THE LIQUIDITY CRISIS Mr. Joey Bermudez Chair, Maybridge Former President, Chinatrust Briefing on NGO Investments September 30, 2008 | Ramon Magsaysay Center.

THE LIQUIDITY CRISISTHE LIQUIDITY CRISIS

Mr. Joey Bermudez

Chair, Maybridge

Former President, Chinatrust

Briefing on NGO InvestmentsSeptember 30, 2008 | Ramon Magsaysay Center

Ramon MagsaysayAward Foundation

Sub-prime crisis, graduating into a full-blown housing crisis

Financial losses

Shattered confidence

Vanishing liquidity

Bursting asset bubbles

Systemic wealth destruction

Net outflow of FDI and hot money, lower Fil-Am demand for property, weaker global demand

External eventsDomestic events

Constricted liquidity, lower purchasing and investing power

Falling asset prices

Runaway commodity prices

Full economic crisis

Dow Jones Industrial Average

Sept2007

Jan2008

March2008

June2008

Sept2008

Philippine Stock Exchange Index

Sept2007

Jan2008

March2008

June2008

Sept2008

Sept2007

Jan2008

March2008

June2008

Sept2008

PRICES OF ROP 32

A Major Local BankPeso Funds

A Major Local BankForeign Currency Funds

% %INSTITUTION UITF NAME YOY YTD

Banco de OroBDO Peso Money Market Fund 4.3915 3.1626

BPI Short-Term Fund 3.3694 2.2620

East West Banking Corp.Infinity Money Market Bond Fund 3.8700 2.7900

Equitable-PCI EPCIB Peso Money Market Fund 4.5277 3.1812

Export and Industry Bank Expert Fund 6.1170 4.6760GE Money Bank, Inc. Classic Fund

ING Bank, N.V.ING Peso Cash Management Fund (UITF) 4.1500 2.6700

Metropolitan Bank and Trust Company Metrofund Starter 4.4971 2.6333RCBC Dragon Fund 4.3297 3.0737RCBC Savings Bank Molave Fund 4.0818 2.8077Security Bank Corporation SB Secure Peso Fund 4.1308 2.8846Security Bank Corporation SB Peso Ease Fund 3.9743 2.7831

United Coconut Planters BankUnited Cash Management Fund 4.0512 2.7713

Unionbank of the PhilippinesiFund Peso Money Market Porfolio 4.0117 2.7735

Peso Money Market Funds

% %

INSTITUTION UITF NAME YOY YTD

Asiatrust Bank Asia Trust Peso Income Fund 5.0287523 3.6177573

Asiatrust Bank Enterprise Fund 7.9598283 6.9340532

BPI Premium Bond Fund 5.3185600 3.0352300

Banco de Oro BDO Peso Bond Fund 4.7442168 2.0470098

Banco de Oro BDO Fixed Income Fund 4.0237962 0.8132147

East West Banking Corp. Peso Trust Maximizer UITF 3.6700000 2.5600000

ING Bank, N.V.ING Peso Short Term Fixed Income Fund (UITF)* 3.8400000 2.7300000

ING Bank, N.V. ING Peso Income Fund 2.8400000Metropolitan Bank and Trust Company Metrofund Elite 4.3863990 1.8366430Metropolitan Bank and Trust Company Metro Invest Plus 5.7841620 1.8483000Multinational Investment Bancorporation MIB Plus UITF 5.2056200 3.3487200Philippine Bank of Communications Signature Trust Fund 3.4827000 2.3891000

Philippine National Bank Peso Punla 3.1006910 1.9762500

Philippine National Bank Mabuhay Plus 3.1408910 2.2624630

Unionbank of the PhilippinesiFund Current Income Portfolio (T-Bill 91) 4.0563320 2.7323450

Unionbank of the Philippines Infinity Prime Fund 2.8706420 1.9368780

Peso Intermediate Term Funds (Fixed Income)

% %

INSTITUTION UITF NAME YOY YTD

AIG Philam Savings Bank Philam Earner Trust Fund

Allied Banking CorporationAllied Unit Performance GS Fund 2.5764388 1.6922684

Asia United Bank AUB Peso Investment Fund 3.3500000 1.8900000

BPI ABF PBIF 3.2989400 -0.7669500

China Banking Corporation Chinabank GS Fund 4.0810000 2.8660000

Equitable-PCI GS Fund 3.7148000 0.5360000

ING Bank, N.V. ING Peso Bond Fund (UITF)* 2.9400000 -0.9600000Metropolitan Bank and Trust Company Metrofund Peak Earner 4.4483380 0.7617810

Philippine Business Bank Diamond Fund - A UITF 3.7120000 2.6530000

Philippine National Bank Mabuhay Prime 2.7854510 2.0347160

Robinsons Savings BankRbank Blue Peso Fixed Income Fund 5.3100000 3.0400000

Unionbank of the PhilippinesiFund Philippine Peso Bond Portfolio 4.0714150 1.4920070

Peso Medium-Term Funds (Fixed Income)

% %INSTITUTION UITF NAME YOY YTD

     Bank of Commerce Peso Trust Fund 7.3927 6.3397East West Banking Corp.

