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Always Moving Forward

With its sights set firmly on the future, Filinvest Development Corporation (FDC) continues to navigate the landscape of the pandemic with acumen and innovation. Backed by strong business fundamentals, robust digitization initiatives, and agile strategies, FDC and its subsidiaries are fully prepared to face the challenges that lie ahead as the company remains a committed partner in nation building and the battle against COVID-19.

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Financial Highlights
as of Dec. 31, 2020

₱ 11.505 B
Consolidated Net Income

₱ 8.461 B
Net Income Attributable to Parent Equity Holder

₱ 72.006 B
Total Revenues and Other Income

₱ 648.015 B
Total Assets

 

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Operational Highlights

The Filinvest Brand is a recognized brand with a wide breadth of products anchored on a deep understanding of the property markets. The group’s strong track record in the property business spans more than 50 years, with FDC and its predecessors having developed over 200 projects across 3,000 hectares of land.
The group’s hotel operations are carried out by Filinvest Hospitality Corporation (FHC), a whollyowned subsidiary of FDC, and hotel management firm Chroma Hospitality, Inc. (CHI), a joint venture with Archipelago International Pte. Ltd. The first hotel opened in 2010 through Crimson Resort and Spa Mactan in Cebu. Five more hotels were added to the portfolio bringing the total to six managed hotels with almost 1,800 rooms plus two 18-hole golf courses by the end of 2020. FDC expanded its interests to the hospitality business in response to the accelerating tourism growth in the Philippines that prevailed over the past decade.
EastWest Bank is among the top 10 banks in the Philippines by asset size and is strategically positioned in the retail and middle-market corporate segments. It has grown in the last few years through aggressive store expansion and acquisitions while remaining focused on the high margin consumer lending segments. It has also been ramping up its digitalization efforts in a move to broaden its product offerings and increase its wallet share of customers. An expanding consumer loan book coupled with relaxed monetary policies are key to the growth of the Filinvest group’s banking business.
FDC re-entered the power industry in Mindanao to address its power crisis. Since start of its power plant operations in 2016, the rolling brownouts have stopped and the power shortage has been addressed. FDCUI has proven to be a formidable and defensive play to the conglomerate’s portfolio.
FDC’s interest in the infrastructure space is through its participation as a consortium member in the airport redevelopment of Clark International Airport (CIA) in Pampanga. The consortium signed a concession agreement with the Bases Conversion and Development Authority in January 2019 for the O&M of CIA for a period of 25 years. The consortium members then incorporated Luzon International Premier Airport Development Corporation (LIPAD) in February 2019 to act as the consortium’s joint venture entity. FDC’s ownership interest in LIPAD is 42.5 percent while the other consortium members are JG Summit, Changi Airports Philippines (I) Pte., Ltd. and Philippine Airport Ground Support Solutions, Inc.

Real Estate

Hospitality

Financial Services

Power and Utilities

Infrastructure

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Financial Highlights
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Filinvest Development Corporation & Subsidiaries

(Amounts in Thousands of Pesos, Except Per Share and Dividends Data)

 20202019201820172016
OPERATING RESULTS     
Total Revenues and Other Income72,006,45684,317,30974,152,35967,590,41458,575,161
Net Income11,505,23215,882,25513,433,19910,273,2788,476,084
Net Income Attributable to Parent Equity Holder8,460,92911,970,3029,768,6636,612,4435,502,727
Return on Assets (ave.)1.8%2.6%2.4%2.0%1.8%
Return on Equity (ave.)8.4%12.6%11.7%9.6%8.4%
FINANCIAL POSITION     
Total Assets648,014,985642,154,875589,788,999532,833,649498,639,070
Total Long-term Debt136,192,164130,221,265127,347,516125,816,419117,435,957
Equity141,606,822132,149,986119,690,474109,129,607103,954,851
Equity Attributable to Parent Equity Holder141,606,822100,515,90087,510,55379,397,32277,020,793
No. of Shares Outstanding (‘000)8,648,4638,648,4638,648,4638,648,4639,317,474
Long-Term Debt to Equity*96.2%98.5%106.4%115.3%113.0%
Net Debt to Equity**32.0%59.1%49.5%46.3%51.9%
PER SHARE DATA***     
EPS - Total Net Income1.3301.8361.5531.1030.910
EPS - Net Income Attributable to Parent Equity Holder0.9781.13841.1300.7100.591
DIVIDENDS     
Dividend per share****0.13840.10000.07650.05900.0516
Dividend payout rate9%9%10%10%11%

 

* computed as long-term debt divided by equity
** computed as long-term debt less cash and cash equivalents divided by equity
*** computed based on weighted average number of shares outstanding
**** Dividend per share declared in 2020 amounts to P0.1384 per share equivalent to 10% of 2019 net income attributable
to parent equity holders, with a record date fixed on July 22, 2020 and payment date on August 17, 2020.

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Joint Message from the Chairman and the President & CEO
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To our fellow Shareholders,

2020 turned out to be the Big Test. It tested our mettle as individuals, our agility as an organization, our resolve as good sustainable corporate citizens, our empathy as members of society, and our resilience as a country.

We are proud of the members of our Filinvest family and organizations on how they responded to the pandemic.

The Philippine economy plunged to its worst contraction in over 70 years, with gross domestic product (GDP) falling by 9.5 percent in 2020. It was the sharpest dip on record since available data dating back to 1947 and the first GDP decline since 1998 when the Philippines recorded a decline of a mere 0.5 percent. Household spending, which has been a key economic driver for the country contracted by 5.7 percent last year as millions lost their jobs during the pandemic. Even Overseas Filipino Worker (OFW) remittances declined for the first time, albeit slightly at 0.8 percent, after 19 years of steady growth.

The contraction was countered by some measures. The Bangko Sentral ng Pilipinas (BSP) implemented a more accommodative monetary policy by cutting the reserve requirement thereby releasing a significant amount to the banking system and lowering cost of funds. The BSP also increased the real estate loan limit of universal banks, allowing property developers to raise funds and strengthen their balance sheet at low interest rates. The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law was passed and effectively lowered the corporate income tax, providing a fiscal relief that is seen to facilitate recovery of businesses. CREATE also finalized the incentives available to investors, removing the cloud of uncertainties especially for BPOs.

It was unfortunate that the Philippines had to endure one of the longest community quarantines in the world. Large parts of the Philippines were put under varying degrees of lockdown beginning mid-March of 2020 as the country struggled to contain the transmission of the virus. On top of the COVID-19 concerns, the country suffered economic fallout from the eruption of the Taal volcano in January last year and devastating typhoons in the fourth quarter that pushed inflation upwards.

While all these events seemed insurmountable, Filinvest and its foundations and subsidiaries did not hesitate to lend a helping hand to the national and local governments. Our immediate response at the onset of the lockdown was to work closely with the public and private sectors to mobilize resources towards the primary concern of health care, testing, and community assistance to avert the crisis.

We believe that the Bayanihan spirit of helping one another should be manifested especially in these trying times.

Across the different business units, we ensured that our people, especially those in the frontlines, were safe as they carried on with their tasks. We then reverted our focus on our business operations and quickly adjusted and innovated to adapt to the circumstances. At this juncture, we saw how resiliency came to the fore as we dealt with this new reality.

Our 2020 Performance

Our results confirmed the rationale of the strategy we crafted over a decade ago. Though we were not spared by the severe impact of the COVID-19 pandemic, we fared relatively well in comparison to our peers.

Our portfolio mix allowed the company to report healthy financial results despite the challenging environment.

FDC reported a net income attributable to equity holders of the parent company of P8.5 billion in 2020, a decline of 29 percent from P12.0 billion in the previous year, while consolidated net income dropped by 28 percent to P11.5 billion. This pandemic disrupted the 18 percent compounded annual growth rate attained for revenues and 14 percent for net income attributable to parent over the last decade. Revenues retreated by 19 percent as the growth posted by the banking business was offset by the contraction of the property business. Expenses rose on account of higher provisioning by EastWest Bank as a prudential measure against probable bank loan losses resulting from the economic impact caused by the COVID-19 disruptions.

We are pleased that our efforts to build a balanced portfolio helped us during arguably the worst crisis of our time. While some businesses took a harder hit, the other businesses continued to deliver solid performances. EastWest Bank, FDC’s banking and financial services subsidiary, delivered a net income contribution to the group of P6.4 billion, equivalent to 46 percent of FDC’s bottom line. The property business, composed of the real estate and hospitality segments and which is historically the largest contributor, delivered a combined P5.3 billion or 38 percent of total. The power subsidiary contributed P1.9 billion in net income or 14 percent of total, while the balance of 2 percent came from other businesses.

Our 2020 performance signifies that we can be defensive during a downturn yet also well-positioned to capture growth when the economy recovers. In the last five years, we have improved our net income from defensive segments from 21 percent in 2015 to 31 percent in 2020. We have clearly proven our ability to actively rebalance our exposure towards defensive and cyclical industry segments, emphasizing FDC's ability to withstand economic slowdown and volatility.

Indeed, we are no stranger to difficulty and volatility.

We should remember that we have decades of experience and track record. We have survived and continued to move forward through some of the most uncertain times in our nation’s as well as the regional and global economic history. While the current environment is clearly challenging, we are confident that we can come out of this trying period with our fundamentals intact and with more experience in managing through the cycles.

Key Strategies Moving Forward

Prospects for 2021 remain uncertain but we are hopeful that the economy can bounce back once community quarantines are relaxed. We recognize that crucial to a robust economic recovery is renewed business and consumer confidence. We are supportive of efforts to open the economy while taking resolute steps to fast-track the vaccination rollout program and keep the COVID-19 caseload to the lowest level possible.

As a known private sector partner in nation-building, Filinvest is aligning its investments and sustainability commitments with the United Nations Sustainable Development Goals (UN SDGs). Its current initiatives and partnerships already have business models that give special focus on priority goals. FDC is harnessing synergies even more to consequently raise its socio-economic impacts.

Building Scale While Leveraging on Strong Foundations

FDC’s foremost and basic strategy is to build scale and leverage on its strong foundation, organization and franchise. Over the years, FDC has built an arsenal of investments across its businesses, providing solid footing for future growth. This move is seen to provide more employment through its ecosystem in key industries that are very crucial for economic growth at this stage of the country’s recovery.

For the real estate business, we have an extensive landbank of close to 1,900 hectares of raw land and over 580 hectares of prime commercial land for development. Its investments in district cooling, sewage treatment, water recycling plants, and smart city initiatives support Filinvest’s goal to build sustainable cities and communities. The focus to expand its recurring income base, to include logistics warehouses and co-working and co-living products, is in response to a need to accelerate e-commerce and address new office trends.

The securitization of our investment portfolio through the REIT market is in place. We are excited to further the growth of the Philippine REIT market through the listing of Filinvest REIT seen to happen in the third quarter of 2021. We believe that Filinvest REIT’s high-quality office portfolio, supported by a strong tenant mix and built-in organic growth through rental escalations, will be an excellent addition to the growing Philippine REIT market. At the same time, the issuance is an opportunity to accelerate growth of the office leasing business under Filinvest Land, Inc. (FLI) as it reinvests the proceeds in office developments across the country.

The plan for banking subsidiary, EastWest Bank (EW), is to optimize its strong franchise in branch banking and consumer lending by expanding its customer offering. The expansion into bancassurance and wealth management is part of the strategy to grow its share of the customer’s wallet. The introduction of Komo last year, the first exclusively digital banking service granted by the Bangko Sentral ng Pilipinas to a local universal bank, is likewise a move towards the improvement and expansion of its customer service particularly in the digital channels space. This is a milestone in its strategy of innovation.

Building an Eco-Sustainable Platform

As one of the country’s largest conglomerates, FDC is actively looking for new areas of growth. FDC is resolute in building an eco-sustainable platform with the support of joint venture partners who are international players recognized for their leadership in their respective fields.

In the last five years, Filinvest has partnered with Engie Services for the operation of the Philippines' largest district cooling system (DCS) and solar rooftop systems. FDC has also entered the sustainable water space with Japanese company Hitachi Aqua-Tech Engineering that is along the path of the clean water and sanitation development goal.

