In its Annual Stockholders’ Meeting held today, Ayala Corporation announced its group companies combined are prepared to spend P49 billion in capital expenditure projects in 2009 despite the more challenging economic environment. Chairman and CEO Jaime Augusto Zobel de Ayala said, “we believe there are opportunities that can be realized that will strengthen the foundation for our sustained growth.” He added, “This will position the group appropriately for the next upturn in the economic cycle.” About 35% of this year’s planned capex is allocated to its real estate development projects, with 33% for its telecommunications expansion, and 23% for its water distribution services.

In 2008, Ayala and its business units raised a combined P23 billion in cash at the height of the tightness in credit markets to ensure more than sufficient liquidity to pursue its growth plans in 2009. Of this, the parent company raised P6 billion from its preferred share issue last November, which combined with its other fund raising efforts, raised close to P10 billion in fresh funds for debt prepayment and new investments. By year-end the holding company had cash of P25 billion after US$60 million in debt prepayments. Net debt was at its lowest in five years with net debt-to-equity ratio at 0.09 to 1 by the end of 2008.

Ayala has re-deployed some of its cash into the high growth business process outsourcing (BPO) sector with cumulative investments of around US$200 million to date. Jaime Augusto said, “We continue to believe in the long-term prospects of offshoring and outsourcing and the natural competitive advantages of the Philippines to be a significant player in this robust global market.”

Beyond the BPO space, Ayala continues to explore investment opportunities in other industries. It recently signed a Memorandum of Agreement with its operating units, Bank of the Philippine Islands (BPI) and Globe Telecom, to create the country’s first mobile micro-finance bank. Mr. Zobel said, “This venture builds on BPI’s extensive delivery and infrastructure network and Globe’s tested G-Cash micro payment platform.” He added, “We continue to explore ways to leverage on our group’s strengths and create business models that align our business goals with a broader social and national development agenda.” Ayala takes the view that there are compelling growth propositions in doing business at the base of the wealth pyramid that can be value-enhancing for Ayala and a much wider base of stakeholders.

In 2009, Ayala celebrates its 175th anniversary. The seventh-generation chairman of the business conglomerate said, “As an organization, we have always set our sights on the future and have not sought to take comfort from the past. It is our ability to adjust to changing environments, in a progressive way, that marks our longevity as an institution. However, anniversaries are also important moments for self reflection. 175 years, by any independent standard, is a long period of time in any company’s history. There are few corporate examples globally of institutions with a similar capacity for resiliency over this swath of time. We should take heed of the values that brought us to this point- values of trust and prudence on one hand but imagination and vigor on the other, coupled with a long term commitment to aligning ourselves to a progressive national development agenda. As we reflect on our changing roles; as an institution that now builds environmentally sound communities, rolls out advanced communication networks, creates stable financial securities, implements clean water systems and invests in both technology driven services and manufacturing entities aligned to global markets – I take some pride in being part of an Ayala that remains true to the dreams of those who have built this company before us. I hope we can continue to count on the support of all our stakeholders as we chart our paths, with the same set of core values, well into the future.”