Infinity Peso Long-Term Bond Fund 3.8600 2.7400

Land Bank GS-FI Fund 0.9166 -1.4009RCBC Unicorn Fund 3.7608 2.0908

Unionbank of the Philippines

iFund Long Term Current Income Portfolio 3.0493 0.5574

United Coconut Planters Bank

United Conservative Fund 5.0460 2.3875

Peso Long-Term Funds (Fixed Income)

% %

INSTITUTION UITF NAME YOY YTD

AB Capital and Investment Corp. AB Capital Equity Fund -31.5649 -35.0799

Allied Banking CorporationAllied Unit Performance Equities Fund -12.7983 -13.6155

Asia United Bank-TIG AUB Equity Investment Fund -18.9200 -21.0600

Banco de Oro BDO Peso Equity Fund -22.9810 -26.3178

BPI Equity Fund -28.6479 -27.9060

Equitable-PCI UITF Equity Fund -22.7803 -25.7406

ING Bank, N.V. ING Philippine Equity Fund (UITF)* -31.4600 -33.4700

ING Bank, N.V.ING Philippine High Conviction Equity Fund (UITF)* -36.1200 -35.7200

Metropolitan Bank and Trust Company Metro Equity Fund -21.5936 -23.9327

Philippine National Bank PHISIX -18.4704 -21.5947

RCBC Tiger Equity Fund -19.8465 -18.7552

United Coconut Planters Bank United Equity Fund -13.0603 -14.6799

Union BankiFund - Large Capitalization Philippine Equity Portfolio -22.0135 -24.1045

Peso Equity Funds

% %

INSTITUTION UITF NAME YOY YTD

Banco de Oro BDO Peso Balance Fund -22.7166 -25.9769

BPI Balanced Fund -19.4016 -18.7579Development Bank of the Philippines

Gintong Sikap Secure Fund - (GSSF) 3.7290 2.6179

ING Bank, N.V. ING Diversified Capital Fund -11.7100 -14.7800

ING Bank, N.V. ING Diversified Balanced Fund -18.5500 -21.2600

Landbank of the Phils. Growth Fund -7.6051 -9.4746

Metropolitan Bank and Trust Company Metro Capital Growth Fund -14.7547 -17.2658

Philippine National Bank Mabuhay Prestige -0.3929 2.3328

Robinsons Savings Bank Rbank Balanced Fund

Security Bank Corporation SB Peso Asset Variety Fund -7.0858 -7.1648

United Coconut Planters Bank United Balanced Fund -4.7595 -6.4361

Peso Balanced Fund

% %

INSTITUTION UITF NAME YOY YTD

Banco de OroBDO Dollar Money Market Fund 3.6018 2.4285

Equitable-PCI EPCIB Dollar Money Market Fund 3.3754 2.2696

Metropolitan Bank and Trust Company

Metro Dollar Money Market Fund 5.4104 3.7329

RCBC Phoenix Dollar Fund 2.9772 1.9137Security Bank Corporation

SB Secure Dollar Fund 1.5079 0.1022

Dollar Money Market Funds

% %

INSTITUTION UITF NAME YOY YTD

Asiatrust Bank Dollar Income Fund 2.2752 1.7342

Banco de Oro BDO Dollar Bond Fund 2.9910 1.1470

BPI Global Phil Fund 4.2175 2.9314

BPI International Fund Plus 1.2084 1.6985

Chinabank Savings, Inc.Fixed Income US Dollar Fund 2.7175 1.9689

East West Banking Corp.Dollar Trust Maximizer UITF 0.3900 -0.0200

ING Bank, N.V.ING US Dollar Income Fund (UITF) 1.9900 0.5200

Metropolitan Bank and Trust Company Metrodollar Phil Liquid Fund 6.7215 4.1678

Philippine National Bank Dollar Punla 2.0904 1.4478

Dollar Intermediate Term Funds (Fixed Income)

