Category: News

Makati, Philippines – March 12, 2020  As Ayala Corporation caps its 185^th founding anniversary, its network of 227,000 small medium enterprises (SMEs) and allied businesses of some 27,000 partners and suppliers across the group are recognized as pillars in its continuing growth story.

“Beyond our products and services, our businesses create multiplier effects for society and the economy. Our group creates employment opportunities for a broad segment of Filipinos– whether professionals, skilled or unskilled—as well as various entrepreneurial opportunities for many micro, small, and medium businesses. With the Ayala group’s unique attributes in diversity, scope, and brand equity, we are fortunate to have the ability to contribute to providing livelihood opportunities with scale and serve as catalyst for economic and social progress for many communities throughout the country,” noted Ayala Chairman and CEO Jaime Augusto Zobel de Ayala.

More than half of these 227,000 unique SMEs within the Ayala network, partner with Globe for their data transaction needs and various ICT solutions to run their daily business operations.

Another 100,000 enterprising Filipinos are already growing their business ventures with BPI’s Banko through zero collateral, low interest loans of up to ₱150,000 and sound financial advice.

An estimated 1,000 SMEs are also doing business in 35 AyalaLand Malls nationwide and some subcontractors at the Makati Development Corporation that build sustainable residential and commercial spaces.

According to a DTI report, micro small medium enterprises (MSMEs) are becoming a significant contributor in the Philippine economy. They make up 99.5% of the businesses in the country where 60% are micro entrepreneurs with annual revenues of less than P10 Million. MSMEs employ 63% of working Filipinos and contribute to 35% of the country’s GDP. Ayala supports the growth of the MSMEs in the country.

In addition, some 27,000 suppliers and partners across the Ayala group continue to benefit from the income derived from Ayala’s diverse businesses. All these economic activities aim to include as many players as possible creating more income generating prospects and jobs.

The Ayala group reported 71,823 total direct hires in 2019, up 19% from 2018. Ayala’s suppliers and SME partners are part of the country’s most productive citizens. The Philippine Statistics Authority estimates the country’s employment rate at 94.9% at December 2019.  

Ayala’s net income in 2019 reached ₱35.3 billion, which included divestment gains from AC Education and AC Energy. The strong consumer-driven growth of Ayala Land, BPI, and Globe lifted Ayala’s bottomline during the period.

An infrastructure company of businessman Enrique K. Razon Jr., Prime Metroline Holdings Inc., through a company that it will incorporate for the transaction (hereafter, “Trident Water”), is joining Ayala Corporation as a strategic investor in Manila Water with the acquisition of a 25 percent stake in the company. Ayala remains a shareholder with a 38.6 percent stake.

The transaction will bring ₱10.7 billion in fresh funds for Manila Water, which will support its capital spending program to improve the water and wastewater distribution system in Metro Manila’s east zone concession.
The partnership with Trident Water, which demonstrates Ayala’s ability to attract sizeable and long-term investments into the business group, adds enormous value to Manila Water as it executes on its long-term strategic direction.

“Across all our partnerships, Ayala values the complementary strengths and expertise that we can leverage off a team-based approach, which has been a hallmark of our many joint undertakings with both local and international groups. Both Ayala and Mr. Razon share a deep commitment to contributing to the country’s water infrastructure development,” Ayala Chairman and CEO Jaime Augusto Zobel de Ayala said.

“Together, both our groups can provide a unique, holistic, and long-term solution to providing predictable and dependable long-term supply to the growing needs of the east zone concession and likewise contribute to strengthening the infrastructure required to deliver an important resource to preserve the city’s livability and health at a time of growth and expansion in the metropolis,” Ayala’s Chairman and CEO noted.

“We expect this partnership to likewise help accelerate Manila Water’s regional aspirations given Mr. Razon’s solid experience in penetrating overseas markets,” Ayala President and COO Fernando Zobel de Ayala stated.

Over the past decade, Manila Water has been establishing itself as a major water infrastructure player in Southeast Asia with investments in various platforms across Vietnam, Thailand, and Indonesia and is constantly on the lookout for opportunities in the region.

“Mr. Razon’s successful global operations in economies around Asia Pacific, Latin America, Middle East, and Africa is a testament to his strong ability to establish business leadership overseas and navigate the nuances and challenges that come with operating in new territories, including differences in culture, social structures, and economic development,” Ayala’s President and COO said.

“We are excited to enter into this partnership with the Ayala group. We will dedicate our efforts to further develop this unique business both here in the Philippines and abroad. We are confident that our collective experience, technical capabilities, and corporate synergies will be of great benefit to Manila Water, the people it serves, and its other stakeholders,” commented Enrique K. Razon Jr.

The Bulk Water Supply Project of the Razon-led Wawa JVCo Inc. is expected to start supplying an additional 80 MLD of water to Metro Manila by the end of 2021.

