PHILIPPINE POSTAL CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. AGENCY PROFILE
By virtue of Republic Act (RA) No. 7354, otherwise known s the !"ostl
#ervices Act of $%%&', the then "ostl #ervices ()ce ws converte* into
+overn,ent-owne* n* controlle* corportion known s the "hilippine
"ostl .orportion ("".).
"hilippine "ostl .orportion or "hilpost *evelops, pro,otes n* opertes
ntionwi*e postl syste, with network to ny settle,ents in the
"hilippines n* roun* the worl* to sustin the postl re/uire,ents of the
0ilipinos in the &$
st
century.
At present, it hs $4 re+ionl o)ces n* opertes totl of &,155 post
o)ces ntionwi*e. 2otl ,npower co,ple,ent which re *istribute* in
the .entrl ()ce, Ntionl .pitl Re+ion n* Re+ionl ()ces totle*
$$,3$7.
2. FINANCIAL/OPERATIONAL HIGHLIGHTS
3. .o,prtive 0inncil "osition
"rticulrs 2010
&11%
As restte*
3ncres
e
(4ecrese)
Assets 6,571,157,79
5
4,745,%55,3%
6
$,5&&,$7&,3%%
7ibilities 4,927,940,75
8
4,41$,565,$5
7
5&6,37&,57$
8/uity 1,643,217,03
7
347,4$7,&1% $,&%5,7%%,5&5
33. .o,prtive Results of (pertions
"rticulrs 2010 &11%
3ncrese
(4ecrese)
(pertin+ revenue 3,191,073,5
93
3,&13,3%5,43
5
($&,3&4,545)
(pertin+ e9penses 3,418,006,6
63
3,546,357,15
$
($&5,351,4$5)
7oss fro, opertions (226,933,070

(34&,%55,643) $$6,1&5,573
0innce cost (34,738,670 (36,%63,&53) &,&&4,6$3
0orei+n e9chn+e (loss):+in (4,388,831 $,65&,743 (6,17$,574)
Net loss (266,060,571

(375,&3%,$53) $$&,$75,6$&
III. 0or the ;nncil yer en*in+ 4ece,ber 3$, &1$1, the .orportion
+enerte* totl revenue of "3.$% billion, *ecrese of 1.3%< fro,
8
their &11% revenue of "3.&1 billion. 2he *ecrese ws substntilly
brou+ht bout by the *ecrese in ,il volu,e, thereby *ecresin+
revenue fro, postl fees.
2he .orportion=s ,>or source of revenue is post+e fees which
constitute 6%< in &1$1 n* 65< in &11% of the totl revenue. 2he
re,inin+ 3$< in &1$1 n* 3&< in &11% re *istribute* s follows?
2010 &11
%
Re+ulr:0orei+n "ostl 0ees 16! $%<
"ostl 34 .r* 0ees 8! 5<
Business 3nco,e 1! $<
#le of "hiltelic 3te,s 1! $<
(ther 3nco,e 5! 3<
31! 3&<
3. COMPLIANCE "ITH NGAS
2he .orportion *opte* the New @overn,ent Accountin+ #yste, (N@A#)
prescribe* by the .o,,ission on Au*it, n* whenever pplicble, *opte*
si+ni;cnt ccountin+ policies which re in ccor*nce with the +enerlly
ccepte* ccountin+ principles in the "hilippines n* the "hilippine
0inncil Reportin+ #tn*r*s ("0R#).
4. SIGNIFICANT ACCO#NTING POLICIES
Basis of accounting A 2he ;nncil stte,ents hve been prepre* on the
bsis of historicl cost, n* e9cept where stte*, *o not tke into ccount
chn+in+ prices n* current vlue of non-current ssets.
Cash Equivalents A 2he .orportion consi*ers s csh e/uivlents ll
hi+hly li/ui* invest,ents with ,turities of three ,onths or less.
Receivables A Receivbles re stte* t net reliBble vlues. Allownce
for b* *ebts is set up followin+ the +in+ ,etho* for tr*e receivbles
n* ,ount of receivble less bene;ts:cli,s for non-tr*e receivbles.
Receivbles fro, 0orei+n "ostl A*,inistrtions re oCset +inst the
pybles to the s,e 0orei+n "ostl A*,inistrtions un*er the Dniversl
"ostl Dnion rules n* re+ultions.
Inventories A 3nventories re vlue* t cost. .ost is *eter,ine* usin+ the
;rst in ;rst out ,etho*.
Property and Equipment A "roperty n* 8/uip,ent re recor*e* t cost.
0or the ln*, buil*in+s n* ,otor vehicles trnsferre* fro, the for,er
9
"ostl #ervices ()ce, the pprise* vlues *eter,ine* by n in*epen*ent
ppriser, the Asin Apprisl .o,pny, in #epte,ber $%%4 were
consi*ere* s their *ee,e* cost. 2he stri+ht line ,etho* is use* in
co,putin+ *eprecition on the bsis of the esti,te* useful lives of the
ssets n* the ten percent ($1<) slv+e vlue prescribe* by the .(A.
