Dearest fellow shareholders,
As steward of the finance, risk, and sustainability functions of our Company, and with the guidance and support of our Chairman and CEO, I have had the distinct opportunity to help steer our path towards an all-inclusive approach to business growth.

Our view on Sustainability is a holistic and end-to-end approach which covers Economic, Environmental, Social and Governance (EESG) aspects. This is in line with our mindful pursuit of marrying profit and purpose with our valued stakeholders at the center of value creation.

We improved our overall Sustainability Framework by building a new Sustainability Playbook with fundamentals defined in four key areas (governance, reporting, and disclosure, strategy and performance, stakeholder engagement) and with the EESG approach as the foundation.

Through this Playbook and Framework, we have rethought our methods and transformed our mindset and ways of doing from Risk Management to Strategic Resilience, covering financial resilience, operational resilience, organizational resilience, and even climate resilience with specific key performance indicators on those.

ECONOMIC – Solidifying Growth and Financial Stability
We rebounded from the decline in 2020 despite continuing pandemic-related restrictions and exceeded our growth target for 2021. Consolidated Core Net Income rose 20% to P12.3 billion due mainly to the resumption of economic activities.

Power continued to be the most significant contributor to our earnings mix due to Meralco’s increased sales volume, particularly from the industrial sector and accounted for P11.2 billion or 65% of total operating income. Toll roads contribution improved to P3.9 billion, accounting for 23% of earnings, as vehicular traffic volume grew after easing restrictions on travel. Our share in water earnings of P2.8 billion accounted for the remainder.

Our balance sheet is stronger after we took action to optimize our portfolio and crystallize value from some of our assets, raising our Consolidated Reported Income by 113% to P10.1 billion. We kept dividends at a consistent level since 2017, even though earnings were down in 2020 because of the pandemic. As a show of confidence in the Company’s prospects and to enhance shareholder value, we reinstituted our Share Buyback Program in 2021, repurchasing about 1.5 billion shares, amounting to P5.7 billion.

ENVIRONMENTAL – Heeding the Call for Climate Action
We are heeding the call for climate action through three specific areas of focus. First, we integrate environmental stewardship with business by designing, building, and operating with the least environmental and social disruption; and recycling / upcycling various materials for business use. Second, we invest in various environmental protection programs such as reforestation and ecosystem preservation, among others. Lastly, we fortify the protection of nature by meaningful collaborations and the use of technology. These initiatives and more are outlined throughout our report.

SOCIAL – Enhancing Stakeholder Engagement
For our social priority areas, we directed our efforts towards our key stakeholders: our employees, our customers, and the community at large. We prioritize the health, safety, and continued livelihood of our
employees; second, we ensure the continuous delivery of high quality services continuity enhanced customer engagements; third, to execute on expansion and enable economic growth from infrastructure development; and finally, to help uplift communities through various positive impact programs. To support our overall strategy of harmonizing sustainability actions across the group, we launched our six GABAY advocacies for a sustainable Philippines, together with other companies in the Manuel V. Pangilinan (MVP) Group. These
advocacies are focused on areas where we can make a positive difference: environmental stewardship, livelihood, health and sports, youth, education, and community empowerment. The GABAY advocacies also encapsulate our efforts toward attaining the United Nations’ Sustainable Development Goals.

GOVERNANCE – Aligning with Global Best Practices
Sustainability was integrated into MPIC’s leadership with the establishment of the Board’s Governance and Sustainability Committee. We then formed the MPIC Group Sustainability Council to harmonize and coordinate various sustainability initiatives across all business units. Resources are rationalized and combined by the Council to generate the most impact in support of our targets. The Council, composed of Sustainability Champions of each operating company, is governed by a Board-approved Sustainability Charter. We also launched our first internal Sustainability Summit in August 2021 to further bring the MPIC leadership on board in this journey.

We continue to elevate our standards for monitoring sustainability initiatives and improving the transparency and quality of our sustainability disclosures, aligning and benchmarking them against global best practices. MPIC became the world’s first conglomerate admitted to the Sustainability Accounting Standards Board (SASB)
alliance. We are the first Asian company to sign the statement of support for the Accounting for Sustainability (A4S) Net Zero Initiative and became one of the founding members of their CFO Leadership Network. We are one of the pioneer companies in the Philippines to support the Task Force on Climate-Related Financial Disclosures (TCFD), the first company in Southeast Asia admitted to the Task Force on Nature-Related Financial Disclosures (TNFD) Forum, and the first and only supporter in the Philippines of the Carbon Disclosure Project (CDP).

We are incredibly pleased to report that in 2021, MPIC ranked first in Sustainalytics ESG Risk Ratings among multi-sector holding companies in the Philippines. This means that our enterprise value is at low risk of exposure to potential impacts by ESG issues and that our management of these issues follows best practices. Sustainalytics is the world’s leading index on corporate sustainability performance and a global leader in ESG research, ratings, and analysis. MPIC also received the highest “A” rating in the 2021 Global Listed Infrastructure Organization/Global Real Estate Sustainability Benchmark (GLIO/GRESB) ESG Index for Infrastructure, joining the ranks of a few companies worldwide.

Making The Most Difference
We have come a long way in such a short amount of time. The rest of our sustainability path lies ahead. Climate change remains the world’s most vital challenge and the one that we are most concerned about. As a responsible business, we march forward to address this challenge, balancing our country’s escalating demand for high-quality  infrastructure with MPIC’s unwavering commitment to improving people’s lives and protecting the environment. This is where we can make the most difference, given the impact of our services and projects on the planet. Biodiversity protection as a means to curb the devastating effects of climate change will continue to be a priority, corollary to the acceleration of further investments in renewable energy. In 2022, we look forward to doing much more.

We have laid the path and foundation for a stronger MPIC and redefined our EESG strategy. This means not only operationalizing sustainability within MPIC but building a culture and mindset that thoroughly embraces sustainability across the MPIC Group. We can no longer operate our businesses with just profit in mind; we need to be driven by purpose. We can always do good while doing well. We will champion the value creation of the Company’s capitals and resources while enhancing such value through our advocacies.

CHAYE A. CABAL-REVILLA
Executive Director
Chief Finance, Risk and Sustainability Officer