Category: News

Makati, Philippines – July 25, 2019 For Ayala President & COO Fernando Zobel de Ayala, Filipinos have massive potential to reap the benefits of Asia’s rise in the global economy. However, ensuring the Philippines’ long-term prosperity requires that the private sector adopt a long-term view, collaborate more closely and engage on a more concerted effort with government to generate sustainable social and economic impact. Zobel shared his thoughts in a keynote address to members of the Financial Executives of the Philippines.

According to McKinsey, Asia is on its way to exceed 50% of global GDP by 2040 and may account for 40% of total global consumption by that time. Other research by The Boston Consulting Group and HSBC also suggest that by 2030, the Philippines’ economy may surpass Malaysia, Hong Kong, Taiwan, and Singapore in size, to make it the 27^th largest out of 75 countries. However, realizing this potential for growth would depend on implementing the right governance system, openness to technology, and the quality of its human capital.

“We need to establish the appropriate environment for progress. In my view, we need a deliberate and strong alignment with sustainability principles and adopt long-term thinking. This of course should also be complemented by effective execution and meaningful impact in critical sectors, especially finance, tourism, education and healthcare,” Zobel said.

Ayala believes that these areas hold tremendous potential to boost the country’s economic development. It is actively contributing to these sectors as part of its commitment to the UN Sustainable Development Goals (SDGs). The group formally aligned its business strategies to the SDGs in 2016 and is a founding member of the UN Global Compact Network Philippines. It continues to be guided by its newly launched Sustainability Blueprint, wherein all Ayala companies champion SDGs to achieve specific targets by 2030.

To illustrate this, Ayala is doing its part to promote inclusive finance, as two-thirds of Filipinos are unbanked and are vulnerable to the risks connected to unauthorized lenders. With the Bangko Sentral’s support, Ayala is able to provide alternative means to access the financial system through BPI’s BanKo, which to date has disbursed P4 billion of microloans to 60,000 entrepreneurs across its 200 branches nationwide. In addition, Mynt, a partnership among Globe Telecom, Ayala Corporation and Ant Financial, harnesses mobile technology and alternative credit scoring models to likewise provide microloans to its 171,000 users with active credit lines. To date, Mynt has disbursed P640 million of credit.

In the tourism space, Ayala sees potential to have a high impact on job creation as well as poverty alleviation in rural areas through sustainable tourism. Ayala believes that companies must leverage on the boom in tourism that the Philippines has seen over the last decade, wherein the sector’s direct economic impact more than doubled and now accounts for 8.7% of GDP and 2.3 million jobs. By 2028, the World Travel and Tourism Council projects that tourism’s direct contribution will reach P2.5 trillion, equivalent to around 10% of GDP and an estimated 3.2 million jobs. Ayala remains hopeful about sustainable tourism and what it can do for the country.

In the education space, 65% of Filipino graduates are deemed unemployable from the lack of industry-related skills. To help remedy this, AC Education is helping prepare the Filipino youth to enter the workforce and is training quality educators. With its partnership with the Yuchengco group, Ayala now reaches 60,000 students through Mapua University, Malayan Colleges Laguna and Mindanao, National Teachers College, University of Nueva Caceres, and APEC Schools. In some universities and other partner schools, Ayala works closely with employers to co-design a semester-long curriculum that is customized to employment needs. As a result, 90% of graduates who have undergone this co-designed program are employed within 90 days, and with 20% higher starting salaries.

In healthcare, AC Health is building an integrated healthcare system that aims to improve healthcare for all Filipinos. However, the overall physical wellbeing of Filipinos remains subpar with an alarming rate of childhood malnutrition and growth stunting. According to economists Dr. Cielito Habito and Dr. Emmanuel De Dios, there is a 50% rate of child stunting for the poorest 20% of the population. At the same time, 21% of children are underweight. Furthermore, a 1% loss in adult height as a result of childhood stunting is linked with a 1.4% loss in economic productivity, resulting in 20% less earnings as adults. Stunting is associated with up to 3% GDP losses annually. Ayala believes that this critical and often ignored issue can be resolved through long-term human development programs.

“In the Philippines, we have a unique opportunity to continue and even increase the impressive growth that we have achieved consistently for the past 10 years in a vibrant and fast-growing region. But it will not happen if we do not build far stronger foundations in infrastructure, social services, financial inclusion, job creation and education among others. Building these foundations will take time and will have to be continued from one administration to the next,” Zobel further stressed.

***

Read Keynote Remarks here.
View presentation here.

Makati City, Philippines – July 11, 2019 As part of its aggressive push toward Digital Transformation, the Ayala group launched Data Base, its first ever employee-based community for data talents from within the group. Driven by the AC Analytics team, it is a venue where “Data Champions” can collaborate and create data-driven solutions that will positively impact business operations. Held at Kickstart Ventures in Paseo de Roxas, the gathering had over 100 attendees from different Ayala business units as well as Ayala executives. 

Ayala Chairman & CEO Jaime Augusto Zobel de Ayala said in his opening remarks, “The Ayala of the future is an Ayala that constantly reinvents itself. Throughout Ayala’s history, we have worked to cultivate this culture of innovation and as a result, this has helped us understand and respond to the changing needs of the Filipino.” 