Capital expenditures A 2n+ible ssets with cost of t lest 2en 2housn*
pesos ("$1,111.11) when purchse* re recor*e* un*er "roperty n*
8/uip,ent. 89pen*itures incurre* subse/uent to the c/uisition of ;9e*
ssets re cpitliBe* if such e9pen*itures pprecibly e9ten* the life,
increse the cpcity or i,prove the e)ciency n* sfety of the property.
Investments 3nvest,ents re crrie* t cost net of shre in prior yer=s
ernin+s:losses of the subsi*iry.
5. E$EMPTION FROM TA$ES, C#STOMS AN% TARIFF %#TIES
2he .orportion is e9e,pt fro, ll *irect n* in*irect t9es, custo,s
*uties, fees, i,ports n* triC *uties, co,penstin+ t9es, whrf+e fees
n* other chr+es n* fro, restrictions on the i,porttion of e/uip,ent,
,chineries, spre prts, ccessories, n* other ,terils, inclu*in+
supplies n* services use* *irectly in the opertions of the "ostl #yste,
not obtinble loclly on fvorble ter,s.
All obli+tions entere* into by the .orportion n* ny inco,e *erive*
there fro,, inclu*in+ those contrcte* with privte interntionl bnkin+
n* ;nncil institutions, re e9e,pt fro, ll t9es on both principl n*
interest. 2he .orportion is lso e9e,pt fro, the py,ent of cpitl +ins
t9, locl +overn,ent i,posts n* fees fter 4ece,ber 3$, $%%7. 0urther,
the .orportion ,y oCset the full vlue of cpitl invest,ents not
otherwise fun*e* by the Ntionl @overn,ent +inst ny inco,e t9 *ue
for the s,e perio*.
6. TA$ S#&SI%Y
3n &1$1, t9 subsi*y in the ,ount of "&5&.6& ,illion to cover py,ent
for Elue-A**e* 29 on *o,estic postl services for the yer &11% n*
Fini,u, .orporte 3nco,e 29 for the yer &115 ws relese* in the for,
of #pecil Allot,ent Relese (r*er (#AR() Nos. 0-1%-15573 G 0-1%-1%3%$
pyble to the Bureu of 3nternl Revenue pursunt to 0iscl 3ncentives
Review Bor* (03RB) Resolution No. $6-1% n* .erti;cte of 8ntitle,ent to
#ubsi*y (.8#) No. 1474 n* 14%5, respectively.
2010 &11%
Elue-**e* t9 (EA2) 281,275,513 &74,41$,6$1
Fini,u, corporte inco,e t9 1,341,809 3,&45,%67
10
282,617,322 &77,647,577
2he libility for Fini,u, .orporte 3nco,e 29 (F.32) is not tken up in
the books of ccounts. 3t ws only booke*-up upon receipt of .erti;cte of
8ntitle,ent to #ubsi*y n* #pecil Allot,ent Relese (r*er.
7. CASH AN% CASH E'#I(ALENTS
2010 &11%
.sh, collectin+ o)cers- locl 45,750,051 37,&76,%35
.sh, collectin+ o)cers- forei+n
47,655
47,655
.sh, *isbursin+ o)cers
1,932,867
6,575,&7$
"etty csh fun*
994,218
$,&75,15&
.sh in bnk, locl currency- current
ccount
283,638,017
74,363,46$
.sh in bnk,locl currency- svin+s
ccount
183,768,960
$&5,556,365
.sh in bnk, forei+n currency- ti,e
*eposits
72,814,915
53,&&3,171
.sh in bnk, forei+n currency-
svin+s ccount 26,881,649 &%,6%4,435
615,828,332
3&5,1$5,&77
Cash, collecting ocers!local re csh on hn* of post,sters n*
cshiers both in the ;el* n* re+ionl o)ces.
Cash, disbursing ocers represents revolvin+ fun*s tht re ,ore thn
"$11,111 which re issue* to centers:*eprt,ents.
Petty cash fund represents revolvin+ fun*s tht re less thn "$11,111
which re issue* to *esi+nte* *isbursin+ o)cers.
2he .sh in bnk ccounts s of 4ece,ber 3$, &1$1 re further broken
*own s follows?
7ocl .urrency 0orei+n .urrency
.urrent
Account
#vin+s
Account
2i,e
4eposits
#vin+s
Account
2otl
.orporte fun*s $1,$%6,7$% $55,5$3,51
&
7&,5$4,%$5 &4,75$,%5
7
&66,317,1%3
Foney or*er fun*s &73,44$,&%
5
$7,%76,76& - $,5&&,&5$ &%&,%41,34$
(ther trust ccounts - 7,&75,6%6 - - 7,&75,6%6
Hulity service fun* - - - 577,4$$ 577,4$$
2otl &53,635,1$
7
$53,765,%6
1
7&,5$4,%$5 &6,55$,64
%
567,$13,54$
Re,ittnces fro, 0orei+n "ostl A*,inistrtions (0"As) re
cre*ite*:*eposite* to the *ollr ccount ,intine* with Bnco *e (ro
(B4() n* re converte* n* trnsferre* to the peso ccount fro, ti,e to
ti,e when locl ,oney or*ers checks re prepre* for the recipient.
