other hand, supporting notes for the third balance sheet (mandatory when there is a retrospective application of an accounting policy, or retrospective restatement or reclassification of items in the financial statements) are not required. PAS 16, Property, Plant and Equipment - Classification of servicing equipment - The amendment clarifies that spare parts, stand-by equipment and servicing equipment should be recognized as property, plant and equipment when they meet the definition of property, plant and equipment and should be recognized as inventory if otherwise. PAS 32, Financial Instruments: Presentation - Tax effect of distribution to holders of equity instruments - The amendment clarifies that income taxes relating to distributions to equity holders and to transaction costs of an equity transaction are accounted for in accordance with PAS 12, Income Taxes. PAS 34, Interim Financial Reporting - Interim financial reporting and segment information for total assets and liabilities - The amendment clarifies that the total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amount disclosed in the entitys previous annual financial statements for that reportable segment.
PFRS 9, Financial Instruments - PFRS 9, as issued, reflects the first phase on the replacement of PAS 39 and applies to the classification and measurement of financial assets and liabilities as defined in PAS 39, Financial Instruments: Recognition and Measurement. Work on impairment of financial instruments and hedge accounting is still ongoing, with a view to replacing PAS 39 in its entirety. PFRS 9 requires all financial assets to be measured at fair value at initial recognition. A debt financial asset may, if the fair value option (FVO) is not invoked, be subsequently measured at amortized cost if it is held within a business model that has the objective to hold the assets to collect the contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding. All other debt instruments are subsequently measured at fair value through profit or loss. All equity financial assets are measured at fair value either through other comprehensive income (OCI) or profit or loss. Equity financial assets held for trading must be measured at fair value through profit or loss. For FVO liabilities, the amount of change in the fair value of a liability that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of the liabilitys credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. All other PAS 39 classification and measurement requirements for financial liabilities have been carried forward into PFRS 9, including the embedded derivative separation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9 will not have an effect on the classification and measurement of the Companys financial assets and financial liabilities. PFRS 9 is effective for annual periods beginning on or after January 1, 2015. The Group has decided not to early adopt PFRS 9 on its financial statements as at December 31, 2012. Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate - This interpretation covers accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors. The SEC and the Financial Reporting Standards Council (FRSC) have deferred the effectivity of this interpretation until the final Revenue standard is issued by the International Accounting Standards Board (IASB) and an evaluation of the requirements of the final Revenue standard against the practices of the Philippine real estate industry is completed. Adoption of the interpretation when it becomes effective will not have any impact on the financial statements of the Group.
Summary of Significant Accounting Policies Cash and Cash Equivalents Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less from dates of placement and are subject to an insignificant risk of change in value. Financial Assets and Financial Liabilities Date of Recognition. The Group recognizes a financial asset or a financial liability on its consolidated balance sheet when and only when, the entity becomes a party to the contractual provisions of the instrument. In the case of a regular way purchase and sale of financial assets, recognition and derecognition, as applicable, are done using settlement date accounting. Regular way purchases and sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place. Initial Recognition and Measurement. Financial assets and liabilities are recognized initially at fair value, which is the fair value of the consideration given (in case of an asset) or received (in case of a liability). The initial measurement of financial instruments, except those designated at FVPL, includes transaction costs.
Annual Improvements to PFRSs (2009-2011 cycle) The Annual Improvements to PFRSs (2009-2011 cycle) contain non-urgent but necessary amendments to PFRSs. The amendments are effective for annual periods beginning on or after January 1, 2013 and are applied retrospectively. Earlier application is permitted. The Group expects that the amendments will not have any impact on its financial position or performance.
Financial assets are classified into the following categories: financial assets at FVPL, held-to-maturity (HTM) investments, loans and receivables and AFS investments. Financial liabilities are classified either as financial liabilities at FVPL or other financial liabilities. The classification depends on the purpose for which the instruments are acquired and whether they are quoted in an active market. The classification depends on the purpose for which the instruments are acquired or incurred and whether they are quoted in an active market. The Group determines the classification at initial recognition and, where allowed and appropriate, re-evaluates this designation at every reporting date. The Group has no HTM investments and financial liabilities at FVPL as at December 31, 2012 and 2011. Determination of Fair Value. The fair value for a financial instrument traded in an active market at the reporting date is based on their quoted market price or dealer price quotation (bid price for long positions and ask price for short positions), without any deduction for transaction costs. When current bid and ask prices are not available, the price of the most recent transaction provides evidence of the current fair value as long as there has not been a significant change in economic circumstances since the time of the transaction. For all other financial instruments not listed in an active market, the fair value is determined by using appropriate valuation methodologies. Valuation methodologies include net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models, and other relevant valuation models. Day 1 Difference. Where the transaction price in a non-active market is different from the fair value from other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from an observable market, the Group recognizes the difference between the transaction price and fair value (a Day 1 difference) in the consolidated statements of comprehensive income unless it qualifies for recognition as some other type of asset or liability. In cases where unobservable data is used, the difference between the transaction price and model value is recognized in the consolidated statements of comprehensive income only when the inputs become observable or when the instrument is derecognized. For each transaction, the Group determines the appropriate method of recognizing the Day 1 difference amount. Subsequent Measurement. The subsequent measurement of financial assets depends on their classification as described below: Financial Assets at FVPL. Financial assets at FVPL include financial assets held for trading and financial assets designated upon initial recognition as at FVPL. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives, including any separated derivatives, are also classified under financial assets at FVPL, unless these are designated as hedging instruments in an effective hedge or financial guarantee contracts. Gains or losses on investments held for trading are included in the consolidated statements of comprehensive income. Interest income on investments held for trading is included in the consolidated statements of comprehensive income. Instruments under this category are classified as current assets if these are held primarily for the purpose of trading or expected to be realized/settled within 12 months from balance sheet date. Otherwise, these are classified as noncurrent assets. Financial assets may be designated by management at initial recognition as at FVPL when any of the following criteria is met:
the assets are part of a group of financial assets, financial liabilities or both which are managed and their performance are evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or the financial instrument contains an embedded derivative, unless the embedded derivative does not significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
Included under this category of financial assets at FVPL is the Groups investment in management account which is designated at FVPL as it is being managed on a fair value basis. Loans and Receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments and are not quoted in an active market. They are not entered into with the intention of immediate or short-term resale and are not classified or designated as AFS financial assets or financial assets at FVPL. After initial measurement, such assets are subsequently measured at amortized cost in the consolidated balance sheets using the effective interest method, less allowance for impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate. Gains and losses are recognized in the profit or loss when the loans and receivables are derecognized and impaired, as well as through the amortization process. Loans and receivables are classified as current assets if maturity is within 12 months from balance sheet date. Otherwise, these are classified as noncurrent assets. Gains and losses are recognized in profit or loss when the loans and receivables are derecognized or impaired, as well as through the amortization process. Included under this category are the Groups cash and cash equivalents and receivables. AFS Investments. AFS investments include equity and debt securities. Equity investments classified as AFS are those, which are neither classified as held for trading nor designated at FVPL. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to liquidity requirements or changes in market conditions. After initial measurement, AFS investments are subsequently measured at fair value with unrealized gains or losses recognized as other comprehensive income in the AFS reserve until the financial asset is derecognized, at which time the cumulative gain or loss is recognized as an operating income, or determined to be impaired, at which time the cumulative loss is recognized in the statements of comprehensive income as finance cost and removed from the AFS reserve. Interest earned while holding AFS investments is reported as interest income using the effective interest rate method. AFS investments are classified as current assets if maturity is within 12 months from the balance sheet date. Otherwise, these are classified as noncurrent assets. Included under this category are the Groups investments in government debt securities, corporate bonds, and golf club shares. Other Financial Liabilities. This category pertains to financial liabilities that are not held for trading or not designated as at FVPL upon the inception of the liability. These include liabilities arising from operations or borrowings. Financial liabilities are recognized initially at fair value and are subsequently carried at amortized cost, taking into account the impact of applying the effective interest method of amortization (or accretion) for any related premium, discount and any directly attributable transaction costs. Included under this category are the Groups accounts payable and other current liabilities (excluding payable to government agencies).
the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or recognizing gains or losses on a different basis; or
Classification of Financial Instruments Between Liability and Equity A financial instrument is classified as liability if it provides for a contractual obligation to: deliver cash or another financial asset to another entity; or exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Group; or satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares.
increases or decreases by adjusting the allowance account. If a future write-off is later recovered, the recovery is recognized in the consolidated statements of comprehensive income. AFS Investments. The Group assesses at each reporting period whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as AFS investments, an objective evidence of impairment would include a significant or prolonged decline in the fair value of the investments below its cost. Significant is evaluated against the original cost of the investment and prolonged against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss, which is measured as the difference between the acquisition cost and the current value, less any impairment loss on that financial asset previously recognized in the profit or loss, is removed from other comprehensive income and recognized in the profit or loss. Impairment losses on equity are not reversed through the profit or loss; increases in fair value after impairment are recognized directly in other comprehensive income. In the case of debt instruments classified as AFS investments, impairment is assessed based on the same criteria as financial assets carried at amortized cost. Future interest income is based on the reduced carrying amount of the asset and is accrued based on the rate of interest used to discount future cash flows for the purpose of measuring impairment loss. Such accrual is recorded as part of Interest income account in the consolidated statements of comprehensive income. If, in subsequent year, the fair value of a debt instrument increased and the increase can be objectively related to an event occurring after the impairment loss was recognized in consolidated statements of comprehensive income, the impairment loss is reversed through the statements of comprehensive income. Derecognition of Financial Assets and Liabilities Financial Asset. A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: the rights to receive cash flows from the asset have expired; the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; or the Group has transferred its rights to receive cash flows from the asset and either: (a) has transferred substantially all the risks and rewards of the asset; or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the Group does not have an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation, the obligation meets the definition of a financial liability. Offsetting of Financial Instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheets if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, where the related assets and liabilities are presented gross in the consolidated balance sheets. Impairment of Financial Assets The Group assesses at each reporting date whether a financial asset or a group of financial assets is impaired. A financial asset or a group of financial asset is deemed to be impaired, if and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or a group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial Assets Carried at Amortized Cost. The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in the collective assessment of impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the impaired asset is reduced through the use of an allowance account. The amount of the loss is charged to the consolidated statements of comprehensive income. Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset. Loans and receivables together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral, if any, has been realized or has been transferred to the Group. If, in a subsequent period, the amount of the impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss
When the Group has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Groups continuing involvement in the asset. Financial Liability. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or has expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability and the difference in the respective carrying amounts is recognized in the consolidated statements of comprehensive income. Property and Equipment Property and equipment, except Land, is stated at cost less accumulated depreciation and any impairment in value. The cost of the Land, which is represented by shares in the Condominium Corporation donated to
the Exchange, is valued at the fair value of the land at the date of donation. Land is subsequently carried at cost less any impairment in value. The initial cost of property and equipment comprises its purchase price and any directly attributable costs in bringing the asset to its working condition and location for its intended use. Expenditures incurred after the property and equipment have been put into operation, such as repairs and maintenance, are charged against current operations. Depreciation is calculated using the straight-line method over the following estimated useful life of the depreciable assets: Buildings Building improvements Transportation equipment Trading system equipment Computer hardware and peripherals Office furniture, fixtures and communication equipment 25 10 5 3 to 7 3 to 5 2 to 5 years years years years years years
After application of the equity method, the Group determines whether it is necessary to recognize an additional impairment loss on the Groups investment in the associate. The Group determines at each balance sheet date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the consolidated statements of comprehensive income. Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amounts of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in the profit or loss. Impairment of Nonfinancial Assets The carrying values of property and equipment, computer software, and investment in an associate are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists, and if the carrying value exceeds the estimated recoverable amount, the assets are written down to their recoverable amounts. The recoverable amount of the asset is the greater of fair value less costs to sell or value in use. The fair value less costs to sell is the amount obtainable from the sale of an asset in an arms-length transaction between knowledgeable, willing parties, less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses are recognized in the profit or loss in those expense categories consistent with the function of the impaired asset. An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment loss may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation and amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the profit or loss. After such a reversal, the depreciation or amortization charge is adjusted in future periods to allocate the assets revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Deferred Fees Deferred fees represent listing fees, listing maintenance fees and data feed fees which are collected but not yet earned as at balance sheet date. This account is reversed and recognized as revenue when services are rendered. Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Group has concluded that it is acting as principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognized: Listing Fees. Listing fees for initial public offering are recognized upon listing of an applicant. The annual listing fees are recognized on an accrual basis based on the listing agreement. The additional listing fees are recognized upon the listing of new securities issued by an applicant.
