PHILIPPINE POSTAL CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2007
(With Comparative Figures for 2006)
(In Philippine Peso)

1.

Agency Profile
By virtue of Republic Act No. 7354, otherwise known as the Postal Services Act
of 1992, the then Postal Services Office was converted into a governmentowned and controlled corporation known as the Philippine Postal Corporation
(PPC).
Philippine Postal Corporation or Philpost develops, promotes, and operates a
nationwide postal system with a network to any settlements in the Philippines
and around the world to sustain the postal requirements of the Filipinos in the
21st century.
At present, it has 14 regional offices and operates a total of 1,960 post offices
nationwide.

2.

Operational Highlights
For the past five (5) years, Philpost was on the red due to very minimal
increases in revenue and increasing cost of operations.
For the financial year ending December 31, 2007, Philpost generated total
revenue of
P3.5 billion, a decrease of 5% from their 2006 revenue of P3.7
billion. The decrease was brought about by the decrease in service income and
subsidy from Affiliates (UPU).
The corporations major source of revenue are postage fees which constitute
70% of its total revenue. The remaining 30% is distributed as follows:
2007
Foreign Postal Accounts
Postal ID
Money Order Fees
Philatelic Items
Other Income

3.

21%
4%
2%
1%
2%
30%

2006
22%
3%
2%
1%
2%
30%

Compliance with NGAS

The corporation adopted the New Government Accounting System prescribed by
the Commission on Audit and whenever applicable, suppletorily adopted

significant accounting policies which are in accordance with the Philippine

Financial Reporting Standards (PFRS) issued by the Accounting Standards.

4.

Significant accounting policies

Basis of accounting The financial statements have been prepared on the basis
of historical cost, and except where stated, do not take into account changing
prices and current value of non-current assets.
Cash equivalents The Corporation considers all highly liquid investments with
maturities of three months or less when purchased as cash equivalents.
Receivables Receivables are stated at net realizable values. Allowance for bad
debts are set up following the aging method for trade receivables and amount
of receivable less benefits/claims for non-trade receivables. Receivables from
Foreign Postal Administrations are offset against the payables to the same
Foreign Postal Administrations under the Universal Postal Union rules and
regulations.
Inventories Inventories are priced at moving average method or net realizable
value.
Fixed Assets Fixed assets are recorded at cost, except for the land, buildings
and motor vehicles transferred from the former Postal Services Office to the
surviving PPC which assumed the amounts provided by an independent
appraiser. The straight line method is used in recording depreciation on the
basis of the estimated useful lives of the assets and the ten percent (10%)
salvage value based on cost prescribed by the COA.
Capital expenditures Tangible assets with a cost of at least ten thousand pesos
(P10,000.00) when purchased are recorded as Fixed Assets. Expenditures
incurred subsequent to the acquisition of fixed assets are capitalized if such
expenditures appreciably extend the life, increase the capacity or improve the
efficiency and safety of the property and extend the assets useful life, upgrade
quality of output and lead to large reduction in operating cost.

5.

Exemption from taxes, customs and tariff duties

The Corporation is exempt from all direct and indirect taxes, customs duties,
fees, imports and tariff duties, compensating taxes, wharfage fees and other
charges and restrictions on the importation of equipment, machineries, spare
parts, accessories, and other materials, including supplies and services used
directly in the operations of the Postal System, not obtainable locally on
favorable terms.
All obligations entered into by the Corporation and any income derived
therefrom, including those contracted with private international banking and
financial institutions are exempt from all taxes on both principal and interest.

The Corporation is also exempt from the payment of capital gains tax, local
government imposts and fees after December 31, 1997.
The Corporation may also offset the full value of capital investments not
otherwise funded by the National Government against any income tax due for
the same period.

6.