Last April 2019, Zobel announced at Ayala’s Annual Stockholders’ Meeting press briefing that digitization is key in propelling the 185-year-old company into the future. Today, Ayala is leveraging its group wide assets to help improve its businesses and deliver products and services in a more efficient way. 

“Our portfolio of companies allows us to touch the lives of many Filipinos in various ways. The richness of the data we collect as a group enables us to better understand our customers, optimize our operations, and identify potential opportunities,” Zobel further shared. 

As the central hub for Ayala’s data experts, Data Base can help unify the group in optimizing its businesses, as digitization progressed in different ways and at different rates across the business units. The community also aims to foster new ways of working to help drive a truly digital culture. 

This inaugural meeting focused on a data storytelling session with presentations from Globe Telecom Director for Advanced Analytics Pam Morales-Cabudoy, AC Health Strategy and Communications Head Rizzy Alejandro, Mynt Data Science Head Inigo Benavidez, and Kalibrr Artificial Intelligence Research Head Aivin Solatorio. 

In photo: Ayala Chairman & CEO Jaime Augusto Zobel de Ayala (front row, second from left) with other Ayala executives and attendees. 

Four interns were proclaimed the Grand Champions at the first ever Ayala Group Interns’ Innovation League (AGI2LE), the culminating event at the 11th Ayala Group Summer Internship Program (AGSIP). The awarding ceremony, which took place at the Globe Auditorium, Maybank Performing Arts Theater in Bonifacio Global City, was attended by 120 Ayala interns and Ayala executives. The winning team named “Osena” was comprised of Maria Betina Ramos (ADMU), Alexander Go Tian (UP), Joe Diether Cabelin (UP), and Jose Karlo Pascual (UA&P). They pitched “Paglago”, a B2B platform that aims to deliver fresh produce efficiently and sustainably from Luzon farmers to Manila kitchens. Team Osena won P50,000, an immersion trip to the headquarters of an Ayala technology partner company, and job offers from the Ayala group.

In his opening address to the interns, Ayala’s Chief Human Resource Officer and Group Head of Corporate Resources John Philip S. Orbeta said, “We at the Ayala group promised to give you an internship experience unlike any other—immersive, engaging, and challenging. After all, this is the Ayala way. For 185 years, our company has aspired to be a partner in nation building. Today, we continue to align our business objectives towards these aspirations. I believe this is what makes our internship program unique. We had no doubt that as the best in your class, you would not only be able to handle the difficulties of performing real work during your internship, but that you would also be able to explore innovative ideas that could make a difference to society. We are certainly proud that all of you have stepped up and delivered.”

Over the course of their six-week AGSIP engagement, the interns, representing the top 15% of the academic achievers in some of the country’s best universities, developed and pitched ideas to answer the brief of providing a sustainable solution that would improve the quality of life of an underserved market. Six out of 27 teams moved on to the final judging by a panel of Ayala executives, namely Toti Bengzon (Ayala Land Chief Financial Officer), Gabby Blaza (AC Industrials Strategy and Business Development Group Head), Jose Rene D. Almendras (Ayala Group Head of Public Affairs and AC Infrastructure President & CEO), Rodell Garcia (Manila Water Chief Technology Adviser), Vince Tobias (Ayala Head of Innovation), and the aforementioned John Philip S. Orbeta.

“The Ayala of today is very different from the one that existed a decade or two ago,” said Ayala Chairman and CEO Jaime Augusto Zobel de Ayala, who dropped by to congratulate the interns. “We need to reinvent ourselves to stay relevant among our customers and the communities we serve. And who better to look for reinvention than from people your age?”

At the first ever Ayala Group Interns’ Innovation League last July 12, 2019, winners (in photo L-R) Jose Karlo Pascual (University of Asia and the Pacific), Maria Betina Ramos (Ateneo de Manila University), Alexander Go Tian (University of the Philippines), and Joe Diether Cabelin (University of the Philippines) from Team Osena pitched “Paglago”, a B2B farm-to-kitchen platform that promotes sustainable practices. The team won P50,000, an immersion trip to the headquarters of an Ayala technology partner company, and job offers from the Ayala group. Ayala’s Chief Human Resource Officer and Group Head of Corporate Resources John Philip S. Orbeta noted there was no doubt that the program’s 120 interns would “be able to explore innovative ideas that could make a difference to society.” On looking to the emerging workforce to help keep a 185-year-old company relevant, Ayala Chairman & CEO Jaime Augusto Zobel de Ayala said, “The Ayala of today is very different from the one that existed a decade or two ago… Who better to look for reinvention than from people your age?”

