PAL Holdings, Inc. Sustainability Report 2020 Contents 26 -- Governance 27 Compliance with laws and 32 Data security regulations 33 Customer privacy Introduction 28 Effective, accountable, and transparent governance 03 The Chairman’s message 04 Executive summary 06 About the Company 34 -- Social 14 Company highlights 35 Health and safety 44 Employee training and development 50 Customer management 19 -- About this report 53 Employee hiring and benefits

20 Purpose, Reporting Standards, Scope and Coverage 20 PHI’s Material Topics 54 -- Environment

55 Resource Management 58 Ecosystem and biodiversity 58 Environmental impact 21 -- Economic

22 Direct economic value generated and distributed 25 Outlook 62 – Our people and values

63 Employee welfare and communication 64 Corporate social responsibilities The Chairman's Message To our Dear Stakeholders, The mission of sustainability gained special force in 2020 when PAL We transformed our services to incorporate New Normal Holdings Inc. faced the greatest challenge in its history, no less than safety protocols that protect our employees and passengers: the survival of the PAL Group, which includes Philippine Airlines full Personal Protective Equipment (PPE) for our crew; modified (PAL) and PAL express (PALex), and their transformation into viable meals, amenities, facilities and digital assets to promote airline businesses for a vastly changed aviation market. healthy travel practices; stronger cleaning and disinfection measures; and new testing centers that helped authorities Impact of a Global Pandemic reopen borders and allow safe increases in travel volumes. The worldwide spread of COVID-19 shut down aviation markets and crippled the economies of most nations. PAL and PALex were forced Public Service and Public Accolades to cancel flights, affecting millions of passengers, wiping out more Our efforts as a responsible flag carrier contributed greatly to than USD 2 Billion in revenues and placing extreme pressure on the Philippine repatriation drive, with PAL flying majority of the liquidity. displaced OFWs and other Overseas Filipinos to their homes all over the country. Our ability to repurpose PAL’s current fleet to Survival, Recovery and Transformation serve new cargo business opportunities enabled PAL to The recovery of PAL and PALex entailed the slow restoration of transport vital economic shipments and essential medical routes and flight frequencies and determined efforts to operate supplies including medicines, PPEs, and life-saving vaccines. hundreds of repatriation flights and thousands of all-cargo flights to augment revenues and perform vital public services. The airlines Through it all, PAL won international recognition in 2020 as one survived through the concerted support of all employees, of the top ten airlines with the highest safety credentials for stakeholders and partners, generating the necessary funds to shore travel during the pandemic according to Safe Travel Barometer; DR. LUCIO C. TAN up liquidity, sustain operations and provide the basis for a and as a 4-Star Major Airline by the Association of Airline Chairman and permanent plan for 2021. Passengers (APEX). PAL and PALex also received the highest 7 Chief Executive Officer stars rating on Safety from AirlineRatings. Enduring Commitment to Sustainability The pandemic demonstrated the depth of our commitment to a The recovery of our airlines further strengthens our resolve to sustainable business that puts the health and safety of our valued work towards reviving tourism, supporting economic recovery personnel and customers first. We are reducing the size of our fleet and Filipino livelihoods, and maintaining global links that serve to align with post-COVID market realities, with priority on younger the public. Service and sustainability shall be the watchwords and more fuel-efficient aircraft. of a renewed Philippine Airlines and PAL express. 3 Executive Summary Executive Summary For close to 80 years, PAL has been on a mission to deliver time of uncertainty and keep an open line of safe, reliable, efficient and pleasant travel experience communication with the employees. We treat exceeding passenger expectations. Despite the setbacks in employees with dignity more so at a time when we have the year 2020, starting with the Taal eruption and ending to let them go as part of a workforce rationalization with COVID-19, the challenges of which we continue to face program. head-on, the mission continues. Our Safety Management System and Quality Assurance While the pandemic has brutally affected the Company’s Programs go hand-in-hand to ensure that our operations ability to generate revenues as planned, the Company did are conducted safely in accordance with Aviation wastes and hazardous substances that all contributes to what it does best - to be of service to the global community, Authority Regulations, PAL Standards, and industry best the deterioration of the global climate landscape. serving with the heart of the Filipino, a heart that is resilient practices. We address issues on Health and Safety of our in difficult times. These circumstances has put the business passengers and personnel, especially, at a time of global The events of 2020 have brought fear, anxiety, uncertainty to a test, and we will emerge better, stronger as we surpass threat to our health. With employees as the main to a vast number of people, including our employees and one challenge after another. Executiveproponents Summaryof safety and the provider of service to our our less fortunate countrymen. Our Company continues to customers, much importance is given by the Company look into the welfare of the employees and has In this report, we present the different aspects of the to employee training and development, to ensure that implemented programs to help employees cope with the Company’s governance, including compliance with laws and employees are equipped in performing services for the various challenges experienced during the year. The regulations, particularly on labor laws and human rights and safety and satisfaction of our customers. Company has not failed to fulfill its corporate social how the Company upholds the rights of its most valuable responsibility even in the most difficult times. assets – its employees. We follow through with labor While we endeavor to recover and slowly resume flights management and how the Company keeps a harmonious to a normal level, we do not forget our responsibility to Sustainability is also defined as the ability to exist relationship between management and its workforce. Part help mitigate the effects of our operation to climate continually. Despite the odds, the Company did show 2020 of keeping a strong relationship between management and change. The Company is conscious of the energy it such ability. We will continue to exist so that we may the employees is maintaining respect and giving consumes and is committed to becoming more efficient continue to deliver safe, reliable, efficient and pleasant opportunities to a diverse group of individuals that make up in the usage of non-renewable energy, limiting travel experience exceeding passenger expectations…and the workforce. We demonstrate transparency especially at a greenhouse gas emissions as well as reducing solid serve as a Bridge of Hope to our countrymen.

5 About the Company About PAL Holdings, Inc.

PAL Holdings, Inc. (the Parent Company or PHI) was incorporated in the Philippines on May 10, 1930 to engage in the business of a holding company. On October 5, 1979, the Philippine Securities and Exchange Commission (SEC) granted PHI an extension of its corporate life for another 50 years from May 1980. PHI is a subsidiary of Trustmark Holdings Corporation, a domestic corporation and is part of the Lucio Tan Group of Companies.

The Parent Company and its subsidiaries are primarily engaged in air transport of passengers and cargo within the Philippines as well as between the Philippines and several international destinations. The Group operates through its major subsidiaries: Philippine Airlines, Inc., the Philippine national flag carrier; and Air Philippines Corporation, a subsidiary under common control that was indirectly acquired through Zuma Holdings Management Corporation in 2017.

PHI's registered office address is at 8th Floor, PNB Financial Center, President Diosdado Macapagal Ave., CCP Complex, Pasay City, Metro Manila

7 About PAL Holdings, Inc. Philippine Airlines, Inc. (PAL) Pioneering in end-to-end airline operations that constitute an industry of its own, Philippine Airlines, Inc. (PAL) lives on with its original name and the national colors, shining through for eight decades. PAL stemmed from the Philippine Aerial Taxi Company established in 1931 by co-founder Andres Soriano, who shut it down in 1939 and replaced it with Philippine Air Lines two years later. Braving the imminence of war, PAL had its inaugural flight with only five passengers from Makati to Baguio on March 15, 1941. A private entity for much of its existence, PAL was brought under government ownership in the 1970s and 1980s, reverting to private hands in the early 1990s. Today, PAL is the only privately-owned major flag carrier in Southeast Asia. Its Chairman and CEO, Dr. Lucio C. Tan, is PAL's longest-serving chief executive. Through the years, designated as the "national flag carrier" by R.A. 2232, PAL has been recognized to play a central role in boosting the growth of the Philippine economy and the emergence of a nation-wide tourism industry. Today, PAL is the Philippines' largest international airline and the only full-service Filipino air carrier offering Business Class, Premium Economy and Regular Economy services. Its fleet consists of modern high-technology aircraft such as the Boeing 777 along with the Airbus A350 and A330 for long-haul routes and the A320/A321 family for regional and domestic routes. PAL's network stretches across the world. The flag carrier operates from four hub airports (Manila, Cebu, Clark and Davao) in the Philippines to an inclusive total of 25 domestic destinations and 28 points in Asia, Australia/Oceania, the Middle East, Europe and North America. PAL operates the country's only direct air links to mainland U.S.A., Hawaii, Canada, New Zealand and Western Europe, Japan and Australia.

8 About PAL Holdings, Inc. Memberships & Affiliations Philippine Airlines, Inc. (PAL) Through the years, PAL had the privilege of flying Philippine presidents on most of their state visits. A multitude of beauty queens, celebrities and other VIPs also availed PAL's services. During calamities and times of urgent public need, PAL has engaged in relief services by flying home Filipino evacuees from crisis-torn countries in the Middle East, Africa and elsewhere, while providing critical services to communities in need after typhoons and other natural disasters. Even with the crippling effects of COVID-19, PAL continued to fulfill its mission as a flag carrier by mounting cargo charter flights to and from various international points and within our country to load food, medicine, medical equipment and other essential commodities on our aircraft, by helping the OWWA, DFA and cruise ship companies bring home stranded Filipinos from around the region, Milan, the Maldives, Qatar and Middle East, as well as helping the DOT and foreign embassies repatriate their nationals who were stranded in different provinces and bring them to their home countries. As the nation continues its fight against COVID-19, PAL is working hand-in-hand with the government and the private sector to transport vital vaccines to key cities across the archipelago. PAL celebrates it’s 80th year Anniversary on March 15, 2021. PAL celebrates this milestone despite all the challenges brought about by the pandemic. While times are difficult and the road to recovery is not a smooth one, PAL will not back down, but will spread its wings and continue to shine on!

9 About PAL Holdings, Inc. Philippine Airlines, Inc. (PAL) 80 Years of Heartfelt Service Known to be the oldest Airline in Asia, alongside the pioneer for the first Skybeds available in our Boeing 747 “Queen of the Skies”, PAL has carried through innovations and firsts around the airline world.

First Asian airline First South East First airline to First Asian airline First to have First Airline be honored by to cross the Pacific Asian airline to fly to fly to China B747-200 with in Asia (1941) Les Chaines de (1946) to Europe (1947) Rotisseurs (1979) (1979) Skybeds (1980)

First to have a First to show First to accept First to launch First Philippine Skytrax 4-star rating Nationwide crowd- BancNet ATM cards PAL Mobile App carrier to be in the Philippines sourced inflight as form of payment in the Philippines IOSA-certified (2006) (2018) safety video (2017) online (2009) (2009)

Change of Hands Over the Years

June 1999 April 2012 September 1948 January 1992 PAL is placed under a San Miguel Corporation Government became PAL was privatized 10-year rehabilitation takes management the majority stockholder through PR Holdings program control of PAL

February 1941 January 1965 September 1998 October 2007 October 2014 Philippine Airlines Government relinquished Asian financial crisis led to PAL exits from Lucio Tan Group was established as a control over PAL, only to suspension of operations, receivership two years reassumes management private company be reassumed in 1977 but reassumed two ahead of the 10-year plan control of PAL weeks after 10 About PAL Holdings, Inc. Memberships & Affiliations PAL express (PALex) Air Philippines Corporation, currently doing business under the name and style of Philippine Airlines or PAL express (PALex), was incorporated in the Philippines on February 8, 1995 while commercial operation began on February 1, 1996.

It is the 3rd biggest airline in the country operating Airbus A321-200s, A320-200s, and De Havilland DASH 8-400s and DASH 8-300s. It was in 1999 when the Lucio Tan Group of Companies took over management of PALex. The Lucio Tan Group of Companies’ entry into picture resulted into a big improvement in the Company as it allowed PALex to continue to provide low-cost air travel to the riding public.

The increase in routes and passenger sales allowed PALex to significantly increase its partnership with Philippine Airlines, including the merging of timetables and ticket sales. The strong relationship with the country’s flag carrier also allowed PALex to move into the PAL terminal at the Ninoy Aquino International Airport. PALex was known for its safety, professionalism and first-class service.

PALex is the 2nd Philippine carrier that was included in the IATA Operational Safety Audit Registry in 2014.

The airline was also certified by SGS last December 2018 on the ISO 9001:2015 Quality Management System. This certification is renewed annually.

