REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
Corporate Government Sector
Cluster 1 – Banking and Credit

INDEPENDENT AUDITOR’S REPORT

The Board of Directors

Development Bank of the Philippines
Makati City

Qualified Opinion

We have audited the consolidated financial statements of the Development Bank of the
Philippines (DBP) and its subsidiaries (the “Group”), which comprise the consolidated statements of
financial position as at December 31, 2017 and 2016, and the consolidated statements of profit or loss and
other comprehensive income, consolidated statements of changes in equity and consolidated statements of
cash flows for the years then ended, and notes to the consolidated financial statements, including a
summary of significant accounting policies.
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying consolidated financial statements present fairly, in all material
respects, the financial position of the Group as at December 31, 2017 and 2016, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance with
Philippine Financial Reporting Standards (PFRS).

Basis for Qualified Opinion

The Bank’s government securities holdings classified as Available for Sale (AFS) with face
amount of P29.081 billion were sold to one and the same counterparty at a loss totaling P876.712 million
in 2014. The same government securities were bought back by the Bank at the same price and were
booked under Held to Maturity. Such derecognition and reclassification are contrary to Philippine
Accounting Standard (PAS) 39 because the comparison of the present value of net cash flows before and
after the sale showed no significant change. Management did not implement previous years’ audit
recommendation to reclassify the securities back to AFS. Had the government securities been classified as
AFS, the Bank’s assets, liabilities and equity accounts would have decreased by P2.102 billion, P0.232
billion and P1.870 billion, respectively, as at December 31, 2017, and P0.406 billion, P0.080 billion and
P0.327 billion, respectively, as at December 31, 2016.
We conducted our audit in accordance with International Standards of Supreme Audit Institutions
(ISSAI). Our responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements section of our report. We are independent of the
Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the Philippine Public Sector, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements
 Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with PFRS,
and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’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 Group
or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISSAI will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.

As part of an audit in accordance with ISSAI, we exercise professional judgment and maintain
professional skepticism throughout the audit.
We also:

 Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
 We remain solely responsible for our audit opinion. We communicate with those charged with
governance regarding, among other matters, the planned scope and timing of the audit and
significant audit observations, including any significant deficiencies in internal control that we
identify during our audit.

COMMISSION ON AUDIT

MARILYN C. BRIONES
Supervising Auditor

June 8, 2018

Republic of the Philippines

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City

INDEPENDENT AUDITOR’S REPORT

THE BOARD OF DIRECTORS

Trade and Investment Development Corporation of the Philippines
(Philippine Export-Import Credit Agency)
17/F Citibank Tower, Citibank Plaza
Valero St., Makati City

Report on the Audit of the Financial Statements

Adverse Opinion

We have audited the financial statements of the Trade and Investment Development
Corporation of the Philippines (TIDCORP), also known as the Philippine Export-Import Credit Agency,
which comprise the statements of financial position as at December 31, 2018 and 2017, and the
statements of comprehensive income, statements of changes in equity and statements of cash flows for the
years then ended, and notes to financial statements, including a summary of significant accounting
policies and other explanatory information.
In our opinion, because of the significance of the matter discussed in the Bases for Adverse
Opinion section of our report, the accompanying financial statements do not present fairly the financial
position of TIDCORP as at December 31, 2018 and 2017, and its financial performance and its cash flows
for the years then ended in accordance with Philippine Financial Reporting Standards (PFRSs).

Bases for Adverse Opinion

The staggered booking by TIDCORP over a period of five years of the deficiency in
allowance for expected credit loss (ECL) aggregating P932.978 million for the accounts of a defaulted
corporation is contrary to the ECL model prescribed by PFRS 9 – Financial Instruments, in measuring
credit impairment. Thus, as at December 31, 2018 and 2017, the Retained Earnings is overstated by
P795.252 million and P958.898 million, respectively; the Loans Receivable, net is overstated by
P198.843 million and P259.200 million, respectively; and the Pari-passu Payable is understated by
P596.409 million and P699.698 million, respectively. In addition, the validity of the deferred tax assets of
P360.425 million and P286.087 million as at December 31, 2018 and 2017, respectively, which comprise
15.92 per cent and 11.84 per cent of its reported total assets as of even dates, is doubtful considering
TIDCORP’s history of recent taxable losses and lack of convincing evidence to support the sufficiency of
future taxable profits against which the related deductible temporary differences can be utilized as
required by pertinent provisions of Philippine Accounting Standards 12 – Income Taxes.
We conducted our audits in accordance with International Standards of Supreme Audit
Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
TIDCORP in accordance with the Code of Ethics for Government Auditors in the Philippines (Code of
Ethics) together with the ethical requirements that are relevant to our audits of the financial statements in
the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our adverse opinion.