At the first ever Ayala Group Interns’ Innovation League last July 12, 2019, winners (in photo L-R)
Maria Betina Ramos (Ateneo de Manila University), Alexander Go Tian (University of the Philippines), Joe Diether Cabelin (University of the Philippines), and Jose Karlo Pascual (University of Asia and the Pacific) from Team Osena pitched “Paglago”, a B2B farm-to-kitchen platform that promotes sustainable practices. The team won P50,000, an immersion trip to the headquarters of an Ayala technology partner company, and job offers from the Ayala group. Ayala’s Chief Human Resource Officer and Group Head of Corporate Resources John Philip S. Orbeta noted there was no doubt that the program’s 120 interns would “be able to explore innovative ideas that could make a difference to society.” On looking to the emerging workforce to help keep a 185-year-old company relevant, Ayala Chairman & CEO Jaime Augusto Zobel de Ayala said, “The Ayala of today is very different from the one that existed a decade or two ago… Who better to look for reinvention than from people your age?”

Porac, Pampanga — In ceremonial turnover rites held last June 29, 2019 followed by outreach activities in an evacuation center in Porac, Pampanga, the Ayala group and its partners completed a series of relief activities as part of its commitment to helping families severely affected by the 6.1-magnitude earthquake that struck the province on April 22.

To officially close out its two-month assistance efforts in the province, Ayala officials, led by Ayala Foundation President Ruel Maranan, ceremonially turned over donations consisting of construction materials to House Speaker Gloria Macapagal-Arroyo and outgoing Pampanga Governor Lilia Pineda at the Laus Group Event Centre in San Fernando, Pampanga.

Tasked to supervise the distribution of the construction materials for qualified families, the Provincial Engineers’ Office (PEO) had received the donations in the Pampanga’s Sindalan warehouse in full last May.

“On behalf of the Province of Pampanga, I extend my heartfelt gratitude for the construction materials (plywood, corrugated GI sheets, deformed bars) and other in-kind assistance you have selflessly extended in aid to the recovery of our people displaced because of the incident,” said Governor Lilia Pineda.

Aside from helping build and rebuild homes destroyed by the earthquake, Ayala has also conducted at least three outreach activities from April to June for affected communities. The first activity was held on April 26 in Floridablanca, in partnership with Manila Water Foundation, Clark Water, and the Apl.de.Ap Foundation, and reached 800 Aeta families. The second relief activity was held on May 4 in the Katutubo Village in Porac and served 300 Aeta families.

Another outreach activity reached affected families who are still in an evacuation center in Sitio Pangaranan, Bgy. Babo Pangulo in Porac, Pampanga. The June 29 outreach program was conducted by Ayala Foundation together with Manila Water Foundation, Apl.de.Ap Foundation, with additional donations of medicines from Generika.

“Ayala believes in sustained efforts to help improve lives,” says Maranan. “Our initiatives in earthquake-affected areas in Pampanga reflect our commitment to building resilient communities.”

“Ayala believes in sustained efforts to help improve lives. Our initiatives in earthquake-affected areas in Pampanga reflect our commitment to building resilient communities,” Ayala Foundation President, Ruel Maranan, said during a courtesy call to House Speaker Gloria Macapagal-Arroyo and Pampanga Governor Lilia Pineda last June 29, 2019 at the Laus Group Event Centre in San Fernando, Pampanga to formally close a two-month Pampanga relief effort conducted by the Ayala group and its partners to extend assistance to the families severely affected by a 6.1 magnitude earthquake that struck the province last April 22. In coordination with the LGU, construction materials were distributed to assist in the repair and rebuilding efforts while outreach activities were conducted from April to June helping over 1,600 affected families.
 
(L-R) – Joy Sanciangco (Ayala Land), Vice-Governor/Governor elect Dennis Pineda, Ruel Maranan (President, Ayala Foundation), Governor/V-Governor elect Lilia Pineda, Former President & House Speaker Gloria Macapagal-Arroyo and Boogz Baffrey of Manila Water.

Contact Information
 

Ayala Foundation
Celerina Rosales – Amores
Corporate Communications
Email: amores.cr@ayalafoundation.org

Ayala Corporation
May Florentino
Corporate Communications
Email: florentino.mpp@ayala.com.ph

Makati, Philippines – June 4, 2019 To Ayala Corporation (Ayala) Chairman & CEO Jaime Augusto Zobel de Ayala, the Future of Work in Asia Pacific is not just about new jobs, new skills, and new ways to work and learn. It is ultimately about motivating employees through purpose-driven work and driving productivity towards inclusive growth.

“Infusing our organizations and our people’s jobs with a deeper and higher purpose should be part and parcel of any discussion about the Future of Work,” Zobel said. He noted that today’s times “are challenging us to adopt a refreshed approach to enterprise—one that fully responds to the critical underserved needs of society, while at the same time enables the creation of value. This would allow our organizations to generate meaningful impact and imbue a higher purpose in people’s work, which would lead to increased productivity and engagement.”

As the first Philippine company to join the World Business Council for Sustainable Development, Ayala has aligned its strategies with the UN Sustainable Development Goals (UN SDGs) through the Ayala Sustainability Blueprint. This is a group-wide plan specifically designed to support the achievement of the UN SDGs by 2030, and to enable Ayala to tangibly contribute to three pillars where its businesses can generate the most significant and lasting impact. These are: access and inclusivity, productivity and competitiveness, and responsible growth and innovation. Through its sustainability blueprint, Ayala is able to institutionalize the creation of meaningful work that would channel its employees’ talents towards positive change, and ultimately, accelerate inclusive growth.