11 About PAL Holdings, Inc. PAL express (PALex) (cont'd)

August 1997 R.A. 8339 was enacted December 1995 APC’s 25-year franchise to February 2018 December 2018 Issuance of an Air Carrier establish, operate and PAL express / Philippine APC/PAL express was Operating Certificate by maintain domestic & Airlines was awarded the certified ISO 9001:2015 the Air Transportation international air transport 4-Star Airline Ratings by Quality Management Office (ATO) services Skytrax System (QMS)

February 1995 February 1996 March 2018 April 2008 Air Philippines APC first commercial flight PAL express renewed IATA Under Dr. Lucio C. Tan’s Corporation (APC) from Manila (T4) to Operational Safety Audit leadership, APC was Incorporation Zamboanga City or IOSA rebranded as PAL express

12 Our Vision, Mission, and Core Values Vision • To be the airline of choice in all markets we serve • To be a source of pride for Filipinos everywhere Mission • To deliver safe, reliable, efficient and pleasant travel experience exceeding passenger expectations • To provide a satisfying career to our employees and adequate returns to stockholders • To represent the Best of the Philippines, the Best of Filipino to the world Core Values • We grow a successful and empowered team • We act with passion and aim for excellence • We embrace and drive change • We put our customers first • We exemplify the Best of the Filipino spirit Our Promise - Buong Pusong Alaga Our signature Buong-Pusong Alaga (wholehearted service) is our unwavering promise to every traveler. More than ever, we are dedicated to giving above-and-beyond service in each flight. With rigorous training programs and leadership empowerment workshops, our partners and crew members always ensure each passenger feels the Heart of the Filipino. To deliver our Service Aspiration of a Heartwarming Filipino Travel Experience, we created stronger employee engagement and front liner service training programs. Through these training programs, our front liners learn five service attributes that guide our behavior: Magaling (Efficient and Skillful) Maaasahan (Reliable and Trusted) Maalaga (Caring and Hospitable) Magalang (Polite) Malambing (Affectionate) Our Front liners continue to exhibit these attributes in their daily interactions to build stronger ties with customers and to endear us to many. 13 Company Highlights Our Fleet (as of December 31, 2020)

Philippine Airlines Fleet Size: Average Age: PAL express Fleet Size: Average Age: 60 5.6 years 37 8.6 years

10 B777-300ER 6 A350-900 15 A330-300 6 A321 NEO 12 A320-200

18 A321 CEO 6 A321 NEO SR 2 A321 NEO XR 3 A320-200 15 Dash 8-400 4 Dash 8-300

15 INTERNATIONAL Route Network

28 Destinations, 30 Routes

North America + Guam Middle East Australasia

Honolulu Dammam Melbourne Los Angeles Doha Port Moresby San Francisco Codeshare Partnerships: Riyadh Vancouver Auckland Guam Dubai * * Toronto Southeast Asia * * New York Japan Bangkok * Europe Kansai Jakarta London Nagoya Hanoi * * Narita * Greater China Kuala Lumpur * Fukuoka Hongkong Ho Chi Minh * PAL is the operating carrier Taipei Haneda Singapore

16 DOMESTIC Route Network

25 Destinations, 34 Routes From Cebu

From Manila Butuan Davao Tagbilaran

Bacolod Davao Legaspi Cagayan de Oro Dipolog Zamboanga

Basco Dipolog Naga Iloilo

Butuan Dumaguete Ozamis From Davao Cagayan de Oro General Santos Pagadian

Catarman Iloilo Puerto Princesa Iloilo Tagbilaran Clark

Caticlan Kalibo Tacloban Cebu

Cebu Laoag Roxas

Cotabato Zamboanga

17 Awards and Recognition Our Safety Protocols Against COVID-19: Provides Personal Protective Equipment for cabin crew use throughout the flight

Carries out disinfection of aircraft surfaces after every flight using high-grade eco-friendly cleaning agents

Uses High Efficiency Particulate Air (HEPA) filters to cleanse cabin air of bacteria, viruses, and impurities with 99.99% efficacy

Carries out simplified inflight food service to minimize contact between cabin crew and Top 10 Safest Carriers 7-Star Safety Rating 4-Star Major Airline passengers

Mandates the use of face masks and shields PAL Group was recognized PAL Group has received PAL has received the 4- among all travelers and airline workers as one of the top 10 the highest star rating on Star Major Airline 2020 airlines with the highest Safety, which is 7 stars rating from Airline Ensures availability of hand sanitizers at pre- safety credentials for from AirlineRatings. Passenger Experience flight facilities, flight proper and post-flight. travel response to the Association (APEX) COVID-19 pandemic by Official Airline Ratings. Thermal scans and footbaths are also observed Safe Travel Barometer. These ratings were based at every entrance of pre-flight facilities. Securing 4.2 rating out of on independently 5.0 as the highest. verified, validated and Conduct COVID-19 screening and assist in the testing of passengers as required by the local certified airline passenger and international health authorities. ratings after flights.

About This Our People and Introduction Economic Governance Social Environment Report Values 18 About this Report About This Report

PURPOSE SCOPE AND COVERAGE The PAL Holdings, Inc. has published this Sustainability Report 2020 to provide This Report details Philippine Airlines and PAL express accomplishments and various prompt and transparent disclosure about business, activity outcomes and data in the economic, environmental, social and governance aspects for the year 2020 major sustainable management performances for the year in order to earn (January 1st to December 31st, 2020). Financial information is mainly obtained from the long-term trust from its stakeholders and achieve sustainable growth that latest audited financial statements. benefits society. PHI’S MATERIAL TOPICS REPORTING STANDARD Our material topics were identified based on the impact of our organization, as well as This report was prepared in accordance with the Securities & Exchange the substantive influence on the assessment and decision of our stakeholders. It is Commission (SEC) guidelines. The GRI Standard issued by the Global Reporting further supported by our Board of Directors, Executives, and Sustainability Committee. Initiative (GRI) was used as reference for Economic, Environment, Social, & The assessment identifies and evaluates the sustainability issues that mattered most to Governance (EESG) information. This report has also been aligned with the our businesses and our stakeholders. United Nations (UN) Sustainable Development Goals (SDGs) in line with the Group’s commitment in answering the call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. Sustainability Topics Economic Environment Social Governance Direct Economic Energy Efficiency Employee Training Compliance with Value Generated and Development Laws & Regulations & Distributed Greenhouse Gas Emission Employee Hiring & Effective, Benefits Accountable, and Transparent Data Security & Governance Privacy

FEEDBACK Health and Safety We enjoin our stakeholders to send their feedback regarding matters in this Sustainability Report via email to [email protected]. Customer Satisfaction

About This Our People and Introduction Economic Governance Social Environment Report Values 20 Economic Direct Economic Value Generated and Distributed

OPERATIONAL STATISTICS 2020 2019 The airline embarked on several cash conservation and cost containment efforts, Number of Roundtrips 19,900 61,396 raising additional funds from shareholders, and sale of noncore assets. Revenue Hours 116,209 343,256 To control expenses, the airline employed cost reduction measures which consisted of Number of Passengers 3,850,919 16,761,050 executive pay cuts and 50% leave without pay for all employees every month since Revenue Passenger Kilometer (000) 11,873,983 42,329,104 April 2020, reductions in staffing with skeletal operations, and elimination of almost all Available Seat Kilometer (000) 20,918,807 55,308,139 marketing and discretionary expenditures. The Group also embarked on a major Passenger Load Factor 56.76% 76.50% workforce rationalization program across all departments. Freight Ton Kilometer (000) 350,758 676,956 Revenue Ton Kilometer (000) 1,510,508 4,631,557 Despite the limited revenue generated, the proactive, bold and dynamic measures Available Ton Kilometer (000) 1,884,173 7,626,934 adopted by the Management enabled the Company to withstand the crisis and pay Revenue Kilometers (Distance Flown) 76,094,740 214,669,083 the employees’ salaries, operating expenses, critical suppliers and lessors and remit taxes to the government. The Group sustained the financial needs of its thousands of The year 2020 started with seemingly big surprises: the Taal Volcano eruption and the workers, cash flowed into the coffers of our suppliers, and contributed to the local dreadful COVID-19 pandemic. As with all airlines in the world, the PAL Group has been economy. The Company has always been transparent in its dealings with stakeholders, facing COVID-19’s devastating impact on demand and liquidity. With the imposition of providing regular updates about the Company’s situation and plans, thus gaining the Enhanced Community Quarantine in Manila, PAL Group’s main hub, and travel support of everyone in its quest to recovery. restrictions around the world, the Group had no choice but to suspend regular commercial flights and operate some Cargo only flights carrying essential products, and DIRECT ECONOMIC VALUE ITEM AMOUNT repatriation and sweeper flights. With very limited operations, the Group suffered Direct Economic Value Generated (Revenue) Php 55.3 Billion tremendous decline in revenues, which only amounted to PHP 55.3 Billion in 2020. Direct Economic Value Distributed: a. Operating Costs Php 71.5 Billion The reduced operations affected liquidity as little cash were being generated, payables b. Employee Wages & Benefits Php 8.2 Billion were falling due, ticket refunds were an all time high due to numerous cancellations c. Payment to Suppliers, other operating costs Php 7.1 Billion brought about by travel restrictions. The liquidity problem caused the Company to take d. Interest payments to loan providers Php 9.8 Billion drastic measures affecting shareholders, the employees, industry partners, lessors and lenders. e. Taxes given to government Php 604 Million f. Investments to community (e.g. donations, CSR) Non-Cash Donations

About This Our People and Introduction Economic Governance Social Environment Report Values 22 PAL CELEBRATES 80TH BIRTHDAY WITH DAWN MASS AT MANILA AIRPORT On March 15, 2021, Philippine Airlines welcomed the flag carrier's 80th anniversary at the break of dawn with an open air eucharistic celebration led by Fr. Jose Winston Margate at the NAIA Terminal 2 grounds. In his anniversary remarks, PAL President and COO Gilbert Santa Maria assured the flying public of the airline’s staunch commitment to service as the PAL team continues to work towards the recovery of the airline and the tourism and travel sector that is a vital component of the Philippine economy. "Our message to our country and the world: Buhay pa tayo. Andito pa tayo. At hindi tayo aalis. (PAL is alive, we’re still here, and we’re here to stay.) This great lady - Philippine Airlines - will stay aloft while she is in our care," said Mr. Santa Maria. The mass and simple ceremony, with a backdrop of PAL aircraft on the tarmac, welcomed the brand new day as symbol of the airline’s renewal amid the pandemic. As the PAL President pointed out, "It's nice to see the sun light up the sky and the flag that has been an indelible part of our fleet for eight decades." Despite great challenges, 'Asia's First' is still the airline with a lot of heart. No less than 310,000 of 420,000 displaced Overseas Filipinos came home via PAL from March 2020 up to the present. Within the same period, tens of thousands of foreign nationals flew back to their home countries via PAL. At present, vaccines are being airlifted on PAL and PALex’s fleet around the Philippines, as part of the national effort to keep our country safe. Mr. Santa Maria cited divine intervention and divine inspiration as blessings that enabled the airlines’ continued survival, along with the support of PAL and PALex’s partners and stakeholders and the intense efforts and dedication of the Group’s personnel. "We must remain bold and fearless. We will continue to work to earn PAL and PALex's future." To cap his message, the PAL President read the Knights Templar motto: "Non nobis, Domine, non nobis, sed Nomini tuo da gloriam (Not for us, My Lord, not for us, but to your Name give the glory)."

23 The Mission Continues… #FlySafePH As the government rolls out its vaccine program to inoculate at least 70 million Filipinos across the nation, the PAL Group The Vaccine Airlift Continues : prepared for the carriage of the vaccines. A Working Group The Group flies vital vaccines to Legaspi, Cagayan de was created, trainings were provided to about 800 personnel Oro, Cotabato, Bacolod, Tagbilaran, Iloilo, Butuan, nationwide, cold chain facilities were prepared, several dry Davao, Cebu and other cities in the Philippines. runs were conducted and close coordination with the government agencies and cargo forwarders were conducted to ensure the safe carriage of the vaccines.

The Group has multiple options of aircraft across its fleet from ultra-long haul wide body to narrow body and turboprop that can be used for the carriage of the vaccine across the country. Philippine President Rodrigo Duterte, Chinese Envoy to the PAL is the only airline in the Philippines with the ultra long- Philippines Huang Xilian, Vaccine Czar Carlito Galvez, Senator Christopher 'Bong' Go and Health Secretary Francisco Duque haul, wide body aircraft that can carry large quantities of give their thumbs up to the arrival of 1M doses of vaccines vaccine from continental sources in Europe and the US and flown via the A330 aircraft of PAL on March 29, 2020 bring them directly to major cities in the country.

On March 24, 2021, PAL picked-up 400,000 doses of Sinovac vaccines from Beijing, China to Manila using a B777 aircraft. This special mission makes PAL as the first local carrier to bring home the much-needed vaccines for the country. The flight was welcomed by Senator Christopher Go, Health Secretary Francisco Duque, Inter-Agency Task Force on Emerging Infectious Diseases (IATF) Vaccine Czar Gen. Carlito Galvez Jr., PAL President and COO, Mr. Gilbert Santa Maria and other government officials. PAL’s President and COO Mr. Gilbert Santa Maria joins the On March 29, 2021, Philippine President Rodrigo Duterte team that spearheaded the safe carriage of the vaccines. Vaccine Transport in Service for the Nation together with Chinese envoy to the Philippines Huang Xilian and other government officials welcomed the arrival of 1 The Group is honored to take part in this historic step towards healing and recovery of the Filipino nation and is million doses of vaccine from Beijing, China loaded in the PAL committed to support the government’s initiative to safely distribute the vaccines all over the Philippines. A330 aircraft. 24 Outlook While COVID-19 continue to devastate the world, it opened a new opportunity for PAL Group. An opportunity to revisit our business model, develop a new plan, rationalize our fleet, create a lean organizational structure, simplify processes and maximize use of digitalization. BRIDGE OF HOPE Data analysis will be at the forefront to better understand the need of our passengers who remain loyal with the Company through its ups and downs. Aspiring passengers will be captured through innovative service offerings and new markets will be explored to PAL’s network builds air maximize aircraft utilization. bridges for our many islands. The Group is a vital agent in the Philippine economy. We are the global link of the country to the world. We will continue to serve the country with our repatriation flights bringing To let goods and people flow. home Filipinos and carrying special cargo of essential supplies, food, medicines and most To give hope and support specially, the vital COVID-19 vaccines into and across the archipelagoes, as our contribution to the rebuilding of our nation. to Filipino businesses. The Group will continue to work with the government and the travel industry to continuously enhance the safe travel program that will allow commercial travel to support the Philippine economy. So that our economy Even in the midst of the pandemic, the Group’s market share remains strong despite tough will hum again. competition for a market that substantially shrunk. Revenge travel is expected once a good percentage of the people have undergone vaccination. PAL Group remain steadfast in the midst of the COVID-19 challenges. Our people shine with teamwork, cooperation, support, perseverance as they work together, harder and closer to keep the Company afloat in this dark and difficult time. The Management is cohesive, focused, equipped and determined to steer the Company towards recovery. The plan is in place, the lessors and lenders are supportive, and the Management is dedicated to bring the airlines to a new and brighter tomorrow. With the unwavering support of its owners and shareholders, PAL Group will emerge stronger, healthier, resilient , more competitive and will be the Bridge of Hope towards nation building.