CASH AND CASH EQUIVALENTS

2007
Cash Collecting Officers- Foreign
Cash Collecting Officers- Local
Cash Disbursing Officers
Petty Cash Fund
Payroll Fund
Cash in Bank, Local Currency- Current
account
Cash in Bank, Local Currency- Savings
account
Cash in Bank, Local Currency- Time
Deposits
Cash in Bank, Local Foreign CurrencySavings
account

2006

174,003,297
75,825,437
1,368,091
69,769,835
964,427,809

47,655
89,833,894
65,926,806
1,242,489
68,302,358
948,717,767

549,621,775

61,749,084

234,021,057

41,674,381

(267,774,648
)

46,873,291

1,801,262,65
3

1,324,367,725

Cash Collecting Officers, Foreign refers to collections on hand from Foreign

Postal Administration.
Cash Disbursing Officers represents revolving funds that are more than
P100,000.00 which are issued to centers/departments.
Petty Cash Fund represents revolving funds that are less than P100,000.00
which are issued to other offices and committees.
Payroll Fund account is an account used for Cash Advances for Salaries and
Wages and other benefits of officers and employees in compliance with COA
Accounting Circular Letter No. 2007-003 dated January 17, 2003.
Remittances from foreign postal administrations are credited/deposited to the
dollar
account maintained with Equitable-PCI Bank (EPCIB) which are
converted and transferred to the peso account from time to time when local
checks (money orders) are prepared for the recipient.
The negative balance in the peso account is due to the cutoff being observed in
the conversion/transfer of dollar IMOF (EPCIB) accounts as practiced by the
investment division. At times, this is also to take advantage of fluctuations in
foreign currency exchange rates.

Total deposits to Postshop account amounting to

of P639,838.99 was
unrecorded, thus resulting to negative balance of Cash in Bank, Local SavingsPPSB Postshop. Corresponding deposits will be recorded in January 2008.
Currency accounts are valued at transaction month end BSP exchange rate.
Amount
In Original
Currency US ($)
In Philippine
Peso
288,846
12,015,987
26,223
1,090,869
13,426
558,533
135,504
5,636,932
351,434
16,123,200

Banks
EPCI Bank-Savings (CF)
EPCI Bank-Savings (PPUSA)
EPCI Bank-Savings (IMOF)
EPCI Bank-Savings Trust (QSF)
PPS Bank- Savings - CF

815,433

35,425,521

An amount approximately totaling P901,972,472 of the Cash and Cash

Equivalents is doubtful because these are unsubstantiated accounts which have
accumulated even before the transfer of the books to Corporate books.

Cash Collecting Officers- Local

140,028,817

Cash Disbursing Officers

51,348,380

Cash in Bank- Local Currency Current Account

681,486,349

Cash in Bank- Local Currency Savings Account

344,955,695

Cash in Bank Foreign Currency- Savings Account

(315,846,769)

901,972,472

7.

ACCOUNTS RECEIVABLE

Accounts Receivable, International

Accounts
Due from Regional Office
Accounts Receivable, Trade
Due from National Treasury

10

2007

2006

2,952,031,6
06
709,461,5
09
229,668,3
45
161,756,5

2,116,434,3
84
(1,899,947,63
0)
1,099,719,3
71
161,756,50

01
153,359,8
25

Due from Subsidiaries

Accounts Receivable, Intl. Accounts - MOF
Due from Officers and Employees
Due from NGAs
Receivables, Disallowances/Charges
Receivables, Others
Due from Local Government Units
Due from Central Office
Due from GOCCs
Sub-total
Allowance for Doubtful Accounts

108,961,234
94,418,1
63
72,968,0
15
46,913,5
91
27,571,3
97
526,3
87
128,4
49
107,0
47
4,557,872,0
69
(105,081,42
9)

2
153,453,61
1
23,720,00
9
70,011,50
5
95,665,74
0
81,922,28
7
3,400,55
0
526,38
6
128,18
9
107,04
7
1,906,897,9
51
(88,065,17
1)