Forging Partnerships on Shared Values and Vision

We are in pursuit of like-minded partnerships that will bolster our financial muscle, deepen our management bench, and widen our technological expertise. The pursuit of M&A opportunities and partnerships will be made while maintaining our discipline on capital allocation.

At the Parent company, we manage our businesses with strict financial prudence. Our balance sheet has always been healthy and we manage our gearing with a conservative approach to debt capacity where we ensure that maturities are well spread out and interest expenses can be covered. At the end of 2020, debt-to-equity stood at 0.96:1 while net debt-to-equity was at 0.32:1. We are happy to maintain good relationships with the financial institutions and have consistent access to the capital markets. FDC was able to successfully raise US$200 million from fixed-rate five-year bonds in September 2020.

Embracing Digital Transformation and Preparing for Digital Disruption

Alongside these developments, we are undergoing a digital transformation journey across the group. We recognized the need to accelerate digital transformation and innovation, and firmly embed it in our strategy and operations to thrive under the new normal environment. Filinvest received the first crowdfunding license from the Securities and Exchange Commission (SEC) for the rollout of a digital lending platform geared for small and medium enterprises in partnership with Investree Indonesia.

As we bring FDC to new heights with these strategies, we recognize our ability to do well in business while doing good for society.

Our strategies are made more meaningful as we help achieve certain sustainable development goals – gender equality, decent work and economic growth, sustainable cities and communities, clean water and sanitation, industry, innovation and infrastructure, and partnerships for the goals.

In closing, we thank our fellow board of directors, management and all our employees across the group for the hard work amidst a most trying period. We also thank our shareholders, partners, and customers for the continued trust and support in us.

It is worth noting that times of crisis are also times of opportunity for strong, forward-thinking companies. We know fully well that the path to recovery will be challenging and volatile, but we are also convinced that we have the right elements in place to come out stronger as we move forward in great anticipation of the future.

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Operational Highlights
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Real Estate

The Filinvest Brand is a recognized brand with a wide breadth of products anchored on a deep understanding of the property markets. The group’s strong track record in the property business spans more than 50 years, with FDC and its predecessors having developed over 200 projects across 3,000 hectares of land.

 

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Hospitality

The group’s hotel operations are carried out by Filinvest Hospitality Corporation (FHC), a whollyowned subsidiary of FDC, and hotel management firm Chroma Hospitality, Inc. (CHI), a joint venture with Archipelago International Pte. Ltd. The first hotel opened in 2010 through Crimson Resort and Spa Mactan in Cebu. Five more hotels were added to the portfolio bringing the total to six managed hotels with almost 1,800 rooms plus two 18-hole golf courses by the end of 2020. FDC expanded its interests to the hospitality business in response to the accelerating tourism growth in the Philippines that prevailed over the past decade.

 

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Banking

EastWest Bank is among the top 10 banks in the Philippines by asset size and is strategically positioned in the retail and middle-market corporate segments. It has grown in the last few years through aggressive store expansion and acquisitions while remaining focused on the high margin consumer lending segments. It has also been ramping up its digitalization efforts in a move to broaden its product offerings and increase its wallet share of customers. An expanding consumer loan book coupled with relaxed monetary policies are key to the growth of the Filinvest group’s banking business.

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Power

FDC re-entered the power industry in Mindanao to address its power crisis. Since start of its power plant operations in 2016, the rolling brownouts have stopped and the power shortage has been addressed. FDCUI has proven to be a formidable and defensive play to the conglomerate’s portfolio.

 

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Infrastructure

FDC’s interest in the infrastructure space is through its participation as a consortium member in the airport redevelopment of Clark International Airport (CIA) in Pampanga. The consortium signed a concession agreement with the Bases Conversion and Development Authority in January 2019 for the O&M of CIA for a period of 25 years. The consortium members then incorporated Luzon International Premier Airport Development Corporation (LIPAD) in February 2019 to act as the consortium’s joint venture entity. FDC’s ownership interest in LIPAD is 42.5 percent while the other consortium members are JG Summit, Changi Airports Philippines (I) Pte., Ltd. and Philippine Airport Ground Support Solutions, Inc.

The contract includes the O&M of CIA’s existing passenger terminal and the development, fit-out, operation and maintenance of a new modern terminal building with an estimated annual capacity of eight million passengers. It also includes the O&M of the related commercial assets and project facilities. The O&M of the old terminal of CIA was officially handed over to LIPAD in August 2019. The official handover of the new terminal to the consortium took place in January 2021. LIPAD is currently doing the fit-out works and interior finishes. Once completed in the third quarter, the old terminal that is currently being used will be de-commissioned and will be moved to the new terminal.

Pre-COVID, CIA covered 19 domestic and 14 international destinations serving about 700 weekly flights from a total of 18 airlines. As soon as air travel normalizes, the consortium will work towards expanding this network, connecting Clark to more domestic and international points and serve as the premier international gateway for Central and Northern Luzon. The investment in CIA is part of the wider and longer-term plan of FDC to develop the Clark region and help boost its growth as a premier economic hub.

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Awards and Achievements
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Moving Forward With A Commitment To Excellence

Despite the challenges of the pandemic, FDC garnered recognition across its subsidiaries and business segments. This is a testament to your Company’s commitment to quality and
These awards and citations inspire us to move forward with renewed purpose to provide the best value for our stakeholders and to strengthen our contribution in nation-building.

  • EastWest Bank introduced Komo, the first exclusively digital banking service granted by the Central Bank to a local universal bank.
  • EastWest Bank achieved a return on equity (ROE) of 12.3% in 2020, almost two times higher than the average of other universal banks at 6.61%.
  • EastWest Bank sustained its net interest margin (NIM) of 8.1% which remained to be one of the highest in the industry.
  • Investree received the license from the Securities and Exchange Commission in January 2021 to operate the first licensed crowdfunding platform for SME financing in the country.

 

  • Filinvest City is the first township in the Philippines, and the largest in Southeast Asia, to be granted Gold Certification for LEED Neighborhood Development. LEED stands for Leadership in Energy and Environmental Design.
  • Filinvest City likewise bagged the Best Mixed-use Development award in the Philippines in the 2020 Asia Pacific Property Awards as well as the Silver Award for Most Bike-friendly Workplace in the inaugural Mobility Awards.
  • FLI was recognized as one of the Top 10 Developers in the Philippines in 2020 by BCI Asia Top 10 Awards, an award-giving body that recognizes the top developers that had the greatest impact on the built environment in Southeast Asia.

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Corporate Social Responsibility
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#BuildtheDreamTogether

The COVID-19 pandemic was and remains to be a national enemy that threatens the health and livelihood of our countrymen. This truly tested the resilience of the Filipino people, and Filinvest understood the value and the power of working together to overcome these difficult times, as one community, as one family. Filinvest, together with its various foundations and subsidiaries, remains steadfast in its commitment towards nation-building.

Filinvest did not hesitate to join hands with the government and the private sector to help uplift the lives of our kababayans. At the onset of the pandemic, Filinvest and its foundations set aside a P100-million COVID-19 war chest towards various initiatives, including support for LGUs, the medical sector, and the national government. Filinvest and its foundations have since gone beyond the pledged amount as a manifestation of their commitment in the Philippines’ fight against COVID-19.

Unconventional Ways of Supporting the Government against COVID-19

Nationwide COVID Tracker Dashboard

Our most important project in the fight against COVID-19 was making data available to the country’s key decision makers. Filinvest worked with the Department of Health (DOH) and Department of Science and Technology (DOST) to fast-track the development of a dashboard for the Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) by sponsoring the data warehouse and data analytics needed to get it up with timely and accurate data.

The dashboard can be accessed through DOH’s website via https://doh.gov.ph/covid19tracker and is used by the IATF-EID, the national and local government, and the greater public to view various information about COVID-19 in the Philippines. This includes Epidemiology Bureau-confirmed data on COVID cases at the national, regional, and city or province level, testing and positivity rates, as well as nationwide medical facilities data that shows the availability of beds and equipment.

COVID DASHBOARD

Filinvest Tent Mega Quarantine Center

Task Force T3

At the early stages of the pandemic in the Philippines, the national government’s Inter-Agency Task Force set up Task Force T3 (Test, Trace, and Treat), a public-private group led by the Department of Health (DOH) and Testing Czar Vince Dizon together with partners from the private sector, including Filinvest. Task Force T3 continues to helm the government’s efforts to swiftly expand and solidify the country’s testing and contact tracing capability.

  1. Filinvest Tent Mega Quarantine Center

    In support of the Task Force T3, Filinvest offered the use of the Filinvest Tent in Filinvest City, Muntinlupa as a Mega Quarantine Center in an effort to decongest hospitals within the vicinity. The Filinvest Tent Mega Quarantine Center was inaugurated and turned over to the government in May 2020.
    With the continuous surge of cases, Filinvest further expanded the Filinvest Tent Mega Quarantine Center during the latter part of 2020. The expansion was completed and turned over in December 2020 building up the capacity of the quarantine center to a total of 128 beds.  
  2. At the onset of the pandemic when the country’s contact tracing and testing capacity was still being fortified, there was a gap found in the timeliness and accuracy of the data and documents coming in from various centers that largely used a manual process to encode and consolidate data. The COVID-19 Documents Repository System (CDRS) was developed to help automate the submission of lab results via OCR or Optical Character Recognition and saved it directly to the server. This created a more efficient process flow with results being fed and consolidated right after it was submitted. CDRS also created a library for Case Investigation Forms where authorized users can simply search and retrieve.
    To develop the CDRS, Filinvest worked closely with the DOH Epidemiology Bureau. The program was developed within a month and was turned over to DOH KMITS or Knowledge Management and Information Technology Service. Today, CDRS and COVID Kaya feed data into the Nationwide COVID tracker dashboard.

    Filinvest Tent Mega Quarantine Center expansion
  3. Training Support for COVID Kaya

    The Task Force T3 created a COVID-19 case information and contact tracing system called COVID Kaya for use in all healthcare and testing facilities nationwide. Filinvest worked with Task Force T3 and assisted with the creation and rollout of the user training program nationwide. A total of 68 virtual training sessions were conducted for various groups nationwide with over 4,500 participants.
     
  4. CaRT

    CaRT (Collection and Rapid Testing) is a data automation and storage platform developed by Filinvest for PCR swabbing and rapid testing that automates and synergizes data collection and coordination from the specimen collection center, testing centers, and laboratories, as well as secures and analyzes patient case data. CaRT was turned over to the DOH and the Philippine Red Cross.
     
  5. Ingat Angat Tayong Lahat Campaign

    The Task Force T3 launched a campaign in partnership with some of the country’s biggest brands, including Filinvest, called “Ingat Angat Tayong Lahat” which aimed to restart the economy through building consumer confidence. The campaign was supported by all subsidiaries with a well- coordinated campaign on all social media channels and websites.

Project Ark

During the early stage of the pandemic when RT-PCR testing was not available, the Office of the Presidential Adviser for Entrepreneurship, Go Negosyo, and various members of the private sector including Filinvest synergized to launch Project ARK in April 2020, an initiative that aims to make massive testing possible at the community level through the use of Antibody Rapid Test Kits. Through Project Ark, Filinvest pledged to donate rapid test kits for use of the public sector as well as procure rapid test kits for employee testing nationwide.

Vaccines

Filinvest donated 50,000 doses of AstraZeneca to the Philippine government in support of the nationwide vaccination program. With the health and safety of the Filinvest family in mind, Filinvest also ordered vaccine doses for employees conglomerate-wide and has since started the registration process for willing vaccine recipients.

Tourism Revival

Filinvest supported the recovery of tourism in Aklan with a donation of a Real-Time PCR System and Applied Biosystem to the Molecular Laboratory of Dr. Rafael S. Tumbokon Memorial Hospital in the province of Aklan. The donation – facilitated by the Department of Tourism (DOT), Filinvest Hospitality Corp., and its hotel property management company, Chroma Hospitality – will help fast- track COVID-19 tests of locals and tourists. This initiative supports the reopening of Boracay Island to tourists in line with the IATF-T3 program that aims to boost consumer confidence to rebuild the tourism industry as it continues to recover from the impact of COVID-19.

