FOR YOUR COMMUNIT Y,

WE FIND WAYS.

2022 ANNUAL REPORT

BDO NETWORK BANK
2022 ANNUAL REPORT

Table of Contents

03 Corporate Profile
Our Vision
Our Mission
05 Message from the Chairman
07 Message from the Vice Chairman
and President
09 Financial and Operating Highlights
10 Review of Operations
15 Corporate Governance
39 Corporate Social Responsibility
40 Financial Statements
Statement of Management’s Responsibility
for Financial Statements
Statements of Financial Position
Statements of Profit or Loss
43 Organizational Structure
43 Board and Management Directory
44 Products and Services
45 Corporate Information

02
Corporate Profile
BDO Network Bank, Inc. (BDONB) operates as the rural bank subsidiary
of BDO Unibank, Inc., proudly living out its vision of a strong community
bank that relentlessly brings modern and relevant banking closer to
underserved communities.

BDONB provides a wide range of banking products and services including

loans, deposits, remittances, bills payment and other banking services
through its network of 333 branches and 120 loan offices.

Expansion of the Bank’s customer touchpoints is an ongoing endeavor. Going

beyond the traditional mindset of setting up branches and offices only in
big urban areas, BDONB bravely chooses to extend its reach to unbanked
and underserved regions to become logistically closer to more and more
communities in need of banking services.

The corporate governance practices of BDONB are consistent with that

of its parent bank: fairness, accountability, transparency, integrity and
performance. The Bank’s operations are handled by a competent team of
professional managers and officers. The members of the Board of Directors
are composed of professionals with competencies and experience in the
fields of banking and finance, accounting, economics, law, agri-business and
consumer lending.

With the support and guidance of its parent bank, BDO Network Bank remains
steadfast in its commitment to serve its customers with simple, quick,
accessible, relevant, convenient and affordable financially inclusive solutions.

Ang Inyong BDO sa Bayan

BDONB is committed to its Vision and Mission to provide customers in the
communities it operates, meaningful and relevant products and services.
Appropriately anchoring its brand as “Ang Inyong BDO sa Bayan”, the
bank continues to strongly deliver its commitment to work together with
communities in enabling their dreams and addressing their financial needs.
BDONB’s deepening presence in the underserved areas, further brings its
strong message of partnership with the communities, and its unwavering
commitment to provide financial access to Filipinos nationwide.

03
Our Vision
To be the Philippines’ leading bank in serving
communities that are unserved or underserved through
the promotion of meaningful financial products and
services, and responsible financial management.

Our Mission
To be the leading community bank in the Philippines,
through:

▪ A wide and deep presence in progressive

communities that are unserved or underserved;
▪ Responsive, innovative and quality banking products
and services;
▪ Competent and values-driven professionals with a
strong sense of purpose;
▪ Good governance and the promotion of best
management practices; and
▪ Superior returns that are among the best in the
industry

04
Message from the
Chairman

Nestor V. Tan
Chairman

“As we move forward, we will

continue to fulfill the Bank’s promise
of enriching the lives of unserved
and underserved communities.”

05
To our shareholders:
We cannot tell the story of BDO Network Bank without talking about how
deeply we are committed to reach unserved and underserved communities
and to provide them with the banking services they deserve.
Simply put, BDO Network Bank exists for this purpose.
As a community bank that has expanded its presence — from its roots
in Mindanao to the Luzon and Visayas regions — BDO Network Bank is
now in a stronger position to propel the financial growth and wellness
of the underserved and unserved segments. We are humbled by the
commendations we are receiving from the communities we serve, and
we continue to respond by offering them more products and services that
support their needs and aspirations.
In 2022, BDO Network Bank continued to underscore accessibility and
reliability as key priorities. We believe that to be able to better serve
Filipinos, we should be where we are needed the most. By opening close to
100 branches in various locations around the country, BDO Network Bank
was able to deliver meaningful products and services while also creating
jobs for highly qualified personnel in these communities.
Reliability, on one hand, came in the form of readiness of the branches
particularly during critical times or in the aftermath of a calamity or major
disruption. These branches are manned by employees we like to call
“bankyanis” (bank heroes) who go out of their way to connect with our
customers by visiting their homes and places of work even if it requires
traveling a great distance.
BDO Network Bank’s focus in 2023 will still be anchored on network
expansion, with the planned opening of more branches in non-urbanized
areas and potential tourist sites. With the renewed economic activity,
we hope to assist micro businesses in getting back on their feet after
experiencing the grueling impact of the COVID-19 outbreak three years
ago. We will also support clients with varied personal needs through
financial solutions encompassing savings, lending, investing, online banking,
payments, and protection.
We continue to write the story of BDO Network Bank. As we move forward,
we will continue to fulfill the Bank’s promise of enriching the lives of
unserved and underserved communities. To us, a reliable banking experience
should never be a privilege only for some; it should be enjoyed by all.
At this point, let me thank the members of Board of Directors, the
management team, and all the “bankyanis” of BDO Network Bank for the
unparalleled dedication and willingness to uphold the Bank’s brand of
service. I could not be more proud of all of you.

Sincerely,

Nestor V. Tan
Chairman

06
Message from the Vice
Chairman and President

Jesus Antonio S. Itchon

Vice Chairman and President

“Our pursuit to promote inclusive

banking is an unbending
commitment, even in the most
challenging of times.”

07
Dear Shareholders, Clients, and Colleagues,
Our pursuit to promote inclusive banking is an unbending commitment even
in the most challenging of times.

When the pandemic paralyzed the economy back in 2020, BDO Network
Bank defied the uncertainties and continued its network expansion to reach
out to unbanked and underbanked communities. The needs of our existing
customers who live and work in various remote areas and far-off islands
were personally attended to by our team despite mobility restrictions.

The condition since then has changed for the better. In 2022, we started
to see an economic recovery that created increased demand for financial
solutions to support the distinct needs of individuals and micro businesses.
As a result, we saw our CASA grow by 18% to P38.1 billion while our gross
loans rose by 79% to P67.7 billion. These numbers bring a deep sense of
fulfillment to BDO Network Bank, because the communities we serve have
started to rebuild the momentum they lost during the pandemic and that
we are able to help them through the products and services we provide.

BDO Network Bank is driven by the service philosophy “Ang inyong BDO sa
bayan”, and we will continue to move forward with this promise.

For 2023, the Bank will focus on continued network expansion with the
opening of more branches in areas where access to banking services is
most needed. We will employ innovative solutions to bring accessibility
and reliability to customers who may be partnering with a bank for the very
first time and those who are looking for meaningful financial products to
support their goals. These products include the Kabayan Loan (unsecured
lending to OFWs and their families), micro insurance (uniquely provides daily
compensation for hospital confinement in addition to the regular coverage
for accidental death and burial assistance), and BDO credit cards (new
payment capability for online settlement).

We would not be where we are now if not for the wisdom and guidance
of the members of the Board of Directors, the commitment of our
management team, and the heroic efforts of our employees. Together, we
are making good strides towards bringing to life our vision to be the leading
provider for the unbanked and underserved.

We will be where we are needed.

Very truly yours,

Jesus Antonio S. Itchon

Vice Chairman and President

08
Financial and
Operating Highlights

2022 2021 Change

BALANCE SHEET (in million Php)
Total Assets 87,229.8 54,738.6 59%
Investment Securities 8,893.1 8,687.7 2%
Liquid Assets 13,406.1 12,470.2 8%
Gross Customer Loans 67,695.2 37,744.4 79%
Deposits 67,110.6 47,039.2 43%
Equity¹/ 11,509.5 6,219.2 85%

INCOME STATEMENT (in million Php)

Net Interest Income 5,273.0 4,068.5 30%
Non-Interest Income 3,937.0 2,090.0 88%
Gross Operating Income 9,210.0 6,158.5 50%
Operating Expenses 6,713.7 5,332.2 26%
Pre-provision Profit 2,496.3 826.3 202%
Impairment Losses 733.8 236.9 210%
Net Profit (Loss) After Tax 1,134.0 383.3 196%

FINANCIAL PERFORMANCE INDICATORS

Profitability
Return on Average Common Equity 12.8% 6.2%
Return on Average Equity 12.8% 6.2%
Return on Average Assets 1.6% 0.8%
Margins and Liquidity
Net Interest Margin 8.2% 9.7%
Gross Customer Loans to Deposit Ratio 100.9% 80.2%
Liquid Assets to Total Assets 15.4% 22.8%
Cost Efficiency
Cost to Income Ratio 72.9% 86.6%
Cost to Average Assets Ratio 9.5% 11.2%
Asset Quality
Non Performing Loans (NPL)/Gross Customer Loans 2.8% 5.4%
Non Performing Loans (NPL) Cover 96.5% 77.3%
Capital and Leverage
Common Equity Tier (CET) 1 Ratio 13.53% 11.5%
Tier 1 Capital Ratio 13.53% 11.5%
Capital Adequacy Ratio (CAR) 14.41% 12.4%
Asset to Equity 7.6x 8.8x

DISTRIBUTION NETWORK AND MANPOWER

Branches 333 243 37%
Loan Offices 120 108 11%
ATMs 425 332 28%
Employees 4,726 4,220 11%
1/
Total capital accounts, inclusive of non-controlling interest and preferred shares.
09
Review of Operations

Financial Performance 2022 ACHIEVEMENTS

BDO Network Bank demonstrated robust growth as the market

recovery created strong demand for new salary and micro small and
P67.7 billion
Gross Customer Loans
medium enterprise (MSME) loans.
79% Increase
In 2022, the Bank opened 105 new branches and loan offices,
bringing the total number to 453. Salary loan growth was at its
highest rate in 2022 as the Bank was able to capitalize on the
increase in allowable maximum tenor from three to five years for
P87.2 billion
Total Assets
salary loans to Department of Education employees coupled with 59% Increase
nationwide sales coverage through continued branch expansion
and the relentless efforts of the Bank’s sales force. In addition, with
the economy gaining momentum in the second half of 2022, loan
demand among micro, small and medium enterprises (MSMEs) P67.1 billion
also increased. Total Deposits
43% Increase
Gross customer loans increased by 79% from P37.7 billion to
P67.7 billion, and total assets increased by 59% from P54.7 billion
to P87.2 billion. Due to the Bank’s continued accessibility and
reliability, total deposits registered a 43% increase from P47.0 billion P38.1 billion
to P67.1 billion, while current account/savings account (CASA) levels CASA
grew 18%, from P32.3 billion to P38.1 billion. For 2022, BDONB’s net 18% Increase
income increased 196% to P1.1 billion, up from P383.3 million in 2021.

Income from interest-generating activities increased 30% from

P4.1 billion to P5.3 billion while non-interest income was higher by
P5.3 billion
Net Interest Income
88% from P2.1 billion to P3.9 billion. Gross operating income grew
30% Increase
by 50% from P6.2 billion to P9.2 billion, while operating expenses
increased 26% from P5.3 billion to P6.7 billion.