4,452,790,64
0

1,818,832,78
0

Accounts Receivable International Accounts includes transactions with Philpost

USA, a franchise of Philpost which operates an extra territorial office of
exchange (ETOE) in New York since year 2000. It includes a disallowed refund of
the 2001 terminal dues amounting to $1,031,936 and disputed bulk mail
charges of $1,559,787.
Accounts Receivable Trade includes Postage Charge Account (PCA). Bulk of this
amount are transactions of the National Capital Region. Of the total amount of
PCA balance as of December 31, 2007, P35.9 Million consists of unadjusted
discounts while P14.6 Million are inactive accounts. Inactive accounts consist of
(1) relatively small amount of penalties the principal amount of which have
already been paid; (2) accounts of companies which could either not be located
or which have closed business; (3) accounts which have offsetting claims with
Philpost that have not been acted upon; and (4) account which are undergoing
reconciliation that have no current transactions with NCR.
Receivables from Subsidiaries includes organizational/operating expenses
incurred during their corporatization which are long outstanding receivables and
still subject for reconciliation. No available document was submitted to the
Accounting Division as basis for dropping.
Advances to Officers and Employees account includes balances of Cash
Advances granted to Officers and Employees for special and time-bound
undertaking which are reclassified from the Due from Officers and Employees

11

account in compliance with COA Accounting Circular Letter No. 2007-003 dated
January 17, 2006.
Fund Transfers from Central Office to Regional Offices covering budgetary
requirements for Current Operating Expenses were reclassified from Due from
RO/Due to CO to Subsidy from CO/Subsidy to RO but not all Regional Offices
made the necessary adjustment due to non-receipt of memorandum from the
Central Office.
Allowances for Doubtful Accounts is computed at 2%, from 10% for the NCR, of
the long outstanding receivables for the Due From Customers and for Due From
Subsidiaries and Employees depending on the nature/status of the
company/employee. The adjusted amount is booked up in the Central Office
books under JEV #00011281A dated December 31, 2007.
The percentage of allowance for each category is as follows:
Due from Employees
Due from Subsidiaries
Due from Customers

AMOUNT
3,626,208
27,933,183
73,522,038

%
3.45%
26.58%
69.97%

105,081,42
9

100.00%

An amount approximately totaling (P787,057,238) of the Accounts Receivable is

doubtful because these are unsubstantiated accounts which have accumulated
even before the transfer of the books to Corporate books.
Accounts Receivable, International Account
Due from National Treasury
Accounts Receivable International Money Order
Receivables, Disallowances/Charges
Due from NGAs
Due From Officers and Employees
Receivable, Others
Accounts Receivable, Trade
Due from Subsidiaries
Due from GOCCs
Advances to Officers and Employees
Due from Local Government Units

12

757,976,48
2
161,756,50
2
93,698,16
8
51,117,42
9
46,915,46
7
42,998,90
1
24,916,21
2
7,389,58
5
794,23
4
107,04
7
37,32
4
6,38

7
(1,974,770,97
6)

Due from Regional Offices- CF/MOF

(787,057,23
8)

8. INVENTORIES
.
2007
Accountable Forms Inventory
Office Supplies Inventory
Merchandise Inventory
Other Supplies Inventory
Spare Parts Inventory
Gasoline, Oil, and Lubricants Inventory
Drugs and Medicines Inventory
Construction Materials Inventory
Medical, Dental, & Laboratory Supplies
Inventory
Textbooks & Other Instructional Materials

2006

906,665,043
85,523,401
47,452,784
36,674,406
12,013,876
6,085,139
238,142
175,082

770,409,576
123,288,174
43,798,818
4,994,258
12,421,136
4,551,475
50,623
-

169,984
16,516

243,622
14,362

1,095,014,37
3

959,772,044

An amount approximately totaling P1,029,226,236 of the Inventory Account is

doubtful because these are unsubstantiated accounts which have accumulated
even before the transfer of the books to Corporate books.
Accountable Forms Inventory
Office Supplies Inventory
Other Supplies Inventory
Spare Parts Inventory
Merchandise
Inventory,
Philpost
Products
Merchandise Inventory, Philatelic
Items
Gasoline,
Oil,
and
Lubricants
Inventory

888,265,226
84,860,939
30,827,913
8,540,196
7,826,502
7,649,051
1,256,409

1,029,226,236
9.