Other Information

Management is responsible for the other information. The other information comprises the
information included in the Annual Report for the year ended December 31, 2018, but does not include
the financial statements and our auditor’s report thereon. The Annual Report for the year ended December
31, 2018 is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we will not
express any form of assurance conclusion thereon.
 In connection with our audit of the financial statements, our responsibility is to read the other
information when it becomes available and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial
statements in accordance with PFRSs, 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 TIDCORP’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 TIDCORP or to cease operations, or has no realistic alternative but to do so. Those charged with
governance are responsible for overseeing TIDCORP’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.

As part of an audit in accordance with ISSAIs, we exercise professional judgment and

maintain professional skepticism throughout the audit.
We also:
 Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of TIDCORP’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management.
 Conclude on the appropriateness of Management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on TIDCORP’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause TIDCORP
to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
 in a manner that achieves fair presentation. We communicate with those charged with
governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we
identify during our audit. We also provide those charged with governance with a statement that
we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

Our audits were conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information required under Revenue Regulation Nos. 15-
2010 and 19-2011 in Note 27 to the financial statements is presented for purposes of filing with the
Bureau of Internal Revenue and is not a required part of the basic financial statements. Such
supplementary information is the responsibility of the Management of TIDCORP. Because of the
significance of the matter described in the Bases for Adverse Opinion section, it is inappropriate to and
we do not express an opinion on the supplementary information referred to above.

COMMISSION ON AUDIT

May 8, 2019

Republic of the Philippines

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City

INDEPENDENT AUDITOR’S REPORT

THE BOARD OF DIRECTORS

Philippine Guarantee Corporation
17/F Citibank Tower, Citibank Plaza
Valero St., Makati City

Report on the Audit of the Financial Statements

Disclaimer of Opinion
 We were mandated to audit the financial statements of the Philippine Guarantee Corporation
(PHILGUARANTEE), formerly known as the Trade and Investment Development Corporation of the
Philippines, which comprise the statements of financial position as at December 31, 2020 and 2019, and
the statements of comprehensive income, statement of changes in equity and statements of cash flows for
the years then ended, and notes to financial statements, including a summary of significant accounting
policies.

We do not express an opinion on the accompanying financial statements of the

PHILGUARANTEE. Because the significance of the matters described in the Bases for Disclaimer of
Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to
provide a basis for an audit opinion on these financial statements.

Bases for Disclaimer of Opinion

We were precluded from performing many of our planned audit procedure for identified
significant and material accounts, thus, limiting the scope of our audit, due to non-submission by
Management of PHILGUARANTEE of several of the required financial reports and schedules,
supporting documents and other relevant data, which include among others:

a. Complete and detailed schedule of the corporation’s cash and cash equivalent and
investments totaling 20.470 billion and 14.481 billion as at December 31,2020 and 2019,
respectively, which prevented us from validating the propriety of their classification in the
statement of financial position pursuant to Philippine Financial Reporting Standards(PFRS)
9. Financial Instruments, and validating them with those confirmed by banks.
b. Detailed schedule of the corporation’s deferred tax assets amounting to 1.890 billion and
1.695 billion as at December 31, 2020 and 2019, respectively and deferred tax liabilities
amounting to 203.135 million and 174.998 million , as at December 31, 2021 and 2019,
respectively, and the accompanying evidence to support the sufficiency of the future taxable
profits against which the related deductible temporary differences can be utilized as required
by Philippine Financial Reporting Standards (PAS) 12, Income Taxes.
c. Detailed documentation of its conduct of impairment testing of the reported investment
property amounting to P12.643 billion and P12.736 billion as at December
31, 2020 and 2019, respectively, and right-of-use (ROU) asset amounting to
P138.021 million and P174.092 million as at December 31, 2020 and 2019, respectively, as
required by PAS 38, Impairment of Assets which would justify the non-recognition of
impairment loss during the year despite the existence of impairment indicators.
d. Pertinent schedules and records as regards its application of the expected credit loss (ECL)
model in impairing the Corporation's receivables totaling P12.354 billion and P16 382 billion
as at December 31, 2020 and 2019. respectively, and in measuring outstanding credit
guarantees of P178.791 billion and P210.058 billion as at December 31, 2020 and 2019,
respectively, which prevented us from completely testing and assessing the adequacy of the
recorded provision for ECL in accordance with PFRS 9; and
e. Copies of outstanding lease contracts and pertinent supporting documents which would
allow us to determine whether the Corporation has fully adopted and applied the straight-line
basis prescribed under PFRS 16, Leases in recognizing rent income.