Over 320 evacuees, most of whom were residents in “locked down” towns of Agoncillo and Laurel in Batangas, have been housed at the Municipal Covered Court of Alitagtag. Those coming from the San Andres Elementary School in Bauan were mostly from Lemery where some areas are still partly locked down. The evacuees needed medical assistance for treatment of common cough and colds, muscle pains, hypertension, diarrhea, diabetes and other skin care concerns. A number of patients also required nebulization services and wound treatment.

In coordination with the Batangas provincial government and the municipal health office, the Ayala group sent a medical mission organized by AFI with various business units and partners – AC Health, Ayala Land’s Makati Development Corporation (MDC) and the Ateneo School of Medicine & Public Health.

The medical mission composed of 41 doctors and 50 allied health professionals was also able to provide patients assorted medicines, supplied by AC Health’s Family Doc and Healthway clinics, Generika drugstores, IE Medica and MedEthix.

The Filipino Young Leaders Program Alumni (FYLPRO), an AFI affiliated non-profit next generation leadership organization based in the United States, also donated 200 N-95 face masks to protect against possible ashfall. They were distributed by AFI to residents of Lemery who were staying in the town of Bauan.

Additionally, Manila Water Foundation (MWF) provided the volunteers with five hundred 500ml bottles of Healthy Family drinking water to ensure proper hydration as they attended to patients throughout the day.

“Bayanihan is very much alive in the hearts of the Batanguenos. In a letter written by Archbishop Garcera, he said and I quote – Tayo ay Taal. Tatag. Abilidad. Angas. Lingap. Qualities that kept the Batanguenos knitted together. No words can express the gratitude we give to all who are lending a helping hand to lift us back to our feet,” shared Dr. Flordeliz Castillo, Alitagtag Municipal Health Officer as she welcomed the medical mission team.

Aside from the medical outreach, one of the 10 KIA K2500 Karga utility vehicles recently donated by AC Motors to the Batangas provincial government was deployed in Alitagtag, a fourth class municipality. The vehicle allowed the Alitagtag Municipal Disaster Risk Reduction Management Office (MDRRMO) to transport patients, evacuees and relief goods to and from the neighboring towns. Prior the assignment of the vehicle, the MDRRMO said that the only utility vehicle available at their disposal was a garbage truck covered with canvas.

With Taal volcano’s alert level status reduced to level 3 last January 26 by the Philippine Institute of Volcanology and Seismology (PHIVOLCS), many of the displaced families have begun to make their way back to their residences. However, it is clear that there is still a lot more to be done as a significant number of them have lost all their possessions and sources of livelihood. Some of those who were allowed to return to their homes eventually made their way back to evacuation centers as their houses were found to be severely or totally damaged. A provincial evacuation center was set up in the town of Ibaan to accommodate evacuees from areas declared as permanent danger zones.

The Ayala group will continue to work closely with the concerned local government units in bringing other relief and rehabilitation efforts to communities to help rebuild lives.

Makati, Philippines – January 29, 2020 Ayala Corporation (Ayala) received a B rating from the Carbon Disclosure Project (CDP) for its commitment to continuously measure and manage its environmental performance in 2019. The company is the first and only organization in the Philippines to achieve such a score.

The CDP, a UK-based organization which supports the disclosure of major corporations’ environmental impact, annually sends out a Climate Change questionnaire. Last year, it received responses from more than 8,000 companies worldwide, and awarded Ayala the Management status for its climate change disclosure. Ayala is one of the 19% of companies who made it to the management & leadership band worldwide. 

Ayala’s B rating is higher than the Asia Region Average Performance and Global Average Performance, which both have a C rating. DBS Group Holdings from Singapore, and Mitsubishi Motors Corporation from Japan received a B rating, together with other companies from Indonesia, Hong Kong, Taiwan, India, South Korea and Thailand. 

This CDP rating recognizes the group’s efforts on environmental stewardship to help mitigate climate change, its proactive and robust risk management, and continuous strong undertakings to adopt sustainability best practices. These endeavors are further reflected in the Ayala Sustainability Blueprint which the company launched in 2019. In this masterplan, each of the group’s business units has set a target that supports the UN Sustainable Development Goal (SDG) that its business naturally aligns with. Guided by this blueprint, Ayala has committed to continuously measure its performance against its targets in support of the UN SDGs’ 2030 agenda. Ayala also pioneered the integration of sustainability, risk management, and corporate governance in the country. 

The group continues to intensify its efforts, and strives to be among the CDP A-Listers in the future. The CDP A-List community is the top two percent who are high-performing global leaders on corporate climate action. 

“This CDP rating is a testament to our focus on the climate change agenda. For years, the importance and urgency of protecting the environment has been a priority across our businesses. We will continue our efforts and commitment to UN SDG 13 in our Ayala Sustainability Blueprint,” said Jose Teodoro Limcaoco, Chief Sustainability Officer and Managing Director of Ayala Corporation. 

A network of investors with USD 96 trillion in assets, purchasers, and policymakers around the globe use CDP data and insights in decision-making. It is also used by major global indices such as MSCI, Sustainalytics, Bloomberg, and more. Companies with a high rating get a boost in their competitive advantage and reputation. 