Official turnover of RT-PCR machine donation to the province of Aklan
Official turnover of RT-PCR machine donation to the province of Aklan

Steady Power Supply

Filinvest responded to the call of the government to bring uninterrupted electricity services to consumers during these challenging times. Through FDC Utilities, Inc. (FDCUI), the power arm of the Filinvest group, the company committed that Mindanaoans will continue to have unimpeded access to electricity amidst the state of public health emergency due to COVID-19.

Moreover, its subsidiary, FDC Misamis Power Corporation, released the remaining ER 1-94 funds to provide immediate financial assistance to host beneficiaries in enhancing their health services to fight the pandemic.

Financial assistance from FDC Utilities, Inc. to Villanueva, Misamis Oriental

Giving Back to Our Unsung Heroes

PPE, Ventilators, and Relief Goods Donations

Filinvest recognizes the sacrifices of our frontliners in the service of our kababayans. As a way to honor their valuable contribution to the country’s continued fight against the virus, part of the P100-million pledge went into the provision of medical supplies including PPEs, ventilators, a biomedical freezer, and relief goods to various hospitals and government units nationwide such as Malacañang, Regional Institute for Tropical Medicine, Philippine General Hospital, Lung Center of the Philippines, San Mateo City, Cebu Province, Cebu City, Misamis Oriental, Davao City, and Lapu-lapu City.

Opening the doors of the Palms Country Club for RITM frontliners

Even at the start of the enhanced community quarantine in Luzon, Filinvest, together with The Palms Country Club, was among the first to open its doors to healthcare frontliners. Workers of the Research Institute for Tropical Medicines (RITM) were provided temporary shelter that is accessible to their place of work.

The Palms Country Club provided the accommodation while Filinvest pledged to shoulder the utilities including power and water consumption charges that The Palms will incur for the duration of the frontliners’ stay at the facility. The frontliners would leave thank you notes for the meals prepared by the Palms GM and staff when the RITM’s food budget started to be under pressure. A donation drive for RITM from the Palms members was also organized.

Appreciation wall with messages of thanks from RITM frontliners

Caring for COVID-stricken Communities

 

Bayanihan Centers

The battle for COVID is not just a medical one but also a mental, economic, and emotional one. To help ease the burden, Filinvest volunteered to provide a total of 12,000 food packs for hospitals and Bayanihan quarantine centers in Cebu. Filinvest prepared food for frontliners in Cebu hospitals, distributed with the assistance of Aboitiz Foundation. Filinvest also readied packed meals for frontliners and patients in various Bayanihan quarantine centers around Cebu.

Affected Families

With the stringent lockdowns, the economic crunch heavily affected communities living in poverty. In partnership with ERDA Foundation, Filinvest, with the help of volunteer employees, packed and distributed relief goods including rice and groceries to affected communities in Muntinlupa City.

Filinvest volunteers with ERDA Foundation
Filinvest volunteers with ERDA Foundation

International Cooperation

Transport and Distribution Partner for Temasek Foundation's Donation of BiPap Machines and N95 Masks

Temasek Foundation (TF) of Singapore donated 400 Bi-level Pap Machines (BiPap Machines) that help aid patients with respiratory ailments and 100,000 N95 masks to the DOH. TF is the biggest government-owned/funded organization in Singapore. As part of a co-participation agreement, Temasek Foundation bought and donated the machines and equipment while Filinvest shouldered the cost of shipment from Singapore to the Philippines. The BiPap Machines and N95 masks were turned over to the DOH in December 2020.

Moving Forward, Together

Indeed, the fight against COVID-19 sparked the Bayanihan spirit in all of us. The initiatives we have detailed in this report are but some of the programs Filinvest and its foundations and subsidiaries have undertaken in support of our stakeholders and the communities we are in.

Further augmenting Filinvest’s well-rounded COVID-19 response, each subsidiary also organized various COVID-19 support programs for their clients, business partners, employees, and beneficiary communities. As exemplified in all of these efforts, Filinvest’s COVID-19 response was and shall remain to be three-pronged: the safety and livelihood of our corporate family, the physical and financial security of our customers and business partners, and the public health of the communities where we operate. As the country takes giant leaps towards recovery, Filinvest shall continue to play an active role in the war against COVID-19.

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Corporate Governance
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Filinvest Development Corporation was founded on the principles of good governance. It continues to abide by the core values of its founding father, Andrew L. Gotianun, of integrity, fairness and financial responsibility. These principles have been incorporated in the Company's Code of Ethics as well as in its Corporate Governance Manual. Today. FDC operates in a manner guided by its corporate core values of integrity, teamwork, professionalism, innovation, customer service and cost effectiveness.

For the year 2020, FDC complied with the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC) regulatory requirements.  It is also in compliance with its Revised Manual for Corporate Governance.  In particular, FDC wishes to highlight the following:   

a) the election of three (3) independent directors to the Board; 

b) the appointment of the members of the audit and risk management oversight, compensation, related-party transaction, corporate governance, and digital committees; 

c) the conduct of regular quarterly board meetings and special meetings, the faithful attendance of the directors at these meetings and their proper discharge of duties and responsibilities as   such directors; 

d) the timely and accurate submission to the SEC and the PSE of reports and disclosures required under the Securities Regulation Code and the PSE Listing and Disclosure Rules;

e) FDC’s adherence to national and local laws pertaining to its operations; 

f)  the observance of applicable accounting standards by FDC;

g) the adoption of the Integrated ASEAN Corporate Governance Report (I-ACGR) in Corporate Governance Reporting; 

h) the adoption of the Related-Party Transaction Policy; 

i) the conduct of annual corporate governance seminar to its directors and senior management officers; 

j) the submission of its sustainability report; and

k) the continuous enhancement of FDC’s website to provide our shareholders and stakeholders with quicker reference to our corporate governance policies. 

The Company continuously reviews and updates its corporate governance manual, in compliance with SEC directives and to reflect current best practices.  

In order to keep abreast of best practices in corporate governance, the members of the Board and key officers participated in the joint Annual Corporate Governance Training Program conducted by SGV & Co. on November 17 and 20,  2020.

FDC, through its Board of Directors and in coordination with the Management, reviews its corporate governance practices annually and welcomes proposals, especially from institutions and entities such as the SEC, PSE and the Institute of Corporate Directors.

 

Leading the practice of good corporate governance is the Board of Directors.  The Board of Directors of FDC is firmly committed to the adoption of and compliance with the best practices in corporate governance as well as the observance of all relevant laws, regulations and ethical business practices.

Nominations and Voting for the Board of Directors

The members of the Board are elected during the annual stockholders’ meeting.  The stockholders of FDC may nominate individuals to be members of the Board of Directors.  

The Corporate Governance Committee, acting as Nomination Committee, receives nominations for independent directors as may be submitted by the stockholders.  After the deadline for the submission thereof, the Corporate Governance Committee meets to consider the qualifications as well as grounds for disqualification, if any, of the nominees based on the criteria set forth in FDC’s Revised Manual on Corporate Governance and the Securities Regulation Code.  All nominations shall be signed by the nominating stockholders together with the acceptance and conformity by the would-be nominees.  The Corporate Governance Committee shall then prepare a Final List of Candidates enumerating the nominees who passed the screening.  The name of the person or group of persons who recommended the nominees for independent directors shall be disclosed along with his or their relationship with such nominees.

Only nominees whose names appear on the Final List of Candidates shall be eligible for election as independent directors.  No other nomination shall be entertained after the Final List of Candidates shall have been prepared.  No further nomination shall be entertained or allowed on the floor during the annual meeting.

The conduct of the election of independent directors shall be in accordance with FDC’s Manual on Corporate Governance and By-Laws.  

It shall be the responsibility of the Chairman of the annual meeting to inform all stockholders in attendance of the mandatory requirement of electing independent directors.  He shall ensure that independent directors are elected during the annual meeting.  Specific slots for independent directors shall not be filled up by unqualified nominees.  In case of failure of election for independent directors, the Chairman of the meeting shall call a separate election during the same meeting to fill up the vacancy. 

A stockholder may vote such number of shares for as many persons as there are directors to be elected.  He may cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares, or he may distribute them on the same principle among as many candidates as he shall see fit; Provided, that the total number of votes cast by him shall not exceed the number of shares owned by him as shown in the books of FDC multiplied by the whole number of directors to be elected.  

The directors of FDC are elected at the annual stockholders’ meeting, to hold office until their respective successors have been duly appointed or elected and qualified.  Vacancies in the Board occurring mid-term are filled as provided in the Revised Corporation Code and FDC’s Revised Manual on Corporate Governance. Officers and committee members are appointed or elected by the Board of Directors typically at its first meeting following the annual stockholders’ meeting, each to hold office until his successor shall have been duly elected or appointed and qualified.

Independent Directors

Before the annual meeting, a stockholder of FDC may nominate individuals to be independent directors, taking into account the following guidelines:

  1.  “Independent director” means a person who, apart from his fees and shareholdings, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgement in carrying out his responsibilities as director in any corporation that meets the requirements of Section 17.2 of the Securities Regulation Code and includes, among others, any person who:

    1. Is not a director or officer or substantial stockholder of FDC or of its related companies or any of its substantial shareholders (other than as an independent director of any of the foregoing);

    2. Is not a relative of any director, officer or substantial stockholder of FDC, any of its related companies or any of its substantial shareholders. For this purpose, "relative" includes spouse, parent, child, brother, sister, and the spouse of such child, brother or sister;

    3. Is not acting as a nominee or representative of a substantial shareholder of FDC, any of its related companies or any of its substantial shareholders;

    4. Has not been employed in an executive capacity by FDC, any of its related companies or any of the substantial shareholders within the last two (2) years;

    5. Is not related as a professional adviser by FDC, any of its related companies or any of its substantial shareholders within the last two (2) years, either personally or through his firm;

    6. Has not engaged and does not engage in any transaction with FDC or any of its related companies or any of its substantial shareholders, whether by himself or with other persons or through a firm of which he is a partner or a company of which he is a director or substantial shareholder, other than transactions which are conducted at arms-length and are immaterial or insignificant.

  2. When used in relation to FDC subject to the requirement above:

    1. "Related company" means another company which is: (a) its holding company, (b) its subsidiary, or (c) a subsidiary of its holding company; and

    2. "Substantial shareholder" means any person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of its equity security.

  3. An independent director of FDC shall have the following qualifications:

    1. He shall have at least one (1) share of stock of FDC;

    2. He shall be at least a college graduate or he shall have been engaged in or exposed to the business of FDC for at least five (5) years;

    3. He shall possess integrity/probity; and

    4. He shall be assiduous.

  4. No person enumerated under Section II (5) of the Revised Manual of Corporate Governance shall qualify as an independent director. He shall likewise be disqualified during his tenure under the following instances or causes:

    1. He becomes an officer or employee of FDC, or becomes any of the persons enumerated under items (A) hereof:

    2. His beneficial security ownership exceeds 10% of the outstanding capital stock of FDC;

    3. He fails, without any justifiable cause, to attend at least 50% of the total number of board meetings, during his incumbency unless such absences are due to grave illness or death of an immediate family member;

    4. If he becomes disqualified under any of the grounds stated in FDC's Revised Manual on Corporate Governance.

  5. Pursuant to SEC Memorandum Circular No. 09, Series of 2011, which took effect on January 2, 2012, the following additional guidelines shall be observed in the qualification of individuals to serve as independent directors.

    1. There shall be no limit in the number of covered companies that a person may be elected as independent director, except in business conglomorates where an independent director can be elected to only five (5) companies of its conglomerate, i.e., parent company, subsidiary or affiliate;

    2. Independent directors can serve as such for five (5) consecutive years, provided that service for a period of at least six (6) months shall be equivalent to one (1) year, regardless of the manny by which the independent director position was relinquished or terminated;

    3. After completion of the five-year period, an independent director shall be ineligible for election as such in the same company unless the independent director has undergone a “cooling off” period, provided, that during such period, the independent director concerned has not engaged in any activity that under existing rules disqualifies a person from being elected as independent director in the same company;

    4. An independent director re-elected as such in the same company after the “cooling off” period can serve for another five (5) consecutive years under the conditions mentioned in paragraph (ii) above;

    5. After serving as independent director for ten (10) years, the independent director shall be perpetually barred from being elected as such in the same company, without prejudice to being elected as an independent director in other companies outside the business conglomerate;

    6. All previous terms served by existing independent directors shall not be included in the application of the term limits.

