Category: News

Manila, Philippines: AC Logistics Holdings Corp. (“AC Logistics”), a wholly owned subsidiary of Ayala Corporation, signed an Investment Agreement with Mr. Alberto D. Lina (“Mr. Lina”), Air 21 Holdings Inc. (“AHI”), Airfreight 2100, Incorporated (“AIR21”), Air 2100, Inc. (“AIR21 Subic”), U-Freight Phils., Inc. (“U-Freight”), U-Ocean, Inc. (“U-Ocean”), Cargohaus, Inc. (“CHI”), LGC Logistics, Inc. (“LGC”), Waste & Resources Management, Inc. (“WARM”), and Integrated Waste Management, Inc. (“IWMI”) for the acquisition of a 60% interest in AHI, subject to the satisfaction of closing conditions precedents.

AHI is a holding company owned by Mr. Lina which will have controlling interests in eight operating companies under the AIR21 Group that are engaged in a broad range of logistics services that include express door-to-door service, international and domestic freight forwarding, warehousing and waste logistics management. 

“The partnership with AHI gives AC Logistics an end-to-end logistics platform that is capable of serving the diverse supply chain requirements of high-growth industries and complements Ayala’s initial foray in logistics through Entrego. We are delighted to have this opportunity to work with the Lina family”, said Fernando Zobel de Ayala, Ayala Corporation President and Chief Executive Officer.

Mr. Lina, Founder and Chairman of AHI welcomes the partnership with AC Logistics. “Ayala’s businesses have proven leadership in their respective industries. The management expertise from the Ayala group combined with our extensive experience in logistics will be transformative not just for our group but for the industry as well,” said Mr. Lina.

This investment allows AC Logistics to participate and service the needs of growing and evolving industries and ecosystems. The company’s goal is to offer a full range of logistics services to more clients and to provide competitive services by leveraging on the strengths of companies in its portfolio.

The pandemic disrupted the supply chain and underscored the need for a more robust and integrated logistics network across the country. Warehousing facilities suited to the needs of critical industries coupled with investment in technologies that drive operational efficiencies are critical to deliver better services across the supply chain and to spur faster economic recovery.

“The decision to enter the logistics sector was a deliberate move on our part. We have been looking at the ecosystem in the past, carefully studying the opportunities where we can invest and make a difference. The supply chain disruptions and lockdowns we faced in 2020 strengthened our conviction in investing in the logistics sector, which we started back in 2017. More than ever, logistics is a critical component of trade, particularly as we recover from the effects of the pandemic. We are very excited to improve and redefine practices with the use of new technology and with the needs of Filipinos at the core of our aspirations,” said Rene D. Almendras, President of AC Logistics.

AC Logistics aspires to become a world class logistics player in the country with digitally empowered end-to-end logistics capability similar to what is now available in other countries.

BPI Capital Corp. and Fortman Cline Capital Markets Ltd. acted as financial advisors for AC Logistics and AIR21 Group, respectively.

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AC Logistics is Ayala Corporation’s wholly owned subsidiary for investments in the logistics sector.

Air 21 Holdings, Inc. (AHI) is the holding company of Mr. Alberto D. Lina that will consolidate ownership stakes in the various operating subsidiaries of AHI, namely, Airfreight 2100, Incorporated, Air 2100, Inc., U-Freight Phils., Inc., U-Ocean, Inc., Cargohaus, Inc., LGC Logistics, Inc., Waste & Resources Management, Inc., and Integrated Waste Management, Inc. (“IWMI”).

For further inquiries, contact:

Joseph M. Quesada
quesada.jam@acinfra.com.ph
AC Logistics

Antonio L. Tañada
tanadatony@yahoo.com
Air 21 Holdings Inc.

MANILA – Ayala Corporation’s (“AC” or “Ayala”) foreign subsidiary, AYC Finance Limited, signed today a 10-year Social Bond through private placement by the International Finance Corporation (“IFC”) amounting to $100 million (the “Social Bond”), which will be used for the sustainable and resilient growth and capacity building of the Group’s healthcare arm, Ayala Healthcare Holdings, Inc. (“AC Health”). The Social Bond will be unconditionally and irrevocably guaranteed by AC.

The issuance marks the first social bond earmarked for healthcare-related purposes in the Philippines.

“The pandemic exposed the massive underinvestment in the country’s healthcare system, reinforcing our thesis for entering the sector six years ago. The Social Bond supports our strategic priority to scale up AC Health as a new growth platform, underpinned by its commitment to uplift the quality and access to preventive care in the country,” said Fernando Zobel De Ayala, Ayala President and CEO.

“The issuance will strengthen Ayala’s ESG financing capabilities and support growth for businesses that can make concrete social contribution, particularly in the healthcare industry. We look forward to a long-term partnership with IFC in providing quality, and accessible health care for all Filipinos,” said Alberto de Larrazabal, Ayala Chief Finance Officer and Chief Sustainability Officer.

The transaction will be settled in January 2022 based on the prevailing base rate plus a certain spread, subject to the completion of the conditions precedents set forth by IFC. The Social Bond Program by IFC aligns with the Social Bond Principles and Social Loans Principles published by the International Capital Market Association. Sustainalytics was engaged to provide a second party opinion on the Social Bond Framework.

“Addressing health gaps in the Philippines is a critical challenge that has been amplified by the COVID-19 pandemic,” said Rana Karadsheh Haddad, Regional Industry Director, Manufacturing, Agribusiness and Services, Asia and the Pacific at IFC. “Our investment in this social bond from our long-standing client, the Ayala Group, will help strengthen the Philippines’ healthcare system at a crucial time while also helping to develop the market for social bonds, which is becoming an important tool for helping the private sector to manage the socioeconomic impacts of the pandemic and build resilience against future shocks.”