Makati, Philippines – January 22, 2020 Ayala companies across the group continue to contribute additional relief efforts for thousands of families devastated by the on-going eruption of Taal Volcano, which started spewing volcanic ash on January 12, 2020. Ayala has been on the move for over a week and steps up multiple donation drives where employees volunteered to help pack and deliver critical aid to evacuees.

On January 20, AC Motors and Ayala Foundation employees delivered relief items carried in a convoy of 30 vehicles from Volkswagen, KIA, Maxus, KTM, Honda and Isuzu. Part of the delivery convoy were 10 brand new KIA K2500 Kargo vehicles turned over to the Batangas provincial government for deployment to evacuation sites that need them the most. To date, three of the vehicles have already been dispatched to the municipalities of San Nicolas, San Luis and Mataas Na Kahoy.

AC Motors, Ayala’s automotive unit under AC Industrials, canceled its annual media thanksgiving event last week and instead reallocated the fund to procure emergency goods such as blankets, mattresses, sleeping mats, slippers, towels and other hygiene products.

Separately, Ayala Foundation’s volunteers at the CENTEX school in Batangas provided meals for families staying at the Bauan Central School, West Bauan Elementary School, and Manghinao Elementary School on January 16. With its partner, GMA Kapuso Foundation and Manila Water Foundation, they distributed relief items, including hygiene kits, food, and water, to evacuees staying at Alagao Elementary School and Inicbulan Elementary School, also in Bauan.

Similarly, employees of AyalaLand Malls Inc, Ayala Land Hotels and Resorts, and Ayala Land Offices, brought and distributed relief items on January 18 to 248 families in Brgy. San Antonio, Sto. Tomas, Batangas. Donations included sleeping mats, blankets and food items, and were procured through employees’ personal cash donations.

Makati Development Corporation (MDC), the construction arm of Ayala Land Inc., sent relief goods to Batangas on January 20, with donations from employees, partner contractors and suppliers. MDC distributed P1.5 million worth of goods to 235 families in Paaralang Elementarya ng San Antonio in Sto. Tomas, Batangas. Relief goods included food items, hygiene kits and sleeping mats. MDC’s in-house medical team conducted free medical check-ups and distributed medicines. A total of 50 employeevolunteers joined the activity, including 10 doctors, five dentists and 20 nurses.

On January 18, 55 volunteers from MDC’s BGC Operations Center distributed 1,500 relief packs containing food and hygiene items in Brgy. Banilad, Nasugbu, Batangas.

Currently, MDC is conducting a cash donation drive where employees can contribute to a fund for future relief initiatives.

On January 15, Bank of the Philippine Islands (BPI) employee volunteers packed relief goods including masks, blankets, sleeping mats, slippers, non-perishable food, clothes, water, medicines and hygienic items and distributed to about 500 families and 3,000 individuals from Lemery, San Nicolas and Agoncillo, who were relocated to Bauan, Batangas.

Part of BPI’s holistic approach to disaster response, an employee-led fundraising initiative is ongoing, wherein funds to be raised will be matched by BPI Foundation. BPI employees started donating on January 20, raising P600,000 in just two days. The employee fund drive will end on February 7, 2020, with the combined amount (raised + matched) to be given to the Philippine Disaster Resilience Foundation (PDRF).

Meanwhile, several tankers from Manila Water, and its operating units Laguna Water and South Luzon Water, that were deployed last January 13 continue to deliver water to various evacuation sites and communities in Batangas, Cavite, and Laguna. As of January 20, these were refilled more than 190 times, and have provided over 1,800 cubic meters of water to almost 42,000 individuals.

AC Health has also been proactively providing medical assistance to the affected communities in light of the public health threats caused by the Taal eruption. FamilyDOC has been giving free consultations since January 16, in Laguna (South City and Canlalay in Binan, Rosario Complex, Landayan and Poblacion in San Pedro, and Tagapo, Sta. Rosa) and Cavite (Carmona, Portal Mall in GMA, DiviMart Manggahan and Gov. Ferrer Ave. in Gen. Trias, Sabang, Fatima 2 and Salawag in Dasmarinas, and Bulihan in Silang). Free consultations end on January 31, 2020.

The Ayala group remains alert for the imminent eruption of Taal Volcano and continues to work with relevant LGUs to anticipate and respond to the urgent needs of the displaced communities.

Makati, Philippines – January 14, 2020 The Ayala group sustains its relief efforts to aid the communities hardest hit by the ongoing eruption of Taal Volcano. The incident displaced thousands of Filipinos and has placed Batangas province under a state of calamity.

Yesterday, January 13, 2020, Manila Water dispatched 30 water tanker trucks from its Balara headquarters in Quezon City. Initially, they carried a combined 248 cubic meters of water to 19 evacuation centers in Batangas and Laguna, where they continue to be stationed. These tankers have been refilled thrice by Laguna Water since yesterday. A total of 10,000 evacuees availed of free potable water by filling up containers.