  6. Pursuant to SEC Memorandum Circular No. 9, Series of 2011, as amended by SEC Memorandum Circular No. 4, Series of 2017, the following additional guidelines shall be observed in the qualifications fo individuals to serve as independent directors;

    1. There shall be no limit in the number of covered companies that a person may be elected as Independent Directors, except in business conglomerates where an ID can be elected to only five (5) companies of the conglomerate, i.e., parent company, subsidiary or affiliate;

    2. The independent director shall serve for a maximum cumulative term of nine (9) years;

    3. After this, the independent director shall be perpetually barred from re-election as such in the same company, but may continue to qualify as non-independent director.

    4. In the instance that a company wants to retain an independent director who has served for nine (9) years, the Board should provide the meritorious justification/s and seek shareholders’ approval during the annual shareholders’ meeting; and

    5. The reckoning of the cumulative nine-year term is from 2012.

Members of the Board of Directors, Attendance and Committee Memberships

The following table lists down the members of the Board of Directors and their attendance in Board Meetings in 2019

Board Member

Name of Director

Date of Election

No. of Meetings Held During the Year

No. of Meetings Attended

% Attendance

Chairman

Jonathan T. Gotianun

June 22,2020

9

9

100%

Member

L. Josephine Gotianun-Yap

June 22,2020

9

9

100%

Member

Micheal Edward T. Gotianun

June 22,2020

9

9

86%

Member

Nelson M. Bona*

June 22,2020

3

3*

100%

Independent

Val Antonio B. Suarez

June 22,2020

9

9

100%

Independent

Virginia T. Obcena

June 22,2020

9

9

100%

Independent

Claire A. Huang

June 22,2020

9

8

89%

*Ms. Claire A. Huang was elected as member of the Board of Directors on April 26, 2019

 

The following table lists down the attendance of the Board of Directors during the June 22, 2020 Annual Stockholders’ Meeting and their memberships in the different comittees:

Name of Director

Attended Annual Stockholders’ Meeting

Member of the Following Committees

Jonathan T. Gotianun

Yes

Chairman: Executive Committee 

Member:
Audit & Risk Management Oversight Committee
Compensation Committee
Corporate Governance Committee
Digital Committee

L. Josephine Gotianun-Yap

Yes

Member:
Executive Committee,
Audit & Risk Management Oversight Committee,
Compensation Committee
Digital Committee

Michael Edward T. Gotianun

Yes

Member: Executive Committee

Nelson M. Bona*

Yes

 

Virginia T. Obcena
Lead Independent Director

Yes

Chairperson:
Audit & Risk Management Oversight Committee 

Member:
 Compensation Committee
Corporate Governance Committee
Related-Party Transaction Committee

Val Antonio B. Suarez
Independent Director

Yes

Chairman:
Compensation Committee  Corporate Governance Committee Related-Party Transaction  Committee 

Member:
Audit & Risk Management Oversight Committee

Claire A. Huang
Independent Director

Yes

Chairperson:
Digital Committee

Member:
Corporate Governance Committee
Related-Party Transaction Committee

*Mr. Nelson M. Bona was elected as director of FDC on June 22, 2020

 

 

Duties and Responsibilities of the Different Board Committees

Committee Members

Office

Name

Date of Appointment

No. of Meetings Held

No. of Meetings Attended

% Attendance

Length of Service in the Committee

Chairman

Jonathan T. Gotianun

June 22, 2020

4

4

100%

1 year

Member (ED)

L. Josephine Gotianun-Yap

June 22, 2020

4

4

100%

1 year

Member (NED)

Andrew T. Gotianun, Jr.

June 22, 2020

4

3

75%

1 year

Member (ED)

Michael Edward T. Gotianun

June 22, 2020

4

4

100%

1 year

(*) The Committee members are elected annually

The functions, duties and responsibilities of the Board of Directors may be delegated, to the fullest extent permitted by law, to an Executive Committee to be established by the Board of Directors.  The Executive Committee shall consist of five (5) members, and least three (3) of whom shall be members of the Board of Directors.  All members of the Executive Committee shall be appointed by and under the control of the Board of Directors.

The Executive Committee may act on such specific matters within the competence of the Board of Directors as may be delegated to it by a majority vote of the Board of Directors, except with respect to:

  1. approval of any action for which shareholders’ approval is required;

  2. the filing of vacancies in the Board of Directors;

  3. the amendment or repeal of these by-laws or the adoption of new by-laws;

  4. the amendement or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable; and

  5. the distribution of cash dividends to shareholders.

The act of the Executive Committee on any matter within its competence shall be valid if (i) it is approved by the majority vote of all its members in attendance at a meeting duly called wher a quorum is present and acting throughout, or (ii) it bears the written approval for conformity of all its incubment members without necessity for a formal meeting.

The Executive Committee shall hold its regular meeting at least once a month or as often as it may determine, in the principal office of the corporation or at such other place as may be designated in the notice. Any member of the Executive Committee may, likewise, call a meeting of the Executive Committee at any time. Notice of any meeting of the Executive Committee shall be given at least seven (7) business days prior to the meeting or such shroter notice period as may be mutually agreed. The notice shall be accompanied by (i) a propsed agenda or statement of purpose and (ii) where possible, copies of all documents, agreements and information to be considered at such meeting.

 

Committee Members

Office

Name

Date of Appointment

No. of Meetings Held

No. of Meetings Attended

% Attendance

Length of Service in the Committee (*)

Chairman (ID)

Virginia T. Obcena

June 22, 2020

3

3

100%

1 year

Member (ED)

L. Josephine Gotianun-Yap

June 22, 2020

3

3

100%

1 year

Member (NED)

Jonathan T. Gotianun

June 22, 2020

3

3

100%

1 year

Member (ID)

Val Antonio B. Suarez

June 22, 2020

3

3

100%

1 year

(*) The committee members are elected annually.

 

The Board constituted an Audit and Risk Management Oversight Committee composed of at least three (3) director-members with accounting and financial background, one of whome mus be an independent director and another must have related audit experience.

The Chairman of this Committee should an independent director. He is responsible for inculcating in the minds of the Board members the importance of management responsiblities in maintaining a sound system of internal control and the Boards’ oversight responsibility.

Duties and Responsibilities:

  • Provide oversight financial management functions specifically in areas of managing credit, market, liquidity, operational, legal and other risks of the Company, and crisis management;

  • Provide oversight of the Company’s internal and external auditors;

  • Review and approve audit scope and frequency, and the annual internal audit plan;

  • Discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure coordination where more than one (1) audit firm is involved;

  • Set up an internal audit department and consider the appointment of an internal auditor as well as an independent external auditor, the audit fee and any question of resignation or dismissal;

  • Monitor and evaluate the adequacy and effectiveness of the Company’s internal control system;

  • Receive and review reports of internal and external auditors, and regulatory agencies, where applicable, and ensure that management is taking appropriate corrective actions, in a timely manner, in addressing control and compliance functions with regulator agencies;

  • Review the quarterly, half-year and annual financial statements before submission to the Board with particular focus on the following matters:

    • Any change/s in accounting policies and practices

    • Major judgemental areas

    • Significant adjustments resulting from the audit

    • Going concern assumptions

    • Compliance with accounting standards

    • Compliance with tax, legal and regulatory requirements

  • Coordinate, monitor and facilitate compliance with existing laws, rules and regulations;

  • Evaluate and determine non-audit work by external auditor and keep under review the non-audit fees paid to the external auditor both in relation to their significance to the auditor and in relation to the Company’s total expenditure on consultancy. The non-audit work should be disclosed in the Annual Report; and

  • Establish and identify the reporting line of the chief audit executive so the the reporting level allows the internal audit activity to fulfill its responsibilities. The chief audit executive shall report directly to the Audit Committee functionally. The Audit Committee shall ensure that the internal auditors shall have free and full access to the Company’s records, properties and personnel relevant to the internal audit activity, and that the internal audit activity should be free from interference in determining the scope of internal auditing examinations, performing work, and communicating results, and shall provide a venue for the Audit Committee to review and approve the annual internal audit plan.

 

Committee Members

Office

Name

Date of Appointment

No. of Meetings Held

No. of Meetings Attended

% Attendance

Length of Service in the Committee (*)

Chairman (ID)

Val Antonio B. Suarez

April 26, 2019

4

4

100%

1 year

Member (ED)

L. Josephine Gotianun-Yap

April 26, 2019

4

4

100%

1 year

Member (NED)

Jonathan T. Gotianun

April 26, 2019

4

4

100%

1 year

Member (ID)

Virginia T. Obcena

April 26, 2019

4

4

100%

1 year

(*) The committee members are elected annually.

The Board constituted a Compensation Committee composed of at least three (3) directors-members, one of whom must be an independent director.

Duties and Responsibilities:

  • Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers and directors, and provide oversight over remuneration of senior management and other key personnel ensuring that compensation is consistent with the Company’s culture, strategy and control environment;

  • Designate amount of remuneration, which shall be in a sufficient level to attract and retain directors and officers who are needed to run the Company successfully;

  • Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of individual directors, if any, and officers;

  • Develop a form on Full Business Interest Disclosure as part of the pre-employment requirements for all incoming officers, which, among others, compel all officers to declare under the penalty of perjury all their existing business interests or shareholdings that may directly or indirectly conflict in their performance of duties once hired;

  • Disallow any director to divide his or her own remuneration;

  • Provide in the Company’s annual reports, information and proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and ensuing year; and

  • Review the existing Human Resources Development or Personnel Handbook, to the strengthen provisions on conflict of interest, salaries and benefits policies, promotion and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in there respective posts.

Committee Members

Office

Name

Date of Appointment

No. of Meetings Held

No. of Meetings Attended

% Attendance

Length of Service in the Committee (*)

Chairman (ID)

Val Antonio B. Suarez

April 26, 2019

2

2

100%

1 year

Member (ED)

L. Josephine Gotianun-Yap

April 26, 2019

2

2

100%

1 year

Member (NED)

Jonathan T. Gotianun

April 26, 2019

2

2

100%

1 year

Member (ID)

Virginia T. Obcena

April 26, 2019

1

1

100%

1 year

Member (Ex officio)

Rizalangela L. Reyes

April 26, 2019

2

2

100%

1 Year

*Ms. Virginia T. Obcena was elected as member of the Nomination Committee on April 26, 2019

** The Committee members are elected annually


 

The Board constituted a Nomination Committee consisting of at least three (3) director-members, one of whom shall be an independent director. The Head of the Human Resources Department shall be a non-voting ex-officio member.

The Nomination Committee may review and evaluate the qualifications of all persons nominated to the Board, as well as those nominated to other positions requiring appointment by the Board, and provide assessment on the Boards’ effectiveness in directing the process of renewing and replacing the Boards’ members.

The Nomination Committee may consider the following guidelines in the determination of the number of directorships for the Board:

  • The nature of the business of the corporations in which he is a director;

  • Age of the director;

  • Number of directorships/active memberships and officerships in other corporations or organizations; and

  • Possible conflicts of interest

The Chief Executive Office and other executive directors shall submit themselves to a low indicative limit on memberships in other corporate boards. The same low limit shall apply to independent, non-executive directors who serve as full-time executives in other corporations. In any case, the capacity of directors to serve with diligence shall not be compromised.

The Nomination Committee may pre-screen and shortlist all candidates nominated to become a member of the Board of Directors, taking into account the qualifications and the grounds for disqualifications as set forth in FDC’s Manual of Corporate Governance and the Securities Regulation Code.

The Nomination Committee shall promulgate the guidelines or criteria to govern the conduct of the nomination for members of the Board of Directors. The same shall be properly disclosed in the Company’s information or proxy statement or such other reports required to be submitted to the Securities and Exchange Commission (SEC)

The Nomination of independent directors shall be conducted by the Committee before the stockholders’ meeting. All recommendations shall be signed by the nomination stockholders together with the acceptance and conformity by the would-be nominees.

The Committee shall pre-screen the qualifications and prepare a final list of all candidates and put in place screening policies and parameters to enable it to effectively review the qualifications of the nominees for independent directors as set forth in the Company’s Manual on Corporate Governance.