In 2022, BDONB continued to fulfill its vision to be the leading bank

for underserved communities by extending its market reach beyond
current infrastructure limitations, providing relevant products and
services that add value to communities and providing meaningful
jobs to highly qualified employees in their own hometowns. Putting
premium on convenience for customers, BDONB offices have long
reverted to standard banking hours, with employees continuing to
reach out to customers in their homes and places of work. BDONB
branches are among the first to restore critical services after a
calamity or major disruption.

10
Operational Highlights
Lending LENDING OPERATIONS

BDONB’s gross customer loans grew by 79% in 2022, rising from

P37.7 billion to 67.7 billion, with growth coming from salary loans and
79%
Increase in
MSME loans. Non-performing loans declined from 5.4% in 2021 to 2.8% in
2022, while the non-performing loan cover increased from 77.3% in 2021 Total Loans
to 96.5% in 2022.

The Bank continued the growth momentum in lending, demonstrating

the Bank’s commitment to be relevant and accessible to unbanked 88%
and underserved communities. Loan offices increased by 11% in 2022 Increase in
to 120 locations. In addition, relevant new products were launched, Salary Loans
additional channels and technologies were utilized and credit policies and
procedures adapted, all to meet the needs of clients in a fast changing
economic environment. 18%
Increase in
Salary Loans MSME Loans

Salary loans substantially grew by 88% in 2022, and the Bank experienced
its highest loan release and highest loan portfolio on record, with loan
releases doubling over the prior year. The lending landscape for Salary
Loans witnessed a major change when the Department of Education
approved the extension of the maximum loan term from three years to
five years in March 2022. Leveraging on the extended loan term, BDONB
was able to continue to capture market share through advertising of
its competitive interest rate offers. In addition, the easing of COVID-19
related restrictions allowed the sales force the opportunity to return
to their signature grassroots marketing efforts, which were welcomed
by customers. Through the team’s year-round, consistent presence in
the field and remote areas, they were able to offer more flexibility and
options for loan borrowers, which drove sales and resulted in more
loan bookings.

Through these BDONB fortified marketing efforts, emphasizing the Bank’s

commitment to meet the customers at their preferred location, our sales
force creates the lasting branding the Bank needs to become top of mind
for Salary Loans and customers’ lender of choice.

The Bank continues its deliberate expansion into remote areas which
are carefully selected with pilot caravans to determine market suitability
and acceptance. In addition to in-person, personalized services, digital
banking solutions are explored to augment our customer experience
and allow the Bank to reach more customers in remote areas where
internet is already available. Other financial products are constantly being
looked at, to cater to the underserved markets, such as Pabahay Loan
and a re-launch of non-DepEd loans, which will enable the Bank to be
a one-stop shop for all financing services needed by our current and
future customers.

11
MSME Loans
In 2022, despite the mobility restrictions from the Omicron variant of
COVID-19, BDONB grew its MSME loan portfolio by 18%, due to the re-
opening of the market and the resulting working capital needs.

The Bank launched two new offerings in 2022, including Kabayan

Loan, which provides unsecured lending to Overseas Filipino Workers
(OFWs) and their families, and microinsurance, which provides daily
compensation for hospital confinement, coverage for accidental death,
and burial assistance that will allow basic risk management capability
for the first time for many underserved customers. An increased focus
on improving sales productivity and asset quality through targeted
customer selection and stronger collection efforts were supported
by enhancements to the Bank’s credit policy and updated processes.
Learnings from portfolio analytics, credit scoring engines, as well as
process simplification, increased response time and provided higher
exposure to customers with good credit indicators.

The Bank continues to invest in making its people, products and

processes smarter and its portfolio quality stronger. As field personnel
continue to meet new and existing customers in their communities,
BDONB remains committed to improving technological applications
to aid in customer information capture, which will facilitate the loan
application process and improve customer service turnaround times.

Deposit-Taking BRANCH OPERATIONS

In 2022, the Community Banking Network Group remained focused

on branch expansion in strategic locations to cover more unbanked 57%
and underserved communities, opening 90 new branches, which is CASA Ratio
the highest number ever opened by the Bank in a single year. Clients
exude positive reception and support in the opening of branches in their
communities and appreciate the convenience, as they no longer need
to travel long distances to visit branches in other towns. Opening day of
43%
Increase in
a new branch often generates Current Account/Savings Account (CASA) Total Deposits
deposits of P10-30 million.

In addition, to help build a relevant, meaningful and more complete

banking relationship for underserved communities, the Bank has
outfitted its field tellers with wireless POS terminals to enable them to
37%
Increase in
walk to customers’ places of business so that they can conveniently
Number of Branches
make deposits and meaningfully use their bank accounts. Through the
cross-selling of BDO credit cards, the Bank also provides customers with
new payment capability for online settlement.

As a result, the Bank’s deposit balance at the end of 2022 reached a

record high of P67.1 billion. CASA Outstanding Balance (OB) increased by
18%. The bank also maintained a CASA ratio of 57%.

BDONB will open more branches in unbanked and underserved areas

in order to stimulate economic activity through the use of the Bank’s
deposit and lending services. BDONB remains committed to bringing
banking services to those most in need, both in-person and online,
putting in place a Rapid Response Team to support branches during
emergency cases and calamities affecting employees so that all
customers can continue to access bank services safely and conveniently
even under adverse conditions.

12
Support and Delivery Systems
In 2022, BDONB added 90 new branches and 15 new loan offices for MSME loans
and deployed 93 additional ATMs. The strategic location of Cash Agad merchants
and remote ATMs further extends the accessibility to customers who are beyond the
periphery of the Bank’s branches, and improved ATM services are expected as ATM
facilities will be powered by BDO.

Domestic remittance volumes were sustained in 2022. Credit to BDONB accounts

remittance service via PESONet steadily increased in value and volume reaching
P8.74 billion or 70% higher compared to last year.

The BDONB Facebook page provides a meaningful alternative to on-the-ground

grassroots marketing. With 85% of the Bank’s customers on the platform, Facebook
and Messenger have quickly become significant channels for customer engagement,
feedback and support as well as leads generation.

BDONB plans to launch mobile banking in late 2023 to augment its new online banking
applications. System enhancements and continued advancements in platforms and IT
infrastructure will ensure that the communities served by BDONB will have access to
an enhanced set of services.

Treasury
In 2022, BDONB focused on diversifying funding options for the Bank’s growing loan
portfolio at a reasonable cost.

Competitive pricing garnered new clients and contributed to the Bank’s deposit
growth. Raising funds through borrowings and deposit generation amid rising
interest rates resulted in higher cost of funds which consequently affected the
Bank’s net interest margins.

For 2023, the Treasury Group will focus on CASA & time deposits to fund the Bank’s
loan growth and expansion, utilize its investment portfolio to generate income and
continue to explore low-cost funding sources to enhance the Bank’s net interest
margin. The Treasury Group will also continue to support other Bank programs and
initiatives, including financial inclusion and network expansion.

Leadership, Talent, and Organization

The Bank’s employee headcount grew in 2022 by 12% to 4,726 employees, with most
of the new hires coming from the communities where new branches are located.

BDONB is proud to provide meaningful career opportunities and to reunite families

by providing employment opportunities in communities where they live. In 2022,
a noteworthy success narrative of one employee, who began his time with the
Bank as a utility personnel at one of its branches because this allowed him to
return to his hometown and be with his family. After serving as a utility person
for five years, he decided to apply for an account officer position when he saw
an interview ongoing at the branch. He was accepted, and this year was awarded
SOCCSKSARGEN Area’s Account Officer of the Year.

Talent acquisition continues to be challenging in the current market as the Bank’s

unique model of meeting the customers where they are located requires selling
skills that are not readily available in the industry. As a result, hiring comes from
outside the industry and entails training new hires to adapt to the highly regulated
banking industry.

13
BDONB further outsourced certain back office and other support functions to its
parent, BDO. Outsourcing these functions provides for improved efficiency and
increased flexibility to support the high growth of the business with the benefits
of scale and the technology solutions being implemented by BDO. In addition, in
2022, the Bank added a Senior Business Development Officer, created a Business
Technology unit to support the IT-related needs of the Bank and added more Area
Heads to support network expansion.

The health and safety of the Bank’s employees remained a key focus in 2022. We
continued to screen employees for COVID – employees who contracted COVID
were provided support thru the grant of additional sick leaves, online medical
consultation, and medical kits, and employees who came into close contact with
COVID patients were also provided support thru testing and quarantine. Work-
from-home opportunities continued for our support teams and the Bank continued
its focus on leadership, training and incentives through the online delivery of
training courses. In 2022, the BOUNCE hotline was established to assist employees
struggling with mental health issues.

Going Forward
The Bank is well-positioned to fulfill its vision to provide the most relevant,
meaningful and complete banking relationship for underserved communities. The
men and women of BDONB remain committed to making a difference in the lives of
the clients and the communities they serve.

BDONB is geared to sustain its network expansion, to develop and provide relevant
products and services, continuously improve operating and credit policies and
procedures and further develop customer engagement models and channels. The
Bank will further explore digital innovations and technology solutions to improve
client access, increase productivity and reduce funding costs. Most importantly, all
teams across business units will continue to provide excellent customer service
and meaningful engagement with current and future clients to further deepen the
customer relationships which is the heart of everything that the Bank does.

14
Corporate Governance

Corporate governance in BDO Network Bank is about effective Board Snapshot

oversight, strict compliance with regulations, and sustainable value
creation to promote the best interest of its various stakeholders. DIRECTOR DIVERSITY
BDO Network Bank, Inc. affirms its deep commitment to the highest 3 Females
standards of corporate governance practice firmly anchored on the
principles of accountability, fairness, integrity, transparency, and 7 Males
performance consistently applied throughout the institution. BDONB’s
good market reputation, especially in the rural areas, has been built on
DIRECTOR AGE
the solid foundation of an ethical corporate culture and responsible
business conduct, underpinned by a well-structured and effective 2 40-49
system of governance.
1 50-59
BDONB complies, where appropriate, with the SEC Code of Corporate
Governance for Public Companies and with the Enhanced Corporate 6 60-69
Governance Guidelines for BSP-Supervised Financial Institutions. It has
also continued to follow and align, where appropriate, to the Corporate 1 70-79

Governance Framework of its parent bank, BDO Unibank, Inc., which

in turn follows relevant international best practices of corporate DIRECTOR EXPERTISE
governance issued by globally recognized standards-setting bodies 9 Banking
such as the Organization for Economic Cooperation and Development
(OECD) and the ASEAN Corporate Governance Scorecard (ACGS) which 10 Accounting and Finance
serve as essential points of reference.
6 Merchandise/Marketing
This report describes the highlights of our corporate governance
practices throughout the financial year ended December 31, 2022.
7 Strategy Formulation

Governance Structure 8 Bank Regulations

1 Information Technology
Board of Directors
3 Risk Management
Responsibility for good governance lies with the Board. It is responsible
for providing effective leadership and overall direction to foster the 2 MSME
long-term success of the Bank. It oversees the business affairs of the
Bank, reviews the strategic plans and performance targets, financial 3 Remittance
plans and budgets, key operational initiatives, capital expenditures,
acquisitions and divestments, annual and interim financial statements, 1 Agri-Business
and corporate governance practices. It also periodically reviews the
Bank’s corporate mission and vision and ensures their continuous
DIRECTOR INDEPENDENCE
alignment with the Bank’s strategic plans. It oversees management
3 Independent Directors
performance, the enterprise risk management, internal control
systems, financial reporting and compliance, related party transactions,
1 Executive Directors
continuing director education, and succession plans for the Board,
the President, and key executives. It considers sustainability issues
6 Non-Executive Directors
related to the environment and social factors as part of its sustainable
banking practices.