In 2018, Ayala Group deepened its commitment to the social, economic, and environmental well-being of the Filipino by being more deliberate and purposive in identifying areas where it can contribute substantially and help solve global issues. Ayala identified 11 Sustainable Development Goals that are at the heart of its businesses—including good health and well-being for AC Health—with the goal of bridging the Filipino to the year 2030.

Ayala announced last October its commitment to achieve net zero greenhouse gas emissions by 2050, aligning its business strategy with the Paris Agreement’s goal of limiting global warming to 1.5°C compared to pre-industrial levels. It is the first Philippine conglomerate to make such a commitment.

Growing the Healthcare Network  

AC Health’s vision is to build an integrated healthcare ecosystem focused on improving healthcare for all. This commitment is a testament to the Ayala Group’s long-standing purpose of improving lives and promoting sustainable development and growth for the Philippines. 

Since its inception in 2015, AC Health has gone a long way in addressing the fundamental gaps in accessibility, affordability, and quality of healthcare. AC Health has built an ecosystem that caters to the various healthcare needs of Filipinos.   

AC Health’s portfolio comprises Generika, a chain of over 700 drugstores that offer quality and affordable generic medicines; Healthway Philippines, a network of primary, multi-specialty, and corporate clinics; the QualiMed Health Network, which operates multi-specialty clinics, a stand-alone ambulatory surgery center, and full-service hospitals; and HealthNow, an all-in-one healthcare app that offers telemedicine consultations, online medicine ordering and delivery, and clinic and diagnostic testing booking. AC Health also has medicine importation and distribution arms, I.E. Medica Inc. and Medethix Inc. (“Medethix”).  

Last July, AC Health officially broke ground for the construction of Healthway Cancer Care Center, the Philippines’ first dedicated specialty cancer hospital. The 100-bed facility, which is expected to be completed in July 2023, will be equipped with 20 chemotherapy chairs, 4 operating theaters, and state of the art diagnostic and therapeutic equipment, optimized for cancer screening, diagnosis, and treatment. AC Health has partnered with Varian-CTSI, a leading oncology service provider, to develop and operate the Healthway Cancer Care Center.   

Leading the Ayala Group’s COVID-19 Response  

When the pandemic struck the Philippines, AC Health proved to be a partner in nation-building by leading the Ayala Group’s COVID-19 response initiatives. It rallied its business units to work closely with the DOH, IATF, and local government units in implementing protocols across the Ayala Group and spearheading key milestones, from converting Qualimed sites into COVID-19 referral hospitals, capacitating 8 RT-PCR testing labs, to securing vaccines for employees and other stakeholders.    

AC Health also helped secure 1 million doses of COVID-19 vaccines for the Ayala Group via tripartite agreements with the government. To date, it has administered over 570,000 doses of the COVID-19 vaccine to recipients from various LGUs, the Ayala Group, and partner companies across its 25 vaccination sites nationwide.   

Medethix, a member of the AC Health group, announced last week its order of 300,000 treatment courses of Molnupiravir, the first oral antiviral medicine to be authorized for the treatment of mild-to-moderate COVID-19 infection. Molnupiravir is expected to democratize COVID-19 treatment due to its affordable price. It will also greatly help ease the burden to the country’s healthcare system by providing an additional treatment option to prevent hospitalizations and deaths. 

“AC Health’s vision is to build an integrated and seamless ecosystem of healthcare. We are proud that this vision has resonated with many stakeholders, including IFC. We are delighted to be partnering with IFC which has been an advocate for affordable and accessible healthcare in developing markets around the world. At Ayala, we truly believe that Filipinos deserve better healthcare, and this social bond will be instrumental to AC Health as we scale-up our services beyond this pandemic,” AC Health President & CEO Paolo Borromeo said.

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For more information:

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
e-mail – alcantara.ypg@ayala.com

Manila – AC Health has administered over 500,000 doses of the COVID-19 vaccine, breaching the halfway mark of its 1 million dose target.

Since its official launch in July, AC Health, through its COVIDShield program, has been inoculating members of priority groups across different LGUs, Ayala Group employees and their dependents, and partner companies across 25 active vaccination sites in key priority areas around the country, including NCR, Bulacan, Laguna, Pampanga, Batangas, Cebu, Davao, Palawan, among others. This large-scale initiative is in support of the Philippine National Vaccine Deployment Program and complements the public sector’s efforts to vaccinate majority of Filipinos at requisite scale and speed to achieve optimal protection. Moreover, over 50,000 regular employees across the different Ayala parent companies have been vaccinated. This brings the vaccination rate of the Ayala group at 90%, with majority of the remaining employees scheduled for vaccination in the next few weeks.

“Three months after launching our COVID-19 vaccination program, we are proud to have administered almost 560,000 doses of COVID-19 vaccines for partners and clients, as part of our contribution to the country’s response to the pandemic. Within the Ayala Group, we have successfully achieved a 90% vaccination rate for our regular employees.  Through consolidated efforts of the entire AC Health network, together with the DOH and the IATF, local governments and the private sector, we will continue to work hard to achieve our country’s vaccination goals,” said AC Health President and CEO, Paolo Borromeo.

Last September 28, Ayala Corporation Chairman Jaime Augusto Zobel de Ayala, together with AC Health President and CEO Paolo Borromeo and Ayala Corporation Chief Human Resource Officer JP Orbeta visited 4 sites to give support to the medical frontliners and COVIDShield staff.

“We are grateful to our healthcare frontliners who are the true heroes of this pandemic. During this time of uncertainty, we owe a lot to their unwavering dedication and sacrifice to help our fellow Filipinos be protected and to keep our nation safe,” added Borromeo.

