2018 sustainability report · 2019-06-25 · in 2017. traffic on the cavite expressway...

2018 SUSTAINABILITY REPORT

About this ReportThis is the third sustainability report for Metro Pacific Investments Corporation (“MPIC”, “the Company” or “the Parent Company”) containing information about our environmental, social and governance (“ESG” or “Sustainability”) impacts for the year ending December 2018.

This report should be read in conjunction with our SEC Form 17A and our 2018 Information Statement. In line with our commitment to transparency and accountability, we have prepared this report in accordance with the Global Reporting Initiative (“GRI”) Standards: Core Option DNV GL has provided an independent assurance statement for our sustainability / non-financial disclosures.

We welcome feedback on this report and any matter concerning the sustainability performance of our business. Please contact us at:

Metro Pacific Investments CorporationInvestor Relations10/F MGO Building, Legaspi corner Dela Rosa Streets, Makati City, 0721, Philippines+63 2 888 [email protected]

1

About this Report

Leadership Message

Company Profile

2018 Key Metrics

Mission, Vision and Values

Core Assets

Contributions to Nation Building

PART 1: Sustainability Framework

Value Creation

Corporate Governance

Economic Performance

PART 2: Sustainability Impacts

Operational Efficiency

Service Excellence

Engaged Employees and Safe Workplaces

Social Responsibility

Methodology

ESG Reporting Methodology

ESG Data Summary

Annex

Integrated Management System Certifications

GRI Content Index

Independent Assurance Statement

1

2

6

6

6

7

8

11

12

16

18

22

24

34

40

49

56

57

62

65

65

68

72

Contents

2018 SUSTAINABILITY REPORT

http://edge.pse.com.ph/openDiscViewer.do?edge_no=0fc1112f9047f60befdfc15ec263a54d#sthash.Tcf91G0o.dpbs

http://edge.pse.com.ph/openDiscViewer.do?edge_no=0fc1112f9047f60befdfc15ec263a54d#sthash.Tcf91G0o.dpbs

http://edge.pse.com.ph/openDiscViewer.do?edge_no=3afe1ee260bff781efdfc15ec263a54d#sthash.UFGMA5ev.dpbs

https://www.globalreporting.org/standards/media/1036/gri-101-foundation-2016.pdf#page=23

https://www.globalreporting.org/standards/media/1036/gri-101-foundation-2016.pdf#page=23

TO OUR FELLOW STAKEHOLDERS,This year we are responding to the evolving needs and expectations of people such as you — our valued stakeholders — and trying something new. While we have reduced and refined the content of our 2018 Annual Report to focus only on the essential information our investors need to make informed decisions about our business, we are placing renewed emphasis on this document, our sustainability report, as a primary means of promoting transparency and accountability in our operations.

Metro Pacific Investments Corporation is focused on addressing the inadequate supply of high-quality yet well-run and fairly-priced infrastructure in the Philippines and other countries in South East Asia. We have invested in the development and operation of power distribution and generation, toll roads, potable water supply and sewerage treatment, healthcare, light

Leadership Message

rail, and logistics – all of which are essential services contributing to sustainable development of our society.

In addition to protecting the welfare and well-being of our investors, employees and customers, we believe in empowering the people we serve to participate in and benefit from sustainable economic growth. The key elements of our strategy to create value are improving the quality of infrastructure assets, enhancing the efficiency with which they are run, extending service coverage to more communities, and working closely with regulators to achieve shared goals.

2018 FINANCIAL AND OPERATIONAL REVIEWMPIC recorded a 7% rise in Core Income to P15.1 billion for 2018. Our earnings growth continues to reflect the benefit of an expanded power portfolio following further investment in Beacon Electric Asset Holdings Inc. (“Beacon Electric”) in 2017, continuing traffic

growth on all Philippine toll roads, and steady volume growth coupled with inflation-linked tariff increases at Maynilad Water Services Inc. (“Maynilad”).

PowerPower contributed P10.8 billion, an increase of 15%, driven by the benefit of our increased ownership in Beacon Electric and good results at Manila Electric Company (“MERALCO”), which more than offset the decline in the contribution of Global Business Power Corporation (“GBP”). MERALCO’s Core Income rose 11% to P22.4 billion driven by a 5% increase in energy sales, and a reversal of provisions following the adoption of a new accounting standard. GBP sold 4,822 gigawatt hours (“GWh”), an increase of 8% from a year earlier. Core Income, however, declined by 15% due to higher interest and depreciation for Panay Energy Development Corporation 3 (“PEDC 3”) from June 1, 2018 onwards and lower margins from Wholesale

DAVID J. NICOLExecutive Vice President and Chief Financial Officer

JOSE MA. K. LIMPresident and Chief Executive Officer

MANUEL V. PANGILINANChairman of the Board of Directors

2

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Leadership MessageElectricity Sales Market (“WESM”) sales due to higher coal and other fuel costs.

Toll RoadsToll Roads accounted for 23% of our operating income at P4.4 billion, an increase of 13% from 2017. This was driven by continuing traffic growth in all our Philippine toll roads and an 11% increase in the North Luzon Expressway (“NLEX”) Closed System toll rate implemented in November 2017. While traffic on the NLEX grew 7%, it surged by 15% on the Subic-Clark-Tarlac Expressway (“SCTEX”) following integration of these two roads and the opening of additional lanes in 2017. Traffic on the Cavite Expressway (“CAVITEX”) rose 5% driven by growth in residential communities in Cavite and increasing tourism in Batangas.

WaterIn 2018, P3.8 billion or approximately 19% of MPIC’s earnings were attributable to our water business; a 2% increase from 2017. Maynilad’s Core Income increased by 5% due to the combined effect of a 3% growth in billed volume and several rounds of tariff increases – 1.9% and 2.8% in April 2017 and January 2018 for inflation followed by an additional 2.7% in October 2018, respectively, as a result of the recent Rate Rebasing exercise.

Potable water is becoming an increasingly precious resource in the face of threats to water supply posed

by climate change coupled with increasing demand for water driven by population growth in our urban areas. In April 2019, Maynilad inaugurated the Putatan Water Treatment Plant 2 (“PWTP 2”), which is its second treatment facility sourcing raw water from Laguna Lake. It is currently producing 100 million liters per day (“MLD”) and the facility’s output will be expanded in phases until it reaches its full 150 MLD capacity by the latter part 2019.

This P5.4 billion facility is part of Maynilad’s water security program to minimize dependence on the Angat Dam in Bulacan as the primary source of raw water supply. It is a vital component of Maynilad’s plan to develop alternative sources of water supply and ensure long-term water security for its customers.

Maynilad also continues to invest heavily in avoiding water loss. Non-Revenue Water (“NRW”) measured at the District Metered Area level fell to 27% as at the end of 2018, and total NRW is now down to 39%. In 2018, Maynilad repaired 21,382 leaks to recover an estimated 56 MLD of water.

HealthcareMetro Pacific Hospitals reported 14% growth in aggregate revenues for 2018 on the strength of an 8% increase of out-patient visits and an 11% growth of in-patient admissions. Investments in Dr. Jesus C.

Delgado Memorial Hospital in Quezon City and St. Elizabeth Hospital in General Santos City in 2017 contributed significantly to this improvement. Overall, Core Income of our healthcare group grew 15% to P2.4 billion in 2018. Light RailLight Rail Manila Corporation (“LRMC”) contributed P394.0 million to MPIC’s Core Income in 2018, supported by a 5% increase in ridership following the rehabilitation of Light Rail Vehicles and augmented by higher advertising income. Combined with the impact of LRMC’s Income Tax Holiday beginning January 2018, these factors gave rise to a 39% increase in its contribution.

MPIC GroupMPIC’s earnings growth for 2018 reflects strong volume increases in all of our businesses, which has been supported by years of high investment and continued emphasis on operational efficiencies. As a result, the Board of Directors declared a final dividend of 7.6 centavos per share for 2018, amounting to a payout ratio of 23% of Core Income per share. Even though earnings were up for the tenth consecutive year, our Board was compelled to hold the dividend unchanged in the face of large planned increases in the Company’s capital commitments over the coming few years.

3

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Leadership MessageGROWTH OUTLOOK AND EXPANSION

PowerWe are increasingly concerned about the risk of power shortages in the Philippines. As our economy grows, we foresee that the continuing rise in power demand will not be met due to minimal progress on regulatory approvals for new generation projects.

In this context, we are pleased to report that construction is proceeding as scheduled on our 455 megawatt (“MW”) - net San Buenaventura supercritical coal-fired power plant in Quezon with commercial operation expected in the third quarter of 2019. This plant’s capacity is subject to a power supply agreement with MERALCO that has already been approved by the Energy Regulatory Commission (“ERC”). Alsons Thermal Energy, in which GBP has a 50% interest, is on track to commence operation of its second 105 MW expansion plant in Sarangani by the second half of 2019. GBP also plans to invest in renewable energy projects that would complement its current fossil fuel capacity. We are also embarking on several new sustainable energy initiatives. In November 2018, the Company signed agreements through our wholly owned

subsidiary MetPower Venture Partners Holdings, Inc. with Dole Philippines, Inc. (“Dole”) to design, construct and operate integrated waste-to-energy facilities for Dole’s canneries in South Cotabato. This project will use biogas derived from processing fruit waste to generate 5.7 MW of clean energy to supply a portion of Dole’s power requirements and reduce its greenhouse gas emissions by 100 metric kilo-tons of CO2 equivalent (“ktCO2e”) per year. Commissioning of these new facilities is expected by the first quarter of 2020.

Since no competing proposals were submitted to challenge our application for a solid waste management facility in Quezon City, we expect to receive the Notice of Award for this project within the first half of 2019. Our plan is to develop a waste treatment facility that will convert up to 3,000 metric tons of municipal waste into electricity each day in a power plant with 36 MW (net) of installed capacity.

Toll RoadsOur new toll road projects in the Philippines are steadily moving ahead. At the end of February 2019, we opened Segment 10 of the NLEX Harbor Link, which is a 6 kilometer (“km”) road connecting Valenzuela City to C3 Road in Caloocan. It has since served a total of over 100,000 vehicles with an average of 7,000 vehicles per day — the bulk

of which are trucks coming from the port area. Meanwhile, construction is ongoing for the NLEX Radial Road 10, CAVITEX C5 South Link, Cebu Cordova Link Expressway and the Laguna section of the Cavite Laguna Expressway. Right-of-way acquisition is underway for other awarded projects in our pipeline, with construction due to begin thereafter. In the next five years, Metro Pacific Tollways Corporation (“MPTC”) plans to spend approximately P104.3 billion to add approximately 84 km of new toll roads to our network in the Philippines. This would increase by P25.0 billion if MPTC secures the Cavite-Tagaytay-Batangas Expressway for which Original Proponent Status has already been received. All investment plans are contingent upon satisfactory resolution of various overdue tariff adjustments on different parts of our existing toll road network.

WaterOutside of the Maynilad concession, which bills over 1,400 MLD, we have other investments in the water sector operated by MetroPac Water Investments Corporation (“MPW”) that currently bill 262 MLD. Through MPW, we are in the process of implementing new projects that will expand the installed capacity of our water investment portfolio by up to 393 MLD in the Philippines and 660 MLD in Vietnam. We are also in the process of negotiating

4

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


and awaiting final award for projects with installed capacity of 430 MLD around the Philippines. While MPW’s contribution to MPIC is currently immaterial, it is expected to become a major profit contributor when these new projects are completed.

HealthcareWe are committed to expanding and extending the service coverage of our hospitals to ensure as many Filipinos as possible have access to world-class medical care. Our healthcare group is rolling out improved patient care across our network of hospitals and establishing new service centers for local communities.

Light RailSince taking over the franchise for LRT 1 in 2015, LRMC has achieved steady improvement in service standards. The majority of its P750.0 million station improvement project has been completed and the remaining work is due to be finished by mid-2019. LRMC is currently undertaking pre-construction preparations for the LRT 1 Cavite Extension. On-site construction work will begin in 2019 but long-overdue tariff increases must ultimately be resolved to make the project financially viable.

MPIC GroupWe expect strong volume growth to continue for 2019 but additional financing costs are expected to slow profit growth considering the ambitious

investment program that we have ahead of us. It will be some time before our new road, water, energy and logistics projects are completed and able to contribute to earnings, so the timing mismatch between investment and profits may influence our near-term profit outlook. This is something we are committed to addressing.

REGULATORY MATTERSWorking closely with regulators to achieve shared goals is one of the key elements of our strategy to create value. We are encouraged by recent progress on resolving long-running differences with regulators over tariffs. In March 2019, new toll rates were approved for the NLEX to address our 2012 and 2014 pending applications, albeit on a staggered basis. The adjustment also facilitates recovery of our investment in the newly-opened NLEX Harbor Link Segment 10.

In our water business, Maynilad was awarded a 16% tariff increase – excluding inflation – to be implemented on a staggered basis following a constructive and professional Rate Rebasing exercise. The Metropolitan Waterworks and Sewerage System (“MWSS”) also approved a 5.7% inflation-linked tariff increase on January 1, 2019. Despite this good news, the Rate Rebasing exercise did not address the corporate income tax recovery issue inherited from the previous administration, which we will continue to pursue.

WE PROTECT, WE EMPOWER, WE CREATE VALUEThis sustainability report provides further details on our key management approaches to Environmental, Social and Governance aspects of our business together with key performance indicators that help quantify and evaluate our impacts in these areas. As you read on, we hope you will appreciate the progress we are making to protect, empower and create value for our stakeholders.

Thank you for your continued support. We look forward to another successful year ahead.

MANUEL V. PANGILINANChairman of the Board of Directors

JOSE MA. K. LIMPresident and Chief Executive Officer

DAVID J. NICOLExecutive Vice President and Chief Financial Officer

Leadership Message

5

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Company Profile 2018 Key Metrics Mission, Vision and ValuesMPIC is a publicly-listed investment management and holding company registered with the Philippine Securities and Exchange Commission. The Company owns and manages a diverse portfolio of infrastructure assets.

Location of headquarters: Makati, Philippines Date of incorporation: March 20, 2006 Ownership and legal form: Publicly-listed company with common shares of stock listed in and traded through the Philippine Stock Exchange Metro Pacific Holdings, Inc. (“MPHI”), a Philippine corporation, owns 41.9% of total issued common shares in MPIC. As sole holder of the voting Class A Preferred Shares, MPHI’s combined voting interest is estimated at 55.0%. MPHI’s stockholders are Enterprise Investment Holdings, Inc. (“EIH”) (60.0%), Intalink B.V. (26.7%) and First Pacific International Limited (13.3%). First Pacific Company Limited, a company incorporated in Bermuda and listed in Hong Kong, holds 40.0% equity interest in EIH. Core businesses: Investment management with investments in power distribution and generation, toll road operations, water utilities, healthcare operations, light rail, logistics and other services

OUR MISSIONWe are the leading Philippine infrastructure investment firm. We manage, transform and grow our companies while continuously seeking investment opportunities to create long-term value for our shareholders.

OUR VISIONWe have a stellar portfolio of infrastructure assets, each being the dominant player in its field. We are admired globally for excellence in investing in and transforming infrastructure. We attract, retain and develop world-class talent.

Through our companies and foundation, we significantly contribute to the economic development of the Philippines and thereby uplift the quality of life of every Filipino.

OUR VALUESTeamwork and EmpowermentWe recognize the diverse strength and abilities within the team. We enable and inspire people to achieve superior results.

Integrity and TransparencyWe adhere to the highest ethical and corporate governance standards.

EntrepreneurshipWe innovate, take risks, act quickly and decisively, and are customer focused.

Financial Discipline and AccountabilityWe employ rigorous financial analysis to arrive at sound business decisions.We are results driven and meet our commitments.

Number of employees: Parent Company: 56MPIC Group: +27,000 (through subsidiaries and associates managed by MPIC)

System wide net sales: P405.7 billion (including revenues of MERALCO, an associate of MPIC)

Total capitalization: P146.2 billion MPIC Parent Company gearing ratio: 56.0%

6

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


For more information about… • MPIC’s associates and subsidiaries, refer to Notes 10 and 39 of the Audited Consolidated Financial statements and Schedule V of MPIC’s 2018 SEC Form 17A on

the PSE Edge Portal or our own corporate website • Report Scope and Topic Boundaries, please refer to the ESG Reporting Methodology

HEALTHCARE

LIGHT RAIL

LOGISTICS

TOLL ROADS

75.1%

100%

100%

100%

29.5%

44.9%

75.9%

REGIONAL INVESTMENTS

DON MUANG

POWER

45.5%

62.4%

WATER

52.9%

100%

OTHERS

60.1%

55.0%

99.1%

Core Assets - Simplified Ownership Structure

7

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


http://edge.pse.com.ph/companyInformation/form.do?cmpy_id=604

http://www.mpic.com.ph/company-disclosures-sec-form-17-a-annual-report/

CONTRIBUTIONS TO NATION-BUILDINGThis map identifies the location of our major assets and operations in the Philippines, providing an overview of the markets we serve at national, regional and local levels.

Key Performance Indicators

4,822 GWhGBP electricity sales

44,313 GWhMERALCO electricity sales

29 millionMERALCO estimated population served

POWER

TOLL ROADS

253,577NLEX average daily vehicles

62,684SCTEX average daily vehicles

146,315CAVITEX average daily vehicles

527 MCMvolume of billed water

9.5 millionestimated population served

WATER

3,200total beds available

3,323,104number of out-patients

193,824number of in-patients

HEALTHCARE

458,021average daily ridership

181,890 total passenger trips

165,345,671total numberof riders

LIGHT RAIL

Greater Manila

Luzon

Visayas

Central Luzon

P2

P5

P6

H13

H10

H12

H14

P7

Mindanao

W4

P3

W5

W7

P4

W6

H18

H9

W2

H15

H7 H11

W8

H2

H3H6

H17

H8

H16

W3

H1

P1

W1

Greater Manila

Central Luzon

H4

T2

H5

T3

T1

R1

8

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


MERALCO is the largest electricity distribution company in the Philippines with a franchise area of 9,685 square km encompassing 36 cities and 75 municipalities, including Metro Manila, all of the provinces of Rizal, Cavite and Bulacan, and parts of the provinces of Pampanga, Batangas, Laguna and Quezon.