11
8. TRA%E AN% OTHER RECEI(A&LES
2010 &11%
Accounts receivble, locl custo,ers 210,849,922 &15,&64,&5&
7ess? Allownce for *oubtful ccounts 58,950,434 5%,755,65$
151,899,488 $45,515,61$
Accounts receivble, interntionl ccounts 887,843,206 713,515,&&1
7ess? Allownce for *oubtful ccounts 214,381,622 &$3,34$,&41
673,461,584 4%1,$66,%51
4ue fro, re+ionl o)ce
1,134,226,81
0

$,&74,41%,&&
4
4ue fro, ntionl +overn,ent +encies 715,109,614 7$4,657,51$
Accounts receivble, 3nterntionl ,oney
or*er 45,779,227 3$,%%7,574
4ue fro, subsi*iries 102,163,285 $1$,551,$$4
7ess? Allownce for *oubtful ccounts 27,927,184 &7,%&7,$54
74,236,101 73,6&&,%31
2,793,712,82
4
&,733,3%1,$$
1
"ccounts receivable, local customers inclu*e "ost+e .hr+e Account
(".A). Bulk of this ,ount re trnsctions of the Ntionl .pitl Re+ion.
"ccounts receivable, international accounts represents ,oney cli,s fro,
0orei+n "ostl A*,inistrtions n* few privte couriers for the *elivery of
,ils to "hilippine **resses. 2his ccount inclu*es trnsctions with
"hilpost D#A, frnchise of "". which opertes n 89tr A 2erritoril ()ce
of 89chn+e (82(8) in New Iersey, D#A since Iune &111 until Iuly &116. 3t
inclu*es *isllowe* refun* of the &11$ ter,inl *ues ,ountin+ to
J$,13$,%36 n* *ispute* bulk ,il chr+es of J$,55%,757.
#ue from national government agencies inclu*es receivble fro, the
4eprt,ent of Bu*+et n* Fn+e,ent in the ,ount of "657.$1 ,illion
which ws set up to reco+niBe the Ntionl @overn,ent obli+tion over the
,oney vlue of the ter,inl leve cre*its s of 4ece,ber 3$, $%%3 of
e,ployees bsorbe* by the .orportion when it ws corportiBe*. 2he
,ount ws co,pute* usin+ the present slry rtes. "ortion of the
receivble ws lre*y re/ueste* for rei,burse,ent s test cse.
#ue from subsidiaries inclu*es or+niBtionl:opertin+ e9penses incurre*
*urin+ the subsi*iries= corportiBtion which hve lon+ been outstn*in+
n* still sub>ect for reconcilition. 3t inclu*es refun* of provi*ent corporte
12
shre re,ittnce for clen*r yer $%%6 n* $%%7 ,ountin+ to
"%1,6%$,53$.
9. S#PPLIES
2010 &11%
"hiltelic ite,s 37,524,110 $4,567,575
"ost+e st,ps 17,508,725 $,&&5,%%4
()ce supplies 16,586,912 $&,515,64&
#pre prts 6,149,905 6,%57,317
@soline, oil n* lubricnts 5,377,294 5,73$,533
"hilpost pro*ucts 1,659,292 514,$%5
(thers 12,360,506 $&,757,737
97,166,744 54,55&,%5%
10. OTHERS
2010 &11%
"repy,ents 33,601,198 5,415,615
(thers 66,071,736 5%,1$4,155
99,672,934 64,4&&,6%6
11. IN(ESTMENTS
2010 &11%
"hilippine "ostl #vin+s Bnk
#ubscribe* 5,111,111 co,,on shres,
"r vlue "$11 500,000,000 511,111,11
1
#hre in 3nco,e or loss fro, opertions
"rior perio*s (68,876,236 (65,576,&36)
.urrent perio* 37,789,711 37,75%,7$$
Net e/uity invest,ent 468,913,475 465,%$3,47
5
"". "rovi*ent 0un* 5,000,000 5,111,111
(thers 1,956,117 &,&$7,5$1
475,869,592 476,$31,%55
Investment in Philippine Postal $avings Ban% (""#B) represents pi* in
portion of the subscribe* 5 ,illion co,,on shres with pr vlue of
"$11, net of shre in inco,e:loss fro, ""#B=s prior perio*s opertions.
""#B is wholly-owne* subsi*iry of ""., re-estblishe* n* re-opene*
by virtue of "". Bor* Resolution No. %4-34 *te* 0ebrury &6, $%%4 in
ful;ll,ent of the intents n* purposes of R.A. No. 7354. 2he bnk shll
,obiliBe svin+s, pro,ote entrepreneurship to wi*en econo,ic
opportunities n* provi*e the 0ilipino people with full rn+e of
professionl bnkin+ n* ;nncil resources ccessible in ll res of the
country.