25 Governance Compliance with Laws & Regulations The Group complies with the local and international laws and Workplace Conditions, Labor Standards, and Human Rights – Labor Laws and Human Rights regulations. The airline industry is highly regulated, and the Group is The Company supports and respects the Universal Declaration of Human governed by the Philippine Government through the Civil Rights, the core conventions of the International Labor Organization and Aeronautics Board with regards to new routes, tariffs, schedules and labor laws in the conduct of its business as well as in its good labor passenger rights and through the Civil Aviation Authority of the relations with its employees and contractors. Philippines for aircraft and operating standards. PAL also conforms The employees, suppliers and the entire organization benefit from the to the standards and requirements set by different foreign civil Company's compliance with human rights and labor laws. aviation authorities of countries where the airline operates. Non-compliance with human rights and labor laws could expose the Company to penalties. PAL and PALex also ensures compliance to labor laws which protects In addition, it may adversely affect the employees' job performance, which ultimately affects the rights of our personnel, as well compliance to environmental the Company's sustainability. laws that protect the environment. The Group’s policies and programs are always consistent with international standards and Environmental Compliance norms found in the Universal Declaration of Human Rights and the core conventions of the Amid the COVID-19 pandemic, the PAL Group continues its International Labor Organization. The Company recognize the rights of its employees to compliance to environmental laws required by Department of organize, to collective bargaining and to collective action. It allows legitimate activities of Natural Resources- Environmental Management Bureau, National registered labor unions. Water Resources Board, Laguna Lake Development Authority and The Group continuously review its policies and programs to ensure compliance with human Civil Aviation Authority of the Philippines.* rights principles and labor laws. DISCLOSURE QUANTITY UNITS DISCLOSURE QUANTITY Total amount of monetary fines for non- No. of legal actions or employee grievances involving forced or child labor None compliance with environmental laws and/or 0 PHP Do you have policies for the following topics that explicitly disallows violations of labor laws and regulations human rights (e.g. harassment, bullying)in the workplace? No. of non-monetary sanctions for non- Forced Labor and Child Labor Yes compliance with environmental laws and/or 0 # Human Rights Yes regulations No. of cases resolved through dispute 0 # resolution mechanism *For more information about Environment, please refer to page 54

About This Our People and Introduction Economic Governance Social Environment Report Values 27 Effective, Accountable, and Transparent Governance

The Group is committed to conducting its business in an honest and ethical Whistle Blower: The Group maintains its Whistleblower Program and all stakeholders manner. The Group’s directors, officers, consultants and employees (“Covered are encouraged to come forward and disclose any and all actual or perceived Persons”) are expected and required to conduct their dealings with the highest wrongdoing, malpractice or risk involving the Group. Reports may be made through ethical standards. email add [email protected], mobile number 09175088942 or 83510454. The Group has adopted guidelines on the following issues. Conflict of Interest: Covered Persons who have personal or pecuniary interest on any enterprise with which the Group has an existing or intended transaction are required to Compliance with Laws and Regulations: Covered Persons are to conduct business disclose the relevant facts of the situation to the Chairman of the Board, in the case of in full compliance with all applicable laws and regulations. Any suspected criminal the directors; and to the President and Chief Operating Officer (COO), and the Group violations will be reported to appropriate authorities. Non-criminal offenses will be Head and Department Heads, in the case of employees. investigated and addressed as appropriate. Related Party Transactions: The Group has in place a related party transactions Anti-Corruption: A strong and transparent policy on anti-corruption reduces the policy to ensure that all related party transactions of the Group are at arm’s length, the exposure of the Group to fines, penalties, and legal liabilities, reduces the cost of terms are fair, and they will inure to the best interest of the Group and its stakeholders. operations, reduces the cost of capital, and reduces the risk of contracts becoming void. Adherence to anti-corruption policies thereby protects the Group’s reputation and allows sustainable growth. Rules on Gifts: Covered Persons are prohibited from accepting gifts or invitations of any form from any supplier, customer, or business partner, or from any third person or entity save in exceptional circumstances that are within the bounds of ethical behavior.

About This Our People and Introduction Economic Governance Social Environment Report Values 28 Effective, Accountable, and Transparent Governance

Labor - Management Relations PAL recognizes two local labor unions: Philippine Airlines Employees’ Association serve the interests of both the employees and the Company. It can lead to mass (PALEA) for the rank and file ground employees and Flight Attendants’ and actions which affect the delivery of services to the customers. Consequently, the Stewards’ Association of the Philippines (FASAP) for the cabin crew. In addition, it day-to-day and strategic concerns of the business are affected. An effective labor also recognizes foreign labor unions in the United States, Singapore and Japan. The management relationship is fundamental to achieving a productive labor Company complies with the existing Labor Law, Collective Bargaining Agreements environment. and Company policies and procedures. Since the declaration of pandemic, the Management has conducted monthly virtual townhall meetings with the different group of employees nationwide and in the The Company believes and exerts all efforts to maintain a harmonious labor international stations. Update on the status and plans of the companies were management relationship. Dialogues to discuss and clarify certain concerns of provided and the employees were encouraged to raise questions or any concerns. employees are conducted regularly to ensure a positive work environment. It is management's way of showing that it values its employees. A valued employee Surveys were also conducted after every townhall meeting to offer further opportunities for employees to voice their views and concerns to promote increases efficiency which leads to higher productivity. continuous improvement in the employee-management relationship. The Human Capital Department leads the regular communication with the various The openness and transparency adopted by the Management has earned the trust, unions. We sit down in the union negotiations scheduled by both parties to discuss understanding and support of the employees leading a harmonious and peaceful and arrive at agreements that are amenable and beneficial to both labor and workforce rationalization program. management. PAL ensures the timely conclusion of different Collective Bargaining QUANTITY Agreements (CBAs) to achieve sound and lasting industrial peace. DISCLOSURE UNITS PAL PALex Though PALex does not have a union, they have Employee-Management % of employees covered with Collective % Cooperation and Collaboration (E=MC2), that serves as a venue to meet and discuss Bargaining Agreements 55% N/A* employees’ concerns with the management openly. Number of consultations conducted with A respectful and collaborative relationship between labor and management should employees concerning employee-related 35 5 # policies be maintained. Otherwise, the parties become adversaries rather than partners in *PALex does not have an employee union but organized an Employee-Management industry. An antagonistic relationship between labor and management does not Cooperation and Collaboration Group.

About This Our People and Introduction Economic Governance Social Environment Report Values 29 Effective, Accountable, and Transparent Governance Workforce Rationalization Program The affected employees continued to The losses sustained by the Group in 2019, aggravated by the Taal Volcano eruption receive their salaries and medical benefits in January 2020 which resulted to the cancellation of nearly 100 domestic and until the effective date of separation. st international flights and the start of COVID-19 virus has led to the 1 workforce Several programs were put in place to rationalization in February 2020. It affected around 300 employees. All of them support the employees which include received appropriate separation benefits, additional trip pass privileges, and outplacement assistance and assistance in the form of career counseling and outplacement support. employability initiatives to help ease the On March 11, 2020 , the situation was further exacerbated when the World Health transition. Outplacement and Organization (WHO) declared the COVID-19 outbreak as a pandemic. On March 16, employability webinars were organized 2020, the country was placed in a State of Calamity halting land, sea and air travel and partnership with several companies except repatriation and cargo flights. were made to assist the outgoing employees. Despite the gradual opening of the airports months after, the massive financial impact to the Group has led to the implementation of several measures to contain the impact to the Company and the employees such as reduction in pay for the executives, temporary furlough and flexible working arrangements to hold off job cuts as long as possible and ensure that its employees continued to receive salaries The exit process was carefully planned to ensure a and benefits, particularly medical benefits, during the height of the pandemic. smooth transition both for the employees and the company. Safety protocols were put in place for the Frequent communication with employees through Townhall meetings every month protection of both the outgoing and attending kept the employees updated on the status of the Company. employees. Sufficient notice were given to the In October 2020, the Company was left without any option but to implement a 2nd employees, the separation package was in accordance round of workforce rationalization program. This company-wide workforce with the requirement of the Law, Collective Bargaining rationalization program covering about 2,300 employees, approximately 30% of the and Agreement and Company policies. airline’s workforce was implemented in March 2021. An inspector of Department of Labor and Employment The rationalization was carried out after a comprehensive system-wide review observed the exit process and provided positive process and is part of the Company’s overall recovery initiatives amid the ongoing comments. pandemic that has massively affected the global airline industry. Separated employees also provided positive comments.

About This Our People and Introduction Economic Governance Social Environment Report Values 30 Effective, Accountable, and Transparent Governance Diversity and Equal Opportunity Our employees' diversity have created the work Our internal personnel policies and procedures are anchored The Company complies with the Philippine laws that culture that puts a premium on the corporate values to the Philippine laws that promote equal opportunity and promotes diversity and equal opportunity to aspiring that we promote which is the Buong Pusong Alaga non-discrimination to those who aspire to work with the applicants and existing employees of the (Whole-hearted Service). We value respect and organization as well as those who are already within. organization. Some of these laws are Republic Act No. exhibit cooperation and unity despite diversity. Personnel policies are readily available in the intranet, MyPALNet. 6725, An Act Strengthening the Prohibition on Ultimately, the entire organization benefits from the Discrimination against Women; and Republic Act No. culture of diversity and equality in our workplace, 10911, An Act Prohibiting Discrimination Against Any because this then enables the organization to handle Individual in Employment on Account of Age. different types of customers. Being in a country with diverse cultures, our We adhere to the Philippine Labor Laws as non- workforce emanates from different regions, cities and compliance puts us at risk on incurring penalties, municipalities across the Philippine archipelago. potential legal action and negative public impression. Through our ticket offices in the provinces, we are able to strengthen and empower our small hubs to Workplace diversity allows inclusion regardless of our bring out the desired experience of our passengers cultural background, gender, ethnicity, personality, and stakeholders. age, and education. Our differences are key to broaden our diverse teams' experiences and 'In flying, there's no gender’: Being the flag carrier, the Group receives applications knowledge. PAL's female pilots on historic first all-female flight crew, led from people of different gender, race, culture, by Capt. Yvonne Sunga, with First Officer May Marie Segovia Our Human Capital Department immediately updates economic background, or religious affinity. Applicants and Second Officer Marie Rose Ison Maximo our internal policies whenever a government law to our vacant positions are ensured of going through relating to diversity and equal opportunity is passed. EMPLOYEE CLASSIFICATION % TO TOTAL fair hiring process taking into consideration the BY GENDER 2019 2020 specific skills and competencies required of the job. Male 50.53% 50.13% Female 49.47% 49.87% EMPLOYEES FROM VULNERABLE SECTOR NUMBER Persons with Disability 17 Solo Parent 27

About This Our People and Introduction Economic Governance Social Environment Report Values 31 Data Security

With passenger air transport as the Group’s primary business, handling of sensitive While the Company have implemented measures to ensure that Company information Company, employee and passenger information are of utmost importance. These are secured, the airline recognizes that perpetrators, fraudsters and hackers become information are collected in the Ticket Office, Sales and Reservation, IT Service Office, more and more creative, and therefore there is a need to keep up and be several steps Contact Center, Data Center, and across all offices of the Group. The IT Department is ahead in terms of data security. As such, increasing data protection will continue to be the primary computer processor serving PAL Group. Data is processed and stored by IT pursued. solutions being used by all personnel across PAL and PALex. Security Awareness Campaigns within the Company are being implemented to educate Significant amounts of sensitive and valuable data must be protected against data loss employees on cybersecurity. This is a continuing program given to employees so that or data theft, which may fall into the hands of unscrupulous individuals or entities attempts to data breaches are easily spotted and reported. through system breach or malware attacks. Should an event occur, various The Company has had its share of malware and phishing incidents over the years, but stakeholders, consisting of passengers, employees, suppliers, vendors, and service these phishing and malware incidents did not result to privacy breaches. The incidents providers are affected. An attack on the system may lead to system unavailability and for both phishing and malware were all blocked by our security systems. No damage or put a halt on operation. harm was experienced against PAL and our customers. An Information Security Manual is in place to provide guidelines and standards for The Group continue to seek improvements in handling incidents that are related to employees’ behavior with regard to the security of the Group’s data, assets, IT information security. systems, etc. The Information Security policy defines the who, what, and why regarding the desired behavior, and they play an important role for the Group’s TYPE OF INCIDENTS / NUMBER OF IINCIDENTS / OCCURENCES overall data security posture. OCCURRENCES Year 2019 Year 2020 The Cybersecurity Operations Center has been established to monitor, respond and Reported Phishing Incidents 440 472 remediate cybersecurity threats affecting computing resources in the Group’s network. Malware Occurrences 23,150 1,004

About This Our People and Introduction Economic Governance Social Environment Report Values 32 Customer Privacy

PAL collects and processes personal information of its customers and passengers To ensure compliance with data protection laws and to promote a culture of privacy, the necessary in order to provide transportation and cargo services. As such, the following policies and procedures have been developed and implemented: Company must assure and commit to consumers that all information they provide • Privacy Policy to PAL Group is handled and processed in accordance with the law and will not be disclosed for any other purpose than that stated by the Company upon collection. • Privacy Management Program • Privacy Handout The stakeholders affected are the passengers and customers who avail of the • Privacy Breach Response Procedure Company’s services; employees with direct interaction with customers • Data Privacy Complaint and Request Handling Procedure particularly those in the Contact Center, Ticket Offices, and Airport; service providers that process customer information; government bodies that require Opportunities for improvement include enhancement of Information Systems to further protect customers' personal information, regular updating of privacy policies and receipt of information of customers such as the Bureau of Immigration, Bureau procedures, and further promotion of culture of privacy within the organization. of Customs, and recently the Department of Health. The Group ensures that policies and procedures are in place to protect the personal information that are collected and processed. The Group recognizes QUANTITY DISCLOSURE that unlawful processing of customers' personal information will result in IN 2019 AND 2020 violation of applicable data protection laws. An event of breach or cyberattacks No. of substantiated complaints on customer privacy* 0 resulting to leak of customer data can hamper business operations and destroy No. of complaints addressed 0 the reputation of the Company. These events can also lead to fines, penalties No. of customers, users and account holders whose information is 0 and potential compensation to data subjects affected. used for secondary purposes As PAL engages service providers to assist in its business operations, it is likewise *Substantiated complaints include complaints from customers that went through the essential for the Company to ensure that its service providers operate in organization’s formal communication channels and grievance mechanisms as well as complaints that were lodged to and acted upon by government agencies. compliance with applicable data protection laws and regulations.