“As we continue these conversations and prepare for the future as individual companies and as a community of enterprises, let us keep in mind an important matter: we also have to create and offer purpose-driven work to our various teams. I believe that [if] we can properly harness technology, properly harness innovation, and properly harness meaningfulness, we will certainly contribute to a more progressive Philippines and Asia Pacific,” Zobel concluded.

As a region known for its low-cost and low-skilled labor, Asia Pacific will likely be facing socio-economic challenges and a growing number of workers displaced by automation and digitization. However, by harnessing, technology, innovation, and meaningfulness, Ayala believes that these developments could also introduce significant opportunities for a future workforce that is inclusive and positively impactful.

PHOTO CREDIT: Asia Society
“As we continue these conversations and prepare for the future as individual companies and as a community of enterprises, let us keep in mind an important matter: we also have to create and offer purpose-driven work to our various teams. I believe that [if] we can properly harness technology, properly harness innovation, and properly harness meaningfulness, we will certainly contribute to a more progressive Philippines and Asia Pacific,” Zobel said at the J.P. Morgan-Asia Society One Step Ahead Series last June 4, 2019 at Makati City.

Contact Information
Ayala Corporation
May Florentino
Corporate Communications
Email: florentino.mpp@ayala.com.ph

Bonifacio Global City, Philippines – The Ayala group onboarded some 120 students from 15 universities nationwide at the 11th Ayala Group Summer Internship Program (AGSIP) last June 3, 2019 at the Globe Tower. AGSIP taps the best and brightest students for its annual 6-week learning program under the different companies in the Ayala group.

This year’s batch was selected among thousands of applicants who underwent a stringent screening process conducted by the Ayala Group’s Talent Network. Student applications were received online and were assessed based on academic performance, skill sets and involvement in non-scholastic programs. Only applicants in the top 15% of their respective schools made the initial cut. Those who qualified then went on to be interviewed to determine their interest in Ayala, their culture fit as well as their aspirations.

“I hope AGSIP will be of greater personal value to you—the opportunity to learn from the network you will establish with mentors and fellow students,” said Renato Jiao, Globe’s Head for Human Resources, who led the opening ceremonies.

During the internship, students are assigned project-based initiatives which have direct impact to business performance. Mentoring is also an essential part of the program where huddles with leaders from their assigned Ayala companies are scheduled for weekly guidance and coaching. Regular interaction sessions are conducted to provide opportunities to integrate learning and to facilitate networking among the participants.

According to 20-year-old Anica Sarmiento, an incoming 4th year student from the Ateneo de Manila University taking up Management Economics, “Coming into this [program], I expect to be challenged… [Ayala has] actual projects for us with specific success indicators that we need to meet. I’m excited about that… and being in a company that I actually really look up to and feel strongly about makes it even better for me.”

This year, AGSIP has set the bar even higher by launching the first Ayala Group Intern’s Innovation League (AGi²Le). It aims to give the interns the opportunity to come up with game changing ideas and pilot their innovation projects. The teams with the best ideas will be in a unique position to pitch their projects to the Ayala group before the end of their internship. Project categories may fall under New Business and Product, Technology/Systems and Processes. The winning AGi²Le team will enjoy a cash prize, an international immersion with an Ayala partner (a global tech company), and potential employment offers from within the group.

“The Ayala of today is very different from the one that existed a decade or two ago. We need to reinvent ourselves to stay relevant among our customers and [the] communities we serve. And who better to look for reinvention than from people your age? This internship gives you a chance to contribute towards our reinvigoration,” said Jaime Augusto Zobel de Ayala, Chairman and CEO of Ayala Corporation, as he welcomed AGSIP Batch 2019.

The participating interns represent UP-Diliman, Ateneo de Manila University, University of Sto. Tomas, De La Salle University, University of Asia and the Pacific Polytechnic University of the Philippines, FEU Institute of Technology, and MAPUA, among others. The very first AGi²Le awarding ceremony is set to happen on July 12, 2019.

“The Ayala of today is very different from the one that existed a decade or two ago. We need to reinvent ourselves to stay relevant among our customers and [the] communities we serve. And who better to look for reinvention than from people your age? This internship gives you a chance to contribute towards our reinvigoration,” Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala said in his welcome remarks to the participants of the 11th Ayala Group Summer Internship Program (AGSIP). AGSIP is Ayala’s internship program that taps the best and brightest students from across 15 universities nationwide for a 6-week learning program under the different companies in the group.

Contact Information
Ayala Corporation
May Florentino
Corporate Communications
Email: florentino.mpp@ayala.com.ph

Makati, Philippines – June 3, 2019 Ayala Chairman & CEO Jaime Augusto Zobel de Ayala shared his thoughts on the future of business, and how companies must continue to evolve amidst disruption. Ayala’s progressive leader discussed the group’s digital transformation journey in response to these changing times, noting that institutions are at risk of falling behind if they are not able to transform.