The residual values, useful lives and methods of depreciation are reviewed at each financial year-end, and adjusted prospectively, if appropriate. Fully depreciated assets are retained in the accounts until they are no longer in use and no further depreciation is credited or charged to current operations. An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset, calculated as the difference between the net disposal proceeds and the carrying amount of the asset, is included in the profit or loss in the year the asset is derecognized. Computer Software Costs associated with developing or maintaining computer software programs are recognized as expense when incurred. Costs that are directly associated with identifiable and unique software controlled by the Group and will generate economic benefits exceeding costs beyond one year, are recognized as intangible assets. Computer software development costs recognized as assets are amortized using the straight-line method over their estimated useful life, but not exceeding a period of seven (7) years. Investment in an Associate The Groups investment in an associate is accounted for under the equity method of accounting. An associate is an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture. Under the equity method, an investment in an associate is carried in the consolidated balance sheets at cost plus post-acquisition changes in the Groups share in net assets of the associate. Goodwill relating to an associate is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment. The profit or loss reflects the share in the results of operations of the associate. Where there has been a change recognized directly in the equity of the associate, the Group recognizes its share in any changes and discloses this, when applicable, in the consolidated statements of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate. The financial statements of the associate are prepared for the same reporting period as the Group.
Listing Maintenance, Processing, Service Fees, Trading-related and Regulatory Fees. Revenue is recognized when the related services are rendered. Other Revenues. Revenue is recognized when the services are rendered or when penalties or fines are charged. This account mainly consists of trading and listing related fines and penalties for late payment, late submission of requirements, noncompliance and nondisclosure of listed companies. Interest Income. Revenue is recognized as the interest accrues, taking into account the effective yield of the asset. Dividend Income. Dividend income is recognized when the Groups right to receive the dividend payment is established. Retirement Cost The Parent Company has a funded noncontributory defined benefit retirement plan, while SCCP has an unfunded noncontributory defined benefit retirement plan, administered by trustees, covering their permanent employees. The Parent Company and SCCPs retirement cost is actuarially determined using the projected unit credit method. The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit actuarial valuation method. This method reflects service rendered by employees to the date of valuation and incorporates assumptions concerning employees projected salaries. Pension cost includes current service cost, interest cost, expected return on plan assets, amortization of unrecognized past service costs, recognition of actuarial gains or losses and effect of any curtailments or settlements. Past service cost is amortized over a period until the benefits become vested. The portion of the actuarial gains and losses is recognized when it exceeds the corridor (10% of the greater of the present value of the defined benefit obligation or fair value of the plan assets) at the previous reporting date, divided by the expected average remaining working lives of active plan members. The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not recognized, reduced by past service cost not yet recognized and the fair value of plan assets, out of which the obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognized net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan. If the asset is measured at the aggregate of cumulative unrecognized net actuarial losses and past service cost, and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan, net actuarial losses of the current period and past service cost of the current period are recognized immediately to the extent that they exceed any reduction in the present value of those economic benefits. If there is no change or if there is an increase in the present value of the economic benefits, the entire net actuarial losses of the current period and past service cost of the current period are recognized immediately. Similarly, net actuarial gains of the current period after the deduction of past service cost of the current period exceeding any increase in the present value of the economic benefits stated above are recognized immediately if the asset is measured at the aggregate of cumulative unrecognized net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan. If there is no change or if there is a decrease in the present value of the economic benefits, the entire net actuarial gains of the current period after the deduction of past service cost of the current period are recognized immediately.
Income Taxes Current Tax. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at balance sheet date. Deferred Tax. Deferred tax is provided, using the balance sheet liability method, on all temporary differences at balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate income tax (RCIT) and unused net operating loss carryover (NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and carryforward of unused tax credits and unused NOLCO can be utilized. Deferred tax liabilities are not provided on nontaxable temporary differences associated with investment in subsidiaries. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured at the tax rate applicable to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at balance sheet date. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and deferred taxes related to the same taxable entity and the same taxation authority. Value-added Tax (VAT). Revenue, expenses and assets are recognized, net of the amount of VAT. The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of Other current assets or Accounts payable and other current liabilities accounts in the balance sheets. Employee Stock Purchase Plan All regular employees in good standing are granted options to purchase shares, subject to restrictions, terms and conditions provided in the Employee Stock Purchase Plan (ESPP). The cost of equity-settled transactions is measured by reference to the fair value at the date on which they are granted. The fair value is determined using a quoted market price at the time of payment. The cost of equity-settled transactions is recognized with a corresponding increase in the equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (vesting date). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Groups best estimate of the number of equity instruments that will ultimately vest. The amount reflected in the profit or loss represents the movement in cumulative expense recognized as at the beginning and end of the period. No expense is recognized for awards that do not ultimately vest.
Foreign Currency-Denominated Transactions Transactions in foreign currencies are recorded using the exchange rate at the date of the transactions. Foreign exchange gains or losses arising from foreign currency-denominated transactions and revaluation adjustments of foreign currency-denominated assets and liabilities are credited to or charged against current operations. Monetary assets and liabilities denominated in foreign currencies are translated using the closing rate prevailing at balance sheet date. 3. Capital Stock Capital stock is measured at par value for all shares issued. Incremental costs incurred directly attributable to the issuance of new shares are shown in stockholders equity as a deduction from proceeds, net of tax. Proceeds and/or fair value of considerations received in excess of par value, if any, are recognized as additional paid-in capital stock. Treasury Shares The Parent Companys own equity instruments which are acquired (treasury shares) are deducted from equity and accounted for at cost. No gain or loss is recognized in the consolidated statement of comprehensive income on the purchase, sale, issue or cancellation of the Parent Companys own equity instruments. Dividends on Common Shares Dividends on common shares are recognized as a liability and deducted from equity when approved by the shareholders of the Parent Company. Dividends for the year that are approved after the balance sheet date are dealt with as an event after the reporting period. Earnings Per Share (EPS) Basic EPS is calculated by dividing the net income for the year by the weighted average number of shares outstanding during the year. Diluted EPS is computed by dividing net income by the weighted average number of shares outstanding during the year, adjusted for the effects of dilutive stock options. Stocks under ESPP are deemed to have been converted into shares on the date when granted. Operating Segments For purposes of segment reporting, the Group does not have other reportable segments. Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is probable that an outflow of assets embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as interest expense. Where the Group expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the receipt of the reimbursement is virtually certain. Contingencies Contingent liabilities are not recognized in the consolidated financial statements. They are disclosed in the notes to consolidated financial statements unless the possibility of an outflow of assets embodying economic benefits is remote. Contingent assets are not recognized in the consolidated financial statements but are disclosed in the notes to consolidated financial statements when an inflow of economic benefits is probable.
Events after the Reporting Date Post-year-end events that provide additional information about the Groups financial position at the end of the reporting date (adjusting events) are reflected in the consolidated financial statements. Post-year-end events that are not adjusting events, are disclosed in the notes to the consolidated financial statements when material.sss Significant Accounting Judgments, Estimates and Assumptions Judgments In the process of applying the Groups accounting policies, management has made the following judgments, apart from those involving estimates and assumptions, which have the most significant effect on the amounts recognized in the consolidated financial statements. Fair Values of Financial Assets and Liabilities. The Group carries certain financial assets at fair value. Fair value determinations for financial assets and liabilities are based generally on listed or quoted market prices. If prices are not readily determinable or if liquidating the positions is reasonably expected to affect market prices, fair value is based on managements estimate of amounts that could be realized under current market conditions, assuming an orderly liquidation over a reasonable period of time. Functional Currency. The functional currency of the Group is the currency of the primary economic environment in which the Group operates. It is the currency that mainly influences the revenue from and cost of rendering services. Based on the economic substance of the relevant underlying circumstances, the functional and presentation currency of the Group is the Philippine peso. Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. Impairment of AFS Investments. The Group treats AFS equity investments as impaired when there has been a significant or prolonged decline in the fair value below its cost or where other objective evidence of impairment exists. The determination of what is significant or prolonged requires judgment. The Group treats significant generally as 20% or more and prolonged as greater than the period of six months. In addition, the Group evaluates other factors, including normal volatility in share price for quoted equities and the future cash flows and the discount factors for unquoted equities. As at December 31, 2012 and 2011, allowance for impairment losses on AFS equity investments amounted to =2.9 P million. The carrying value of AFS equity investments amounted to =327.8 P million and =209.7 P million as at December 31, 2012 and 2011, respectively (see Note 8). Impairment of Receivables. The Group annually reviews its receivables that are individually significant to assess impairment. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, it collectively assesses them for impairment. In determining whether an impairment loss should be recorded in the consolidated statements of comprehensive income, the Group makes judgment as to whether there is any observable data indicating that there is a measurable decrease in the estimated future cash flows from the receivables. This evidence may include observable data indicating that there has been an adverse change in the payment status of borrowers.
As at December 31, 2012 and 2011, allowance for impairment losses on receivables amounted to =2.6 P million. As at December 31, 2012 and 2011, the carrying values of receivables amounted to =87.1 P million and =72.4 P million, respectively (see Note 9). Impairment of Investment in an Associate. The Group assesses impairment on its investments in an associate whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the Group considers important which could trigger an impairment review on its investments in subsidiaries and associate include the following: Deteriorating or poor financial condition; Recurring net losses; and Significant changes with an adverse effect on the technological, market, economic, or legal environment in which the associate operates have taken place during the period, or will take place in the near future.
As at December 31, 2012 and 2011, the Group recognized deferred tax asset amounting to =10.9 P million and =13.6 P million, respectively. Unrecognized deferred tax asset amounted to =9.9 P million and =10.7 P million as at December 31, 2012 and 2011 (see Note 22). Present Value of Defined Benefit Obligation. The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost for pensions include, among others, discount rate, expected rate of return on plan assets and rate of salary increase. Actual results that differ from the Groups assumptions are accumulated and amortized over future periods and therefore, generally affect the recognized expense and recorded obligation in such future periods. The assumption of the expected return on plan assets is determined on a uniform basis, taking into consideration the long-term historical returns, asset allocation and future estimates of long-term investment returns. The Group determines the appropriate discount rate at the end of each year. It is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. Other key assumptions for pension obligations are based in part on current market conditions. While it is believed that the Groups assumptions are reasonable and appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the Groups pension and other pension obligations. As at December 31, 2012 and 2011, the present value of the defined benefit obligation amounted to =87.3 P million and =93.2 P million, respectively, for the Parent Company and =13.3 P million and =10.8 P million, respectively, for SCCP (see Note 23). While the net cumulative unrecognized actuarial losses as at December 31, 2012 and 2011, amounted to =12.1 P million and =43.5 P million, respectively, for the Parent Company and =3.8 P million and =3.6 P million, respectively for SCCP. 4. Financial Risk Management Objectives and Policies The Groups principal financial instruments consist of cash and cash equivalents, financial assets at FVPL and AFS investments. The main purpose of these financial instruments is to raise finances for the Groups operations. The Group has other financial assets or liabilities such as receivables and accounts payable and other current liabilities which arise directly from its operations. It is the Groups policy not to directly engage in the trading of financial instruments. The main risks arising from the Groups financial instruments are liquidity risk, credit risk, interest rate risk and foreign currency risk. The Parent Companys BOD, management and the Corporate Governance Office review and agree on the policies of managing each of these risk as summarized below. Liquidity Risk Liquidity risk or funding risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may also result from the inability to sell financial assets quickly at their fair values. The Group seeks to manage its liquidity profile to be able to service its maturing liabilities and to finance capital requirements. The Group maintains a level of cash and cash equivalents deemed sufficient to finance operations. As part of its liquidity risk management, the Group regularly evaluates its projected and actual cash flows.
The carrying value of the investment in an associate amounted to =211.5 P million and =172.7 P million as at December 31, 2012 and 2011, respectively (see Note 11). Impairment of Other Nonfinancial Assets. The Group assesses impairment on its other nonfinancial assets (e.g., property and equipment, computer software) whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Among others, the factors that the Group considers important which could trigger an impairment review on its nonfinancial assets include the following: Significant underperformance relative to expected historical or projected future operating results; Significant changes in the manner of use of the acquired assets or the strategy for overall business; and Significant negative industry or economic trends.
