I. Financial Strategies

For the past 180 years, Ayala Corporation has been recognized as the oldest and biggest

operating conglomerate in the Philippines. What kept the company running is its excellent

management and unbeatable strategies. Ayala Corporation started as a simple partnership

business, but now it does not only own a single business but several businesses in various sectors

of the industry.

Developing financial strategies is an essential part of a company’s strategic planning. A

company must understand how to plan and manage its finances in order keep its operations on

track. Ayala Corporation’s financial strategy focuses on maintaining an aggressive investment

portfolio.

For the past 5 years, Ayala Corporation has been undertaking several investment projects

in order to achieve the company’s target.

a. Intended

The continuous growth in earnings of Ayala Corp. has sustained the growth of its

subsidiaries. This growth has led the company on pursuing opportunities for its real estate,

banking, telecommunications, electronics manufacturing, transportation, infrastructure, and IT

and BPO subsidiaries. Throughout the years, Ayala has been expanding its operations by

investing in several kinds of businesses. Through these investments, the company continuous to

increase the welfare of its shareholders and improve the overall performance of the company.

b. Deliberate

In 2010, Ayala Corporation announced the expansion of the company’s buyback program

from P5 billion to P10 billion. The additional P5 billion was allocated for the company’s health,

technology, and engineering programs.

In 2012, Ayala expanded its banking services by purchasing a total of P25.6 billion worth

of BPI shares from DBS Bank Ltd.

In 2013, Ayala bought P140 million worth of shares of Manila Water Co. from

Mitsubishi Corporation to expand its water utility subsidiary.

In 2014, according to the annual report of Ayala Corporation, the company is allocating

P185 billion in capital expenditure to finance its expansion plans and new investments. The

company is setting a P20 billion net income target by 2016, which they plan to achieve before

the said target year.

In 2015, Ayala’s subsidiary, AC Education, Inc. acquired a 60% stake in University of

Nueva Caceres (UNC) in Naga, Camarines Sur to expand its education subsidiary. In the same

year, Ayala also acquired a 50% stake in the Generika group for the expansion of its medical

subsidiary.

c. Realized

In 2011, South Luzon Thermal Energy Corporation, established by AC Energy Holdings,

Inc. partnered with Trans-Asia Oil and Energy Development Corporation to invest on the

construction and operation of a 135-megawatt Circulating Fluidized Bed (CFB) power plant. The

two signed a P9-billion project loan facility through Banco de Oro Unibank, Security Bank

Corporation, and Rizal Commercial Banking Corporation. The facility was expected to be

functional by 2014.

In the same year, Ayala also signed a partnership with Phinma Corporation, to build a

thermal power plant in Calaca, Batangas.

In 2012, Ayala Corporation entered into a sale and purchase agreement to acquire the

GNPower Mariveles 600-megawatt power plant. In this year, the company with AboitizLand

participated in the public bidding of the Mactan-Cebu International Airport Passenger Terminal

under the Philippine government’s Public Private Partnership Program.

In 2013, Ayala Corporation also invested to develop wind projects in Ilocos Norte by

signing an agreement with UPC Philippines Wind Holdco I B. V., and Philippine Investment

Alliance for Infrastructure.

In 2014, Ayala invested P2.2 billion in constructing Daang Hari-SLEX Connector Road,

which was opened to the motorists last July 24, 2015. They are expecting to acquire the returns

for this project on the next 30 years.