In coordination with the Batangas Provincial Disaster Risk Reduction and Management Office (Batangas PDRRMO), Manila Water continues to provide clean drinking water to the evacuation centers in the towns of Sto. Tomas, Tanauan City, Lipa City, Batangas City, San Pascual, San Luis and Cuenca including Tagaytay City and Alfonso in Cavite.

Similarly, Manila Water Foundation distributed 2,000 units of 5-gallon bottles of potable water to Sta. Teresita and Bauan, Batangas where it provided the water needs of the evacuees from the municipalities of Agoncillo, San Nicolas, Laurel, Taal and Talisay. This was done in coordination with partners from Batangas PDRRMO, MMDA, RAF International Forwarding Phils. Inc., GMA Kapuso Foundation, Inc., Philippine Air Force 710 SPOW, 730^th Combat Group – Nasugbu, Batangas and Bureau of Fire Protection – Laurel, Batangas and representatives from Barangay Labas.

Meanwhile, Globe Telecom (Globe) has set up five Libreng Tawag and Charging Stations in Cavite (Brgy. Amuyong Covered Court, Bagong Tubig Barangay Hall, Brgy. Kaybagal South Old Rehab Center, and Luksihin National HS in Brgy. Luksuhin) and Batangas (Sto. Tomas City Evacuation Center Poblacion 3) from January 13-16, 2020.  More Libreng Tawag and Charging centers will be set up as the need arises, to help keep people connected during the disaster.

Globe also continues to provide free and unlimited GoWiFi internet connection in all four terminals of the Ninoy Aquino International Airport, which cancelled hundreds of flights due to the risk from volcanic ash released by Taal Volcano. Globe is also providing free and unlimited GoWiFi internet connection in select malls in Laguna, Cavite and Batangas. Free GoWiFi will be available until today.

AC Health continues to be on standby to provide medical assistance to those affected by the eruption. All 74 FamilyDOC clinics are open today, i­ncluding branches in affected areas in Cavite and Laguna. As of January 13, 2020, most Generika Drugstore branches are open and ready to serve the public, except for branches in the immediate danger zone in Batangas and Cavite.

Meanwhile, the Bank of the Philippine Islands (BPI) branches are open today except for branches in Tagaytay Highway, Tagaytay Ayala Malls Serin, Lemery Batangas and Solenad 3, which are in the immediate danger zone.

The Ayala group continues to work with concerned LGUs to deliver aid to the affected communities. According to the Philippine Disaster Resilience Foundation (PDRF), the country’s major private sector vehicle and coordinator for disaster risk reduction and management, these communities urgently need the following donations: N95 face masks, food items, sleeping mats, hygiene kits, gensets (and fuel), and more drinking water.

Makati, Philippines – January 13, 2020 Companies across the Ayala group are driving efforts together with concerned LGUs to help provide urgent relief efforts amidst the eruption of Taal Volcano, which started in the afternoon of January 12, 2020.

Manila Water and its other operating units in Laguna and Batangas, in cooperation with Batangas Provincial Disaster Risk Reduction and Management Office (PDRRMO), has sent a convoy of 30 water tankers to various evacuation centers in Batangas, including Bolbok Provincial Sports Complex, three sites in Tanauan, and one in Sto. Tomas. Twelve tankers are allocated for these sites. Manila Water Foundation is also sending an initial 2,000 five-gallon units of bottled water.

Laguna Water, a joint venture between the Provincial Government of Laguna and Manila Water Philippine Ventures (MWPV), a wholly-owned subsidiary of MWC, has also preemptively evacuated its employees from Silang to its Nuvali Office as of 7:35pm on January 12, 2020.

Ayala Land (ALI) has announced that all Ayala Malls in Metro Manila and Calabarzon have extended the waived overnight parking fee and free WiFi connection on January 13, 2020 to help customers whose vehicles might be affected by the ash fall from Taal Volcano and may need internet connection.

In Ayala Malls Solenad, the cinema building ground floor is open to any customers who are in need of shelter and charging stations.

Meanwhile, Globe Telecom network is up and running at full capacity in all affected areas.

In anticipation of possible adverse health effects related to the Taal eruption, AC Health’s Generika drugstore and FamilyDOC clinics are on high alert to provide medicine, medical supplies, first-aid, and medical consultation. Adverse health effects may include exacerbations of respiratory and skin diseases and eye irritation, among others. Ash fall may also increase the risk of accidents. AC Health reminds the public to remain indoors as much as possible.

More relief efforts are underway as the Ayala group continues to work with relevant LGUs to meet the immediate needs of the affected communities.

Manila, Philippines – November 29, 2019 Ayala Corporation (Ayala) recently hosted the McMicking Wings Awards, a prestigious recognition given yearly to Philippine Air Force (PAF) Flying School graduates with the highest proficiency in pilot training and overall performance rating. Twenty-one of 96 total recipients attended the awarding ceremony held at Ayala Tower One & Exchange Plaza, Makati City.