15
Board Composition
The board is composed of eleven (11) seats, with one vacancy as of December 31,
2022, reserved for an independent director. It is aided by one (1) advisor and led
by a Non-Executive Chairperson with three (3) Independent Directors, five (5) Non-
Executive Directors, and one (1) Executive Director who is the Vice Chairman and
the President.

The present composition of the Board exceeds the minimum regulatory standards
which require that independent and non-executive directors account for the
majority. Independent and Non-Executive Directors of the Bank comprise 80% (8 of
10) of the Board. With four (4) of 11 Board seats allocated for independent directors,
the Bank complies with the 1/3 minimum requirement of the Bangko Sentral ng
Pilipinas and the Securities and Exchange Commission. Independent directors chair
four (4) of five (5) board committees, namely Risk Management, Audit, Corporate
Governance, and Related Party Transactions. This provides independent, objective,
and balanced judgment on significant corporate matters and ensures that key
issues and strategies are objectively reviewed, constructively challenged, thoroughly
discussed and rigorously examined.

The Board advisor is considered as an integral part of the Board whose influence is
akin to directors. Her opinions and recommendations are taken into consideration
by the Board members. The presence of a female Board advisor provides an
independent view of the Bank and complements the three (3) female non-executive
directors in the Board, two (2) of whom are independent directors.

In 2022, the only change in board membership that occurred was the resignation of
Atty. Jesse H.T. Andres effective June 30, 2022.

Screening of Directors
The Board is responsible for the screening of new directors through the Corporate
Governance Committee. It leads the process of identifying and evaluating the
nominees for directors. Annually, before the re-election of the directors in the
Annual Stockholders’ Meeting, it evaluates the balance, skills, knowledge and
experience of the existing Board and the requirements of the Bank. The result of the
evaluation determines the role and key attributes an incoming director should have.
The Corporate Governance Committee receives recommendations for potential
candidates and uses, to the extent possible, external search firms or external
databases in selecting the pool of candidates for the new members of the Board.
The Corporate Governance Committee recommends the most suitable candidate to
the Board for appointment or election as director.

For reelection of incumbent directors, the Corporate Governance Committee also

considers the results of the most recent annual evaluation of the performance of
the Board, Board Committees, and peer evaluation made by the Board members
and advisors or by an independent third-party evaluator, attendance record in
meetings, participation in Board activities and overall contribution to the functioning
of the Board.

Board Diversity
In evaluating the suitability of an individual board member and promoting diversity
in the composition of the Board, the Corporate Governance Committee annually
reviews the Board and Board Committee composition to ensure appropriate balance
of skills, competencies, experience of its members, and diversity to ensure the
alignment with the new regulations.
16
The Committee recommends to the Board of Directors the slate 2022 BOARD MEETINGS
of nominees for election to the Board of Directors during the No. of Total
Bank’s annual stockholders’ meeting. The Committee takes into Meetings No. of %
Directors Attended Meetings Rating
account the relevant qualifications of every candidate nominated Nestor V. Tan 15 15 100%
for election, with competence and integrity as the primary factors, Jesus Antonio S. 15 15 100%
including other criteria such as, among others, physical and mental Itchon

fitness, relevant educational and professional background, personal Rolando C. 15 15 100%

Tanchanco
track record, experience and training, commitment to contribute, Jaime C. Yu 15 15 100%
willingness to serve, and interest to remain engaged and involved, Edwin Romualdo G. 15 15 100%
without regard to race, gender, ethnic origin, religion, age, or Reyes

sexual orientation. Jovasky Wei Shen 15 15 100%

Pang
Geneva T. Gloria 15 15 100%
As part of the Board’s commitment to continually promote and
Ma. Leonora V. 15 15 100%
observe diversity in its membership, it ensures that the members De Jesus
of the Board have expertise in fields relevant to BDONB’s business Jesse H. T. Andres* 7 7 100%
and strategic plans. The present members of the Board have Jose S. Tanjuatco 15 15 100%
extensive experiences in banking, accounting and finance, law, Evelyn Cristina A. 15 15 100%
Cam
merchandise/marketing, strategy formulation, bank regulations,
information technology, risk management, MSME, remittance, * Resignation is effective July 29, 2022.
and agri-business. More than half of the board members have
foreign educational and/or work experiences, which bring global
perspectives to the board.

Considering the changes done, complexity and scope of the

Bank’s business, the Board believes that its current size and
composition provide sufficient diversity among its directors, foster
critical discussion, and promote balanced decision-making. It
views diversity at the Board level, which includes differences in
skills, experience, gender, sexual orientation or preference, age,
education, race, business and other related experience, as an
essential element in maintaining an effective board for strong
corporate governance.

Selection and Appointment of Senior

Executive Management
The Board is also responsible for approving the selection and
appointment of a competent executive management led by
the President including the heads of units who exercise control
functions i.e. Chief Compliance Officer, Chief Risk Officer, and
Chief Internal Auditor. Fit and proper standards are applied in the
selection of key officers and utmost consideration is given to their
integrity, technical expertise, and banking industry experience.

Review of Bank’s Mission, Vision, and

Strategic Plans
The Board, being the highest governance body, is responsible for
approving and updating the Bank’s mission, vision, objectives and
strategies on a continuing basis and in overseeing management’s
implementation thereof which takes into account the Bank’s long-
term financial interests, its level of risk tolerance, and ability to
manage risks effectively. It actively engages in the affairs of the
Bank and keep up with material changes in the Bank’s business

17
and regulatory environment and ensures that the Bank has beneficial influence on
the economy. The Board also approves and oversees the implementation of policies
governing major areas of the Bank’s operations. The Board holds special meetings as
may be necessary to discuss strategic matters and critical concerns.

During the year, the Board approved, reviewed, and oversaw the Bank’s financial
budget and capital funding, business targets and strategies, and the release of
the 2021 audited financial statements. Its oversight functions include the review
of operational and financial performance of senior management and work of the
various committees in accordance with their Terms of Reference. The Board also
discussed the current state of COVID-19 and the ongoing global inflation and their
impact on the bank strategies. As part of its strategy to build strong business
franchise, the Board approved the additional equity investment and capital infusion
by BDO Unibank and Osmanthus Investment Holdings Pte. Ltd. into the Bank to
support its strong salary and MSME loan growth.

Sustainability Initiatives
The Board also oversaw matters related with sustainability, particularly on the
Bank’s alignment with the institutional approach of the BDO Group to transition into
a sustainable finance framework through engagement in Technical Working Groups
and adoption of policies on energy, water, fuel and waste management; gender,
diversity and inclusion initiatives of HR, including the incorporation of sustainability
commitments in performance reviews; supply chain management; and employee
volunteer program based on sustainable development goals themes. The Board,
through the Corporate Governance Committee, is regularly updated on sustainability
initiatives and policies through close coordination with Compliance and the BDO
Sustainability Office. The Bank reports on its sustainability strategies through the
annual BDO Sustainability Report.

Improving Board Effectiveness

Board Performance
A yearly self-assessment is conducted focusing on the performance of the Board,
directors, Committees and senior management, through the Corporate Governance
Committee, using an approved set of questionnaires. The performance evaluation
process begins with sending out customized Board Evaluation Questionnaires
to each director and advisor. They are required to complete the questionnaire
and explain the rationale of their response. The results of which are tabulated
and consolidated.
The Parent Bank engaged Isla Lipana & Co./PwC Philippines (PwC) anew as external
facilitator for its 2021 Board Effectiveness Evaluation (BEE) and BDO Network Bank
adopted the same set of questionnaires for 2021. The results from the directors’ and
board advisor’s assessment responses show that the Board has healthy and positive
dynamics, indicating that the Board works well as a group. The Board is also diverse
in terms of expertise, experience and perspectives, which is key for a well-governed
bank. The results further indicate strong oversight and engagement by the Board
with senior management. The Board also approves and monitors appropriate key
performance indicators for senior management, which are aligned to the Bank’s
strategic plan, and oversees management’s conduct of the Bank’s business to
assess if it is being properly managed, and intervenes as needed.

18
Continuing Education for Directors
The continuing education program for directors is an ongoing process to ensure the
enhancement of their skills and knowledge. Every year, all directors and key officers
are given updates and briefings, and are required to attend a corporate governance
seminar on appropriate topics to ensure that they are continuously informed of the
developments in the business and regulatory environments, including emerging
opportunities and risks in the banking industry.
All of the directors of BDO Network Bank complied with the annual corporate
governance training requirement of four (4) hours in 2022. Ten (10) directors of BDO
Network Bank, along with members of senior management, attended BDO Unibank’s
in-house corporate governance seminar held on July 20, 2022. Keynote speaker Prof.
Kishore Mahbubani of the Asia Research Institute, National University of Singapore
provided valuable insights on geopolitical risk in the face of fierce geopolitical contest
among world superpowers and the continuing rise of Asia and the ASEAN. S&P
Global, on the other hand, talked about sustainability and the role of boards, with
focus on climate change and biodiversity challenges that companies are facing today.

Succession Planning
Succession planning for the Board and senior management is an important part
of the governance process. The Bank adopts the succession planning policy of its
Parent Bank complete with the succession framework and leadership development
plans for senior management and those directly reporting to the President, which
are reviewed by BDO Unibank’s Corporate Governance Committee and subsequently
approved by its Board. As part of the periodic review, the succession framework is
updated and training programs are conducted accordingly. For succession planning in
the Board, it has adopted the nine-year term limit of Independent Directors as a way
to refresh the Board membership progressively and in an orderly manner.
The Parent Bank’s Succession Planning Policy not only includes the identification
of key roles and talents, but also the assessment and building of the organization’s
bench strength. It has adopted a talent management program that identifies
the appropriate development interventions and program to ensure that potential
successor is ready to assume the next key leadership/critical position in the Bank.