Investment in PPC Provident &und represents the see* ,oney of the
fun*. 3t ws crete* by the "". Bor* of 4irectors on (ctober $4, $%%3
to provi*e retire,ent n* other bene;ts to ll its /uli;e* ,e,bers.
13
Investment!others lso inclu*es invest,ent in "hilpost 7esin+ n*
0inncin+ .orportion ("70.) reporte* t no,inl ,ount of one peso.
3t is wholly-owne* subsi*iry of "".. 3t ws crete* by virtue of Bor*
Resolution No. %4-$33 *te* (ctober 5, $%%4 n* *uly re+istere* un*er
#ecurities n* 89chn+e .o,,ission No. A#(-%5-111$$7%% *te*
4ece,ber &%, $%%4. 3t ws incorporte* pri,rily to provi*e lesin+
n*:or ;nncin+ pck+e to support the over-ll postl workers in line
with the i,prove,ent of *elivery of bsic services t Cor*ble rte n*
esy ter,s. 3n $%%5, the .orportion stoppe* its lesin+ n* ;nncin+
opertions n* in &111, its Bor* of 4irectors psse* resolution to
*issolve si* .orportion. At present, its opertion is li,ite* to collection
of ccounts receivble n* tten*nce to court herin+s for its collection
cses. #i,ilrly, the Bor* of 4irectors of the "hilippine "ostl 3nstitute
0oun*tion, 3ncorportion n* the "hilpost Fil Fn+e,ent .orportion
pprove* the *issolution of these two "". subsi*iries in 4ece,ber
&111. #i* subsi*iries hve no opertions since then.
12. PROPERTY AN% E'#IPMENT
Fove,ent of the property n* e/uip,ent is s follows?
7n* n* 7n*
3,prove,ents
Buil*in+ n*
Buil*in+
3,prove,ents
0urniture
0i9tures
n*
8/uip,ent
2rnsportti
on
8/uip,ent
32
8/uip,ent
n*
#oftwre
7ibrry
Books
n* Arts
2otl
C)*+
Inury 1$, &1$1 3$4,%11,%63
$,$77,65$,4$
$ 36%,$37,&17 &1%,416,7$1 41,14%,&&&
$,5%6,63
5
&,$$&,74&,$4
5
A**itions (Note
&4) $,575,&17,$&1 &,756,$46 3,15&,4$5 - $,5&3,%$1 $5,551
$,55&,555,47
$
A*>ust,ents - (33,164,731) (&,&$4,1%%) $,$5$,553 (65,%65) (3,%41) (34,$66,554)
4isposls - - - (%77,&$7) - - (%77,&$7)
4ece,ber 3$,
&1$1 $,5%1,$15,153
$,$47,34&,5&
7 36%,%75,5&3 &1%,6$$,376 4$,517,$64
$,615,57
5
3,661,453,54
5
A,,-.-/0+12 %1341,50+5)6
Inury 1$, &1$1 3,31$,7$& 47&,613,%13 345,%5%,43& $75,3&7,551 $5,%%5,&%%
$,&&%,&1
5
$,1&1,4$7,43
4
A*>ust,ent - %,&%5,54% 57,$53,554 (5$1,&&5) 4,$11,565 - $11,141,371
"rovision 41,3%6 3%,345,63$ 4,17$,455 7,$3$,43% $,4%%,4&1 - 5&,155,374
4ece,ber 3$,
&1$1 3,34&,$15 5&$,&45,353 441,$54,514 $5$,%4%,1%$ &4,5%5,554
$,&&%,&1
5
$,$7&,546,$7
5
C0447568
A.)-6+
%1,1.914 31,
2010 1,886,765,97 626,097,444 (70,209,281 27,662,285
17,211,57
9 379,367
2,487,907,3
69
.rryin+ A,ount
4ece,ber 3$,
&11% 3$$,5%%,&5$ 715,147,515 &1,&%3,411 34,175,531 &$,153,%&3 367,4&7
$,1%&,441,33
%
"roperty n* 8/uip,ent inclu*es ssets n* fcilities trnsferre* fro,
the *efunct Bureu of "osts n* therefter, the then "ostl #ervice ()ce
to the "hilippine "ostl .orportion pursunt to #ection %(b) of R.A. No.
7354.
14
2he "hilippine "ostl .orportion=s property of $4,$1& s/ure-,eter lot
covere* by 2.2 No. N-&1356$ locte* t N3A Ro*, Brn+y "iKhn,
4ili,n, HueBon .ity ws ,ort++e* to 8/uitble Bnk .orportion s
collterl to the e9ten*e* lon fcility of "771 ,illion. 2he Bnk, throu+h
,er+ers with "hilippine .o,,ercil n* 3n*ustril Bnk (".3B) n* now
known s Bnco 4e (ro (B4(), foreclose* the lot on #epte,ber $, &1$1
by virtue of its "etition for 89tr>u*icil 0oreclosure ;le* before the
HueBon .ity Re+ionl 2ril .ourt on the lle+e* non-py,ent of "".=s
in*ebte*ness of "&64,44&,5&&.%7.