The McMicking Wings Awards was created by Col. Joseph R. McMicking, the visionary who transformed post-war Makati into the country’s premier Central Business District. He was also a decorated World War II pilot, who in 1939 created this distinction to celebrate excellence amongst the best military pilots in the PAF.

“The much-coveted McMicking Wings worn on an awardees’ right breast remains an honor and a privilege to this day. We are treated with great respect because it is a symbol of excellence. . . The McMicking Wings motivate students in the military pilot training to excel and give their best in carrying out higher responsibility—always in good moral standing to achieve the mission we seek to accomplish,” said BGen. Adelberto F. Yap (Ret.), Armed Forces of the Philippines (AFP), who was the last recipient to be personally awarded by Col. McMicking in 1968.

This year’s only awardee, 2Lt. Realyn G. Janoras, PAF, is the first ever female recipient of the McMicking Wings. Former awardees in attendance included 1949 awardee BGen. Mariano F. Castañeda Jr. (Ret.), AFP, the first McMicking Wings recipient after the war, class 1951 awardee Col. Vicente C. Rivera Jr. (Ret.), PAF, former Secretary of the Department of Transportation and Communications, and class 1985 awardee Lt. Gen. Salvador Melchor B. Mison Jr., former Vice Chief of Staff of the AFP. 1988 McMicking Wings awardee Lt. Gen. Rozzano D.  Briguez, Commanding General of the PAF, was represented by MGen. Ferdinand M. Cartujano, AFP, Commander of Air Education, Training and Doctrine Command.

“The Ayala group has been a strong advocate of initiatives in support of the Armed Forces… We understand the enormous responsibility you carry in helping secure our peace and security, and we truly appreciate all that you have done for our country,” said Ayala Corporation Chairman & CEO Jaime Augusto Zobel de Ayala in his welcome address. Zobel is the grandnephew of Col. McMicking, who, he revealed, taught US President Dwight D. Eisenhower how to fly.

Col. McMicking was inducted into the US Air Force from the Philippine Air Force Reserve Corps after the bombing of Pearl Harbor. He accompanied Gen. Douglas MacArthur to Corregidor and Australia, and later on, to Leyte with President Sergio Osmeña. He was given the Distinguished Service Star by the Philippine government, while the US government awarded him the Legion of Merit, the Air Medal, the Bronze Star, Distinguished Unit Badge, Pacific Theater Ribbon, Philippine Liberation Ribbon and the Philippine Defense Ribbon. He passed away on October 5, 1990 in Sotogrande, Spain.

By continuing the McMicking Wings Awards, Ayala upholds the tradition started by Col. McMicking to pay tribute to the brave men and women of the PAF. It is also a commemorative celebration of Col. McMicking’s legacy and patriotism.

Seated from L to R:
MGen. Ferdinand M. Cartujano, AFP, Commander of Air Education, Training and Doctrine Command
Col. Vicente C. Rivera Jr. (Ret.), PAF, former Secretary of the Department of Transportation and Communications
Jaime Augusto Zobel de Ayala, Ayala Corporation Chairman & CEO
BGen. Mariano F. Castañeda AFP (Ret.), McMicking Wings awardee of class 1949, and the first recipient of the award after WWII
Fernando Zobel de Ayala, Ayala Corporation President & COO
BGen. Adelberto F. Yap (Ret.), AFP, who was the last recipient to be personally awarded by Col. McMicking in 1968

Manila, Philippines – November 14, 2019 Ayala Corporation (Ayala) is forging a strategic partnership with the Yoma Group, Myanmar’s leading conglomerate led by the Pun family. The Yoma Group, which is comprised of two holding companies, Singapore-listed Yoma Strategic Holdings Ltd. (YSH) and Myanmar-listed First Myanmar Investment Public Co. Ltd. (FMI), is selling a maximum 20% stake to Ayala for up to USD 237.5 million, making Ayala the second largest investor in both entities. This is a milestone international transaction in Ayala’s history, and the biggest ever Philippine conglomerate investment into Myanmar.

“Our partnership with the Yoma Group gives Ayala a unique opportunity to participate in Myanmar’s growth story. We could not imagine a better way to do this than with the Pun family, whose solid, decades-long reputation as a business house has cemented their expertise in multiple sectors such as real estate, banking, automotive, healthcare, power, and tourism, among others,” said Ayala Chairman & CEO Jaime Augusto Zobel de Ayala. “We have always believed that ASEAN has massive potential to reap the benefits of Asia’s rise in the global economy. Ayala can definitely move closer to this aspiration by working with a respected and diversified conglomerate in the region.”

Myanmar’s underpenetrated market is the second fastest growing in the region with GDP growth over 6% year on year for the last three years. With its unique geographic location between India and China to the North, Myanmar incentivizes the construction of multiple infrastructure projects and Special Economic Zones. Its government’s broad liberalization initiatives have opened several key sectors to foreign investment, with real estate alone acquiring over USD 4 billion in foreign investment since 2012 when Myanmar transitioned to democratic rule.