Cebu Energy Development Corporation (246 MW)

Panay Energy Development CorporationPEDC 1 & 2 (164 MW)PEDC 3 (150 MW)

Toledo Power Co.TPC Sangi (60 MW)TPC 1A (82 MW)TPC Carmen (40 MW)

Panay Power CorporationPPC 1 & 2 (92 MW)PPC 3 (7.5 MW)PPC 4 (5 MW)

GBH Power Resources Inc. (7.5 MW)

Sarangani Energy Corporation Phase I (105 MW)

GBP is a leading energy company in the Visayas and Mindoro Island. Our power generation portfolio consists of 11 operational power plants with 854 MW aggregate capacity.

MPTC operates and maintains 212 km of expressway across three major Philippine toll road systems. In the next five years, we will be adding a further 84 km of expressway in the Philippines at a cost of approximately P104 billion.

TOLL ROADS

POWER

T1 T2 T3NLEX (104 km) SCTEX (94 km) CAVITEX (14 km)

P1 MERALCO Franchise Area

P2

P3

P4

P5

P6

P7

Luzon

Visayas

Central Luzon

P2

P5

P6

P7

Mindanao

P3

P4

P1Central Luzon

T2

T3

T1

9

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Maynilad is the clean water and wastewater services provider for the West Zone of Greater Metro Manila. Our concession area covers 540 square km encompassing 17 cities and municipalities.

WATER

Hospitals

Primary Care Center

MPHHI is the largest hospital operator in the Philippines with a portfolio of 14 hospitals nationwide, including eight hospitals in Metro Manila and six hospitals around the country. It also operates a network of primary care clinics & cancer centers among other investments in allied healthcare services. Within the scope of this report, we focus on the operations of four leading hospitals.

HEALTHCARE

H1 Asian Hospital and Medical Center Manila Doctors HospitalH8

H3 Makati Medical Center Davao Doctors HospitalH10

H6 Our Lady of Lourdes Hospital Riverside Medical Center (“RMCI”)H13

H2 Cardinal Santos Medical Center Marikina Valley Medical CenterH9

H5 Sacred Heart Hospital St. Elizabeth Hospital (“SEHI”)H12

Central Luzon Doctors Hospital (“CLDH”)H4 Dr. Jesus C. Delgado Memorial HospitalH11

De Los Santos Medical CenterH7 West Metro Medical CenterH14

Cancer Centers

H17 Keralty Metlive

H15 Megaclinic H4 Metro CLDH H13 Metro RMCIH16 Tophealth H12 Metro SEHI H13 Lipa Medix

LRMC has a 32-year concession to operate and maintain the 20.7 km LRT 1 in Metro Manila with 20 stations. Construction is due to begin in 2019 on the 11.7 km Cavite Extension, which will add eight new stations.

R1 LRT 1

LIGHT RAIL

Putatan Treatment Plant 1 & 2W3

W1 Maynilad Concession AreaW2 La Mesa Treatment Plant 1 & 2 Carmen Bulk WaterW7

Eco-System TechnologiesW8

Metro Iloilo Bulk WaterW4

W5 Cagayan de Oro Bulk WaterW6 Laguna Full Concession

Greater Manila

Luzon

Visayas

H13

H10

H12

H14

Mindanao

W4

W5

W7

W6

H18

H9

W2

H15

H7 H11

W8

H2

H3H6

H17

H8

H16

W3

H1

W1

Greater Manila

R1

MPW focuses on water projects outside of Metro Manila with contracted volumes of 393 MLD in the Philippines.

10

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Value Creation Corporate Governance


1612 18

Sustainability Framework

PART 1

11

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


At the core of MPIC’s Sustainability Framework is our Mission to create long-term value for our stakeholders through six Core Drivers of our business that reflect the main roles, responsibilities and activities of the Parent Company: 1. Investment Selection

and Portfolio Management, 2. Strategy Management

and Leadership Selection, 3. Risk Management, 4. Good Governance

and Ethical Business Practices, 5. Employee Welfare and 6. Social Responsibility.

In accordance with our Sustainability Framework, we monitor and evaluate our operating companies’ performance with respect to four pillars of sustainability: 1. Operational Efficiency, 2. Service Excellence, 3. Engaged Employees

and Safe Workplaces, and 4. Social Responsibility.

The content of Part 2: Sustainability Impacts of this report aligns with these four pillars.

Optimized Infrastructure Development

Resource Efficiency

Clean Operations

Business Continuity

Community Engagement

Educational Support

Greening Initiatives

Disaster Relief and Response

Increasing Access to Service

Customer Experience

Commensurate Services

Service Continuity

Employee Relations and Diversity

Health and Safety

Competency and Skills Development

Equal Opportunities

Value Creation

PART 1 Sustainability Framework

12

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


The Parent Company engages directly with stakeholders through a variety of channels to enable them to make well-informed assessments and decisions about our business.

Frequent dialogue and information exchange by our operating companies with their respective stakeholder groups is also integral to MPIC’s Sustainability Framework.

Influences

Employees

Investors

Partners

Creditors

Operating Companies

Employees

Investors

Environment and Communities

Creditors

Regulators

Serv

ices

Capi

tal a

nd L

eade

rshi

p

Customers/Public

Stakeholders of MPIC and Our Operating Companies

STAKEHOLDER ENGAGEMENT

Our stakeholders are important to us. We give due consideration to their distinct interests when making long-term decisions that impact our business and its future.

Value Creation


13

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


METHODS AND OUTCOMES OF STAKEHOLDER ENGAGEMENT DIRECT STAKEHOLDERS

Employees

Key topics and concernsMethods of engagement

Investors and Creditors

Partners

· Annual performance appraisals· Bi-annual employee satisfaction surveys· Year-round training and development programs· Year-round health and wellness programs· E-mail blasts and bulletins· Annual teambuilding activity and Christmas party· Social media

· Working conditions· Safe and secure workplace· Career advancement opportunities· Work-life balance· Transparent, honest and professional leadership

· Individual meetings· Quarterly financial and operational briefings· Annual General Stockholder Meeting· Corporate disclosures· Corporate website· Investor conferences and roadshows· Site visits· Conference calls and email correspondences· Annual participation in Global sustainability indices, including Dow Jones Sustainability Index and Carbon Disclosure Project

· Updates on regulatory resolution· Capital allocation· Overall cash flow and funding strategy· Financial and operational performance· Business outlook

· Regular board committee meetings· Quarterly board meetings· Individual meetings, as necessary· Conference calls and e-mail correspondences

· Cash flow and profit performance· Representation in regular board committees and board meetings

· Updates on regulatory resolution· Business outlook

Value Creation


14

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


METHODS AND OUTCOMES OF STAKEHOLDER ENGAGEMENT STAKEHOLDERS OF OUR OPERATING COMPANIES

· Corporate websites· Customer satisfaction surveys

· Awareness campaigns

· Corporate disclosures· Social media· Forums· Partnership projects

Customers and the Public

Local Communities

· Corporate social responsibility programs· Awareness campaigns· Corporate disclosures· Corporate websites· Social media

· Environmental impact assessments

· Safe operations

· Operational efficiency· Social responsibility

· Service excellence· Value for money

Operating Companies

Government and Regulators

· Regular board meetings· Regular management committee meetings· Annual budget meetings· Conference calls and e-mail correspondences

· Alignment with expectations of Parent Company· Funding support for new projects and acquisitions· Disclosures on material transactions

· Industry-wide regulatory briefings· One-on-one discussions during project bidding processes· Participation in public consultations, as necessary· Submission of comments and related inputs on new rules and regulations

· Compliance with laws and regulations· Disclosures and standards of reporting

Value Creation

Key topics and concerns

Key topics and concerns

Methods of engagement

Methods of engagement


METHODS AND OUTCOMES OF STAKEHOLDER ENGAGEMENT DIRECT STAKEHOLDERS

For more information about… the identified material topics covered in this report, please refer to ESG Reporting Methodology

15

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


We recognize that robust corporate governance is essential for long-term value creation in our business. In 2018, the Company affirmed its material compliance with the Code of Corporate Governance mandated by the Philippine Securities and Exchange Commission, the Philippine Stock Exchange and other regulatory authorities. Beyond compliance, we are committed to demonstrating leadership in good governance and to upholding the highest standards of ethical business conduct throughout our organization.

BOARD OF DIRECTORSMPIC’s highest governance body is the Board of Directors led by the Chairman, which is composed of 15 Directors (three Executive Directors and 12 Non-Executive Directors), three of whom are Independent. It meets on average eight times a year to oversee management of the Company and ensure implementation of a robust governance framework.

In 2018, the composition of the Board included one female, and all members were over 50 years of age. In accordance with MPIC Guidelines on Search, Screening and Selection of Directors, the Board is composed of individuals with a wide spectrum of skills, experience and expertise, including leaders from each of our major operating companies. Newly

For more information about… Corporate Governance at MPIC, please refer to www.mpic.com.ph/corporate-governance

Corporate Governanceappointed members receive a comprehensive orientation program, and all members participate in ongoing professional development training.

In accordance with the Revised Manual of Corporate Governance that requires each Director to participate in at least four hours of continuing education per year, the Parent Company organizes an Annual Corporate Governance Enhancement Session (“ACGES”) accredited by the Philippine Securities and Exchange Commission. In 2018, the ACGES was attended by 18 people including 11 members of the Board and seven personnel from the Parent Company senior management team. The program included presentations by external experts on ESG Best Practices as well as the strategic benefits, risks and governance issues associated with blockchain technology.

ENTERPRISE RISK MANAGEMENTIn accordance with internationally recognized standard ISO 31000 Risk Management, MPIC’s Enterprise Risk Management (“ERM”) framework is closely linked with our corporate objectives to protect and grow our business in an ethical manner. Our Enterprise Risk Management Policy outlines the Company’s ERM objectives, which are assessed annually by the Risk Management Committee of

the MPIC Board. On a semi-annual basis, the Parent Company conducts a performance review to evaluate the status of ERM objectives for each department and operating company.

ESG STRATEGYThe Board of Directors regularly reviews the Company’s performance with respect to the six Core Drivers of our Sustainability Framework. Responsibility for execution of our strategies for sustainable development resides largely with our operating companies’ respective leadership teams. Each operating company is required to:• Assess sustainability issues that are relevant to its

business• Formulate and implement sustainability strategies

through appropriate organizational structures• Monitor and report ESG performance

Each major operating company has formed a Sustainability Working Team (“SWT”) to implement sustainability initiatives and collect and analyze relevant data. To support the operating companies, the Parent Company facilitates information sharing and harmonization of management approaches across the operating companies. The Parent Company SWT is responsible for analyzing and reporting ESG performance at group-level.


16

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index




Strategy Management and Leadership SelectionThe Parent Company provides support to the operating companies on strategy-setting, clear specification of well-defined business objectives, and appointment of strong leadership teams. Once appointed, the leadership teams of all operating companies are responsible for day-to-day operations of their businesses, and report regularly to the Parent Company. In addition to having the relevant skills and experience, every individual selected for leadership positions in our operating companies must demonstrate full commitment to upholding MPIC’s corporate values. To facilitate effective management of our investments and risk-mitigation, each major operating company is represented by a Director on the MPIC Board.

ETHICAL BUSINESS PRACTICESMPIC’s Corporate Code of Conduct (the “Code”) stipulates that all employees and officers of the Company will uphold high standards of business ethics, including specific provisions on compliance, competition and fair dealing, confidentiality of information and proper use of property, conflicts of interest and corporate opportunities, disclosure, risk management and relationships with shareholders and investors. As stipulated in the conditions of their employment or appointment, all directors, officers, and employees of MPIC commit to complying with both the letter and spirit of the Code.

In accordance with the Code, MPIC respects all applicable laws and regulations on the environment, employment (including laws prohibiting child or forced labor), health and safety, product responsibility (such as advertising and labeling), bribery, privacy, and non-discrimination. In 2018, there were no significant fines or non-monetary sanctions applied to the Company or our operating companies for non-compliance with such laws and regulations, and furthermore there were no cases brought against us through dispute resolution mechanisms.

Our Whistle-Blowing Policy encourages Parent Company employees to notify the corporate governance team of any actual or potential violations of the Code. Whistle-blowing reports are treated in a sensitive and confidential manner. If a violation is deemed to have occurred, we reserve the right to take disciplinary and preventive action, including dismissal from employment and/or filing of appropriate civil and criminal claims.

The operating companies provide ethics training to their employees in line with MPIC’s policies and guidelines. All operating companies either have in place or are currently developing their own Whistle-blowing policies. Where applicable, these policies can be viewed on the operating companies’ respective websites.

Anti-corruptionIn accordance with our Conflict of Interest Policy, Insider Trading Policy, Policy on Gifts, Entertainments and Sponsored Travel and Related Party Transaction Policy, MPIC’s commitment to anti-corruption extends to ensuring compliance with applicable laws and regulations on anti-corruption, anti-bribery and anti-money laundering, among others.

Legal, corporate governance and finance teams at the Parent Company monitor conflicts of interest across the Company and our operating companies. When negotiating agreements with joint venture partners, we insist on inclusion of standard provisions to ensure compliance with applicable laws. In our partnerships with multi-national companies, we have considered the reasonable application of anti-corruption laws in other jurisdictions, such as the Foreign Corrupt Practices Act of the United States.

The Company’s anti-corruption policies and procedures have been communicated to all members of the Board and employees of the Parent Company. All new Parent Company employees receive training on anti-corruption as part of their onboarding process. We also expect our operating companies to design and uphold a similar set of anti-corruption policies.

17

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index




We strive to add value to previously underperforming infrastructure projects by delivering improved services for customers and investing in further expansion and development with the goal of achieving near-term capital appreciation. As our infrastructure investments become optimized over the longer term, we also intend to deliver inflation-protected dividend streams for our investors.

INVESTMENT SELECTION AND PORTFOLIO MANAGEMENTRigorous processes for investment selection and portfolio management are fundamental to the growth and development of our business. While our investment decisions are necessarily geared toward what the regulators in the Philippines and other markets consider to be affordable for the public, we have due diligence processes in place for all new investments that take into consideration a broad range of economic, environmental, social and governance considerations.

We monitor and evaluate our investments to ensure full-compliance with applicable laws and regulations, including the specific terms of relevant approvals and agreements governing environmental and social impacts and community engagement. Beyond compliance, in addition to upgrading our assets through capital investment, we frequently implement operational improvements to our portfolio companies such as regularizing employment terms for workers, and strengthening health, safety and security practices for workers and the public.

Consolidated Financial HighlightsOne of the key metrics we use to evaluate financial performance is Core Income. This is the net income attributable to owners of the Company excluding one-off gains and losses. We consider this to reflect the true and fair value of our underlying earnings.

In 2018, MPIC’s Core Income rose to P15.1 billion, representing a 7% increase from 2017 and continuing the trend of steady and consistent growth that has been recorded over the past 12 years. During the year, Parent Company expenses, which includes operating costs and wages and benefits for the Parent Company amounted to P1.1 billion and interest expense amounted to P3.4 billion aggregate taxes paid to the Philippine government amounted to about P34.9 billion, representing a 21% increase from the P28.8 billion paid in 2017. MPIC’s total tax payments over the past 12 years exceed P180.0 billion (net of pass through taxes and excluding other taxes paid by operating companies outside the scope of this report).

18

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Growth In Consolidated Core Income*

15.1

20182014 201620122009 201720132010 201520112008

14.1

12.1

10.3

8.5

7.26.6

5.1

3.9

2.0

0.3

In P Billions


*Core income is measured as net income attributable to owners of the Company excluding the effects of foreign exchange and derivative gains or losses and non-recurring items (“NRI”), net of tax effect of aforementioned. NRI represent gains or losses that, through occurrence or size, are not considered usual operating items.

Consolidated Financial Highlights

In P Millions 2017 2018 % Change

MPIC share

Power 9,378 10,823 15%

Toll Roads 3,901 4,423 13%

Water 3,733 3,794 2%

Healthcare 685 771 13%

Light Rail 283 394 39%

Others (133) (642) 383%

Share of operating income 17,847 19,563 10%

Parent Company expenses (1,074) (1,133) 5%

Interest expense (2,669) (3,370) 26%

Core income 14,104 15,060 7%

Non-core expense (953) (930) -2%

Reported income 13,151 14,130 7%

In Centavos

Diluted EPS on core income 44.69 47.71 7%

Final dividend per share 7.60 7.60 0%


19

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Economic PerformanceToll Roads

MPTC recorded a 13% increase in Core Income to P4.5 billion in 2018 on the back of continuing traffic growth on all our major Philippine toll roads.

Water

Maynilad’s Core Income increased by 5% to P7.7 billion, lifted by a 3% increase in the volume of sales and a combination of basic and inflation-linked tariff increases amounting to 1.9% in April 2017, 2.8% in January 2018 and 2.7% in October 2018.

Healthcare

MPHHI reported a 15% rise in aggregate Core Income on the strength of an 8% increase in out-patient visits and an 11% growth in in-patient admissions.

