The Philippine government is firm in its goal to reduce the number of Filipinos who cannot afford basic necessities to 11 percent by 2022, using as a point of reference the 16.6 percent poverty incidence in 2018.
Recognizing the influence of businesses to the country’s economic performance, Ayala aims to contribute to SDG 1 (No poverty) and SDG 8 (Decent work and economic growth) by creating economic values that improve lives, especially for the underserved and unserved. Moreover, Ayala observes fair and ethical practices in its business activities.
Ayala contributes to economic growth through distribution of economic value among various stakeholders. In 2019, the total economic value generated by the Ayala group increased by 8.5 percent to about ₱560 billion. This growth was driven by significant increases in revenue of ALI, BPI, and Globe, and divestment gains from AC Energy and AC Education.
Of this total value generated, 76 percent was distributed to stakeholders while only 24 percent was retained by the companies. About 41 percent was used to pay suppliers to cover operating costs, 10 percent to employees, 15 percent to providers of capital, and 10 percent to government and community investments.
At the parent company, total economic value generated increased by five percent to ₱309.6 billion and total economic value distributed to stakeholders also increased by six percent to ₱318.9 billion.
Ayala companies encourages their suppliers to comply with quality standards and ethical practices. Our business units have their respective supply chain policies and code of conduct that require suppliers to undergo an accreditation process to examine their legitimacy, technical competence, financial capability, service quality, and, in some cases, their sustainability performance. In particular, Ayala Land, Manila Water, and IMI use environmental and social criteria for their supplier accreditation process.
Some Ayala companies are more deliberate in their commitment to support local economic growth, cognizant that supporting local suppliers improves economic activity. The following charts shows the percentage of procurement budget spent on Philippine-based suppliers by these Ayala companies.
Percent Local Spending
Ayala builds trust among the people in areas where its businesses operate by creating value that benefits all and managing the impacts its operations may have.
Each business unit has community engagement programs that help build capabilities not only among beneficiaries but also project partners including LGUs. Most programs encourage and support volunteerism among employees.
Ayala continues to nourish the spirit of volunteerism among its employees. Its biggest volunteer-driven initiative in celebration of its 185th year is a combination of activities spanning environmental causes, donation drives, and outreach programs. When it was launched, a target of 185,000 hours was committed. This was eventually surpassed with more than 600,000 volunteer hours through the combined efforts of employees across the group.
Buoyed by the knowledge that we have maintained strong foundations across the five materiality themes that we focused on in our 2019 assessment presented by emerging trends, we are confident that we can deliver more to our stakeholders.