“Companies that do not innovate are in danger of becoming irrelevant,” said Zobel. “We need to be proactive in finding gaps in our current systems and areas ripe for transformation, and we need to act swiftly, even if it means we have to be the ones disrupting ourselves.”

Recognizing the need for continuous innovation within the group, Zobel noted that the “innovation mindset” is what fuels the Ayala’s ongoing digital transformation. This consists of five key components which would collectively allow Ayala to further improve operational efficiency, make better strategic decisions, and improve the customer experience. These include both digital and non-digital initiatives to transform existing businesses; investments in new business models and technologies to make services more convenient and accessible for Filipinos; a more deliberate effort in venture investing through the establishment of a new US$150m ACTIVE Fund; the launch of AC Analytics as the group’s center of excellence for data and analytics; and various initiatives to upskill and empower the group’s talent base.

On the urgency of innovation, Zobel said, “Here in the Philippines, there seems to be a pervasive mindset that industries may be slower to change or that disruption will hit us gradually… [However] you’ll see these changes are happening here as quickly as they are anywhere else. If one doesn’t accept that, then you really have a good chance of being left behind.”

Such changes are already taking place in Ayala, as its companies gear up to disrupt themselves. Globe Telecom, for example, is forecasting its future business by harnessing the power of big data and mobile technology to better understand its customers and their needs, particularly in the retail space. Secondly, the Bank of the Philippine Islands is transforming its business to make its banking services more insightful, instant, intelligent, informative, and interactive. Lastly, in the logistics space, Entrego, Ayala’s technology-driven logistics solutions provider under AC Infrastructure, aims to stay ahead of the curve by investing in infrastructure, automation, and software to create the capacity to meet its growing consumer demand.

As exhibited by these changes, Ayala remains fully committed to its digital transformation as announced at its Annual Stockholders’ Meeting last April 2019.

“Here in the Philippines, there seems to be a pervasive mindset that industries may be slower to change or that disruption will hit us gradually… [However] you’ll see these changes are happening here as quickly as they are anywhere else. If one doesn’t accept that, then you really have a good chance of being left behind,” Zobel said at the 2019 BusinessWorld Economic Forum.

He was joined at the event by other Ayala executives:
Peter Maquera, Senior Vice-President, Enterprise Group, Globe Telecom, Inc., spoke on “How Big Data & Mobile Technology are Shaping the Future of Retail”
Constantin Robertz, President, Entrego, spoke on “Smart Delivery Solutions and the Future of Logistics”
Noel Santiago, Chief Digital Officer, Bank of the Philippine Islands, spoke on the “Digital Transformation of a Traditional Bank”

Contact Information
Ayala Corporation
May Florentino
Corporate Communications
Email: florentino.mpp@ayala.com.ph

Geneva, 03 June 2019 – Ayala Corporation (Ayala) has today joined nearly 200 forwardthinking companies as the newest member of the World Business Council for Sustainable Development (WBCSD).

Ayala is one of the Philippines’ largest and most diversified conglomerates. Through its leadership in real estate, financial services, water and telecommunications, the company has set the pace for inclusive growth – by building sustainable communities, widening access to financial services, improving connectivity and providing clean water to Filipinos throughout the country.

The group also has emerging enterprises in infrastructure, energy, industrial technologies, healthcare and education, positioning it to play a vital role in crossing geographic, economic and social orders to bring progress to all.

In addition to its sustainability initiatives, Ayala’s commitment to nation-building is reinforced by the social and cultural programs of its Ayala Foundation. The foundation helps improve lives through programs in education, youth leadership, sustainable livelihoods, and arts and culture.

Established in 1834, Ayala has grown to now employ close to 45,000 people across the Philippines.

“We are excited to be part of WBCSD and together with like-minded global institutions, work towards alleviating some of the development challenges our society faces today through sustainable businesses,” Ayala Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said. “WBSCD’s vision is very much aligned with our own at the Ayala group as we increasingly integrate our country’s most pressing issues such as social and economic inclusivity, innovation and infrastructure development, and climate resiliency into the core of our business strategy and products and services,“ Mr. Zobel noted.

WBCSD is a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world. Its member companies come from all business sectors and all major economies, representing a combined revenue of more than USD $8.5 trillion and with 19 million employees. WBCSD is uniquely positioned to work with member companies along and across value chains to deliver high-impact business solutions to the most challenging sustainability issues.

“WBCSD is delighted to welcome Ayala as our newest member. Ayala’s leadership in sustainability is a beacon to large conglomerates across the world, showing how financial results can be integrated with wider impacts on people and societies. We look forward to working with Ayala to deepen their impact and help effect transformational change across the systems of our world” said WBCSD President and CEO Peter Bakker.

By connecting with WBCSD’s network of forward-thinking businesses across a variety of sectors, Ayala can make an even wider impact on global corporate sustainability.

Contact Information
Ayala Corporation
May Florentino
Senior Manager, Corporate Communications
Email: florentino.mpp@ayala.com.ph

World Business Council for Sustainable Dev’t.
Felicity Glennie-Holmes
Manager, Communication
Email: glennie-holmes@wbcsd.org

As part of a sustained effort to provide relief and rehabilitation support for families severely affected by the April 22 earthquake, the Ayala group, through Ayala Foundation, conducted relief operations for Aeta families in Porac, Pampanga, on May 4.