An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is determined based on the assets value in use computation which considers the present value of estimated future cash flows expected to be generated from the continued use of the asset. The Group is required to make estimates and assumptions that can materially affect the carrying amount of the asset being assessed. As at December 31, 2012 and 2011, the aggregate carrying value of property and equipment and computer software amounted to =519.8 P million and =520.3 P million, respectively (see Notes 10 and 12). Estimation of Useful Lives of Property and Equipment and Computer Software. The Group estimated the useful lives of its property and equipment and computer software based on the period over which the assets are expected to be available for use. The Group reviews annually the estimated useful lives based on factors that include asset utilization, internal technical evaluation, technological changes, and anticipated use of the assets. A reduction in the estimated useful lives of property and equipment and computer software would increase the recorded depreciation and amortization expense and decrease the related assets. Recognition of Deferred Tax Assets. Deferred tax assets are recognized for all deductible temporary difference to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. Significant management judgment is required to determine the amount of deferred income tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
To meet the requirement for liquidity, adequate cash flow is provided for administrative/operating expenditures and capital expenses based on projected funding requirements. All excess funds are invested in an organized investment mix of short-term and long-term investments to achieve maximum returns. The tables below summarize the maturity profile of the Groups financial assets held for liquidity purposes and financial liabilities based on remaining contractual undiscounted payments. As at December 31, 2012 More than No Maturity 12 Years 2 Years Date
Within a Year Financial Assets Loans and receivables: Cash and cash equivalents = P 1,041,644,459 Receivables: Receivables from: Trading participants 56,494,988 Listed companies 4,353,073 Data vendors 4,686,260 Accrued interest receivable 3,149,142 Advances to officers and employees 4,688,196 Others 1,674,084 Other noncurrent assets - deposits in banks Financial assets at FVPL 207,881,747 AFS investments: Government debt securities: Short-term 42,342,741 Long-term Corporate bonds Equity securities = P 1,366,914,690 Financial Liabilities Other financial liabilities: Due to SEC = P 76,077,971 Trade payables 41,130,159 Accrued expenses 27,966,242 Others 5,412,860 = P 150,587,232
As at December 31, 2011 More than 12 Years 2 Years = P = P = P = P = P 326,961 135,154,591 31,716,429 = P 167,197,981 = P = P
No Maturity Date
Total
= P = P 1,041,644,459 56,494,988 4,353,073 4,686,260 3,149,142 4,688,196 1,674,084 326,961 207,881,747
Within a Year Financial Assets Loans and receivables: Cash and cash equivalents = P 1,051,355,197 Receivables: Receivables from: 62,737,616 Trading participants Listed companies 7,380,176 Data vendors 10,363,355 Accrued interest receivable 2,369,199 Advances to officers and employees 6,627,588 Others 215,610 Other noncurrent assets - deposits in banks Financial assets at FVPL 274,585,220 AFS investments: Government debt securities: Long-term Corporate bonds Equity securities = P 1,415,633,961 Financial Liabilities Other financial liabilities: Due to SEC Trade payables Accrued expenses Others
Total
= P = P
= P 331,824 277,647,291 50,000,000 = P 327,979,115
= P = P 1,051,355,197 62,737,616 7,380,176 10,363,355 2,369,199 6,627,588 215,610 331,824 274,585,220
42,342,741 135,154,591 31,716,429 3,414,000 3,414,000 = P 3,414,000 = P 1,537,526,671 = P = P = P 76,077,971 41,130,159 27,966,242 5,412,860 = P 150,587,232
277,647,291 50,000,000 3,078,000 3,078,000 = P 3,078,000 = P 1,746,691,076
= P 82,398,201 37,862,248 37,782,768 4,184,802 = P 162,228,019
= P = P
= P = P
= P = P
= P 82,398,201 37,862,248 37,782,768 4,184,802 = P 162,228,019
Credit Risk Credit risk refers to the potential loss arising from failure by the Groups counterparties to fulfill their contractual obligations, as and when they fall due. The Groups credit risk exposure arises mainly from receivables from trading participants on clearing related services for securities transactions, membership fees and other fees, receivable from listed companies on listing maintenance fees and receivable from market data vendors for data feed charges. To minimize credit risk, the Group monitors the financial health of trading participants and takes note of participants with potential default. The credit risk of the Groups other financial assets, which comprise cash and cash equivalents and AFS investments, arises from default of the counterparty with a maximum exposure equal to their carrying amounts of these instruments. The fair values of these financial instruments are disclosed in Note 5.
The tables below show the aging analysis of the Companys financial assets as at December 31, 2012 and 2011:
2012 Past Due but not Impaired Neither Past Due nor Impaired Financial assets Loans and receivables: Cash and cash equivalents* = P 1,051,272,207 Receivables: Receivables from: Trading participants 62,241,949 Listed companies 218,705 Data vendors 7,452,340 Accrued interest receivable 2,369,199 Advances to officers and employees 6,627,588 Others 181,890 Other noncurrent assets deposits in banks 331,824 Financial assets at FVPL 274,585,220 AFS investments: Government debt securities: Long-term 277,647,291 Corporate bonds 50,000,000 200,000 Equity securities = P 1,733,128,213
*Excluding cash on hand amounting to = P 0.08 million.
2011 Past Due but not Impaired Neither Past Due nor Impaired 30 to 60 Days 60 to 120 Days 120 to 180 Days Over 180 Days but Less than 360 Days Past Due and Impaired
30 to 60 Days 60 to 120 Days
120 to 180 Days
Over 180 Days but Less than 360 Days
Past Due and Impaired
Total
Total
= P
= P
= P
= P
= P = P 1,051,272,207
349,440 2,011,376 6,720
28,000 893,938
950,000
43,559 3,709,193 5,701
102,668 2,474,278 27,000
62,737,616 7,380,176 10,363,355 2,369,199 6,627,588 215,610 331,824 274,585,220
= P 2,367,536
= P 921,938
= P 950,000
= P 3,758,453
277,647,291 50,000,000 2,878,000 3,078,000 = P 5,481,946 = P 1,746,608,086
Financial assets Loans and receivables: Cash and cash equivalents* = P 1,041,515,911 Receivables: Receivables from: Trading participants 56,119,529 Listed companies 575,862 Data vendors 4,660,232 Accrued interest receivable 3,149,142 Advances to officers and employees 4,450,196 Others 1,257,468 Other noncurrent assets deposits in banks 326,961 Financial assets at FVPL 207,881,747 AFS investments: Government debt securities: Short-term 42,342,741 Long-term 135,154,591 Corporate bonds 31,716,429 Equity securities 536,000 = P 1,529,686,809
= P
= P
= P
= P
= P = P 1,041,515,911
272,791 98,000 30,000
320,616
98,000 39,000
1,302,933 26,028 42,000
102,668 2,474,278 27,000
= P 56,494,988 4,353,073 4,686,260 3,149,142 4,688,196 1,674,084 326,961 207,881,747
= P 400,791
= P 320,616
= P 137,000
= P 1,370,961
42,342,741 135,154,591 31,716,429 2,878,000 3,414,000 = P 5,481,946 = P 1,537,398,123
The following tables provide information regarding the credit risk exposure of the Group by classifying financial assets according to credit ratings of the counterparties:
2012 Neither Past Due nor Impaired Medium Grade Low Grade = P = P
High Grade Loans and Receivables Cash and cash equivalents* Receivables Receivables from: Trading participants Listed companies Data vendors Accrued interest receivable Other receivables Other assets - deposits in banks Financial Assets at FVPL AFS Investments Government debt securities: Long-term Corporate bonds Equity securities Total Financial Assets = P 1,051,272,207 62,241,949 218,705 7,452,340 2,369,199 12,116,398 331,824 274,585,220 277,647,291 50,000,000 200,000 = P 1,738,435,133
Total
Past Due but not Impaired
Total
= P = P 1,051,272,207 62,241,949 218,705 7,452,340 2,369,199 12,116,398 331,824 274,585,220
= P = P 1,051,272,207 392,999 4,687,193 2,911,015 339,336 62,634,948 4,905,898 10,363,355 2,369,199 12,455,734 331,824 274,585,220
277,647,291 50,000,000 200,000 = P = P 1,738,435,133
277,647,291 50,000,000 200,000 = P 8,330,543 = P 1,746,765,676
2011 Neither Past Due nor Impaired Medium Grade Low Grade = P = P Past Due but not Impaired
High Grade Loans and Receivables Cash and cash equivalents* Receivables Receivables from: Trading participants Listed companies Data vendors Accrued interest receivable Other receivables Other assets - deposits in banks Financial Assets at FVPL AFS Investments Government debt securities: Short-term Long-term Corporate bonds Equity securities Total Financial Assets = P 1,041,515,911 56,119,529 575,862 4,660,232 3,149,142 5,707,664 326,961 207,881,747 42,342,741 135,154,591 31,716,429 536,000 = P 1,529,686,809
Total
Total
Market Risk The Groups market risk (the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in market variables) originates from its holdings of debt and equity securities. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchanges rates and other market changes. Equity Price Risk. Equity price risk is the risk to earnings or capital arising from changes in stock exchange indices. The Groups exposure to equity price risk relates primarily to its quoted AFS financial assets. The Groups policy is to maintain the risk to an acceptable level by monitoring regularly the movement of share prices to determine the impact on its financial position. As at December 31, 2012 and 2011, the Groups exposure to equity price risk is minimal. Fair Value Interest Rate Risk. The Group follows a prudent policy on managing its assets and liabilities so as to ensure that exposure to fluctuations in interest rates are kept within acceptable limits. There are no floating rate financial assets and financial liabilities. Term deposits with banks and debt securities carry fixed rates throughout the period of deposit or placement. The table below sets forth the sensitivity to a reasonable possible change in interest rates with all other variables held constant, of the Groups equity (through the impact on unrealized gain/loss on AFS fixed rate debt securities). The impact on the Groups equity already excludes the impact on transactions affecting the statements of comprehensive income. Effect on Equity 2012 (In Millions) Changes in interest rates: +70 basis points -70 basis points (P =8.8) 8.8 (= P 5.4) 5.6 2011
= P = P 1,041,515,911 56,119,529 575,862 4,660,232 3,149,142 5,707,664 326,961 207,881,747
= P = P 1,041,515,911 272,791 1,302,933 26,028 627,616 56,392,320 1,878,795 4,686,260 3,149,142 6,335,280 326,961 207,881,747
42,342,741 135,154,591 31,716,429 536,000 = P = P 1,529,686,809
42,342,741 135,154,591 31,716,429 536,000 = P 2,229,368 = P 1,531,916,177
The credit quality of the financial assets was determined as follows: Cash and cash equivalents - based on the nature of the counterparty. High grade pertains to cash and cash equivalents deposited or invested in top local banks. Financial assets at FVPL - based on the nature of the counterparty. High grade pertains to investments in fund management account through Investment Management Account deposited or invested in top local banks. AFS investments investments in debt securities are based on the nature of the counterparty. High grade debt securities pertain to bonds and notes issued by the Philippine government, except for dollardenominated government bonds which are considered medium grade due to sovereign and foreign currency risk considerations. Receivables - high grade pertains to receivables with no default in payment by the borrower; medium grade pertains to receivables with up to 3 defaults in payment by the borrower and low grade pertains to receivables with more than 3 defaults in payment by the borrower. The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial instrument. In the selection of investment, capital preservation is the primary consideration of the Group. With this objective, funds are basically invested in government bonds and securities and duly registered with the Registry of Scripless Securities under the name of the Group. For US dollar-denominated placements, the Group maintains a third party custodian bank. The Treasury Manager is responsible for the identification of investments that provide a relatively stable rate of return and submit these identified investments to the Vice President for Finance and Investments Division who endorses it to the Treasurer or President for approval. The Exchange is guided by a BOD approved investment policy guidelines. Any exemption to the set policy is subject to the approval of the BOD. In addition, on a monthly basis, the Treasurer reports the investment portfolio performance and managements performance associated with the investment portfolio to the BOD.
Foreign Currency Risk. Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. The Exchanges exposure to foreign currency risks arise primarily from US dollar transactions, mostly from cash and cash equivalents and investments in debt securities. The Groups policy is to maintain foreign currency exposure within acceptable limits. The Group believes that its profile of foreign currency exposure on its assets and liabilities is within conservative limits. The following table summarizes the exposure to foreign currency exchange risk as at December 31, 2012 and 2011: 2012 In USD Financial assets: Cash and cash equivalents Receivables $776,032 230,746 $1,006,778 In = P = P 31,856,126 9,472,123 = P 41,328,249 In USD $692,963 98,519 $791,482 2011 In = P = P 30,379,498 4,319,073 = P 34,698,571
In translating the foreign currency-denominated monetary assets and liabilities into Philippine Peso amounts, the exchange rate used was =41.05 P to US$1.00 and =43.84 P to US$1.00, the Philippine Peso to U.S. Dollar exchange rate as at December 31, 2012 and 2011, respectively.
The table below indicates the effect of increase or decrease in US dollar exchange rate on income before income tax to which the Group has substantial exposures on its financial assets. The result calculates the effect of a reasonably possible change in the spot rates, when all other variables are held constant. Negative values in the table reflect a potential reduction in income while a positive amount reflects a potential increase. 2012 USD Strengthens/ (Weakens) 5% (5%) Effect on Income Before Tax (in millions) = P 2.1 (2.1) USD Strengthens/ (Weakens) 5% (5%) 2011 Effect on Income Before Tax (in millions) = P 1.7 (1.7)
2012 Carrying Value Financial Liabilities Other financial liabilities: Due to SEC Trade payables Accrued expenses Other payables Fair Value Carrying Value
2011 Fair Value
= P 82,398,201 37,862,248 37,782,768 4,184,802 = P 162,228,019
= P 82,398,201 37,862,248 37,782,768 4,184,802 = P 162,228,019
= P 76,077,971 41,130,159 27,966,242 5,400,921 = P 150,575,293
= P 76,077,971 41,130,159 27,966,242 5,400,921 = P 150,575,293
The methods and assumptions used by the Group in estimating the fair value of the financial instruments are: Cash and Cash Equivalents, Receivables, and Accounts Payable and Other Current Liabilities The carrying amounts approximate the fair values due to the short-term maturities of these financial instruments. Financial Assets at FVPL and AFS Investments Fair values are based on quoted market prices. Fair Value Hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques: Level 1: quoted prices in active markets for identical assets or liabilities; Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and Level 3: techniques which use inputs which have significant effect on the recorded fair value that are not based on observable market data. As at December 31, 2012 and 2011, the Groups financial assets at FVPL and AFS investments, which are measured at fair value, are categorized under level 1 of the fair value hierarchy. During the years ended December 31, 2012 and 2011, there were no transfer between level 1 and level 2 fair value measurements. There are no financial instruments classified under levels 2 and 3. 6. Cash and Cash Equivalents This account consists of:
The increase in = P rate as against US$ rate demonstrates weaker functional currency while the decrease represents stronger Philippine Peso value. There is no other impact on the equity other than those already affecting the consolidated statement of comprehensive income. 5. Fair Value Measurement and Fair Value Hierarchy The table below presents a comparison of the carrying amounts and estimated fair values by category and by class of the Groups financial instruments: 2012 Carrying Value Financial Assets Loans and receivables: Cash and cash equivalents Receivables: Receivables from: Trading participants Listed companies Data vendors Accrued interest receivable Advances to officers and employees Others Other assets - deposits in banks Total Loans and Receivables Financial assets at FVPL AFS investments: Government debt securities: Short-term Long-term Corporate bonds Equity securities Total AFS Investments (Forward) Fair Value Carrying Value 2011 Fair Value
= P 1,051,355,197 62,737,616 7,380,176 10,363,355 2,369,199 6,627,588 215,610 331,824 1,141,380,565 274,585,220 30,805,204 246,842,087 50,000,000 200,000 327,847,291 = P 1,743,813,076
= P 1,051,355,197 62,737,616 7,380,176 10,363,355 2,369,199 6,627,588 215,610 331,824 1,141,380,565 274,585,220 30,805,204 246,842,087 50,000,000 200,000 327,847,291 = P 1,743,813,076
= P 1,041,644,459 56,392,320 1,878,795 4,686,260 3,149,142 4,688,196 1,647,084 326,961 1,114,413,217 207,881,747 42,342,741 135,154,591 31,716,429 536,000 209,749,761 = P 1,532,044,725
= P 1,041,644,459 56,392,320 1,878,795 4,686,260 3,149,142 4,688,196 1,647,084 326,961 1,114,413,217 207,881,747 42,342,741 135,154,591 31,716,429 536,000 209,749,761 1,532,044,725
Cash on hand and in banks Time deposits
2012 = P 78,659,311 972,695,886 = P 1,051,355,197
2011 = P 55,962,131 985,682,328 = P 1,041,644,459
Cash in banks earn interest at the respective bank deposit rates. Time deposits are made for varying periods with original maturity of three months or less from dates of placement and earn interest rates ranging from 1.63% to 3.9%, 4.56% to 4.69% and 3.00% to 4.06% in 2012, 2011 and 2010, respectively.
Interest income earned from cash and cash equivalents amounted to =38.8 P million, =34.2 P million and =10.9 P million in 2012, 2011 and 2010, respectively (see Note 17). 7. Financial Assets at FVPL The Group entered into an investment management agreement with third party banks for the disposition of its investible funds with banks full discretion. The fair value of the investment as at December 31, 2012 and 2011 amounted to =274.6 P million and =207.9 P million, respectively. Mark-to-market gain on financial assets at FVPL amounted to =65.1 P million and =7.4 P million in 2012 and 2011, respectively. 8. Available-for-sale Investments This account consists of: 2012 = P 277,647,291 50,000,000 327,647,291 3,078,000 2,878,000 200,000 327,847,291 = P 327,847,291 2011 = P 42,342,741 135,154,591 31,716,429 166,871,020 3,414,000 2,878,000 536,000 167,407,020 = P 209,749,761