“We are confident that by leveraging our own capabilities and experiences over the last 185 years, Ayala’s partnership with the Yoma Group could certainly help improve the lives of people in Myanmar through purposeful business. In October 2019, Ayala’s energy unit, AC Energy, together with YSH, announced its plans to help develop around 200MW of renewable energy in Myanmar, sustainably powering up 70% of its population mostly in rural areas. Through partnerships of this kind, we see greater potential to deploy and explore shared expertise, knowledge and resources to grow in multiple sectors,” said Ayala President & COO Fernando Zobel de Ayala.

“Today marks a new milestone for the Yoma Group. I am extremely pleased and honoured to have Ayala become one of our most important strategic partners, a partnership that reflects their faith in the future of Myanmar, and validates the Yoma Group’s business model. Ayala is one of the foremost conglomerates in the Philippines; a family business that has endured generations of change, while maintaining a stellar track record in many sectors across the economy. We have much to learn, and they have much to teach us. We look forward to leveraging their expertise and experience to strengthen our existing businesses, and to explore potential new opportunities in Myanmar,” said Serge Pun, Executive Chairman of YSH and FMI.

To date, Ayala has established its presence in Indonesia, Vietnam, and China, as well as Australia, Europe, the US, and Mexico. Ayala pursues international expansion opportunistically, in markets and sectors where it can bring its strengths and expertise.

Ayala Corporation’s net income almost doubled during the first nine months of the year to reach ₱46.2 billion, lifted by the solid contribution of its banking, telecommunications, real estate, and power units.

Equity earnings from Ayala’s business units grew 77 percent to reach ₱51.9 billion, boosted by contributions coming from the Bank of the Philippine Islands, Ayala Land, and AC Energy. Further, Ayala recognized gains from the merger of AC Education with iPeople and from the partial divestment of AC Energy’s thermal assets.

All these cushioned the impact of weaker results of AC Industrials, which is experiencing headwinds from one of the sharpest and most widespread downturns in global manufacturing that significantly weighed on most of its business lines.

In the third quarter, Ayala’s net profits expanded seven percent to ₱8.3 billion, supported by robust results from BPI and AC Energy. Equity earnings from Ayala’s business units, meanwhile, rose four percent year-on-year to ₱10.2 billion in the third quarter.

“We are pleased to see sustained growth in most of our core businesses continuing to provide stability in our earnings. AC Energy has quickly become a significant contributor to our portfolio,” Ayala President and COO Fernando Zobel de Ayala said. “We continue to be mindful of the challenges in some sectors, particularly AC Industrials and the global manufacturing space,” Mr. Zobel noted. “We believe the strategies put forth in AC industrials continue to be promising but are saddled near-term by geopolitical and trade issues. The pipeline of opportunities remains strong and efforts to manage the effects of this near-term uncertainty are being aggressively addressed,” he explained.

Ayala Land

Ayala Land saw its net income reach ₱23.2 billion in the first nine months of 2019, climbing 12 percent from ₱20.8 billion in the same period last year. This was driven by strong revenues from office, commercial and industrial lot sales, and commercial leasing assets.

Revenues from property development went down 2 percent to ₱85.4 billion year-on-year. The decrease was due to lower contributions from its high-end and upscale residential projects as well as from the full sell-out of projects by Malaysia-based MCT. This was offset by office for sale revenues that saw a 51 percent increase to ₱11.1 billion from ₱7.3 billion from projects in Makati and Bonifacio Global City. The sale of commercial and industrial lots, which grew 16 percent to ₱6.5 billion, likewise supported Ayala Land’s revenues during the period. In the third quarter, Ayala Land infused ₱37.8 billion worth of new inventory, bringing the launches to ₱57.3 billion during the nine-month period.

Commercial leasing revenues, on the other hand, expanded 16 percent to ₱27.6 billion from ₱23.9 billion year-on-year as openings from new malls, offices, and hotel assets provided uplift to the segment. Ayala Land continued its expansion of mall and office leasing spaces, adding 2.1 million and 1.2 million, respectively, in gross leasable area to its portfolio during the period. It opened the Ayala Malls Manila Bay, which also houses a BPO office space.

Capital spending reached ₱78.2 billion after the first three quarters wherein 42 percent was spent for residential projects, 22 percent for malls, offices, and hotels, 17 percent for land acquisition, and the rest for estate development and others.

Bank of the Philippine Islands

Strong revenues from its core intermediation and fee-based businesses drove the 30 percent hike in Bank of the Philippine Islands’ net earnings to ₱22 billion in the first nine months.

Total revenues increased 25 percent to ₱71 billion, driven by a 20 percent year-on-year growth in net interest income which reached ₱48.7 billion. Net interest margin widened 26 basis points on higher asset yields which rose 89 basis points. This was partially offset by higher cost of funds.