2he 89tr>u*icil #le of Rel "roperty ws con*ucte* on (ctober &1,
&1$1 by the 89-()cio #heriC of HueBon .ity who ccepte* n* opene*
the bi* oCer of B4( of "&&$,3&5,5$7.%5 *espite 2e,porry Restrinin+
(r*er issue* by the HueBon .ity Re+ionl 2ril .ourt. 2he blnce of
these outstn*in+ lons pyble per books s of 4ece,ber 3$, &1$1 is
"&$7,544,47&. Fn+e,ent is currently un*ertkin+ the ;nl step
necessry to re-c/uire the le+l ownership of the property which ws re-
pprise* t "634,5%1,111.
13. ACCO#NTS PAYA&LE : INTERNATIONAL ACCO#NTS
"ccounts payable, international accounts refers to 0orei+n "ostl
Accounts (0"As) tht re settle* in ccor*nce with Dniversl "ostl
Dnion (D"D) conventions, rules n* re+ultions which ,y be either thru
the *irect py,ent ,o*e or the oCsettin+ ,o*e. Dn*er the oCsettin+
,o*e, the *iCerence between the receivbles n* pybles re either
pi* or bille*:collecte*. 0"As re ccounte* for in #pecil 4rwin+ Ri+hts
(#4Rs) n* trnslte* t closin+ #4R rte n* D# 4ollr rte to peso
e/uivlent t blnce sheet *te.
14. O#TSTAN%ING POSTAL MONEY OR%ERS
'utstanding postal money orders refers to ,oney or*ers lre*y issue*
fro, which coverin+ ,oney or*er fees were collecte* but not yet
presente* or cli,e*. 4etils below?
2010 &11%
4o,estic postl ,oney or*ers 165,595,496 $5,336,%1%
3nterntionl inco,in+ postl ,oneys
or*ers
1,601,614 $,34%,147
3nterntionl out+oin+ ,oney or*ers 481,877 475,5%5
167,678,987 &1,$6$,55$
15. TERMINAL LEA(E &ENEFITS PAYA&LE
2his ccount pertins to the e/uivlent blnces of ter,inl leve cre*its
of the entire "". personnel s of 4ece,ber 3$, &1$1. 2he ,ount ws
co,pute* usin+ present slry rte.
16. %#E TO GO(ERNMENT AGENCIES
2010
&11%
15
4ue to .o,,ission on Au*it
279,731,46
1 &7$,%%$,555
4ue to @#3#
167,364,21
1 $&5,%65,413
4ue to "+-3B3@
25,529,250
$7,5%$,54%
4ue to "hilhelth
28,143,526
6,446,&&%
4ue to B3R
18,115,271
6,354,7$$
4ue to other @(..s
11,048,972
7,555,$&&
529,932,69
1 436,&41,5%%
4ue to .o,,ission on Au*it (.(A) refers to the unpi* retiners fee *ue
to .(A since $%%%.
4ue to @#3# refers to the outstn*in+ withhel* contributions n* lons
*ue to @#3# inclu*in+ penlties n* surchr+es.
17. %#E TO S#&SI%IARIES
2his ccount consists of lesin+ cost pyble to "hilpost 7esin+ n*
0inncin+ .orportion n* ,ounts *ue to "". "rovi*ent 0un* n*
"hilippine "ostl #vin+s Bnk.
18. OTHERS
2010
&11%
(ther re,ittbles 22,234,298 4&,6$%,754
4ue to other fun*s $,$55,53%
"erfor,nce:bi**ers bon*s pyble
2,748,308 &,7$7,76&
@urnty *eposits pyble
2,077,170
$,75&,%%3
(thers
815,310
$,1&5,%&$
27,875,086
4%,335,&6%
19. LOANS PAYA&LE
2010 &11%
Bnco 4e (ro (B4() 217,844,472 &65,663,%%1
""#B ("43.) 191,040,177 $%5,%51,3&5
""#B (4B") 16,208,742 &$,445,51&
""#B (32 F(N8L R8F322AN.8) 18,000,000 &1,111,111
443,093,391 516,15%,5&1
2he lon ccount with "hilippine .o,,ercil n* 3nterntionl Bnk
(".3B): Bnco *e (ro (B4() h* n ori+inl principl of "645 ,illion in
$%%7. 2his ws restructure* for seven (7) yers co,,encin+ on (ctober
$, &116 until (ctober $, &1$3. 4ue to ti+ht csh Mows, "". hs
totl of seven (7) ,onths *ely in the py,ent of principl ,ortiBtion,
three (3) ,onths in .L &1$1 n* four (4) ,onths in .L &11%. Nowever,
py,ent for interest ,ortiBtion is up*te*. (n Fy $5, &1$1, ;nl
*e,n* for full py,ent ws clle* by B4( n* on #epte,ber $, &1$1,
B4( ;le* its !"etition for 89tr>u*icil 0oreclosure #le' t HueBon .ity
16
Re+ionl 2ril .ourt since the lon is secure* by Rel 8stte Fort++e
un*er 2.2 No. N-&1356$ of the Re+istry of 4ee*s of HueBon .ity.