In view of the above and coupled with the non-posting and/or delayed posting in the Financial
Information System of all the financial transactions of the Corporation, particularly those of its Housing
Guarantee Group, we were unable to determine whether any adjustments might have been found
necessary in respect of the recorded or unrecorded cash and cash equivalents, investments deferred taxes,
investment property. ROU asset, provision for ECL receivables, and the elements making up the
statement of comprehensive income, statement of changes in equity and statement of cash flows
Responsibilities of Management and Those Charged with Governance for the Financia Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with PFRSS, and for such internal control as Management determines is necessary to enable
the preparation of financial statements that are free from material misstatement, whether

In preparing the financial statements Management is responsible for assessing

PHILGUARANTEE'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 PHILGUARANTEE or to cease operations, or has no realistic alternative but to do so

Auditor’s Responsibility for the Audit of Financial Statements

Our responsibility is to conduct an audit of PHILGUARANTEE's financial statements in
accordance with International Standards of Supreme Audit Institutions and to issue an auditor's report.
However, because of the matters described in the Bases for Disclaimer of Opinion section of our report,
we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on
these financial statements

We are independent of PHILGUARANTEE in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the Philippines, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.

Report on Other Legal and Regulatory Requirements

We were mandated to form an opinion on the basic financial statements taken as a whole. The
supplementary information in Note 29 to the financial statements is presented for the purpose of filing
with the Bureau of Internal Revenue and is not a required part of the basic financial statements Such
supplementary information is the responsibility of the Management of PHILGUARANTEE. Because of
the significance of the matters described in the Bases for Disclaimer of Opinion section, it is inappropriate
to and we do not express an opinion on the supplementary information referred to above.

COMMISSION ON AUDIT

July 27, 2021

 Statutory auditor's repo rt to the general meeting of the members of the
association CARITAS EUROPA AISBL on the financial statements for the year
ended 31 December 2012

In accordance with legal and statutory requirements, we report to you on the performance of our
audit mandate. This report includes our opinion on the financial statements together with the
required additional comments.

Unqualified audit opinion on the financial statements

We have audited the financial statements of CARITAS EUROPA AISBL for the year ended 31
December 2072, prepared in accordance with the financial reporting framework applicable in
Belgium (Royal Decree of December 19, 2003), which show a balance sheet total of EUR
1 .010.573 and a profit for the year of EUR 42.831 .

The board of directors of the association is responsible for the preparation of the financial
statements. This responsibility includes: designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with legal requirements and auditing standards applicable in Belgium,
as issued by the "Institut des Réviseurs d'Entreprises/Instituut van deBedrijfsrevisoren". Those standards
require that we plan and perform the audit to obtain reasonable assurance whether the financial statements
are free from material misstatement.

In accordance with these standards, we have performed procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depen on our
judgment, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, we have considered internal control
relevant to the association's preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances but not for the purpose of expressing an
opinion on the effectiveness of the association's internal control. We have also evaluated the
appropriateness of the accounting policies used, the reasonableness of accounting estimates made by the
association and the presentation of the financial statements, taken as a whole. Finally, we have obtained
from management and responsible officers of the association the explanations and information necessary
for our audit. We believe that the audit evidence we have obtained provides a reasonable basis for our
opinion.

In our opinion, the financial statements as of 31 December 2012 give a true and fair view of the
association's equity, financial position and results in accordance with the financial reporting
framework applicable in Belgium.

Additional comments

The association's compliance with the Law of June 27, 1921 on the not-for-profit associations,
not-for-profit international associations and foundations and with the association's articles of
association is the responsibility of the board of directors.
Our responsibility is to supplement our report with the following additional statements, which do
not modify our audit opinion on the financial statements:

 Without prejudice to formal aspects of minor importance, the accounting records were maintained
in accordance with the legal and regulatory requirements applicable in Belgium.
 There are no transactions undertaken or decisions taken in violation of the association's articles of
association or the Law of June 27, l92l on the not-for-profit associations, notfor-profit
international associations and foundations that we have to report to you.