About This Our People and Introduction Economic Governance Social Environment Report Values 33 Social Health and Safety

Our Health Program Contact tracing program was likewise developed to identify and contain the spread of the virus amongst the personnel. Several employees are considered as frontliners due to Ensuring the health and safety of our personnel is one of the top priorities of the their constant exposure to passengers, hence, MSD has developed a program for testing PAL Group. Our Medical Sub-Department (MSD) aims to provide optimal care and treating employees who may have contracted COVID-19. The Group has accredited and is committed to look after the employees’ health and well-being. hospitals for the employees and partnered with several DOH-accredited Diagnostics At the onset of the COVID-19 threat in early 2020, MSD launched an information Laboratories for the testing program of the Group. campaign to educate employees about the virus. A dedicated webpage in Home quarantine is being issued to pilots, cabin crew and ground personnel who may MyPALNet, the Company intranet was created and became the repository of have had exposure to passengers/co-workers who are confirmed positive. This is done numerous information materials about COVID-19. The webpage can be accessed by through an online portal that automatically sends email notification to the all employees and provides information to keep employees aware of the preventive employee. Two quarantine facilities were established in two separate locations for the measures and actions to avoid catching the virus. exclusive use of the employees who are confirmed positive of the virus. When Enhanced Community Quarantine was announced by the Philippine In partnership with the Lucio Tan Group of Companies, the Group is now preparing for President, the Group’s MSD continued to provide medical services face to face or via the vaccination program of all its employees and dependents. phone calls and issued medicines through PAL Pharmacy. Professional help for those who seek emotional support to relieve anxiety and stress during the COVID- 19 crisis was also made available to all employees. The MSD also conducted webinars on COVID, Mental Health and other health related topics and issued Medical Bulletins to employees via emails. A Core Emergency Response Team composed of Safety, Security and MSD was formed to develop programs and manage the exposure of employees and passengers from COVID-19. For employees entering any PAL Facility, he or she must first accomplish a Health Declaration Form via the Online Daily Self-Assessment App. This has an online database that can be accessed by MSD for review of employee status.

About This Our People and Introduction Economic Governance Social Environment Report Values 35 Health and Safety

Emergency Response on COVID

The COVID-19 pandemic has impacted the 21 23 31 07 01 25 Jun aviation industry severely with national and Jan Jan Jan Feb Mar Apr international lockdowns, and travel restrictions. With the pandemic announcement by the World Health Organization (WHO) last March 2020, international borders were locked down and domestic travels were restricted. Except for A reiteration of PAL’s Public Health Emergency Plan was By February 2020, the Group has intensified its health and some repatriation and cargo only flights, PAL cascaded to all members of the Crisis Management screening measures for the passengers and personnel at the and PALex operations halted until the lifting of Group as part of the preparation. airport and in all PAL offices and facilities and has enhanced the lockdown. Strict travel restrictions and When COVID-19, NCOV back then, was declared a Public the disinfection program. This includes temperature screening health requirements were imposed soon after. Health Emergency of International Concern (PHEIC) last in all entry points at the airport and in all PAL and PALex All of those hindered the aviation industry from January 30, 2020, PAL has already intensified the offices. Disinfection at the airport, all offices, and all operating at full capacity. sanitation program of its aircraft to include the use of frequently-touched surfaces have been performed regularly as COVID-19 Measures disinfectants. Personal Protective Equipment (PPEs) such part of the enhanced disinfection program. Several measures, programs, and policies have as surgical masks were provided to the crew for their By April 2020, the Group has been adopted both as proactive measures and protection and an information campaign was launched to started developing the “Safe to reactive counter-measures against COVID-19. inform all PAL/PALex employees about the current Return To Work” program which situation. contains the health protocols set At the start of January 2020 when news broke by the Department of Labor and out about a “mysterious illness” in Wuhan, PAL and PALex activated its Crisis Management Group in Employment, Department of China, PAL Safety Department immediately response to the first reported case onboard one of the Health and World Health coordinated with Bureau of Quarantine (BOQ) flights. A PAL contact tracing team was also deployed to Organization. The program was and Department of Health (DOH) to establish assist the BOQ and Bureau of Epidemiology on tracing all implemented by June 2020. early communications for a heightened alert possible close contacts of the index case. status. This includes regular communication updates with health authorities and other airlines. About This Our People and Introduction Economic Governance Social Environment Report Values 36 Health and Safety COVID-19 Measures (cont.) Employees, Customers, and Passengers Safety An online medical self-assessment/questionnaire was In compliance with the minimum health protocols set by the DOH, implemented as part of the health screening of employees BOQ/IATF, Department of Labor and Employment (DOLE), and/or reporting back to work to determine the general health Department of Trade and Industry (DTI), all employees, as well as condition of employees including identification of potential customers and passengers are required to wear PPEs such as face masks COVID-related symptoms and exposure. and face shields, observe social distancing, and practice health Manual recording and monitoring of cases were replaced in hygiene/etiquette. PAL and PALex internal policies adopted these minimum July 2020 by the creation of a COVID Dashboard for real- health protocols which are strictly complied in all areas of operations time monitoring of internal cases as well as cases reported of the airline. Enhanced sanitation and disinfection routines are observed in PAL and PALex flights. The tool is currently being used for in all PAL and PALex offices. Strict health and medical monitoring of all analysis and assessment of flights and passengers affected employees were implemented through the use of various by COVID. screening methods such as online health declaration forms, temperature and health screening at all entry points in all PAL and PALex offices and The Emergency Response Team (ERT) Portal was also facilities, and internal reporting of cases including contact tracing. launched and implemented by November 2020. This is a tool for real-time reporting of cases in PAL and PALex flights Inflight Safety including identifying personnel exposure and monitoring of their medical disposition. Additional measures and policies are in place to ensure that the passengers, crew, and aircraft are protected against the virus pre-flight, in-flight and post-flight. These include mandatory wearing of PPE for all flight deck and cabin crew, augmented sanitation and disinfection of all the aircraft in the outstations and maintenance hub, and compliance to all applicable health and safety protocols set by applicable international regulators and State requirements. All passengers are also required to wear face mask and face shield on board the flight. Even before the pandemic, the Group already has an established guideline for managing communicable diseases on board. Procedures, equipment, and trainings are in place to reassure and help the crew manage these types of events inflight. Trainings include topics on identification and infection control precautions. Our procedures highlight the step-by-step actions to be taken by the crew in such situations.

About This Our People and Introduction Economic Governance Social Environment Report Values 37 Health and Safety

Inflight Safety (cont.) • Isolation of the affected passenger by seat With the recent development on the COVID- transfer in the last 3 rows of the aircraft 19 pandemic, existing procedures were reviewed • Disinfection of the aircraft at the and enhanced to specifically handle suspected destination. cases of COVID-19 inflight. Some of the key points • Assistance to the sick passenger is limited to on our enhanced procedures are: one cabin crew member who should • Provision of N95 masks, Nitrile gloves, and wear the required Personal Protective alcohol for a passenger showing symptoms Kit (PPK) and shall strictly observe the safety of a communicable disease such as COVID- precaution measures. Universal Precaution 19. Kit (UPK) are also available onboard for cleaning of areas in cases of respiratory secretions, vomitus, or excreta. • Designation of a specific lavatory for the exclusive use of the sick passenger. • Storage of soiled items after use in a biohazard bag. How Clean Is The Cabin Air You Breathe In Our Aircraft? Airflow direction in the cabin is from top to bottom One will be surprised that the air quality in the where 50% of filtered air and 50% fresh air is pumped aircraft cabin is much cleaner than most indoor from the ceiling into the cabin, then sucked out at environments. That is because our aircraft are the floor 20-30 times per hour. The HEPA filters clean equipped with HEPA (High Efficiency Particulate the cabin air completely in about every two to Air) filters that block and capture 99.99% of three minutes. Passengers are facing the same direction airborne particles like bacteria and viruses such as and the seatbacks act as barriers that further lowers the SARS-CoV-2 circulating in the air. risk of virus transmission.

About This Our People and Introduction Economic Governance Social Environment Report Values 38 Health and Safety Our Safety Program Our SMS also interacts with all applicable Aviation SAFETY ACTIVITY FREQUENCY Safety is the responsibility of everyone in PAL and Authorities and Aerodrome Operators where we Hazard Identification and Reporting Regular Safety Incident Investigation and Reporting Regular PALex. The management is committed to continuously operate, service providers and suppliers, and other airlines. Safety Meetings (LSTs, SAGs, SC) Regular improve safety strategies and programs to ensure a Risk Identification, Assessment, Mitigation Regular high level of Safety Performance and satisfy the Our Safety Management System is structured upon the Flight Data Analysis Regular Company’s Safety Objectives. four basic components of safety management in Safety Training Yearly There are several safety programs and activities across accordance with PCAR and ICAO Document 9859 Safety Communication (Safety Bulletins, Regular the organization that ensure all hazards and risks are namely: Safety Policy, Safety Risk Management, Safety Notices, etc.) Crisis Management Exercise Yearly captured, assessed, mitigated and monitored. Safety Assurance, and Safety Promotion. Fire Drills, Earthquake Drills Yearly Management System (SMS) is continuously being Safety Policy Safety Audits and Assessments Yearly enhanced to ensure that the organization’s safety Our SMS policies and procedures explicitly describe our External, Statutory and Regulatory Regular objectives are achieved or even exceeded. Since last responsibility, authority, accountability, and Communications year's pandemic, risks to health and safety of expectation. It is integrated into "the way things are employees, customers, and passengers are bound to done" in our organizational structure and activities Safety Assurance increase if vectors of the virus are not controlled in all because we believe that every employee contributes to Safety performance indicators and targets are in areas of business. Also, risks of penalties and sanctions the safety and health of our organization. are possible for non-compliance to the minimum place to validate our performance in the safety health protocols set by local and international health Safety Risk Management risk management we designed. We have assessments, checks, inspections, investigations, reviews, surveys, regulators. Management of risks includes a Hazard management of change, and observance of best practices. Identification process which involves the identification Safety Management System All of these ensure the effectiveness of our safety program. and analysis of hazards to identify its safety Safety assurance gives the Group confidence that its PAL and PALex Safety Management System (SMS) consequences in terms of its effects to operations. We set safety standards are met with quality. The Group complies with Philippine Civil Air Regulations (PCAR) use tools to identify hazards such as our safety checks if the organizational and regulatory procedures are and International Civil Aviation Organization (ICAO) reporting forms and eReports where all reports consistently practiced towards the set performance targets. Document 9859 Safety Management Manual. This received in 2020 were recorded in Aviation Quality covers Flight Operations, Simulator Training providers, Database (AQD) and all were addressed. Inflight Services, Maintenance and Engineering, Ground Operations, Cargo, and Training.

About This Our People and Introduction Economic Governance Social Environment Report Values 39 Health and Safety DISCLOSURE 2019 2020 UNITS Safe Man-Hours 18,090,240 4,018,976 Man-hours Safety Promotion Workplace Safety Inspection​ No. of work-related 99 27 cases injuries PAL and PALex have developed formal means of • Covers the safety inspection of the Group’s workplaces No. of work-related 0 0 case safety promotion to ensure that and facilities​ fatalities relevant personnel are fully aware of the SMS • Performed by Ground Safety Specialists​ No. of work-related ill- 32 3 # program, safety critical and generic information. health Ground Safety Inspection No. of safety drills 23 1 Fire drill Flight Safety and Cabin Safety Inspection • Covers all aspects of ground operations including • Verifies that flight and cabin crew adhere to activities in the airport and ramp applicable regulations and established • Performed by Ground Safety Specialists company standards during flight and identify Occupational Health and Safety 100% hazards and risks encountered during flight Of all reported hazards have been assessed and addressed operations. The Group’s work-related injuries plummeted from 99 • Covers all flight and cabin crew activities cases in 2019 to only 27 cases in 2020. The trend is the Of all safety incidents have been assessed, investigated, and addressed starting from the time the crew reports for same for work-related illnesses with only 3 cases in 2020 duty until flight debriefing from 32 cases in 2019. Fatal accident for the past 22 years (PAL) • Performed by Fleet Safety Pilots and Cabin Both organizations had zero work-related fatalities last Fatal accident for the past 20 years (PALex) Safety Specialists year. Non-fatal accident for the past 4 years Flight Data Analysis (FDA) Program A fire drill was conducted last year in PAL Fuel Work related fatalities and high consequence injuries • Involves the capture and analysis of data and Management Department to simulate emergency situation information from onboard recorders in the in fuel depot. 0 aircraft. QUANTITY Customer Complaints DISCLOSURE • Results of flight data analysis are used to 2019 2020 There were three (3) substantiated complaints on product determine any safety risks in flight operations No. of substantiated complaints on 7 3 and develop safety mitigating actions. or service health and safety, one (1) of which has been product or service health and safety* • Information derived from the program are addressed and the remaining two (2) are still for resolution No. of complaints addressed 7 1 also used to improve safety by enhancing with the affected passengers. These complaints involved *Substantiated complaints include complaints from customers that went injury during boarding or while on flight. through the organization’s formal communication channels and grievance training effectiveness and operational mechanisms as well as complaints that were lodged to and acted upon by procedures. government agencies.