% %

INSTITUTION UITF NAME YOY YTD

Asia United Bank AUB Gold Dollar Fund 4.7500 2.8700

China Banking Corporation Chinabank Dollar Fund 2.1960 1.2700

Equitable-PCI Dollar Fund 2.7137 0.7043

GE Money Bank Inc. Greenback FundMetropolitan Bank and Trust Company Metrodollar Phil Bond Fund 4.9822 2.5506Philippine Bank of Communications Winner Dollar Fund 2.8112 1.9980

Philippine National Bank Dollar Profit 4.1011 2.8107

Robinsons Savings BankRbank Green Dollar Fixed Income Fund 3.3200 1.8100

Unionbank of the PhilippinesiFund - Philippine Dollar Bond Portfolio 2.3623 0.2661

Dollar Medium-Term Funds (Fixed Income)

  % %

INSTITUTION UITF NAME YOY YTD

Allied Banking CorporationAllied Unit Performance Dollar Fund

Bank of CommerceBancommerce Dollar Trust Fund 3.9313 0.1886

BPI Phil. Dollar Bond Index Fund 3.9136 0.5597

East West Banking Corp.Infinity Dollar Long-Term Bond Fund 0.3600 -0.1900

Export and Industry Bank Expert Green Fund 2.5955 1.4963

ING Bank, N.V.ING Philippine Dollar Bond Fund (UITF) 1.4200 -1.9700

Landbank of the Phils. Global Dollar Fund 3.6363 2.8711

RCBC Eagle Dollar Fund 1.4669 0.0548

United Coconut Planters Bank

United US$ Money Market Fund 4.6365 1.3720

Dollar Long-Term Funds (Fixed Income)

% %

INSTITUTION UITF NAME YOY YTD

BPI Global Equity Fund -23.44 -22.53

ING Bank, N.V.ING Asia Pacific High Dividend Equity Fund -22.25

Dollar Equity Funds

     % %

INSTITUTION UITF NAME YOY YTD       

Banco de OroInstitutional Fixed Income Fund 3.8113 0.6799

BPI Institutional Fund UITF 4.9785 2.1784

ING Bank, N.V.ING Tax-Exempt Peso Fixed Income Fund -0.0900 -3.5800

ING Bank, N.V.ING Tax-Exempt Dollar Fixed Income Fund 1.1700 -2.2300

ING Bank, N.V.

ING Tax-Exempt Philippine Equity Fund (UITF)* -30.5800 -32.9600

Unionbank of the PhilippinesiFund Institutional Tax Exempt Porfolio 0.1541

Tax-Exempt Funds

FIRM WRITE-DOWNS CAPITAL RAISED

Citigroup Inc. 55.1 49.1Merrill Lynch & Co. 51.8 29.9UBS AG 44.2 28.0HSBC Holdings Plc 27.4 3.9Wachovia Corporation 22.7 11.0Bank of America Corp. 21.2 20.7IKB Deutsche Industriebank AG 15.1 12.4Washington Mutual Inc. 14.8 12.1Morgan Stanley 14.4 5.6Royal Bank of Scotland Group Plc 14.3 23.4JPMorgan Chase & Co. 14.3 9.5Deutsche Bank AG 10.6 3.2Credit Suisse Group AG 10.4 2.7Wells Fargo & Company 10.0 4.0Barclays Plc 9.8 18.0Credit Agricole S.A. 9.0 8.7Lehman Brothers Holdings Inc.* 8.2 13.9

Fortis 7.3 7.1Canadian Imperial Bank of Commerce 7.1 2.8Bayerische Landesbank 7.1 0.0HBOS Plc 6.8 7.3ING Groep N.V. 6.8 4.7Societe Generale 6.7 9.6Mizuho Financial Group Inc. 5.9 0.0National City Corp. 5.4 8.9Natixis* 5.4 6.6Indymac Bancorp Inc 4.9 0.0Landesbank Baden-Wurttemberg 4.8 0.0Lloyds TSB Group Plc 4.8 4.8WestLB AG 4.7 7.4Dresdner Bank AG 4.0 0.0BNP Paribas 3.9 0.0Goldman Sachs Group Inc. 3.8 0.6E*TRADE Financial Corp. 3.6 2.4Rabobank 3.6 0.0Nomura Holdings Inc. 3.3 1.2Bear Stearns Companies Inc. 3.2 0.0

FIRM WRITE-DOWN CAPITAL RAISED

Debt

Capital

Liquidity

Spending and Investing Power

The Anatomy of Liquidity Leveraging De-leveraging

Panic! Panic!

More! More!Loss! Loss!