The COVIDShield program provides comprehensive COVID-19 vaccine administration services from ensuring vaccine supply, proper scheduling, vaccine administration to post-vaccine surveillance. AC Health is on track in achieving its goal of administering 1 million COVID-19 vaccine doses as the next tranches of privately-procured vaccines arrive in the country.

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For more information, contact:

CHACHI MORENO, M.D.
Strategy and External Affairs Manager
Zodiac Health Ventures, Inc
E-mail: moreno.fmm@achealth.com.ph

MANILA, Philippines – Ayala Corporation, one of the largest conglomerates in the country, is committing to achieve net zero greenhouse gas emissions by 2050, as announced by its President & CEO Fernando Zobel de Ayala during the group’s Integrated Corporate Governance, Risk Management, and Sustainability Summit held Thursday.

“As Ayala’s concrete contribution to the well-being of future generations of Filipinos, we are announcing our commitment to achieve net zero greenhouse gas emissions by 2050. We are aligning ourselves with the global movement for climate action as our way to help secure our country’s future from the threats brought by climate change. We believe that we have the capabilities and collective will to make this happen,” Zobel said.

Ayala aligns its business strategy with the Paris Agreement’s goal of limiting global warming to 1.5°C compared to pre-industrial levels. As such, Ayala commits to set      targets aligned with science  that cover the following: Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from generation of purchased electricity), and all relevant Scope 3 (all other indirect emissions that occur in value chain). Scope 3 emissions are expected to make up the majority of Ayala’s footprint and can be complex to address, but Ayala is committed to net zero best practices and driving meaningful change in its business ecosystem.

Prior to Ayala’s net zero by 2050 announcement, its core business units have initiated the following climate-action interventions:

• Ayala Land pushes for offsetting its Scope 1 and 2 emissions by 2022 for its commercial operations
• BPI will not finance new greenfield coal power generation projects. The Bank will reduce its coal power generation exposure to half of 2020 by 2026 and to zero by end of 2032.
• Globe, a participant to the Race to Zero and a signatory to the Science-Based Targets Initiative (SBTi), has shifted to buying energy directly from renewable energy producers for its headquarters in Taguig and six offices and facilities since 2019
• AC Energy is on its way to installing 5GW of renewable energy by 2025
• Ayala Corporation’s Project Kasibulan, a reforestation, forest protection, and biodiversity conservation program for carbon sequestration is to be piloted in the island of Mindoro

To develop a net zero roadmap, Ayala partners with South Pole, a leading project developer and global climate solutions provider that works with private organizations and governments worldwide. This partnership enables the group to have an accurate view of emissions across its core business units and a tangible roadmap for reducing them in line with its net zero by 2050 ambition. In the next 12 months, Ayala and South Pole will: 

• Develop a detailed greenhouse gas footprint that includes all relevant Scope 3 emissions from the value chain, which is considered net zero best practice
• Assess potential emission reduction activities and strategies to help Ayala prioritize and budget for these interventions across its core business units, ensuring practical steps are taken to reduce emissions as quickly as possible
• Establish interim targets aligned with a science-based 1.5°C pathway across the core business units to ensure Ayala has robust and measurable milestones along their journey to net zero by 2050

Ayala Corporation and its core business units are signatories to the Taskforce on Climate-related Financial Disclosures (TCFD) and are currently working to implement the 11 recommended disclosures. This year,  Ayala focuses on determining the actual and potential impacts of climate-related risks and opportunities on its businesses, strategy, and financial planning. A physical and transition-risk analysis is well underway.

Ayala’s announcement of its net zero by 2050 ambition comes ahead of the 26th United Nations Climate Change Conference of the Parties (COP26) to be held in Glasgow, United Kingdom in November 2021, where signatories to the Paris Agreement will be reporting back on progress made since 2015. 

Last April, the Philippines submitted its first nationally determined contribution to the Paris Agreement, committing to a projected greenhouse gas emission reduction and avoidance target of 75% by 2030.

Ayala believes that accelerating climate action is part of its recovery roadmap. Despite the challenges of COVID-19, global companies have moved towards net zero. Capital has been flowing to sustainable investments as a growing number of investors and lenders walk away from carbon-intensive sectors. And while a net zero ambition entails risks and costs, Zobel sees it as a long-term investment for the future generations, aptly defining Ayala as a catalyst and partner for net zero transition in the Philippines.  

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For more information, contact:

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
E-mail – alcantara.ypg@ayala.com

MANILA – Ayala Corporation’s Managing Director JP Orbeta bares how company’s human resources units address the challenges of the COVID-19 pandemic and fulfill their commitment as responsible employers at the panel discussion “The New People People” hosted by The Economist.

Ayala Corporation is one of the three Philippine corporations that made it to Forbes’ 2021 list of the World’s Best Employers. This recognition follows Ayala’s merit of excellence award from the International Association of Business Communicators (IABC) and another gold from Gawad Pandayon by PANA, the country’s biggest advertiser group.

Speaking alongside HR leaders from another ‘best employer’ Standard Chartered and tech startup Zilingo, Orbeta said Ayala has always had a people-first perspective in addressing the COVID-19, prioritizing the health and well-being of employees across the group.

“There was never a question about making sure that we continue to pay our employees despite them not physically coming to work. The true north for leaders is ‘What is the right thing to do here?’” Orbeta said. 

Beginning March of last year, Ayala empowered its personnel to work efficiently and effectively under a remote setting and in the workplace which it calls ‘Work Where Effective’ weeks before government announced the nationwide lockdown.

Ayala also rolled out a groupwide COVID response package, covering all employees, business partners, customers, and the broader population. As of October 2021, Ayala Group has allocated over P19.5 billion for this response package.  