Light Rail

LRMC contributed P394 million to Core Income in 2018, a 39% increase from 2017, on the back of a 5% increase in ridership following the rehabilitation of Light Rail Vehicles, higher advertising income, and the impact of an Income Tax Holiday beginning January 2018.

Power

MERALCO’s Core Income rose 11% to P22.4 billion driven by a 5% increase in energy sales and a reversal of provisions following the adoption of a new accounting standard.

Despite an 8% increase in energy sales from a year earlier, GBP’s Core Income declined 15% to P2.5 billion due to depreciation and interest costs for PEDC’s 150 MW plant from June 1, 2018 and lower margins from WESM sales due to higher direct costs of generation.

Earnings Contribution of the Operating Companies

52% 22%

21%

5%

POWER TOLL ROADS WATER HEALTHCARE AND OTHERS

55% 23%

19%

3%

P19.6 billionP17.8 billion20182017


In 2018, power, water and toll roads accounted for 97% of the Company’s Net Operating Income.

20

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Capital ExpenditureMPIC is constantly reinvesting in each of its businesses to maintain high levels of service standards and lay the groundwork for future growth. In 2018, our group-wide capital expenditure amounted to P49.8 billion, the majority of which was used by the operating companies to make major investments that are enhancing their operations and expanding their services. In addition, the Company invested a further P16.3 billion to deepen its participation in the Power sector in the Philippines and to further expand into new markets such as Indonesia for Toll Roads and Vietnam for Water.

Capital Investment HighlightsDuring the year, MPIC’s major operating companies continued to make significant investments to enhance and expand their services.

Economic Performance Toll Roads

In our toll roads business, P11.8 billion was spent on completing the construction of the NLEX Harbor Link Segment 10 (which became operational in February 2019) as well as ongoing construction of the CAVITEX C5 South Link, Cavite Laguna Expressway and Cebu Cordova Link Expressway. In July 2018, MPTC increased its interest in Nusantara from 48.3% to 53.3% on a fully-diluted basis. This step-up acquisition triggered a General Offer and Participation in Rights Issue, which further increased MPTC’s ownership in Nusantara. As of December 31, 2018, MPTC’s ownership in Nusantara is at 75.9% based on issued and outstanding capital stock.

WaterMaynilad allocated P11.9 billion on upgrading and building reservoirs and pumping stations, laying primary pipelines and constructing wastewater facilities to improve public health.

HealthcareMPHHI spent P3.8 billion on upgrading equipment and facilities that will expand capacity and enhance services for improved patient care delivery.

Light RailLRMC’s capital expenditure amounted to P6.6 billion. This was largely spent on pre-construction activities for the South Extension project, maintenance and restoration of Light Rail Vehicles; and its ongoing station improvement program, which is due to be completed within the first half of 2019.


Power MERALCO spent P13.7 billion to expand, strengthen and modernize its facilities; support growth in demand and customer connections; and ensure reliable, efficient and least cost power supply.

GBP spent P0.5 billion to maintain and upgrade its existing power plants.

21

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Sustainability ImpactsPART 2

Service Excellence Operational Efficiency

Engaged Employees and

Safe Workplaces

403424

The content of Part 2 of this report aligns with the four pillars of our Sustainability Framework: 1. Operational Efficiency 2. Service Excellence 3. Engaged Employees and Safe Workplaces 4. Social Responsibility


49

22

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


SCOPE OF ESG DATAThe following operating companies are included in the scope of ESG data of this report:

HEALTHCARE

Featured Hospitals:• Asian Hospital, Inc. – the entity

operating and managing Asian Hospital and Medical Center (“AHMC”)

• Colinas Verdes Hospital Managers Corporation – the entity operating and managing Cardinal Santos Medical Center (“CSMC”)

• Davao Doctors Hospital (Clinica Hilario), Inc. – the entity operating and managing Davao Doctors Hospital (“DDH”)

• Medical Doctors, Inc. – the entity operating and managing Makati Medical Center (“MMC”)

• Maynilad Water Services, Inc. (“Maynilad”)

WATER• Light Rail Manila Corporation (“LRMC”) - the

entity holding concession rights to operate and maintain the Light Rail Transit 1 (“LRT 1”) and construct the LRT 1 South Extension

LIGHT RAIL

POWER

• Manila Electric Company (“MERALCO”)

• Global Business Power Corporation (“GBP”)

For more information about… Report Scope and Topic Boundaries, please refer to the ESG Reporting Methodology

Featured Toll Roads: • NLEX Corporation – the entity

holding concession rights to construct, operate and maintain the North Luzon Expressway (“NLEX”) and Subic–Clark–Tarlac Expressway (“SCTEX”)

• CAVITEX Infrastructure Corporation – the entity holding concession rights for Cavite Expressway (“CAVITEX”)

TOLL ROADS

PART 2 Sustainability Impacts

23

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Efficient management of resources is an essential element of our strategy to create value from our investments by conserving inputs to production and minimizing waste.

ENTERPRISE RISK MANAGEMENT - ENVIRONMENT Due to our geographical location, MPIC’s investments are vulnerable to the effects of earthquakes, volcanic eruptions and tropical storms, including strong winds, storm surge and heavy rains giving rise to landslides and extensive flooding. On average, the Philippines is affected by 20 typhoons per year, of which four or five may be considered “strong”, resulting in human casualties and moderate to heavy destruction of property.

Some of the environmental risks incorporated into MPIC’s risk register include climate change risk, catastrophic risk, air quality and carbon emissions risk, waste and environmental pollution risk, scarcity of natural resources risk and business continuity planning risk. Significant environmental risks are discussed periodically by the leadership teams of our operating companies at their respective Board and Board Committee meetings.

In the face of uncertainty about the nature, scale and timeframe of environmental and social impacts that could be associated with climate change, MPIC adopts a precautionary approach to implementing cost-effective measures to manage and mitigate those risks in accordance with our long-term business objectives and willingness of regulators to approve the cost of these initiatives. We also support global efforts to mitigate the long-term effects of climate change and are studying how we can control emissions of GHGs.

By investing in the highest standards of infrastructure that our country can afford, such as reliable, clean and efficient coal-fired power generation, robust systems for water treatment, world-class expressways and enhanced light rail services, we expect that our portfolio of high-quality investments will continue to serve our business and our stakeholders productively for many years to come.

Subject to cost considerations reflected in relevant concession and franchise agreements, our operating companies have purchased business interruption and environmental risk insurance to mitigate the risks of destruction to life and property, and are continuously reviewing and enhancing their business continuity processes, disaster recovery programs and crisis management capabilities.

Environmental Management SystemsTo facilitate comprehensive environmental program management, our operating companies implement environmental management systems (“EMS”) certified to international standards. These systems are designed to integrate our internal processes and procedures for training of personnel and monitoring and reporting of environmental performance information in order to achieve continuous improvement.

A full list of EMS certifications received by our operating companies is available as an Annex.

This chapter provides information about our operating companies’ energy and water use and disposal of waste.

For more information about...• our identified material topics and basis of calculation for data in this section, please refer to the ESG Reporting Methodology • consolidated summary of key performance indicators (“KPIs”) for all operating companies, please refer to the ESG Data Summary



24

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


ENERGY AND EMISSIONSOur operating companies consume energy in various forms, which gives rise to Greenhouse Gas (“GHG”) emissions measured in metric kilotons of CO2 equivalent (“ktCO2e”) and other air pollutants such as nitrogen oxides (“NOx”) and sulphur oxides (“SOx”).

PowerOur approach to investment and management in the power sector focuses on developing, operating and maintaining socially and environmentally compatible energy sources and infrastructure. As part of our sustainable development strategy, we are exploring various opportunities around the country to convert waste into energy.

We recently finalized an agreement with Dole Philippines—the local subsidiary of the world’s largest producer of fresh fruits, vegetables and cut flowers—to design, construct and operate integrated waste-to-energy facilities for its canneries in South Cotabato. These facilities will generate 5.7 MW of clean energy for Dole and reduce its GHG emissions by 100 ktCO2e per year. We are also leading a consortium with Covanta Energy and Macquarie Group to develop a 36 MW (net) waste-to-energy facility from up to 3,000 metric tons of municipal waste in Quezon City.

Operational EfficiencyOverview of Our Major Energy and Emissions ImpactsOur most significant energy and emissions impacts arise in our power business, where energy consumption and GHG emissions are increasing over time at both MERALCO and GBP in line with growing energy sales.

San Buenaventura super critical

coal-fired power plant is on track for commercial

operation in 2019

MERALCO’s new

455MW


Out of GBP’s 854MW aggregate capacity in 11 power plants, four plants with combined

capacity of 642MW useCirculating Fluidized

Bed Boiler Technology

are under development through MetPower

Venture Partners (MPIC’s 100% owned

subsidiary)

2 newwaste to-energy

projects

25

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Operational EfficiencyEnergy Sales and Energy Consumption (TJ)

Other Operating Companies

Energy Sold Energy Consumed

GHG Emissions (ktCO2e)

Scope 1 Scope 2

MPIC’s other operating companies consume non-renewable liquid fuels and grid-purchased electricity. By continuing to improve energy efficiency, we aim to reduce our environmental footprint and realize cost savings.

Energy Consumption (TJ) GHG Emissions (ktCO2e)

Featured Toll Roads Maynilad Featured Hospitals LRMC

2017 2017 2017 20172018 2018 2018 2018 2017 2017 2017 20172018 2018 2018 2018

MERALCO MERALCOGBP GBP

151,567

13,750

48,900

13,87533

47,584

1,605 1,909

4,654 4,776

85

21

156,632

9,7619,460

2017 2018 2017 2018 2017 2018 2017 2018

79

493

191 178

8

79 80

3242

3136

82

529

216183

9


TJ Terajoules

26

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


MERALCOIn accordance with its franchise obligation and corporate mission to provide the best value in energy products and services, MERALCO manages the supply of electricity for distribution to its customers from a range of power sources including independent power producers, retail electricity suppliers and the WESM. In 2018, 39.1% of consolidated distributed electricity was sourced from natural gas plants, 29.9% from coal-fired plants, 0.2% from liquid fuels including bio-fuels and 30.9% from multi-fuel i.e. originating from coal, hydro, biomass and geothermal (2017: 37.5% natural gas, 34.1% coal, 1.6% liquid fuels and 26.8% multi-fuel).

MERALCO: System Loss (%)


‘18‘08 ‘10 ‘12‘09 ‘11 ‘13 ‘14 ‘15 ‘16 ‘17

4,307ktCO2e of GHG emissions avoided*

Reduced system loss leads to lower electricity bills for consumers and lessened carbon footprint

*Over the period 2008-2018

P39.6Bsaved by consumers*

>39%Natural gas

plants

Shifting towards more socially and environmentally compatible

energy sources

MERALCO continues to achieve a steady reduction in system loss as a result of major investments in substation and distribution infrastructure as well as targeted implementation of system loss management and anti-electricity pilferage programs. The level of system loss in 2018, at 5.67%, improved 0.24 percentage points compared with the year before (2017: 5.91%). The difference between actual system loss and the declining level of the regulatory cap for system loss over the period 2008-2018 has saved MERALCO’s customers in excess of P39.6 billion, which is the equivalent of 0.11 centavos per kWh, and has also avoided 4,307 ktCO2e of GHG emissions. Since June 2018, the indicative level of the regulatory cap for system loss is 7.5%, while the system loss cap level from January to May 2018 is 8.5%.

To ensure compliance with relevant environmental standards and regulations, MERALCO monitors and installs pollution abatement systems to make sure that all emissions and discharges are within the allowable limits imposed by the regulating bodies.


10

6

8

5

5.915.67

6.356.476.496.927.04

7.35

7.94

8.61

9.28

MERALCO’s Energy Mix

27

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


GBPGBP has a long-term goal to be the nation’s foremost provider of sustainable energy solutions that utilize diversified sources and innovative technologies. In partnership with other investors in its five subsidiary companies, GBP owns and operates 11 power generation facilities with a total combined installed capacity of 854 MW. Key facilities in GBP’s portfolio, namely CEDC, PEDC 1, 2, 3 and TPC1A utilize advanced circulating fluidized bed boiler technology. To ensure compliance with relevant standards and regulations, GBP monitors the concentration of CO, NOx, SOx and particulate matter in air emissions from its power plants.

GBP: Portfolio of Power Plants in Operation1


1 Through its 50% stake in Alsons Thermal Energy Corporation, through Sarangani Energy Corporation, GBP has an operational 1 X 105 MW baseload coal-fired plant in Maasim. Power plants under development in Mindanao include an additional 105 MW baseload coal-fired plant in Maasim and a 105 MW baseload coal-fired plant in Zamboanga City. Since these plants are not under the management control of GBP, they are outside the scope of this report.

2 IFO – Intermediate Fuel Oil; SFO – Special Fuel Oil; HFO – Heavy Fuel Oil

Subsidiary GPB

ownership Facilities Location Size Fuels2 AgeCebu Energy Development Corporation

52.2% CEDC Toledo City, Cebu 246 MW Coal, diesel 2011

Panay Energy Development Corporation

89.3%PEDC 1 & 2 Iloilo City, Iloilo 164 MW Coal, diesel 2011

PEDC 3 Iloilo City, Iloilo 150 MW Coal, diesel 2017

Toledo Power Co. 100%TPC Sangi Toledo City, Cebu 60 MW Coal, IFO Pre-2003

TPC1A Toledo City, Cebu 82 MW Coal, diesel 2014TPC Carmen Toledo City, Cebu 40 MW SFO, IFO Pre-2003

Panay Power Corporation 89.3%

PPC 1 & 2 Iloilo City, Iloilo 72 MW + 20 MW HFO, diesel Iloilo 1 pre-2003Iloilo 2 2005

PPC 3 Nabas, Aklan 7.5 MW HFO, diesel 2006PPC 4 New Washington, Aklan 5.0 MW HFO, diesel 2005

GBH Power Resources Inc. 100% GPRI Pinalamayan, Oriental

Mindoro 7.5 MW HFO, diesel Pre-2003


28

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


>60%of process water used

in GBP’s power plants is withdrawn from the sea

Operational EfficiencyMaynilad supplies its customers with potable water in accordance with the Philippine National Standards for Drinking Water. Raw water withdrawn by Maynilad comes from three sources: Angat Dam (93.5%), Laguna de Bay (6.4%) and active deep well (<0.1%) in 2018, 94% came from Angat Dam and 6% from Laguna de Bay (2017: 92% Angat, 8% Laguna de Bay).

711,500 757,000

872,077908,656

922,133 920,848

2016 2017 2018

Maynilad: Water Supplied and Withdrawn (ML)

Supplied Withdrawn

water and wastewater investments operated through MetroPac Water

Investments Corporation

260 MLD

WATER AND EFFLUENTSMPIC’s investments and management approaches in the water sector focus on utilizing the country’s water resources in a sustainable way to meet the needs of our customers today without undermining the ability of future generations to meet their needs too.

Overview of Our Major Water Impacts

ML Mega Liters(1ML = 1,000 cubic meters)


instance of non-compliance with laws and regulations concerning

water withdrawal and discharge by our operating companies in 2018

0

Maynilad’s water and sanitation services:

1,400 MLD in 17 cities and municipalities

in the West Zone of Metro Manila

Approximately

29

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Maynilad’s wastewater treatment system guarantees that the pollution content of all water discharged by its operations into receiving water bodies at 11 locations in its service area complies with relevant regulatory standards.

2017 2018

63,99859,490

Manila Bay

Dario Creek

Pasong Diablo River

Talayan Creek

San Juan River

San Franciso River

Maribolo Creek

Culiat Creek

Maypajo Creek

Estero De Santibañez

Maricaban Creek

41,111

6,125

2,670

2,636

2,306

1,760

1,340

729

705

108

-

41,647

5,628

2,744

4,511

2,456

1,697

1,311

777

707

87

2,433

Maynilad: Water Discharge3 (ML)

3100% of Maynilad’s water discharge is categorized as ‘Other’ water i.e. >1,000 mg/L total dissolved solids. Water discharge data for Maricaban Creek covers the period from September 24 to December 31, 2018 only.

Operational EfficiencyFor power plant operations, majority of GBP’s water withdrawal comes from seawater. Our other operating companies consume mostly freshwater from municipal supplies for cleaning and other general business purposes. MERALCO and NLEX/SCTEX also withdraw some groundwater from deep wells within their sites. The operating companies have waste water treatment systems in place to ensure all wastewater discharged from their operations complies with Water Quality and general Effluent Standards.

Other Operating Companies: Water Withdrawn (ML)

2017 2018

For more information about… the types and sources of water withdrawn by all operating companies, please refer to the ESG Data Summary

MERALCO FeaturedToll Roads

Featured Hospitals

LRMCGBP

439.4473.3

74.1128.9

765.5826.2

79.5 79.2

1,343.61,374.8


30

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Water Maynilad has direct control over the system of raw water withdrawal and treatment, potable water distribution and wastewater and sanitation services that it operates in the National Capital Region’s West Zone. It also works closely with its regulators, customers and local communities to promote responsible water management in areas outside of its direct control, such as protection of the nation’s important water sources, public health and water conservation.

Maynilad has a comprehensive Non-Revenue Water (“NRW”) Reduction Program in place to reduce the volume of “lost” water due to faulty or leaking pipes in its distribution network, theft, illegal connections and non-payment of water bills. In 2018, 5,794 km of pipes were checked for leaks and over 21,380 leaks were repaired. NRW measured at the District Metered Area level fell to 27% at the end of 2018 from 32% at the end of 2017. Since 2006, total NRW, which includes water loss from all primary pipes, has decreased from 66% to 39%.