DEFERRED CHARGES

13

2007
Deferred Charges
Guaranty Deposits
Prepaid Insurance
Advances to Contractors
Prepaid Rent
Other Current Assets
Other Prepaid Expenses

2006

2,096,655
1,254,275
492,953
36,120
22,000
3,140
(146,436)

817,019
1,180,372
859,964
(850,949)
20,600
2,422,660
317,264

3,758,707

4,766,930

An amount approximately totaling (P101,374) of the Deferred Charges Account is

doubtful because these are unsubstantiated accounts which have accumulated
even before the transfer of the books to Corporate books.
Deferred Charges
Mobilization Fees
Guaranty Deposits

8,108
124,274
(233,756)
(101,374)

10
.

INVESTMENTS
This account includes investments in various PPC subsidiaries, affiliates and others to wit:
2007
PPSB
Other Investments and Marketable
Securities
PFO
Golden Kris
MERALCO
Regions
PPIFI
PLDT
PLFC
PMMC
Investments- Others (Suspense Account)

468,913,475

2006
468,913,475
125,281,992

341,863
5,000,000
999,517
824,250
239,358
50,000
25,600
1
1
187,180

5,000,000
999,517
824,250
63,634
50,000
25,600
1
1
-

476,581,245

601,158,470

The respective Boards of Directors of the Philippine Postal Institute Foundation,

Inc., and the Philpost Mail Management Corporation approved the dissolution of
the two PPC subsidiaries on 13 December 2000 and 31 December 2000,
respectively. Said subsidiaries have no operations since then.

14

Similarly, the Board of Directors of Philpost Leasing and Financing Corporation

passed and approved a resolution to dissolve said corporation in CY 2000. At
present its operation is limited to collection of accounts receivable and
attendance to court cases for its collection cases.
An amount approximately totaling P187,180 of the Investments Account is
doubtful because these are unsubstantiated accounts which have accumulated
even before the transfer of the books to Corporate books.
11. PROPERTY, PLANT & EQUIPMENT
Movement of the property, plant and equipment is as follows:
Land
and Land
Improvemen
ts.

IT
Equipment

Library

Transportati
on

and

Books &

Equipment

Software

Arts

Building
Improvemen
ts & Other

Furniture
Fixtures &

Structures

Equipment

1,271,406,1
64
1,335,679
13,753,028
1,286,494,8
72

1,109,775,9
85
3,938,756
(11,249)
(3,564,331)
1,110,139,1
61

(309,992,16
8)
(36,581,753
)
(13,939,013
)
(360,512,93
4)

(294,796,04
9)
(11,013,617
)
(146,850,54
8)
(452,660,21
4)

(154,234,62
2)

5,765,301
(156,630,61
0)

(12,749,54
5)
(2,008,105
)
(1,790,728
)
(16,548,37
8)

925,981,938

657,478,947

67,548,072

253,848,66
6

Total

Cost
January 01, 2007
Additions
Disposals
Reclassifications

314,699,770
514,501
(514,501)

December 31, 2007

314,699,770

221,413,372
47,565
(1,761,029)
4,478,775
224,178,682

263,983,05
4
6,702,471
(288,480)
270,397,04
4

1,689,140
(425,174)
1,263,966

3,182,967,4
85
12,538,972
(1,772,278)
13,439,317
3,207,173,4
95

Accumulated Depreciation
January 01, 2007

(3,301,816)

Provision
Disposals

(27,591)
-

Reclassifications

104,073

December 31, 2007

Carriying Amount
December 31, 2007

(3,225,334)

311,474,436

(7,433,601)
(727,688)

(2,889)
(1,226,68
7)
(1,229,57
6)

34,390

(775,074,20
0)
(57,067,557
)
(727,688)
(157,937,60
3)
(990,807,04
7)
2,216,366,4
48

Property and Equipment account includes all existing assets and facilities
transferred from the defunct Bureau of Posts and thereafter the then Postal
Service Office to the Philippine Postal Corporation (PPC) pursuant to Sec. 9(b) of
R.A. 7354. The property and equipment are carried at cost, except for land and
buildings which are carried in the books at appraised values determined by an
independent appraiser, Asian Appraisal Company, Inc., on 15 September 1994.
An amount approximately totaling P1,421,309,512 of the Fixed Assets Account is
doubtful because these are unsubstantiated accounts which have accumulated
even before the transfer of the books to Corporate books.

