Month: January 2018

To expand access of reading JAZA’s New Year Message for Ayala group employees, we are publishing the material below.

Dear colleagues and friends,

Welcome to the start of 2018 and I hope you have all had the chance to get some rest in the company of family and friends. A big thank you, upfront, for working to ensure the continued growth and relevance of the Ayala group.

I write this note as part of a new tradition that I wanted to implement this year.  So many events happen in any given year and there is never much time to synthesize and bring some coherence and closure to all these thoughts.  Today is an attempt, on my part, to try to look back at the year that passed and identify some key themes in the hope of both bringing closure to my thoughts and setting some values based goals for the year ahead.  These thoughts will remain broad, macro focused and cover both global and national themes that are relevant to us.  Here goes.

As we reflect on the past twelve months, we see trends that persist – both social and economic – that affect many sectors of society.   We are increasingly globally interconnected and many of these themes cut across nation states.  I believe that it is important for us to take stock of these key trends, and understand how they shape and influence our path forward both as professionals and as stewards of our institutions.

Let me draw attention today to five themes that are the most relevant and that have had a disproportionate impact on our societies in 2017.

First, let me touch on the rise of populism which has been driven, to a large extent, by both perceived and real increasing social and economic inequity. Second, let me expand on the intertwined themes of globalization and technological advancement, two trends that have been at the center of public debate but whose effects have been, in my opinion, misunderstood.  Third, let me emphasize our need to continue to retool and upgrade our workforce in order to successfully navigate the employment challenges brought about by technological advancements and to remain relevant to the changing nature of our industries. Fourth, the need for infrastructure to support our many social and economic requirements remains of unprecedented importance.  Finally, let me highlight the indispensable role that the private sector plays in defining and executing on a more comprehensive economic social contract, where businesses build trust and relevance by being contributors to society and not just contributors to a more limited grouping of stakeholders.

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Download: JAZA-New-Year-Message-to-the-Ayala-Group.pdf

JAIME AUGUSTO ZOBEL DE AYALA
Fostering CSR in the Philippines: Conference on Responsible Business
Session 1: The Role of Businesses in Achieving the Philippines’ Goals for
Sustainable Development | Opening Statement
January 17, 2017

Good morning, and thank you for the kind invitation to be here today.

The past few years have seen questions raised around the role of business in inclusive growth and sustainable development. Brexit, the rise of populism, the election of unorthodox leaders around the world have all
been traced to a dissatisfaction with the status quo—with societies where progress has not benefited all, and lack of economic opportunity.

Businesses are now being asked to do more, to involve themselves more in combating developmental hurdles, and build a more all-encompassing relationship with society. Ignoring the challenges faced by both global and national communities today threatens our ability to create long-term value and jeopardizes both enterprises and the markets we serve.

On a personal note, the role of business in inclusive growth and society has always been in my thoughts. I remember completing my MBA and thinking that, while the knowledge I gained was valuable, it was not necessarily sufficient to help our country overcome the challenges it faced. In the Philippines, our need to address economic inclusivity and build on sustainable business practices remains of paramount importance. Allow
me to share with you some of our experience at the Ayala group.

The Ayala group has always aligned its business strategies with the country’s development agenda. Throughout our history, we entered critical sectors in dire need of private sector participation. In recent years, we have become much more aware of integrating societal challenges into the core of our business strategy. We reinvented some of our business models and created new ones to broaden our positive impact on the
communities where we operate and the country at large. Through our businesses, we do our best to engage society in a deeper and more meaningful way.

Most of our businesses traditionally catered to the higher end of the market. In recent years, we have expanded our products and services to reach a wider segment of the population. Ayala Land now offers affordable housing for as low as P500,000, while Globe Telecom provides affordable subscription plans for mobile and internet. Meanwhile, BPI has also made it a point to create customized loan products and provide financial guidance to the micro- and small entrepreneur segment. In addition, Manila Water delivers water supply as well as sewerage and sanitation services to more than 6 million customers in the eastern part of Metro Manila. It  as a flagship program called Tubig Para Sa Barangay, which is designed specifically for areas with clusters of low-income communities, including informal settlers.

Moreover, we entered the energy, infrastructure, health, education, and industrial technologies spaces. These are all sectors with critical gaps in quality and affordability, and are crucial in sustaining our country’s growth and development. Through AC Energy and AC Infrastructure, we are helping build our country’s much-needed physical infrastructure. Through AC Health and AC Education, we are able to provide affordable, quality services that supports human capital development.

Human capital development, particularly in skills training and education, is something we have identified to be absolutely necessary today, and it is an endeavor in which the private sector can contribute significantly. Businesses are in an excellent position to identify the disruptive impact on new technologies, as well as the new skills that will be necessary to adapt. We are already taking steps in this direction. Through APEC schools, AC Education uses a specially-designed curriculum to enhance the employability of students with skills needed in the job market. A number of other companies have their own initiatives to ensure the continued learning and development of their employees, keeping them up to industry standard—Globe University, IMI University, and Makati Development Corporation’s partnership with TESDA to upskill its construction workforce.