For more information about… how water stress is impacting our water business, please refer to Maynilad’s 2018 sustainability report which will be available in June 2019

of pipes checked for leaks NRW measured at District Metered Area from 32% in 2017

total NRW from 66% in 2006

leaks repaired

5,794 km 27%

39% 21,380

Reducing the Volume of “Lost” Water

Maynilad’s sewerage and sanitation services include collection, conveyance, treatment and discharge of wastewater into receiving bodies of water. It also collects septage through desludging of domestic customer’s septic tanks for treatment and processing into biosolids that are safely disposed of by contractors at specialized composting facilities. In 2018, Maynilad achieved a 34% increase in the number of people reached by its sewerage services to over 1,950,000. This represents 20% of its water-served population (2017: 1,455,920, 15%).

In conjuction with, and subject to, regulatory approval of capital expenditure and tariffs, Maynilad’s sewerage coverage target is 100% of its concession area by 2037.

Maynilad: Wastewater Treatment Unit 2017 2018Wastewater treated and discharged ML 59,490 63,999Volume of septage desludged ML 200 137

Pollution Load AbatementBiological oxygen demand metric tons 2,093 2,540Chemical oxygen demand metric tons 3,210 3,633Total suspended solids metric tons 1,241 1,850Oil and grease metric tons 52 221


people reached by Maynilad’s sewerage services

over

1,950,000

= 100,000 people

31

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


http://www.mayniladwater.com.ph/news-dwn-sustainability.php

WASTEWaste management is an important issue for all of our operating companies. Guided by the Environmental Management Systems in place in different parts of our business, we implement waste management and waste reduction initiatives from the design phase of new infrastructure developments to operations and service delivery. As stipulated in relevant approvals and regulations, our operating companies also report on the production and disposal of waste to the Department of Environment and Natural Resources (“DENR”).

Across our operating companies, the amount and type of waste produced varies greatly, as does its potential for reuse and recycling. Where appropriate, the operating companies have appointed DENR-accredited service companies to collect and dispose of hazardous waste materials.

Operational EfficiencyOperating Companies: Waste By Type and Disposal MethodWater Stress

The Parent Company has reviewed the location of each of MPIC’s investments using the online Aqueduct Water Risk Atlas tool to identify facilities in areas at high risk of water stress. We have identified that DDH is located in an area where the ratio of total annual water withdrawal to total available annual renewable water supply (i.e. baseline water stress) is considered extremely high (>80%).

DDH consumes freshwater from the Davao City Water District municipal supplier for sanitation, cleaning and other general purposes at a rate of 4 ML/month. It operates a sewage treatment plant onsite that processes 150 cubic meter per day of effluent and monitors the quality of water discharged into the public drainage system to ensure compliance with national regulatory standards. In the event of water supply disruptions, the hospital’s satellite office purchases groundwater from a third-party to supplement its freshwater supply.

1The term “residual waste” includes waste disposed by landfill and incineration as well as waste for which disposal information is not available. For LRMC, residual waste also includes waste that is stored on-site and managed by third-party service providers.2The non-hazardous materials generated by MERALCO only account for domestic waste and exclude tree trimmings, line materials and office furnitures.


Reused/Recycled Residual1

97%654.6 MT

MERALCO 3%

0%0.7 MT

Featured Toll Roads 100%

0%105.7 MTLRMC 100%

91%407.1 MT

GBP 9%

1%683.4 MT

Featured Hospitals 99%

0%41.5 MTMaynilad 100%

Hazardous Non-Hazardous

Reused/Recycled Residual1

20%89.1 MTMERALCO2 80%

0%712.1 MT

Featured Toll Roads 100%

1%157.2 MTLRMC 99%

3%GBP 97%

1%5,524.5 MT

Featured Hospitals 99%

0%184.9 MT

Maynilad 100%

125,353.5 MT

32

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


GBP also produces hazardous waste such as waste oil, used batteries, electronic waste, medical waste, acid waste, alkali waste and resinous materials. In 2018, GBP disposed of 350 metric tons of waste and used oil and 54 metric tons of solid waste.

MayniladMaynilad practices waste segregation at source by collecting recyclable materials from its facilities at least once a month for sale to third-parties or donation to charity. Established systems and protocols are in place governing the handling and disposal of hazardous waste. Only trained personnel are allowed to handle hazardous waste and DENR-accredited third parties have been appointed to carry out proper transport, treatment and disposal.

Featured HospitalsIn 2018, the Featured Hospitals disposed of over 680 metric tons of infectious and non-infectious hazardous waste. Disposal of all hazardous hospital waste is contracted out to DENR-accredited service companies.

LRMCIn 2018, LRMC disposed of over 100 metric tons of used oil and oil contaminated materials and containers, which are classified as hazardous waste. In addition to storing some hazardous waste on-site, LRMC has contracted out the collection and treatment of hazardous waste to DENR- accredited service companies.


MERALCOIn 2018, MERALCO recycled over 600 metric tons of used oil and 36 metric tons of used lead acid batteries, which are categorized as hazardous waste. The used batteries were donated to the Balik Baterya Program organized by Ramcar, Inc. in partnership with Philippine Business for Social Progress and Philippine Recyclers Incorporated. This initiative produces new automotive and industrial batteries, with all proceeds from the sale of the new batteries going to various environmental, educational and health projects.

GBPGBP produces large quantities of non-hazardous waste in the form of coal ash as a by-product of power generation in its coal-fired power plants. In 2018, 71,400 metric tons of ash were sold to third-parties as an input for cement production and over 251,300 metric tons of ash were disposed in purpose-built ponds.

In Iloilo, where PEDC (GBP Subsidiary) owns and manages the ash pond that is located within its site boundary, a Toxicity Characteristic Leaching Procedure has been implemented and regular groundwater quality monitoring takes place to ensure compliance with the plant’s Environmental Compliance Certificate. In Toledo, ash is transferred to a transient disposal site before it is permanently disposed of by a third-party service provider with Environmental Compliance Certificate from DENR.

metric tons of used batteries donated by MERALCO to produce new automotive and industrial batteries, with proceeds funding environmental, educational and health projects


metric tons of waste ash sold by GBP to produce cement

71,400 of hazardous waste handled by DENR accredited service providers

100% 36

33

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Service Excellence

We seek to add value for customers and communities by improving the quality of our infrastructure assets and services.

Our management approaches to Service Excellence encompass integrated quality management systems and sustained investment to improve access to our services and meet or exceed contractual service standards. We also monitor customer experience to gather valuable feedback for continuous improvement in service delivery.

Overview of Our Major Service-Related Social Impacts

MERALCO Maynilad

6,038,407 6,326,6916,614,814

1,312,223 1,358,7581,407,503

458,000 riders served per day

201820172016 201820172016

Number of Billed Customers

In 2018, notable growth in service delivery was achieved by all of our operating companies.

Power In 2018, the number of customer accounts served by MERALCO increased 5% to 6.6 million, which represents over 29.0 million people.

WaterMaynilad’s water connections (or billed customers) rose 4% to 1.4 million at the end of 2018, representing an estimated 9.5 million people.


29.0M people served

6.6M billed customer

accounts

9.5M people served

1.4M billed customer

accounts

Served

3.3M outpatients

over

193,800 in-patients

over

470,000 average daily vehicle

entries for NLEX, SCTEX and CAVITEX

Average of

34

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Toll Roads Average Daily Vehicle Entries Hospital Patients Served LRT 1 Average Daily Ridership

Service Excellence

SCTEXNLEX CAVITEX

20182018 20172017 20162016 2016 2017 2018

In-patients Out-patients

2016 20162017 20172018 2018

62,684253,577

54,566

237,046

45,025

220,010 128,137139,208

146,315

409,595435,199

458,021

2,702,996

3,085,638

173,939

3,323,104

193,824160,581

Toll RoadsAverage daily vehicle entries for NLEX, SCTEX and CAVITEX rose 7% to over 470,000 in 2018. Traffic rose 7% on the NLEX and surged by 15% on the SCTEX following integration of these two roads and the opening of additional lanes in 2017. Traffic on the CAVITEX rose 5% driven by growth in residential communities in Cavite and tourism in Batangas.

HealthcareIn our hospitals, aggregate out-patient visits increased by 8% to 3.3 million and in-patient admissions rose 11% to over 193,800.

Light RailLRMC operated 181,890 train trips on LRT 1 in 2018, serving an average of 458,000 riders per day.


35

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Service Excellence

QUALITY MANAGEMENT SYSTEMSAt MPIC, we aspire to set the gold standard for service provision in the country. To help us achieve this objective, our operating companies ascribe to Quality Management System (“QMS”) certifications that standardize their technical processes and provide assurance for our customers and other stakeholders.

A full list of QMS certifications obtained by our operating companies is available as an Annex

COMMENSURATE SERVICESFor the model of public-private infrastructure provision to be sustainable, it is essential that all parties adhere fully to the contracted terms of relevant concession and franchise agreements. Our operating companies coordinate closely with regulatory authorities to share data on their performance, review contractual agreements and resolve issues as they arise. As the operational and service metrics of our operating companies clearly demonstrate, we have a strong track record of meeting and often exceeding the outputs and outcomes that we have promised to achieve.

Metrics for Reliability

Power MERALCO has consistently outperformed standards set by the ERC for system reliability and availability, power quality, system loss, time to process applications and energize new customers and call center performance.

2016 2017 2018System average interruption frequency index (times) 2.18 1.88 1.80System average interruption duration index (minutes) 225 184 197

GBP produces a reliable and cost-efficient supply of power by continually improving plant operations and business processes and systems. It uses advanced circulating fluidized bed boiler technology in its Cebu and Iloilo facilities.

GBP

* In 2018, PPC 3 underwent an extended preventive maintenance schedule

Equivalent Forced Outage Rate Equivalent Availability FactorPEDC 1 & 2 2.16% 89.96%PEDC 3 1.01% 88.82%PPC 1 & 2 0.53% 95.44%PPC 3 98.31% 46.95%*PPC 4 36.13% 94.09%GPRI 23.44% 77.52%CEDC 1.08% 95.23%TPC1 15.62% 79.18%TPC1A 1.25% 93.14%TPC Carmen 5.79% 90.85%

MERALCO

Light RailSince assuming responsibility for operations and maintenance of LRT 1 in 2015, LRMC has replaced 43.5 km of old track and is implementing a P1 billion program for restoration of Light Rail Vehicles (“LRVs”). While delayed delivery of government procured items, such as rights-of-way, new LRVs and the Common Station, may undermine service performance and enhancements on LRT 1, LRMC mitigates these risks by regularly engaging with regulators at the Department of Transportation and the Light Rail Transit Authority.

LRMC2016 2017 2018

Average train cycle time (minutes) 106.0 102.5 99.7Average train waiting time during peak hours (minutes) 4.0 3.4 3.5Average train waiting time during non-peak hours (minutes) 5.0 4.3 3.9Number of train failure incidents (minutes) 16.4 14.0 16.6Frequency of train failure incidents 43.0 11.3 5.7

3.5 minutes waiting time (peak hours)

5.7 train failure incidents recorded,

almost half of 2017’s 11.3

3.9 minutes waiting time (non-peak hours)for LRT 1 passengers


36

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


CUSTOMER EXPERIENCEOur operating companies invest time, resources and management attention into collecting, hearing and responding to the feedback of their customers.

2016 2017 2018Residential 8.19 8.42 8.23General services 8.36 8.09 8.43Local government units 8.44 8.47 8.38Businesses 8.35 8.15 8.23Corporate 8.35 8.49 8.24National government offices 8.21 8.56 8.41Overall 8.29 8.39 8.25

MERALCO: Customer Satisfaction Scores (Out of 10.00)

PowerMERALCO’s ongoing Customer Experience Transformation Program involves automation of back-end processes and platforms to deliver simple, fast, and convenient service in every customer interaction. To implement the program, MERALCO has studied global industry best practices, partnered with reputable vendors and is adopting the latest technologies. Customer satisfaction is monitored through a bi-annual study through face to face interviews aided by structured questionnaires and materials conducted by a third-party consultant.

Service Excellence

WaterUnder the banner of its Next Generation program, Maynilad has implemented a comprehensive three-year roadmap for 2016-2018 to shift its focus from revenue and billed volume to a customer-centric mindset. A key indicator of Maynilad’s relationship with its customers are customer satisfaction (“CSAT”) scores based on survey results.

Maynilad: Customer Satisfaction

Number 2016 2017 2018Service-related complaints 57,898 54,185 60,894Billing-related complaints 56,735 56,652 42,919Application requests 46,628 42,081 41,231Installation requests 37,476 30,121 28,785

Resolution Rate (within 10 days) 2016 2017 2018Service-related complaints 98.3% 99.7% 99.7%Billing-related complaints 98.6% 99.4% 99.8%Application requests 99.4% 99.9% 100.0%Installation requests 98.9% 99.9% 100.0%

CSAT Scores (Out of 4.0) 2016 2017 2018Service-related complaints 3.3 3.4 3.6Billing-related complaints 3.1 3.4 3.6Application requests 3.5 3.8 4.0 Installation requests 3.6 3.9 4.0

8.25 (out of 10)MERALCO customer satisfaction overall score

Maynilad resolution rate (within 10 days) ranges from

99.7% to 100%

Maynilad customer satisfaction scores ranges from

3.6 to 4.0 (out of 4.0)


37

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


HealthcareOur featured hospitals track levels of patient satisfaction with in-patient and out-patient services based on survey results.

Featured Hospitals: Overall “Delighted” Patients

Service Excellence

%Asian Hospital and Medical Center 89.5%Cardinal Santos Medical Center 93.6%Davao Doctors Hospital 72.5%Makati Medical Center 91.0%

SERVICE CONTINUITYDisruption to the continuity and quality of services delivered by our operating companies can have significant impacts on the safety and well-being of customers and the public at large. We recognize our responsibility to uphold regulations and voluntary codes concerning health and safety impacts of our services. In addition to implementing integrated management systems that promote and protect customer safety, we invest in appropriate technologies and foster a strong safety culture among our employees and contractors.

In 2018, the Company was not aware of any non-compliance with regulations and/or voluntary codes concerning the health and safety of services provided by our operating companies.

PowerAs the country’s longest serving provider of electricity distribution services, MERALCO maintains its record of strict compliance with relevant industry

standards by striving to mitigate all safety risks from its operations for customers and the public. Such risks may arise from power supply interruptions affecting critical community facilities, accidents involving power distribution infrastructure located near neighboring communities, and unsafe use of electricity. MERALCO’s corporate website features safety tips for home safety – including what to do in the event of a typhoon, earthquake or fire – and construction safety.

Through its Net-Metering Program, MERALCO supports its customer to install Renewable Energy (“RE”) facilities within their premises of up to 100 kW installed capacity. Excess electricity not consumed by the customers is exported to the grid with compensation from MERALCO through credits in their monthly bill. MERALCO helps to ensure the RE facilities comply with safety standards and to manage the safety, stability and sustainability of the grid. Since 2013, there has been remarkable growth in this program giving rise to 1,688 participating customers with 11.6 MW installed capacity by the end of November 2018.

Toll RoadsSafety and security protocols in our toll road operations revolve around the Traffic Control Room of each road system. Traffic management and safety personnel are on duty 24 hours a day, seven days a week to respond to disturbances or emergency situations within an average expected response time of 20 minutes. All toll roads are equipped with closed-circuit television (“CCTV”) monitoring systems and patrol crews are empowered to direct road users and clear debris in order to ensure the smooth flow of traffic. They are also authorized to conduct road accident investigations and refer cases to the Philippine National Police, as appropriate.

In the event of an accident, emergency medical protocols are in place to coordinate first-aid and paramedic care from our Emergency Medical Service teams and a network of medical aid specialists with extraction and air transport capability. Advanced Life Support-equipped ambulances are on stand-by to provide critical care for accident victims.

Customer satisfaction on our hospitals ranges around

72.5% – 93.6%


38

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Service Excellence

Featured Toll Roads: Metrics for Customer Safety

NLEX AND SCTEX 2017 2018Customers fined for over-speeding 10,786 20,113Emergencies resolved 41,627 55,550Patrol assistance average response time (minutes) 12.5 12.4Medical service average response time (minutes) 15.1 15.7Traffic incident accident response time (minutes) 13 12.7

CAVITEX 2017 2018Customers fined for over-speeding 929 286Emergencies resolved 472 330Patrol assistance average response time (minutes) 11.2 9.7Medical service average response time (minutes) 9.1 8.8Traffic incident accident response time (minutes) 9.3 18.5

WaterWhen laying new pipes or replacing aging pipes, Maynilad informs affected communities in advance and works closely with community representatives to protect public safety and restore any impacted infrastructure or property. In 2018, Maynilad laid 16 km of new pipes and replaced 256 km of aging pipes.

Average response time sustained at less than

19 minutes

HealthcareIn 2018, MMC received several notable awards from the Philippine Hospital Association, Healthcare Asia Awards Singapore and the International Hospital Federation. These include recognitions for hospital best practices in infection prevention and control, patient safety and customer service initiative of the year and merit award for exceptional quality care for patients.

AHI was also nominated for five system-wide quality improvement projects in the Hospital Management Asia (“HMA”) Awards. HMA is the most prominent professional body in the Asia Pacific region that recognizes healthcare best practices. Two of AHI’s projects entitled “Nurses at the Forefront of Patient Experience: A Multi-Modal Approach in Improving Nursing Service” and “Patients at the CORE of What We Do: Improving Patient Experience in the Nuclear Medicine Department” received recognition in the Nursing Excellence Clinical Services categories.

Light RailOperation of LRT 1 involves significant safety and security risks that were previously exacerbated by inadequate maintenance resulting in poor condition of the system prior to MPIC’s investment. To mitigate these risks, LRMC has established a Safety Management System, appointed a strong senior management team with extensive light rail operating experience and is implementing a combination of engineering and administrative controls to enhance operations and maintenance of the LRT 1 line.