Meanwhile, total loans as of end-September reached ₱1.4 trillion, up 8.2 percent year-on-year on the back of consumer and corporate loan growth of 12.5 percent and 7.4 percent, respectively. Within the consumer segment, credit card loans continued its upward trajectory, climbing 25 percent from a year ago. Total deposits reached ₱1.6 trillion, 5 percent higher than a year ago. The bank’s current account savings account deposit ratio stood at 69 percent while the loan-to-deposit ratio was at 85 percent.

Non-interest income reached ₱22.3 billion in the nine-month period, growing 38 percent, driven by higher securities trading gains and fee-based income. BPI’s total securities position stood at ₱393 billion, up 17 percent year-on-year. Meanwhile, fees, commissions, and other income increased 19 percent, primarily driven by higher fee revenues from credit cards, transaction banking, electronic channels, deposit products, and insurance.

Operating expenses stood at ₱37.1 billion in the nine-month period, 16 percent higher year-on-year. Cost-to-income ratio was at 52.2 percent, lower than the 56.4 percent recorded in the same period last year. Provision for losses for the nine-month period, including specific reserves for Hanjin, was at ₱4.6 billion, bringing BPI’s loss coverage ratio to 102.7 percent. Non-performing loans ratio ended flat at 1.81 percent.

In August, S&P Global Ratings assigned a ‘BBB+’ long-term and an ‘A-2’ short-term issuer credit rating to the bank. S&P’s outlook on BPI’s long-term rating is stable and its standalone credit profile was assessed to be ‘bbb+’.

During the period, BPI priced its inaugural CHF 100 million two-year interest free ASEAN Green Bond, the first public Swiss franc-denominated benchmark out of the Philippines, the first ASEAN Green Bond benchmark for BPI, the first ever rated Philippine Green Bond in the international capital markets, and the first negative yielding bonds to be issued out of the Philippines in the international capital markets. Subsequently, the bank priced a US$300 million Senior Unsecured Fixed Rate ASEAN Green Bond via a drawdown under its US$2 billion Medium Term Note Program.

Globe Telecom

Globe Telecom’s net profits in the first nine months of 2019 reached ₱17.7 billion from last year’s comparative period of ₱14.8 billion, expanding 20 percent mainly due to the continued shift towards data-related services and a growing subscriber base. The company’s mobile, home broadband, and corporate data segments bolstered its service revenues during the period, which saw a 13 percent growth year-on-year ending at ₱110.6 billion.

Mobile data revenues grew 44 percent to ₱52.2 billion lifted by higher traffic, which jumped 87 percent to 1,200 petabytes. Mobile data users ended at almost 38 million for the period, or 8 percent higher year-on-year.

In home broadband, revenues improved 19 percent to ₱16.1 billion resulting from a 24 percent year-on-year increase in subscriber base at 1.9 million as of the first three quarters of 2019. Corporate data revenues likewise grew 12 percent to ₱9.5 billion. As a whole, data-related services accounted for 70 percent of total service revenues in the first nine months of the year.

Globe’s robust revenues and subdued operating expenses supported the 17 percent growth in its EBITDA, which reached ₱57.9 billion during the period.

Capital expenditure ended at ₱32 billion to support the growing subscriber base and demand for data. Bulk of this amount at 75 percent was allocated for data-related services.

In a move aimed at strengthening the products and services catering to its enterprise clients, Globe reacquired a 51 percent stake in Yondu. From a content developer and provider of mobile value-added services, Yondu has evolved to become a leading IT solutions company in the Philippines since its acquisition by Xurpas Inc. in 2015.

Manila Water

Manila Water’s nine-month net profits dropped 11 percent from its year-ago level to ₱4.4 billion as Metro Manila’s water crisis early this year continued to weigh down on its core concession. The impact, however, was partly cushioned by the improved performance of its domestic subsidiaries.

Manila Concession’s net income declined 17 percent to ₱4 billion, driven by the impact of the water supply crisis. Non-revenue water remained at an efficient level of 11.5 percent to mitigate the impact of a still-reduced water supply allocation. Despite the ongoing challenges in water source, Manila Watercontinues to efficiently allocate the limited supply across the concession and provide consistent service to its customers.

Manila Water’s revenues expanded 10 percent to ₱16 billion on robust net income performance of its domestic subsidiary, Manila Water Philippine Ventures, which more than doubled to ₱301 million. Strong contributions from Laguna Water, Boracay Water, and Estate Water provided the boost.

Manila Water’s topline growth was tempered by the one-time bill waiver implemented in March and higher operating expenses resulting from the penalty imposed by the Metropolitan Waterworks and Sewerage System in connection with the water supply shortage. These items were already recognized by the company during the first half of this year.

AC Energy

AC Energy’s nine-month net profits reached ₱24.3 billion, lifted by the recovery of costs incurred from adjustments in the construction and operations of its power plants and gains from the partial divestment of its thermal assets. In addition, it realized earnings from 410MW of new solar projects in Vietnam following the start of commercial operations in the second quarter, in time to meet the solar feed-in tariff deadline. Remeasurement gain from a higher stake in South Luzon Thermal Energy Corporation following the acquisition of PHINMA Energy also boosted AC Energy’s net earnings during the period.