After the nomination, Committee shall prepare a Final List of Candidates which shall contain all the information about all the nominees for independent directors, which shall be made available to the SEC and all stockholders’ through the filing and distribution of the Information Statement, or in such reports the Company is required to submit to the SEC. The name of the person or group of persons who recommended the nomination of the independent director shall be identified in such report, including any relationship with the nominee.

Committee

Office

Name

Date of Appointment

No. of Meetings Held

No. of Meetings Attended

% Attendance

Length of Service in the Committee (*)

Chairman (ID)

Val Antonio B. Suarez

April 26, 2019

2

2

100%

1 year

Member (NED)

Andrew T. Gotianun, Jr.

April 26, 2019

2

2

100%

1 year

Member (ID)

Virginia T. Obcena

April 26, 2019

2

2

100%

1 year

Member (ID)

Claire A. Huang

April 26, 2019

1

1

100%

1 year

(*) The committee members are elected annually

 

The Related Party Transaction Committee is composed of at least three (3) non-executive directors, two (2) of whom must be independent, including the Chairman of the Committee.

The Related Party Transaction Committee has the following duties and responsibilities:

  • Conduct continuous evaluation and monitoring of existing relations among counterparties to ensure that all related parties are identified, RPTs are monitored, and subsequent changes in relationship with counterparties, should be reflected in the relevant reports to the Board and the SEC;

  • Evaluate all material RPTs to ensure that these are transacted on an arm’s length basis and that no corporate or business resources of the company are misappropriated or misapplied, and to determine any potentials reputational risk issues that may arise as a result of or in connection with the transactions.

In evaluating RPTs, the Committee may take into account the following:

  • The related party’s relationship to the Company and interest in the transaction;

  • The material facts of the proposed RPT, including the proposed aggregate value of such transaction;

  • The benefits to the Company of the proposed RPT;

  • The availability of other sources of comparable products or services;and

  • An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances. The company should have an effective price discovery system in place and exercise due diligence in determining a fair price for RPTs.

  • Ensure that appropriate disclosures is made to the regulating and supervising authorities relating to the Corporation’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest;

  • Report to the Board, on a regular basis, the status and aggregate exposures to each related party, as well as the total amountof exposures to all related parties; and

  • Oversee the implementation of the system for identifying, monitoring, measuring, controlling, and reporting RPTs, including a periodic review of RPT policies and procedures.

Committee Members

Office

Name

Date of Appointment

No. of Meetings Held

No. of Meetings Attended

% Attendance

Length of Service in the Committee (*)

Chairman (ID)

Claire A. Huang

April 26, 2019

2

2

100%

1 year

Member (ED)

L. Josephine Gotianun-Yap

April 26, 2019

2

2

100%

1 year

Member(ED)

Jonathan T. Gotianun

April 26, 2019

2

2

100%

1 year

(*) The Committee members are elected annually

Compensation of the Board of Directors and Officers

Except for a per diem being paid to each non-executive director of Php50,000 for every Board committee meeting attended and Php100,000 for every Board meeting attended, there are no other arrangements for the payment of compensation or remuneration to the directors in their capacity as such. There are no outstanding warrants or options held by the Company’s CEO, the above-named executive officers, and all officers and directors as a group.

Meanwhile, the aggregate compensation incurred or paid during the last two fiscal years to the non-independent directors and top officers of FDC are as follows:

Name and Principal Position

Year

Salary

Bonus

Other Annual Compensation

Total

Josephine G. Yap
(President/CEO)

Jonathan T. Gotianun
(Chairman)

Nelson M. Bona
(EVP, CFO, Treasurer and Compliance Officer)

Daniel Ang Tan Chai
(SVP/Deputy CFO)

Michael T. Gotianun
(Director/VP)

 

 

 

 

 

CEO and top 4 highest compensated officers

2020-Estimated

2019

2018

P66.1M

P62.9M

P54.8M

P8.8M

P8.4M

P7.5M

 

P74.9M

P71.3M

P62.3M

All officers and directors as a group unnamed

2020-Estimated

2019

2018

P87.2M

P83.0M

P66.8M

P12.0M

P11.4M

P9.3M

 

P99.2M

P94.4M

P76.1M

 

 

Mr. Andrew T. Gotianun Jr., Mr. Jonathan T. Gotianun, Mr. Michael Edward T. Gotianun and Ms. Lourdes Josephine Gotianun Yap are siblings.

 

The auditing firm SyCip Gorres Velayo & Co. (SVG) is the current independent auditor of FDC. There have been no disagreements with SVG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

FDC, in compliance with SRC Rule 68(3)(b)(iv) relative to the five-year rotation requirement of its external auditors has designated Mr. Michael C. Sabado as its engagement partner starting CY 2018. The representatives of SVG were present at the annual meeting held last April 26, 2018 to respond to appropriate questions at the meeting.

  1. Audit and Audit-Related Fees
    In consideration for the following professional services rendered by SVG as the independent auditor of FDC:

    1. The audit of FDC’s annual financial statements and such services normally provided by an external auditor in connection with statutory and regulatory filings or engagements for those fiscal years;

    2. Other assurance and related services by SVG that are reasonably related to the performance of the audit or review of FDC’s financial statements.

    The aggregate fees billed to the Group of professional services rendered by the external auditor for the examination of the annual financial statements amounted to Php11.2 million and Php9.3 million, net of VAT in 2019 and 2018, respectively.

    In 2019 and 2018, additional fees for other services which pertained to compliance review amounted to Php27.9 million and Php24.0 million, respectively.

  2. Tax Fees
    The fees billed to the Group for tax services which pertained to compliance review amounted to Php8.6 million and Php6.8 million in 2019 and 2018, respectively.

  3. All Other Fees
    There are no other fees bill in each of the last two (2) years for products and services provided by the external auditor, other than services reported under items mentioned above.

  4. Approval Policies and Procedures for Independent Accountant’s Services of Management/ Audit and Risk Management Oversight Committee

  5. In giving its stamp of approval to the audit services rendered by the independent accountant and the rate of the professional fees to be paid, the Audit and Risk Management Oversight Committee, with inputs from the management of FDC, makes a prior independent assessment of the quality of audit services previously rendered by the accountant, the complexity of the transactions subject of the audit, and the consistency of the work output with generally accepted accounting standards.

The Company recognizes that the most cogent proof of good corporate governance is that whihc is visible to the eyes of its investors. Therefore, the following provisions are issued for the guidance of all internal and external parties concerned, as governance covenant between the Company and all its investors:

The Board shall be committed to respect the following rights to the stockholders:

  1. Voting Right

    • Shareholders shall have the right to elect, remove and replace directors and vote on certain corporate acts in accordance with the Revised Code.

    • Cumulative voting is mandatory in the election of directors.

    • A director shall not be removed without cause if it will deny minority shareholders representation in the board.

  2. Power of Inspection
    All shareholders shall be allowed to inspect corporate books and records including minutes of Board meetings and stock registries, in accordance with the Revised Corporation Code, during business hours and upon prior written notice to the Company, for legal purposes.

    All shareholders shall be furnished with annual reports, including financial statements, without cost or restrictions.

  3. Right to information

    • The shareholders shall be provided, upon request, with periodic reports which disclose personal and professional information about the directors and officers and certain other matters such as their holdings of the Company’s shares, dealings with the Company, relationships among directors and key officers, and the aggregate compensation of directors and officers.

    • The minority shareholders shall be granted the right to propose the holding of a meeting, and the right to propose items in the agenda of the meeting, provided the items are for legitimate business purposes.

    • The minority shareholders shall have access to any and all information relating to matters for which the management is accountable for and to those relating to matters for which the management shall include such information and, if not included, then the minority shareholders shall be allowed to propose to include such matters in the agenda of stockholders’ meeting, being within definition of “legitimate purposes”.

  4. Right to Dividends

    • Shareholders shall have the right to receive dividends subject ot the discretion of the Board.

    • The commission may direct the Company to declare dividends when its retained earnings shall be in excess of 100% of its paid-in capital stock, except: i) when justified by definite corporate expansion projects or programs approved by the board; or ii) when the Company is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or iii) when it can be clearly shown that such retention is necessary under special circumstances obtaining in the Company, such as when there is a need for special reserve for probable contingencies.

  5. Appraisal Right
    The shareholders shall have appraisal right or the right to dissent and demand payment of the fair value of their shares in the manner provided for under the Revised Corporation Code of the Philippines, under any of the following circumstances:

    • In case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence.

    • In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all substantially all of the corporate property and assets as provided in the Revised Corporation Code;

    • In case of investment of corporate funds in any other corporation or business or for any purpose other than the Company’s primary purpose; and

    • In case of merger or consolidation

  6. The Board should be transparent and fair in the conduct of the annual and special shareholders’ meeting of the corporation.

    The shareholders should be encouraged to personally attend such meetings. If they cannot attend, they should be apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the By-Laws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy should be resolved in the shareholders’ favor.

  7. It shall be the duty of the directors to promote shareholder rights, remove impediments to the exercise of shareholders’ rights and allow possibilities to seek redress for violation of their rights. They shall encourage the exercise of shareholders’ voting rights and the solution of collective action problems through appropriate mechanisms. They shall be instrumental in removing excessive costs and other administrative or practical impediments to shareholders participating in meetings and/or voting in person. The directors shall pave the way for the electronic filing and distribution of shareholder information necessary to make informed decisions subject to legal constraints.

While the Board endeavors to declare dividends each year, the payment of cash dividends depends upon the Company’s earnings, cash flow, financial condition, capital investment requirements and other factors (including certain restrictions on dividends imposed by the terms of loan agreements).

On July 2, 2015, FDC paid cash dividends of Php0.0500 per share or a total of Php465.87 million to all shareholders on record as of June 10, 2015. This is equivalent to 12.4% of the Php3.744 billion in net income attributable to parent generated in 2014.

On June 21, 2016, FDC paid cash dividends of Php0.0516 per share or a total of P480.78 million to all shareholders on record as of May 27, 2016. This is equivalent to 11.0% of the P4.37 billion net income attributable to parent generated in 2015

On June 21, 2017, FDC paid cash dividends of Php0.059 per share or a total of Php550.27 million to all stockholders on record as of May 28, 2017. This is equivalent to 10.0% of the Php5.50 billion net income attributable to parent generated in 2016.

On June 28, 2018, FDC paid cash dividends of Php0.0765 per share or a total of Php661.62 million to all stockholders on record as of June 3, 2018. This is equivalent to 10.0% of the Php6.6 billion net income attributable to parent generated in 2017.

On June 19, 2019, FDC paid cash dividends of Php0.10 per share or a total of Php864.85 million to all stockholders on record as of May 26, 2019. This is equivalent to 8.9% of the Php9.8 billion net income attributable to parent generated in 2018.

Notice of Annual Stockholders’ Meeting

On January 23, 2019, FDC disclosed to the Philippine Stock Exchange that its Board of Directors had fixed the date of the Annual Stockholders’ Meeting on April 26, 2019 with the record date set on March 20, 2019.

Stockholders were informed that the Annual Stockholders’ Meeting for 2019 would be held at 9:00 a.m at Ballrooms 1& 2, Crimson Hotel Filinvest City, Manila, Entrata Urban Complex, 2609 Civic Drive, Filinvest City, Alabang, Muntinlupa City.

Procedures During the Annual Stockholders’ Meeting

The following was the agenda of the Annual Stockholders’ Meeting last April 26, 2018:

  1. Call to order

  2. Proof of Notice of Meeting

  3. Certification of Quorum

  4. Approval of the Minutes of the Annual Stockholders’ Meeting held on May 4, 2018

  5. Presentation of the President’s Report

  6. Ratification of the Audited Financial Statements for the year ended December 31, 2018

  7. Ratification of the Acts and Resolutions of the Board of Directors, Board Committees and Management from the Date of the Last Annual Stockholders’ Meeting up to April 26, 2019

  8. Election of the Members of the Board of Directors, including three (3) Independent Directors for 2019-2020

  9. Appointment of the External Auditor

  10. Approval by the stockholders of the grant of authority to the Board of Directors to conduct an equity offering by FDC (such as, but not limited to, a placing and subscription transaction and in such instance, waiver by all its stockholders of the Philippine Stock Exchange (PSE) requirement to conduct a rights or public offering for shares issued by FDC pursuant to such equity offering) under such terms and conditions that the Board of Directors may determine, inclusive of: (i) authority to fix the number of shares for such equity offering in such number of shares as may be required by FDC for funding its projects; (ii) delegation of authority to the President to appoint advisers, consultants, underwriters, lead managers, arrangers, global coordinators, stabilization agent, and other relevant parties for the equity offering; (iii) determination of the offering price based on generally accepted pricing formulas such as but not limited to publicly traded comparables (e.g. Enterprise Value/EBITDA/ Price/ Earnings), discounted cash flow or net asset value, and any discount.premium thereto, as may be appropriate or relevant per prevailing market conditions; and (iv) authority to list the shares issued in connection with the equity offering with the PSE

  11. Other Matters

  12. Adjournment

Only stockholders of record as of March 20, 2019 were entitled to attend and vote in the said meeting.