2he lon pyble to ""#B represents lons vile* by the "hilippine
7esin+ n* 0inncin+ .orportion ("70.) fro, "hilippine Ntionl Bnk
n* when the ltter ws privtiBe*, the lon ws trnsferre* to "hilippine
4eposit 3nsurnce .orportion ("43.). 3n Iuly &11&, ""., s +urntor,
ssu,e* the lon n* this ws oCset +inst the "".=s pyble to "70..
(n 4ece,ber $$, &116, "". trnsferre* the lon fro, "43. to ""#B.
Fonthly ,ortiBtion of "". hs been oCset +inst o)ce rentls of
""#B t the "".-owne* Ntionl .pitl Re+ion Buil*in+ strtin+ 0ebrury
&117.
2he "". vile* nother lon fro, ""#B un*er "ro,issory Note ("N)
No. 4N(-116-15 *te* Iuly 3$, &115, coverin+ bck to bck ter, lon
to tke out "".=s obli+tions fro, the 4evelop,ent Bnk of the
"hilippines (4B") ,ountin+ to "&5,1&5,555.

A "&1 ,illion lon with ""#B ws vile* in &11%, +urntee* by
"hilippine A,use,ent n* @,in+ .orportion ("A@.(R), in tri-prtite
+ree,ent n* thru hol*-out *eposit to enble the "". to enhnce its
3nfor,tion 2echnolo+y (32) cpbility for its ,oney re,ittnce syste,.
20. %EFERRE% CRE%ITS
2his ccount consists of inco,in+ forei+n re,ittnces to the @enerl
0un* *ollr svin+s ccount with Bnco *e (ro which coul* not be
i,,e*itely i*enti;e* s to the re,ittin+ 0orei+n "ostl A*,inistrtion
(0"A) n*:or clients. 2hese re,ittnces *o not constitute libilities but
re *e*uctions fro, ssets since these re collections re,itte* by 0"As
in settle,ent of Accounts Receivble, 3nterntionl Accounts.
21. OPERATING RE(EN#E
2010 &11%
"ostl fees 2,782,789,26
2
&,54%,$$5,5%&
"ostl 34 cr*s fees 262,958,502 &45,343,46&
Business inco,e 40,577,988 3&,%55,736
#le of philtelic ite,s 32,703,391 &5,57&,$35
(ther inco,e 72,044,450 44,175,&$1
3,191,073,59
3
3,&13,3%5,435
22. OPERATING E$PENSES
P14*)60/ S14;5,1* consists of?
2010 &11%
#lries n* w+es 1,583,313,84
3
$,631,571,356
A**itionl co,penstion 29,204,838 &17,5$4,&7$
17
7ife n* retire,ent insurnce contributions 185,760,770 $%3,554,$%3
Ler en* bonus 134,518,717 $4$,3&4,5&6
(ther bonuses n* llownces 24,253,310 46,345,555
2er,inl leve bene;ts 136,784,007 $55,%$6,&5&
"8RA 235,452,574 75,375,75$
.sh +ift 55,480,855 55,%$5,351
.lothin+:unifor, llownce 42,589,337 45,51$,15&
(verti,e n* ni+ht py 15,231,622 $7,%7$,%$5
"hilNelth contributions 18,595,003 $%,$54,5%7
"+-3B3@ contributions 12,842,342 $4,$64,616
Representtion llownce 9,911,418 5,777,$44
8.. contributions 12,018,765 $&,747,%71
2rnsporttion llownce 9,920,392 5,743,41$
7on+evity:loylty py 4,433,900 5,17$,4&&
Retire,ent bene;ts < $,114,%53
NBr* py 835,289 53$,&46
Nonorri 207,580 $&6,&55
2,511,354,56
2
&,64%,676,55$
M056+1606,1 062 O+=14 O3140+568 E>316*1* consists of?
2010 &11%
2rnsporttion n* *elivery 552,456,372 56&,&74,43%
4eprecition 52,088,374 54,555,5&5
@soline, oil n* lubricnts 47,478,926 41,551,435
2rvelin+ e9penses 44,968,887 4%,$4%,536
7i+ht n* wter 60,101,538 51,516,4%1
#upplies n* ,terils 44,871,275 35,%6$,$3%
(thers 104,686,729 $11,15&,166
906,652,101 5%6,651,&31
23. A#THORI?E% CAPITAL STOC@
2he .orportion hs n uthoriBe* cpitl stock of "$1 billion "esos
("$1,111,111,111) *ivi*e* into 45 ,illion .lss !A' shres to be
subscribe* by the @overn,ent n* 55 ,illion .lss !B' shres to be
subscribe* by privte entities with pr vlue of "$11.