Another key risk for LRMC is terrorism in its trains and stations. This risk is mitigated with a regime of strict inspection of incoming passengers using x-ray screening and K9 dogs trained in bomb detection as well as banning of wrapped packages and potentially harmful tools and chemicals.


39

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


The success of our business depends on our people continuing to deliver high quality, customer-oriented services 24 hours a day, seven days a week.

MPIC values its people and encourages all operating companies to foster a safe, enabling and engaging work environment for their employees. Our management approaches to employment align with our corporate values: We are focused on promoting employee well-being and productivity, rewarding performance and fostering a culture of inclusion, equal opportunities and mutual respect.

In accordance with local regulations and practices, regular contract staff and staff under probation are considered ‘employees.’ In contrast, contractual staff and project-based staff are classified as ‘other workers.’ Data from General Disclosure 102-8 (Information on Employees and Other Workers) has been used consistently to identify the total number of employees by headcount at the end of the reporting period when compiling the information specified in Topic Specific Disclosures for Employment, Training and Education and Diversity and Equal Opportunity.

EMPLOYMENT PROFILEAs part of our commitment to good governance, the Board, acting through its Audit Committee, oversees compliance of the Company’s policies and practices with relevant laws and regulations concerning employment and employee welfare, including the Labor Code of the Philippines and the National Health Insurance Act.

To cope with the diverse challenges of our business, we recognize the value of strengthening decision-making and making our organization more resilient by cultivating diversity of experience and expertise among our leadership. We support all employees and other workers to do their best by ensuring they are treated with dignity and respect in our workplaces. We do not tolerate harassment or unlawful discrimination of any kind, including breaches of relevant employment laws such as the Magna Carta for Women, Anti-Age Discrimination Law, Solo Parents’ Welfare Act and the Paternity Leave Act.

In accordance with our Code of Conduct, the Parent Company provides orientations on equal opportunities and non-discrimination to assist employees to understand their rights and obligations



40

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Engaged Employees and Safe WorkplacesParent Company In 2018, Parent Company employed 56 people (2017: 52). To attract and retain the right talent, we provide competitive compensation and benefits packages, including an incentive plan linked to profitability and share price performance, allowances, paid leaves, life and accident insurance and a retirement plan. The value we place on diversity and gender equality is reflected in the composition of our leadership team, with women occupying 53% of top management positions and 71% of junior management positions.

Parent Company: Employment By Gender, Age Group and Contract Type

31

21

34

22

By Gender

Female Male

2017 2018

16

28

8

20

27

9

By Age Group

Below 30 years old 30-50 years old

2017 2018

Over 50 years old

Diversity and Gender Equality

in Management

Females occupy

AllowancesPaid Leaves

Life and Accident InsuranceRetirement Plan

53% of top management positions

71% of junior management positions

Employee Compensation and Benefits


41

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Our corporate culture fosters open communication. At the Parent Company, all employees receive regular and constructive feedback on their performance using a “management by objectives” approach with formal comparative ranking of employee performance. Our employee training and engagement programs are continuously evolving to meet the needs of our growing business and expanding team to optimize employee productivity, satisfaction and well-being. We conduct an employee satisfaction survey every two years to receive feedback and implement improvements.

Parent Company: New Hires and Employee Turnover

Number of New Hires

Rate of New Hires

Number of Employee Turnover

Rate of Employee Turnover

Female 3 14% 2 14%Male 5 15% 3 6%Below 30 years old 8 40% 2 10%30 to 50 years old 0 0% 1 4%Over 50 years old 0 0% 2 22%TOTAL 8 14% 5 9%

Operating Companies In 2018, we employed 17,952 people on regular employment contracts (including probationary staff ) across all operating companies within the scope of this report. All employees enjoy the rights and responsibilities of permanent employees in accordance with Philippine employment laws.

By Gender

Female Male

MERALCO

4,4431,159

Featured Toll Roads

700712

2,0934,293

Featured Hospitals

938463

LRMC

1,642562

Maynilad

GBP

770177

17,952 regular and probationary employees

across all operating companies



42

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


By Age Group

MERALCO

1,1041,391

Featured Toll Roads

Featured Hospitals

LRMC

Maynilad

GBP

Below 30 years old 30-50 years old Over 50 years old

3,107

600 178169

827 48537

1,289 416499

2,682 2523,452

918 222261

Operating Companies: Females in Management

% Senior Managers

% Of Middle Managers

% Of All Employees

MERALCO 20% 34% 21%GBP 35% 35% 19%Featured Toll Roads 30% 37% 50%Maynilad 34% 33% 25%Featured Hospitals 59% 67% 67%LRMC 30% 30% 33%



43

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Employee turnover reflects the number of employees who leave our employment voluntarily or due to dismissal, retirement or death in service. In recognition of the costs associated with high employee turnover, such as additional recruitment and training expenses and lower productivity, our operating companies provide a range of employment benefits to help retain their staff and reward loyalty.

Operating Companies: New Hires and Rate of New Hires

Employee new hires RateMERALCO 315 6%GBP 34 4%Featured Toll Roads 404 29%Maynilad 114 5%Featured Hospitals 1,731 27%LRMC 46 3%

Employee turnover RateMERALCO 252 4%GBP 41 4%Featured Toll Roads 242 17%Maynilad 83 4%Featured Hospitals 1,468 23%LRMC 63 4%

Operating Companies: Employee Turnover and Rate of Employee Turnover

for collective bargaining. MERALCO, for example, takes a proactive and collaborative approach to maintaining open communication and meaningful engagement with its unions, including monthly coordination meetings and quarterly briefings, regular corporate events and other activities.

In 2018, 77% of MERALCO’s employees were involved in collective bargaining agreements through participation in two unions representing the interests of rank and file employees and supervisory employees, respectively. At year end, the rate of employee participation in collective bargaining at Maynilad was 72%, while at CSMC, MMC and DDH, collective bargaining agreements covered 63%, 63% and 64% of employees, respectively. There were no collective bargaining agreements in place for employees at GBP, the Featured Toll Roads, AHI or LRMC.

Workers who are not EmployeesIn 2018, our operating companies employed 1,372 workers on temporary contracts within the scope of this report. Additionally, our operating companies engage contractors (who are not directly employed by our organization) to provide important services in accordance with their business needs. Each operating company has its own policies and procedures in place to ensure that all workers’ rights are upheld in their respective workplaces.


Collective Bargaining MPIC respects and upholds the Philippine Labor Code, which is the key national legislation on industrial relations, dispute settlement and social dialogue that guarantees the rights of workers to organize unions


MERALCO - 77%Maynilad - 72%

CSMC - 63%MMC - 63%DDH - 64%

Employee Participation in collective bargaining

agreementsWe respect and uphold the rights of workers to organize unions

44

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


HealthcareIn our featured hospitals, doctors, including residents and fellows, are sometimes engaged as consultants rather than employees. Reflecting the fundamental importance of consultants to our healthcare services, they benefit from training opportunities and staff engagement and well-being initiatives in a similar way to regular employees.

Light RailLRMC has a proactive and systematic approach to managing and controlling occupational health and safety risks for its contractors. All potential vendors go through an accreditation process, including a thorough review of legal documentation, such as work permits, and on-site inspections to ensure compliance with high standards for health, safety, environment and quality (“HSEQ”). Once selected, all contractors receive a comprehensive safety orientation. Oversight for contractors’ performance is provided by a cross-functional team including project managers and representatives of LRMC’s HSEQ, Finance and Legal divisions.

TRAINING AND DEVELOPMENTIn 2018, Parent Company employees participated in training on effective workplace communication to help develop their interpersonal skills of courtesy, attentive listening, and situation-appropriate body language. We hosted a training program entitled “Lego Serious Play” with the objective of enabling organizational change and improving team synergy, and another entitled “DX Masterclass” to improve our employees’ understanding of digital transformation and help strengthen our corporate positioning on this important topic.

Our operating companies invest time and resources in training and development, including technical training, leadership training and other focused training

Operating Companies: Average Training Hours

Training hours/ Employee / YearMERALCO 33GBP 24Featured Toll Roads 19Maynilad 46Featured Hospitals 71LRMC 58

Technical Training As part of our recruitment process, new hires participate in aptitude tests and receive training to develop their technical competence and skills. Once completed, we have tailored ongoing professional development programs in place for our employees to foster a culture of learning and continual improvement at all levels of our organization.

In 2018, there were over 1,500 participants in MERALCO’s technical training courses, including its Cadet Engineering Program, New Engineers Development Program,

programs to ensure our workforce has the breadth and depth of skills and experience we need to continue to achieve our business goals in a sustainable way.

Hosted training programs for Parent Company employees to improve:- Organizational change and team synergy- Understanding of digital transformation



45

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Lineman Development Program and various advanced courses such as Professional Electrical Engineering Licensure Program, Master of Engineering in Electrical Engineering and Immersion Program for Emerging Technical Experts (Electrical Engineers).

The GBP Institute of Energy in Iloilo, for example, is the hub of GBP’s learning and development programs dedicated to promoting energy efficiency through technical education. It features the Circulating Fluidized Bed simulator to help optimize operational efficiency. By continually enhancing its employees’ technical skills, GBP is also able to lessen reliance on outsourced services.

Leadership TrainingTo ensure the long-term success of our business, we must continue to attract, retain and develop talented individuals in positions of leadership. In 2018, MERALCO’s leadership development programs for Distribution Engineers, First Line Supervisors and Middle Managers were attended by 144 participants. At GBP, tailored leadership development programs cater to the career-development needs of supervisors, managers and executives, including Basic Supervisory Skills Training, Mentoring and Coaching for Supervisors, Root Cause Analysis and Project Management.

Other TrainingAs part of our operating companies’ commitment to integrated management systems (“IMS”), they undertake extensive training to ensure employees at all levels are on board with the transformation processes that are underway. GBP, for example,

For more information about… ethics training, please see Corporate Governance

provides annual training for its IMS Committee members, IMS internal auditors and other employees on revisions and updates impacting international standards ISO 14001:2015 Environmental Management Systems and ISO 9001:2015 Quality Management Systems to enable them to apply relevant changes in their respective work areas.

It is also important for our employees to keep abreast with changes in laws and regulations that impact our business. To avoid incurring costs from penalties for non-compliance, GBP conducts regular training for its employees on relevant topics, such as WESM and Ancillary Services Procurement Agreement.

Operating Companies: Employee Training and Development

In 2018, employees from our operating companies underwent technical, leadership, and other training programs that broadened

their knowledge on:



Energy efficiencyCadet engineeringLineman developmentElectrical engineeringEffective leadershipChanges in laws and regulations

46

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


hospitals’ commitment to quality management encompasses health and safety for employees and workers. The Joint Commission International (“JCI”) Accreditation Standards for Hospitals adopted by AHI and MMC, for example, is a recognized global symbol of quality in healthcare through safe and effective care of the highest quality and value. Accredited hospitals by JCI are regularly evaluated on the organization’s commitment to performance standards such as Governance, Leadership and Direction, Access to and Continuity of Care, Prevention and Control of Infections, Medication Management and Use, Assessment and Education of Patients, Facility Management and Safety and Staff Qualifications and Education, among others.

Operating Companies: Coverage OHSMS Certified By External Parties

Operating companies Certification standard achieved

Number and percentage of employees and

workers covered

MERALCO OHSAS 18001: 2007 Occupational Health and Safety Assessment Series

5,602 (29%)

GBP 962 (5%)

NLEX Corp. 1,476 (8%)

Maynilad 2,503 (13%)

Featured Hospitals

ISO 9001:2015 Quality Management System and JCI and Accreditation Canada International (“ACI”) accreditation standards for the healthcare sector

7,170 (37%)

Total 17,713 (92%)5

Operating Companies: Occupational Health and SafetyFatalities from

work-related accidents

Occupational injuries

Lost days due to

injuriesSafe

man-hoursMERALCO - 11 456 11,396,576GBP - 6 - 2,401,186Featured Toll Roads - 6 1 3,664,536Maynilad - 6 113 2,128,571Featured Hospitals - 553 291 9,176,945LRMC - 13 1 2,976,862

OCCUPATIONAL HEALTH AND SAFETYAt MPIC, health and safety at work involves both the prevention of harm and the promotion of health and well-being. In accordance with relevant regulations and agreements, the operating companies report data on their Occupational Health and Safety (“OHS”) performance to the Department of Labor and Employment (“DOLE”).

OHS MANAGEMENT SYSTEMEach of our operating companies assume responsibility for health and safety of their employees and other workers by developing and communicating appropriate OHS policies, analyzing and controlling risks, providing training and recording and investigating health and safety incidents. They implement occupational health and safety management systems (“OHSMS”) in line with local regulatory requirements4

and internationally recognized standards with the aim of continuously improving their OHS performance.

All employees and other workers at MERALCO, GBP and Maynilad are covered by OHSMS certified by external parties to international standard OHSAS 18001: 2007 Occupational Health and Safety Assessment Series. In our healthcare business, our

A full list of OHS certifications received by our operating companies is available as an Annex. In 2019, MERALCO and LRMC have plans to achieve OHS certifications to the latest international standard, ISO 45001.


4 Please refer to DOLE Bureau of Working Conditions homepage for a list of requirements.5 The remaining 8% of our operating companies’ employees and workers within the scope of this report are covered by OHSMS at CAVITEX and LRMC. These operating companies are working towards third party certification of their OHSMS in the future.


47

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


OHSMS HIGHLIGHTS 2018Key features of OHSMS Illustrative highlights from our Operating Companies

Analyze OHS Hazards and Select Controls GBP’s power plants implement Hazard Zoning and Personal Protective Equipment mapping. All high risk activities are governed by a Permit-To-Work system.

Establish Responsibility and Accountability MERALCO’s Safety Board works relentlessly to promote a culture of safety among all employees and workers. The Organizational Safety and Resiliency Office is responsible for ensuring that tasks involving significant hazards are properly assessed and addressed.

LRMC implements a safety intervention program known as ‘management by walking around’ through which senior managers interact with subordinates to supervise their work while they are performing it. In this way, senior managers develop a better understanding of OHS issues and concerns.

Ensure Competence and Provide Training Every GBP employee has his/her corresponding safety training requirement with reference to the established Safety Training Matrix. Also, compliance to mandatory trainings are monitored accordingly. In 2018, GBP conducted 23 safety-related trainings covering Confined Space Entry, First Aid Training and Job Safety Analysis among other topics.

LRMC’s online HSE induction program for new hires includes Incident Injury Free Workshop and 5 in 1 Technical Safety Training for Maintenance Personnel, Defensive Driving Training, Fire Truck Training, and Personal Protective Equipment Orientation.

Establish OHS Communication and Participation • including workers, contractors and other parties

Our operating companies have formal joint management–worker health and safety committees in place.

Safety requirements have been incorporated into GBP’s process for contractor selection and evaluation and all contractors receive on-site Safety orientation training.

Control OHS Documents LRMC has implemented Assai document control and management software for its OHS records in line with industry best-practice.

Promotion of worker health Our operating companies provide employees and workers with access to non-occupational medical and healthcare services through the national Social Security System, the national health insurance program – PhilHealth –as well as other supplementary medical benefits, including Annual Physical Evaluation (“APE”) and Health Maintenance Organization (“HMO”).

Maynilad evaluates workers’ exposure to various physical and chemical hazards and implements proper control measures in its workplaces. Employees at high risk of hearing loss, for example, receive free medical screening for early disease and prevention. All employees benefit from in-house health initiatives such as gym facilities and group exercises. Employees and their dependents enjoy access to emergency, out-patient and in-patient services as well as annual vaccination and oral health programs.

Establish an OHS Emergency Management Process

As part of its proactive Emergency Prevention and Response system, each of GBP’s power plants have been fitted with fire detection alarm and suppression systems that are regularly inspected, tested and maintained. Emergency response procedures have been established and are the subject of regular training and drills.

MERALCO’s Business Continuity Management team is responsible for strategy and governance of company-wide business continuity plans with the objective of enhancing safety and organizational resilience.

Investigate Incidents and Take Remedial Action

Under GBP’s Behavioral-Based Safety program, a Safety Observation System monitors unsafe acts and conditions, including good practices, which are being reported by employees and other workers to ensure that appropriate corrective actions and preventive measures are put in place.



48

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Social ResponsibilityGiving back to the people we serve is an integral part of our corporate culture.

All of our operating companies implement local community engagement initiatives and investment programs to suit their specific circumstances in key areas such as poverty alleviation, educational support, environmental protection, and disaster response and relief.

ENTERPRISE RISK MANAGEMENT – SOCIAL RISKSMPIC’s investments facilitate social development of local communities by delivering essential services, such as power, transport, water, and healthcare. Our Enterprise Risk Management framework governs how we collaborate with local stakeholders to address the needs and vulnerabilities of specific groups, such as communities who are relocated to make way for major infrastructure developments.

Power

MERALCOUnder its Energizing Partnerships Program, MERALCO partners with local government units from the municipalities of Binangonan, Cardona, Morong, Pililia, Tanay and Teresa in the Province of Rizal to enhance disaster preparedness and implement safety initiatives and community electrification. When developing its electrical capital projection, MERALCO also participates in strategic utility planning with each municipality to take account of their regional development plans and power requirements.

MERALCO’s Household and School Electrification Program works through its service centers and local government agencies to support low-income households meet the initial financial and documentary requirements for electrification. MERALCO also

extends the benefits of electrification to people outside of its service area in remote, mountain and island villages by installing photo-voltaic technology in households and schools.