On the same day, right after the stockholders’ meeting, FDC disclosed to the Philippine Stock Exchange the results of the annual stockholders’ meeting which included the following:

  1. Approval of the Minutes of the Annual Stockholders’ Meeting held on May 4, 2018;

  2. Ratification of the Audited Financial Statements for the year ended December 31, 2018;

  3. Declaration of cash dividends in the amount of Php0.10 per share to all stockholders of record as of May 26, 2019, with payments due on June 19, 2019;

  4. Ratification of all the acts, resolutions and proceedings of the Board of Directors, Board Committees and Management from the date of the last annual stockholder’s meeting up to April 26, 2019;

  5. Appointment of Sycip Gorres Velayo & Co. As the independent external auditor of FDC for the year 2019; and

  6. Approval by the stockholders of the grant of authority to the Board of Directors to conduct an equity offering by FDC (such as, but not limited to, a placing and subscription transaction and in such instance, waiver by all its stockholders of the Philippine Stock Exchange (PSE) requirement to conduct a rights or public offering for shares issued by FDC pursuant to such equity offering) under such terms and conditions that the Board of Directors may determine, inclusive of: (i) authority to fix the number of shares for such equity offering in such number of shares as may be required by FDC for funding its projects; (ii) delegation of authority to the President to appoint advisers, consultants, underwriters, lead managers, arrangers, global coordinators, stabilization agent, and other relevant parties for the equity offering; (iii) determination of the offering price based on generally accepted pricing of formulas such as but not limited to publicly traded comparables (e.g. Enterprise Value/ EBITDA/ Price/ Earnings), discounted cash flow or net asset value, and any discount/premium thereto, as may be appropriate or relevant per prevailing market conditions; and (iv) authority to list the shares issued in connection with the equity offering with the PSE.

FDC likewise disclosed that the following were elected as directors to serve for the period 2019-2020 and until their successors shall have been duly elected and qualified:

  1. Andrew T. Gotianun, Jr.

  2. Jonathan T. Gotianun

  3. 3. L. Josephine Gotianun-Yap

  4. Michael Edward T. Gotianun

  5. Val Antonio B. Suarez (as independent director)

  6. Virginia T. Obcena (as independent director)

  7. Claire A. Huang (as independent director)

FDC made another disclosure to the Philippine Stock Exchange regarding the delcaration of the Board of Directors of a cash dividend for all stockholders on record as of May 26, 2019 in the amount of Php0.10 per share. The payment date was set on June 19, 2019.

FDC full complied with the Philippine Stock Exchange (PSE) and Securities and Exchange Commission (SEC) regulatory requirements. Below is the Company’s Reportorial Compliance report:

Type of Report

Number of Filings

Financials

 

Annual Report (17-A)

1

Quarterly Report (17-Q)

3

2018 Audited Financail Statements

1

Request for extension in filing 17-A, 17-Q

None

 

 

Ownership

 

Annual List of Stockholders – for Annual Stockholders’ Meeting

1

Foreign Ownership Monitoring Report

14

Public Ownership Report

12

Report on Number of Shareholders and Board Lot

12

Statement of Changes in Beneficial Ownership of Securities (23-B)

4

Top 100 Stockholders’ List

4

 

 

Notices – Stockholders’ Meeting/Briefings/Dividends

None

Notice of Annual/Special Stockholders’ Meeting

1

Dividend Notice (part of disclosure on Results of Stockholders’ Meeting)

1

 

 

Other Disclosures

 

Certification – Qualifications of Independent Directors

1

Clarifications of News Articles

2

Definitive Information Statement (20-IS)

1

General Information Sheet

1

Preliminary Information Statement (20IS)

1

SEC Form 17-C (Current Report)

Which includes the following:

 

a) Results of Annual Stockholders Meeting/Board Meetings

b) Press Release

c) Other Matters

23


 

FDC’s website, www.filinvestgroup.com, makes available to the public current information on the Company, including details of its operations.

The Investor Relations section of the website provides information on financial statements, press releases, declaration of dividends, ownership structure and any changes in the ownership of major shareholders and officers, a notice of analysts’ briefings, other reportorial requirements by the Philippine Stock Exchange.

The contact details of the Investor Relations Department are available on the website.

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Consolidated Financial Statements

(Amounts in Thousands of Pesos)

(Amounts in Thousands of Pesos, Except Earnings Per Share Figures)

(Amounts in Thousands of Pesos)

(Amounts in Thousands of Pesos)

(Amounts in Thousands of Pesos)

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Board of Directors and Senior Management

Board of Directors

Top from Left:
Mercedes T. Gotianun
Chairperson Emerita

Jonathan T. Gotianun
Chairman

Josephine Gotianun Yap
Director
President & CEO


Michael Edward T. Gotianun
Director
Bottom from Left:
Nelson M. Bona
Director

Claire A. Huang
Independent Director

Virginia T. Obcena
Independent Director

Val Antonio B. Suarez
Independent Director

Mercedes T. Gotianun

Chairperson Emerita

Jonathan T. Gotianun

Chairman

Josephine Gotianun Yap

Director / President & CEO

Michael Edward T. Gotianun

Director

Nelson M. Bona

Director

Claire A. Huang

Independent Director

Virginia T. Obcena

Independent Director

Val Antonio B. Suarez

Independent Director

Subsidiary Heads

Top from Left:

Josephine Gotianun Yap
President & CEO
Filinvest Land, Inc. (FLI)
Filinvest Hospitality Corporation (FHC)

President
Luzon International Premier Airport
Development Corporation (LIPAD)
Philippine DCS Development Corporation
(PDDC)

Jonathan T. Gotianun President & CEO
Pacific Sugar Holdings Corporation (PSHC)

Antonio C. Moncupa, Jr.
Vice Chairman, President & CEO
EastWest Banking Corporation (EWBC)

Catherine A. Ilagan
President & COO
Filinvest Alabang, Inc. (FAI)

Bottom from Left:

Juan Eugenio L. Roxas
President & CEO
FDC Utilities, Inc. (FDCUI)
Filinvest-Hitachi Omni Waterworks, Inc. (FLOW)
Countrywide Water Services, Inc. (CWSI)


President
Filinvest-Engie Renewable Energy Enterprise, Inc. (FREE)

Raymond L. Castaneda
President & COO, Corporate Technologies, Inc. (CTI)

Josephine Gotianun Yap

President & CEO, Filinvest Land, Inc (FLI), Filinvest Hospitality Corporation (FHC)

Jonathan T. Gotianun

President & CEO, Pacific Sugar Holdings Corporation (PSHC)

Antonio C. Monucupa, Jr.

Vice Chairman, President & CEO, EastWest Banking Corporation (EWBC)

Catherine A. Ilagan

President & COO, Filinvest Alabang, Inc. (FAI)

Juan Eugenio L. Roxas

President & CEO, FDC Utilities, Inc. (FDCUI)

Raymond L. Castaneda

President & COO, Corporate Technologies, Inc. (CTI)

Senior Management

Top from Left:

Nelson M. Bona
EVP - Group CFO, Treasurer and
Compliance Officer

Daniel L. Ang Tan Chai
SVP - Deputy CFO

Renato Rex Xavier G. Marzan
SVP - Group Chief Digital Officer
& Chief Innovation Officer

Michael Edward T. Gotianun
VP - Supply Chain Management

Bottom from Left:

Virginia A. Cayanga
VP - Risk Management

Sharon P. Refuerzo
VP - Corporate Secretary & Corporate Information Officer

Melody Joyce K. Yapson
VP - Group Strategic Planning

Nelson M. Bona

EVP - Group CFO, Treasurer and Compliance Officer

Daniel L. Ang Tan Chai

SVP - Deputy CFO

Renato Rex Xavier G. Marzan

SVP - Group Chief Digital Officer & Chief Innovation Officer

Michael Edward T. Gotianun

VP - Supply Chain Management

Virginia A. Cayanga

VP - Risk Management

Sharon R. Refuerzo

VP - Group Real Estate Marketing

Melody Joyce K. Yapson

VP - Group Strategic Planning

Real Estate Group

Top  from Left:

Josephine Gotianun Yap
President & CEO, FLI

Catherine A. Ilagan
President & COO, FAI

Ma. Carmen M. Rosal
President, ProExcel
Property Managers, Inc. (PPMI)

Arnulfo N. delos Reyes
President, Dreambuilders Pro, Inc. (DPI)

Middle from Left:

Maricel B. Lirio
President

Tristaneil D. Las Marias
EVP - Chief Strategy Officer, FLI

Ana Venus A. Mejia
FSVP - Chief Finance Officer,
FLI & FAI

Vince Lawrence L. Abejo
FSVP - Chief Sales and Marketing Officer, FLI

Bottom from Left:
Francis V. Ceballos
SVP - Business Group Head, FLI

Winnifred H. Lim
SVP – Chief Technical Planning Officer, FLI & FAI

Romeo T. Bautista
SVP - Bids & Awards Head, FLI & FAI

Joselito F. Santos
SVP - Business Group Head, FLI

Josephine Gotianun Yap

President & CEO, FLI

Catherine A. Iligan

President & COO, FAI

Ma. Carmen M. Rosal

President, ProExcel Property Managers, Inc. (PPMI)

Arnulfo N. delos Reyes

President, Dreambuilders Pro, Inc. (DPI)

Maricel B. Lirio

President

Tristaneil D. Las Marias

EVP - Chief Strategy Officer, FLI

Ana Venus A. Mejia

FSVP - Chief Finance Officer, FLI & FAI

Vince Lawrence L. Abejo

FSVP - Chief Sales and Marketing Officer, FLI

Francis V. Ceballos

SVP - Business Group Head, FLI

Winnifred H. Lim

SVP - Chief Technical Planning Officer, FLI & FAI

Romeo T. Bautista

SVP - Bids & Awards Head, FLI & FAI

Joselito F. Santos

SVP - Business Group Head, FLI

Banking Group

EASTWEST BANKING CORPORATION

 

Antonio C. Moncupa, Jr.
Vice Chairman, President & CEO

Rafael S. Algarra, Jr.
Senior Executive VP – Treasury, Markets and Off-Balance Sheet Head 

Jacqueline S. Fernandez
Senior Executive VP – Chief Lending Officer

Gerardo Susmerano
Senior Executive VP - Retail Banking Head

Pierre Leonard C. Monserrate
EVP & Group Head of Human Resources

Rick M. Pusag
EVP & Head, Technology & Productivity

Grace N. Ang
SVP & Chief Risk Officer

Eloida F. Oquialda
SVP & Chief Audit Executive

Angel Marie L. Pacis
SVP & Special Projects Officer

Eleanor B. Rivera
SVP & Chief Compliance Officer

Salvador R. Serrano
SVP & Head, Central Branch Operations 1

Richard Chester C. Tamayo
SVP & Head, Wealth Management

Ivy B. Uy
SVP & Head - Regional Branch Banking

Antonio C. Moncupa, Jr.

Vice Chairman, President & CEO

Rafael S. Algarra, Jr.