• Groupwide emergency financial response package for direct and indirect employees’ salary continuance, leave conversions, and loan deferments;
• A quarantine facility for employees called Ayala Group Employee Care Center;
• A dedicated healthcare hotline and teleconsultation service, including an in-house bot called Assistant during Crises and Emergencies (ACE) for daily health and risk assessments to monitor employees and household members;
• Work-from-home arrangement and online resources for re-tooling and upskilling, as well as shuttle services for essential workers who needed to be physically present at work;
• A re-entry plan that included redesigning the workplace and providing tools and protective equipment;
• Administration of one million doses of COVID-19 vaccines for employees and their registered dependents and business partners; over 500,000 doses have been administered to date; and
• An all-in-one healthcare app called HealthNow, which offers teleconsultation, online medicine ordering and delivery, and clinic and diagnostic testing booking.

According to Orbeta, Ayala also prioritized employees of vendor partners given their crucial role to the value chain. From 60,000 direct employees, Ayala Group extended its service to its 120,000 indirect employees.

Inspired by the group’s caring gesture, Ayala employees gave back to vulnerable communities by raising over P149 million through an internal program called Project Pananagutan, which benefitted staff under no-work, no-pay arrangement, public hospitals, and vulnerable families in Metro Manila and Cavite. Some employees also donated to Project Ugnayan, a private sector consortium-led response to feed the hungry, which raised P1.7 billion and distributed grocery vouchers to over 2.8 million families or 14 million individuals in Greater Manila Area during the first months of the lockdown in 2020.

For Ayala, the overall well-being of the people within and outside its companies is at the center of its operations.  At the core of Ayala’s pride is its HR departments organized to manifest the company’s commitment to its primary asset – its people.   

“When they know that your company will put the people above everything else, it sends a huge message across that this is a place that really takes care of its people,” Orbeta noted.

John Philip S. Orbeta has been recently appointed as Chief Administrative Officer and Chief HR Officer of AC Energy. He served as Chief Human Resources Officer of Ayala Corporation for 16 years.

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For more information, contact:

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
E-mail – alcantara.ypg@ayala.com

Manila – AC Health was hailed as the Grand Winner of the Service Excellence Company of the Year Award for their contributions in healthcare, at the recently concluded 12th Asia CEO Awards, the largest business awards event in the Philippines and one of the largest business award events in the Asia Pacific region.

The online event, held last October 12, was attended by local and international business leaders who have advocated for progress and innovation in their respective sectors despite the pandemic. AC Health was chosen as the winner among 28 other companies in the Service Excellence Company of the Year category for their continued commitment to improve access to healthcare as evidenced by the group’s COVID-19 response initiatives.

AC Health President and CEO Paolo Borromeo highlights the company’s vision in providing quality healthcare to Filipinos in his speech, stating, “It has been a challenging year but we remain committed to investing in healthcare. Throughout the crisis, we have leveraged the entire AC Health network to lead the group’s COVID-19 response initiatives through spearheading and implementing key milestones to address gaps in the healthcare system. We hope to continue this momentum and strive to deliver better care to all Filipinos.” He also dedicates the award to AC Health’s frontliners and healthcare workers who have tirelessly served during the pandemic.

To date, AC Health, together with Healthway, QualiMed and HealthNow, has set up mega-isolation facilities, COVID-19 testing labs, and has administered over 500,000 COVID-19 doses across 25 vaccination sites in key cities.

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For more information, contact:

CHACHI MORENO, M.D.

Strategy and External Affairs Manager

Zodiac Health Ventures, Inc E-mail: moreno.fmm@achealth.com.ph

MANILA – Ayala Corporation Chairman Jaime Augusto Zobel de Ayala is keen to continue exchanging ideas and investing resources with Japanese firms to accelerate a strong and sustainable recovery from the COVID-19 pandemic through innovation and digitalization.    

At the 38th Joint Meeting of the Philippines-Japan Economic Cooperation Committees held Monday, Zobel shared thoughts alongside DTI Secretary Ramon Lopez and Japanese business leaders Ken Kobayashi of Mitsubishi Corporation, Teruo Asada of Marubeni Corporation, and Nobuhide Hayashi of Mizuho Bank, Ltd.    

“The Philippines and Japan have always maintained a strong economic partnership even during this pandemic,” Lopez said. “In this partnership, innovation and digitalization now play a key role—as both our countries continue to encourage globally competitive and innovative industries at this crucial stage of recovery.”    

“Japan has been the largest foreign investor in the Philippines for the last two decades, with more than 1,400 Japanese companies presently operating in the country,” Kobayashi said. “I’m grateful for this strong and growing relationships between our two nations that will bring economic growth for both.”   

During his speech, Zobel cited the Ayala group’s long-standing strategic partnerships with Japanese firms, notably Mitsubishi Corporation since 1974; and highlighted three key areas of outsized potential for co-investment between Japanese and Philippine firms to drive recovery and growth in the new normal. “We often look to Japan, with its history and leadership in innovation, as a source of inspiration for the forward-thinking and novel ways in which technologies can be applied to address pain points and create value for business and society alike,” Zobel noted.    

Access to Healthcare   

First in Zobel’s list is healthcare, a traditionally underserved market in the Philippines, which has been most critical during the pandemic.

“Globally, the pandemic has exposed woeful inadequacies in healthcare infrastructure,” Zobel said. “Our experience with HealthNow–Ayala Group’s all-in-one healthcare platform—and COVID illustrates the need for systematic investment in innovation and digitalization to address challenges faced by our healthcare system.”      

According to Zobel, while the Philippines produces the best healthcare workers in the world, the country’s physical and digital healthcare infrastructure requires substantial stimulus, which can be provided by a collaborative effort between the private and public sectors.    