Working closely with award-winning journalist Kara David and her personal “Project Malasakit” initiative, Ayala Foundation distributed food and water for at least 300 Aeta families living in Katutubo Village in barangay Planas, Porac, Pampanga.

Ayala Foundation also came with the Manila Water Foundation to the relief operations, with assistance from the Apl.de.Ap Foundation, the Pampanga Social Welfare and Development Office, and the Philippine Air Force stationed at the Cesar Basa Air Base in Floridablanca, Pampanga.

The May 4 relief initiative was the second of several similar activities for Aeta families who lost their homes and livelihood during the 6.1-magnitude Luzon earthquake. The previous week Ayala Foundation and internationally renowned performer Apl.de.Ap distributed sleeping mats and drinking water for 800 families in Floridablanca, Pampanga.

“For any initiative to have an impact, it must be sustained and done in collaboration with the community and other partners,” said Ayala Foundation President Ruel Maranan. “This is why the Ayala group is actively consulting local stakeholders and the community members themselves on their needs after the earthquake, not only in terms of immediate relief but also for reconstruction and rehabilitation.”

The Ayala group has also started the delivery of plywood and galvanized iron sheets to help at least 1,000 Pampanga families who lost their homes to the earthquake.

Aside from helping rebuild shelters, Ayala is also working closely with Pampanga communities and officials in identifying other needs, particularly in the area of reconstruction and rehabilitation.

Ayala Corporation recorded a net income of ₱8 billion in the first quarter of the year, five percent higher from a year ago, lifted by its real estate, banking, and telco units and boosted by net accounting gains from the merger of its education arm with the Yuchengco group.

Ayala’s sustained earnings momentum was a result of healthy equity earnings contribution from its business units, which grew seven percent to reach ₱9.9 billion. Equity earnings contributions of Globe, Ayala Land, and BPI grew 44 percent, 15 percent, and five percent, respectively in the first quarter.

Furthermore, Ayala’s net profits during the period was boosted by net accounting gains from AC Education’s merger with iPeople, which amounted to ₱1 billion. As a result of the merger and the additional shares it purchased, Ayala now owns a 33.5 percent stake in iPeople.

“Our first-quarter results show the advantages of a diversified portfolio. The strong performance of Ayala Land, Globe, and BPI offset the challenges from Manila Water’s water supply issues and the market conditions facing AC Industrials,” Ayala President and COO Fernando Zobel de Ayala said. “In addition, capital generated from the closing of the transactions in AC Education and AC Energy provide a boost for funding new investments and reducing debt at the parent level,” Mr. Zobel noted.

Apart from the gains from the merger of its education business with iPeople, Ayala will receive gross proceeds of US$573 million from the partial sale of AC Energy’s thermal assets to Aboitiz Power following the completion of the transaction last May 2. The transaction involved Aboitiz Power’s acquisition of a 49 percent voting stake and 60 percent economic stake in AA Thermal, AC Energy’s thermal platform in the Philippines. AA Thermal consists of AC Energy’s limited partnership interests in GNPower Mariveles and GNPower Dinginin, which is currently under construction.

Ayala Land

Ayala Land sustained its double-digit growth trajectory in the first three months of the year, with net income expanding 12 percent to ₱7.3 billion, driven by its property development and commercial leasing segments.

Ayala Land’s revenues from property development climbed four percent to ₱26.1 billion, lifted by its office-for-sale and commercial and industrial lot sales segments. Sales reservations expanded 8 percent to ₱34.1 billion driven by the continued strong demand from local and overseas Filipinos, which grew eight percent and 15 percent, respectively. Sales from other nationalities, meanwhile, increased five percent in the first quarter.

Revenues from commercial leasing grew 19 percent to ₱9.2 billion, lifted by higher contribution from newly opened malls, offices, and hotels and resorts. The opening of the retail section of Ayala North Exchange brought Ayala Land’s total mall gross leasable area to 1.9 million square meters in the first quarter, while 719,000 square meters is under construction. Its average mall occupancy rate stood at 89 percent, with stable malls at 95 percent. Same mall rental growth stood at 12 percent during the period. Meanwhile, office GLA stood at 1.1 million square meters, while 424,000 square meters is under construction. Average office occupancy rate was at 92 percent in the first quarter.

Ayala Land continues to diversify its income mix. In the first quarter, new estates contributed 54 percent to its net income, while established estates (Makati, Bonifacio Global City, Nuvali, Alabang, and Cebu) contributed 46 percent. In terms of business line, its recurring income segment accounted for 38 percent, while its development business contributed 62 percent to Ayala Land’s bottomline.

Ayala Land has announced its plans to establish the first real estate investment trust in the Philippines. It has set up AyalaLand REIT Inc. (formerly known as One Dela Rosa Property Development Inc.), which will initially be composed of Ayala Land’s prime, Grade-A, commercial office assets in Makati. Ayala Land believes that a REIT is a viable investment vehicle to access new investors, recycle capital, and promote the development of the Philippine capital market.