These are only a few examples of how Ayala is responding to the call of the times—how we remain progressive contributors to the changes needed in the world, and how we are evolving to make sure that we do
our part in national development.

The United Nations Sustainable Development goals were instrumental as we made a deliberate shift in company strategy. We can all agree that the SDGs are the simplest, clearest articulation of the goals we all share: the eradication of poverty, and the flourishing of communities, industry, innovation, and the environment.

The SDGs provided our group with a framework through which we could shape our value creation process—clear outcomes by which we could frame our sustainability goals. Framing our value creation process along the SDGs allows us to align with global initiatives.

Given the diversity of the industries in which Ayala is present, our group of companies contributes to the SDGs in a wide variety of ways.

Social tensions around the world have put at the forefront of our considerations the paramount role that the private sector plays in providing decent livelihood and work. Apart from the millions in capital expenditures that Ayala invests into the domestic economy, the group also contributes to “decent work and economic growth,” through the jobs it generates. The Ayala group provided employment opportunities to over 124,000 individuals in 2016. Moreover, as of November 2017, Ayala Land’s construction arm, Makati Development Corporation, provided close to 70,000 jobs in the lower-income segment, particularly for skilled construction workers. MDC has also partnered with TESDA in response to the industry-wide shortage in skilled labor and provide employment opportunities for more individuals in the construction industry.

In terms of “sustainable cities and communities,” Ayala Land has distinguished itself through its sustainable estates in the country that consider disaster resilience, connectivity, eco-efficiency, and economic development. For “clean water and sanitation,” Manila Water delivers a clean, reliable supply of water, sewerage, and sanitation services to over six million customers.

To complement these efforts, Ayala adopted the Integrated Reporting framework. This allows us to hold ourselves to higher standards of transparency and accountability by discussing not only financial and operational highlights, but also our sustainability and inclusive development initiatives documented through the SDGs. The Ayala Corporation 2016 Integrated Report was the first Integrated Report published by a Filipino company.

Ensuring that our companies can contribute to societal growth, I believe, is both a moral and a practical imperative. This is not mere altruism; rather, it is a deliberate strategy. Businesses cannot survive in societies where
inequity thrives; in markets failing markets; and where the environment is socially and physically degraded. Tremendous value can be realized when we strive to build more inclusive businesses—not only can companies
harness innovation and creativity in going beyond traditional models, we also help to empower the markets that have sustained our businesses.

Thank you, and I look forward to a productive and meaningful discussion.

Download: JAZA – CSR Conference 2017 Opening Statement.pdf

iPeople, inc. (“iPeople”), the listed holding company for the education sector of House of Investments Inc., a member of the Yuchengco Group of Companies, and AC Education, Inc. (“AEI”), the wholly-owned education arm of Ayala Corporation, have executed a Non-Binding term sheet for their potential merger. Under the Non-Binding term sheet, the parties agreed to an exclusivity period to complete due diligence, and to finalize the terms and conditions of the proposed merger within the first quarter of 2018. All terms and conditions of the proposed merger, including the involvement of House of Investments and Ayala Corporation in the management of the surviving entity, iPeople, shall be presented for approval by the parties’ respective boards of directors and merging parties’ stockholders, and the transaction will be subject to the requisite regulatory approvals as well.

The potential merger would bring together the educational institutions of House of Investments and Ayala Corporation (iPeople and AEI respectively). The potential merger would include iPeople and its significant subsidiary, Malayan Education System, Inc. (Operating under the name of Mapua University), a leading private engineering and technical university in the country, a world ranked QS-3 star university and the school with the most CHED Centers of Excellence in Engineering, and its subsidiaries, Malayan Colleges Laguna, the best board exam performing private school in Calabarzon, and Malayan Colleges Mindanao, and AEI and its subsidiaries, the University of Nueva Caceres, one of the oldest and largest universities in Bicol, and APEC Schools, the largest stand-alone chain of private high schools in the country. Together, the combined population would be over 40,000 students.

“We are looking forward to this potential merger. Mapua’s reputation as a leading private engineering and technical university in the country, together with AEI’s ability to provide quality education leading to enhanced employability, at an affordable price, would enable the Yuchengco Group of Companies and Ayala Corporation to jointly contribute to the improvement of the quality of education in the Philippines, for the benefit of all sectors of society,” said Mrs. Helen Y. Dee, Chairperson of House of Investments, Inc.

“We are very pleased about this opportunity to partner with the Yuchengco Group of Companies to help build our nation through education. Our belief is that the potential combination of iPeople and AEI would create significant synergies that would enable us to better equip students for compelling futures.” said Jaime Augusto Zobel de Ayala, Chairman and CEO of Ayala Corporation.

Contact Information

House of Investments, Inc.
Investor Relations Office
Ring F. Joven
Email: rfjoven@hoi.com.ph

iPeople Inc.
Investor Relations Office
Ring F. Joven
Email: rfjoven@hoi.com.ph

Ayala Corporation
Corporate Communications
Yla Patricia G. Alcantara
Email: alcantara.ypg@ayala.com.ph