 Financial Inclusion    

Another opportunity for PH-Japan collaboration is financial inclusion. As both BPI Mobile Banking and GCash generated record-high transactions during the pandemic, Zobel invites Japanese firms to look at these channels, citing Paypal’s $2.7B deal with Paidy.

“Considering Paidy’s ‘buy now, pay later’ model, there are many analogues that we can possibly borrow from this— perhaps on exploring ways around how we might adapt learnings from Japan to the needs of our own young market that has a sub-10% credit card penetration rate,” he said. 

“We have much to learn from the approaches and models of our Japanese counterparts, and we hope that further success stories might arise from continued cooperation to transform this space,” he added.        

During the pandemic, BPI saw its transactions swing to digital. With 92% of transactions now done online, the platform recorded over 4 million digital enrollments, with over 2.5 million digitally active users. Meanwhile, GCash has experienced over 280% growth in daily active transactions year-on-year, and nearly +1,000% growth from pre-pandemic levels. The GCash App now has 46 million downloads.  

Green Energy Shift  

Finally, Zobel echoed the global call for a shift to green energy development, which the Ayala Group is addressing through AC Energy.   

With Japan being recognized for designing and building infrastructure resilient to natural disasters, Zobel said the Philippines can borrow technologies and practices from Japan to build a more resilient and adaptive grid.   

Zobel also touched on Japan’s pioneering efforts in the liquefied hydrogen space, which has tremendous implications for accelerating green energy transitions in the automotive space, and for the scalability of clean energy generation and storage vis-à-vis fuel cell technology.       

“Japan is certainly well on its way with its Green Growth Strategy by investing in these technologies, with hopes to achieve 40% of its national mix generated by renewable sources by 2030. There is much we can continue to learn from Japanese leadership in this field— disaster-resilient energy infrastructure and cutting-edge carbon-free fuels being just the tip of the iceberg,” he said.     

AC Energy aims to be the largest listed renewable platform in Southeast Asia, with a goal of producing 5GW of attributable renewable capacity by 2025.    

According to Zobel, Ayala’s longstanding partnership with Mitsubishi Corporation—which has supported Ayala at the holding company level as well as in Manila Water, AC Energy, and Ayala Land—is a testament on how Philippine firms can work with Japanese firms to scale up and innovate.    

“I believe there is much room for further cooperation and investment in innovation and digitalization between the Philippines and Japan,” he said.   “Combining our resources and experiences will surely yield innovative ways of addressing the challenges posed by a more volatile, uncertain, complex, and ambiguous world that demands more digital and inclusive means of serving our stakeholders,” he added.    

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For more information, contact:

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
E-mail – alcantara.ypg@ayala.com

Manila – Ayala Corporation, together with its healthcare arm, Ayala Healthcare Holdings, Inc. (AC Health), has donated 1,000 flu vaccine doses to the City of Taguig as part of #Brigadang Ayala. The turnover ceremony was done last July 2021 during the groundbreaking event of the Healthway Cancer Care Center, AC Health’s specialty cancer hospital, located in Taguig City. The initiative is part of Ayala’s commitment to support both COVID and non-COVID healthcare initiatives.

The flu vaccination drive kicked off last September 7, 2021 in 3 participating Healthway branches: Healthway Family Clinic Palingon, Healthway Family Tuktukan and Healthway Multispecialty Clinic Market Market. This vaccination drive aims to administer flu vaccines for Taguig City’s priority beneficiaries, namely, immunocompromised patients and those at high risk or with comorbidities.

“AC Health has continued to be at the forefront in the fight against COVID-19. We also recognize the need to address other vaccine-preventable infectious diseases such as Influenza, which continue to pose a burden for many Filipinos. We hope that the administration of these flu vaccines to those most at-risk will support the City of Taguig’s efforts in lessening the burden of Influenza. We are proud to partner with Mayor Lino Cayetano and the Taguig City team, who have always been strong advocates in promoting the health and wellness of its constituents, especially during this pandemic.” said AC Health President & CEO Paolo Borromeo.

Influenza and influenza-like illnesses affect an estimated 480,000 Filipinos annually, according to the IPSOS 2020 Flu Vaccination Report. Commonly called the flu, this respiratory illness may cause complications, especially among high-risk groups such as children, the elderly, and those with compromised immune systems. 

The flu vaccination drive in Taguig City is expected to continue until the end of September with the target of administering 1,000 doses.

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For more information, contact:

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
E-mail – alcantara.ypg@ayala.com

CHACHI MORENO, M.D.
Strategy and External Affairs Manager
Zodiac Health Ventures, Inc
E-mail: moreno.fmm@achealth.com.ph

MANILA – As the country continues to grapple with COVID-19, AC Health takes a valuable lesson from its 187-year-old parent Ayala Corporation: Don’t put all your eggs in one basket.  

Armed with a P10 billion investment, AC Health has gone a long way in addressing the fundamental gaps in accessibility, affordability, and quality of healthcare. With its President & CEO, Paolo Borromeo, at its helm, AC Health has built an ecosystem that caters to the various healthcare needs of Filipinos.   

“As part of Ayala’s commitment to investing in social infrastructure and human capital, AC Health’s vision is to build, invest, and connect various businesses into an integrated and seamless ecosystem of services across three key pillars of healthcare: drugstores, clinics, hospitals, and digital health,” Borromeo said.   

AC Health’s portfolio comprises Generika, a chain of 700 drugstores that offer quality and affordable generic medicines; Healthway Philippines, the country’s largest clinic network; QualiMed Health Network, which operates mall-based multi-specialty clinics, stand-alone ambulatory or day surgery centers, and full-service hospitals; and HealthNow, an all-in-one healthcare app that offers telemedicine consultations, online medicine ordering and delivery, and clinic and diagnostic testing booking. AC Health also has a health technology arm, Vigos, as well as medicine importation and distribution arms, IE Medica and MedEthix.   

