Asset & Liability Committee

TERMS OF REFERENCE

The Asset/Liability (ALCO) Committee has been established by the Management to assist the Senior Management and Board of Directors of Philippine Business Bank to perform specific functions. The committee members including the Chairman, shall come from different units, shall be appointed by the Management and shall report directly thereto. Its primary objective is to provide the framework to strategically manage PBB's overall asset and liabilities for the long-term and the short-term:

• Establish policies, limits and guidelines within which ALM strategies are to be executed
• Liquidity management
• Foreign Exchange management
• Interest Rates / Pricing management
• Provide direction, guidance, and monitor performance of investments

ROLES AND RESPONSIBILITIES

The Committee shall be responsible for:

• Review specific investments proposals and transactions consistent with PBB policy and guidelines and recommend appropriate Board action.
• Defining bank's liquidity management for local and for foreign currency
• Monitor the quality and performance of major domestic equity investments in the portfolio
• Review, recommend and revise as necessary, or Board approval the Bank's Asset Liability and Funds Management Policy, Investment Policy, and Contingency Funding Plan. Changes may be recommended by Management or be initiated by the ALCO Committee. The policies and the plan will be reviewed by the Committee annually.
• Monitor the actions and results of management to assure that:
  
  
  1. liquidity is being maintained within policy guidelines;
  2. interest rate risk is appropriately measured, monitored and controlled;
  3. trends of liquidity and interest rate risk are monitored, and where problems are identified that corrective actions are being taken; and
  4. appropriate standards or limits are established and followed.
  
  
• Annually review, revise as necessary, and recommend for Board approval the Bank's capital plan.
• Oversee the management of the Bank's assets and funding sources consistent with the Bank's growth and profitability objectives while meeting policy on interest rate risk, liquidity, and capital adequacy. 5. Monitor management's investment activities and ensure that they are in compliance with the Investment Policy.
• The Committee shall review and assess the adequacy of this Charter annually.

CONDUCT OF MEETING

The Committee shall meet regularly (every Monday) at 4PM. If the meeting falls on a Holiday or non-working day, it will moved to a day as may be designated by the Chairman. Venue will be at the Board Room, 4th/floor of PBB Head Office. During each meeting, the Committee may require the attendance of relevant officer/s to address any query from its Member and/or present specified reports.

Minutes of the meetings shall be approved by the Committee and be maintained for reference and record purposes.

QUORUM

The quorum shall be at least 51% of the regular members or the members chosen representative in case of his absence. In the absence of the Chairperson the Vice-Chair or highest ranking of the Committee shall preside the meeting. A majority of the vote among the present shall be required to pass or defeat any resolution at the meeting, provided such majority vote shall always include the vote of the Chairman or in his absence, the Vice Chairman.

APPROVALS

Approvals by the committee may be made at or during its meeting or through circulation to all members of the committee.

CHARTER REVIEW

The Committee may recommend amendments to this Charter at any time and submit amendments for approval to the Board.