Remuneration of Directors and Senior Management

Our Remuneration policy is aligned with that of our Parent Bank BDO Unibank, which
is geared towards attracting, retaining, and motivating employees and members of
the Board.
The remuneration framework for senior management includes fixed pay, bonuses
and the Employee Stock Option Plan (ESOP) as a long term incentive program. A
claw back mechanism is in place, where the benefits and rights accruing from the
ESOP can be revoked or forfeited, if the eligible employee is terminated from service
for cause or in the event of imposition of an administrative or disciplinary sanction
or penalty against the employee at any time during and after the vesting period
prior to exercise. It is linked to corporate and individual performance, based on an
appraisal of senior management. The five most highly compensated officers are the
President, one Executive Vice President, two Senior Vice Presidents, and one First
Vice President. All qualified employees may be entitled to an annual merit increase
in salary, based on their performance for the immediately preceding year. This has a
long-term and compounding effect to the fixed pay, which serves as basis for their
retirement benefit.
Non-Executive Directors (NEDs), who are not also officers of the Parent Bank,
and Independent Directors receive per diem for attending board and committee

19
meetings. In addition, the Bank grants director fees, other than per diem, in
accordance with law to ensure that the remuneration is commensurate with the
effort, time spent, and responsibilities of NEDs. There is no distinction on the
director’s fee for a committee chairman or member. The total remuneration of each
member of the Board is disclosed in the Bank’s Definitive Information Statement and
SEC Form 17-A (Annual Report).

Dividends
The Bank recognizes the importance of providing a stable and sustainable dividend
stream consistent with its commitment to shareholders.

The payment of dividends entails prior board approval of the amount, record and
payment dates as recommended by Management based on the BSP and SEC rules
on declaration of cash dividends. Upon Board approval, necessary disclosures are
made in compliance with regulatory requirements.

Related Party Transactions

The Bank has established policies and procedures on related party transactions
(RPT) in accordance with BSP and SEC regulations and are aligned with that of
our Parent Bank, except for materiality threshold. These include definition of
related parties, coverage of RPT policy, guidelines in ensuring arm’s length terms,
identification and prevention of potential or actual conflicts of interest, adoption of
materiality thresholds, internal limits for individual and aggregate exposures, whistle-
blowing mechanisms, and restitution of losses and other remedies for abusive
RPTs. The RPT Committee reviews and endorses to the Board for final approval all
material RPTs. The Related Party Transactions Policy applies to BDO Network Bank,
Inc., as applicable, to ensure that every related party transaction is conducted
in a manner that will protect the Bank from any potential conflict of interest.
The policy also covers the proper review, approval, ratification, and disclosure of
transactions between the Bank and any of its related parties in compliance with
legal and regulatory requirements. The policy also requires that any member of the
RPT Committee who has a potential interest in any related party transaction shall
abstain from the discussion and endorsement of the related transaction. Likewise,
any member of the Board who has interest in the transaction must abstain from the
deliberation and approval of such related party transaction.

Chairperson of the Board

The Chairperson is primarily responsible for leading the Board and ensuring its
effectiveness. He provides leadership to the Board, fosters constructive relationships
between directors, promotes an open environment for critical discussions and
constructive debate on key issues and strategic matters, and ensures that the Board
of Directors exercises strong oversight over the Bank’s business and performance
of senior management. He takes a lead role in ensuring that the Board provides
effective governance of the Bank and continues to operate at a very high standard of
independence with the full support of the directors.

Independent and Non-Executive Directors’ Meeting

A regular meeting is held by Independent and Non-Executive Directors (INED) with
the heads of the control functions (i.e. Chief Risk Officer, Chief Compliance Officer,
and Chief Internal Auditor) as well as the external auditor, without the presence of
management or any bank executive, to discuss various matters or issues outside
the Board Audit Committee and Risk Management Committee meetings. The
meeting is chaired by the Lead Independent Director. In 2022, the INED conducted
one (1) session and the results of said session were discussed with the Bank’s
Executive Director.
20
Major Stockholders
As of December 31, 2022, the following are known to BDO Network Bank, Inc. (BDONB) to be
directly or indirectly beneficial owners of more than 5% of BDO Network Bank’s voting securities:

Title of Class Name Citizenship Percentage

Common BDO Unibank, Inc. Filipino 86.18%
Common Osmanthus Investment Holdings Pte. Ltd. Singaporean 12.54%

Every stockholder is entitled to one (1) vote for each share of stock standing in his name in the
books of BDO Network Bank, unless the law otherwise provides. Cumulative voting shall be used
in the election of the members of the Board of Directors.

Security Ownership of Directors

As of December 31, 2022, the following are known to BDONB to be the record and/or beneficial
owners of BDO Network Bank voting securities:

Principal Percentage
Stockholder No. of direct to total
Position/Type of represented No. of Years and indirect outstanding
Name of Director Directorship if nominee as Director shares held shares
Nestor V. Tan Chairman NA* 6.3 (August 2015 up 1 0.00%
to present)
Jesus Antonio S. Itchon Vice - Chairman/ NA 4.3 (September 2017 1 0.00%
Executive Director up to present)
Jose S. Tanjuatco Lead Independent NA 1.3 (September 2020 1 0.00%
Director up to present)
Evelyn Cristina A. Cam Independent Director NA 1.3 (September 2020 1 0.00%
up to present)
Ma. Leonora V. De Jesus Independent Director NA 3.6 (May 2018 up to 1 0.00%
present)
Jesse H. T. Andres Independent Director NA 3.6 (May 2018 up to 1 0.00%
July 2022)
Rolando C. Tanchanco Non - Executive NA 6.3 (August 2015 up 1 0.00%
Director to present)
Jaime C. Yu Non - Executive NA 6.3 (August 2015 up 1 0.00%
Director to present)
Edwin Romualdo G. Reyes Non - Executive NA 3.6 (May 2018 up to 1 0.00%
Director present)
Jovasky Pang Wei Shen Non - Executive NA 2.6 (May 2019 up to 1 0.00%
Director present)
Geneva T. Gloria Non - Executive NA 2.0 (Jan 2020 to 1 0.00%
Director present)

* NA - Not Applicable

21
Board of Directors

Nestor V. Tan is the Chairman and Director of BDO

Network Bank, Inc. He was first elected as Director of
BDONB on 18 August 2015. He is the President and Chief
Executive Officer of BDO Unibank, Inc., and concurrently
Chairman of BDO Strategic Holdings, Inc. He also holds
the following positions in the BDO Group: Chairmanship of
BDO Strategic Holdings, Inc. and BDO Network Bank, Inc.;
Vice chairmanships and/or directorships in BDO Capital &
Investment Corporation, BDO Finance Corporation, BDO
Life Assurance Company, Inc., BDO Private Bank, Inc., and
SM Keppel Land, Inc., and, Trusteeship of BDO Foundation,
Inc.

In addition, he is currently the Chairman of the De La

Salle University Board of Trustees, Chairman of Bancnet,
the operator of the electronic payment system, InstaPay,
Nestor V. Tan and the ATM switching utility for Philippine banks, and;
Chairman of Mastercard Asia Pacific Advisory Board. He
Chairman is the past president and current Director of the Bankers
Non-Executive Director Association of the Philippines.
Filipino, 64 years old
Prior to joining BDO Unibank, Mr. Tan was Chief Operating
Officer of the Financial Institutions Services Group of BZW,
the investment-banking subsidiary of the Barclays Group.
His banking career spans nearly four decades and includes
posts at global financial institutions, among them Mellon
Bank in Pittsburgh, PA; Bankers Trust Company in New York,
NY; and the Barclays Group in New York and London. He
holds a bachelor’s degree in Commerce from De La Salle
University and an MBA from the Wharton School, University
of Pennsylvania.

Jesus Antonio S. Itchon is the President and Vice Chairman

of BDO Network Bank, Inc. and was elected Director of
BDO Network Bank, Inc. in September 2017. Prior to joining
BDONB, he served as Executive Vice President of Property
Company of Friends, Inc., a low cost residential and estate
developer, and as Independent Director of Paymaya Phils.,
Inc., subsidiary of Smart Communications, Inc. He has
more than 30 years of experience in banking and finance,
holding key positions such as Managing Director of Citibank
N.A. and President of Citibank Savings, Inc. He holds a
bachelor’s degree in Economics from De La Salle University
and finished his MBA at the Johnson Graduate School of
Management, Cornell University.

Jesus Antonio S.
Itchon
Vice Chairman
and President
Executive Director
Filipino, 61 years old
22
 Jose S. Tanjuatco is a member of the Board of Directors,
of BDO Network Bank, Inc. His appointment to the BDO
Network Bank, Inc. Board, as the Lead Independent
Director, commenced last August 28, 2020. He is also
an Independent Director of BDO Capital & Investment
Corporation, BDO Securities Corporation, and BDO Private
Bank, Inc. He holds a Bachelor of Arts degree, major in
History & Political Science and a Bachelor of Science
degree, major in Business Administration from De La
Salle College (now De La Salle University). He obtained his
Masters in Business Management degree from the Asian
Institute of Management. His work experience included
stints with PCIBank, PLDT, Equitable Bank, Philippine
Airlines, Bank of Commerce, Macroasia Corporation and
PAGCOR. He also served as a member of the Board of
Trustees of De La Salle University and Chairman of the
Jose S. Tanjuatco Board of Trustees of La Salle College Antipolo.
Lead Independent
Director
Filipino, 71 years old

Evelyn Cristina Ang Cam, CFA, is an Independent Director

of BDO Network Bank, Inc. since August 28, 2020. She
is the Managing Director and Chief of Operations of
Cam & Company, Inc. since 2015, a family owned and
Davao-based corporation engaged in Agribusiness and
Commercial Real Estate. Moreover, she holds ownership
stakes in the following privately held companies, namely:
1.) Cam Marketing, Inc., a Davao-based corporation
engaged in Mindanao distribution of veterinary and animal
health products; 2.) Five Jewels Corporation, a Davao-
based corporation engaged in the distribution of United
Laboratories Products and B Meg Animal Feeds; 3.) South
Sea Designs, Inc., a Davao-based corporation engaged in
real estate and distribution of B Meg Animal Feeds for large
farms; 5.) Phil Agro Industrial Corporation, a Bukidnon-
based corporation engaged in the manufacture of cassava
Evelyn Cristina starch, and which also provides financing and technical
Ang Cam assistance to cassava farmers; and 6.) FJC Farm, Inc., a
Bukidnon-based corporation engaged in hog raising.
Independent Director
Filipino, 42 years old Ms. Cam holds a Bachelor of Arts in Management
Economics from the Ateneo de Manila University and a
Master’s degree in Business Administration from the Tuck
School of Business at Dartmouth College. She successfully
passed Level 3 of the CFA (Chartered Financial Analyst)
exam in 2010 and earned her charter thereafter. Ms. Cam is
a current member of the CFA Philippine Society as well as
the Hog Farmers Association of Davao City.