The rollforward analysis of the Groups AFS investments as follows: Balance at beginning of year Acquisitions Maturities Net change in fair value 2012 = P 209,749,761 149,955,537 (40,039,622) 8,181,615 = P 327,847,291 2011 = P 964,626,960 82,523,235 (826,243,352) (11,157,082) = P 209,749,761
9.
Receivables This account consists of: 2012 Receivables from: Trading participants (Note 25) Listed companies Data vendors Accrued interest receivable Advances to officers and employees Others Less allowance for impairment losses = P 62,737,616 7,380,176 10,363,355 2,369,199 6,627,588 215,610 89,693,544 2,603,946 = P 87,089,598 2011 = P 56,494,988 4,353,073 4,686,260 3,149,142 4,688,196 1,674,084 75,045,743 2,603,946 = P 72,441,797
Short-term government debt securities Long-term: Government debt securities Corporate bonds Equity securities Less allowance for impairment losses Total long-term available-for-sale investments
Receivables generally have terms of 30 days, except for the receivables from data vendors which are normally collected within 45 days. As at December 31, 2012 and 2011, receivables from trading participants and listed companies with total carrying value of =2.6 P million, which were specifically identified to be impaired, were fully provided with allowance. There are no movements in the allowance for impairment losses during the year. The movements in the allowance for impairment losses in 2011 follow: 2011 Listed Companies = P 4,715,918 480,000 (2,721,640) = P 2,474,278
The short-term government debt securities earn annual interest rates ranging from 6.50%, 4.25% to 11.00% and 4.07% to 11.00% in 2012, 2011 and 2010, respectively. Short-term government debt securities as of December 31, 2011 matured in February and April 2012. Peso-denominated long-term government debt securities earn annual interest rates ranging from 5.38% to 6.00%, 5.75% to 6.00% and 5.25% to 11.00% in 2012, 2011 and 2010, respectively, while US dollardenominated corporate bonds earn annual interest rates ranging from 8.25% to 8.38% in 2010. Government debt securities as at December 31, 2012 and December 31, 2011 will mature in 2015-2027 and 2015-2021, respectively. Corporate bonds as at December 31, 2012 and December 31, 2011 will mature in 2014-2019 and 2014-2017, respectively. Interest income earned from AFS investments amounted to =16.0 P million, =25.6 P million and =67.7 P million in 2012, 2011 and 2010, respectively (see Note 17). As at December 31, 2012 and 2011, movements of net unrealized gain on AFS investments are as follows: 2012 = P 5,062,059 8,181,615 8,181,615 = P 13,243,674 2011 = P 16,219,141 (11,157,082) (11,157,082) = P 5,062,059
Balance at beginning of year Provision for impairment loss Recoveries Balance at end of year
Trading Participants = P 67,788 34,880 = P 102,668
Others = P 27,000 = P 27,000
Total = P 4,810,706 514,880 (2,721,640) = P 2,603,946
Balance at beginning of year Net unrealized gains (losses) on AFS investments for the year Net change in fair value Balance at end of year
10. Property and Equipment The composition of and movements in property and equipment are as follows:
December 31, 2012 Computer Hardware and Peripherals Office Furniture, Fixtures, Communication Equipment Transportation and Others Equipment = P 79,455,835 6,113,102 (3,555,624) 82,013,313
Condominium for the purpose of holding title to the parcel of land where the Exchange Plaza is located and other common areas of the condominium. The PSEs share in the parcel of land where the condominium is located and the common areas of the condominium is classified under Land. The donation is divided into two tranches consisting of 120 and 176 shares, each valued at =63,117,630 P and =92,572,524, P respectively. Such shares were received by the Exchange on December 29, 1994 for the 120 shares and on January 15, 1995 for the 176 shares and were valued at fair market value of the land at the time of donation. Trading System Equipment. This represents software and hardware costs. Software costs cannot be separately classified as an intangible asset as this is an integral part of the related hardware. 11. Investment in an Associate This account represents the 20.98% interest in Philippine Dealing System (PDS) Holdings: 2012 = P 137,050,657 56,184,307 38,773,027 94,957,334 (20,489,418) = P 211,518,573 2011 = P 137,050,657 26,120,245 30,064,062 56,184,307 (20,489,418) = P 172,745,546
Land Cost At beginning of year Additions Disposals At end of year Accumulated Depreciation At beginning of year Depreciation Disposals At end of year Net Book Value
Buildings
Trading System Building Equipment Improvements
Total
= P 155,690,154 = P 224,895,034 = P 447,465,365 = P 154,940,111 = P 186,459,925 4,703,739 45,408,286 (2,295,280) (8,485,714) 155,690,154 224,895,034 447,465,365 157,348,570 223,382,497
= P 12,600,085 = P 1,261,506,509 5,666,071 61,891,198 (1,788,300) (16,124,918) 16,477,856 1,307,272,789
= P = P 152,977,457 = P 234,844,386 = P 129,975,505 = P 154,033,163 8,995,801 38,081,366 6,821,668 15,959,422 (3,809) (4,609,663) 161,973,258 272,925,752 136,793,364 165,382,922 = P 155,690,154 = P 62,921,776 = P 174,539,613 = P 20,555,206 = P 57,999,575 December 31, 2011
= P 64,117,699 4,859,020 (3,457,594) 65,519,125 = P 16,494,188
= P 5,449,574 = P 741,397,784 2,610,452 77,327,729 (1,754,177) (9,825,243) 6,295,849 808,890,270 = P 10,182,007 = P 498,382,519
Acquisition cost Accumulated equity in net income of an associate: Balance at beginning of year Share in net income of investee Balance at end of year Impairment losses at beginning and end of year
Land Cost At beginning of year Additions Disposals At end of year Accumulated Depreciation At beginning of year Depreciation Disposals At end of year Net Book Value
Buildings
Trading System Equipment
Building Improvements
Office Furniture, Fixtures, Computer Hardware Communication Equipment and Peripherals and Others = P 77,123,568 6,457,746 (4,125,479) 79,455,835 62,757,533 4,127,657 (2,767,491) 64,117,699 = P 15,338,136
Transportation Equipment
Total
= P 155,690,154 = P 224,895,034 = P 447,398,401 = P 151,269,826 = P 170,766,432 66,964 6,902,981 20,744,076 (3,232,696) (5,050,583) 155,690,154 224,895,034 447,465,365 154,940,111 186,459,925 = P 155,690,154 143,981,656 195,554,242 8,995,801 39,290,144 152,977,457 234,844,386 = P 71,917,577 = P 212,620,979 123,380,386 6,595,119 129,975,505 = P 24,964,606 140,206,805 13,961,610 (135,252) 154,033,163 = P 32,426,762
= P 14,411,995 = P 1,241,555,410 3,157,321 37,329,088 (4,969,231) (17,377,989) 12,600,085 1,261,506,509 5,357,991 671,238,613 2,146,944 75,117,275 (2,055,361) (4,958,104) 5,449,574 741,397,784 = P 7,150,511 = P 520,108,725
Summarized financial information of PDS Holdings is as follows (amounts in millions): 2012 Total assets = P 1,138.6 129.0 Total liabilities 749.6 Revenue Net income 184.8 12. Other Noncurrent Assets This account consists of: 2012 = P 21,402,479 10,480,181 331,824 1,152,461 = P 33,366,945
2011 = P 915.1 90.1 601.3 143.3
The cost of fully depreciated assets still in use by the Group amounted to =308.3 P million and =307.7 P million as at December 31, 2012 and 2011, respectively. The Group has no idle property and equipment as at December 31, 2012 and 2011. Buildings. These represent properties donated by Philippine Realty and Holdings Corporation (PRHC) and Ayala Land, Inc. (ALI) and a condominium unit at the Philippine Stock Exchange Centre in Pasig City. Land. This represents shares in the condominium corporation donated to the Exchange. ALI established a stock condominium corporation with the corporate name of Tower One and PSE Exchange Plaza
Computer software - net Other investments (Note 15) Deposits in banks Others
2011 = P 153,858 10,480,181 326,961 64,035 = P 11,025,035
Computer Software. The movements in this account follows: 2012 Cost: Balance at beginning of year Additions Balance at end of year Accumulated amortization: Balance at beginning of year Additions (Note 18) Balance at end of year Net book value = P 36,547,566 24,637,095 61,184,661 36,393,708 3,388,474 39,782,182 = P 21,402,479 = P 36,547,566 36,547,566 31,285,215 5,108,493 36,393,708 = P 153,858 2011
In October 2010, the Parents BOD authorized the termination of the letter of intent with New York Stock Exchange and to proceed with the Asean Linkage using a different model. The Parents share in the Asean Linkage platform was initially recorded as computer software and upon termination, this was reported as a loss on asset write-off amounting to =13.7 P million (see Note 19). As at December 31, 2010, no depreciation expense was recorded since the asset was never used. Other Investments. These pertain to the donation of Fort Bonifacio Development Corporation (FBDC) in favor of the Parent Company of 10,480,181 shares of Crescent West Development Corporation (CWDC) (see Note 15). Deposits in Banks. These represent the balance of =0.3 P million in deposits in bank posted by the Parent Company in favor of National Labor Relations Commission (NLRC) in connection with pending labor cases which are still on appeal. Under the Rules of NLRC, the amount may not be withdrawn by the Parent Company until final disposition of the cases. 13. Accounts Payable and Other Current Liabilities This account consists of: 2012 = P 82,398,201 37,862,248 13,045,469 9,463,775 4,460,477 4,272,184 3,791,177 2,635,230 114,456 13,799,949 4,184,802 = P 176,027,968 2011 = P 76,077,971 41,130,159 12,768,090 3,768,390 4,587,850 2,379,121 3,270,303 219,961 790,027 182,500 8,960,391 5,412,860 = P 159,547,623
15. Donated Capital As at December 31, 2012 and 2011, this account consists of donations from: ALI (Note 10) PRHC (Note 10) FBDC (Note 12) United States Agency International Development = P 235,690,154 139,542,000 10,480,181 1,925,250 = P 387,637,585
On November 12, 2002, the Parent Company and FBDC executed a Definitive Agreement with the following salient terms and conditions: (i) the Parent Company agrees to relocate its headquarters, majority of its management offices and its unified trading operations in equity securities for the National Capital Region (NCR) to the Bonifacio Global City; (ii) CWDC shall be the corporate vehicle to which FBDC shall contribute the land as additional capital and the shares of which shall eventually be donated to the Parent Company; and (iii) the FBDC and the Parent Company agree to develop the land and construct the building that will house the Parent Companys headquarters, majority of its management offices and its unified trading operations in equity securities for the NCR. Based on such agreement, all outstanding shares of stocks of CWDC shall be donated by FBDC to the Parent Company on the following dates: Date of Donation January 7, 2005 January 7, 2006 January 7, 2007 January 7, 2008 January 7, 2009 January 7, 2010 January 7, 2011 %/Number of Shares to be Donated 14.32% or 5,247,419 shares 14.28% or 5,232,762 shares 14.28% or 5,232,762 shares 14.28% or 5,232,762 shares 14.28% or 5,232,762 shares 14.28% or 5,232,762 shares 14.28% or 5,232,762 shares
Due to SEC Trade payables Accrued expenses: Compensation and other related staff costs Repairs and maintenance Other accrued expenses Professional fees Occupancy costs Telecommunication Travel and transportation Penalties Payable to government agencies Others
Following the Definitive Agreement, on January 7, 2006 and 2005, FBDC executed a Deed of Conditional Donation in favor of the Parent Company, which covers the transfer of 5,232,762 shares and 5,247,419 shares of CWDC, respectively, for =10.5 P million. Such shares received were classified as Other noncurrent assets (see Note 12). In June 2007, the donation of all remaining CWDC shares was deferred pending negotiations among the Parent Company, FBDC and ALI for the joint development, pursuant to a Memorandum of Understanding dated April 26, 2007, of an iconic office building in Bonifacio Global City for the relocation of the Parent Companys headquarters, majority of its management offices and unified trading operations in equities securities for the NCR to the Bonifacio Global City. As at December 31, 2012, negotiations among the Parent Company, FBDC and ALI are still ongoing.
Due to SEC represents the amount payable for license fees to operate an exchange imposed under Section 35 of the SRC entitled Additional Fees of Exchanges, which are subsequently billed and collected from active trading participants. Trade payables, accrued expenses, payable to government agencies and others are noninterest-bearing and are normally settled within the next financial year. 14. Deferred Fees and Others This account consists of: 2012 = P 16,530,468 8,671,496 3,397,822 3,104,263 1,715,644 = P 33,419,693 2011 = P 10,534,202 7,553,813 1,525,001 1,865,382 1,843,150 = P 23,321,548
Listing fees Data feed income Fines and penalties Deferred output tax Other fees
16. Equity This account consists of: 2012 Capital stock - = P 1.00 par value Authorized - 97,800,000 shares Issued - 61,258,130 shares in 2012 and 61,208,733 shares in 2011 Additional paid-in capital Treasury stock (200,012 shares in 2012 and 2011) 2011
Ownership in the Exchange The SRC provides that no industry or business group may beneficially own or control, directly or indirectly, more than 20% of the voting rights of the Exchange. On August 13, 2007, the SEC imposed on the Exchange a penalty of =101,100 P plus a daily fine of =100 P for every day of delay of compliance because the total trading participant ownership in the Exchange exceeds the allowable limit. Starting March 2009, the daily fine for every day of delay of compliance is =500. P The Exchange is studying the alternative courses of action in order to comply with the SRC. Capital Management The Groups objectives when managing capital are (a) to safeguard the Groups ability to continue as a going concern, so that it continues to provide returns for shareholders and benefits for other stakeholders; (b) to support the Groups stability and growth; and (c) to provide capital for the purpose of strengthening the Groups risk management capability. The Group considers all the components of its total equity as capital. The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. No changes were made in the objectives, policies or processes as at December 31, 2012 and 2011. The Group adopts a practice of providing shareholders with regular dividends. 17. Interest Income This account consists of interest income from: 2017 = P 38,285,189 16,003,310 482,421 = P 54,770,920 2011 = P 33,251,480 25,571,279 938,960 = P 59,761,719 2010 = P 10,244,544 67,658,893 655,138 34,470 = P 78,593,045
= P 61,258,130 1,038,100,114 (68,000,012) = P 1,031,358,232
= P 61,208,733 1,018,810,564 (68,000,012) = P 1,012,019,285
The following summarizes the information on the Company's registration of securities under the Securities Regulation Code: Authorized Shares 36,800,000 61,000,000 Shares Balance at beginning of year Issuance of stock dividends during the year Issuance of capital stock (Note 28) Balance at end of year 2012 61,208,733 49,397 61,258,130 2011 30,704,370 30,504,363 61,208,733 2012 = P 61,208,733 49,397 = P 61,258,130 No. of Shares Issued 9,200,008 6,077,505 Issue/Offer Price = P 31.16 120.50 Amount 2011 = P 30,704,370 30,504,363 = P 61,208,733
Date of SEC Approval August 8, 2001 January 28, 2004 September 12, 2008
On April 13, 2011, the Parent Companys BOD approved the issuance of the 100% stock dividend declared by the Exchange to stockholders of record as at May 30, 2011. Parent Companys Cash Dividends Dividend Date of Declaration March 14, 2012 March 9, 2011 March 10, 2010 February 25, 2009 Per Share = P 7.00 12.00 10.00 8.00 Total Amount = P 427,061,012 366,052,356 304,550,060 243,178,000 Record Date March 29, 2012 March 24, 2011 March 25, 2010 March 12, 2009 Payment Date April 18, 2012 April 11, 2011 April 21, 2010 March 25, 2009
Time deposits AFS investments Cash in banks Car loan
18. Cost of Services This account consists of: 2012 Compensation and other related staff costs (Note 20) Depreciation (Note 10) Repairs and maintenance Communication Amortization of computer software (Note 12) Office supplies Insurance Others = P 73,676,926 53,574,537 33,261,358 8,431,961 3,388,474 666,348 93,964 3,860,843 = P 176,954,411 2011 = P 69,827,303 52,331,528 30,386,397 9,405,923 5,108,493 648,655 87,157 = P 167,795,456 2010 = P 64,345,064 34,385,066 15,933,361 10,158,731 5,085,741 693,661 125,671 = P 130,727,295
The balance of unappropriated retained earnings includes the accumulated equity in net income of an associate and subsidiaries amounting to =189.0 P million and =150.2 P million as at December 31, 2012 and 2011, respectively. The amount is not available for dividend distribution until such time that the Parent Company receives dividends from the respective associate and subsidiaries As at December 31, 2012 and 2011, the total appropriated retained earnings is =71.0 P million. In August 13, 2008, the Parent Company's BOD appropriated =68.0 P million in connection with its acquisition of treasury shares. In 2007, the Parent Company's BOD appropriated =3.0 P million to cover potential liability cases filed against the Parent Company, its directors and/or its officers (see Note 27).
19. General and Administrative Expenses This account consists of: 2012 Compensation and other related staff costs (Note 20) Occupancy costs (Note 21) Professional fees Depreciation (Note 10) Public relations Membership development Taxes and licenses Office supplies Market development Travel and transportation Repairs and maintenance Foreign exchange loss Insurance Communication Donations and contributions Meetings and conferences Recovery of impairment losses - net (Note 9) Loss on asset write-off Other expenses = P 145,692,787 44,708,795 43,568,019 23,753,192 12,606,406 8,990,373 7,713,557 3,973,655 3,865,126 3,472,150 2,641,171 2,555,313 2,001,390 1,362,555 1,315,000 1,096,083 18,864,181 = P 328,179,753 2011 = P 104,497,867 41,579,481 56,236,423 22,785,747 6,278,268 7,403,478 7,820,350 3,318,840 4,351,725 6,202,745 2,120,810 438,224 2,075,510 2,073,941 1,000,864 1,296,747 (2,206,760) 5,523,282 = P 272,797,542 2010 = P 114,341,836 44,097,971 29,988,040 18,613,281 3,329,581 6,129,895 5,897,397 3,757,482 1,642,992 5,637,096 8,779,059 8,794,848 1,858,290 1,521,648 608,775 902,124 (9,000) 13,692,355 6,884,153 = P 276,467,823
22. Income Tax The provision for income tax consists of: RCIT Final Deferred 2012 = P 165,029,021 12,739,705 486,418 = P 178,255,144 2011 = P 139,802,622 11,722,983 1,704,554 = P 153,230,159 2010 = P 125,002,938 14,976,414 (66,811) = P 139,912,541
As at December 31, 2012 and 2011, the Group did not recognize the deferred tax assets on the following temporary differences since management believes that these deductible temporary differences may not be realized in the future: 2012 Allowance for impairment losses on investment, in an associate and AFS investment Retirement liability Mark-to-market loss on financial assets at FVPL = P 23,367,418 9,524,520 = P 32,891,938 2011 = P 23,367,418 7,212,481 4,924,795 = P 35,504,694