Under its Orange Tag Program, MERALCO’s Power Lab has partnered with 21 appliance brands to provide helpful technical information so that customers can evaluate the costs of using various electrical appliances. So far, 225 Orange Tags have been issued. These are visible to customers on the products of participating appliance brands in appliance stores and on MERALCO’s website. MERALCO also develops and disseminates learning resources on energy, energy conservation and sustainable energy solutions to support educators incorporate learning on these important topics into the K to 12 curriculum of the Department of Education.

WaterMaynilad’s pro-poor water services scheme assists informal settlers to overcome the legal, financial and technical barriers that prevent them from becoming legitimate, billed customers so they can gain access to affordable drinking water and reliable sanitation that is crucial for environmental protection and safeguarding public health. In order to address broader social issues around water, sanitation and hygiene, Maynilad also works closely with schools and other key customers to ensure proper provision of drinking fountains, bidets and signage advocating good hygiene practices.

Maynilad is a spearheading a proactive and inclusive approach to rehabilitation of Manila’s major water sources. It has teamed-up with the Pasig River Rehabilitation Commission and the Manila Bay SUNSET Partnership Program, Inc. to implement multi-stakeholder clean-up initiatives for Pasig River and Manila Bay. To combat the root causes of environmental degradation, Maynilad also works with marginalized


49

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Social Responsibilitycommunities such as indigenous people living within the Ipo Watershed to help them develop sustainable sources of income.

Toll RoadsNLEX/SCTEX has a dedicated Right-of-Way Task Force that works closely with the Department of Public Works and Highways to manage and implement right-of-way acquisition for new projects. The task force is responsible for liaising with all stakeholders who are affected by road construction, including land owners, Local Government Units and the National Housing Authority, to facilitate resettlement and/ or relocation of Informal Settler Families. It is also responsible for proper evaluation, management and settlement of unpaid claims.

To help mitigate social risks associated with unsafe road use, NLEX/SCTEX and CAVITEX have implemented numerous road safety campaigns to educate drivers and other road users. NLEX/SCTEX offers a free eye care program for drivers and hosts a summer activity program to reduce vandalism by keeping local youth occupied during the school holiday period. CAVITEX works closely with local communities to promote environmental protection and restoration in the Las Piñas-Parañaque Critical Habitat and Ecotourism Area situated along the Las Piñas-Parañaque carriageway, which is the last significant natural mangrove habitat south of Metro Manila.

HealthcareOur hospitals have subsidized patient programs designed to extend healthcare services to marginalized patients experiencing financial constraints while

providing suitable clinical cases for new healthcare initiatives and existing training programs.

In 2018, MMC provided free consultation and discounted hospital services with an estimated value of P27 million to more than 29,000 beneficiaries. CSMC’s Medical Subsidy Program, valued at P17.9 million, had over 1,000 beneficiaries while its Medical Assistance Program provided support amounting to P5.2 million for up to 400 indigent patients to receive in-patient or out-patient care. CSMC also operates an off-site clinic partnership with the Roman Catholic Archdiocese of Manila – San Felipe Vicariate that provides free medical consultations for the local community.

Light RailIn accordance with its comprehensive Environmental and Social Systems Policy and Environmental and Social Management Systems Manual, LRMC works closely with its regulator, LRTA, on the relocation of informal settlers displaced by construction of the LRT-1 Cavite Expansion project.

Since 2016, LRMC has supported the Live for the Rivers Movement Coalition to help address pollution in the Estero de Tripa de Gallina. Under the DENR’s Adopt an Estero program, LRMC helps to implement a comprehensive program of environmental improvement along a 0.5 km portion of the river running through its depot in Pasay City. LRMC has recently adopted a new slogan – ‘Better Communities, Better Every Day’. In line with this philosophy, it has launched a new initiative to collect polyethylene terephthalate waste from local communities for recycling into special tactile tiles that will be used in LRT 1 stations.


50

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Social ResponsibilityCOMMUNITY ENGAGEMENT HIGHLIGHTS 2018

Household Electrification Program

6,960 household energized158 volunteers provided 545 volunteer-hours

Program cost: P20.4 million

School Electrification Program

19 off-grid schools energized benefitting 4,973 students and 153 teachers10 volunteers provided 452 volunteer-hours


Energy Education Program1,101 participating schools reaching more than 680,000 students1,128 energy kits distributed


See Clearly. Drive Safely

Free eye checks, glasses and follow-up treatment>230 drivers of public vehicles (e.g. buses and jeepneys) regularly using the NLEX and SCTEX

Program cost: P200,000

Lingkod EskwelaDrink-wash areas installed in 50 of the most populous and resource-deficient public schools in the West Zone area


Sining IpoLivelihood support for 30 Dumagat craftsmen from the Ipo WatershedSining Ipo products showcased in > 7 trade and livelihood fairs


Ginhawash500 bidets and 20 drinking fountains installed in one hospital, one health center and female restrooms in 17 high schools


Maynilad/LRMC: GinhawashPublic drinking fountains installed in LRT-1 Stations

Program cost: P456,000 (2016-2018)

Daloy Dunong14,300 elementary and high school students recruited and trained as “Water Warriors” to become ambassadors for good hygiene, waste management and water conservation


Youth Summer Program

Basketball tournament for 220+ youth (aged 13-15) from local communities Selected players participated in a 3-day clinic


Environmental ProgramCarriageway beautification and tree-plantingCoastal cleanups and pollution control Mangrove habitat appreciation tours



Maynilad

CAVITEX

NLEX/SCTEXMERALCO

51

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Social ResponsibilityCOMMUNITY INVESTMENTCOMMUNITY ENGAGEMENT HIGHLIGHTS 2018

Medical Missions

12 missions offered surgery and medical consultations for optical, OB/GYN and dental conditions, among others

>5200 patients

117 volunteer-hours


Live for the Rivers Coalition

Annual river clean-up

Livelihood programs for local communities

Community engagement through seminars and competitions

Program cost: P6.5 million (2016-2018)

Ikot Manila

Walking tours of Manila using LRT1

Revitalization of Liwasang Bonifacio (a historical part of Manila) with clean-ups, landscaping and Christmas lighting


Metro Pacific Investments FoundationMetro Pacific Investments Foundation (“MPIF”) is a constituent of the Corporate Social Responsibility Council of the Manuel V. Pangilinan (“MVP”) group of companies, known as “Tulong Kapatid”. It has a Board of Trustees and is collectively managed by MVP group representatives with the objective of complementing MPIC’s investment and management strategy in physical infrastructure and public services by helping to alleviate poverty, provide high-quality educational opportunities for children and promote conservation of our natural environment.


MMC LRMC

52

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Shore It Up!Our Shore It Up environmental program was established in 2007.

Aim• To work with municipalities on cleaning up,

restoring and protecting valuable ecosystems in coastal areas so they can fulfil their potential for eco-tourism

MPIF Key Programs (Total Program Cost of P12.1 million)


12,171 volunteers participated in a nationwide coastal and underwater clean-up in Cordova, Cebu, Alaminos City, Pangasinan, Mabini, Batangas, Puerto Galera, Oriental Mindoro and Surigao Del Norte

800 volunteers helped to plant 300 mangrove seedlings in Alaminos

9 Marine Protection, Inspection and Conservation Guardians received open water scuba training

Mano AmigaMANO AMIGA is a non-profit organization established in 2008 that has developed into a highly impactful social development program with support from MPIF.

Aim• To provide quality education for children

from low-income families

18 MPIC volunteers hosted a summer program for the students

Key activities• Environmental rescue, restoration and revival• Community engagement through Mangrove

Propagation and Information Centers in Alaminos and Del Carmen (with another one under development in Cordova)

• Capacity building for partnership organizations such as scuba diving scholarship program and similar initiatives

Key Activities• Annual P1 million scholarship grant for 30

scholars from the Mano Amiga Academy—the same 30 scholars that have been supported since Kindergarten and are currently in Grade 8

• Annual P500,000 teacher training and benefits support including training sessions four times a year


53

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


“Puno Ng Pag-Ibig”Translated as “Tree of Love” or “Filled with Love”— is the annual upcycling competition we hold each December to remind our Parent Company employees about the importance of reducing waste while having fun and working together to produce the best upcycled Christmas tree from office materials. In 2018, we donated our upcycled Christmas trees to beneficiary organizations, including Saint Rita Orphanage and the Philippine Children’s Medical Center, together with gifts and snacks so that the children could celebrate the festive season.


Brigada EskwelaSeveral of our operating companies support the Department of Education’s annual maintenance week known as “Brigada Eskwela” to help public schools prepare for the opening of the new school year.

CSMCCleaning, repairs and painting of 25 classrooms at San Juan Elementary School


MayniladRefurbishing of classrooms and upgrading of water and sanitation facilities in 150 schools Hydration stations provided for all volunteers, including parents, teachers and local officials 10 desktop sets donated to Las Piñas National High School-Gatchalian Annex


CAVITEXMulti-year support for Binakayan National High School, including refurbishment and construction of classroom and support for the school’s façade beautification project


GBPSupport for 13 adopted elementary public schools (3 in Aklan, 3 in Cebu, 6 in Iloilo and one in Mindoro), including supply of materials and labor


NLEXCleaning and painting of classrooms in 5 schools

Program cost: P145,000+


54

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Social ResponsibilityOther Community Investment HighlightsGBP’s community investment initiatives for health and social development work closely with local communities to build capacity for basic services. Under its an adopt-a-health center program, GBP’s power plants supply over-the-counter medicines and basic medical equipment to health centers in local communities. Through its social development program, GBP provides materials and labor for local agencies to implement small infrastructure projects, such as repairing a community center, constructing a health center, paving a roadway or establishing materials recovery facilities that will promote recycling.

GBP: Adopt-a-Health Center41,200 patients from local communities in Aklan (2,400), Cebu (13,000), Iloilo (25,500) and Mindoro (300)


GBP: Social Development Program Materials and labour supplied for 18 small infrastructure projects in Aklan (3), Cebu (4) and, Iloilo (11)

Program cost: P 4.7 million


We operate in a country that is prone to natural disasters. In addition to building and maintaining suitable infrastructure and implementing strong integrated management systems that bolster the resilience of our services to extreme weather events, we also support relief efforts in affected communities. Maynilad, for example, provides portable water filters to ensure that flood victims have access to safe drinking water. Its Green Badge Program employs seamstresses from the under-privileged community of STM-Riverview to produce essential items such as clothes and tent canopies from upcycled materials for donation to disaster survivors.

Maynilad: Green Badge Uniform upcycling and livelihood program Provided extra income of P500-P2,000 monthly to women-seamstresses of STM-Riverview. The project produces drawstring bags (used as tokens for various engagements); tent canopies made from old tarpaulins and debadged uniforms which are then donated to disaster survivors and charities.


55

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


ESG Data Summary


6257

Methodology

56

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


REPORT SCOPE AND TOPIC BOUNDARIES

Changes in scopeThere have been no significant changes to the scope of this report compared with MPIC’s previous sustainability reports other than inclusion of DDH to the list of Featured Hospitals. This table summarizes our shareholding of corporate entities in scope and out of scope of ESG data collection and disclosures for this report:

In Scope Out of ScopePower 46% Manila Electric Company

62% Global Business Power Corporation

100% MetPower Venture Partners Holdings, Inc.*100% Metropac Clean Energy Holdings Corporation*31% Alsons Thermal Energy Corp.

Toll Roads Featured Toll Road Operating Companies

Other Toll Road Operating companies

76% NLEX Corporation(North Luzon Expressway and Subic-Clark Tarlac Expressway)100% CAVITEX Infrastructure Corporation (Cavite Expressway)

100% Metro Pacific Tollways Corporation (holding company) Philippines 100% MPCALA Holdings Inc.*100% Cebu Cordova Link Expressway Corporation*66% Easytrip Services Corporation

Regional Investments29% Don Muang Tollway Public Company Limited (Thailand)45% CII Bridges & Roads Investment Joint Stock Company (Vietnam)76% PT Nusantara (Indonesia) Infrastructure

Water 53% Maynilad Water Services, Inc.

53% Philippine Hydro, Inc.53% Amayi Water Solutions Inc.100% MetroPac Water Investments Corporation* and its subsidiaries and associates


* Start-up or early development phase

For more information about… • our materiality assessment for defining report content, please refer to our

2017 Sustainability Report (page 23) and 2016 Sustainability Report (pages 20 - 21)

• the location of relevant disclosures corresponding to our identified material topics, please refer to GRI Content Index

This report has been prepared in accordance with the Global Reporting Initiative’s GRI Standards: Core Option. The content of this report follows relevant GRI Standards with some explanations and supporting notes set out in this section and the GRI Content Index <hyperlink>.

IDENTIFIED MATERIAL TOPICSFor the purposes of this report, ‘materiality’ refers to significant economic, environmental and social impacts of our business that have substantive influence on the assessments and decisions of MPIC’s stakeholders. The content of this report reflects the same list of material topics as our previous report for 2017.

Methodology

57

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


http://www.mpic.com.ph/corporate-governance-sustainability-report/

http://www.mpic.com.ph/corporate-governance-sustainability-report/

Boundaries of reportingThis table summarizes the reporting boundaries for material topics within our organization:

Parent Company MERALCO GBP

Featured Toll Roads Maynilad

Featured Hospitals LRMC

GRI 201 Economic PerformanceGRI 203 Indirect Economic ImpactsGRI 205 Anti-corruptionGRI 419 Socioeconomic ComplianceGRI 307 Environmental ComplianceGRI 302 EnergyGRI 303 Water and EffluentsGRI 305 EmissionsGRI 306 Effluents and WasteGRI 416 Customer Health and SafetyGRI 401 EmploymentGRI 403 Occupational Health and SafetyGRI 404 Training and EducationGRI 405 Diversity and Equal OpportunityGRI 413 Local Communities

ESG Reporting MethodologyIn Scope Out of Scope

Healthcare Featured Hospitals Other Hospitals / Healthcare Facilities51% Asian Hospital and Medical Center60% Colinas Verdes Hospital Managers Corporation (Cardinal Santos Medical Center)30% Davao Doctors Hospital (Clinica Hilario Inc.)20% Medical Doctors, Inc. (Makati Medical Center)

60% Metro Pacific Hospital Holdings, Inc. (holding company)12% Manila Doctors Hospital31% Central Luzon Doctors Hospital (“CLDH”)31% Sacred Heart Hospital35% De Los Santos Medical Center39% Dr. Jesus C. Delgado Memorial Hospital47% Riverside Medical Center (“RMCI”)48% St. Elizabeth Hospital (“SEHI”)56% Marikina Valley Medical Center60% Our Lady of Lourdes Hospital60% West Metro Medical Center

Clinics15% The Megaclinic Inc.24% Tophealth Medical Clinics Inc.30% Keralty Manila Inc.

Laboratory24% Medi Linx Laboratory

Cancer Center30% Lipa Medix31% Metro CLDH 54% Metro RMCI48% Metro SEHI

Light Rail 55% Light Rail Manila Corporation

Logistics 100% MetroPac Logistics Company, Inc. and its subsidaries (holding company)100% MetroPac Movers Inc.*

Other Services

20% AF Payments25% Indra Philippines Inc.38% Landco Pacific Corporation

Methodology

58

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


System LossFor MERALCO, System Loss experienced in kWh is equal to the Total Net System input (“NSI”) less Total Output, where Total Output is the sum of Energy Sales and Company Use. System Loss expressed as a percentage is System Loss in kWh divided by NSI.

Energy consumption within the organizationWe have not included any energy purchased or sold to meet service level agreements as it is not energy consumed within the organization. We make the following restatement of data from our 2017 Sustainability Report for MERALCO and GBP to reflect this change:

ESG Reporting MethodologyBasis of ReportingEconomic Performance has been reported on a consolidated basis for the group in accordance with financial reporting requirements. With the exception of Economic Performance, ESG data has been reported on a 100% basis; i.e KPIs have not been adjusted to reflect MPIC’s shareholdings in various operating companies.

EnergyDirect energy consumption has been reported in TJ (i.e ‘000 Gigajoules) and calculated by multiplying the mass of fuel by corresponding heating values. Indirect energy consumption has also been reported in Tera Joules, with each GWh of electricity representing 3.6 TJ.

Heating values applied in 2018Fuel (GJ/ tonne) SourceDiesel 43.38 IEA Energy Statistics Manual

2004 Gasoline 44.75Diesel (Consumed in GBP powerplants) 42.93 GBP (Certificate of Quality)Heavy Fuel Oil (Consumed in GBP powerplants) 42.90

Special Fuel Oil (Consumed in GBP powerplants) Range: 40.20-41.11

GBP (Certificate of Sampling and Analyis of

Suppliers Source)Coal (Consumed in GBP powerplants) Range: 16.25-18.56

2017 2018Unit MERALCO GBP MERALCO GBP

Total Energy Consumption within the organization = a + b + c + d – e

TJ 9,459.7 48,900.2 9,761.0 47,584.3

a. Non-renewable fuels consumed TJ 110.5 46,595.2 112.1 47,545.7

b. Renewables consumed TJ – 0.3 – 0.5c. Electricity purchased for consumption TJ 216.0 1.3 220.4 38.1

d. Self-generated electricity which is not consumed

TJ – 2,303.4** – **

e. Electricity Sold TJ (9,133.2)* – (9,428.5)* –

*Represents System Loss**Represents self-generated electricity consumed for house power (no data available for 2018)

Methodology

59

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


https://ec.europa.eu/eurostat/ramon/statmanuals/files/Energy_statistics_manual_2004_EN.pdf

ESG Reporting MethodologyEMISSIONSIn general, greenhouse gases in our calculations include CO2, CH4 and N2O expressed in carbon dioxide equivalents (“CO2e”). Global Warming Potential (“GWP”) rates for all greenhouse gases have been sourced from IPCC assessment reports. Direct emissions for GRI reporting are the same as Scope 1 emissions under the Greenhouse Gas Protocol and indirect emissions for GRI reporting are the same as Scope 2 emissions under the Greenhouse Gas Protocol.