About This Our People and Introduction Economic Governance Social Environment Report Values 40 Health and Safety

Food Safety How do we cook and handle inflight meals? Established control system for safe cooking, chilling, As safety is always our top priority, food safety is one and setup is in place. Microbial testing is conducted to aspect that the Group gives utmost importance to. It verify the effectiveness of food safety management has always been our commitment to provide our system. passengers peace of mind by providing safe and delectable inflight meals. Here are the things we have How do we transport the inflight meals? been doing to uphold the highest levels of safety from Inflight meals are transported under controlled the time the meals are prepared until they are loaded conditions from the facility to the aircraft by authorized in our aircraft. and trained personnel. How do we source our food supplies? As part of our safety protocol since the pandemic, the The food supplies are bought from accredited inflight meal service on board was modified. Main suppliers. An effective approval system is in place to courses are served with foil covers to the passengers. ensure safe food supply. We have also shifted to disposable cups and utensils. The business class service was simplified with the How do we prepare the inflight meals? suspension of One-by-One meal service while the Food is prepared in a clean and hygienic facility boarding drinks are served in individual pet bottles. following procedures based on World Food Safety Guidelines to prevent contamination and ensure food For 2020, our rate of hygiene concerns is 0.0015% from safety. 0.0037% in 2019, which means we have 1 concern for every 100,000 meals compared to 2 concerns for every What personal hygiene standards are in place? 100,000 meals in 2019. We work closely with Procedures are in place to ensure personal hygiene our caterers to mitigate and control contamination. Rate of Hygiene Concerns standards exist and are maintained. These include Currently, we do not have food safety concerns that 0.0040% wearing of PPEs, wearing of masks and hairnets, and lead to payment of fees, penalties, or warnings. standard operating procedure on handwashing and 0.0037% others. 0.0020% 0.0015% 0.0000% 2019 2020

About This Our People and Introduction Economic Governance Social Environment Report Values 41 Health and Safety Aircraft Maintenance Authorities’ mandatory requirements. This ensures that the aircraft PAL and PALex subcontracts the maintenance of its commercial fleet (except for the and equipment are always in an airworthy condition. PAL AED established the DeHavilland turboprops) to Lufthansa Technik Philippines (LTP Manila) for line, base, GMM while PALex established their MCM. Both manuals describe the policies heavy maintenance as well as other CAAP-approved Maintenance and Repair and processes required to achieve the intent of the CAMP, as required by the Organization (MRO). PALex maintains its turboprop fleet from line maintenance up to CAAP. A-check, under its own CAAP-approved MRO. Maintenance materials and parts are sourced from approved suppliers PAL and PALex Aircraft Engineering Department (AED) undertakes planning, which include original equipment manufacturers. monitoring and control of all maintenance activities and technical compliance of Shop maintenance and overhaul services of engines are provided by aircraft, engines and accessories with airworthiness requirements and industry Lufthansa Technik AG (LHT), Air France Industries (AFI), IAE International Aero accepted standards for safety, reliability, and customer acceptability. Engines (IAE), Pratt & Whitney, and Rolls-Royce while the same services for the Line maintenance in overseas destination stations is subcontracted to CAAP-approved Auxiliary Power Units (APUs) are provided by Honeywell. Component pooling maintenance organizations. and repair services are handled by Hong Kong Aircraft Engineering Company Limited (HAECO), LHT and Airbus. LTP and the outstation service providers are mandated to comply with the requirements of PAL and PALex Maintenance Schedule and General Maintenance Manual (GMM) and Maintenance Control Manual (MCM) approved by the CAAP. AED exercises oversight responsibilities to ensure compliance of the contracted maintenance providers to the established policies and procedures and contractual obligations. The PAL and PALex Fleet is maintained in accordance with the standards mandated by the aviation authorities such as: • Civil Aviation Authority of the Philippines (CAAP), • US Federal Aviation Authority (US-FAA), and the • European Aviation Safety Agency (EASA) The Continuous Airworthiness Maintenance Program (CAMP) of PAL and PALex is approved by the CAAP and is based on Aircraft Manufacturer’s / Original Equipment Manufacturer’s approved and recommended documents and Airworthiness

About This Our People and Introduction Economic Governance Social Environment Report Values 42 Health and Safety How we got that Star: Quality Assurance Program The Quality Assurance Program of the Group includes all planned and systematic actions necessary to enhance confidence that the Group’s management systems. All operations and maintenance processes are conducted in accordance with the Aviation Authority regulations and the Group’s standards. The Program was established to ensure that all work performed, processes, controls and procedures in the Group’s operations, vendors, suppliers as well as other organizations who provide contracted services in support of maintenance and operations, are in accordance with Aviation Authority regulations and the Group’s standards. With new processes introduced during the pandemic, aside from performing the regular scheduled audits, Quality Department intensified their activities for unannounced surveillances and unscheduled audits which were part of the enhancement in the Quality Assurance Program. The unscheduled audits and surveillances are conducted in case of significant changes to the management, organization, operation, technologies used or significant regulatory requirements and in case of quality & safety precursors are identified in the different aspects of maintenance and operations. This includes focus on new normal safety protocols, aircraft parking & storage, defect management and aircraft disinfection. Surveillance activities using Safety Assessment of Foreign Aircraft (SAFA) checklists to ensure compliance with ICAO standards were also performed.

Customer Touchpoint Assessment Additional quality control activities related to customer satisfaction were introduced in 2020. The Customer Touchpoint Assessment is a new quality control activity which aims to look into customer experience from booking through contact center or ticket offices, check-in, boarding up to arrival. The verification involves cabin passenger conditions, inspection of aircraft passenger convenience items, observance of new normal safety protocol and the delivery of Buong Pusong Alaga service to customers. Use of Electronic Audit Database The Group uses Rolls-Royce SMS Solution, (known as Aviation Quality Database (AQD)) in its Quality Assurance Program. AQD is a software with a complete self-contained quality assurance management system which includes audit planning, scheduling, audit generation, risk management, finding analysis, leveling/categorization/analysis, action plan tracking, statistical analysis, and root cause analysis (RCA). It is a repository of all audit records in electronic format. The AQD is maintained by the Information Systems Department (ISD). Back-up files/ records are done regularly by ISD based on existing Company policy.

About This Our People and Introduction Economic Governance Social Environment Report Values 43 Employee Training and Development We rely on people with the right knowledge, skills, values and attitudes to carry out their duties and responsibilities in order to fulfill our mission of delivering safe, reliable, efficient and pleasant travel experience exceeding passenger expectations. Employee training and development play an important role in our organization in order to ensure that the personnel perform according to what is expected by customers, as well as in adherence to certain regulations. Training and Development is responsible for equipping personnel with appropriate skill set and competencies to perform their job, as well as setting and maintaining right qualifications in compliance with regulations and company standards. First and foremost, the Group ensures that training modules for airlines' workforce and third-party providers are conducted by qualified and competent trainers. Trainers are equipped with the necessary tools and information in facilitating the trainings required. Training programs are function-targeted and needs-specific to ensure that trainings are relevant and can support business objectives and needs. These training programs include technical or regulatory training and soft skills training. The Company recognizes the importance of training and equipping people with the necessary knowledge on regulatory requirements, since non-compliance to the mandatory requirement will expose us to penalties or cancellation of permits. Soft skills training are also given importance as these will support the behavioral/social aspect of the business unit and function. The Group’s Training and Development impacts various stakeholders of the business. A successful training program will develop employees to become competent and productive and ensures that our passengers ultimately benefit from the service that our employees render. TOTAL AVERAGE The airline invests heavily in infrastructure and equipment for training of its employees. The PAL Learning EMPLOYEE TRAINING HOURS TRAINING HOURS PER Center is a facility dedicated to conducting various technical and soft skills training of pilots, cabin crew and IN 2020 EMPLOYEE IN 2020 ground personnel. The airline invested in Flight Simulators and Flight Training Devices for pilots. A Cabin Female 49,845 13 Fire Simulator was also acquired to train pilots, cabin crews and ground personnel for handling a fire Male 61,475 17 incident inside an aircraft, in the office and facilities. The airline makes use of technology for e-learning, online training, and blended learning, and for keeping training records of employees.

About This Our People and Introduction Economic Governance Social Environment Report Values 44 Employee Training and Development How we got that Star: Our Trainers Regular meetings and commitment setting are conducted for a more people- The training initiatives are aligned with the Group’s vision. Developing employees centric approach to ensure performance. is the primary role of Training to ensure that employees are skilled and Training and Development also support the operations team during the IOSA audits knowledgeable to ensure business continuity. for documentation and compliance to safe operational practices. Training and Development develops programs that are needs-specific. They Training and Development is also a support arm during New Station Openings and provide more tailored training solutions that address training gaps in specific when there are new systems to be used such as Passenger Services System for functions within departments. These learning and development solutions are Airport Operations and Sales, providing training to the employees deployed to attuned to the current challenges and needs of departments. handle operations in the New Station. Our trainers provide curriculum-based courses to client-departments for a more Our team of trainers participated in the monthly Safety Action Group meetings holistic development of employees. Our trainers cater to the needs of employees where operational situations and concerns were discussed. from PAL, PALex and Third-party handlers or employees assigned to work for Moving forward, the Group plans to pursue the following: various functions and locations such as the Airport (particularly at the check-in 1. Benchmarking with other organizations in the same or related industries on counters, gates, ramp, baggage and cargo offices) and Contact Center being Third training solutions. party providers. 2. Trainer development by taking certification and developmental workshops The manner by which these training programs are implemented have been provided by credible training firms and institutions for the purpose of integrated in the performance management system for the trainers, which includes continuous development. assessment for commitment setting, monitoring, coaching, and ensuring the 3. Strengthening of training evaluation techniques to be able to translate success of the program and trainings. learning to actual business objectives. The Group makes use of technology for collaboration, faster coordination, and 4. Strengthening of contextualized and organizational research for conceptual close monitoring of performance. Cloud-based drives, software, and systems have or theoretical development in content, methodologies, and facilitation. been utilized for communication, documentation, file storage, among others. 5. Enhancing group-specific handling processes of learning and development solutions

About This Our People and Introduction Economic Governance Social Environment Report Values 45 Employee Training and Development Pilot Training The training and development of flight deck crew and flight dispatchers of Philippine Airlines, and other non-PAL personnel, as necessary, is handled by the PAL Aviation Training Center (PATC). The PATC ensures all training and qualification requirements of pilots and dispatchers are compliant with: (a) Regulatory (CAAP); (b) International Civil Aviation Organization (ICAO); (c) IATA Operational Safety Audit (IOSA); and (d) Other needs by (but not limited to) Flight Operations Department (FOD), Integrated Operations Control Center (IOCC), and Safety Department. To ensure the efficiency of flight trainings, various divisions under PATC are responsible for the different aspects of training. The Flight Training Division upholds training standards of B777 Enhanced Virtual Trainer the Company by training, guiding, and monitoring the performance of pilots and flight instructors using flight training devices. This division also provides type-rating and instructor courses. The Ground Training Division provides theoretical and practical instructions, periodic refresher, recurrent, and special courses to flight crew and dispatchers. It also supports the ground training needs of pilots for type-rating and instructor courses. The Quality and Standards Division takes care of planning, organizing, and implementing the quality management system of PATC. This office ensures that the highest standards of training are given to the flight crew members and flight dispatchers. Last but not the least, the PAL Aviation School (PALAS) Division provides Ab-initio program for pilot trainees. The PALAS produce pilots that will eventually join the airline. A320 Full Flight Training is mostly done in classrooms, Flight Training Devices, and blended learning using Simulator located Learning Management System (LMS) or e-learning. Pilot Training venues include the PATC inside the PAL Flight Ground Training Division, PATC PAL Aviation School, and PAL Flight Simulator Training Simulator Building in Andrews Avenue, Building, all located in Andrews Avenue, Pasay City. For the simulator trainings of A330, Pasay City A350 and B777 flight crew, our pilots are sent to various simulator training venues in the Asian region.