The components of the net deferred tax assets are as follows: 2012 Deferred tax assets: Unamortized past service costs Accrued expenses Allowance for impairment losses Unrealized foreign exchange losses NOLCO Deferred tax liabilities: Retirement asset Net unrealized gains on available-for-sale = P 7,159,831 2,281,692 781,184 670,379 10,893,086 (2,792,696) (1,831,475) (4,624,171) = P 6,268,915 2011 = P 6,746,594 3,436,152 781,184 47,645 2,572,576 13,584,151 (2,299,850) (2,134,788) (4,434,638) = P 9,149,513
20. Compensation and Other Related Staff Costs This account consists of: 2012 = P 132,088,582 20,736,146 66,544,986 = P 219,369,714 2011 = P 127,722,473 16,587,999 30,014,698 = P 174,325,170 2010 = P 110,810,887 10,824,369 57,051,644 = P 178,686,900
Salaries and wages (Note 25) Retirement cost (Notes 23 and 25) Other employee benefits (Note 28)
investments
Other employee benefits include the share-based payment expense amounting to =2.6 P million and =4.4 P million in 2012 and 2010, respectively (see Note 28). There were no expenses related to sharebased payment in 2011. 21. Occupancy Costs This account consists of: Utilities Condominium dues Security and janitorial services 2012 = P 24,943,404 10,523,785 9,241,606 = P 44,708,795 2011 = P 22,398,132 10,518,690 8,662,659 = P 41,579,481 2010 = P 25,325,545 9,821,697 8,950,729 = P 44,097,971
The reconciliation between the statutory tax rates and the Groups effective tax rates on income before income tax is as follows: 2012 Provision for income tax at statutory income tax rate Adjustments for: Interest income subjected to final tax Equity in net income of an associate Change in unrecognized deferred tax assets Nondeductible expenses Effective income tax rate 30.00% (3.63%) (1.45%) 1.80% (4.51%) 22.21% 2011 30.00% (3.51%) (1.61%) 2.61% (0.10%) 27.39% 2010 30.00% (1.54%) (1.43%) 0.06% (1.99%) 25.10%
23. Retirement Plan The Parent Company has a funded noncontributory defined benefit retirement plan, while SCCP has an unfunded noncontributory defined benefit retirement plan covering all their regular employees. The benefits are accumulated based on years of service and compensation per year of credited service. The principal actuarial assumptions used in determining retirement liabilities as at January 1, 2012 and 2011 are shown below: Parent Company 2012 2011 6.11% 6.29% 4.00% 6.00% 10.00% 10.00% SCCP 2012 6.28% 10.00% 2011 6.43% 10.00%
Changes in the present value of the defined benefit obligation are as follows: Parent Company 2012 = P 93,247,257 (26,112,003) 15,259,649 (971,080) 5,865,252 = P 87,289,075 SCCP 2011 = P 69,204,250 13,510,032 11,274,827 (6,451,203) 5,709,351 = P 93,247,257 2012 = P 10,829,810 306,599 1,514,308 696,357 = P 13,347,074 2011 = P 9,163,915 571,642 1,374,521 (1,002,385) 722,117 = P 10,829,810
Balance at beginning of year Actuarial (gains)/losses Current service cost Actual benefits paid Interest cost on benefit obligation Balance at end of year
Discount rate Expected rate of return on assets Future salary increases
The movements in the fair value of plan assets recognized by the Parent Company follow 2012 = P 57,388,509 (971,080) 4,016,186 3,951,110 20,066,927 = P 84,451,652 2011 = P 61,457,726 (6,451,203) 3,493,927 (1,111,941) = P 57,388,509
The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date applicable to the period over which the obligation is to be settled. The latest actuarial valuation studies of the retirement plan of the Parent Company and SCCP were made on December 31, 2012. The retirement expense included under Compensation and other related staff costs in the consolidated statements of comprehensive income are as follows: 2012 = P 16,773,957 6,561,609 (4,016,186) 1,416,766 = P 20,736,146 2011 = P 12,649,348 6,431,468 (3,493,927) 1,001,110 = P 16,587,999 2010 = P 9,212,561 5,653,195 (2,705,002) 553,615 (1,890,000) = P 10,824,369
Balance at beginning of year Actual benefits paid Expected return on plan assets Actuarial gains/(losses) Contributions Balance at end of year
The actual return on the plan assets of the Parent Company amounted to =8.0 P million, =2.4 P million, and =1.6 P million in 2012, 2011 and 2010, respectively. The assets of the Parent Companys retirement Plan are being held by a trustee bank. The investing decisions of the Plan are made by Board of Trustees of the Retirement Plan. The following table presents the carrying amounts and estimated fair values of the assets of the Plan: 2012 Carrying Amount = P 26,316,818 11,502,399 46,028,861 603,574 = P 84,451,652 Fair Value = P 26,316,818 11,502,399 46,028,861 603,574 = P 84,451,652 2011 Carrying Amount = P 19,418,494 614,845 36,837,133 518,037 = P 57,388,509
Current service cost Interest cost Expected return on plan assets Net actuarial loss recognized Reversal of retirement benefits
The Parent Companys retirement asset included in the consolidated balance sheets as at December 31, 2012 and 2011 are as follows: 2012 = P 87,289,075 (84,451,652) 2,837,423 (12,146,411) = P 9,308,988 2011 = P 93,247,257 (57,388,509) 35,858,748 (43,524,916) = P 7,666,168
Present value of the obligation Fair value of plan assets Unrecognized actuarial losses Retirement asset
Cash and cash equivalents Investment in equity securities Investment in government securities, bonds and other debt instruments Others
Fair Value = P 19,418,494 614,845 38,537,126 518,037 = P 57,388,509
The Plans assets and investments consist of the following: Cash and cash equivalents includes regular savings and time deposits. Investment in equity securities consists of listed equity securities. Investments in government securities, consisting of retail treasury bonds that bear interest ranging from 4.89% to 6.25% and have maturities from March 2016 to October 2037; and fixed-income treasury notes that bear interest ranging from August 2017 to August 2037. Investments in debt and other securities consist of long-term corporate bonds, which bear interest ranging from 5.45% and have maturity of November 2019. Other financial assets held by the Plan are primarily accrued interest income on cash deposits and debt securities and dividend receivables.
The net unfunded retirement obligation of SCCP recognized in the consolidated balance sheets as at December 31, 2012 and 2011 are as follows: 2012 = P 13,347,074 (3,822,554) = P 9,524,520 2011 = P 10,829,810 (3,617,329) = P 7,212,481
Present value of the obligation Unrecognized actuarial losses Retirement liability
Amounts for the current and previous years are as follows: 2012 = P 87,289,075 (84,451,652) 2,837,423 (10,553,135) 3,951,110 2011 = P 93,247,257 (57,388,509) 35,858,748 (737,088) (1,111,941) Parent Company 2010 = P 69,204,250 (61,457,726) 7,746,524 (2,570,263) (1,139,466) SCCP 2010 = P 9,163,915 9,163,915 170,224 2009 = P 45,201,713 (38,741,708) 6,460,005 (1,918,317) 100,965 2008 = P 35,623,584 (14,509,085) 21,114,499 19,205,036 (813,601)
Present value of the obligation Fair value of plan assets Deficit Experience adjustment on plan liabilities Experience adjustment on plan assets
The details of transactions with related parties are as follows: Amount/ Volume of Category Year Transactions Outstanding Balance Stockholders Trading participantsRevenues Trading-related fees: Transaction
Terms
Conditions
2012 2011 2010
= P 101,279,075 120,029,889 97,486,442 30,632,267 22,229,243 23,251,314 16,469,264 14,996,700 16,658,219 = P 316,376,987 254,034,164 215,604,239 657,021 843,643 3,622,976
= P 62,737,616 56,494,988 45,008,470
Present value of the obligation Deficit Experience adjustment on plan liabilities 24. Basic/Diluted Earnings Per Share
2012 = P 13,347,074 13,347,074 195,692
2011 = P 10,829,810 10,829,810 (300,777)
2009 = P 7,221,418 7,221,418 157,451
2008 = P 4,097,548 4,097,548 229,566
30 days term, noninterest bearing
Unsecured; with impairment
Block sales
2012 2011 2010 2012 2011 2010 2012 2011 2010 2012 2011 2010
Collectible monthly, non-interest bearing
Basic earnings per share are calculated by dividing the net income for the year by the weighted average number of common shares outstanding as at balance sheet date. The basic and diluted earnings per share are the same as the dilutive effect of potential common shares from share-based payments have no impact. 2012 = P 624,166,134 61,008,721 = P 10.23 2011 = P 406,192,157 61,039,839 = P 6.65 2010 = P 417,497,291 61,123,022* = P 6.83
Subscription
Collectible monthly, non-interest bearing
Service fees
Net income (a) Weighted average number of outstanding common shares (b) Basic/diluted earnings per share (a/b)
*Restated for the effect of the 100% stock dividends declared in 2011.
Other revenues
25. Related Party Transactions Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. Related parties include trading participants that are stockholders of the Group. The Group, in its normal course of business, has transactions with related parties.
The receivable from trading participants included in the balance sheets are net of allowance for impairment losses of =102,668 P in 2012 and 2011. Other revenues include recoveries from printing of data transaction report, penalty on trading floor, cancellation of matched orders, and other fees. Compensation of key management personnel (covering officer positions starting from Assistant Vice President and up) included under Compensation and other related staff costs in the profit or loss as follows: 2012 = P 58,894,859 2,679,528 1,276,703 = P 62,851,090 2011 = P 45,741,163 817,129 = P 46,558,292 2010 = P 39,171,278 6,463,639 701,982 = P 46,336,899
Short-term employee benefits Share-based payments (Note 28) Post-employment pension and medical benefits (Note 23)
Short-term employee benefits include salaries, paid annual leave, vacation and sick leave, profit sharing and bonuses, and non-monetary benefits.
26. Operating Segment The Group has one reportable business segment which is the equity securities market. The equity securities market provides trading, clearing, depository and information services for the equity market. The Group also has one geographical segment and derives all its revenues from domestic operations. The financial information about the sole business segment is presented in the consolidated financial statements. The management monitors the operating results of its business segment for the purpose of making decisions about resource allocation and performance assessment. The segment performance is evaluated based on operating profit or loss and is measured consistently with the income before income tax in the consolidated financial statements. 27. Contingencies In 2007, the Parent Companys BOD appropriated a portion of its retained earnings amounting to =3.0 P million to cover potential liability cases filed against the Parent Company, its directors and/or officers. As at March 13, 2013, the said cases are still pending before the courts and quasi-judicial agencies. The amount of the appropriation which is based on available relevant information as at December 31, 2012, will be reassessed periodically to reflect material developments made known to the Parent Company. The SCCP, as the central counterparty to stock exchange transactions, has contingent liabilities pertaining to outstanding trades as at December 31, 2012 and 2011. Details of stock exchange transactions outstanding as at balance sheet dates are as follows: 2012 2011 Value of shares not yet delivered (net selling) = P 8,502,722,736 = P 6,439,651,225 Amount of purchases unpaid (due clearing) 2,661,568,475 2,310,668,164 = P 11,164,291,211 = P 8,750,319,389 All transactions outstanding as at December 31, 2012 and 2011 were subsequently settled in January 2013 and 2012, respectively. Accordingly, no failed trades occurred from these transactions. 28. Share-based Payments On April 11, 2012, the BOD of the Exchange approved the ESPP for its employees and SCCPs employees, with the following terms and condition: a. b. c. d. e. f. g. number of shares allotted for the offering is 150,000 shares for 3 years or about 0.25% of the outstanding capital stock of the Exchange. Each offering consists of 50,000 shares; all regular employees in good standing of the Exchange and SCCP with at least 1 year of continuous service as at the offer date is eligible; offer date is annual for a period of 3 years exercisable from July to December of each year; if the exercise period shall lapse without the allocation having been exercised in full, the ESPP shares corresponding to the unexercised allocation will be forfeited and reverted back to the pool of unexercised allocation to be made available to interested participants; offer price is fixed based on Volume Weighted Average Price of PSE shares of the month preceding the offer date; discount of 10% from the offer price; and cash payment is required during the exercise period.
The rollforward analysis of number of shares on ESPP is as follows: 2012 50,000 (49,397) 603 2011 654 (654)
Outstanding at beginning of year Granted during the year Exercised during the year Expired during the year Outstanding at end of year
In 2012, a total of 50,000 shares of the Exchange were available for availment. Subscription period was from November to December 2012 with an exercise price of =333.51 P per share while the average fair value at grant date was =386.17, P which is based on quoted market price. Out of the 49,397 shares of the Exchange that were availed of and fully paid by the participants under the ESPP, 43,888 shares and 5,509 shares were availed by the Exchanges and SCCPs employees, respectively. In 2010, a total of 50,012 shares of the Exchange were available for availment, which consist of 50,000 original shares for the third tranche and the remaining 12 shares from the second tranche. Subscription period was from July to December 2010 with an exercise price of =237.46 P per share while the average fair value at grant date was =326.62, P which is based on quoted market price. Total additional paid-in capital arising from share-based payments amounted to =19.3 P million and =18.2 P million in 2012 and 2010, respectively. Total expense arising from share-based payments amounted to =2.7 P million and =6.4 P million in 2012 and 2010, respectively. There were no granted shares for availment of the ESPP in the year 2011. 29. Clearing and Trade Guaranty Fund The CTGF is a risk management tool designed to protect the market against the settlement risks of trading participants. Each active trading participants monthly contribution is equivalent to 1/500 of 1% of the members trade value, net of block sales and cross transactions of the same flag. Starting in 2010, the CTGF was presented off balance sheet and is not included within the noncurrent assets and noncurrent liabilities in the consolidated balance sheets. The revised presentation is to better reflect the trading participants contribution as trust monies and does not result in a change in net assets of the Group.
The CTGF consists of: 2012 Principal contributions from: Trading participants: Balance at beginning of year Contributions Balance at end of year The Exchange Accumulated income: Balance at beginning of year Interest income - net of management fee of = P 0.7 million and = P 0.6 million in 2012 and 2011, respectively Balance at end of year Net unrealized gains on AFS investments 2011
As at December 31, 2012 and 2011, AFS investments with principal amounts of =111.10 P million and = P 378.71 million, respectively, will mature within one year from balance sheet date. Net unrealized gains (losses) from CTGF investments held as AFS follows: 2012 = P 7,279,677 16,278,292 = P 23,557,969 2011 = P 6,961,287 318,390 = P 7,279,677
= P 289,233,115 44,102,894 333,336,009 80,000,000 413,336,009 208,472,153 20,213,040 228,685,193 23,557,969 252,243,162 = P 665,579,171
= P 235,686,735 53,546,380 289,233,115 80,000,000 369,233,115 189,675,565 18,796,588 208,472,153 7,279,677 215,751,830 = P 584,984,945
Balance at beginning of year Change in fair value Balance at end of year
For the management and administration of CTGF, the SCCP is entitled to a management fee computed at 0.1% of CTGF fund level as at the close of year. Management fee amounting to =0.7 P million and = P 0.6 million in 2012 and 2011, is included under Other revenues account in the Groups profit or loss. Any proceeds from the CTGF shall not be used for any purpose other than for: a. b. c. d. e. f. Payment of the net money obligations of a defaulting buying member in order to settle a failed trade; Buy-in of relevant securities due from a defaulting selling member in order to settle a failed trade; The satisfaction of losses, liabilities and expenses of the SCCP incidental to the operation of its clearing and settlement functions and the management of the CTGF; For use as collateral in securing credit facilities from the Settlement Banks for the purpose of settling a Failed Trade; For use as collateral in borrowing securities through the Securities Borrowing and Lending Facility; and Payment of premium on any insurance policy taken for the CTGF.
Contributions In order for the SCCP to effectively implement its Fails Management function, the CTGF must be adequate to cover any unsettled trade by any member on any settlement day. Fails Management aims to settle a failed trade due to nonpayment of cash and/or nondelivery of securities by clearing members. In this regard, the Group continuously builds up the CTGF through the monthly contributions collected from the clearing participants and collection of initial contributions from new and returning trading participants. On January 28, 2003, the SCCPs BOD approved the amendment of its rules on CTGF providing for the non-recourse of all CTGF contributions to members. In July 2007, the SCCPs BOD approved the full refund of contributions to the CTGF upon cessation of business of the clearing member and upon termination of its membership with the SCCP. This is subject to approval by the SEC. Assets of CTGF The assets of the CTGF consist of: 2012 = P 15,284,127 3,611,865 9,190,519 566,920,000 47,680,936 23,557,969 666,245,416 666,245 = P 665,579,171 2011 = P 22,169,787 3,528,098 3,537,774 541,333,000 7,722,180 7,279,677 585,570,516 585,571 = P 584,984,945
30. Reclassification of Accounts The comparative information has been reclassified from the consolidated financial statements previously presented to conform to the presentation of the statement of comprehensive income for the periods ended December 31, 2012, 2011 and 2010. 31. Events after the Reporting Date On March 13, 2013, the BOD approved the declaration of regular cash dividends of =4.59 P per share and special cash dividends of =4.41 P per share out of the unappropriated retained earnings of the Parent Company as at December 31, 2012 in favor of stockholders of record as at April 2, 2013. The cash dividends will be paid on April 26, 2013. On February 4, 2013, the SEC resolved to grant a provisional license to SCCP to operate as a Securities Depository subject to the fulfillment of several conditions.