GHG emission factors applied in 2018Emission factors for

fuels (tCO2e/liter)Emission factors for

electricity (kgCO2e/kWh) SourceScope 1: Diesel 0.002685659 DENRScope 1: Gasoline 0.002280113 DENRScope 1: Heavy Fuel Oil (GBP only) 0.002948981 DENRScope 1: Special Fuel Oil (GBP only) 0.002948981 DENRScope 2: Purchased electricity – National Grid

0.7122 2015-2017 National Grid

Emission Factor from DOE

For MERALCO, Scope 1 GHG emissions include those from combustion of non-renewable fuels and fugitive emissions of HFCS & SFG. Scope 2 GHG emissions include emissions associated with system loss.

For GBP, reported Scope 1 GHG emissions include those from combustion of non-renewable fuels. Scope 2 GHG emissions reflect purchased electricity for consumption within the organization.

WaterTo evaluate the relevance of “water stress” on our business, we have reviewed the location of each of MPIC’s investments using the online Aqueduct Water Risk Atlas Tool

For Maynilad, water withdrawal is the sum of water withdrawn from the following three sources:

2017* 2018Angat (ML) 862,347.10 861,204.47Laguna (ML) 58,717.12 59,239.14Active deep well (ML) 1068.38 404.47Total 922,132.60 920,848.08*This is a restatement of data from our 2017 Sustainability report in which withdrawal of water from Active Deep well was not reported.

For GBP, the reported value of water withdrawal reflects only process water. Additionally, five of GBP’s power plants withdrew seawater and groundwater for cooling as summarized below:Item Water type 2017* 2018

Process Water (m3)

Cooling Water (m3)

Process water (m3)

Cooling water (m3)

PEDC 1 & 2 Seawater 80,300 358,147,373 89,346 347,164,132PEDC 3 Seawater 40,150 297,711,450 128,290 311,098,714PPC 1 & 2 Groundwater 18,287 5,075PPC 3 Groundwater 402 553PPC4 Groundwater 110 127GPRI Groundwater 225 226CEDC Seawater 799,387 520,381,180 636,182 504,985,930CEDC Groundwater 157,756TPC 1A Groundwater 56,758 165,739,444 60,355 192,716,496TPC Sangi Groundwater 283,934 165,617,481 263,536 183,084,140TPC Carmen Surface water 63,875 33,031TOTAL 1,343,613 1,507,596,928 1,374,762 1,539,049,412

*This is a restatement of data from our 2017 Sustainability report, in which no distinction was made between water withdrawn for process water and cooling water

Methodology

60

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


https://www.doe.gov.ph/electric-power/2015-2017-national-grid-emission-factor-ngef



http://www.wri.org/applications/maps/aqueduct-atlas/#x=121.84&y=15.86&s=ws!20!28!c&t=waterrisk&w=def&g=0&i=BWS-16!WSV-4!SV-2!HFO-4!DRO-4!STOR-8!GW-8!WRI-4!ECOS-2!MC-4!WCG-8!ECOV-2!&tr=ind-1!prj-1&l=7&b=terrain&m=group

http://www.wri.org/applications/maps/aqueduct-atlas/#x=121.84&y=15.86&s=ws!20!28!c&t=waterrisk&w=def&g=0&i=BWS-16!WSV-4!SV-2!HFO-4!DRO-4!STOR-8!GW-8!WRI-4!ECOS-2!MC-4!WCG-8!ECOV-2!&tr=ind-1!prj-1&l=7&b=terrain&m=group

WasteThe waste data reported by our operating companies has either been collected directly through their internal monitoring systems or provided by third-parties employed to collect and dispose of the waste on their behalf. The term ‘residual waste’ includes waste disposed by landfill and incineration as well as waste for which disposal information is not available. For LRMC, residual waste also includes waste that is stored on site and managed by third-party service providers.

Employment, Training and Education, Diversity and Equal OpportunityIn accordance, with local regulations and practices, regular contract staff and staff under probation are considered ‘employees’. In contrast, contractual staff and project-based staff are classified as ‘other workers’. Data from General Disclosure 102-8 (Information on Employees and Other Workers) has been used consistently to identify the total number of employees by headcount at the end of the reporting period when compiling the information specified in Topic Specific Disclosures for Employment, Training and Education and Diversity and Equal Opportunity.

In this report, rates of new hires and employee turnover have been calculated by dividing the number of new hires or leavers (for each category of employee) by the total headcount of employees (for each category of employee) e.g new hires who are male/total headcount of male employees* 100. Average training hours (for each category of employee) divided by the total headcount (for each category of employee) e.g training hours for employees who are male/total headcount of male employees.


Methodology

61

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Power Featured Toll Roads Water Featured Hospitals Light RailEnergy Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Total Energy Consumption within the organization Terajoule 9,761.00 47,584.30 69.7 12.5 529.2 66.1 34.6 29.2 86.1 183a. Non-renewable fuels consumed TJ 112.1 47,545.70 52.8 6.4 56.2 1.2 0.5 0.1 0.9 2.8b. Renewables consumed TJ - 0.5 0.2 - - - - - 0.1 -c. Electricity purchased for consumption TJ 220.4 38.1 16.7 6.2 473 64.9 34.1 29.1 85 180.3d. Self-generated electricity which is not consumed TJ - - - - - - - - - -e. Electricity sold TJ -9,428.50 - - - - - - - - -

Total Scope 1 & Scope 2 GHG Emissions ktCO2e 1,929.60 4,783.10 7.2 1.7 80.2 12.9 6.8 5.8 16.9 35.9GHG Emission - Scope 1 ktCO2e 20.7 4,775.60 3.9 0.5 4.8 0.1 - - 0.1 0.2GHG Emission - Scope 2 ktCO2e 1,908.90 7.5 3.3 1.2 75.4 12.8 6.7 5.8 16.8 35.7

Water Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Total water withdrawn by type Megaliter 473.3 1,374.80 81.3 47.7 920,848.10 205.3 252.9 47.7 320.3 79.2a. Freshwater ML 473.3 520.9 81.3 47.7 920,848.10 205.3 252.9 47.7 320.3 79.2b. ‘Other’ water (>1,000 mg/L total dissolved solids) ML - 853.8 - - - - - - - -Total water withdrawn by source ML 473.3 1,374.80 81.3 47.7 920,848.10 205.3 252.9 47.7 320.3 79.2a. Surface water ML - 33 - - 920,443.60 - - - - -b. Groundwater ML 9.3 487.6 69.8 - 404.5 - - - - -c. Seawater ML - 853.8 - - - - - - - -d. Produced water ML - - - - - - - - - -e. Third-party (including municipal supply) ML 464 0.3 11.5 47.7 - 205.3 252.9 47.7 320.3 79.2

Waste Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Total hazardous waste Metric tons 654.6 407.1 0.7 - 41.5 222.4 145.6 22 293.4 105,723.10a. Reused and recycled Metric tons 636.3 369.8 - - - 4.1 - - - -b. Residual (including incinerated, landfilled, stored on-site and other)

Metric tons 18.3 37.3 0.7 - 41.5 218.3 145.6 22 293.4 105,723.10

Total non-hazardous waste Metric tons 89.1 125,353.5 712.1 - 184.9 332.1 4,324.00 80.5 788 157.2a. Reused and recycled Metric tons 17.6 4,152.50 - - - - - - 76.5 1.1b. Residual (including incinerated, landfilled, stored on-site and other)

Metric tons 71.5 121,201.0 712.1 - 184.9 332.1 4,324.00 80.5 711.5 156.1

Employee Breakdown Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Total Workers (including Employees and Others) Number 5,602 962 1,476 160 2,503 1,521 1,364 1,108 3,177 1,451Total Employees Number 5,602 947 1,318 94 2,204 1,466 1,032 1,093 2,795 1,401Employees by type Numbera. Full-time Number 5,602 947 1,318 94 2,204 1,466 1,032 1,093 2,780 1,401b. Part-time Number - - - - - - - - 15 -

ESG Data Summary

Methodology

62

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Power Featured Toll Roads Water Featured Hospitals Light RailEmployees by gender Numbera. Female Number 1,159 177 666 46 562 979 683 732 1,899 463b. Male Number 4,443 770 652 48 1,642 487 349 361 896 938Employee by gender, by employee typea. Full-time, female Number 1,159 177 666 46 562 979 683 732 1,889 463b. Full-time, male Number 4,443 770 652 48 1,642 487 349 361 891 938c. Part-time, female Number - - - - - - - - 10 -d. Part-time, male Number - - - - - - - - 5 -Employees by age Numbera. Under 16 years old Number - - - - - - - - - -b. 16 - 29 years old Number 1,391 169 507 30 499 805 512 547 1,588 261c. 30 to 50 years old Number 3,107 600 772 55 1,289 618 468 506 1,090 918d. Over 50 years old Number 1,104 178 39 9 416 43 52 40 117 222Employees by grade Numbera. Senior managers Number 637 26 30 7 71 13 6 7 20 20b. Middle managers Number 668 49 43 25 342 67 45 52 63 70c. Supervisors Number - 395 145 18 380 203 61 47 599 275d. Rank & File Number 4,297 477 1,100 44 1,411 1,183 920 987 2,113 1,036Employee Participation in CBAs % 77% 0% 0% 0% 72% 0% 63% 64% 63% 0%

Employee New Hires Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Employee New Hires Number 315 34 349 55 114 467 324 258 682 46Number of New Hires by gendera. Female Number 101 9 216 22 35 349 212 173 476 14b. Male Number 214 25 133 33 79 118 112 85 206 32Number of New Hires by agea. Below 30 years old Number 288 19 310 39 78 383 213 188 536 22b. 30 to 50 years old Number 27 15 37 16 34 84 110 69 143 22c. Over 50 years old Number - - 2 - 2 - 1 1 3 2Rate of Employee New Hires % 6% 4% 26% 59% 5% 32% 31% 24% 24% 3%Rate of New Hires by gendera. Female % 9% 5% 32% 48% 6% 36% 31% 24% 25% 3%b. Male % 5% 3% 20% 69% 5% 24% 32% 24% 23% 3%Rate of New Hires by agea. Below 30 years old % 21% 11% 61% 130% 16% 48% 42% 34% 34% 8%b. 30 to 50 years old % 1% 3% 5% 29% 3% 14% 24% 14% 13% 2%c. Over 50 years old % 0% 0% 5% 0% 0% 0% 2% 3% 3% 1%

Employee Turnover Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Employee Turnover Number 252 41 223 19 83 419 324 210 515 63Turnover by gendera. Female Number 60 9 140 8 31 298 207 152 374 14b. Male Number 192 32 83 11 52 121 117 58 141 49

ESG Data Summary

Methodology

63

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Power Featured Toll Roads Water Featured Hospitals Light RailTurnover by agea. Below 30 years old Number 47 3 182 10 44 285 196 128 381 20b. 30 to 50 years old Number 78 16 35 7 37 131 116 75 127 34c. Over 50 years old Number 127 22 6 2 2 3 12 7 7 9Employee Rate of Turnover % 4% 4% 17% 20% 4% 29% 31% 19% 18% 4%Rate of Turnover by gendera. Female % 5% 5% 21% 17% 6% 30% 30% 21% 20% 3%b. Male % 4% 4% 13% 23% 3% 25% 34% 16% 16% 5%Rate of Turnover by agea. Below 30 years old % 3% 2% 36% 33% 9% 35% 38% 23% 24% 8%b. 30 to 50 years old % 3% 3% 5% 13% 3% 21% 25% 15% 12% 4%c. Over 50 years old % 12% 12% 15% 22% 0% 7% 23% 18% 6% 4%

Employee Training Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Hours of Training/Employee/ Year Hours 33 24 17 44 46 203 16 48 31 58Average Hours of Training by gendera. Female Hours 28 24 7 39 51 223 16 50 32 64b. Male Hours 34 24 28 49 44 164 17 44 30 56Average Hours of Training by gradea. Senior managers Hours 29 14 7 67 32 22 66 77 23b. Middle managers Hours 25 47 15 54 77 36 26 55 74 120c. Supervisors Hours 27 34 54 128 307 19 108 37 185d. Rank & File Hours 13 20 16 41 16 197 15 45 28 21

Employee Occupational Health & Safety Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Workers covered by OHSAS management systemEmployees % 100% 100% 100% 100% 100% 100% 0% 100% 100% 100%Other workers % 0% 0% 100% 100% 0% 100% 0% 100% 100% 100%Total fatal cases from work accidents Number - - - - - - - - - -Total occupational injuries Number 11 6 6 - 6 - 18 24 511 13Total lost working days due to injuries Number 456 - 1 - 113 - - 2 289 1Total no. of occupational diseases Number 140 - - - 686 - - - 18 -No. hours of health & safety training provided to employees

Hours 12,520 7,408 471 110 13,227 23,456 112 1 37,352 4,518

Safe Man-Hours Hours 11,396,576 2,401,186 3,657,608 6,928 2,128,571 3,207,601 2,179,584 1,926,080 1,863,680 2,976,862Number of safety drills Number 131 84 4 2 55 802 11 1 4 13

Service Coverage Unit MERALCO GBP NLEX / SCTEX CAVITEX Maynilad AHI CSMC DDH MMC LRMC

Customers served in the year Number 6,614,814 31 115,435,363 53,405,560 1,407,503 249,706 322,211 436,178 997,406 165,345,671Customers served each day Number 6,614,814 31 316,261 146,315 1,407,503 684 883 1,195 2,733 458,021

ESG Data Summary

Methodology

64

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Integrated Management System CertificationsENVIRONMENTAL MANAGEMENT SYSTEMS

Certified Entities Certification Standard and Scope ValidityMERALCO ISO 14001:2015 Environmental Management System

Balintawak Sector, Valenzuela Sector, Plaridel Sector, Manila Sector, Rizal Sector, Pasig Sector, Dasmariñas Sector, San Pablo Sector, Santa Rosa Sector and Sub-Transmission Services

Valid until May 2020

GBP Subsidiaries• Cebu Energy Development Corporation• Panay Energy Development Corporation• Toledo Power Co.• Panay Power Corporation• GBH Power Resources Inc.

ISO 14001:2015 Environmental Management System

Power Generation

Valid until April 2020

NLEX/SCTEX ISO 14001:2015 Environmental Management

Design, development, construction, operations and maintenance of toll roads managed by NLEX Corporation

Valid until November 2021

Maynilad (Company-wide) ISO 14001:2015 Environmental Management Valid until July 2021LRMC (LRT 1) ISO 14001:2015 Environmental Management Valid until August 2020

Annex

65

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index



Certified Entities Certification Standard and Scope ValidityMERALCO ISO 9001:2015 Quality Management System

Supply Chain Management, Procurement, Materials Management, Strategic Sourcing and Vendor Management, Supply Chain & Logistics Process & Standards

The Networks Department is undergoing ISO 9001:2015 certification for their power distribution contract in New Clark City; certification expected in Q4 2019.

Valid until June 2021

GBP ISO 9001:2015 Quality Management System

Provision of policy direction and support services to the GBP-owned power plants


GBP subsidiaries• Cebu Energy Development Corporation• Panay Energy Development Corporation• Toledo Power Co.• Panay Power Corporation• GBH Power Resources Inc.

ISO 9001:2015 Quality Management System

Power generation


NLEX/SCTEX ISO 9001:2015 Quality Management System

Design, development, construction, operations and maintenance of toll roads managed by NLEX Corporation

Valid until November 2021

Maynilad (Company-wide) ISO 9001:2015 Quality Management System Valid until July 2021AHI Joint Commission International, Gold Seal of Approval* 1st accreditation December 9,

2013; 2nd accreditation September 2016

CSMC ISO 9001:2015 Quality Management System

Provision of health care services

Valid until July 2021

DDH ACI Gold Standard* August 31, 2017MMC JCI Gold Seal of Approval* November 19, 2017LRMC ISO 9001:2015 Quality Management System

Operations and maintenance of LRT 1

Valid until August 2020

QUALITY MANAGEMENT SYSTEMS

*ACI is a Canada-based independent non-governmental organization that operates globally as an affiliate of Health Standards Organization. JCI is a US-based accreditation body that monitors the quality of medical services in more than 90 countries.

Annex

66

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index



Certified Entities Certification Standard and Scope ValidityMERALCO OHSAS 18001:2007 Occupational Health and Safety Assessment Series

Balintawak Sector, Valenzuela Sector, Plaridel Sector, Manila Sector, Rizal Sector, Pasig Sector, Parañaque Sector, Dasmariñas Sector, San Pablo Sector, Santa Rosa Sector, and Sub-Transmission Services

Valid until May 2020

GBP subsidiaries• Cebu Energy Development Corporation• Panay Energy Development Corporation• Toledo Power Co.• Panay Power Corporation• GBH Power Resources Inc.