15

Furniture and Fixtures

Land
IT Equipment and Software
Office Building
Motor Vehicle
Office Equipment
Land Improvements
Other Machineries Equipment (SemiExpendable)
Other Property, Plant and Equipment)

721,259,327
307,119,214
240,983,376
136,704,196
37,337,853
7,153,280
6,335,629
2,121,700
6,817
1,459,021,392
(37,711,880)

Less: Accumulated Depreciation

1,421,309,512

12. OTHER NON-CURRENT ASSETS

2007
Suspense Accounts
Other Semi-Expendable Assets
Other Current Assets

66,359,960
3,140

2006
91,710,044
2,054,224
3,140

66,363,100
93,767,408
An amount approximately totaling P1,269,743,745 of the Other Assets Account
is doubtful because these are unsubstantiated accounts which have
accumulated even before the transfer of the books to Corporate books.
13. ACCOUNTS PAYABLE
This account consists of:

2007

Accounts Payable, International Accounts

Accounts Payable, Trade
Due to Officers and Employees

2,339,522,51
8
1,066,934,77
0
182,440,905
3,588,8
98,193

2006
2,192,667,670
247,472,826
156,736,519
2,596,877, 015

Accounts Payable, International Account refers to Foreign Postal Accounts (FPAs)

that are settled in accordance with UPU conventions, rules and regulation which
may be either thru the direct payment mode or the offsetting mode. Under the
offsetting mode, receivables and payables are net and the balances are either

16

paid or billed/collected. FPAs are accounted for in SDR (Special Drawing Rights)
and translated at closing SDR rate and USD rate to peso equivalent at balance
sheet date.
An amount approximately totaling P888,324,077 of the Accounts Payable
Account is doubtful because these are unsubstantiated accounts which have
accumulated even before the transfer of the books to Corporate books.

Accounts Payable, Trade

Due to Officers and Employees

873,859,136
14,464,941
888,324,077

14. INTER-AGENCY PAYABLES

This account includes amounts due to:
2007
BTR
BIR
GSIS
Pag-ibig
Philhealth
NGAs
Other GOCCs
LGUs
Central Office
Regional Office
Other Funds
Subsidiaries

2006

(1,030)
53,893,622
39,167,079
9,730,770
5,787,415
276,150,119
8,239,665
142,428
(1,569,099,702
)
243,772
1,171,640
258,180,839

1,542,036
65,887,761
29,608,509
10,163,558
10,936,346
269,219,702
8,920,690
142,428
(3,300,316,544)

(916,393,383)

(2,635,965,814)

138,378
1,171,640
266,619,682

An amount approximately totaling P878,415,504 of the Inter-Agency Payable

Account is doubtful is because these are unsubstantiated accounts which have
accumulated even before the transfer of the books to Corporate books.
CO/RO
GSIS
BIR
Philhealth
National Treasury
Pag -ibig
Other GOCCs

875,188,713
3,580,401
286,176
159,419
(131)
(107,409)
(691,665)

17

878,415,504

15
.

OTHER LIABILITY ACCOUNT

This account represents:
2007
Money Order Fund
Remittables
Guaranty Deposits Payable
Performance/Bidders Bonds Payable
Others

2006

3,355,653,64
9
5,390,642
1,920,595
259,352,480

3,581,162,194

3,622,317,36
5

4,259,060,785

106,568,186
3,738,006
1,089,337
566,503,062

An amount approximately totaling P975,829,984 of the Accounts Payable

Account is doubtful because these are unsubstantiated accounts which have
accumulated even before the transfer of the books to Corporate books.