Cash in bank Accounts receivable Accrued interest receivable AFS investments - debt securities: Principal amount Net unamortized premium (discount) Net unrealized gains on AFS investments Less accrued management fees
The CTGF invested on the following: a. b. Securities issued or guaranteed by the Republic of the Philippines; and Such other investments as the SCCPs BOD may approve, taking into consideration the liquidity requirements of the clearing fund.
108 | PSE 2012 ANNUAL REPORT ALAKOR SECURITIES CORPORATION Gerard Anton S. Ramos (Nominee Trading Participant) 5/F, Quad Alpha Centrum 125 Pioneer Street, Mandaluyong City Ofce: 631-8173;637-4496 Exchange: 634-6928 to 29 Fax: 631-5166 ALPHA SECURITIES CORPORATION Jonathan Joseph S. Kui (Nominee Trading Participant) Unit 3003, One Corporate Centre Julia Vargas Street cor. Meralco Ave. Ortigas Center, Pasig City Ofce: 654-6806 to 07 477-9959; 477-9279; 470-8356 Exchange: 638-6692 to 93 638-6689 Fax: 654-6799 Email: alphasec@pldtdsl.com.ph ANGPING & ASSOCIATES SECURITIES, INC. Wilma C. Crisostomo (Nominee Trading Participant) Suite 2003-2004, The Peak 107 L. P. Leviste Street, Salcedo Village, Makati City Ofce: 848-2915 Ofce of the President 810-0930 Ofce of the EVP 848-2564 Exchange: 891-9115 Fax: 848-2572 Email: Info@angping.com.ph wcris@angping.com.ph sgogola@angping.com.ph ANSALDO, GODINEZ & COMPANY, INC. Mariano U. Godinez (Nominee Trading Participant) 340 Nueva Street, Binondo, Manila Ofce: 242-5124 to 25 242-5127 to 31 Exchange: 634-5160 & 63 634-6232 to 34; 634-6521 to 22 Fax: 242-5121 APEX PHILS. EQUITIES CORPORATION Jose Roberto Delgado (Nominee Trading Participant) 2/F, Mary Bachrach Building Port Area, Manila Ofce: 527-8888 loc. 219 527-5291 Exchange: 891-8586 Fax: 527-8919; 527-8912 ARMSTRONG SECURITIES, INC. Tony O. King (Nominee Trading Participant) 20/F, BDO South Tower, Makati Ave. cor. H. V. dela Costa St., Makati City Ofce: 878-4043 Exchange: 891-8534; 891-8542 891-8563 Fax: 840-7175 Email: chua.james@bdo.com.ph sampayo.nilo@bdo.com.ph ASIA PACIFIC CAPITAL EQUITIES & SECURITIES CORP. David O. Chua (Nominee Trading Participant) 24/F, Galleria Corporate Center EDSA cor. Ortigas Avenue, Quezon City Ofce: 634-5621 Exchange: 891-9550 to 59; 891-8571 Fax: 634-5813 Email: apcap@compass.com.ph 103 ASIASEC EQUITIES, INC. Gideon G. Sison (Nominee Trading Participant) 8/F, Chatham House 116 Valero cor. Herrera Streets, Salcedo Village, Makati City Ofce: 845-3421 to 26 Exchange: 891-9370 to 75 Fax: 845-3418 Email: schong@asiasecequities.com 232 ASTRA SECURITIES CORP. Benito B. H. Ang (Nominee Trading Participant) 12/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-6421 to 27 Exchange: 891-9126 to 27 Fax: 848-6428 Email: astrasecurities@gmail.com ATC SECURITIES, INC. Anselmo Trinidad Jr. (Nominee Trading Participant) Unit 6F, 6/F 8101 Pearl Plaza, Pearl Drive, Ortigas Center, Pasig City Ofce: 683-0204; 687-1768 687-2866; 683-0201 Exchange: 891-9337 to 38 Fax: 687-1760 Email: atcsettle@pacic.net.ph 110 AURORA SECURITIES, INC. Emmanuel Edward C. Co (Natural Person Trading Participant) 24/F, West Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City Ofce: 634-8321 to 24 Exchange: 634-8321 to 24 Telefax: 634-8321 Email: ausecinc@pldtdsl.net B. H. CHUA SECURITIES CORPORATION Michael Li Chua (Natural Person Trading Participant) 872 G. Araneta Avenue, Quezon City Ofce: 742-5850; 742-6032 412-3444 Exchange: 891-9771 to 73 Telefax: 412-3448 BA SECURITIES, INC. Bryan Jan L. Ang (Nominee Trading Participant) Room 401-403, CLMC Building 259-267 EDSA, Mandaluyong City Ofce: 727-5374; 722-0132 Exchange: 891-9672 to 75 Telefax: 722-0132 basec@ultimate.info.com.ph BDO SECURITIES CORPORATION Eduardo V. Francisco (Nominee Trading Participant) 20/F, BDO South Tower, Makati Ave. cor. H. V. dela Costa St.,Makati City Ofce: 878-4070; 840-7000 loc. 6391; 6385; 6382; 6386; 6392; 6068 Exchange: 848-5836; 848-7015 Fax: 840-7175 Email: evf@bdo.com.ph sampayo.nilo@bdo.com.ph BELSON SECURITIES, INC. Emmanuel G. Lim (Nominee Trading Participant) 4/F, Belson House 271 EDSA, Mandaluyong City Ofce: 724-7586 to 90; 724-7580 Exchange: 891-9860 to 68 Fax: 721-9238 Email: belsonsecurities@yahoo.com 116 BENJAMIN CO CA & CO., INC. Benjamin Co Ca (Nominee Trading Participant) Rm. 301-305, Downtown Center Bldg. 516 Q. Paredes St., Binondo, Manila Ofce: 241-1261; 241-1345 Exchange: 634-5186 to 90 Fax: 241-1261 Email: benjamincoca168@yahoo.com.ph BERNAD SECURITIES, INC. Elphege Wong (Nominee Trading Participant) 3/F, 1033 M. H. del Pilar Street, Ermita, Manila Ofce: 524-5326; 524-5186 524-5267 Exchange: 635-6756 to 60 635-5665 Fax: 523-7907 119 BPI SECURITIES CORPORATION (No Nominee Trading Participant) 8/F, BPI Head Ofce Ayala Avenue cor. Paseo de Roxas,Makati City Ofce: Marketing 816-9190; 816-9192 845-5541; 845-5543 Administration 845-5289;816-9678 Operations 845-5735; 816-9554 Exchange: 891-9930; 845-5541 848-5543; 845-5545 Fax: 818-7809; 845-5733 Email: bpitrade@bpi.com.ph www.bpitrade.com CAMPOS, LANUZA & CO., INC. Gerardo O. Lanuza Jr. (Nominee Trading Participant) 20/F, East Tower, PSE Centre Exchange Road, Ortigas Center,Pasig City Ofce: 634-6881 to 87; 634-6888 636-3134; 638-3510 636-3135; 636-3138 Exchange: 636-3001 to 05 Fax: 636-1167 Email: camposlanuza@yahoo.com CENTURY SECURITIES CORPORATION Chan Kok Bin (Natural Person Trading Participant) Rm. 1105 Galleria Corporate Center EDSA cor. Ortigas Avenue, Quezon City Ofce: 633-7044 to 46 Exchange: 891-9880 to 81 Fax: 633-7047 CITISECURITIES, INC. Edward K. Lee (Nominee Trading Participant) 27/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 635-5735 to 40 Exchange: 634-6976 to 80 Fax: 634-6696 CLSA PHILIPPINES, INC. Raymond M. Tempongko (Nominee Trading Participant) 19/F Tower 2, The Enterprise Center 6766 Ayala Avenue, Makati City Ofce: Trunkline: 860-4000 Sales & Dealing: 860-4030 Exchange: 891-9945; 759-4073 Fax: 860-4065 Email: raymond.tempongko@clsa.com COHERCO SECURITIES, INC. Wilfred T. Co (Nominee Trading Participant) 8/F, Herco Center, 114 Benavidez Street, Legaspi Village, Makati City Ofce: 818-7736 Exchange: 848-7301 Fax: 818-7331 122 COL FINANCIAL GROUP, INC. Conrado F. Bate (Nominee Trading Participant) 2401B East Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City Ofce: 636-5411 Fax: 634-6958; 645-4632 126 DA MARKET SECURITIES, INC. Nestor S. Aguila (Nominee Trading Participant) Unit 6K, 6/F, Fort Palm Spring Condominium, 30th Street cor. 1st Avenue, Fort Bonifacio Global City, Taguig, 1634 Metro Manila Ofce: 887-6407 Exchange: 891-9143 to 44 Telefax: 887-5457 Exchange 891-9144 Email: dmsi8.care@houseofdavidgroup.ph DAVID GO SECURITIES CORPORATION David C. Go (Nominee Trading Participant) Rm. 309 Federation Center Building Muelle de Binondo, Binondo, Manila Ofce: 242-2375 & 79; 242-2467 Exchange: 634-5048 to 49 634-5178 Fax: 242-2467 Email: dgosec@yahoo.com DBP-DAIWA CAPITAL MARKET PHILIPPINES, INC. Shoichi Saito (Nominee Trading Participant) 18/F, Citibank Tower, 8741 Paseo de Roxas, Makati City Ofce: 813-7344; 813-7454 Exchange: 891-9109; 891-9119 Fax: 848-0105 Email: admin@dbpdaiwasmbc.com.ph DEUTSCHE REGIS PARTNERS, INC. Emmanuel O. Bautista (Nominee Trading Participant) 23/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: Trunk line 894-6600 Research 894-6636 to 47 Sales 894-6651 to 58 Operations 894-6618 to 35 Exchange: 891-9090 Fax: Sales 894-6605 Research 894-6638 Operations 894-6622 DIVERSIFIED SECURITIES, INC. Ramon C. Garcia Jr. (Nominee Trading Participant) 5/F, PDCP Bank Centre Herrera cor. Alfaro Streets, Salcedo Village, Makati City Ofce: 892-2890; 892-4330 753-5250 to 53 Exchange: 636-0814 634-6630 to 31 Fax: 892-4330 Email: rowena.ruiz@psenow.com www.dtrade.net DW CAPITAL, INC. Derwin Ngo Wong (Nominee Trading Participant) Unit 1610-1611 Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City Ofce: 836-9633; 836-2719 (Trading Department) 836-1938 Accounting Dept.: 403-0709 Telefax: 403-0066 Email: dwcapital1328@gmail.com E. CHUA CHIACO SECURITIES, INC. Ernesto Chua Chiaco (Natural Person Trading Participant) 113 Rentas Street, Binondo, Manila Ofce: 242-5145; 241-9293 Exchange: 891-9246 to 48 Fax: 243-3232 Email: eccsi@yahoo.com EAGLE EQUITIES, INC. Joseph Y. Roxas (Natural Person Trading Participant) 779 Harvard Street, Mandaluyong City Ofce: 724-1584; 725-2777 Exchange: 634-6684; 634-6283 Fax: 725-2777 204
aCtive tradinG partiCipants direCtory | 109 EASTERN SECURITIES DEVT. CORP. Generosa R. Jacinto (Nominee Trading Participant) Binondo Head Ofce: 17/F, Tytana Building,Binondo, Manila Ofce: 242-4006 to 09 Fax: 241-0178 Makati Sales Ofce: 7/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas,Makati City Ofce: 848-5491 to 95 Exchange: 891-9340 to 44 Fax: 848-6349 Email: eastern_securities@yahoo.com EASTWEST CAPITAL CORPORATION Edilberto B. Bravo (Natural Person Trading Participant) 3/F U-Bix Bldg., 1344 Angono Street, Makati City Ofce: 897-7124; 897-6807 Exchange: 895-6008; 895-5638 Fax: 897-6805 Email: eastwest@ubix.com.ph 142 EQUITIWORLD SECURITIES, INC. Antonio A. Lopa (Nominee Trading Participant) 8/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5401; 848-5403 to 06 President/GM 848-5418 Exchange: 891-9756 Fax: 848-5423 Email: eqworld_87@yahoo.com EVERGREEN STOCK BROKERAGE & SECURITIES, INC. Francisco S. Gaisano (Nominee Trading Participant) 6/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 891-9451 to 58 Exchange: 891-9451 to 58 Fax: 891-9459 to 60 Email: evergreensecurities@yahoo.com 145 F. YAP SECURITIES, INC. Felipe U. Yap (Nominee Trading Participant) 17/F Lepanto Building, 8747 Paseo de Roxas, Makati City Ofce: 856-7680 Exchange: 634-5171; 634-6917 634-5390 to 91; 634-6217 to 18 Fax: 813-0865 Email: fysi162@yahoo.com FIDELITY SECURITIES, INC. Ben C. Tiu (Nominee Trading Participant) 2/F, JTKC Centre 2155 Pasong Tamo, Makati City Ofce: 818-6774; 812-6267 Exchange: 634-7110; 633-9707 633-9710; 633-9711 Fax: 810-3536 Email: delitysecinc@yahoo.com 150
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A & A SECURITIES, INC. Shirley Y. Bangayan (Nominee Trading Participant) 1906 Ayala Avenue Condominium 6776 Ayala Avenue, Makati City Ofce: 891-1008 to 10 Exchange: 891-1008 to 10 Telefax: 891-1010 Email: aasec@pldtdsl.net A. T. DE CASTRO SECURITIES CORP. Alejandro T. de Castro (Nominee Trading Participant) 7/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-7160 to 63 Exchange: 848-7160 to 63 Telefax: 848-7163 Email: atcastro@info.com.ph AAA SOUTHEAST EQUITIES, INC. D. Alfred A. Cabangon (Nominee Trading Participant) G/F Fortune Life Building 162 Legaspi Street, Legaspi Village, Makati City Ofce: 816-2918 892-9841 to 49 loc. 103 Exchange: 891-9570 to 72 Fax: 812-1831 AB CAPITAL SECURITIES, INC. Lamberto M. Santos, Jr. (Nominee Trading Participant) Unit 1401-1403, 14/F Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City Ofce: 898-7555 Exchange: 891-9135 Fax: 898-7596 Email: abcsi@abcapitalonline.com www.abcapitalonline.com ABACUS SECURITIES CORPORATION Paulino S. Soo (Nominee Trading Participant) 29/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 667-8900 Exchange: 667-8900 Fax: Operations 634-5206 Retail/Customer Svc. 634-2109 Accounting 634-2105 Email: customerservice@abacus-sec.com www.abacus-sec.com ACCORD CAPITAL EQUITIES CORPORATION Paul L. Wee (Nominee Trading Participant) G/F, Unit EC-05B, East Tower, PSE Centre, Exchange Rd., Ortigas Center, Pasig City Ofce: (Trunk Line) 588-1919 24/7 Customer Care: 588-1900 Exchange: 687-0911; 687-0936 Fax: 687-3738 Email: info@accordcapital.ph www.accordcapital.ph
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CREDIT SUISSE SECURITIES (PHILS.), INC. 311 Joselito C. Vicencio, Jr. (Nominee Trading Participant) 19/F The Enterprise Center, Tower 2 Ayala Avenue cor. Paseo de Roxas Makati City Ofce: 858-7770 Fax: 858-5676 Email: list.css@credit-suisse.com CUALOPING SECURITIES CORPORATION 141 Simeon S. Cua (Nominee Trading Participant) Suite 301, 1765 P. M. Guazon Street Paco, Manila Ofce: 561-3862 Exchange: 634-5745 to 46 634-5180; 634-5755 Email: cualopingsecuritiescorp@gmail.com
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FIRST INTEGRATED CAPITAL SECURITIES, INC. 159 Manuel Maalac Jr. (Nominee Trading Participant) 12/F, Tower One & Exchange Plaza, Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 759-4320 to 23 891-9418 to 19 Exchange: 759-4320 to 23 891-9418 to 19 Fax: 759-4326 Email: ncapsec@yahoo.com FIRST METRO SECURITIES BROKERAGE CORPORATION Roberto Juanchito T. Dispo (Nominee Trading Participant) 18/F, PS Bank Center, 777 Paseo de Roxas cor. Sedeo St. Makati City Ofce: 859-0600 Fax: 859-0699 Email: customerservice@rstmetrosec.com.ph. 267
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110 | PSE 2012 ANNUAL REPORT FIRST ORIENT SECURITIES, INC. Trinidad Y. Kalaw (Nominee Trading Participant) 12/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 891-9240; 891-9243 to 44 Exchange: 891-9240 to 45 Fax: 848-6175 Email: fosisec@gmail.com FRANCISCO ORTIGAS SECURITIES, INC. Paolo Martin M. Ortigas (Nominee Trading Participant) 10/F, Ortigas Building, Ortigas Avenue, Pasig City Ofce: 631-2674; 631-2733 Exchange: 634-5149 to 53 Fax: 631-2668 G. D. TAN & COMPANY, INC. Gilbert Tan (Nominee Trading Participant) 22/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 634-6255; 637-5686 Exchange: 634-6255; 634-5408 634-6256 Telefax: 637-6256 Email: gdtaninc@yahoo.com 157 HDI SECURITIES, INC. 174 Chia Kim Teck (Nominee Trading Participant) Suite 2002, 20/F, The Orient Square, F. Ortigas Ave. (formerly Emerald Ave.), Ortigas Center, Pasig City, 1605 Ofce: 687-7955; 687-7956 687-7957; 910-6188 Fax: 910-6189 Email: info@hdisecurities.com I. ACKERMAN & COMPANY, INC. 179 Ma. Luisa C. Ackerman (Nominee Trading Participant) 7/F, Tower One & Exchange Plaza, Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 891-9070 to 72 Exchange: 891-9070 to 72 Fax: 891-9353 Email: info@aiackerman.com I.B. GIMENEZ SECURITIES, INC. Ignacio B. Gimenez (Nominee Trading Participant) No. 42 3/F New Rosario Ortigas Arcade, Rosario Ortigas Extn., Pasig Ofce: 628-0000 local 306 Exchange: 634-6260 to 61 634-6263 to 65; 634-5168 Fax: 642-7299 180 JAKA SECURITIES CORPORATION Katrina C. Ponce-Enrile (Nominee Trading Participant) 8/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-7122 to 24 Exchange: 848-6413 to 15 Fax: 848-7121 Email: jakase@yahoo.com JSG SECURITIES, INC. Jorge S. Go (Nominee Trading Participant) 4/F, A & T Building, 244 Escolta Street, Binondo, Manila Ofce: 241-0594; 242-9380 242-9385 Exchange: 637-3159 to 61 Fax: 242-9392 KINGS POWER SECURITIES, INC. Carlos J. Ching (Nominee Trading Participant) Room 1602, Federal Tower, Dasmarias Street, Binondo, Manila Ofce: 242-3048 to 49 Exchange: 848-5605 to 07 Fax: 241-1417 Email: kings 389@yahoo.com.ph LARRGO SECURITIES COMPANY, INC. (Natural Person Trading Participant) 2/F, Runo Tower Building 6784 Ayala Avenue, Makati City Ofce: 810-1183; 810-1353 to 54 810-1440 & 46 Exchange: 891-9530 to 33 Fax: 817-2486 Email: larrgosec@yahoo.com LITONJUA SECURITIES, INC. Eduardo V. Litonjua Jr. (Nominee Trading Participant) Room 205 DITZ Building 444 T. M. Kalaw Street, Manila Ofce: 521-1951 to 57 Exchange: 634-7178; 634-5713 Fax: 521-7692 LOPEZ, LOCSIN, LEDESMA & COMPANY, INC. Dionisio Lopez (Nominee Trading Participant) Roofdeck, Urban Building 405 Sen. Gil Puyat Avenue (nr. MRT) EDSA, Makati City Ofce: 895-0624; 895-7310 Exchange: 891-9640 to 41 Fax: 896-0835 Email: lopezlocsinledesma@yahoo.com LUCKY SECURITIES, INC. Eddie T. Gobing (Nominee Trading Participant) 19/F, West Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 634-6826; 634-6786 634-6747 & 60 Exchange: 634-5382 to 83 634-5411; 634-5707 Fax: 634-6826 LUYS SECURITIES COMPANY, INC. Enrique Luy, Sr. (Nominee Trading Participant) 28/F, LKG Tower 6801 Ayala Avenue, Makati City Ofce: 884-1271 to 85 Exchange: 634-5175 to 76 634-6523 to 24; 634-6850 to 51 Fax: 884-1384 MACQUARIE CAPITAL SECURITIES (PHILIPPINES), INC. Paulo C. Rojas (Nominee Trading Participant) 22/F 6750 Ayala Avenue Bldg., Ayala Avenue, Makati City Ofce: 857-0888; 857-0834 Fax: 857-0910; 857-0912 Email: john.madamba@macquarie.com 125 MANDARIN SECURITIES CORPORATION Charles H. Shih (Nominee Trading Participant) 28/F, LKG Tower 6801 Ayala Avenue, Makati City Ofce: 884-1271 to 85 Exchange: 634-6517 to 20 Fax: 884-1384 MARIAN SECURITIES, INC. Richard L. Lee (Nominee Trading Participant) Unit B 26/F, Export Bank Plaza, Chino Roces Avenue cor. Gil Puyat Avenue, Makati City Ofce: 887-9067 to 68 Exchange: 891-9309; 891-9316 Fax: 814-0502 Email: Lailah_bazar@yahoo.com 200 NIEVES SECURITIES, INC. Philip S. Huang (Nominee Trading Participant) 106 Tytana Plaza, V. Tytana corner Insular Sts. Plaza Lorenzo Ruiz, Binondo, Manila Ofce: 477-7899; 477-8899 Exchange: 891-9306 to 08 Fax: 477-8899 loc. 291 Email: nievessecurities@gmail.com nieves_sanchra_inc@yahoo.com OPTIMUM SECURITIES CORPORATION Eddie S. Jose (Nominee Trading Participant) No. 11 E. O. Building cor. United & 2nd Streets, Bo. Kapitolyo, Pasig City Ofce: 631-7831 to 36; 631-3989 633-2629 Exchange: 891-9581 to 85 Fax/Telefax: 631-8834 / 633-2629 PAN ASIA SECURITIES CORPORATION Lucio K. Tan, Jr. (Nominee Trading Participant) 9/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5153 to 54 Exchange: 891-9170 to 74 Fax: 848-5154 Email: panasec218@yahoo/.com PAPA SECURITIES CORPORATION Myron Timothy P. Papa (Nominee Trading Participant) 6/F, S & L Building De la Rosa cor. Esteban Streets, Legaspi Village, Makati City Ofce: 817-8433 & 79; 817-8454 815-1308 Exchange: 891-9630 to 32 Fax: 815-1308 Email: mcpapa@pacic.net.ph PCCI SECURITIES BROKERS CORP. 282 Federico C. Galang (Nominee Trading Participant) 4/F, PCCI Corporate Center, 118 L. P. Leviste Street, Salcedo Village, Makati City Ofce: 893-3920; 893-3923 to 24 893-4341 Exchange: 891-9952 to 55 848-6284 to 85; 840-2991 Fax: 893-4340 Email: pcci.sbc@yahoo.com PCIB SECURITIES, INC. Gabriel U. Lim (Nominee Trading Participant) 20/F, BDO South Tower, Makati Ave. cor. H. V. dela Costa St.,Makati City Ofce: Dealing Room 878-4556 878-4558; 878-4562 to 63 Operations 878-4559 to 60 Compliance 878-4564 Exchange: 891-9008 to 09 891-9045 Fax: 840-7175 Email: nilo.sampayo@ebdo.com.ph beboso.michelle@bdo.com.ph PHILIPPINE EQUITY PARTNERS, INC. Joseph R. Madrid (Nominee Trading Participant) Unit 19C, Citibank Tower, Citibank Plaza 8741 Paseo de Roxas, Makati City Ofce: 814-5700 Exchange: 891-9162; 891-9222 891-9097 Fax: 814-5793 to 94 PHIL-PROGRESS SECURITIES CORP. Enrique Raymond I. Yap (Nominee Trading Participant) G/F, PPL Building, U. N. Avenue cor. San Marcelino Street, Manila Ofce: 526-4207; 526-4208 &10 Exchange: 891-8579 to 80 Fax: 526-4208 Email: phil_progress@yahoo.com.ph 131 213