About This Our People and Introduction Economic Governance Social Environment Report Values 46 Employee Training and Development How we got that Star: Pilot Training (cont.) PATC has an Approved Training Organization Certificate PATC started working on digital transformation of grade (ATOC) given by the Civil Aviation Authority of the slips as well as transformation into Competency Based Philippines (CAAP) which allows the Sub-department to Training (CBT) and eventually go into Evidence Based conduct pilot and dispatcher training for both internal and Training (EBT). This will enable us to evaluate the external clients. performance of all our pilots and instructors from the data Internal clients are from FOD and IOCC, specifically from gathered during training Flight Dispatch Division. Ground Training Division mostly Non-compliance in training-related regulatory requirement provides training to our external clients from PALex. would not allow pilots and dispatchers to fulfill their duties. We do not only adhere and comply with regulatory or This would result in shortage of manning and penalties mandated requirement but also work on the improvement from regulators not only in the Philippines, but also in out- on the quality of our training. We continue to standardize stations where PAL flies. and improve the quality of our ground and flight instructors PATC also use training performance to gauge the skill level by giving them valuable workshops and additional trainings. of our trainees and determine areas of improvement. All instructors undergo Airbus Pilot Instructor Course (APIC), Training must be as dynamic as how the aviation industry which comprises the Core Course (given to all instructors), evolves. Data gathered from all stakeholders are used to and the type-specific (given to all Airbus simulator draw up a training solution for the improvement of our instructors). An instructor’s workshop entitled “Effective trainees. This ensures high standards of safety and Performance Coaching” is being given to all instructors. efficiency of our crew. Improvement in training methodologies and evaluation has been the main topic of improvement.

About This Our People and Introduction Economic Governance Social Environment Report Values 47 Employee Training and Development How we got that Star: Cabin Crew Training The Inflight Services Training (IFST) Division provides IFST is supported through the provision of competent and qualified cabin crew members resources and trainings necessary to provide the rostered in the line through the promotion of the required trainings to cabin crew. The Company has safety culture through the trainings provided. The invested in training equipment such as Door Trainers, trainings include Initial Training for new cabin crew, Swimming Pool, and Cabin Fire and Smoke Trainer Recurrent Training, Re-qualification Training, Senior which is a special structural equipment that simulates Cabin Crew Training, and Recency Training. Cabin inflight fire scenarios. Crew Training Programs are guided by RP-Civil With limited face-to-face trainings, the airline has Aviation Regulation and IATA regulations and policies increased the use of the Learning Management in maintaining high safety standards in training. System (e-learning or computer-based training). We IFST trainers undergo IATA qualifications, Red Cross keep these training resources and facilities available, Trainings, Greenlight Trainings, and other trainings to well-maintained, functional, and compliant to be equipped and competent to train cabin crew. regulatory requirements to ensure we have Apart from the trainings mandated by regulators, IFST competent cabin crew certificate holders. We continue to seek improvement in our training also conducts other forms of training for our cabin programs as we pursue excellence in our services to crew such as Inflight Service Trainings which place Cabin Fire and Smoke Trainer stand as a barometer in Safety and Service PAL and PALex crew at par with the industry’s best Standards. cabin crew. Trainings required by World Health Safety is our top priority. By embedding and Organization (WHO), Transportation Security emphasizing safety in our trainings, we instill the Administration (TSA), Office of Transport Security culture of safety not just within our work (OTS) and First Aid requirements for cabin health and environment but also outside the workplace. security are also included in the cabin crew training program.

About This Our People and Introduction Economic Governance Social Environment Report Values 48 Employee Training and Development How we got that Star:

Ground Crew Training Employees, both individual contributors and leaders, from different groups, namely, For Airport personnel, Reservations and Ticketing personnel to be fully equipped Commercial, Office of the President, Operations, Finance & Administration, PALex and in strict compliance to regulatory bodies, they undergo regular trainings. and Third-party providers are also trained on curriculum-based soft skills. Trainers ensure that licenses of airport personnel are maintained and current as a All the technical trainings are aligned with the contents of the various manuals requirement. The Commercial Training and Development Division (CTDD) trainers used in our operations. attend the initial and recurrent Dangerous Goods (DG) Regulations training at IATA as a mandatory requirement to meet regulatory compliance. For behavioral skills which encompasses both technical and non-technical skilled employees, the Management and People Development Division (MPDD) ensure regular consultation with each department for their team's professional development. Curriculum-based courses are provided to client-departments that request courses on customer service, personality development, communication, values formation, and new employee indoctrination for a more holistic development of new employees. Trainings other than technical or regulatory are provided to better prepare employees (leader and staff) to manage other factors that may affect a person’s emotions & behavior, productivity and relationship towards his colleagues & other external parties.

About This Our People and Introduction Economic Governance Social Environment Report Values 49 Customer Management

Our Response to COVID-19 Being part of an industry that is heavily hit by the effects of COVID-19, PAL and PALex had to adapt quickly in explicable yet astounding ways amidst unprecedented changes in travel restrictions, requirements, and safety protocols.

Now, more than ever, our duty remains the same—to ensure everyone a safe Being in enclosed spaces may be a concern of travelers, but about 50% of the air in travel experience, while maintaining our service culture of heartwarming service the cabin is refreshed every 2 to 3 minutes. The other 50% that is recirculated in the or buong pusong alaga. Safety and wholehearted service. This is the promise we cabin goes through hospital-grade High Efficiency Particulate Air Filters (or HEPA committed to our passengers when we first flew 80 years ago, and one we are Filters) that eliminates up to 99.99% of airborne viruses and bacteria. Also, the air determined to keep amidst this global pandemic. Philippine Airlines welcomes flow in the cabin goes from top to bottom, never left to right or front to back. This everyone to the New Normal with our Same Heart. further reduces the already low risk spread of airborne microbes. Keeping You Safe Always Inflight meals continue to follow strict Hazard Analysis Critical Control Point Guided by this mantra of New Normal Same Heart, the Group has transformed its (HACCP) procedures and are placed in sanitized containers. Seat distancing inside entire travel experience; from the minute the passenger books a flight to the the aircraft are observed depending on space availability. When flights are not full, moment they land. All measures have been put in place so that passengers can fly we continue to allocate seat assignments, upon check-in at the airport, in a way worry-free on their next trips with us. that maximizes personal distance between our passengers. Business class passengers enjoy the same ultimate comfort and exclusivity with plush seats, To ensure minimized contact, our ticket offices and airport counters are equipped exclusive cabin space, and dedicated lavatories. Economy class passengers also have with protective barriers, and our staff are wearing the appropriate facial coverings. the option to purchase Neighbor-Free seats for added peace of mind and comfort. Thermal scans and footbaths are also observed at every entrance, while hand sanitizers are available in key areas. Our personnel also ensure that customers and We have intensified our cleaning and disinfecting measures especially in high touch passengers maintain the right social distancing guidelines. We have also areas on ground—including barriers, counters, seating areas, and push carts. Cabin implemented contactless transactions by opening our online check-in surfaces in our aircraft are properly and rigorously disinfected using high-grade, eco- facility and have enforced self-tearing and self-scanning of boarding passes in select friendly cleaning agents after every flight, including frequent sanitation routes and airports. and disinfection of our lavatories and high-touch surfaces by our cabin crew during every flight.

About This Our People and Introduction Economic Governance Social Environment Report Values 50 Customer Management Staying in the Know, Now At the start of the pandemic, the Group has set up a COVID-19 information Capitalizing on technology, PAL has implemented a digital infrastructure, via center—a dedicated webpage of the PAL Website that provides the latest the Passenger Profile and Health Declaration System, that allows passenger updates on PAL and PALex flights and travel rules and requirements, whether convenience on registration, verification, and test payments, as well as passengers are departing from, arriving in, or traveling within the Philippines. seamless integration with process partners. Our communication efforts have also been amplified to further reach our Maximum Flexibility for Flight Changes customers in different channels via e-mails, SMS, print media and press releases, and in our social media pages. We acknowledge that uncertain times can also lead to uncertain plans. For greater flexibility even for voluntary changes, the Group has also introduced Testing Made Convenient the No-Worry Flight Fare Brand—which allows passengers unlimited Our promise to ensure the most convenient and seamless travel experience rebooking, or the option to also convert their tickets to a Travel Voucher or has led us to pilot several customer-centric initiatives before and after they request for a refund, subject to applicable terms depending on the ticket’s fly with PAL and PALex. We have set up testing facilities, in partnership with fare family. The launch of our myPAL Request Hub, an online facility for DOH-accredited Diagnostics Laboratory, that administer COVID-19 tests to submission of booking change requests, has provided more convenience to our passengers flying to destinations that require negative RT-PCR or Antigen our passengers, as they are able to transact at the comfort of their tests before departure. Likewise, we have partnered with at least homes anytime. 15 private testing laboratories in more than 50 locations nationwide, so our passengers can get exclusive or discounted rates and/or quicker release of test results wherever they start their travels with us. For passengers arriving in the Philippines, our own International One Stop Shop works in tandem with other agencies to ensure passengers follow and observe the arrival and quarantine protocols set by the Philippine government. Our partnership with the Hotel Sales and Marketing Association (HSMA) also provides our travelers with exclusive rates in over 60 Metro Manila Hotels for their quarantine stay.

About This Our People and Introduction Economic Governance Social Environment Report Values 51 Customer Management

Customer Satisfaction Quarterly 2020 Net Promoter Score (NPS) Safety Perception Rating The Group solicits close to real-time customer feedback through 60% 56% 64% the Post Trip Survey. The survey is conducted through a self- 53% 58% accomplished questionnaire designed to meet the following 44% 48% research objective: 32% 23% • To measure overall customer experience metrics: Customer 18% 18% Satisfaction (CSAT), Net Promoter Score and Intent to Fly with Q1 Q2 Q3 Q4 PAL (ITF) Q2 Q3 Q4 Promoter Detractor • To monitor COVID-19 safety concerns of passengers, To determine touchpoint CSAT with drill-down to airport and NPS significantly improved quarter on quarter coming safety questions for tracking Safety Perception inflight experience from the dip in 2nd quarter during the lockdown. Rating was introduced on the 4th week of May 2020 • Draw customer feedback and identify improvement areas Overall Customer Satisfaction (CSAT) Intent to Fly With PAL Group E-mail survey invitations are sent daily to all customers who have 80% 82% flown with PAL and PALex and have provided valid e-mail 75% addresses. 53% 66% 50% 48% The Group has also invested in a Customer Experience 40% Management Tool that operationalizes gathering and analysis of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Voice of Customer (VOC) along with the customer journey. The tool CSAT and Intent to Fly with PAL Group has been on an upward trend since 2nd quarter after implementation of enables the group to collect passenger feedback about their enhanced safety protocols and One-Stop-Shop program for testing and quarantine hotel booking. experience on-ground and inflight using our robust survey tool that Our Customer Experience Metrics took a beating in the 2nd quarter of 2020 after the declaration of COVID- utilizes email, QR code, and other channels. This allows the group 19 as a pandemic and the placement of National Capital Region under Enhanced Community Quarantine, to check if the minimum requirements of customers are being freezing our operations except for repatriation flights and essential cargo-only flights. As we slowly resume delivered, to identify key areas of improvement that will address commercial flights in the 3rd quarter, the intensified safety protocols on-ground and during flights has pain points of customers, as well as to formulate product and given back reassurance and confidence to the passengers to fly with PAL, thereby significantly improving service offerings that will continue to delight our customers while our scores quarter-on-quarter, ending the year with scores higher than the 1st quarter, the period before delivering our brand promise of Buong Pusong Alaga (whole- the pandemic. The Safety Perception Rating, which we began tracking in the 4th week of hearted service) in the midst of the pandemic. May, continuously increased from 48% to 64% in the 4th quarter.

About This Our People and Introduction Economic Governance Social Environment Report Values 52 Employee Hiring and Benefits Employee Hiring Benefits Talent Acquisition remains true to its objectives and that is to fill the Group’s The Group provides comprehensive benefits and policies which include Medical, free and manpower requirement observing the internal fulfillment guidelines and reduced-fare tickets for the employee and dependents, service awards, perfect attendance complying with the Department of Labor and Employment orders and awards, as well as various leaves. The Employee Benefits office also facilitates employee advisories, including Republic Act 10911, also known as the Anti-Age availment of social benefits from the government. Discrimination in Employment Act; and Republic Act 10173, also known as Non-compliance with rules on availment of statutory social benefits are punishable in the Data Privacy Act of 2012 when hiring external candidates. accordance with the law. Any violation of RA 10911 shall be punished with a fine of not less than PAL PALex P50,000 but not more than P500,000, or imprisonment of not less than three YES % OF EMPLOYEES WHO EMPLOYEE BENEFITS months but not more than two years, or both, at the discretion of the court. OR NO AVAILED FOR THE YEAR We conduct benchmarking for best practices in the field of Talent FEMALE MALE FEMALE MALE Acquisition. We partner with hiring departments in identifying the skillset of a.) SSS (Calamity and Salary Loan) Y 9% 6% 24% 22% candidates to fill the role. Digitalization plays a big role in the improvement of b.) PhilHealth Y 2% 1% 7% 4% processes. An end-to-end automation of travel benefits processing will allow c.) Pag-ibig (Calamity loan and MPL) Y 4% 5% 20% 19% the employees access to his travel privilege, online ticketing, payment and d.) Parental Leaves (Solo Parent Leave) Y 4% 2% 9% 2% refund features. Digitalization of employee records and documents also e.) Sick Leaves Y 4% 3% 98% 93% improved document management. d.) Vacation Leaves Y 97% 97% 96% 97% We have existing guidelines/policies and a Manual to refer to in Talent e.) Medical Benefits (aside from PhilHealth) Y 87% 87% 69% 68% Acquisition. f.) Housing Assistance (aside from Pag-ibig) N - - - - g.) Retirement Fund (aside from SSS) Y 1% 0% 0% 1% EMPLOYEE DATA AS OF 31-DECEMBER-2020: PAL PALex h.) Further Education Support N - - - - Total number of male employees 3,018 702 i.) Company Stock Options N - - - - Total number of female employees 3,220 520 j.) Telecommuting Y 38% 32% 74% 63% Attrition rate (voluntary and involuntary) 8.20% 15.26% k.) Flexible working hours Y data not available 29% 18% Ratio of lowest paid employee against minimum wage 104% 105% l.) (Others) (Emergency Leaves, etc.) Y 39% 31% not applicable