24. APPRAISAL CAPITAL
Apprisl cpitl represents the ccu,ultive ,ount of pprisl
increses s *eter,ine* by in*epen*ent pprisers who were hire* to
con*uct pprisl of "".=s ;9e* ssets. Apprisl increse is the ,ount
by which the pprise* vlue e9cee*s the book vlue of ;9e* ssets n* is
**e* to the crryin+ vlue of ;9e* ssets. 2he lst pprisl ws
18
con*ucte* in &11% n* &1$1 for selecte* lots only n* recor*e* t their
new pprise* vlues, *etils s follows?
7(.A23(N (0 7(2#
A""RA3#A7
R8"(R2
#epte,ber ,
$%%4
R8A""RA3#A7
&11%:&1$1
R8A""RA3#84
EA7D8
3ncrese
(4ecrese)
N.R
B3R Ro*, HueBon .ity " $4$,1&1,11
1
"
634,5%1,111 "
4%3,571,11
1
.F8., "sy .ity
-
$,115,731,1
11
$,115,731,11
1
Re+ionl ()ces
33,17$,411
$15,%75,5&
1
75,%17,$&1
Apprisl 3ncrese " $74,1%$,41
1
" $,74%,&%5,5
&1
" $,575,&17,$&
1
25. PRIOR PERIO% A%A#STMENTS
2his consists of the followin+?
#ubstntil increse *ue to
*>ust,ent of reciprocl
ccounts
"
$,&74,41%,&&4
Blnce of prior perio* *>ust,ents $&,$%7,5$$
2otl "
$,&56,617,135

26. A%A#STMENTS TO THE &ALANCE SHEET FOR FAIR PRESENTATION
OF FINANCIAL POSITION
2he "". hs booke*Aup certin ccount blnces clle* !b* ccounts'
which hve been presente* seprtely in its consoli*te* tril blnce
n* which coul* not be substntite*. A si+ni;cnt portion of these
ccount blnces were lre*y booke* :in the ccounts of the "ostl
#ervice ()ce ("#(), the precursor of the "hilippine "ostl .orportion
("".). Dpon its incorportion in $%%&, "". continue* usin+ the "#(
books of ccounts. As result, these ccount blnces inclu*in+
unreconcile* ,ounts, ie. *iCerence between the +enerl le*+er blnce
n* the totl of the sche*ule of subsi*iry le*+ers, were crrie* over to
the "". books of ccounts. 3n April $%%6, ;re broke out t the .entrl
()ce which co,pletely *estroye* the ccountin+ recor*s. "". set up
the +enerl le*+er ccount blnces of the .entrl ()ce s of Inury $,
$%%5 bse* on copy of the .L $%%4 Annul Au*it Report of the
.o,,ission on Au*it. (n the other hn*, "". set up the subsi*iry
le*+er blnces bse* on the *ocu,ents such s bnk stte,ents
receive* fro, outsi*e sources.
3n **ition, these ccount blnces woul* hve been the result, ,on+
others, of the followin+?
19
$. Non-recor*in+ by Re+ionl ()ces of *eposits ,*e by collectin+
o)cers.
&. Non-recor*in+ by Re+ionl ()ces of sweepin+s of *eposits to the
.entrl ()ce.
3. Recor*in+ of collections fro, Accounts Receivble A 3nterntionl
Accounts to the peso ccount inste* of to the *ollr ccount.
4. Recor*in+ of collections to Accounts Receivble - 3nterntionl
Accounts inste* of to Accounts Receivble A 3nterntionl Foney
(r*er Accounts.
5. Non A recor*in+ by the .entrl ()ce of issunces of post+e st,ps
to the Re+ionl ()ces.
6. Recor*in+ of receipts by the Re+ionl ()ces of post+e
st,ps:postl ,oney or*er for,s t fce vlue inste* of t printin+
cost.
7. Non-recor*in+ of supplies use*.
5. "rior yers= e9cess certi;ction on ccounts pyble.
%. 0ilure of the Re+ionl ()ces to recor* the trnsfer to the .entrl
()ce of trust libilities:pybles for 4o,estic Foney (r*ers issue*
by the for,er.
2he ccount titles n* the correspon*in+ blnces s of 4ece,ber 3$,
&1$1 n* &11%, the net eCect of "45%,$54,7%5 ws chr+e* to retine*
ernin+s in &11% re s follows?