Merelbeke, 26 March 2013

KPMG & Partners

Statutory Auditor
represented by
Wim Heyndrickx
Réviseur d' Entreprises / Bedrijfsreviso

UNDERSTANDING THE FOUR TYPES OF AUDIT OPINION

A couple of things that make audit reports so complicated is that some of the information isn't
readily available and some of the information is subjective in nature. Auditors have to make various
judgmental assumptions in finalizing reports. The audit opinion is a very important part of the audit report
because it makes a statement about a company's financial status to investors. The audit report provides a
picture of a company's financial performance in a given fiscal year. Investors analyze audit reports and
base much of their investment decisions on information contained in the audit reports. Investors are
particularly interested in the audit opinion because it's a reflection of the integrity of the audit report and
projects an image of the company. The audit opinion is based on such things as how available the data
was to them, whether they had an opportunity to follow all due procedures, the level of materiality and
other issues along those lines. All of these things are subjective in nature and depend on the auditor's
opinion.
Auditors form their opinions by making professional judgments and getting legal opinions. It's
vital that companies have internal controls and financial policies in place and have them reviewed
regularly by the company's internal audit team to ensure that everything is in order before the audit
ensues.
What Do Auditors Do During an Audit?
Before the audit, management provides financial information to the audit committee. During the
annual audit, the auditor has to review the processes and procedures that the company used to prepare the
financial information. The auditors check to see whether the company uses GAAP or other applicable
reporting frameworks in preparing the reports. Annual audits demonstrate transparency in corporate
financial reporting, which is a positive step in establishing good relationships between companies and
their investors, as well as the public.

Four Different Types of Auditor Opinions

Auditors have the option of choosing among four different types of auditor opinion reports. An
auditor opinion report is a letter that auditors attach to the statutory audit report that reflects their opinion
of the audit. The four types of auditor opinions are:

1. Unqualified opinion
2.Qualified opinion
3.Disclaimer of opinion
4.Adverse opinion

Type of Audit Opinion Content and Salient Features

Unqualified Opinion  Considered as clean report and the type of report that auditors
give most often.
 The auditor believes that the company's operations are in good
compliance with governance principles and applicable laws.
 This type of report indicates that the auditors are satisfied with
the company's financial reporting.
 An unqualified opinion doesn't have any kind of adverse
comments and it doesn't include any disclaimers about any
clauses or the audit process
 The company, the auditors, the investors and the public perceive
such a report to be free from material misstatements
 Companies, investors and the public highly value unqualified
reports.

Qualified Opinion  A common for reason for auditors issuing a qualified opinion is
that the company didn't present its records with GAAP.
 When an auditor isn't confident about any specific process or
transaction that prevents them from issuing an unqualified, or
clean, report, the auditor may choose to issue a qualified opinion.
Investors don't find qualified opinions acceptable, as they project
a negative opinion about a company's financial status.
 Auditors write up a qualified opinion in much the same way as an
unqualified opinion, with the exception that they state the reasons
they're not able to present an unqualified opinion.

Disclaimer of Opinion  Contains indefinite and unsubstantial audit opinion due to

inadequate evidence and supplemental financial statements.
  The general consensus is that a disclaimer of opinion constitutes a
very harsh stance. As a result, it creates an adverse image of the
company.
 Auditors that aren't allowed an opportunity to observe operational
procedures or to review particular procedures may feel like
they're not able to express a definite opinion, so they feel a
disclaimer is necessary and in order

Adverse Opinion  Auditors who aren't at all satisfied with the financial statements
or who discover a high level of material misstatements or
irregularities know that this creates a situation in which investors
and the government will mistrust the company's financial
reports.
 An auditor's adverse opinion is a big red flag. An adverse audit
report usually indicates that financial reports contain gross
misstatements and have the potential for fraud.
 Adverse opinions send out a high alert that the company's
records haven't been prepared according to GAAP. Financial
institutions and investors take this opinion seriously and will
reject doing any kind of business with the company.
 Auditors use all types of qualified reports to alert the public as to
the transparency, reliability and accountability of companies