23
 Ma. Leonora V. De Jesus was elected as Independent
Director of BDO Network Bank, Inc. on May 19, 2018. She
is presently the Chairperson of the Bank’s Board Audit
Committee, and a member of the Corporate Governance
Committee, and Related Party Transactions Committee.
She is also an Independent Director of STI Education
Systems Holdings, Inc. Ms. De Jesus also serves as Director
of Risks, Opportunities Assessment and Management
(ROAM), Inc. In addition, she is an accredited SEC trainor
on corporate governance. In the past, Ms. De Jesus
was an Independent Director of Dominion Holdings, Inc
(formerly BDO Leasing and Finance, Inc.), Equitable Savings
Bank, PCI Capital Corporation, and BDO Elite Savings
Bank, Inc. (formerly GE Money Bank, Inc.), and a Director
of SM Development Corporation. She was formerly the
University President of the Pamantasan ng Lungsod ng
Ma. Leonora V. Maynila and was a professorial lecturer at the University of
De Jesus the Philippines, Diliman, and at the De La Salle Graduate
School of Business and Governance. She attended a
Independent Director training on Portfolio Management at the New York Institute
Filipino, 72 years old of Finance, and a Housing Finance course at the Wharton
School of Business. She was also a member of the Board
of Governors of the Philippine National Red Cross. Ms. De
Jesus was a trustee of the Government Service Insurance
System (GSIS) from 1998 until 2004, and was a member
of the cabinet of Presidents Corazon C. Aquino, Fidel
V. Ramos and Joseph E. Estrada. She holds bachelor’s,
master’s and doctorate degrees in Psychology from the
University of the Philippines.

Geneva T. Gloria has been with BDO Unibank, Inc. for more
than 20 years and has over thirty (30) years experience
in the banking industry. She is the Senior Vice President
and Head of BDO Remittance and was also elected as a
Director of BDO Network Bank, Inc. on January 4, 2020.
Ms. Gloria is also the concurrent director of BDO Remit
offices located in Hong Kong, Macau, Japan, USA, Canada
and the UK. Having acquired more than 25 years in the
remittance industry, her expertise spans from business
development, local and foreign remittance operations,
project management to marketing. Ms. Gloria has earned
the reputation of having a very deep understanding of the
overseas Filipino market for she was once an overseas
worker herself. BDO Unibank, Inc. has been a consistent
recipient of the BSP’s ‘Top Commercial Bank in Generating
Remittances from overseas Filipinos’ award beginning
Geneva T. Gloria 2008 to 2010 and again, from 2013 to 2019. BDO Unibank,
Non-Executive Director through Ms. Gloria, has been supporting the projects of the
government for the overseas Filipino market particularly
Filipino, 57 years old
– financial inclusion. In 2014, Ms. Gloria and her team
launched a grassroots marketing campaign in various
provinces across the country. The campaign has evolved
and went on to dig deeper into the overseas Filipino
market and the underserved clients. Ms. Gloria holds a
Bachelor of Science degree in Business Administration
from the University of the Philippines.

24
 Jovasky Wei Shen Pang is a Director of BDO Network Bank,
Inc. He is likewise the Director and Chief Executive Officer
of Archipelago Capital Partners Pte Ltd., a Singapore based
fund that invests in small to mid-market companies in
Southeast Asia, and a Director of Archipelago Asia Focus
Investment VCC. Prior to Archipelago, Mr. Pang spent over
a decade at Temasek and Fullerton Financial Holdings
(FFH). As the Global Head of SME and Consumer Banking
at FFH, the financial services investment arm of Temasek
Holdings, he was responsible for FFH’s investments into
financial institutions and the strategy and management
of these companies. In the initial years at Temasek, he
was instrumental in the turnaround of Bank Danamon in
Indonesia and building the microfinance and SME banking
business models which were subsequently replicated
Jovasky Wei regionally in other portfolio investments. He also served
for six years as the CEO of BOC Fullerton Community
Shen Pang Bank and built it up to become the largest village bank
network in China. BOC Fullerton Community Bank had won
Non-Executive Director
numerous national awards for excellence in service and
Singaporean, 46 years old
innovation, and Mr. Pang was named Banking CEO of the
Year (small bank category by the Economic Observer).

Mr. Pang started his career at a global consulting firm,

McKinsey & Company. He worked extensively with clients
across many markets (e.g. Korea, China, Australia, Malaysia,
Taiwan, etc.) and was one of the founders of McKinsey’s
Financial Institution Practice in South-east Asia. Mr. Pang
holds a Bachelor of Arts (Hons) and a Master of Arts in
Philosophy, Politics and Economics from Oxford University
in the United Kingdom.

Edwin Romualdo G. Reyes is currently CFO and Treasurer

of MapleTree Holdings, Inc., a family-owned corporation.
Mr. Reyes previously served as an Executive Vice President
of BDO Unibank, Inc. and Group Head for the Transaction
Banking Group from June 2015 to September 2022, and
was retained as a Consultant for the remainder of 2022
upon retirement. Reyes has more than thirty (30) years
of experience in the banking industry. He was previously
the Managing Director and Global Head of Depositary
Receipts at Deutsche Bank Trust Company Americas,
New York, USA (Deutsche Bank) from years 2006 to 2014.
Mr. Reyes also served as the Director and Global Head of
Strategic Initiatives and Channel partners from years 2001
to 2006, and the Director & Global Head of Intermediaries,
Corporate Trust & Agency Services from years 1999 to 2001.
Prior to that, he was the Vice President of Capital Markets
Edwin Romualdo G. Trust Services at IBJ Whitehall Financial Services, New
Reyes York, USA from years 1998 to 1999. Furthermore, Mr. Reyes
also serves on the board of BDO Network Bank, Inc.
Non-Executive Director (BDONB), as non-Executive Director. He holds a Master’s
Filipino, 63 years old Degree in Business Administration, major in Finance/Money
and Financial Markets from Columbia University, Graduate
School of Business in New York, USA. Mr. Reyes graduated
cum laude from the University of the Philippines, with a
degree of Bachelor of Science in Industrial Engineering and
Operations Research.

25
 Rolando C. Tanchanco is a Senior Executive Vice President
of BDO Unibank, Inc. and Head of its Consumer Banking
Group. His responsibilities cover all retail lending
businesses (Home Mortgages, Auto Financing, Small
Business Loans, Credit Cards and Personal Loans),
Payment Channels, and Digital Banking. He currently sits
on the board of BDO Network Bank, Inc., BDO Insurance
Brokers Inc. and TransUnion Phils Inc. Mr. Tanchanco is
a member of Visa Asia Pacific Client and Risk Councils,
American Express Partner Advisory Council, and UnionPay
SEA Regional Council.

Prior to joining BDO, Mr. Tanchanco was president of

AIG Savings Bank and Managing Director of AIG Credit
Card Company. He has extensive banking experience
having worked in several multinational organizations like
Rolando C. Citibank, HSBC and AIG. He holds a Bachelor’s degree in
Business Economics, cum laude from the University of the
Tanchanco Philippines and a Master’s degree from the Asian Institute
Non-Executive Director of Management.
Filipino, 60 years old

Jaime C. Yu, Filipino, is a Director of BDO Network Bank,

Inc. since August 18, 2015 and a Senior Executive Vice
President of BDO Unibank, Inc. He is also a Director of BDO
Life Assurance Company, Inc. and BDO Insurance Brokers,
Inc. He holds a Bachelor of Arts degree in Economics from
De La Salle University and is a MBA graduate from the
Ateneo de Manila University. He has extensive experience
in commercial, corporate, and investment banking from
the International Corporate Bank and Union Bank of the
Philippines, where he held various positions up to his
appointment as First Vice President and Region Head for
the Manila- Pasay area. He joined BDO in December 1997
and is currently the Group Head of Branch Banking of BDO
where he manages the entire branch network.

Jaime C. Yu
Non-Executive Director
Filipino, 64 years old

26
CORPORATE SECRETARY

Joseph Jason M. Natividad is the Corporate Secretary

of BDO Network Bank, Inc. since January 4, 2020. He
concurrently holds the position of Corporate Secretary
of Dominion Holdings, Inc. (formerly BDO Leasing and
Finance, Inc.), the DSV/Agility Group of Companies in
the Philippines, and serves as a member of the Board of
Directors and Corporate Secretary of Gaia South, Inc. He is
also the Assistant Corporate Secretary of BDO Insurance
Brokers, Inc. He served as Assistant Corporate Secretary
of Equitable PCI Bank from September 2006 to June 2007,
prior to its merger with BDO Unibank, Inc., BDO Rental, Inc.,
and BDO Securities Corporation. Atty. Natividad is currently
a partner at the Factoran and Natividad Law Offices. He
has been in law practice for more than 20 years, mainly
in the fields of corporate law and environmental law. He
has a Bachelor’s Degree in Management, major in Legal
Joseph Jason M. Management, from the Ateneo de Manila University, and
Natividad obtained his Juris Doctor degree from the Ateneo de
Manila University School of Law.
Filipino, 50 years old

ADVISOR TO THE BOARD

Teresita T. Sy

27
Board Committees
The Board has established five (5) committees to help in
discharging its duties and responsibilities. These committees
derive their authority from and report directly to the Board. Their
mandates and scopes of responsibility are set forth in their
respective Terms of Reference, which are subjected to annual
review and may be updated or changed in order to meet the
Board’s needs or for regulatory compliance. The number and
membership composition of committees may be increased or
decreased by the Board as it deems appropriate, consistent
with applicable laws or regulations specifically on the majority
membership and chairmanship of independent directors in
various committees. As of December 31, 2022, four (4) of five (5)
board-level committees are chaired by Independent Directors.