%1,1.914 31, 2010 062 2009
4ebit .re*it
.sh n* csh e/uivlents $,$$%,756,1&$ 3$5,44$,%$5
Accounts receivble 367,$3%,%
43
4ue fro, other +overn,ent o)ces
4ue fro, re+ionl o)ces
47,&65,$76
$,%74,771,%76
#upplies $,117,67%,667
4eferre* chr+es 4&%,$63
@urnty *eposits &55,$4&
FobiliBtion fees 54%,55%
"repi* e9penses $&4,&7
3
3nvest,ents in stocks $5%,$5
1
"roperty n* e/uip,ent $,16%,55$,1
$6
(ther ssets 65,51%,%5
3
2otl Assets 3,65$,55%,564 &,&%1,76&,753
Accounts pyble 5$5,466,567
3nter-+ency pybles 66,75&,516
4ue to .entrl ()ce - 4o,estic Foney (r*er 0un* $$&,555,%%$
20
4ue to subsi*iries n* )lites 4,5$5,4$
1
(ther libilities $14,753,44&
4eferre* cre*its 55,3$1,15&
2otl 7ibilities $$7,414,41$ $,145,3$&,5%7
Retine* ernin+s-contin+ent $,635,434
.ontin+ent cpitl &,165,354
2otl 8/uity 3,713,5$5
2otl 7ibilities n* 8/uity $$7,414,41$ $,14%,1$6,4$5
3,7%5,%63,%65 3,33%,77%,$61
B* Accounts-net 45%,$54,7%5
27. OTHER MATTERS
$. 2he "hilippine "ostl .orportion is now un*er+oin+
RtionliBtion "ro+r, which will ri+ht-siBe the co,pny fro, its
current he* count of $$,715 e,ployees, n* contrct of service
workers n* e,er+ency lborers to roun* 7,676 personnel.
2he RtionliBtion "ln ws pprove* by the Bor* of 4irectors
throu+h Bor* Resolution No. &116-$&5 *te* 4ece,ber $%, &116
n* ws re-pprove* on (ctober &7, &1$$ thru Bor* Resolution No.
&1$$-$53.
.urrently, ll the re/uire,ents hve been forwr*e* by "". to the
4eprt,ent of Bu*+et n* Fn+e,ent (4BF). Oeekly ,eetin+s
re now bein+ hel* between "". n* the 4BF. 2he RtionliBtion
"ln is e9pecte* to be si+ne* by Nis 89cellency, "resi*ent Beni+no
#. A/uino 333, on Inury $4, &1$&.

&. (n Iuly $4, &1$$, the fourth Moor of the Re+ionl ()ce, Ntionl
.pitl Re+ion which is occupie* by the 0innce 4eprt,ent, ws
rBe* or totlly *estroye* by ;re. 2he esti,te* *,+e ws
*eter,ine* by the ccre*ite* @#3# A*>uster in the net ,ount of
"55.1 ,illion.
2he buil*in+ which houses the Re+ionl ()ce, Ntionl .pitl
Re+ion n* the "hilippine "ostl #vin+s Bnk he* o)ce is insure*
with the @#3# for the .len*r Ler &1$$ in the totl ,ount of
"&15.1 ,illion.
Bse* on the investi+tion con*ucte* by the 4eprt,ent of 3nterior
n* 7ocl @overn,ent (437@), the cuse of the ;re is un*eter,ine*
bse* on previlin+ circu,stnces n* evi*ences +there*.
Nowever, the cse ,y be re-opene* when circu,stnces wrrnt.
21
3. 0ore+one revenues fro, frnkin+ ,il privile+es for .L &1$1
,ounte* to "35%,5&3,$65. 2hese were uthoriBe* un*er severl
issunces n* were +iven to severl +overn,ent o)ces such s the
()ce of the "resi*ent, #upre,e .ourt, #ente, .on+ress,
.o,,ission on 8lections, etc.
4. 2he ,o*erniBtion pro+r, of the "ostl #yste, throu+h Buil*-
7ese- 2rnsfer sche,e pprove* by the "resi*ent of the "hilippines
in &116 ws not pushe* throu+h becuse the proponent,
Renissnce of A+e (R(A), file* to co,ply with the contrct
such tht ter,intion letter ws sent on Iune &, &115.
5. "". stoo* s +urntor to "70. lons s follows?
.re*itor Bnk
"rincipl 3nterest Blnce
(in ,illions)
AAA #pecil 0un* 333 A
08B2.
&51,7&& $5$,4$5 41&,$37
Bnco 4e (ro $5%,5&5 37,$%$ &&6,7$6
Allie* Bnkin+ .orportion 44,&$5 &3,37$ 67,55%
"rovi*ent 0un* 3,&5% 44 3,333
457,754 &$&,1&$ 6%%,775
6. 2he .orportion hs reli+iously co,plie* with n* enforce* the
i,ple,enttion of t9 lws pursunt to Revenue Re+ultion No. &-%5
*te* April $7, $%%5 i,ple,entin+ Republic Act No. 54&4. 2he t9es
withhel* fro, the slries of e,ployees n* those tht re *ue fro,
the +ross py,ent of +oo*s n* services *urin+ the ,onth for which
it ws *ue were re,itte* i,,e*itely on the ensuin+ ,onth.
28. RESTATEMENT OF 2009 FINANCIAL STATEMENT &ALANCES
.ertin ccounts in 4ece,ber 3$, &11% ;nncil stte,ents were
restte* to +ive retroctive eCect on *>ust,ents ,*e in 4ece,ber
3$, &1$1 ;nncil stte,ents.
22