Bank of the Philippine Islands

Bank of the Philippine Islands recorded a net income of ₱6.72 billion in the first quarter, up eight percent year-on-year on strong performance of its core banking business.

BPI’s total revenues in the first quarter climbed 23.5 percent to ₱22.78 billion on solid growth from both net interest income and non-interest income. Net interest income jumped 29 percent to ₱16.1 billion resulting from an 8.8 percent increase in average asset base and a 50-basis point expansion in net interest margin to 3.39 percent. Yield on interest-earning assets improved 109 basis points, but this was partially offset by the increase in cost of funds, owing to higher time deposit rates, and an increase in other borrowings.

The bank’s total loans at the end of the first quarter stood at ₱1.35 trillion, up 11.5 percent year-on-year, boosted by strong growth in corporate loans, credit card loans, and housing loans with growth of 11.8 percent, 20.3 percent and 9.9 percent, respectively. Meanwhile, total deposits reached ₱1.61 trillion, an increase of 1.3 percent. The bank’s CASA ratio was at 70.3 percent while the loan-to deposit ratio stood at 83.9 percent.

On the other hand, non-interest income registered a 12.4 percent increase to reach ₱6.73 billion, attributed to increases in transaction-based service charges, credit card and rental businesses, and income from assets sold.

Operating expenses totaled ₱12.1 billion in the first quarter of 2019, 23.8 percent higher year-on year, mainly driven by the bank’s investments in technology, digitalization, and its microfinance branch network. Cost-to-Income ratio was at 53 percent, slightly up from the 52.8 percent registered from a year ago. The provision for losses of ₱1.80 billion was 13.2 percent lower than the fourth quarter of 2018. Non-performing loans ratio stood at 1.85 percent, while the bank’s total loss coverage, including allowances for contingent exposures, was at 95.7 percent in the first quarter.

At the end of March 2019, the bank’s total assets stood at ₱2.08 trillion, up 8.9 percent, and Return on Assets was at 1.34 percent. On account of the stock rights offering conducted in May 2018, BPI’s total capital reached ₱257.11 billion, up 35.6 percent. Return on Equity was at 10.7 percent, which declined 2.9 percentage points, reflecting the impact of the dilution from the SRO. Capital Adequacy and Common Equity Tier 1 ratios were at 16.57 percent and 15.68 percent, respectively.

Globe Telecom

Globe registered robust performance in the first quarter, with a 44 percent surge in net income from its year-ago level to ₱6.7 billion bolstered by strong subscriber usage in data-related services across mobile, corporate data, and home broadband segments.

This was achieved through solid topline gains, which fully offset the higher depreciation expenses from Globe’s continued network expansion and acceleration of its LTE and broadband rollout. Consolidated service revenues climbed 13 percent to ₱36 billion, while EBITDA grew 24 percent to ₱19.9 billion.

The sustained momentum in prepaid brands drove mobile revenues, which grew 11 percent to nearly ₱27 billion. Mobile data continued to be the top contributor to Globe’s total mobile business, accounting for 61 percent of gross service revenues from 47 percent a year ago. Mobile data revenues grew 44 percent to ₱16.5 billion as subscribers avail of promos that provide the best surfing deals.

Similarly, home broadband revenues climbed 21 percent to ₱5.2 billion resulting from a 22 percent increase in subscriber base at 1.7 million. Meanwhile, corporate data revenues grew 16 percent to ₱3.1 billion, from internet and domestic services and higher circuit count.

Overall, data-related services accounted for 69 percent of Globe’s service revenues during the period, with mobile data services alone making up for 46 percent. Globe is now reaping the benefits of its modernized 4G/LTE network that allows more of its customers to experience faster content downloads, smoother music and video streaming, and richer web browsing experiences. It recorded mobile data traffic growth from 180 petabytes a year ago to 370 petabytes in the first quarter.

During the period, Globe spent around ₱8.8 billion in capital expenditures or 24 percent of the topline revenue to support the growing subscriber base and demand for data. Of this amount, 68 percent was deployed to data-related services. Globe has provided a guidance of achieving a high single-digit growth in service revenues and EBITDA margin in the low-50s by the end of 2019.

Manila Water

Manila Water recorded a net income of ₱1.2 billion in the first three months of the year, 27 percent lower from the previous year on higher operating expenses, which reflects the impact of the water shortage in the Manila Concession.

Manila Water’s operating expenses reached ₱2.46 billion, up 39 percent from a year ago, driven by the provision of financial penalty imposed by the Metropolitan Waterworks and Sewerage System to Manila Water amounting to ₱534 million for its inability to meet its service obligations to provide 24/7 water supply to its consumers in accordance with the concession agreement.

Manila Water’s inability to provide its usual 24/7 water supply to some of its consumers stemmed from insufficiency of the water supply from Angat Dam to service the demand of its consumers. This raw water allocation has remained unchanged at 1,600 MLD since the concession started in 1997 when the Manila had a population of only three million people. Today, Manila Water serves a population of almost seven million people whose per capita consumption has significantly increased through over two decades of economic progress in Metro Manila. However, under the concession agreement, the development of new water sources is ultimately the responsibility of MWSS. In collaboration with government, Manila Water continues to implement service recovery efforts, which are now geared towards addressing those residing in the elevated and farthest areas of the concession who are still inconvenienced due to the water supply shortage.