The standing committees of the Board are as follows:

Executive Committee
FUNCTIONS: Chairperson:
▪ Exercises the power of the Board in the management and Nestor V. Tan
direction of the affairs of the Bank.
Members:
▪ Acts as the main approving body for loans, credits, advances or
commitments and property-related proposals. Jesus Antonio S. Itchon
Rolando C. Tanchanco
▪ Reviews and recommends for Board approval major credit
policies, including delegation of credit approval limits.
Advisors:
Jaime C. Yu
Edwin Romualdo G. Reyes

Board Audit Committee

FUNCTIONS: Chairman:
▪ Empowered by the Board to oversee the financial reporting Ma. Leonora V. De Jesus
process, internal control and risk management systems, (Independent Director)

internal and external audit functions, and compliance with Members:

applicable laws and regulations.
Jose S. Tanjuatco
(Lead Independent Director)
Their oversight function covers the following areas:
Evelyn Cristina A. Cam
(Independent Director)
▪ On financial reporting, the committee reviews the integrity of
the reporting process to ensure the accuracy and reliability Advisor:
of financial statements and compliance with financial
Edwin Romualdo G. Reyes
reporting standards and disclosure requirements set for
public companies.
No. of Total
▪ On internal control and risk management, it monitors and Board Audit Committee
Meetings No. of
Attended Meetings
evaluates the adequacy, soundness and effectiveness of the Ma. Leonora V. De Jesus 12 12
Bank’s established internal control and risk management Jose S. Tanjuatco 11 12
systems, policies and procedures including implementation Evelyn Cristina A. Cam 10 12
across all units of the Bank to provide reasonable assurance Edwin Romualdo G. 11 12
Reyes
against fraud or other irregularities and material misstatement
or loss.
28
▪ On internal and external audit, it reviews non-audit work of external auditors, if
any, ensuring that it would not conflict with their duties or may pose a threat to
their independence. It approves the annual audit plan and reviews audit results
focusing on significant findings with financial impact and its resolution. It reviews
the implementation of corrective actions to ensure that these are done in a
timely manner to address deficiencies, non-compliance with policies, laws and
regulations. Annually, it evaluates the performance of the Chief Internal Auditor
and internal and external audit functions.
▪ On compliance, it recommends the approval of the Compliance Charter and
reviews annually the performance of the Chief Compliance Officer and the
compliance function. It also reviews the annual plans of the Compliance Office
including the Anti-Money Laundering Unit (AMLU), and evaluates the effectiveness
of the regulatory compliance framework of the Bank to ensure that these are
consistently applied and observed throughout the institution. It reviews the report
of examination of the Bangko Sentral ng Pilipinas and other regulators including
replies to such reports for endorsement to the Board for approval.

In this context, the following were done during the year:

On financial reporting, the Board Audit Committee (BAC) reviewed and

recommended for approval to the Board the Bank’s quarterly unaudited and annual
audited financial statements ensuring compliance with accounting standards and
tax regulations. On February 15, 2022, it endorsed for approval of the Board the
Bank’s audited financial statements as of December 31, 2021 including the Notes
to the Financial Statements. This was approved by the Board on February 18, 2022.
It believes that the financial statements are fairly presented in conformity with the
relevant financial reporting standards in all material aspects. The related internal
controls on financial reporting process and compliance with accounting standards
were likewise reviewed.

In overseeing the internal audit function, it reviewed and approved the 2022 and
2023 Internal Audit risk-based audit plans after a thorough review of its scope,
as well as changes to the plan, and audit methodology. It reviewed audit reports
focusing on high and moderate risk findings relating to operational, financial and
compliance controls including risk assessment systems with impact to financial,
reputation and information security. It regularly tracked the timely resolution of
findings and asked for Management’s action plans on items that needed to be
addressed. It also assessed the performance of the Chief Internal Auditor and the
internal audit function. It ensured the Internal Audit’s independence and unfettered
access to all records, properties and information to be able to fully carry out its
function. The Committee is satisfied that the internal audit function has adequate
resources to perform its function effectively.

On external audit, it reviewed and approved the 2022 Audit Plans of the external
auditor to ensure the adequacy of its scope and coverage and appropriateness
of the timelines. It reviewed and discussed the content of the engagement
letter, scope of work, composition of engagement team among others, prior to
the commencement of the non-audit work. It comprehensively discussed the
external audit reports, focusing on internal controls, risk management, governance
and matters with financial impact particularly on the changes in accounting and
reporting standards. It reviewed Management’s Letter as well as Management’s
response and action taken on the external auditor’s findings and recommendations.

29
In overseeing the compliance function, it reviewed and approved the new internal
work Guidelines, revisions to the Money Laundering and Terrorist Financing
Prevention Program (MTPP) Manual, annual compliance plans, and independent
compliance testing roadmaps of the Compliance Office and Anti-Money Laundering
(AML) Unit. It monitored the progress and reviewed the status of the annual
compliance plans, results of the independent compliance and AML testing, timely
submission of regulatory and prudential reports, compliance to mandatory ratios, as
well as continuous improvement of the compliance and AML systems. It conducted
the annual appraisal of the performance of the Chief Compliance Officer for 2021.
It discussed in detail the Bangko Sentral ng Pilipinas Reports of Examination and
reviewed Management’s replies and its periodic updates to the regulators, thereby
ensuring implementation of corrective actions. It also reviewed and provided
guidance to Management in its replies to concerns of the regulators to ensure that
the Bank’s position is appropriately presented. It noted on January 25, 2022 the
Money Laundering/ Terrorism Financing Institutional Risk Assessment (IRA) of the
Bank for the year 2021 and the 2021 Money Laundering/Terrorism Financing Risk
Assessment (MRAS) of the Bank.

Reports on cases in operations, whistle blower accounts as well as non-loan

related cases with impact to financials, internal controls, information systems and
reputation were deliberated on focusing on risk assessment, legal handling, and
fraud prevention.

As part of its commitment to excellent corporate governance, the Committee

conducted a self-assessment for its 2021 performance based on its Terms
of Reference. The BAC likewise evaluated the performance of Internal Audit,
Compliance Office and AML Unit, and External Audit to ensure their effectiveness
and achievement of their objectives.

The BAC reports its evaluation of the effectiveness of the internal controls, financial
reporting process, risk management systems of the Bank, based on the report
and unqualified opinion obtained from the External Auditor, the overall assurance
provided by the Chief Internal Auditor and additional reports and information
requested from Senior Management, and found these to be generally adequate
across BDONB.

30
Corporate Governance Committee
FUNCTIONS: Chairman:
▪ Primarily tasked to assist the Board in formulating the Jesse H. T. Andres
governance policies and overseeing the implementation of the (Independent Director)
Chairman until June 30, 2022
governance practices of the Bank.
Ma. Leonora V. De Jesus
▪ Annually, it also oversees the performance evaluation of the (Independent Director)
Board of Directors, its committees, executive management, Acting Chairman beginning
July 1, 2022
peer evaluation of directors, and conducts a self-evaluation of
its performance. It provides an assessment of the outcome Member:
and reports to the Board the final results of the evaluation
Geneva T. Gloria
including recommendations for improvement and areas to
focus on to enhance effectiveness. Advisor:
▪ Oversees the continuing education program for directors and Rolando C. Tanchanco
key officers and proposes relevant training for them.
No. of Total
▪ Oversees the Sustainability initiatives of the Bank, particularly Corporate Governance Meetings No. of
Committee Attended Meetings
key processes, standards and strategies designed to manage
Jesse H. T. Andres 4 4
environmental and social impact and governance.
Geneva T. Gloria 4 4
▪ Leads the process of identifying candidates for election and Ma. Leonora V. De Jesus 4 4
appointment of Directors and all other positions requiring Rolando C. Tanchanco 4 4
appointment of the Board of Directors, giving full consideration
to succession planning and the leadership needs of the
group. In particular, this process includes the profiling of the
skills and competencies of the currently serving directors,
the gaps in skills and competencies identified and the search
for candidates who are aligned with the Bank’s directions to
fill the gaps. It then makes appropriate recommendations to
the Board.
▪ Makes recommendations to the Board on the composition and
chairmanship of the various committees.
▪ Keeps under review the structure, size and composition of
the Board, including the balance of skills, knowledge and
experience and the independence of the Non-Executive
Directors, and makes recommendations to the Board with
regard to any changes.
▪ Reviews and approves the interlocking positions of Directors
in other entities and ensure its compliance with the Bank’s
Interlocking Policy.

During the year, the Corporate Governance Committee achieved

the following:

a. Annual Continuing Education of Directors

The Corporate Governance Committee facilitated the

compliance of the directors of the Bank with the regulatory
requirement for an annual corporate governance seminar as
part of their continuing education. The BDO Unibank in-house
seminar focused on the impact of geopolitical risk in the face
of the rising Asia and the ASEAN, as well as sustainability
and the role of boards, covering climate change and
biodiversity challenges.

31
b. Adherence to Corporate Governance Standards

The Committee continuously monitored the Bank’s

compliance with local and international corporate governance
standards. It reviewed and endorsed for Board approval
the Bank’s 2021 Annual Corporate Governance Report to
the Securities and Exchange Commission (SEC), which
documents the Bank’s compliance with the SEC Code of
Corporate Governance.

c. Policy on Interlocking Positions

The Committee approved and endorsed to the Board for

approval the Bank’s Policy on Interlocking Positions, which
establishes the framework in handling interlocking positions
of the Bank’s directors and officers, in compliance with BSP
Circular 1129 on Amendments to Corporate Governance
Guidelines for BSP-Supervised Financial Institutions.

d. Sustainability Initiatives

The Committee defined its oversight responsibility on

the sustainability initiatives of the Bank, consistent with
its Sustainable Finance Framework and its commitment
to sustainable development. As an exercise of its newly
established duties and responsibilities, the Committee noted
various sustainability updates, including the transition process
for the Parent Bank’s group-wide approach to compliance
with the Sustainability Framework.

e. Board Effectiveness Evaluation

The Committee also spearheaded the annual Board

evaluation self-assessment by Board members and advisor
covering the performance in 2021 of the Board of Directors,
Board Committees, senior management, each director, and
board advisor.

Risk Management Committee

Chairman:
FUNCTIONS:
Jose S. Tanjuatco
▪ Is responsible for the oversight of the enterprise risk (Lead Independent Director)
management program of the Bank.
▪ Is responsible for approving risk appetite levels, policies, and Members:
risk tolerance limits related to credit portfolio risk, market Jesse H. T. Andres
(Independent Director)
risk, liquidity risk, interest rate risk, operational risk (including Member until June 30, 2022
business continuity risk, IT risk, information security risk, data Rolando C. Tanchanco
privacy risk and social media risk), consumer protection risk,
and environmental & social risk management, to ensure that Advisor:
current and emerging risk exposures are consistent with the Geneva T. Gloria
Bank’s strategic direction and overall risk appetite.
▪ Oversees the implementation and review of the risk No. of Total
Risk Management Meetings No. of
management plan, including the system of limits of Committee Attended Meetings

discretionary authority delegated by the Board of Directors to Jose S. Tanjuatco 4 4

management under its purview and ensures that immediate Jesse H. T. Andres 2 4
Geneva T. Gloria 3 4
corrective actions are taken whenever limits are breached.
Rolando C. Tanchanco 2 4

32
▪ Is responsible for approving the enterprise risk management framework and
written risk management plan developed by management, defining the policies,
limits, and strategies for managing and controlling the major risks of BDONB.
▪ Is responsible for ensuring that there is periodic review of the effectiveness of the
risk management systems and recovery plans, and that corrective actions are
promptly implemented to address risk management concerns.
▪ Is responsible for conducting regular discussions with management on the current
and emerging risk exposures, based on regular management reports, and direct
concerned units on how to reduce these risks.
▪ Is also responsible for the appointment/selection, remuneration, approval and
assessment of interlocking positions held, performance evaluation, and dismissal
of the Chief Risk Officer, and shall ensure that the risk management function has
adequate resources and effectively oversees the risk-taking activities of the Bank.
▪ Works with the Board Audit Committee in certifying in the Annual Report the
adequacy of the Bank’s risk management systems and controls.