aCtive tradinG partiCipants direCtory | 111 PLATINUM SECURITIES, INC. William O. Go (Nominee Trading Participant) 8/F, Antel 2000 Corporate Center 121 Valero St., Salcedo Vill., Makati Ofce: 887-1178 to 79 Exchange: 891-9301 to 03 Telefax: 887-1178 Email: plasec223@yahoo.com PNB SECURITIES, INC. Carlos A. Pedrosa (Nominee Trading Participant) 3/F, PNB Financial Center, Roxas Boulevard, Pasay City Ofce: 526-3510; 526-3678 832-5461 / Dealing 526-3478 Exchange: 891-9841; 891-9846 891-9849 Fax: 526-3477 PREMIUM SECURITIES, INC. Antonio Y. Tee (Nominee Trading Participant) 14/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5915 to 17 Exchange: 891-9593 to 95 Telefax: 848-5917 Email: premium_dec@yahoo.com QUALITY INVESTMENT & SECURITIES CORP. Benjamin Y. Cu (Nominee Trading Participant) Unit 1602 Tytana Plaza, Plaza Lorenzo Ruiz, Binondo, Manila Ofce: 241-0072; 241-0486 241-0547 Exchange: 891-9184 to 89 Fax: 241-0166 Email: qualsec@pldtdsl.net R & L INVESTMENTS, INC. Rene R. Lee (Nominee Trading Participant) 675 Lee Street, Mandaluyong City Ofce: 724-5207 Exchange: 891-9201 to 05 Fax: 724-7210 R. COYIUTO SECURITIES, INC. Robert Coyiuto Jr. (Nominee Trading Participant) 5/F, Corinthian Plaza, Paseo de Roxas, Legaspi Village, Makati City Ofce: 811-3064 to 67; 811-3201 Exchange: 634-6203 to 07 634-5035; 634-6697 & 69 Fax: 811-3073 Email: rcoyiutosec@hotmail.com vito.rcoyiuto@gmail.com R. NUBLA SECURITIES, INC. Ralph Nubla Jr. (Natural Person Trading Participant) Room 300, CNC Investment Bldg. 231 Juan Luna Street, Binondo, Manila Ofce: 242-1595 to 96; 242-1770 Exchange: 634-6525 to 29 Fax: 242-1666 Email: nublasec@yahoo.com R. S. LIM & COMPANY, INC. Alejandro T. Yu (Nominee Trading Participant) 1509 Galvani Street, Makati City Ofce: 843-4313; 844-7235 844-2245 Exchange: 891-9660 to 66 Fax: 844-2245 Email: rslim@mydestiny.net rslimcoinc@gmail.com RCBC SECURITIES, INC. Raul M. Leopando (Nominee Trading Participant) 7/F Yuchengco Tower, RCBC Plaza 6819 Ayala Avenue, Makati City Ofce: Trunk line 889-6931 to 35 Exchange: 845-2641 Fax: 889-7642 Email: sales@rcbcsec.com Website: www.rcbcsec.com 223
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GLOBALINKS SECURITIES & STOCKS, INC. 168 David L. Wuson (Nominee Trading Participant) 7/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-6341 to 42 759-4136 to 37 Exchange: 891-9920 to 22 Telefax: 848-6341 to 43 759-4136 to 37 GOLDEN TOWER SECURITIES & HOLDINGS, INC. Kenneth S. Lao (Nominee Trading Participant) 4/F, Vernida I Condominium 120 Amorsolo Street, Legaspi Village, Makati City Ofce: 813-2839; 892-1316 Exchange: 891-9680 to 82 Fax: 813-0321 Email: g_towersec@yahoo.com GOLDSTAR SECURITIES, INC. Joseph L. Mancilla Jr. (Nominee Trading Participant) 22/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 636-0197 633-7485 to 86 Exchange: 634-6765 & 69 634-6983 & 87 Fax: 633-7487 GUILD SECURITIES, INC. Antonio B. Alvarez (Nominee Trading Participant) 12/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 891-9230; 891-9234 to 35 Exchange: 891-9232 to 37 891-9230 Fax: 891-9231 Email: help.desk@guildsec.com H. E. BENNETT SECURITIES, INC. Jesus M. dela Pea (Nominee Trading Participant) Rm. 1704, World Trade Exchange Bldg., 215 Juan Luna Street, Binondo, Manila Ofce: Executive Ofce 242-5733 Dealing Room 241-6284;241-6458 Exchange: 634-5030; 634-6235 Telefax: 245-6959 Email: hebsi@info.com 285
IGC SECURITIES, INC. 140 Ismael G. Cruz (Nominee Trading Participant) 10/F, Tower One & Exchange Plaza, Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 891-9193 to 94 Exchange: 891-9190 to 92 Fax: 891-9194 Email: igcsec@pldtdsl.net IMPERIAL, DE GUZMAN, ABALOS & CO., INC. Leonides C. Tiotuico (Nominee Trading Participant) G/F, EDSA Central Square Shaw Boulevard, Mandaluyong City Ofce: 633-2686; 634-5717 631-8651 loc. 145 Exchange: 634-5161 & 66 634-5739; 634-5710 Fax: 633-4716 Email: imperdga@yahoo.com INTRA-INVEST SECURITIES, INC. Jose Maria A. De Leon (Nominee Trading Participant) 11/F, ACT Tower 135 Sen. Gil Puyat Avenue, Salcedo Village, Makati City Ofce: 813-8293 to 94 Exchange: 891-9206; 891-9208 Fax: 892-1290 Email: Intrainvest_secinc@yahoo.cim INVESTORS SECURITIES, INC. Edward Go (Nominee Trading Participant) 6/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-7032 to 33 891-9441 to 42 Exchange: 891-9441 to 46 Fax: 848-7034 J. M. BARCELON & COMPANY, INC. Amparo V. Barcelon (Nominee Trading Participant) 5 Pennsylvania,New Manila, Quezon City Ofce: 661-8396; 661-8398 661-7359 Exchange: 635-0236; 687-6317 Email: jmbarcelon@yahoo.com.ph J. P. MORGAN SECURITIES PHILIPPINES, INC. Milagros Cecilia D. Suarez (Nominee Trading Participant) 31/F, Philam Life Tower 8767 Paseo de Roxas, Makati City Ofce: General 575-1199 Sales 885-7801; 757-2101 Exchange: 687-2364; 687-2370 Fax: 885-7058 to 59 Email: remedios.c.pasil@jpmorgan.com 182
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MAYBANK ATR KIM ENG SECURITIES, INC. 220 Lorenzo Andres T. Roxas (Nominee Trading Participant) 17/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5298; 849-8888 Dealing Room 848-5288 Exchange: 891-9120 891-9124 to 25 Fax: General 848-5738 Settlements 848-5285 Email: atrke_sec@maybankatrke.com MDR SECURITIES, INC. Manuel D. Recto (Nominee Trading Participant) 6/F, Unit 617 AIC-Burgundy Empire Tower, ADB Avenue cor. Garnet & Sapphire Roads, Ortigas Center, Pasig City Ofce: 706-2131; 706-2169 Exchange: 891-9226 to 28 Mobile: 0922-8814788 0922-8823137; 0922-8823136 MERCANTILE SECURITIES CORP. Kevin Nathaniel N. Co (Nominee Trading Participant) 3/F Goodwill Building 393 Sen. Gil Puyat Avenue,Makati City Ofce: 898-2984; 890-7336 890-6792; 890-1939 Exchange: 891-9350 to 58 891-9350; 856-2880 Fax: 895-2376 MERIDIAN SECURITIES, INC. Ronaldo S. Salonga (Nominee Trading Participant) 27/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 635-6261 to 64 Exchange: 634-6931 to 36 Fax: 634-6937 Email: meridiansec@yahoo.com MOUNT PEAK SECURITIES, INC. William Gaweco (Nominee Trading Participant) 748 C. K. Building, Juan Luna St., Binondo, Manila Ofce: 241-7990 & 92; 241-8043 243-1953 Exchange: 891-9601 to 03 Fax: 241-8042 Email: Info@mountpeak.com www.mountpeak.com NEW WORLD SECURITIES, INC. Joan Chai Chu (Nominee Trading Participant) Room 202 CNC Investment Bldg. 231 Juan Luna St., Binondo, Manila Ofce: 242-1759; 242-1767 Exchange: 634-5711 to 12 634-5721 Fax: 242-1743 Email: newworld211@yahoo.com 208
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112 | PSE 2012 ANNUAL REPORT REGINA CAPITAL DEVELOPMENT CORP. Marita A. Limlingan (Natural Person Trading Participant) 8/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5482 to 84 Exchange: 891-9413 891-9415 to 17 Fax: 848-5482 to 84 Email: rcdc@reginacapital.com RTG & COMPANY, INC. Ramon T. Garcia (Nominee Trading Participant) 6/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 891-9480 to 84 Exchange: 891-9480 to 84 Fax: 891-9483 S. J. ROXAS & COMPANY, INC. Simplicio J. Roxas (Nominee Trading Participant) 6/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5065 to 69 Exchange: 891-9708 to 09 891-9714 to 16; 891-9439 Fax: 891-9447 Email: sjroxas.co@yahoo.com SALISBURY BKT SECURITIES CORPORATION Simon B. Bailey (Nominee Trading Participant) Executive Ofce: 12/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Backroom Ofce: 11/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-7373 to 76 Exchange: 891-9490 to 92 Fax: 848-7375 Email: admin@salisburybkt.com SARANGANI SECURITIES, INC. Arthur W. Antonino (Nominee Trading Participant) Unit 2 D1 Vernida I Condominium, 120 Amorsolo Street, Legaspi Village, Makati City Ofce: 817-5806; 840-4504 817-5834 Exchange: 891-9176 to 79 Fax: 817-5815 Email: sarangani95@yahoo.com 235 SINCERE SECURITIES CORPORATION John Kenneth L. Ocampo (Nominee Trading Participant) 12/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 638-3549 to 50 Exchange: 634-6664; 634-6668 Fax: 638-3549 Email: sinceresec.corp@yahoo.com SOLAR SECURITIES, INC. Johnny S. Yap (Nominee Trading Participant) 30/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: Trunk line 636-6302 Direct lines 634-6651; 634-6653 Exchange: 636-6302; 634-6869 634-6878 Fax: 635-2466 Email: solar_sec_inc@yahoo.com STANDARD SECURITIES CORPORATION Domingo Herrera 34 Jefferson Street, West Greenhills, San Juan, Metro Manila Ofce: 725-3905; 721-5887 Exchange: 891-9760 to 61 891-9764 to 65 Fax: 721-5887 STAR ALLIANCE CORPORATION Alfonso S. Anggala (Nominee Trading Participant) Unit 1201, 12/F, One Global Place 5th Avenue cor. 25th Street, Bonifacio South District, Bonifacio Global, Taguig City Ofce: 566-2265; 478-0107 Fax: 238-1575 Email: staralliancesec@gmail.com STRATEGIC EQUITIES CORPORATION Roberto Z. Lorayes (Nominee Trading Participant) 6/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5159 Exchange: 891-9620 to 21 Fax: 848-5164 Email: sec@pldtdsl.net SUMMIT SECURITIES, INC. Harry G. Liu (Nominee Trading Participant) 21/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 631-1032 to 37 Exchange: 631-1032 to 37 Fax: 631-1033 SUNSECURITIES, INC. Jerry G. Yu (Nominee Trading Participant) 2703 One Corporate Center Meralco Avenue cor. Julia Vargas Avenue, Pasig City Ofce: 477-6001 to 6005 Fax: 621-1018 Email: sunsecuritiesinc@gmail.com 129 THE FIRST RESOURCES MANAGEMENT & SECURITIES CORPORATION Ma. Vivian Yuchengco (Natural Person Trading Participant) 8/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-6311 to 18 Exchange: 848-6311 to 18 Fax: 848-6272 Email: 1stres@philwebinc.com TOWER SECURITIES, INC. Raymond Peter L. Unlay (Nominee Trading Participant) 18/F, East Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City Ofce: 635-4448 to 49; 635-4144 634-6726 Exchange: 634-5146; 634-5148 638-3847; 638-3850; 633-9411 Fax: 635-4145 Email: tower_sec@yahoo.com TRANS-ASIA SECURITIES, INC. Eugene Ong (Nominee Trading Participant) Room 601-S State Centre Building 333 Juan Luna Street,Binondo, Manila Ofce: 242-2823; 242-3031 242-1031 Exchange: 634-5725 to 27 634-5752 to 54 Fax: 242-3031 Email: transasia_securities@ymail.com TRI-STATE SECURITIES, INC. Gregorio T. Chan (Nominee Trading Participant) 10/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: 848-5044 to 47 Exchange: 891-9361 to 64 Fax: 848-5047 TRITON SECURITIES CORPORATION Edwin L. Luy (Nominee Trading Participant) 26/F, LKG Tower 6801 Ayala Avenue, Makati City Ofce: 884-2081 to 83 Exchange: 635-5531 to 35 Fax: 884-2088 Email: tsc136@yahoo.com UBS SECURITIES PHILIPPINES INC. Robrina L. Go (Nominee Trading Participant) 19/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: Trunk Line 784-8888 Sales 784-8864 Operations 784-8813 Compliance 784-8807 Exchange: 891-8588; 891-8589 Fax: General 784-8899 Equities 848-2382 Logistics 784-8810 Email: Robby.Go@ubs.com Tet.Achacon-Espallardo@ubs.com UCPB SECURITIES, INC. Vincent K. De Leon (Nominee Trading Participant) 5/F, UCPB Building Makati Avenue, Makati City Ofce: 811-9000 Ofce of the President loc. 9545 Compliance Ofcer loc. 9793 Securities Settlement loc. 9972 Accounting loc. 9970 & 9973 Exchange: 891-9735 to 37 Fax: 811-9792 Email: sccastronuevo@ucpb.com jrdeguzman@ucpb.com UNICAPITAL SECURITIES, INC. 345 Leonardo R. Arguelles (Nominee Trading Participant) 3/F, Majalco Building, Trasierra cor. Benavidez Streets, Legaspi Village, Makati City Ofce: Dealing/Sales 812-2589 812-2566; 817-5749 Operations/Dealing/Sales 892-0991 Exchange: 891-9622; 891-9624 Fax: 818-2127 Email: lra@unicapital-inc.com UOB-KAY HIAN SECURITIES (PHILIPPINES), INC. 260 Tan Chek Teck (Nominee Trading Participant) Unit 404 Locsin Building, Ayala cor. Makati Avenue, Makati City Ofce: 887-7972 Exchange: 891-9526 to 27 Fax: 887-7973 Email: milasanjose@uobkayhian.com 254 UPCC SECURITIES CORPORATION 100 William C. Uy (Nominee Trading Participant) 12/F Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce & Exchange: 891-8512 891-8514; 891-8519 Fax: 892-0215 Email: upcc_mla@i-manila.com VALUE QUEST SECURITIES CORPORATION 190 Glenn Paul R. Garcia (Nominee Trading Participant) 1006B West Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City Ofce: 636-6684; 636-6686 Fax: 687-0584 Email: valuequestsecurities@gmail.com VENTURE SECURITIES, INC. 263 Eusebio Tanco (Natural Person Trading Participant) 7/F, Phil. First Building 6764 Ayala Avenue, Makati City Ofce: 848-6505; 887-8447 Local nos. 7011/7012/7016 Exchange: 891-9420 to 22 Telefax: 848-6503 Email: venturesecurities@yahoo.com VICSAL SECURITIES & STOCK BROKERAGE, INC. 266 Frank Sy Gaisano (Nominee Trading Participant) Unit 504 Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City Ofce: 804-2400 to 01 Exchange: 891-9710 to 13 Fax: 804-2402 Email: Vssb_sec2005@yahoo.com VSEC.COM,INC. 135 Senen L. Matoto (Nominee Trading Participant) Unit 1009-1011, Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City Ofce: 856-5801 to 03 Fax: 856-3922 WEALTH SECURITIES, INC. 269 Hosanna T. Ayson (Nominee Trading Participant) 21/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 634-5038 to 42 637-3048 to 50 Exchange: 634-6222 634-6225 to 29 Fax: 634-5043 Email: ofce@wealthsec.com
aCtive tradinG partiCipants direCtory | 113 WESTLINK GLOBAL EQUITIES, INC. 270 Rafael O. Muoz (Nominee Trading Participant) 6/F, Tower One & Exchange Plaza Ayala Avenue cor. Paseo de Roxas, Makati City Ofce: Trunkline 848-6231 to 33 Operations Department 759-4012 Exchange & Marketing 891-9380 & 82 Fax: 848-6229 Email: wgeirsc@gmail.com WONG SECURITIES CORPORATION 273 Eden Wong (Nominee Trading Participant) 960 Ideal Street, Mandaluyong City Ofce: 727-6317 Exchange: 634-5735 to 36 Telefax: 718-0887 Email: wongsecuritiesonline@yahoo.com YAO & ZIALCITA, INC. 275 Carmelita C. Yao (Natural Person Trading Participant) 5H Vernida I Condominium 120 Amorsolo Street, Legaspi Village, Makati City Ofce: 813-3496; 892-5936 894-0553 to 55 Exchange: 634-6284; 634-6286 634-6946 Fax: 813-3496; 818-6739 Email: yaozialcita@yahoo.com YU & COMPANY, INC. 278 Johnny Yu (Nominee Trading Participant) 16/F, East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City Ofce: 634-6611 & 18; 634-7577 Exchange: 634-6248 to 50 Fax: 634-5918 Email: yunco27@gmail.com
aCtive tradinG partiCipants direCtory | 113
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Whats beyond the numbers and this annual reportis your feedback. We'd like to know your thoughts on the 2012 PSE Annual Report.
Please send the accomplished form to: The Philippine Stock Exchange, Inc. 2/F PSE Plaza, Ayala Triangle Ayala Avenue, 1226 Makati City Philippines You may also email your comments and suggestions to pird@pse.com.ph or fax to (632) 864 9046.
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SB EQUITIES, INC. 115 Eduardo M. Olbes (Nominee Trading Participant) 18/F, Security Bank Centre 6776 Ayala Avenue, Makati City Ofce: President 891-1092 Manager 891-1116 Dealing 891-1243/57/58/78 Accounting 813-3441 Settlement 891-1031 or 37 Dealing 891-1021 Exchange: 891-9677 891-9686 to 87 Fax: 813-3349 Email: sbequities@securitybank.com.ph SECURITIES SPECIALISTS, INC. Francisco V. Cancio (Nominee Trading Participant) Rm. 903 National Life Insurance Bldg., Ayala Avenue, Makati City Ofce: 812-5905 Exchange: 891-9701 to 03 Fax: 813-1682 Email: securities.specialists@gmail.com 242
SUPREME STOCKBROKER, INC. 249 (No Nominee Trading Participant) Unit G, Garden Level, Corinthian Plaza, Paseo de Roxas Ave., Legaspi Village, Makati City Ofce: 576-4384 Exchange: 891-9401; 891-9403 Telefax: 901-4309 TANSENGCO & COMPANY, INC. Francisco O. Tansengco (Nominee Trading Participant) Room 2308 World Trade Exchange Bldg. 215 Juan Luna Street, Binondo, Manila Ofce: 241-7155 Exchange: 634-6675 & 85 633-1310; 634-8230 Fax: 241-7155 251
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Audience. Im primarily interested in the Philippine Stock Exchange, Inc. as a: PSE shareholder PSE employee Trading participant Media representative If others, please specify: Content. The gures and narrative are easy to read and understand. Strongly Agree Agree Neutral Disagree Strongly Disagree
Coverage. The report effectively communicates the 2012 performance of the PSE. Strongly Agree Agree Neutral Disagree Strongly Disagree
Corporate Information
Annual Meeting The Annual Stockholders Meeting of the Philippine Stock Exchange, Inc. will be held on May 18, 2013, Saturday 8:00 AM at the Pavilion A and B, Wack Wack Golf and Country Club, Shaw Boulevard, Mandaluyong City. Corporate Offices Philippine Stock Exchange Plaza Ayala Triangle, Ayala Avenue 1226 Makati City, Philippines Tel (632)819 4100 Fax (632)891 9004 (632)864 9046 Website: www.pse.com.ph (Principal Ofce) External Counsels Philippine Stock Exchange Centre Exchange Road, Ortigas Centre 1605 Pasig City, Philippines Tel (632)688 7600 Philippine Stock Exchange Cebu Ofce Insular Life Cebu Business Centre Mindanao Avenue cor. Biliran Road Cebu Business Park, Cebu City 6000 Philippines Tel (032)266 3464
Design & Layout. The images, photos, design and layout are visually attractive, relevant, and consistent with theme of the Annual Report. Strongly Agree Agree Neutral Disagree Strongly Disagree Overall Rating. On a scale of 1-5, with 1 having the highest rating, assess the overall design, relevance, and readability of the 2012 PSE Annual Report: 1 2 3 4 5 Parts of the Report. On a scale of 1-7, with 1 being the most relevant, rank the following parts of the 2012 PSE Annual Report. Messages of the Chairman and the President Stock Market Performance Financial Highlights Operational Highlights Table of Listed Companies and Issues Gallery of Directors and Ofcers Financial Statements and Documents Active Trading Participants Directory Format. You prefer to receive or read the Annual Report in: Printed copy only Digital copy in CD format Printed copy and digital le If others, please specify:
Angara Abello Concepcion Regala & Cruz Law Ofces 22nd Floor, ACCRALAW Tower Second Avenue cor. 30 th Street, Crescent Park West Bonifacio Global City 0399 Taguig City, Philippines Marcos Ochoa Serapio & Tan Law Firm 30 th Floor Tycoon Centre Pearl Drive, Ortigas Center 1605 Pasig City, Philippines MM Lazaro & Associates 19 th Floor Chatham House Building 116 Valero cor. VA Runo Streets Salcedo Village 1200 Makati City, Philippines External Auditor SyCip Gorres Velayo& Co. SGV Building 6760Ayala Avenue 1226 Makati City, Philippines
Quasha Ancheta Pea & Nolasco Don Pablo Building 114 Amorsolo Street, Legaspi Village 1229 Makati City, Philippines Rodrigo Berenguer & Guno Suite 1517, 15th Floor AIC Burgundy Empire Tower ADB Avenue cor. Garnet and Sapphire Roads Ortigas Center 1605 Pasig City, Philippines Zamora Poblador Vasquez & Bretaa Law Ofces 5th Floor, Montepino Building 138 Amorsolo Street, Legaspi Village 1229 Makati City, Philippines Stock Transfer Agent Rizal Commercial Banking Corp. Stock Transfer Department G/F West Wing, 221 Grepalife Building Sen. Gil Puyat Avenue 1226 Makati City, Philippines Social Sites: Follow us on Twitter: http://twitter.com/PhStockExchange Track us on Facebook through: The Philippine Stock Exchange, Inc.
For inquiries, please contact: Public and Investor Relations Department Tel (632)819 4100 Fax (632) 864 9046 E-mail for shareholders and analysts: ir@pse.com.ph for general inquiries: pird@pse.com.ph
PROGRESS BEYOND THE EXCHANGE
The Philippine Stock Exchange, Inc. www.pse.com.ph