The higher operating expenses eclipsed the improvement in revenues registered during the period, expanding 8 percent to ₱5.08 billion on account of higher tariff in the Manila Concession and improved topline growth of non-Manila Concession businesses which grew 19 percent to ₱1.1 billion. Revenues was also tempered by the implementation of the voluntary one-time bill waiver program made effective in April as relief to its customers who were affected by the water supply shortage.

Net earnings of Manila Water Philippine Ventures, which comprises the company’s domestic businesses outside the Manila Concession, climbed 7 percent to ₱174 million in the first quarter, primarily lifted by revenues from Estate Water, which grew more than twofold to ₱319 million. Meanwhile, net earnings of Manila Water Asia Pacific, which houses Manila Water’s international investments, more than doubled to ₱135 million led by contribution of East Water in Thailand and its operating subsidiaries in Vietnam.

AC Energy

AC Energy recorded a net income of ₱2.5 million in the first quarter, dropping from its year-ago level of ₱593 million, as higher interest expense from a green bond issuance, lower wind regime, and a scheduled outage of a thermal plant weighed on its bottomline.

Equity earnings from AC Energy’s investee companies reached ₱496.9 million, primarily lifted by its international renewable energy platforms. Meanwhile, it booked lower equity earnings contribution from GNPower Mariveles on scheduled outage combined with the impact of its reclassification to an asset held for sale in light of the thermal sell-down to Aboitiz Power. Similarly, its wind farms NorthWind and North Luzon Renewables posted lower equity earnings contribution owing to lower wind regime this El Nino season. Higher interest expense incurred from AC Energy’s issuance of US$410 million in green bonds also contributed to the decline in AC Energy’s net profits in the first quarter.

Last April, AC Energy and the BIM Group inaugurated the 330MW solar farm in Ninh Thuan Province, one of the largest solar farms in Southeast Asia, as well as the 30MW solar plant in Dak Lak, both inVietnam. In addition, AC Energy in partnership with The Blue Circle recently announced the construction of the first 40MW of the Mui Ne Wind Farm located in Binh Thuan Province, Vietnam with an estimated cost of US$92 million. The project has an expansion potential of up to 170MW. AC Energy also recently energized a 50MW solar project in Khan Hoa, which is part of the 80MW solar plant partnership with AMI Renewables of Vietnam. These projects are all in line with AC Energy’s target to assemble five gigawatts in attributable capacity across solar, wind, and geothermal technologies by 2025.

AC Industrials

The ongoing global market slowdown, startup losses from its newly acquired businesses, and weaker sales of its automotive retail distribution segment pulled AC Industrials’ performance in the first quarter to a net loss of ₱332 million.

Its electronics manufacturing services unit, Integrated Micro-Electronics, experienced macro-driven margin constraints due to the continued fallout from the US-China trade war, lingering political uncertainty in the UK, and the ongoing electronic component shortage. Net profits dropped to US$335,000, 94 percent lower from its year-ago level of US$5.6 million. Consolidated revenues stood at US$323 million (₱16.6 billion), relatively flat from the previous year. Gross profit for the first three months of 2019 totaled US$29.1 million, with margins declining to 9 percent compared to the previous year’s 10.6 percent.

IMI continues to grow its target business segments – automotive, industrial, and aerospace – which now comprise 77 percent of total revenues for the period. Revenues from automotive grew 27 percent to US$168 million, while contribution from the industrial segment climbed 10 percent to US$68M. Revenues from aerospace increased six percent to US$13M. However, consumer and telecom revenues declined by 59 percent and 12 percent, respectively, due to delays in new project awards and the aforementioned China economic slowdown.

In domestic vehicle distribution, AC Motors registered a net loss of ₱89 million due to weaker sales of Honda, Isuzu, and Volkswagen, as the Philippine automotive market continues to experience an overhang from last year’s industry-wide decline. KTM and Kia also posted weaker than expected results, due to slower than expected exports and ongoing startup activities, respectively. 

Balance Sheet

Ayala’s balance sheet remains healthy with ample capacity to undertake investments as well as cover its dividend and debt obligations. As of the first quarter of the year, parent level cash stood at ₱5.5 billion, with net debt at ₱99.8 billion. Ayala’s net debt-to-equity ratio stood at 0.79 at the parent level and 0.73 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 11.7 percent at the end of the first quarter. Its peso-dollar debt split ended at 66:34 as of end-March. Ayala’s dollar denominated debts are fully covered by foreign currency assets.

In April 2014, Ayala issued US$300 million bonds, which were exchangeable into secondary shares of Ayala Land. Upon the bonds’ maturity last May 2, 100 percent of the bondholders opted to exchange into Ayala Land shares. The exchange led to a 2.6 percent dilution in Ayala’s economic ownership in Ayala Land to 44.4 percent from 47 percent.