In accordance with its mandate, the Committee conducted regular discussions on

the Bank’s exposures to various risks (i.e., credit portfolio risk, liquidity risk, market
risk, interest rate risk in the banking book, operational risk, including business
continuity risk, IT risk, information security risk, data privacy risk, and social media
risk, as well as consumer protection risk and environmental & social risks), including
mitigation strategies, where necessary and applicable, such as, large exposures and
concentration, asset quality, results of credit stress tests and its impact on capital
adequacy, results of the BSP-mandated stress tests (i.e. BSP Uniform Stress Test;
liquidity gaps and results of liquidity stress tests; regulatory reports on Liquidity
Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR); mark-to-market of the
investment portfolio, , Earnings-at-Risk (EAR), results of market risk and interest rate
risk stress tests and impact on capital adequacy; results of performance monitoring
of all implemented risk management models; operational risk profile of the Bank,
significant risk incidents, operational losses and impact on capital adequacy, results
of Business Continuity Plan (BCP) testing, any information security breaches, and
any data privacy incidents in relation to Republic Act No. 10173, otherwise known as
the Data Privacy Act (DPA); general profile of client inquiries/requests/complaints
and resolutions/actions taken in compliance with BSP Circular 857 on Consumer
Protection; and social media risk report in compliance with BSP Circular 949 on the
Guidelines on Social Media Risk Management.

Further, the Committee approved the adoption of the Parent Bank’s Information
Security Strategic Plan (ISSP), Information Security Program (ISP), and Operational
Risk Management (ORM) Policy Guidelines on Significant Incident Reporting; revisions
to the Loss Data Collection and Reporting Guidelines, BCP Framework and Policy
Manual, Operational Risk Policy Manual, and Data Privacy Manual; and the increase
in the Maximum Cumulative Outflows (MCO) and EAR limits and the increase in the
Exposure Limits to the Consumption Industry and sub-limit in Salary Loans.

33
Related Party Transactions Committee
FUNCTIONS: Chairman:
▪ Assists the Board in its oversight of the conduct of all Related Evelyn Cristina A. Cam
Party Transactions (RPTs) to protect the interests of the Bank (Independent Director)
and its stakeholders.
Members:
▪ Ensures proper disclosure of all approved RPTs in
Jesse H. T. Andres
accordance with applicable legal and regulatory (Independent Director)
requirements and confirmation by majority vote of the Member until June 30, 2022
Bank’s significant transactions with related parties at the Ma. Leonora V. De Jesus
(Independent Director)
Annual Stockholders’ meeting.
Advisor:
On a monthly basis, the RPTC carefully reviews the material
Jaime C. Yu
related party transactions being proposed by Management and
provides necessary action, including endorsement for approval
No. of Total
of the Board. The Committee also reviews all non-material Related Party Transactions Meetings No. of
Committee Attended Meetings
related party transactions for the year prior to its confirmation by
Evelyn Cristina A. Cam 9 9
the Board.
Jesse H. T. Andres 4 9
Ma. Leonora V. De Jesus 9 9
Information Technology Steering Jaime C. Yu 7 9

Committee
The IT Steering Committee of the Bank is a management level
committee which regularly present updates to the Board of
Directors and Board Audit Committee as well as request Board
confirmation or approval of action items. Their functions are
integrated with the IT Steering Committee of the Parent Bank.

FUNCTIONS:
▪ Provides oversight and governance over the Bank’s IT functions,
including approvals of information technology related policies
and practices of the Bank and applicable guidelines.
▪ Informs the Board of both internal and external IT-related
developments and activities, potential challenges and risks,
progress versus strategic objectives.
▪ Approves and endorses to the Board IT-related best practices,
strategic plans, policies and procedures.
▪ Is responsible for understanding, managing and mitigating
technology risks that confront the Bank, ensuring that the risks
are properly managed and mitigated, and monitoring of IT
performance including status of major IT projects and issues.

In 2022, the Committee continued to perform its mandate of

overseeing the progress and implementation of information
technology projects and cybersecurity-related initiatives. It
regularly reviewed reports on the availability of the Bank’s major
client-servicing systems as well as the performance of the
Bank’s technology service providers.

It also reviewed and discussed IT-related issues raised by

regulators and internal auditors and tracked the status of the
remediation of said issues.

34
Independent Control Functions
Compliance
BDONB’s Compliance Office, through the Chief Compliance Officer (CCO),
oversees the design of the Bank’s compliance system and the overall compliance
framework executed through a Compliance Program, and promotes their effective
implementation. BDONB Compliance Office reports to and is under the direct
supervision of the Board Audit Committee. It is responsible for overseeing,
coordinating, monitoring and ensuring compliance of the Bank with existing laws,
rules and regulations through the implementation of the overall compliance system
and program in accordance with the requirements of the BSP and other regulatory
agencies, including but not limited to the identification and control of compliance
risks, prudential reporting obligations as well as compliance training. BDONB’s
Compliance System forms the processes, people, policies and other components
that, as an integral unit, ultimately drive the Bank’s initiatives to conform to industry
laws, regulations and standards. In line with the Bank’s initiatives is its commitment
to ensure that activities of the Bank and its personnel are conducted in accordance
with all applicable banking laws and regulations and industry standards, and this
commitment to compliance serves to protect the Bank and its stakeholders.
BDONB’s Compliance Office, as provided in its Charter, conducts independent
compliance tests and reports to the Board Audit Committee any significant
compliance issues or breaches.

The Anti-Money Laundering Unit (AMLU) under the Compliance Office, together with
the Anti-Money Laundering Committee (AMLCom), focuses on the enforcement of
the Bank’s Anti-Money Laundering (AML) Counter-Terrorist Financing (CTF) Program,
and Combating Proliferation Financing (CPF), in accordance with the Anti-Money
Laundering Law as amended; Terrorism Financing Prevention and Suppression
Act, and Anti-Terrorism Act (ATA) and their respective Implementing Rules and
Regulations (IRRs). The Bank also adheres with BSP and Anti-Money Laundering
Council (AMLC) Rules, Regulations and Directives. The AML Program of the Bank
is articulated in the Bank’s Board- approved Money Laundering and Terrorist
Financing Prevention Program (MTPP) Manual, which covers AML/CTF/CPF policies
and information such as: (i) customer on-boarding, (ii) customer risk assessment
and due diligence, (iii) handling and monitoring of clients and their transactions,
(iv) Covered and Suspicious transactions reporting, (v) record-keeping, (vi) AML/
CTF training (vii) AML System and technology platforms, and (vii) Institutional Risk
Assessment. AMLU likewise oversees the investigation of suspicious transactions
under the auspices of the AMLCom that is comprised of select key senior officers of
the Bank.

The Compliance Office and its compliance program endeavors to protect the Bank’s
franchise, manage compliance risks and simultaneously supports the business
goals and growth of the institution by providing appropriate compliance insights and
regulatory guidance to safeguard the Bank and its stakeholders.

Internal Audit
The Internal Audit Function is outsourced to the Parent Bank under a Service
Agreement . It adheres to the principles required by the International Standard for
the Professional Practice of Internal Auditing (ISPPIA/Standards), COSO Internal
Control-Integrated Framework, Control Objectives for Information and Related
Technology (COBIT), the Internal Audit Definition and Code of Ethics.

35
It provides assurance and a systematic, disciplined approach to evaluate and
improve effectiveness of risk management, internal control, and governance
processes. Upholding a commitment to integrity and accountability, Internal Audit
provides value to senior management and governing bodies as objective source
of independent advice, not only by promoting the professional development of its
auditors but also by keeping abreast of relevant changes in regulations and trends
in technology.

Internal Audit reports to the Board of Directors through the Board Audit Committee
(BAC). It seeks BAC approval for the annual audit plan, provides updates on
accomplishments, reports results of audit conducted and tracks resolution of audit
findings. In its year-end closing report, Internal Audit attests to the fulfillment of its
mandated responsibilities and provides overall assurance on the effectiveness of
internal control, risk management and governance processes.

Consumer Protection Practices

BDONB’s financial consumer protection framework is anchored on disclosure and
transparency, protection of client information, fair treatment, effective recourse,
and financial education and awareness. The framework ensures that consumer
protection practices are embedded in our operations and considered in the
development and implementation of our products and services.

The Board is primarily responsible in maintaining an effective oversight on the Bank’s

consumer protection policies and programs. Senior management implements the
Board-approved strategy and ensures that control mechanisms are in place.

BDONB’s Consumer Assistance Management System reflects the Bank’s

commitment that our customers are treated fairly, honestly, and professionally at
all stages of their relationship with the Bank. To ensure its effective implementation,
BDONB Customer Contact Center records customer complaints and monitors its
resolution in adherence to established standard operating procedures and service
level agreements. Customer feedback and complaints are analyzed and these are
reported to the Board’s Risk Management Committee on a periodic basis.

BDONB continuously provides relevant and responsive channels for managing

inquiries, requests and complaints of its expanding client base. In 2022, BDONB
CAMS logged a total of 172,922 customer cases of which only 8.20% were problem-
related. Majority of the cases were inquiries (88.31%) and only 3.50% were requests.

Data Privacy
The Bank continues to implement its Data Privacy Management Program (DPMP),
which serves as the framework for protecting the data privacy rights of the Bank’s
data subjects, to ensure compliance with the Philippine Data Privacy Act (PDPA). The
Bank appointed a Data Protection Officer (DPO) who is registered with the National
Privacy Commission (NPC). Compliance Officers for Privacy (COPs) in each business
and support unit (BSU) were also appointed to ensure proper coordination in the
implementation of any initiatives related to the Bank’s DPMP. The required data
processing systems were also registered with the NPC and the Bank is awaiting
the NPC’s new registration guidelines for updating said registration. The Enterprise
Data Privacy Policy, Privacy Statement, and Breach Reporting Procedures were
established, including the templates for Consent, Data Sharing Agreement (DSA),
and Outsourcing Agreement Supplements. Furthermore, conduct of Privacy Impact
Assessments (PIAs) for the whole Bank was completed to assess privacy risks
in order to ensure that the necessary security measures are in place to mitigate

36
risks to personal data and uphold the data privacy rights of individuals. Privacy risk
monitoring is also integrated in the Bank’s operational risk management tools. To
ensure continuous education within BDONB, an eLearning course on Data Privacy is
established, mandatory to be taken every 2 years for all employees. A Data Privacy
campaign through an email blast is launched to serve as a continuing reminder to
all employees that Data Privacy is everyone’s responsibility.