N
O
T
E
S

Due to Subsidiaries
Payables, Others MO Fund, International
Incoming
Guaranty Deposits Payable
Payables, Others Suspense Accounts
Payables, Others - Remittables
Payables, Others MO Fund, Domestic

A
N
D

(2,492,377)
(1,256,496)
3,500
200,429,172
221,430,224
557,715,961
975,829,984

A
C
C
E
P
T
A
N

18

CE
2007
Equitable PCI Bank
Philippine Postal Savings Bank
Development Bank of the Philippines

2006

366,616,307
208,366,152
18,266,297

430,375,665
212,464,458
18,266,297

593,248,756

661,106,420

The loan account with the Equitable PCI Bank (formerly Philippine Commercial
International Bank) had an original principal of P645 Million in 1997. This was
restructured for seven (7) years commencing on 01 October 2006 until 01
October 2013.
The loan payable to PDIC represents loan availed by PLFC which was
assumed by PPC on July 2002 as a guarantor and was offset against the
payable of PPC to PLFC. On December 11, 2006, the Philippine Postal Savings
Bank took out the PDIC loan. Monthly amortization of PPC was offset against
rentals of PPSB starting February 2007.

17.

AUTHORIZED CAPITAL STOCK

Under Section 9 of R.A. 7354 or the Postal Services Act of 1992, the Corporation
shall have an authorized capital stock of P10 Billion Pesos (P10,000,000,000)
divided into 45 Million Class A shares to be subscribed by the Government and
55 Million Class B shares to be subscribed by private entities with par value of
P100.
The sale of the 55 Million Class B shares is now undergoing study by the
Privatization Management Office under the Office of the President (PMO). The
Pricewaterhouse Coopers was hired as Financial Advisor by the PMO for the said
undertaking.

18.

FUNDAMENTAL ERRORS
The balance of the retained earnings at year-end has been restated to include
the following:
2007
Adjustments Prior Years Income
Adjustments Prior Years Expense

19

2006

4,218,022
(174,016,16
4)

8,112,244
(1,587,409,23
1)

(169,798,14
2)

(1,579,296,98
7)

Prior years adjustments expenses includes unbooked tax liability for taxable
years 2004 to 2006 from the Bureau of Internal Revenue amounting to
P152,240,767.58.

19. Tax Assessment

A tax subsidy in the amount of P413,691,691 to cover payment for value-added
tax on domestic postal services for the years 2006 and 2007 and Minimum
Corporate Income Tax for the years 2004 and 2005 was again released in the
form of Special Allotment Release Order (SARO) No. D-07-06672 payable to the
Bureau of Internal Revenue pursuant to Fiscal Incentive Review Board (FIRB)
Resolution No. 8-07 and Certificate of Entitlement to Subsidy (CES) No. 0383
dated July 17, and July 16, 2007, respectively.

This liability for MCIT is not taken up in the books of accounts. It was only
booked up upon receipt of CES and SARO.

20.

OTHER INCOME
This account consists of:
2007
Interest Income
Dividend Income
Gain/loss on sale of disposed assets
Landing and Parking Fees
Sale of confiscated abandoned/seized
goods
property

3,091,158
134,770
270,956
11,000
3,507,884

21.

PERSONAL SERVICES

20

2006
2,895,868
14,882
155,748
7,889
78,845
3,153,232

Utility expenses
Professional services
Other Maintenance and Operating
expenses
Repairs and Maintenance
Communication expenses
Taxes, Duties and Insurance Premiums and
other Fees
Rent Expenses
Subscription and membership dues
expenses
Representation Expenses
Extraordinary and Miscellaneous expenses
Training expenses
Advertising expenses
Rewards and Other Claims
Subsidies and Donations