OHSAS 18001:2007 Occupational Health and Safety Assessment Series Valid until April 2020

NLEX/SCTEX OHSAS 18001:2007 Occupational Health and Safety Assessment Series Valid until November 2021Maynilad OHSAS 18001:2007 Occupational Health and Safety Assessment Series Valid until July 2021

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEMS

ADDITIONAL INFORMATION

Aside from ISO 14001, ISO 9001 and OHSAS 18001, Maynilad is certified to the following additional standards:• ISO 14064:2006 Greenhouse gases• ISO 50001:2011 Energy Management System• ISO/IEC 17025:2005 Laboratory Quality Management System• ISO/IEC 20000-1:2011 IT Service Management System• ISO 22301:2012 Business Continuity Management Systems

NLEX Corp is preparing to be certified to ISO 39001:2012 Road Traffic Safety Management System by 2020 and ISO 50001:2018 Energy Management System by 2021

CAVITEX plans to apply for an Integrated Management System Certification (ISO 9001, ISO 14001 and ISO 45001) in the future when the Cavite – Laguna Expressway is operational

LRMC plans to apply for ISO 45001 by 2020

Annex

67

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


GRI Content IndexGRI 102: GENERAL DISCLOSURES 2016

GRI Indicator Description References and Remarks

Organizational Profile

102-1 Name of the organization Company Profile (p.6)102-2 Activities, brands, products, and

services102-3 Location of headquarters102-4 Location of operations102-5 Ownership and legal form102-6 Markets served102-7 Scale of the organization102-8 Information on employees and other

workersCompany Profile (p.6)

Employment Profile (p.40 – 45)

ESG Data Summary (p.62 – 64)102-9 Supply chain The supply chain for MPIC’s major operating

companies consists primarily of contractors and materials suppliers for design, construction and maintenance of infrastructure projects.

102-10 Significant changes to the organization and its supply chain

There were none.

102-11 Precautionary Principle or approach Enterprise Risk Management – Environment (p.24)

102-12 External initiatives Annex: Integrated Management System Certifications (p.65 – 67)

102-13 Memberships of associations Not applicable for Parent Company. The major operating companies have memberships in their respective industries’ associations.

Strategy and Analysis

102-14 Statement from the most senior decision-maker of the organization

Leadership Message (p.2 – p.5)

Ethics and Integrity

102-16 Values, principles, standards and norms of behavior

Company Profile (p.6)

Governance 102-18 Governance structure Corporate Governance (p.16 – 17)

GRI Indicator Description References and Remarks

Stakeholder Engagement

102-40 List of stakeholder groups Value Creation (p.12 – 15)102-41 Collective bargaining agreements Collective Bargaining (p.44)102-42 Identifying and selecting stakeholders Value Creation (p.12 – 15)

2016 Sustainability Report (p. 16 - 19)102-43 Approach to stakeholder engagement Value Creation (p.12 – 15)

2016 Sustainability Report (p. 16 - 19)102-44 Key topics and concerns raised Value Creation (p.12 – 15)

2016 Sustainability Report (p. 16 - 19)Reporting practice

102-45 Entities included in the consolidated financial statements

Notes 10 and 39 of MPIC’s 2018 Audited Financial Statement Schedule V of MPIC’s 2018 SEC Form 17-A (http://edge.pse.com.ph)

102-46 Defining report content and topic boundaries.

ESG Reporting Methodology (p.57 – 61)

2017 Sustainability Report (p. 23); 2016 Sustainability Report (p. 20- 21)

102-47 List of material topics This Content Index102-48 Restatements of information ESG Reporting Methodology (p.57 – 61)

Restatements have been made with regard to 302-1 Energy consumption within the organization and 303-3 Water withdrawal.

102-49 Changes in reporting ESG Reporting Methodology (p.57 – 61)102-50 Reporting period About this Report (p.1)102-51 Date of most recent report102-52 Reporting cycle102-53 Contact point for questions regarding

the report102-54 Claims of reporting in accordance with

GRI Standards 102-56 External assurance Independent Assurance Statement (p.72 - 74 )

Annex

68

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


GRI Content IndexGRI 103: MANAGEMENT APPROACH 2016 & MATERIAL TOPICS (ECONOMIC)

GRI Indicator Description References and remarks

GRI 201: Economic Performance 2016

103-1 Explanation of the material topic and its boundary

Economic Performance (p.18 – 21)

ESG Reporting Methodology (p.57 – 61)103-2 The management approach and its

componentsEconomic Performance (p.18 – 21)

103-3 Evaluation of the management approach

201-1 Direct economic value generated and distributed


GRI 203:

Indirect Economic Impacts 2016




componentsCompany Profile (p.6)

Economic Performance (p.18 – 21)103-3 Evaluation of the management

approach203-1 Infrastructure investments and services

supportedCompany Profile (p.6)

Economic Performance (p.18 – 21)GRI 205:

Anti-corruption 2016


Corporate Governance (p.16 – 17)

103-2 The management approach and its components



205-2 Communication and training on anti-corruption policies and procedures


GRI 103: MANAGEMENT APPROACH 2016 & MATERIAL TOPICS (ENVIRONMENTAL)


GRI 302:

Energy 2016


Energy & Emissions (p.25 – 28)


componentsEnterprise Risk Management – Environment (p.24)


Annex: Integrated Management System Certifications (p.65 – 67)


302-1 Energy consumption within the organization


ESG Data Summary (p.62 – 64)GRI 303:

Water & Effluents 2018


Water and Effluents (p.29 – 32)






303-1 Interactions with water as a shared resource


303-2 Management of water discharge-related impacts


303-3 Water withdrawal Water and Effluents (p.29 – 32)


Emissions 2016








305-1 Direct (Scope 1) GHG emissions Energy & Emissions (p.25 – 28)

ESG Data Summary (p.62 – 64)305-2 Indirect (Scope 2) GHG emissions Energy & Emissions (p.25 – 28)

ESG Data Summary (p.62 – 64)

Annex

69

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


GRI Content Index


GRI 306:

Effluents and Waste 2016


Waste (p.32 – 33)


componentsCorporate Governance (p.16 – 17)

Enterprise Risk Management – Environment (p.24)

Waste (p.32 – 33)



306-2 Waste by type and disposal method Waste (p.32 – 33)


Environmental Compliance 2016





Enterprise Risk Management – Environment (p.24)



307-1 Non-compliance with environmental laws and regulations


GRI 103: MANAGEMENT APPROACH 2016 & MATERIAL TOPICS (SOCIAL)


GRI 401:

Employment 2016




componentsEmployment Profile (p.40 – 45)


401-1 New employee hires and employee turnover



Occupational Health and Safety 2018


Occupational Health and Safety (p.47 – 48)


componentsOccupational Health and Safety (p.47 – 48)


403-1 Occupational health & safety management system



Omission 403-4: Our operating companies do have formal joint management–worker health and safety committees in place but we were not able to collect information on their responsibilities, meeting frequency and decision-making authority for this year’s report. We will report this information in the future.

403-2 Hazard identification, risk assessment, and incident investigation

403-3 Occupational health services403-4 Worker participation, consultation,

and communication on occupational health and safety

403-5 Worker training on occupational health and safety

403-6 Promotion of worker health

403-8 Workers covered by an occupational health & safety management system



Annex

70

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


GRI Content Index


GRI 404:

Training and Education 2016


Traning & Development (p.45 – 46)


componentsTraning & Development (p.45 – 46)


404-1 Average hours of training per year per employee

Traning & Development (p.45 – 46)


Diversity and Equal Opportunity 2016


Board of Directors (p.16)



componentsBoard of Directors (p.16)

Employment Profile (p.40 – 45)103-3 Evaluation of the management

approach405-1 Diversity of governance bodies and

employeesBoard of Directors (p.16)


ESG Data Summary (p.62 – 64)


GRI 413:

Local Communities 2016


Social Responsibility (p.49 – 55)


componentsSocial Responsibility (p.49 – 55)


413-1 Operations with local community engagement, impact assessments, and development programs

Social Responsibility (p.49 – 55)

GRI 416:

Customer Health and Safety 2018


Service Continuity (p.38 – 39)


componentsQuality Management Systems (p.36)




416-1 Assessment of the health and safety impacts of product and service categories


GRI 419:

Socioeconomic Compliance 2016





Annex: Integrated Management System Certifications (p.65 – 67)103-3 Evaluation of the management

approach419-1 Non-compliance with laws and

regulations in the social and economic area


Annex

71

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Independent Assurance StatementINTRODUCTION Metro Pacific Investment Corporation (“MPIC” Securities and Exchange Commission (SEC) Identification Number: CS200604494) commissioned DNV GL Business Assurance Philippines Branch (“DNV GL”), part of DNV GL Group to undertake independent assurance of sustainability/non-financial disclosures in MPIC’s 2018 Sustainability Report (the “Report”) for the year ended 31st December 2018.

This assurance engagement was planned and carried out using AccountAbility’s AA1000 Assurance Standard 2008 (“AA1000AS”) and DNV GL’s assurance methodology VeriSustainTM1 (Version 5.0) which is based on our professional experience, international assurance best practice including the International Standard on Assurance Engagement 3000 (“ISAE3000”) Revised2 and the Global Reporting Initiative (“GRI”) Sustainability Reporting Guidelines - Principles for Defining Report Content and Quality.

SCOPE AND BOUNDARY OF ASSURANCE

The scope of assurance included a review of sustainability disclosures and performance data from MPIC and its operating companies including Manila Electric Company (“MERALCO”), Global Business Power Corporation (“GBPC”), Maynilad Water Services, Inc. (“Maynilad”), featured toll roads of Metro Pacific Tollways Corporation (“MPTC”), featured hospitals of Metro Pacific Hospital Holdings, Inc. (“MPHHI”) and Light Rail Manila Corporation (“LRMC”).

The boundary of the Report for identified material topics and topic-specific disclosures is set out in the sections: ‘About this report’, ‘Materiality’ and ‘Environment Social and Governance (“ESG”) reporting methodology’. We evaluated the Report for adherence to the reporting principles for defining the sustainability report content as set forth in the GRI Standards along with AA1000AS. We understand that the reported financial data and information are based on MPIC’s Annual Report3 and financial statements which are subject to a separate independent audit process. The review of financial data taken from the audited financial statements is not within the scope of our work.

RESPONSIBILITIES OF MPIC AND OF THE ASSURANCE PROVIDERThe Board of MPIC has sole responsibility for the integrity of the Report. This responsibility includes: designing, implementing and maintaining internal controls over collection, analysis, aggregation and preparation of data, fair presentation of the information, and ensuring that data is free from material misstatement including maintaining the integrity of their website. DNV GL expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on this Assurance Statement.

In performing our assurance work, our responsibility is solely towards the management of MPIC in accordance with our agreed terms of reference agreed, however our statement represents our independent opinion and is intended to enlighten MPIC’s stakeholders. DNV GL’s responsibility is to form an independent conclusion. In doing so, we carried out the sampling procedures required for the evidence for Type 2, Moderate level of

1 The VeriSustain protocol is available on request from www.dnvgl.com. 2 Assurance Engagements other than Audits or Reviews of Historical Financial Information3 Posted on 15 April 2019, http://edge.pse.com.ph/

assurance based on AA1000AS i.e. DNV GL is responsible for planning and performing the engagement to obtain assurance about whether the selected information is free from material misstatement and meets the disclosure requirements.

BASIS OF OUR OPINIONA multi-disciplinary team of sustainability and assurance specialists performed the work at MPIC’s headquarters in Makati City and its business units in the Philippines, from April to May 2019 to test the reliability of qualitative and quantitative disclosures including the reported data and the robustness of the data aggregation process including related management approach information for identified material topics.

As part of the verification, we planned and performed our work based on DNV GL’s Risk Based Approach to obtain the evidence that we considered necessary to provide a basis for our assurance opinion. Within the framework of our assessment, we performed the following procedures and other activities:

• conducted interviews with data owners from MPIC and its subsidiaries to understand the key processes and controls for reporting business units’ performance data;

• assessed the robustness of the underlying data and information flow and controls; • performed data analysis using a risk-based approach and materiality;• challenged the sustainability-related disclosures, statements and claims;• performed limited testing on a sampling basis of the selected information at MPIC’s Headquarters and

operating companies’ headquarters and to check that the selected environmental and social data had been properly measured, gathered, recorded, collated and reported; and,

• visited headquarters of operating companies including GBPC and its power plant, Panay Energy Development Corporation, Workshop of LRMC, Asian Hospital and Medical Center (a subsidiary of MPHHI) and Maynilad.

We also performed the following activities to assess the adherence to reporting principles:• interviewed the senior managers and representatives responsible for sustainability management and made

enquiries to determine their understanding of stakeholder engagement and materiality; and,• reviewed the current sustainability issues that could affect MPIC and could be of interest to stakeholders of

MPIC.

CONCLUSIONBased on the verification undertaken, nothing has come to our attention that causes us to believe that the reported disclosures i.e. sustainability performance data and information disclosed in the Report does not give a fair representation of MPIC’s related sustainability performance. Without affecting our assurance opinion, we also provide the following observations;AA1000 Accountability Standard (2008)

InclusivityThe participation of stakeholders in developing and achieving an accountable and strategic response to Sustainability.

Annex

72

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


http://www.dnvgl.com

Independent Assurance StatementMPIC and the operating companies engage with the stakeholders through various channels to identify sustainability concerns and expectations. The Report identifies key stakeholders through a process of stakeholder identification. Stakeholder concerns are well responded to within the Report through explanations of the value delivered to the key stakeholders. The outcomes from the stakeholder engagement exercise are used as an input for the materiality determination process, strategic planning and in understanding areas for allocating the resources towards enhancing the value of its identified capitals. Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Inclusivity.

MaterialityThe process of determining the issues that is most relevant to an organization and its stakeholders.

The Report describes the process adopted by MPIC for materiality assessment and identifying material issues. The process considered inputs from operating companies including concerns of key stakeholders and impacts of material issues on key stakeholders at group level. Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Materiality.

ResponsivenessThe extent to which an organization responds to stakeholder issues

MPIC and its operating companies has established formal and informal processes to respond to stakeholder concerns and feedback. The Report fairly brings out MPIC’s strategies and management approaches related to identified key material topics including key policies, management systems and governance mechanisms. Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Responsiveness.

Specific Evaluation of the Information on Sustainability Performance

We consider both the methodology and process adopted by MPIC for gathering information on its sustainability performance was quite appropriate, and the qualitative and quantitative data included in the Report was found to be identifiable and traceable: Personnel responsible could demonstrate the origin and interpretation of the data and its reliability. Nothing has come to our attention to suggest that the Report does not present a faithful description of the reported non-financial disclosures for the reporting period.

ReliabilityThe accuracy and comparability of information presented in the report, as well as the quality of underlying data management systems.

The Report has disclosed MPIC’s non-financial performance using selected GRI Topic Specific Standards for the identified qualitative and quantitative disclosures. The majority of data and information verified at the Head Office and sampled sites were found to be accurate. Some of the data inaccuracies identified during

the verification process were found to be attributable to transcription, interpretation and aggregation errors. These identified errors were communicated and subsequently corrections were made to the reported data and information. Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Reliability.

Additional principles as per DNV GL VeriSustain

CompletenessHow much of all the information that has been identified as material to the organisation and its stakeholders is reported.

The Report has fairly brought out the disclosure requirements of selected GRI Topic Specific Standards i.e. strategy, management approach, monitoring systems and sustainability performance indicators considering the scope and boundary of its reporting covering MPIC’s operations in the Philippines. Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Completeness.

NeutralityThe extent to which a report provides a balanced account of an organization’s performance, delivered in a neutral tone.

The Report discloses non-financial issues, challenges and performance in a fairly neutral tone, in terms of content and presentation, and had also considered the sustainability context and external environment in bringing out its non-financial disclosures during the reporting period. Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Neutrality.

LIMITATIONOur assurance relies on the premise that the data and information provided by MPIC to us as part of our review procedures have been provided in good faith and free from misstatements. Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk that errors or irregularities, possibly significant, may not have been detected. The engagement excludes the sustainability management, performance and reporting practices of MPIC’s suppliers, contractors and any third-parties mentioned in the Report. The company position statements, statements about the management approach, and case studies and examples are excluded from the scope of our work. We did not interview external stakeholders as part of this assurance engagement.

The reported disclosures related to Economic performance are based on financial disclosures and data, which were cross-checked with internal documents and the audited consolidated financial statements.

As per our agreed scope of engagement, limited depth of evidence gathering including inquiry and analytical procedures and limited sampling were applied as per DNV GL VeriSustain. The data for Environmental and

Annex

73

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


Independent Assurance StatementSocial performance are verified with random samples and the aggregated data at the head office level are used for the verification.

STATEMENT OF COMPETENCE AND INDEPENDENCE DNV GL applies its own management standards and compliance policies for quality control, in accordance with ISO IEC 17021:2015 - Conformity Assessment Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

We have complied with the DNV GL Code of Conduct4 during the assurance engagement and maintain independence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability assurance professionals. DNV GL was not involved in the preparation of any statements or data included in the Report except for this Assurance Statement. DNV GL maintains complete impartiality toward stakeholders interviewed during the assurance process. DNV GL did not provide any services to MPIC and its subsidiaries in the scope of assurance during 2018 that could compromise the independence or impartiality of our work.

4 The DNV GL Code of Conduct is available from DNV GL website (www.dnvgl.com)

For and on behalf of DNV GL Business Assurance AS Philippines Branch

Vadakepatth Nandkumar

Lead Verifier,

Head - Sustainability

Operations,

DNV GL – Business Assurance

India Private Limited.

Heng Chwin Mak

Operations Manager –

South East Asia

DNV GL Technology Centre.

Singapore 118227

Prasun Kundu

Assurance Reviewer,

DNV GL – Business Assurance India Private Limited.

22nd May 2019, Philippines

-----------------------------------------------------------------------------------------------------------------------------------DNV GL Business Assurance AS Philippines Branch is part of DNV GL – Business Assurance, a global provider of certification, verification, assessment and training services, helping customers to build sustainable business performance. www.dnvgl.com

Annex

74

About this Report

Leadership Message

Company Profile

2018 Key Metrics


Core Assets



Value Creation





Service Excellence



Methodology


ESG Data Summary

Annex


GRI Content Index