The Risk Management Committee (RMC) is also regularly updated with respect to
the progress of the Bank’s compliance to the PDPA. In view of its commitment to
comply with data privacy requirements, and as part of its continuing assessment
and development efforts, the Bank actively participates in data privacy forums
of the NPC and continues to align the processes and procedure with that of our
Parent Bank.

Engagement with Stakeholders

The Bank employs a multi-pronged communications strategy handled by specific
units to promote transparency and actively engage with its various stakeholders, as
well as increase awareness and visibility about the Bank.

Communication with shareholders, board members and senior management

is handled by the Corporate Secretary’s office (CorSec). Also, communications
requiring media involvement are done in conjunction with the Bank’s Marketing Unit.

Compliance with the SEC Code of Corporate

Governance
Public companies are advised to disclose in their Annual Report the company’s
compliance with the Code of Corporate Governance and where there is non-
compliance, to identify and explain the reason for such issue. We confirm that as of
December 31, 2022, the Bank has substantially complied with the recommendations
of the Code except for the following: 1) Policy on retirement age of directors and 2)
Disclosure of executive remuneration on an individual basis.

On the retirement age of directors, the Board recognizes the fact that chronological
age is not the main factor in determining effectiveness of the director in discharging
his duties and responsibilities. The wisdom of senior directors is a valuable asset.
The Board derives much benefit from their counsel and will continue to utilize them
for the benefit of all its stakeholders. Age discrimination is discouraged by law, as
once a director has been elected, removal due solely to age is prohibited. In this
regard, the Board decided to hold in abeyance the implementation of a retirement
age policy for directors and instead review the individual director’s potential
contribution to the Bank and its stakeholders, and decide on that basis.

On the disclosure of the remuneration on an individual basis for executive officers,

the figures for key executives are presented in aggregate due to possible adverse
security issues and poaching of talents by competitors in the industry.

37
Looking Ahead
The Bank, having obtained approval from the BSP, will start transitioning into a
thrift bank after filing its amended Articles of Incorporation and By-Laws with the
SEC and after receiving its certificate of authority to operate as a thrift bank from
the BSP. As a thrift bank, BDONB will continue in pursuing its mission of serving
underserved and unbanked communities in order to promote financial inclusion and
sustainable economic development in the countryside.

On sustainability, the Bank, as a financial institution, recognizes the importance of

addressing the climate change and supporting the country’s transition towards a
low-carbon economy. It is aligned with the institutional approach of the BDO Group
to transition into a sustainable finance framework through engagement in Technical
Working Groups and adoption of applicable policies. The Bank is committed to
advancing the sustainability agenda and achieving strategic resilience by consistently
incorporating sustainability in the way it conducts business. The Bank endeavors
to contribute to the country’s sustained growth by financing economic activities
that nurture the environment, empower the Filipino consumers, and promote the
best interest of the Bank’s various stakeholders. Consistent with the UN Sustainable
Development Goals (SDGs), UN Global Compact, and the government’s Sustainable
Finance Roadmap, the Bank constantly strives to create lasting, net positive impact
through delivery of various banking products and services that are sustainable,
inclusive, equitable, environment-friendly, and socially-relevant.

38
Corporate Social
Responsibility

“Ang inyong BDO sa Bayan” is more than just BDO Network Bank’s brand proposition. Apart from
providing relevant products and services to the underserved regions, it serves as a reliable partner
on various meaningful projects, giving hope and inspiration in times when the communities needed
it the most.

BDONB consolidates its resources and enjoins employees to actively engage in school
improvements and beautification through participation in Brigada Eskwela and Balik Eskewala
programs. Various support it provides include book drives, donation of educational tools such
as Smart TV units and learning materials, distribution of school barriers for security of students
and teachers crossing the school area, and employee participation for painting & rehabilitation of
school facilities.

It also conducts financial literacy roadshows in various communities to aid teachers, micro
entrepreneurs and other sectors to help them better manage their cash flows and financial needs,
while giving them access to relevant and financially inclusive services and products.

The holiday season is also one of the awaited occasions for BDONB employees not just to celebrate
but bring enormous joy through gift giving. In partnership with BDO Foundation, gift packs are
distributed to select school beneficiaries and feeding programs even reached the indigenous
sectors. Medical supplies and devices are also donated to emergency response teams to help them
in their mission to provide free medical services for underserved communities.

Corporate social responsibility form part of BDONB’s DNA, where community involvement for
meaningful causes is just as important as being an enabler in fulfilling the communities’ financial
needs and aspirations.

39
Financial Statements

Statement of Management’s Responsibility for

Financial Statements
The management of BDO NETWORK BANK, INC. (the Bank) is responsible for the preparation and
fair presentation of the financial statements, including the schedules attached therein, for the
years ended December 31, 2022 and 2021, in accordance with the prescribed financial reporting
framework indicated therein, and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Bank or
to cease operations, or has no realistic alternative to do so.

The Board of Directors is responsible for overseeing the Bank’s financial reporting process.

The Board of Directors reviews and approves the financial statements, including the schedules
attached therein, and submits the same to the stockholders.

Punongbayan & Araullo, the independent auditors, appointed by the stockholders, has audited
the financial statements of the Bank in accordance with Philippine Standards on Auditing, and in
their report to the stockholders, have expressed their opinion on the fairness of presentation upon
completion of such audit.

Nestor V. Tan Jesus Antonio S. Itchon Niezl D. Gilvero

Chairman of the Board President Head, Comptrollership

Signed this 17th day of February 2023. Doc. No. 34;

Page No. 08;
SUBSCRIBED AND SWORN to before me on this 31st day of March 2023; Book No. IV;
affiant exhibiting to me their Competent Evidence of Identity (CEI) as follows: Series No. 2023;
Name CEI Number Date and Place of Issue
Atty. JAYSON G. TAN
1. Nestor V. Tan P5830111B 11-23-2020/NCR East
Roll of Attorneys No. 72337
2. Jesus Antonio S. Itchon P7922198B 10-19-2021/Manila
IBP No. 269889 - 01/05/2023 - Davao Ctiy
3. Niezl D. Gilvero P2988528C 01-19-2023/Davao
PTR No. 7928859 - 01/04/2023 - Davao Ctiy
Notary Public for Davao City
Until 31 December 2024
Serial No. 2023-240-2024
Legal Services Unit, BDONB Center, Km 9, Sasa, Davao City
MCLE Compliance No. VII-0010372 valid until 04/14/25

40
Statements of Financial Position


BDO NETWORK BANK, INC.

(A Subsidiary of BDO Unibank, Inc.) 
DECEMBER 31, 2022 AND 2021 
(Amounts in Philippine Pesos)

  



   

   

   


   

   

   


   

   

   

   

   

  



   

   

   

   

  

  

   

  



See Notes to Financial Statements.

41
Statements of Profit
or Loss
BDO NETWORK BANK, INC. 

(A Subsidiary of BDO Unibank, Inc.)

FOR THE YEARS ENDED DECEMBER 31,
2022 AND 2021
(Amounts in Philippine Pesos)

  


   
   
   
 


   
   
   
   
 

  

   


  


   
   
 


   
  
   
   
  
  
  
  
  
  
  
  
  
  
   
 

  

   

  

See Notes to Financial Statements.

 42
Organizational Structure
BOARD OF DIRECTORS

Risk Corporate Related Party

Executive Board Audit
Management Governance Transaction
Committee Committee
Committee Committee Committee

Risk Internal
Compliance
Management Audit

President

Treasury Liability Asset Operations Support Group Corporate

Services

Community Salary Loans Operations Marketing Corporate &

Treasury Banking MSME
Group Group Community Affairs
Network Group

Legal Services Business

Development
Corporate
Security & Safety

Corporate
Planning

Comptrollership

Business
Technology

Board and Management

Directory
BOARD OF DIRECTORS Advisor Senior Vice Presidents
Teresita T. Sy Karen L. Cua
Chairman Alberto O. Quiogue
Corporate Secretary
Nestor V. Tan Jaime A. Talingdan
Atty. Joseph Jason M. Natividad
Vice Chairman and President First Vice Presidents
Assistant Corporate
Jesus Antonio S. Itchon Dulce Amor E. Alimbuyuguen
Secretary
Lead Independent Director Atty. Ma. Cecilia S. Santos Norman Vic C. Aycocho
Jose S. Tanjuatco Rogelio C. Basco
PRINCIPAL OFFICERS Franchette C. Cardona
Independent Directors
Evelyn Cristina A. Cam President Vice Presidents
Ma. Leonora V. de Jesus Jesus Antonio S. Itchon Editha M. Apacible
Minda A. Lim
Non-Executive Directors Executive Vice President Roderick A. Marudo
Geneva T. Gloria Ramon T. Militar Christina M. Navarro
Jovasky Wei Shen Pang Ramil G. Tigley
Edwin Romualdo G. Reyes Nielex C. Tupas
Rolando C. Tanchanco
Jaime C. Yu 43
Products and Services
DEPOSIT TRANSACTION BANKING SERVICES

Peso Savings Collection Services

Regular Savings Account Payment Services
ATM Savings Account Remittance Services
Payroll Savings Account Outward Remittance Services
Kabayan Savings Account BDO Send Money
ATA Savings Account Palawan Express Pera Padala Send Money
Optimum Savings Account PESONet Send Money
Young PeraSavers Savings Account Inward Remittance Services
Peso Checking BDO Remit Cash Pick-up
Regular Checking Account Palawan Express Pera Padala Cash Pick-up
ATA Checking Account Credit to Account via PESONet
Peso Time Deposit Account and InstaPay
Regular Time Deposit CHANNELS
2-Year Time Deposit
Business Online Banking
5-Year Time Deposit
Personal Online Banking
LOAN

Salary Loan
Kabuhayan Loan
Kabayan Loan

44
Corporate Information
COMPANY HEADQUARTERS
BDO Network Bank, Inc.
Km. 9, Sasa, Davao City
Davao Del Sur, Philippines
+63 (082) 233-7777
Company website: www.bdonetworkbank.com.ph
Facebook: BDO Network Bank PH

BRANCHES AND ATMs

For the complete list of BDO Network Branches
and ATM locations, please visit
www.bdonetworkbank.com.ph.

The 2022 Annual Report, with Financial Supplements, can be viewed and downloaded online at
www.bdonetworkbank.com.ph/annual-reports.

BDO Network Bank, Inc. is regulated by the Bangko Sentral ng Pilipinas. https://www.bsp.gov.ph

For concerns, please visit any BDONB branch nearest you, contact us thru our hotline
+63 82 233-7777, email us via [email protected] or send us a private
message at our official Facebook page www.facebook.com/BDONetworkBankPH.

45