The Securities and Exchange Commission has since approved the renaming of PHINMA Energy to AC Energy Philippines, which will serve as AC Energy’s platform for growth in the Philippines. In October, AC Energy announced the transfer of its interests in SLTEC, its onshore renewable assets, and its Philippine development platform to ACEPH under a share-for-share swap.

For its international business, AC Energy has announced a new solar joint venture with UPC Solar Asia Pacific for the development of solar projects in the Asia-Pacific region. UPC Renewables is the company’s existing partner in the 81MW wind farm in the Philippines North Luzon Renewables as well as in the 75MW Sidrap wind project in Indonesia.

In October, AC Energy signed an agreement to enter into a joint venture with Yoma Strategic Holdings where the proposed joint venture will invest at least US$30 million into Yoma Micro Power and jointly explore developing around 200MW of additional renewable energy projects within Myanmar, including participation in large utility scale renewable projects. Yoma Micro Power builds micro power plants and mini-grids that provide electricity to off-grid rural communities and telecommunications towers in Myanmar.

These new investments and joint ventures support AC Energy’s goal of achieving 5GW of attributable capacity from renewable energy, with a target of generating at least 50 percent of total output from renewable sources by 2025.

AC Industrials

AC Industrials posted a net loss of ₱1.6 billion on weak performance across its business lines.

Integrated Micro-Electronics Inc., its electronics manufacturing services platform, continues to weather challenges in its main market segments in the slowing global automotive space. IMI recorded a significant drop in its net profit to US$451,000 from US$41.4 million a year ago as the continued slowdown in IMI’s main market segments, compounded by the effects of various geopolitical issues, hindered growth. Persistent contraction in the automotive sector, particularly in China, has brought down customer demand forecasts, leading to challenged margins as new manufacturing lines are temporarily underutilized.

Revenues from IMI’s wholly owned businesses stood at US$755M, down three percent from a year ago. China’s domestic market challenges proved to be the largest contributor to the decline, with IMI’s factories in the region showing a 22 percent decrease year-on-year. Despite the global slowdown, the company’s Mexico and Bulgaria/Serbia operations showed a growth of 66 percent and three percent, respectively.

IMI subsidiaries Via Optronics and STI, Ltd. together posted $184 million in revenues, a 20% decline against the same period last year. The delays in the production of next generation computer processors affected Via’s consumer laptop business. It remains ready to serve the market as the segment rebounds and rolls out new products towards the end of the year. Meanwhile, continued political tensions in the UK as a result of the Brexit situation have depressed revenue growth in STI, where revenues were down 11 percent during the period. However, IMI’s UK subsidiary expects business to improve in the near term having won US$62M in new business projects.

In vehicle distribution and retail, AC Motors registered a net loss of ₱262 million on lower sales volume of the Honda, Isuzu, and Volkswagen brands due to continued intensifying competition, combined with supply issues which affected unit availability. Players in the highly competitive Philippine automotive market continue to compete aggressively for incremental sales volumes in spite of the slowly recovering customer demand.

Meanwhile, AC Industrials’ startup investments, Merlin Solar and MT Technologies, recorded higher net losses during the period on challenges in new product launches, margin pressures, and underutilization of capacity resulting from the global downturn in automotive and manufacturing.

Balance Sheet

Ayala’s balance sheet remains strong with sufficient capacity to support its future investments and cover dividend and debt obligations. Its parent level cash stood at ₱12 billion, with net debt at ₱74.4 billion. Ayala’s net debt-to-equity ratio stood at 56 percent at the parent level and 60 percent at the consolidated level. The conglomerate’s loan-to-value ratio, the ratio of its parent net debt to the total value of its assets, was at 7.7 percent at the end of the first three quarters of 2019.

During the nine-month period, Ayala spent ₱15.1 billion in capital expenditure at the parent level, accounting for 67 percent of the allocation for the year, primarily to support its investments in power, industrial technology, and infrastructure.

On October 23, Ayala together with its subsidiary AYC Finance Limited has set the terms of a US dollar-denominated fixed-for-life (non-deferrable) senior perpetual notes. The notes will be issued by AYC Finance Limited for an aggregate principal amount of US$400 million with an annual coupon of 4.850% for life with no step-up. The notes will be unconditionally and irrevocably guaranteed by Ayala. AYC Finance Limited may redeem the notes in whole but not in part on October 30, 2024 (first redemption date) or any interest payment date falling after the first redemption date at 100 percent of the principal amount of the notes plus any accrued but unpaid interest. The notes are listed on the Singapore Exchange Securities Trading Limited.

In September, Ayala exercised the option for the early redemption of ₱13.5 billion Class B Series 2 Preferred Shares on November 5, 2019. Subsequently, it announced the reissuance of Class B Series 2 Preferred Shares for at least ₱10 billion with an oversubscription option of ₱5 billion.