2007
49,262,566
27,290,882

2006
53,224,862
25,287,930

18,809,121
13,851,171
12,555,632

11,293,508
19,254,672
10,581,453

8,773,702
8,287,517

12,186,494
7,219,270

2,677,250
2,347,790
2,004,235
1,009,210
767,753
260,964
5,000

4,148,603
2,393,766
1,983,496
1,313,690
1,036,232
19,921
10,000

914,203,429

1,084,041,914

This account consists of:

2007
Salaries and Wages
Other Compensation
Personnel Benefits contribution
Other Personnel Benefits

2006

1,446,846,3
08
787,546,461
241,595,001
100,866,754

1,556,131,383
638,844,379
227,462,195
130,629,949

2,576,854,5
24

2,553,067,906

22. MAINTENANCE AND OTHER OPERATING EXPENSES

This account consists of:
2007
Transportation and Delivery expenses
Supplies and Materials expenses
Non -Cash expenses
Travelling expenses

21

548,421,765
108,074,160
60,253,237
49,551,474

2006
659,083,445
114,072,615
112,426,218
48,505,739

23.

MODERNIZATION PROGRAM
The President of the Philippines through the ICC-NEDA approved on March 28,
2006 a proposal by a Japanese Firm, Renaissance of Age (ROA), to modernize
the postal system through a Build-Lease-Transfer scheme. The contract for the
same was signed by the parties on 01 September 2006.
Under the proposal, the ROA will build a modern postal system with a cost of
P3.4 Billion. It includes a digital identification card issuing machine hybrid mail
and e-post shops with provisions of internet, desktop publishing, VoIP, Money
Order System, track and trace, Bills Payment. The project has a term of seven
(7) years. Philpost and ROA will share on the incremental revenue from the
project on 28% - 72% ratio respectively.

24.

OTHER MATTERS
a)

Foregone revenues from franked mails are estimated at P164,658,670.

Franked mail privileges were authorized under several administrative
issuances and were given to several government offices such as Comelec,
Office of the President, Supreme Court, Senate, Congress, etc.

b)

The corporation receives subsidy from UPU-QSF amounting to

P5,127,027.51 (USD116,391.09) for the final payment to Union Motors
Corporation of the procured vehicles for mail operations.

c)

The extraordinary losses is comprised of fire loss that gutted the

Domestic Airport Post Office with an estimated cost of P12,879,999.00.
This is recorded in the Central Office books since NCR books were already
closed.

PPC stood as guarantor to PLFC loans as follows:

Credit of Bank
AAA Special Fund IIIFBTC
EPCI Bank
Allied Banking Corp.
Provident Fund

d)

Original
Amt.

Principal

320,000
199,500
100,000
20,000

Interest

Total Balance

250,722
189,525
44,218
3,289

151,415
37,191
23,371
44

402,137
226,716
67,589
3,333

487,754

212,021

699,775

Bad Accounts are accounts which accumulated from the time before
corporatization and during conversion of accounts from the then Bureau of
Post to the Corporate books which at this time could not be substantiated
with proper supporting documents. The amount reflects the consolidated
total of the head office and the regional accounts. Postage Stamps
Inventory, for example, in some regions reflect the face value instead of
printing cost; Due from Officers and Employees includes incomplete or

22

unliquidated
payroll;
Receivables/Disallowances
includes
accountabilities/shortages of absconded employees; Land includes
booked-up value of properties without titles; Accounts Payables include
excess certification or booked-up payables without corresponding
disbursement vouchers or valid supporting documents. These accounts are
subject to verification and validation and further subject to COA approval
for adjustments. Breakdown of Bad Accounts is as follows:
ASSET ACCOUNTS
Cash and Cash Equivalent
Accounts Receivables
Inventory
Deferred Charges
Property, Plant and Equipment
Accumulated Depreciation
Other Assets

901,972,472
(787,057,238)
1,029,226,236
(101,375)
1,459,021,393
(37,711,880)
1,269,743,745
3,835,093,353

LIABILITY ACCOUNTS
Accounts Payable
Inter-Agency Payables
Other Liability Accounts

888,324,077
878,415,504
975,829,984

Net Addition to Retained Earnings Due to Bad

Accounts

23

2,742,569,565