Public and Investor Relations Department
Tel (632) 819 4100 Fax (632) 864 9046 Email for analysts and shareholders: ir@pse.com.ph Email for general inquiries: pird@pse.com.ph

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WHATS BEYOND THE NUMbERS

2012 Annual Report

PSE 2012 ANNUAL REPORT

Beyond outlook. Beyond records.

The Philippine Stock Exchange, Inc. and Subsidiaries

Stock Market Performance

Concept & Design: Medium3 Photography: Jake Verzosa

4 | PSE 2012 ANNUAL REPORT

6 | PSE 2012 ANNUAL REPORT

MessaGe FroM the ChairMan | 5

Message from the Chairman

JOSE T. PARDO Chairman

8 | PSE 2012 ANNUAL REPORT

MessaGes FroM the president | 7

Message from the President

HANS B. SICAT President and Chief Executive Ofcer

10 | PSE 2012 ANNUAL REPORT 10 | PSE 2012 ANNUAL REPORT

Stock Market Performance

It's Philippines, Inc. as a vibrant and viable investment destination

12 | PSE 2012 ANNUAL REPORT

PSEi vs Select Asian Indices

14 | PSE 2012 ANNUAL REPORT

Sectoral Indices Performance (in %)

As of September 10, 2012

Select PSE Market Indicators

16 | PSE 2012 ANNUAL REPORT

2012 Top 25 Companies by Trading Frequency

2012 Top 25 Companies by Market Capitalization

2012 Top 25 Companies by Value Traded

2012 Top 25 Price Gainers

18 | PSE 2012 ANNUAL REPORT

19 | PSE 2012 ANNUAL REPORT

Total Market Capitalization and Trading Value by Sector

It's providing capital for growth

2012 Market Activity

20 | PSE 2012 ANNUAL REPORT

New listings in 2012

Board Upon Listing First Board

Screenshots of PSE online presence

Listing programs and seminars

Second Board First Board

It's having more investors grow with the market

Summary of 2012 Capital Raising Activities

Stock Rights Offering

22 | PSE 2012 ANNUAL REPORT

CERTIFIED SEcURITIEs SPEcIALIsT COURsE:

BY THE NUMbERs In 2012:

GRA DUA TEs

What's beyond the numbers? A course for the future.

24 | PSE 2012 ANNUAL REPORT

It's the commitment to integrity and good governance

It's about new products and services offered to investors

Stock Trading Tournaments

26 | PSE 2012 ANNUAL REPORT

It's the legacy of unication towards a more progressive market

28 | PSE 2012 ANNUAL REPORT

Performers during the 20th Anniversary launch

30 | PSE 2012 ANNUAL REPORT

It's cultivating an inspired and healthy workforce

It's the capacity to share our gains

Second prize winner for Sculpture category by Joji Limayo

32 | PSE 2012 ANNUAL REPORT

Highlights of Financial Results