About This Our People and Introduction Economic Governance Social Environment Report Values 53 Environment Resource Management The Philippines ranked 17th in the world as the most affected Energy Efficiency country from extreme weather events (both in terms of the The Group’s energy consumption mainly relies on non- fatalities as well as the economic losses that occurred) in the th renewable energy sources. Airline operations use large Global Climate Risk Index (CRI) 2021 and ranked 4 in the amounts of fossil fuels: Jet A-1 fuel for the aircraft, Gasoline world as the most affected country over the last two and Diesel for the shuttle service, ground equipment and decades (2000-2019). generator sets, Coal for power generation (main source of The Group is aware of its responsibility to its country to help distributed electricity purchased from electric distribution mitigate climate change while continuing its operation and companies) for the occupied buildings and offices. has implemented the Environmental Management System. Our operations use large amounts of energy which contributes The Management has approved the implementation of the to the depletion of the resources. With this, the Environmental Management System (EMS) which identifies Group committed to reduce the energy consumption. the environmental aspects and impacts of the Group’s Energy Consumption (Electricity) activities, focusing on which mitigating measures should be implemented. The Management has set the targets that the The Group is committed to improve its energy efficiency Group will take to reduce its impact on the environment. annually by implementing energy conservation measures. This These are: (1) Compliance to the International Civil Aviation is monitored through the Environmental Management System, Organization (ICAO) - Carbon Offsetting and Reduction and we have set a target to reduce energy consumption Scheme for International Aviation (2) Reduction of Energy (electricity) by 5% with 2018 data as baseline. Consumption (3) Reduction of Water Consumption (4) The Group continue to implement simple yet effective Reduction of Plastic Consumption (5) Reduction of Paper measures to further reduce energy consumption, such as Consumption (6) Reduction of Residual Waste (7) Reduction switching from fluorescent lamps to LED, setting of room of Hazardous Waste Generation temperature from 22°C to 25°C in all offices, regulating the The Management is committed to provide the necessary time of turning on and off of office appliances and human and financial resources to help achieve the targets. equipment, and conducting of regular preventive maintenance.

About This Our People and Introduction Economic Governance Social Environment Report Values 55 Resource Management

The Group has also invested in energy efficient Amid the COVID-19 pandemic, the Group Energy consumption within the organization office equipment. continues to implement fuel efficiency DISCLOSURE QUANTITY UNITS initiatives using the IATA four-pillar strategy. The implementation of community quarantine Energy consumption (renewable sources) N/A GJ Fuel conservation measures are in place to in the Philippines due to the COVID-19 Energy consumption (jet fuel) 21.7 million GJ ensure reductions in fuel consumption. pandemic, has restricted and limited the Energy consumption (gasoline) 3,314 GJ movement of personnel. This led to shifting to Energy Consumption (Diesel and Gasoline)​ Energy consumption (LPG) N/A GJ digital means of communication, temporary With the limited number of operated flights, Energy consumption (diesel) 42,671 GJ work suspension and implementation of work the gasoline and diesel consumption of the Energy consumption (electricity) 11.7 million kWh from home set-up for most employees. This is Group also decreased by 34% or also the main reason why the energy ​Reduction of energy consumption​ 1,673 Gigajoules and 59% or 61,056 consumption (electricity) dropped by 40% - Gigajoules, respectively. DISCLOSURE QUANTITY UNITS from 19.4 million kilowatt-hour last 2019 to Energy reduction (renewable) N/A GJ 11.7 million kilowatt- hour in 2020. Continuous use of non-renewable energy can lead to depletion of resources that will Energy reduction (jet fuel) 36.8 GJ Energy Consumption (Jet A-1) increase the cost of buying fuel and Energy reduction (gasoline) 1,673 GJ The current COVID-19 pandemic has severely electricity needed for the operation. This Energy reduction (LPG) N/A GJ affected demand for aviation transport which presents an opportunity for PAL and PALex to Energy reduction (diesel) 61,056 GJ led the airlines to cancel most of its flights. The do a study in further improving its energy Energy reduction (electricity) 7.1 million kWh Group mainly operated repatriation, cargo only efficiency using available new technology. flights and a limited number of commercial Energy Consumption in the Organization The Group has no facilities in using flights due to travel restrictions. As a result, the renewable sources while Liquified Petroleum 80 Group’s energy consumption for Jet A-1 58.45 Gas (LPG) data are being monitored by our significantly reduced by 63% from 58.5 million 60

service provider. Millions 40 19.42 Gigajoules (GJ) in 2019 to 21.7 21.70 million Gigajoules (GJ) in 2020. This year's unit 20 0.005 0.104 11.73 of measure was changed to GJ from tons last 0.003 0.043 0 year. Energy consumption (Jet Energy consumption Energy consumption Energy consumption A-1 fuel) in GJ (gasoline) in GJ (diesel) in GJ (electricity) in kWh 2019 2020

About This Our People and Introduction Economic Governance Social Environment Report Values 56 Resource Management

Water Consumption importance of sanitation, hygiene, and access to Water consumption within the organization clean water in preventing and containing Rising human populations are leading to increased DISCLOSURE QUANTITY UNITS demand for water. In the Philippines, around one diseases. (1) in ten (10) people still do not have access to Knowing the importance of water in its operation, Water withdrawal (Cebu) 13,796 Cubic meters improved water sources. This is driving over- the Group is committed to reduce its operational extraction of water and pollution of freshwater water consumption to prevent depletion of Water consumption 139,125 Cubic meters ecosystems - resulting to rivers running dry, lake resources. Water recycled and reused N/A Cubic meters and groundwater levels dropping, and freshwater Amidst the COVID-19 pandemic, the Group species becoming endangered. In the last couple continued to apply the water conservation Water Consumption of years, we have been experiencing water measures implemented in the previous years such (in cubic meters) shortage from time to time, forcing water as placing signages across various areas about 400 concessionaires to implement rotational water water conservation and regularly checking 306.4 interruption. pipelines for leaks and performing preventive 300

Water supply is essential to the Group’s maintenance. The reduction of employees Thousands 200 operations. It is mainly used in our offices and reporting to work and decrease in flight 139.1 buildings for sanitation and cooling towers, operations were the main contributors in the 100 potable water supply in our aircraft and in meal decrease of water consumption in 2020. The 17.9 13.8 preparations by our caterers. With the ongoing usage has dropped by 55% equivalent to 167,272 0 COVID-19 pandemic, we have seen the cubic meters compared to 2019 consumption. Water withdrawal Water consumption 2019 2020

About This Our People and Introduction Economic Governance Social Environment Report Values 57 Ecosystem and Biodiversity Environmental Impact

Wildlife Greenhouse Gas (GHG) Emission Illegal wildlife traffickers smuggle endangered species aboard passenger The aviation industry depends on liquid fossil fuels and has inherently long flights, hide wildlife in cargo loaded onto planes and send illegal wildlife technology development and fleet turnover times, which make it difficult for the products around the world. Unabated, illegal wildlife trade sector to decarbonize. threatens the survival of iconic species. The current COVID-19 pandemic has severely affected demand for aviation The aviation industry is committed to playing its part in stopping this illegal transport, with global passenger traffic results for 2020 showing that demand trade in wildlife, worth at least US$ 19 billion annually. (revenue passenger kilometers or RPKs) fell by 65.9% compared to the full year of PAL is a signatory of the United for Wildlife Transport Taskforce Buckingham 2019, by far the sharpest traffic decline in aviation history. The aviation industry Palace Declaration that agrees to implement the commitments relating to expects emissions to increase in the coming decades, despite the current COVID- the airline industry, as part of its intention to tackle the issue and bring an 19 pandemic, which is currently estimated to impact traffic until at least 2024. end to illegal wildlife trade. The Group recognizes its responsibility to help mitigate climate change. The Wildlife trafficking is also known to pose risks to public health. airlines have adopted IATA's Four Pillar Strategy to help achieve the targets to Approximately 75% of emerging infectious diseases in humans–such as mitigate carbon dioxide emissions from air transport. Ebola, HIV/AIDS, and severe acute respiratory syndrome (SARS) – originated Pillar 1: Improved Technology from animals. The Group continues to invest in modern fleet which are more fuel-efficient, with lower carbon emissions and lesser noise compared to previous- generation aircraft. Pillar 2: Operational Measures The Group strives to improve our existing fuel efficiency programs. We adopt the industry's best practices in fuel and carbon emission reductions. ▪ Single Engine Taxi-In (SETI) One engine shutdown after a prescribed time. Remaining engine capable of taxiing into gate leading to lower fuel consumption.

About This Our People and Introduction Economic Governance Social Environment Report Values 58 Environmental Impact

Greenhouse Gas Emission (cont.) Updates aids in the generation of Green House Gas Emission the flight plans utilizing optimum routes for fuel/cost- ▪ Estimated Fuel Remaining (EFR) Reduction efficient operations. DISCLOSURE QUANTITY UNITS Revision of required fuel upon landing for Pillar 4: Global Market-Based Measure (MBM) A330 and A321 leading to lower total fuel Direct (Scope 1) GHG 1,593,404 Ton CO2e loaded Philippines through CAAP has voluntarily participated Emissions in the Pilot Phase of ICAO initiated Carbon Offsetting Indirect (Scope 2) GHG ▪ Improved Zero Fuel Weight (ZFW) Accuracy 8,345 Ton CO e This permits better initial fuel projections and Reduction Scheme for International Aviation Emissions 2 and minimizes excess fuel load. (CORSIA) which will start in 2021. With this, PAL Emissions of ozone- No data ▪ Reduction of Unplanned Extra Fuel (UEF) and PALex are required to submit Emissions Report depleting substances Ton CO e available 2 Limitation of requested extra fuel by the from 2019 to 2035 and purchase and cancel (ODS) flight deck crew. Done with strict allocation “emission units” to offset the growth in CO2 emissions of anticipated extra fuel requests within the covered by the scheme for international flights GHG Emission flight plan fuel load. operated between volunteering states. (tons CO2e) ▪ B777 Engine Data Base Adjustment Several challenges were experienced in data Allows increase accuracy in fuel required and collection because of the implemented community 16.02 loaded for flight. Total quarantine but​ PAL and PALex were able to submit 42.95 By implementing these fuel efficiency initiatives, the the verified Emissions Report to CAAP in 2020. Group was able to reduce 2,035 tons of fuel 0.08 The reduction in the Group’s operation due to the Indirect (Scope 2) 0.14 equivalent to 6,431 tons of CO2 emissions. pandemic coupled by the measures implemented to reduce the energy consumption resulted in the 15.93 Pillar 3: Improved Infrastructure Direct (Scope 1) substantial drop in GHG emissions by 63% for direct 42.81 PAL and PALEx remain in close coordination with Air sources (flight operations) and 40% for indirect Traffic Management for enhancements sources (purchased electricity) compared to 2019. 0 10 20 30 40 50 on navigational procedures. Operational Flight x 100000 Plan (OFP) preparation using Jet Planner with Wind 2020 2019

About This Our People and Introduction Economic Governance Social Environment Report Values 59 Environmental Impact

Other Environmental Measures The Group is committed to reduce its Solid Waste Generation solid waste generation by enhancing waste Ground Emissions segregation and finding alternative materials as DISCLOSURE QUANTITY UNITS The Group operates EURO V compliant COBUS used as replacement to single use items. Total solid waste generated 1,586,868 kg airport shuttle bus. These transport vehicles have Reusable N/A kg diesel engines with low emission of gaseous and Our solid waste hauler oversees segregation of waste Recyclable 369,278 kg particulate pollutants. into different categories: Recyclable, Compostable, Composted 242,850 kg Food Waste, and Residual. Food waste and Incinerated N/A kg Aircraft Noise compostable materials are decomposed through Residuals/Landfilled 974,740 kg The Group complies with ICAO Chapter 4 Noise bokashi and vermicomposting. Recyclable materials Standard with its modern fleet that emits less aircraft are recovered and sold to various recycling facilities Solid Waste Generation noise. and residual wastes are disposed to a sanitary in kilograms landfill. 5 Solid Waste 4.26 Each year, an estimated one third of all food produced The COVID-19 pandemic has also reduced the Group’s 4 around the world – equivalent to 1.3 billion tons worth waste generation. Solid waste generated in 2020 Millions around $1 trillion – ends up rotting in the bins of decreased by 65% or 2.88M kilograms from 3 2.33 consumers and retailers or spoiling due generation in 2019 due to flight reductions. However, to poor transportation and harvesting practices. there was an increase in the solid waste generated 2 1.59 Decomposition of solid waste emits greenhouse gas- 1.03 0.91 0.97 per passenger due to a shift into disposable materials 1 0.37 methane (CH4). from rotable tableware to ensure passenger safety. 0.24 0 Total solid waste Recyclable Composted Residuals/Landfilled The Group generates large amounts of waste in its The Group is studying some alternative sustainable generated operations. It is composed of 24% Recyclables, 6% materials to replace its current inflight items. Compostable, 10% Food Waste, and 60% Residual 2019 2020 Waste. Waste generated mainly comes from its catering facility and flights are the main sources of the solid waste.