Addressing the pandemic: 2,000 confirmed cases admitted; 300K vax doses administered  

When the pandemic struck the Philippines, AC Health embodied Ayala’s commitment to nation-building by leading the group’s COVID-19 response initiatives. It has rallied its business units to work closely with the DOH, IATF, and local governments in implementing protocols across the Ayala Group and spearheading key milestones, from setting up mega-isolation facilities, testing labs to securing vaccines for employees and other stakeholders.   

To help expand the country’s COVID wards, AC Health converted QualiMed’s network into COVID-19 referral hospitals, which have admitted nearly 2,000 confirmed cases as of August 10, 2021. AC Health also helped secure 1 million doses of COVID-19 vaccines for the Ayala Group via tripartite agreements with the government. It has administered over 300,000 doses of the COVID-19 vaccine since the first batch arrived in the Philippines late February. It has set up 24 vaccination sites across the country to inoculate members of priority groups across LGUs, the Ayala Group, and partner companies.  

“AC Health will remain committed to supporting the country’s vaccination efforts and will continue to strengthen our partnerships with our LGUs and private sector partners, in order to vaccinate at the requisite scale and speed and to help achieve our nation’s goal of achieving herd immunity at year-end. We are proud to leverage the full strength of our network, with Healthway and QualiMed leading site operations and vaccine administration, and HealthNow functioning as our vaccine management platform to meet our goal of administering 1 million doses within 2021,” Borromeo said.   

Looking beyond COVID: Building the country’s first dedicated cancer specialty hospital  

According to Borromeo, as AC Health continues to invest in improving healthcare in the Philippines, it will not put all its eggs in one basket. Instead, it will strike a balance between battling COVID-19 and addressing other health issues unrelated to the pandemic.   

Last month, AC Health officially broke ground for the construction of Healthway Cancer Care Center, the Philippines’ first dedicated specialty cancer hospital. The 100-bed facility, which is expected to be completed in July 2023, will offer a complete range of cancer services from screening, diagnosis, treatment to post-cancer care.   

The Healthway Cancer Care Center will be equipped with 20 chemotherapy chairs, 4 operating theaters, and state of the art diagnostic and therapeutic equipment, optimized for cancer screening, diagnosis, and treatment. The Ayala Group has invested over P2 billion for this facility and has partnered with Varian-CTSI, a leading oncology service provider, to develop and operate it.  

Beyond the cancer hospital, AC Health aims to leverage its integrated healthcare network to expand its oncology services. A hub-and-spoke model, involving its integrated clinic and hospital network, allows AC Health to drive access to affordable cancer care for patients across the country. As such, Healthway and QualiMed will serve as “spokes” of the model and extensions of the cancer hospital “hub.” This provides patients more avenues to seek consultation and have easier access to cancer screening and detection. The vision of this model is to provide impact and solutions to the many Filipinos in need of cancer services.  

“The eventual growth of the healthcare industry will be largely dependent on its ability to regain patient trust and confidence to continue looking after non-COVID healthcare issues. AC Health remains in a unique position to ride on these key trends with our expanded ecosystem of end-to-end services and platforms for all patients and customers,” Borromeo said.  

For more information

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
e-mail – alcantara.ypg@ayala.com

JANELLE MICAELA S. PANGANIBAN
Strategy and External Affairs Specialist 
AC Health
e-mail: panganiban.jms@achealth.com.ph

1H21 vs 1H20 Highlights

• Ayala Corporation reported a net income of ₱10.4 billion in the first semester, expanding 31 percent from the low base of the previous year when the metropolis was under a higher quarantine status. The improved results of its business units supported Ayala’s earnings:

• Ayala Land registered a net income growth of 34 percent to ₱6 billion showing significant improvements in performance compared to the first half of 2020 during the onset of the pandemic. 
• BPI’s net income went up one percent to ₱11.8 billion due to lower loan loss provisions. 
• Globe recorded a net income growth of 13 percent to ₱13 billion on higher gross service revenues as well as the positive impact of the CREATE law.
• AC Energy Corporation (ACEN) posted a net income growth of five percent to ₱2.7 billion as power demand returned to pre-pandemic levels and additional renewables capacity were added. This was partially tempered by high spot electricity purchases during a thermal outage and the absence of non-recurring gains during the period.  
• Manila Water’s net income improved 10 percent to ₱2.7 billion, mainly due to the absence of provisions and adjustments made in the same period last year.

• In accordance with accounting standards, Ayala’s investment in Manila Water was reclassified from a subsidiary to an Investment in Associates beginning June 3, 2021, following loss of control. This reflects Ayala’s reduced economic interest in the company from 51.4 percent to 38.6 percent following the completion of Trident Water’s acquisition of a majority stake in Manila Water.

• AC Industrials narrowed its net losses from ₱1.8 billion in the previous year to ₱592 million due to better results across its subsidiaries, including IMI and AC Motors.

• Meanwhile, Ayala’s core net income, which isolates the effect of various provisions, remeasurement losses, the CREATE law as well as divestment gains booked in 2019, decreased eight percent to ₱13.3 billion in the first half of the year compared to the same period last year. This is equivalent to 90 percent of Ayala’s pre-pandemic level. 
• On a topline basis, Ayala’s diversified portfolio supported its performance in the first semester. Its revenues grew 24 percent to ₱122 billion from the same period last year. Ayala Land, Globe, and AC Industrials exhibited topline improvement amid the current business climate:

• Ayala Land’s revenues were up 19 percent to ₱49 billion propelled by continued construction progress and higher bookings from property development while commercial leasing operations were weighed down by renewed restrictions.
• Globe’s topline increased four percent to ₱75.5 billion on the back of continued demand for mobile and home broadband data amid the pandemic. 
• AC Energy Corporation’s revenues expanded 35 percent to ₱13.4 billion as power demand returned to pre-pandemic levels and additional renewables capacity were added.
• AC Industrials’ revenues soared 32 percent to ₱40.7 billion as manufacturing plants in IMI ramped up alongside loosening quarantine restrictions from the height of the health crisis in last year as well as demand recovery across its various businesses.   
• Meanwhile, BPI continued to navigate through the challenges of the pandemic as its revenues declined seven percent to ₱48.1 billion from muted loan demand which was tempered by the strength of BPI’s diversified businesses. 