SEVP & Head of Treasury, Markets and Off-Balance Sheet

Jacqueline S. Fernandez

Senior Executive VP – Chief Lending Officer

Gerardo Susmerano

SEVP & Head - Retail Banking

Pierre Leonard C. Monserrate

EVP & Group Head of Human Resources

Rick M. Pusag

EVP & Head, Technology & Productivity

Grace N. Ang

SVP & Chief Risk Officer

Eloida F. Oquialda

SVP & Chief Audit Executive

Angel Marie L. Pacis

SVP & Special Projects Officer

Eleanor B. Rivera

SVP & Chief Compliance Officer

Salvador R. Serrano

SVP & Head, Central Branch Operations 1

Richard Chester C. Tamayo

SVP & Head, Wealth Management

Ivy B. Uy

SVP & Head - Regional Branch Banking

Power and Utilities Group

 

Juan Eugenio L. Roxas
President & CEO
FDCUI, FLOW & CWSI

President
FREE

Daniel L. Ang Tan Chai
Chief Finance Officer
FDCUI

Juan Eugenio L. Roxas

President & CEO FDCUI, FLOW & CWSI

Daneil L. Ang Tan Chai

SVP – Chief Finance Officer, FDCUI

Hospitality Group

 

Charles E. Brookfield
President & COO,
Chroma Hospitality, Inc. (CHI)

James M. Montenegro
Country Manager, CHI

Francis C. Gotianun
SVP, FHC

Charles E. Brookfield

President & COO, Chroma Hospitality, Inc. (CHI)

James M. Montenegro

Country Manager, CHI

Francis C. Gotianun

SVP, FHC

Sugar Group

PACIFIC SUGAR HOLDINGS CORPORATION

 

Jonathan T. Gotianun
President & CEO

Constancio B. Galinato
EVP - COO
 

Jonathan T. Gotianun

President & CEO

Constancio B. Galinato

EVP - COO

Information Technology Group

 

Raymond L. Castañeda 
President & COO, CTI

Joseph Patrick G. Yap  
Chief Technology Officer

Raymond L. Castañeda

President & COO, CTI

Joseph Patrick G. Yap

Chief Technology Officer
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Downloads
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Presentations

November 21, 2019

Investor Presentation - November 2019

April 26, 2019

President’s Report 2018 Annual Stockholders’ Meeting

May 04, 2018

President’s Report 2017 Annual Stockholders’ Meeting

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Real Estate
Copy Section ID: #paragraph-id-787
Filinvest City, Alabang
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The Filinvest Brand is a recognized brand with a wide breadth of products anchored on a deep understanding of the property markets. The group’s strong track record in the property business spans more than 50 years, with FDC and its predecessors having developed over 200 projects across 3,000 hectares of land.

The Filinvest group is currently one of the leading real estate developers in the Philippines with focus on three major areas – residential development, commercial leasing, and large-scale township masterplanning.

The real estate business is carried out through two key subsidiaries – listed company Filinvest Land, Inc. (FLI) and Filinvest Alabang, Inc. (FAI). In 2020, the real estate subsidiaries delivered revenues and other income of P21.4 billion and P6.0 billion in net income, contributing 43 percent to FDC’s consolidated net income.

Masterplanned townships allow synergies across the businesses to be harnessed and consequently raise the value of the existing landbank of close to 1,900 hectares of raw land and over 580 hectares of prime commercial land.

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Trading Revenues

The Filinvest group offers various products catering to different market segments ranging from socialized to affordable to upscale, and product offerings ranging from horizontal to mid-rise to high-rise buildings. These are offered under residential housing brands such as Pabahay, Futura, Aspire, Prestige, and Filigree – differentiating each brand from socialized to upscale living.

Given the wide breadth of offerings, Filinvest’s focus through FLI remains on the affordable and middle-market housing segments where it is well-entrenched, having identified this market as fast-growing but underserved early on. As a backdrop, it is estimated that half of the housing demand across the country is in the affordable- and the middle-income mass market housing segments. FLI’s Futura brand that caters to the affordable housing and mid-rise building communities, and the dynamic lifestyle Aspire brand catering to the middle-income market with its selection of themed horizontal, resort-inspired mid-rise and highly accessible vertical communities, are well-positioned to capture this demand. Both brands target the first-time homeowners and end-user buyers.

FAI engages in commercial lot sales in Filinvest City. The largest and most recent transaction in Filinvest City was a joint venture between FAI and Mitsubishi Corporation which was completed and recognized in 2020 to develop almost 17,000 square meters of prime land in one of Filinvest City’s finest blocks. The project will be jointly developed as a multitower, mixed-use complex, which is expected to add approximately 183,000 square meters of mixed-use GLA to the already-booming Alabang CBD. Including the Mitsubishi joint venture property, 86 hectares of prime commercial land are remaining in Filinvest City.

Pandemic-related issues in 2020 such as long lockdowns impacted sales while construction stoppages and government-mandated consumer support delayed revenue recognition and caused trading revenues and other income to decline by 37 percent to P14.8 billion in 2020. The group took a more conservative approach by delaying launches that can still be served by existing projects and focused on the completion of ongoing projects and the marketing of existing inventories. FLI reduced its launches to P3.7 billion with P30 billion ready to go in pace with market demand. FAI was also selective and launched only an expansion of one of Filigree’s luxury properties.

While full-year residential revenues declined in 2020, some segments have shown remarkable improvement in revenues in the second half of 2020 driven by the higher demand for affordable housing. To ensure that demand for housing across the country is addressed when market conditions improve, the group has a large and valuable residential landbank of about 1,900 hectares in strategically located areas that are seen to provide sufficient inventory in the medium term.

Artist's illustration of Futura Vinta, Zamboanga
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Leasing Revenues

The group’s focus over the past few years has been to increase the recurring income business. On a net income contribution basis for the real estate segment, rental income share has increased from 22 percent in 2015 to 35 percent in 2020.

Overall, the group’s office leasing business was less affected by the pandemic restrictions as the Filinvest buildings remained operational throughout the community quarantine. The retail business was not as fortunate, with most parts of the malls closed for the same period. This led to Filinvest waiving rental payments for the non-operational establishments in solidarity with its tenants. The property group’s rental revenues declined by 11 percent to P6.7 billion in 2020, with the growth in office leasing countered by the decline in retail mall revenues.

At the end of 2020, the group’s total leasing portfolio stood at 855,000 square meters of GLA. This is inclusive of FLI’s 31 operational office buildings comprising 524,000 square meters of GLA and the balance accounted for by FLI and FAI’s retail spaces primarily in Filinvest City. In the next two years, FLI has 11 new office buildings slated for completion to bring the total office GLA to approximately 750,000 square meters. These buildings are strategically located in the high-growth areas of Metro Manila, Clark, and Cebu.

On top of these, FAI leases out commercial lots in Filinvest City totalling 288,000 square meters.

More than 75 percent of the group’s retail portfolio comes from Festival Supermall, located at the heart of Filinvest City and is a mecca for shopping in South Metro Manila. Other retail projects are on a smaller scale which serve to support other township developments.

Artist's illustration of Botanika, Alabang
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New Leasing Concepts

FLI has also ventured into the logistics space through the launch of the Filinvest Innovation Park in Filinvest New Clark City. Filinvest Innovation Park is targeted for locators from the growing logistics and e-commerce industry in the Philippines who are looking to lease large parcels of land and ready-built factories. Depending on the needs of locators, FLI may build warehouses or build-to-suit factory buildings for them, or lease lots. FLI signed up its first locator in the third quarter of 2020. Encouraged by the strong interest for industrial lots, FLI is expanding the Filinvest Innovation Park brand to its existing township in Ciudad de Calamba in Laguna. Detailed planning has commenced on a 20-hectare extension which will make the Filinvest Innovation Park Ciudad de Calamba one of the biggest parks in the vicinity with total size of over 80 hectares upon completion.

To enhance its residential leasing portfolio, Filinvest launched the offering of dormitels, a co-living space product. Dormitels are designed as affordable yet comfortable and secure residences near the workplace. FLI’s first dormitel offering is The Crib Mimosa+ in Clark, Pampanga which is due for completion in the second half of 2021. The project is composed of four low-rise dormitel buildings with a total of 552 rooms or 3,312 beds, and each room typically having six beds. FAI has also launched The Crib at Filinvest City, which is an 11-storey tower with an estimated 4,800 square meters in GLA offering a co-living work-from-home alternative for employees.

The Crib Clark, Pampanga
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Master-planned Townships

Filinvest City in Alabang 

Filinvest’s flagship masterplanned development is the 244-hectare Filinvest City in Alabang, Muntinlupa. Developed by FAI, which is 80 percent owned by FDC and 20 percent by FLI, Filinvest City is an integrated retail, commercial, residential, and leisure development in the south of Metro Manila. It is also one of the most innovative, having earned the distinction of being the first township in the Philippines and the largest in Southeast Asia to receive a Gold certification under the LEEDv4 Sustainable Neighborhood Development Plan, reflecting FDC’s commitment to sustainable development.

Different Filinvest subsidiaries have contributed to the growth of the township. Filinvest City brings together a complete mix of residential developments spanning from FAI’s high-end Filigree brand represented by Botanika and Bristol projects to FLI’s Aspire mid-income brands such as Studio N and The Levels. FLI’s Northgate Cyberzone, the pioneer campusstyle IT park, has the largest aggregation of BPO buildings in South Metro Manila.

The presence of third-party developers has also spurred the township’s continued growth. Most of the big box retailers and almost all of the car dealerships have chosen Filinvest City and is the home of FLI’s Festival Mall, the largest mall in South Metro Manila. Most hotels in the area are located in Filinvest City, including the group’s Crimson Hotel. Filinvest City is also home to three hospitals, a university, and other healthcare and education facilities, enhancing support services to the community.

Artist's illustration of Filinvest City Central Park
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Clark Corridor

Filinvest is heavily invested in the Clark Corridor in Clark, Pampanga. Following a bidding process in 2016, Filinvest was awarded the leasehold rights to both the 201-hectare Mimosa Leisure Estate (now known as Filinvest Mimosa+ Leisure City) and Filinvest New Clark City, the 288-hectare parcel within New Clark City. On top of that, Filinvest has interest in Clark International Airport (CIA) as part of a consortium that has been awarded the O&M contract which includes the fit out and operations of a new terminal as well as a 223-hectare aerotropolis for aviationrelated and logistic industries and mixed-use developments.

Filinvest Mimosa+, the leisure-based township, has substantially completed its land development. It has two golf courses and a 309-room Quest Plus Hotel Conference Center, both of which are undergoing a phased renovation while in operation. Two office buildings under FLI are operational and nearly fully leased out. In addition to the two completed office towers, another two offices and four co-living spaces branded as The Crib Mimosa+ are for delivery in the second half of 2021. A 33,000-square meter lifestyle mall is also in the pipeline to complement the strip mall.

The first phase of the 288-hectare Filinvest New Clark City has signed up its first locator in the second half of 2020. The first phase, which consists of an industrial park, represents a key catalyst of progress in the north of Metro Manila. Given the proximity of the location to CIA and the construction of additional transport infrastructure within the region, Filinvest New Clark City is expected to be a strategic operations hub in Southeast Asia. The existing road networks such as the North Luzon Expressway (NLEX), the Subic-Clark-Tarlac Expressway (SCTEX), and the Tarlac-Pangasinan-La Union Expressway (TPLEX) have improved the accessibility of Clark from Metro Manila. The plan for the entire Filinvest New Clark City is to develop a future-ready and environment-friendly mixed-use township comprised of industrial locators, retail establishments, and residential developments.

Artist's illustration of Filinvest Innovation Park New Clark City
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City di Mare in Cebu

The third of Filinvest’s masterplanned communities is City di Mare or “City by the Sea” located in South Road Properties in Cebu. It is a 50.6-hectare mixed-use development composed of three different zones, including residential, commercial, and entertainment, with a view to catering to a wide array of lifestyles and activities in line with the live-work-play concept. FLI has developed Il Corso Mall, a waterfront lifestyle strip, on a 10.6-hectare portion of the property. A 10,000-square meter portion of the mall is also being reconfigured to accommodate BPO companies. In addition, FLI constructed medium-rise buildings known as Sanremo Oasis and Amalfi on the remaining 40-hectare portion, under a joint venture and profit-sharing arrangement with the Cebu City Government.

City di Mare serves as a model for thoughtful urban planning with its signature green and open master plan. Approximately 60 percent of the development remains dedicated to infrastructure that enhances the outdoors, and multiple spaces within the development have been maintained as green spaces to help generate more long-term value. The seaside location of the development creates a resort-like feel and helps to distinguish it from other CBDs in the region.