“Our first semester results show recovery in the business environment compared to last year. However, increasing infections from the Delta variant present new challenges”, Ayala President and CEO Fernando Zobel de Ayala said. “As a business group operating in diversified industries, we will continue to do our part in helping revitalize the economy through continued investments and supporting the country’s pandemic response and vaccination program,” Mr. Zobel added. 

2Q21 vs 1Q21 Highlights

• Ayala’s core net income declined 15 percent to ₱6.1 billion in the second quarter from the first quarter of the year as the better performance of Ayala Land and Globe were outweighed by weaker results of BPI and AC Energy and higher losses of AC Industrials and AC Ventures.
• Meanwhile, Ayala’s reported net income decreased seven percent to ₱5 billion. 

Real Estate 

• Ayala Land’s consolidated revenues and net income increased 19 percent to ₱49 billion and 34 percent to ₱6 billion, respectively in the first half of 2021 compared to the same period last year, showing significant improvements in performance compared to the same period last year during the onset of the pandemic.  
• Property development revenues saw a growth of 37 percent to ₱34.1 billion on the back of continued construction progress and higher bookings. 

• Residential revenues surged 47 percent to ₱30.1 billion. 
• Office for sale revenues jumped 43 percent to ₱2.1 billion.
• Commercial and industrial lots declined 32 percent to ₱2 billion.

• Residential sales reservations grew 26 percent to ₱48.2 billion as local demand remained strong throughout the period.

• Second quarter sales reservations improved 45 percent to ₱19.7 billion from the same period last year despite the reimposition of an enhanced community quarantine at the end of March until April.  

• Commercial leasing revenues dipped 26 percent to ₱9.5 billion as operations of malls, hotels, and resorts were weighed down by renewed restrictions.

• Shopping center leasing revenues went down 43 percent to ₱3.4 billion. 
• Office leasing income slightly improved to ₱4.8 billion with host of BPO and HQ tenants providing support to office leasing operations. 
• Hotels and resorts rental revenues dropped 42 percent to ₱1.2 billion.

• Capital expenditures reached ₱32.1 billion in the first half of the year. 
• Ayala Land launched eight projects worth ₱25.3 billion in the second quarter alone, bringing the total projects launched in the first half to 14 at ₱44.3 billion. These include: Ayala Land Premier’s Anvaya Cove S3 in Morong, Bataan; ALVEO’s Bayview Heights in Cagayan de Oro, Misamis Oriental; Avida’s Averdeen Estates Phase 1 and Southdale Settings both in Nuvali, Laguna, Makati Southpoint Tower 2, and Astrea Tower 2 in Quezon City; and Amaia’s Steps The Junction Place Clara and Skies Cubao Tower 2 both in Quezon City. The company has budgeted ₱100 billion-worth of launches in 2021. 

Banking

• BPI posted a net income of ₱11.8 billion in the first half of 2021, one percent higher in the same period last year due to lower loan loss provisions recognized. 

• The bank’s second quarter net income was its highest since the start of the pandemic, reaching ₱6.8 billion in the period, up 29 percent year-on-year and up 36 percent quarter-on-quarter.

• Total revenues decreased seven percent to ₱48.1 billion due to lower net interest income and non-interest income.

• Net interest income dipped seven percent to ₱33.9 billion because of a 24-basis point contraction in net interest margin, which ended at 3.32 percent. 
• Non-interest income likewise declined seven percent to ₱14.3 billion due to lower trading income despite fees and commissions showing a 37 percent growth. 

• Total loans declined four percent to ₱1.4 trillion because of softer demand in corporate, SME, and auto loans.

• CASA ratio stood at 83.2 percent.
• Loan-to-deposit ratio was 80.8 percent. 

• The bank recognized ₱6.5 billion in provisions in the first half, 56 percent lower than the same period last year. NPL ratio stood at 2.94 percent and NPL coverage ratio reached 120.3 percent.
• BPI affirmed its strategic imperatives which focus on five key initiatives underpinned by its passion for its customers:

• It aims to be the undisputed leader in digital banking as it leverages its early investments in digitalizing its systems to deliver products and services that will enhance customer experience and deepen their relationship with the Bank.  
• As clients adopt digitalization, the bank will rationalize its branches through re-location, consolidation or co-location.  The remaining branches will undergo physical transformation and will be segmented depending on the client preferences in the area.
• BPI aims funding leadership by becoming the main operating bank of its corporate clients, capitalizing on its robust transaction platforms and optimizing funding cost.  
• The bank will continue to reposition its loan book by increasing exposure to SME and consumer loans. 
• As part of its thrust for Sustainable Banking, BPI launched its Sustainability Agenda and made significant commitments:  become the most financially inclusive bank through BPI Direct BanKo, no additional commitments to finance greenfield coal power generation projects and support the Task Force on Climate-related Financial Disclosures.