Il Corso at City di Mare, Cebu
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Hospitality
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Crimson Resort & Spa Mactan
Quest Hotel and Conference Center Cebu

The group’s hotel operations are carried out by Filinvest Hospitality Corporation (FHC), a whollyowned subsidiary of FDC, and hotel management firm Chroma Hospitality, Inc. (CHI), a joint venture with Archipelago International Pte. Ltd. The first hotel opened in 2010 through Crimson Resort and Spa Mactan in Cebu. Five more hotels were added to the portfolio bringing the total to six managed hotels with almost 1,800 rooms plus two 18-hole golf courses by the end of 2020. FDC expanded its interests to the hospitality business in response to the accelerating tourism growth in the Philippines that prevailed over the past decade.

The six hotels carry the group’s homegrown brands, namely Crimson and Quest, which cater to distinct market segments. The Crimson brand caters to the mass affluent market segment, while the Quest and Quest Plus brands target the group’s key market, the middle market, including families and business lodging with emphasis on the MICE (Meetings, Incentives, Conventions and Exhibitions) segment.

The hospitality group had to reinvent itself during the pandemic. During the months of strictest quarantine in the country, five of the six hotels and resorts remained in operation on a limited basis to serve essential BPO workers as well as returning overseas Filipinos serving quarantine. Cost cutting measures such as reduction in contract services and working hours as well as partial closure of certain areas were implemented to offset the lower occupancy and daily rates. However, beginning October 2020, all hotels have been open, with the resort hotels Crimson Boracay and Crimson Mactan having experienced improvement in occupancy coming from domestic tourism in the fourth quarter. Quest Clark also got a boost in occupancy in the fourth quarter when it was blocked off for the duration of one season of the Philippine Basketball Association (PBA) league, dubbed as the “PBA Bubble”.

In view of the lingering mobility and foreign travel restrictions brought about by the global pandemic, future expansion plans have been pushed back until a big market improvement is in sight. These plans include the launch of a third brand called Grafik that will cater to millennial and other younger guests, and expansion to new geographies. These, however, can easily be reassessed and executed when the market conditions permit it. The new development currently on hold within Luzon is in Puerto Princesa, while those in Visayas-Mindanao are in Mactan, Dumaguete, General Santos, and Zamboanga. Meanwhile, the Clark, Rizal, Baguio, and Mactan Expansion projects are pushing through upon careful and deliberate assessment.

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Financial Services
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EastWest Bank is among the top 10 banks in the Philippines by asset size and is strategically positioned in the retail and middle-market corporate segments. It has grown in the last few years through aggressive store expansion and acquisitions while remaining focused on the high margin consumer lending segments. It has also been ramping up its digitalization efforts in a move to broaden its product offerings and increase its wallet share of customers. An expanding consumer loan book coupled with relaxed monetary policies are key to the growth of the Filinvest group’s banking business. East West Bank

In the last 10 years, EastWest Bank has aggressively built a strong consumer banking franchise by substantially increasing its number of branches from 168 in 2011 to 468 in 2020, contributing to its growing low-cost current and savings accounts base. Before COVID-19 struck, EastWest Bank has been focusing on an aggressive deposit gathering program and acquisition of middle market corporate loans to reach the full potential of its store network. Notwithstanding the disruption created by the pandemic, EastWest Bank holds leadership positions in consumer finance. It is estimated to be the second largest in auto loans, top three in personal loans and fifth largest in credit cards.

The COVID-19 pandemic defined EastWest Bank’s operating results in 2020. Lockdowns, social distancing and limited mobility resulted in the economy contracting by 9.5 percent, prompting the authorities to adopt more accommodative monetary policies. These impacted EastWest Bank’s growth trajectory as it meant lower growth resulting from lower volume of new business, less transactions across all businesses and higher provisions for loan losses. On the other hand, lower rates and the consequent lower funding costs resulted in higher net interest margins and higher trading gains. These offsetting trends drove the flattish operating results of EastWest Bank and its contribution to FDC.

Respectable Financial Performance

EastWest Bank delivered a net income contribution to the group of P6.5 billion in 2020, 4 percent higher than the P6.1 billon in 2019. On a standalone basis, EastWest’s net interest income increased by 23 percent to P26.5 billion. This was on the back of a sustained net interest margin (NIM) of 8.1 percent which remained to be one of the highest in the industry. Non-interest income declined by 5 percent to P6.9 billion mostly due to the drop in fees and other income brought about by the pandemic-induced slowdown in business activities, modified payment schemes brought about by Bayanihan Acts 1 and 2, and assistance to customers. The lower fees and cost of the debt relief programs were partially mitigated by the P4.2-billion increase in securities trading gains.

EastWest Bank’s respectable net income growth reflected the benefits from its strategies and the attainment of economies of scale, underscored by its improving costto- income ratio over recent years. Operating expenses, excluding provisions for losses, decreased by 1 percent to P16.2 billion in 2020 thus enabling cost-to-income ratio to improve to 49 percent from the previous year’s 57 percent. EastWest Bank more than doubled its provisions for losses to P9.8 billion from P4.0 billion in 2019. Despite the heavy provisioning, EastWest Bank’s strong overall performance is shown by its return on equity (ROE) of 12.3 percent.

EastWest Bank believes there is still a lot of room for optimization of the branch network, product suite, as well as increasing cross-selling opportunities to its customers. The expansion into bancassurance and wealth management to augment its overall customer offering is part of EastWest Bank’s strategy to grow its share of the customer’s wallet.

Komo, First Exclusively Digital Bank from a Local Universal Bank

EastWest Bank launched Komo in 2020 in a move to increase wallet share while being supportive of the digitalizing environment in the country. EastWest Bank is particularly proud of Komo being the first exclusively digital banking service granted by the Central Bank to a local universal bank. This is in line with EastWest Bank’s thrust to contribute to the national development of digital ecosystems and revamp key channels such as online and mobile banking. With its success, EastWest Bank will continue to introduce technological initiatives for improved and expanded customer service efforts particularly in the digital channels space.

EastWest Bank Komo

 

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Power and Utilities
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FDC UtilitiesFDC re-entered the power industry in Mindanao to address its power crisis. Since the start of its power plant operations in 2016, the rolling brownouts have stopped and the power shortage has been addressed. FDCUI has proven to be a formidable and defensive play to the conglomerate’s portfolio.

FDCUI operates an aggregate 405-megawatt plant that uses the latest circulating fluidized bed (CFB) clean coal technology. With a backdrop of a competitive contracting environment and without a definitive energy fuel policy governing the industry then, FDCUI embarked on using the CFB technology which is 10 percent more expensive to build and 6 percent more expensive to operate to address the base load requirements of its customers. The plant meets the standards imposed by the Department of Energy and the World Bank and is able to operate efficiently. It maintained a high availability factor of 94 percent in 2020, allowing it to serve its dispersed customer base of 14 – mostly triple A – distribution cooperatives of good credit standing and two industrial customers. Of the 405-megawatt capacity, 231 megawatts are contracted under mostly long-term power purchase agreements (PPAs).

In 2020, FDCUI contributed P1.9 billion to FDC’s net income, declining by 23 percent year-on-year. Despite its operations being in Mindanao where the impact of the pandemic was less severe compared to Metro Manila, its sales volume was affected by the general slowdown in economic activity especially during the enhanced community quarantine period in the second quarter. The earlier easing of lockdowns in Misamis Oriental, where its coal thermal plant is located, has helped improve the situation but energy demand has yet to get back to pre-COVID levels even in the Mindanao region.

Notwithstanding the slowdown in 2020, the industrial developments in the PHIVIDEC Industrial Estate and surrounding urban centers are seen to increase demand for power in the area in the medium term. According to the Department of Energy, projected peak demand in Mindanao is expected to increase by 5.1 percent in 2021 and 5.4 percent per annum from 2021 to 2024.

The plant is compliant with environmental standards and has been performing better than the minimum standards imposed by the Department of Energy and the World Bank. The plant’s emissions are well within the guidelines of the Clean Air Act and the World Bank’s Environmental Health and Safety Guidelines for Thermal Power Plants. The CFB plant has similar efficiencies as pulverised coal-fired plants under identical steam conditions but with lower NOx emissions. The technology allows for the removal of sulfur dioxide in the combustion process thus eliminating the need for an external desulphurization process and the problem of sulfur disposal. FDCUI has put in place not only engineering controls but also administrative controls to ensure emissions from operations are in check.

Retail Electricity Supply

FDCUI expanded into the retail electricity supply (RES) business in 2016. The move allows FDCUI to trade electricity and cater to contestable customers, or those with electricity demand of more than one megawatt across the Philippines. The RES operations of FDCUI commenced in 2017 and to date, FDCUI has retail supply contracts with 17 commercial and industrial customers for the supply of a total of 40 megawatts of electricity District Cooling System

New Ventures in Renewable Energy and Environment Sustainable Solutions

To complement the power generation and trading operations, FDC has entered into strategic partnerships with Engie Services Philippines (Engie) to develop potential renewable energy solutions and district cooling services in the Philippines. Engie is a global energy services provider with focus on low-carbon power generation mainly based on natural gas and renewable energy.

The first joint venture of the group with Engie was the completion and operation of the Philippines' largest district cooling system (DCS) in FLI’s Northgate Cyberzone in Filinvest City in 2017 with a capacity of up to 12,000 tons of refrigerant. The DCS provides sustainable energy solutions by conserving energy through lower use of electricity, water and chemicals, and reducing greenhouse gas emissions and ozone-destroying refrigerants. In Northgate, the DCS is able to provide airconditioning to around 20 buildings, allowing an energy reduction of approximately 40 percent.

Another joint venture with Engie is the Filinvest-Engie Renewable Energy Enterprise, Inc. (FREE). FREE entered the solar power industry in late-2018 and has since gained rapid success. FREE has been awarded three contracts for a total of 5.4 megawatts of solar rooftop systems.

Plans are underway to further expand its renewable energy offerings also in partnership with Engie. Some projects being lined up are the development of a 30-megawatt solar farm and a 26-megawatt hydropower plant in the Pampang River in Luzon.

In addition to the ongoing district cooling and solar rooftop projects, a joint venture agreement with Japanese company Hitachi Aqua-Tech Engineering Pte. Ltd. was signed in September 2019 to establish Filinvest- Hitachi Omni Waterworks, Inc. (FLOW) to provide processed water solutions across the Philippines. FLOW is focused on offering services in desalination, recycled water, and sewage treatment facilities. FLOW is seen to complement the operations of another wholly owned subsidiary, Countrywide Water Services, which provides water and wastewater services for internal customers within the Filinvest group as well as external parties.

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Infrastructure
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Construction of new terminal FDC’s interest in the infrastructure space is through its participation as a consortium member in the airport redevelopment of Clark International Airport (CIA) in Pampanga. The consortium signed a concession agreement with the Bases Conversion and Development Authority in January 2019 for the operations and management (O&M) of CIA for a period of 25 years. The consortium members then incorporated Luzon International Premiere Airport Development Corporation (LIPAD) in February 2019 to act as the consortium’s joint venture entity. FDC’s ownership interest in LIPAD is 42.5 percent while the other consortium members are JG Summit Holdings, Inc., Changi Airport Philippines (I) Pte. Ltd., and Philippine Airport Ground Support Solutions, Inc.

The contract includes the O&M of CIA’s existing passenger terminal and the development, fit-out, operation, and maintenance of a new modern terminal building with an estimated annual capacity of eight million passengers. It also includes the O&M of the related commercial assets and project facilities. The O&M of the old terminal of CIA was officially handed over to LIPAD in August 2019. The official handover of the new terminal to the consortium took place in January 2021. LIPAD is currently doing the fit-out works and interior finishes. Once completed within the year, the old terminal that is currently being used will be de-commissioned and will be moved to the new terminal.

Pre-COVID, CIA covered 19 domestic and 14 international destinations serving about 700 weekly flights from a total of 18 airlines. As soon as air travel normalizes, the consortium will work towards expanding this network, connecting Clark to more domestic and international points and serve as the premier international gateway for Central and Northern Luzon. The investment in CIA is part of the wider and longer-term plan of FDC to develop the Clark region and help boost its growth as a premier economic hub.

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