Telco

• Globe’s net income increased 13 percent to ₱13 billion in the first half as the decline in non-operating charges and upside from the implementation of the CREATE law fully covered for the increase in depreciation expenses. 
• Excluding the impact of non-recurring charges, foreign exchange, and mark-to-market charges, Globe’s core net income grew 19 percent to ₱13.2 billion.
• Total service revenues grew four percent to ₱75.5 billion driven by data revenues led by home broadband. Total data revenues accounted for 79 percent of total service revenues, a growth of 300 basis points from the same period last year.
• Growth in data was present in all segments, most evident in the upward momentum of Globe’s mobile data and home broadband categories.

• Mobile data revenues increased seven percent to ₱38.6 billion.
• Mobile data traffic grew 59 percent to 1,761 petabytes.  
• Home broadband revenues soared 16 percent to an all-time high of ₱14.5 billion. 
• Home broadband subscriber base grew 47 percent to over 4.2 million customers. 
• Corporate data expanded eight percent to ₱6.3 billion.

• EBITDA dipped three percent to ₱37.4 billion due to higher costs and expenses attributed to more spending to support its aggressive network expansion and improve customer digital lifestyle experience.

• Operating expenses including subsidy grew 12 percent to ₱38.1 billion.
• EBITDA margin consequently contracted by 300 basis points to 50 percent.  

• Capital expenditures more than doubled to₱43.3 billion, representing 57 percent of gross service revenues and 116 percent of EBITDA. Moreover, 88 percent of the investment went to data-related requirements for network expansion and network modernization from 3G to 4G LTE/5G as well as fiber technology. 
• As a result of continuous modernization of its network to make 5G and fiber technology available to more customers nationwide, Globe has made strides in improving its overall network data infrastructure:

• New cell towers ramped up to 641, an improvement of 71 percent 
• Upgraded mobile sites reached 8,175 or a 47 percent growth   
• On the fixed line front, it has surpassed the 600,000 FTTH lines delivered in 2020

Power

• AC Energy Corporation posted a net income growth of five percent to ₱2.7 billion. Revenue expanded by 35 percent to ₱13.4 billion as power demand returned to pre-pandemic levels and additional renewables capacity were added. However, the strong revenue growth was partially offset by high spot electricity purchases during a thermal outage. The absence of non-recurring gains during the period also tempered income growth.
• Meanwhile, AC Energy group’s legacy coal plants (GN Power Kauswagan and AA Thermal, both of which are outside of ACEN) registered a 28 percent decline in equity in earnings to ₱1.9 billion in the first half of 2021, mainly due to a loss on derivative (related to project loan) and higher business taxes.
• Given the reduced ownership in ACEN and decline in legacy coal plant earnings, AC Energy group registered a net income decline of 21 percent to ₱3.5 billion in the first half of 2021.
• ACEN commenced the operations of two solar plants in the Philippines and two solar plants in India in the second quarter. Philippines: 63MW Gigasol Palauig in Zambales (April) and 120MW Gigasol Alaminos in Laguna (June). India: 70MWdc Paryapt Solar in Gujarat (April) and 140MWdc Sitara Solar in Rajasthan (May).
• In May, ACEN completed the listing of 1.58 billion primary shares from its follow-on offering, which raised ₱10.3 billion. Regulators then approved the company’s increase in authorized capital stock, which enabled the infusion of parent ACEIC’s international platform into ACEN via an asset-for-share swap. These strategic initiatives, alongside the recently concluded ₱5.4-billion stock rights offering in January, and the ₱11.9-billion private placement to Arran in March, enable ACEN’s transformation as Ayala’s main energy platform. With the infusion of international assets, the power company now has more than 2,500 MW in attributable capacity, of which 2,070 MW, or 80 percent, comes from renewable sources. AC Energy intends to achieve 5,000 MW of renewable capacity by 2025, toward its vision to become the largest listed renewables platform in Southeast Asia. 

Industrial Technologies

• AC Industrials narrowed its net loss to ₱592 million in the first semester from ₱1.8 billion a year ago as IMI benefited from better utilization and recovering markets, while AC Motors saw stronger demand following looser quarantine measures. 
• From a net loss in same period last year, IMI recorded a net income of US$915,000 (₱46.1 million) amid the continuing global chip shortage and challenged supply chains.
• Meanwhile, AC Motors’ revenues grew 42 percent to ₱8.1 billion in the first semester as the Philippine automotive market continues to recover. Both automotive and motorcycle businesses grew, buoyed by new models launched across the portfolio.

Balance Sheet Highlights 

• Parent level cash stood at ₱16.9 billion.
• Parent net debt stood at ₱119.1 billion.
• Parent net debt-to-equity ratio stood at 94 percent.
• Consolidated net debt-to-equity stood at 66 percent.
• Loan-to-value ratio, the ratio of its parent net debt (excluding the fixed-for-life perpetuals which have no maturity) to the total value of its assets, was at 9.8 percent.
• In May, Ayala Corporation completed the first tranche of its ₱30 billion Debt Securities Program with an aggregate principal amount of ₱10 billion consisting of a base offer of ₱6 billion and an oversubscription option of an additional ₱4 billion. The first tranche consists of 3.0260% Series A Bonds due 2024 and 3.7874% Series B Bonds due 2026. The bonds were issued and listed at the Philippine Dealing & Exchange Corporation on May 28, 2021.
• Ayala is taking advantage of attractive levels in the equities market to invest in value-accretive opportunities such as its exercise of a share buyback and block purchase of Ayala Land shares.

• Ayala purchased a sizeable block of its own shares in May valued at ₱5.8 billion. Combined with its past buyback exercises, Ayala has accumulated shares equivalent to 1.7 percent of its total outstanding shares at an average purchase price of ₱691 per share.
• Ayala recently purchased blocks of Ayala Land shares at an average price of ₱36.34 per share. These transactions increased Ayala’s stake in Ayala Land from 44.5 percent to 46.4 percent as of July 2021.