About This Our People and Introduction Economic Governance Social Environment Report Values 60 Environmental Impact

Hazardous Waste Effluents Hazardous waste The Group’s operation generates hazardous More than 80 per cent of wastewater resulting DISCLOSURE QUANTITY UNITS waste from the flight operations and from human activities is discharged into rivers occupancy of buildings and offices. Hazardous or seas without any pollution removal. This Total weight of hazardous waste generated 52.45 Tons waste generated by the Group are used lead results to pollution of water bodies which are acid batteries, busted fluorescent lamps, used the habitat of marine biodiversity. Total weight of hazardous waste transported 3 Tons industrial oil and infectious waste. The Group is doing its share to prevent and Effluents The Group complies with RA 6969 or the Toxic significantly reduce marine pollution by the Substances and Hazardous and Nuclear treatment of wastewater produced in its DISCLOSURE QUANTITY UNITS Wastes Control Act of 1990. operations. Total volume of water discharges 25,721 Cubic meters In 2020, there was an increase in hazardous PAL has also invested in a Sewage Treatment Percent of wastewater recycled 0 % waste from 22.91 tons in 2019 to 52.45 tons Plant (STP) to treat the wastewater from its due to infectious waste generated with the catering operations. In 2020, amid the COVID- ongoing COVID-19 pandemic. In compliance 19 pandemic, the STP remained operational Hazardous Waste Generation Effluent to the regulatory guidance on waste and discharged 25,721 cubic meters of (in tons) (in cubic meters) management, all waste coming from flights effluent from 41,139 cubic meters in 2019. 60,000 60 with suspected or confirmed COVID-19 case The decrease by 37% from 2019 data is due to 52.45 should be disposed as infectious waste. The the limited number of meals prepared by the 41,139 Group has transported 3 tons of hazardous caterer. Lavatory waste of aircraft is still 40 40,000 waste in 2020. treated in the STP managed by Manila 25,721 22.91 International Airport Authority. 20,000 The Group will explore alternative non-toxic / 20 non-hazardous materials to reduce the Improper disposal of wastewater will pose hazardous waste generated. reputational risk and legal liabilities. 0 0 2019 2020 2019 2020 PAL will explore reduction of wastewater generation and reuse of treated wastewater. About This Our People and Introduction Economic Governance Social Environment Report Values 61 Our People and Values Employee Welfare and Communication

PAL’s Employee Welfare and Communication (EWC), a team under the Human Capital Department, is dedicated to identifying and addressing the needs of the employees to promote their well-being and communicating the various programs with employees. The COVID-19 pandemic has not only affected the airline’s business, but also the lives of the thousands of employees that depend on the airline for their daily bread. Challenges faced by our people include financial setbacks arising from reduced earnings due to leaves without pay, stress and anxiety affecting both physical and mental health, among others. To provide support to the employees, the EWC organized various webinars that give value to the employees, addressing the needs of the employees affected by the pandemic. Diverse topics were discussed in the numerous webinars conducted since June 2020, touching on the following: • Webinars to help employees maximize their Work From Home experience • Online sessions to re-educate employees on their various Company, Government and Medical Benefits • Online sessions aimed at providing employees physical, mental, emotional, and spiritual guidance, knowledge and skills during the pandemic • Online platform that allows employees to promote and sell their products and services Monthly Town Halls starting in April 2020 to March 2021 were organized • Webinars on entrepreneurship, starting and managing own business to equip employees and conducted to regularly communicate with PAL employees on business, should they plan to go into business financial, and employee support, and other updates. FAQs were prepared • Online sessions on managing finances and investments and communicated to employees after each town hall. Post town hall • A partnership with Microsoft PHLs, Go PHLs and LinkedIn to provide employees surveys were conducted to get employees’ satisfaction about the town hall opportunities for upskilling through free online courses and Confidence in the Company’s leadership. • Online sessions to help employees increase employability • Company partners that offered part-time and full-time opportunities to employees who were on 15-day Leave Without Pay and during the Outplacement Activity after the rationalization program.

About This Our People and Introduction Economic Governance Social Environment Report Values 63 Corporate Social Responsibilities

The Philippine Airlines Foundation (PAL Foundation) promotes social sustainability through its programs involving engagements with underprivileged communities. The Foundation extends humanitarian assistance for the welfare of neglected members of the Philippine society including youth, elderly, medical patients, persons with disabilities (PWD), victims of calamities, poverty and indigenous people.

Youth, Persons with Disabilities Under the Foundation’s flagship corporate social responsibility program, #RPRSNTPinoy! (Represent Pinoy), the Foundation aims to encourage the youth to enhance their talents and skills and inspire other youth to become the best that they can be and showcase the best of the Filipinos in the world stage. PAL Foundation provides travel assistance to underprivileged but outstanding Filipinos who represent the country for global competitions in the fields of sports, arts, academics, etc. ANGELS WALK FOR AUTISM Last January 26th , PAL supported The Angels Walk for Autism 2020. The event was held in MOA Arena and was spearheaded by Autism Society Philippines. It is an annual advocacy event that has been held since 2007. The activity aims to increase public awareness, private sector involvement and inclusion of the autism agenda in government social development initiatives.

About This Our People and Introduction Economic Governance Social Environment Report Values 64 Corporate Social Responsibilities

Victims of Calamities, Elderly Persons The Foundation makes use of the airlines’ transport capacity to help residents of disaster-stricken communities by airlifting essential medical supplies as well as relief goods to neglected and disaster-affected areas. In 2020, it transported and distributed donations to the victims of typhoons Ulysses and Rolly in Bicol and victims of Taal volcano eruption in Batangas.

HOPE CARAVAN Last January 2020, Asia Brewery and Tanduay, along with Philippine Airlines (PAL) and the Tan Yan Kee Foundation, held relief operations in Barangays Pook Lian and Malaruhatan in Lian and Barangay Banilad in Nasugbu for two days. The provincial government in Nasugbu has commended and thanked the efforts of the Group, which was among the first companies to respond and provide the much-needed help to almost 700 evacuees.

RELIEF OPERATIONS FOR TYPHOON ULYSSES Last November 2020, PAL express donated boxes of relief good to our kababayans in Isabela and Cagayan who were affected by Typhoon Ulysses. The donations were turned over to the Philippine Coast Guard Aviation Force for immediate action in Humanitarian Assistance and Disaster Relief.

About This Our People and Introduction Economic Governance Social Environment Report Values 65 Corporate Social Responsibilities

Indigent patients Indigenous community Through its Medical Travel Grant program, the PAL Foundation, in partnership with The Foundation, which is also involved in various environmental protection medical organizations including the Philippine Heart Center, helps bring patients with programs like the preservation of the Philippine Eagles and its habitat at serious conditions (heart disease, craniofacial defects, etc.) and their escorts to where Mount Apo in Davao, also aims to help provide sustenance to the they will be provided with free medical treatment in the Philippines and abroad. The Indigenous Peoples’ communities living within the forest. PAL Foundation also transports medical volunteers to serve several underserved communities in the country. In partnership with Make a Wish Foundation, PAL Foundation also helps fulfill the wishes of sick children by arranging special activities for kids who dream of becoming a pilot or cabin crew. The activity includes a visit in actual PAL aircraft and flight simulator at the Maintenance Base Center in Nichols and personal encounter with pilots and cabin crew.

PROJECT WHEELCHAIR TURNOVER PAL transported 36 wheelchairs and 360 hygiene kits for the City of Marawi via PR 2529, a Manila to Cagayan de Oro flight last 12 October 2019. The cargo forms part of the donation of the Makati Medical Center Foundation(MMCF) for the City of Marawi. PAG-ASA ONE FLIGHT PAL express welcomes angel visitors from Shelter of Hope. More than 20 cancer patients aged two (2) to twenty (20) were warmly welcomed to PALex by volunteers from HR, IFSTD, Flight Ops, Treasury, Aircraft Maintenance Department, Security and Safety for the aircraft familiarization tour/experiential learning activity. The learning activity is part of the PALex E=MC2 (Employee-Management Cooperation and Collaboration) CSRs which varies from outreach activities, Brigada Eskwela, donation/relief drive, to granting requests from institutions serving people with special needs.

About This Our People and Introduction Economic Governance Social Environment Report Values 66 Corporate Social Responsibilities

Base of the pyramid Child welfare, education For its annual Christmas activities, the Foundation organizes gift-giving programs The Foundation is a regular supporter of the advocacies of media networks GMA for neglected children. In the recent years, the Foundation, in partnership with and ABS-CBN. It provided support to GMA Kapuso Foundation’s Unang Hakbang SKAL Makati, organized Christmas gift-giving programs for orphans and street sa Kinabukasan project, an initiative to help parents from impoverished kids under the care of Food for the Hungry Philippines, Children’s Joy communities provide for their children’s school requirements; and ABS-CBN Foundation, Virlanie Foundation, etc. Lingkod Kapamilya Foundation’s Bantay Bata program that helps protect disadvantaged and at-risk children. The Foundation also partnered with Habitat for Humanity Philippines to help improve the living conditions of informal settlers living in high-risk areas in the country.

RELIEF OPERATION PAL express joined by the Philippine Army and the Armed SHARING CHRISTMAS JOY PAL Express, along with other government agencies Forces of the Philippines, conducted a relief operation for COVID-19 affected and private groups and organizations, spearheaded a gift-giving program for the individuals at the Philippine Army Gymnasium last June 27, 2020. They managed children of the Saint Rita Orphanage in Paranaque. Toys, toiletries, food packs, to feed 365 individuals affected by the pandemic and donated boxes of PPEs to new clothes and other essential supplies were given to the children and the staff our troops in the Philippine Army Reserves. as part of the traditional yuletide season of giving despite the pandemic.

About This Our People and Introduction Economic Governance Social Environment Report Values 67 Corporate Social Responsibilities

ALAY SA OFWs PAL President, Mr. Gilbert Santa Maria turned over the Lucio Tan Group’s (LTG) donations to Department of Foreign Affairs Undersecretary Sarah Arriola for the Overseas Filipino Workers (OFW) residing in Lebanon on September 24, 2020. The LTG donated 27,500 face shields, 3,000 boxes of disposable masks and 1,000 boxes of Vitamin C which were carried in PAL’s repatriation flight to Lebanon and was turned over to the Philippine Embassy in Beirut. The Lucio Tan Group also distributed 100 cases of Cobra Energy drinks, 100 cases of bottled iced tea, 1,870 cases of Bi-frutas pineapple mango, 50 cases of Vitamilk Banana, 50 cases of Summit bottled water to arriving OFWs of PAL repatriation flights from Lebanon.

About This Our People and Introduction Economic Governance Social Environment Report Values 68 Material Topic Disclosure Index SEC Guidelines GRI Sustainability Topics Sustainable Development Relevant section(s) Page remarks Equivalent Goals Alignment

Governance GRI 408 Compliance with laws and Compliance with laws and regulations, Workplace p. 27 GRI 409 regulations conditions, labor standards and human rights – labor laws and human rights GRI 407 Effective, accountable, and Labor-management relations p. 29 GRI 405 transparent governance Diversity and equal opportunity p. 31

Economic Economic Performance GRI 201 Direct economic value generated Direct economic value generated and distributed p. 22 and distributed

Environment Resource Management GRI 302 Energy Resource Management, Energy consumption (electricity) p. 55 Resource Management, Energy consumption (Jet A-1) p. 56 Resource Management, Energy consumption (Diesel and p. 56 GRI 303 Water Gasoline) Resource Management, Water consumption p. 57 Environmental Impact GRI 305 Greenhouse Gas Emission Environmental impact, Greenhouse gas emission p. 58-59 GRI 306 Solid and Hazardous Waste Environmental impact, Solid waste p. 60 Environmental impact, Hazardous waste p. 61 GRI 306 Effluents Environmental impact, Effluents p. 61 Environmental Compliance GRI 307 Environmental Compliance Compliance with laws and regulations, Environmental p. 27 compliance

Legend:

No poverty Gender equality Decent work and economic growth Responsible consumption and production​​​

Good health and well being Clean water and sanitation Reduced inequalities Climate action

Quality education Affordable and clean energy​ Sustainable cities and communities​ Peace, justice and strong institutions​​ 70 SEC Guidelines GRI Sustainability Topics Sustainable Development Relevant section(s) Page remarks Equivalent Goals Alignment

Social Employee Management GRI 404 Employee training and Employee training and development p. 44-49 development

Employee Management GRI 401 Employee hiring and benefits Employee hiring and benefits p. 53

Data Security GRI 418 Data security Data security p. 32 Customer Management Customer privacy Customer privacy p. 33 Workplace conditions, labor GRI 403 Occupational health and safety Health and Safety, Occupational health and safety p. 35-37, 40 standards, and human rights

Customer Management GRI 416 Health and safety Customer complaints p. 36-43

Customer Management Customer satisfaction Customer satisfaction p. 50-52

Legend:

No poverty Gender equality Decent work and economic growth Responsible consumption and production​​​

Good health and well being Clean water and sanitation Reduced inequalities Climate action

Quality education Affordable and clean energy​ Sustainable cities and communities​ Peace, justice and strong institutions​​ 71 Isang taon na puno ng pagsubok Tinahak nang walang pagsuko Haharapin ang bukas na may… Pag-asang Hindi Natitinag

Kapag may ipagmamalaki, ang sabi nila: “Ibandila mo!” Ang bandila ang mukhang ihinaharap natin sa mundo Nakamamanghang tanawin, masarap na pagkain Palakaibigang tao, makulay na kultura

Sa digmaan, ang tagahawak ng watawat ang nasa unang hanay May bitbit na inspirasyon At para sa kalabang walang anyo, hugis o mukha Ang inspirasyon ay mabisang sandata

At hindi namin itinigil ang pagwagayway Bumagal man ang ikot ng mundo Kumulimlim man ng bahagya ang langit Mahahawi pa rin ang ulap, at sisikat pa rin ang araw

Ganyan ang Pilipinas, at ganyan ang Pilipino Gaya ng bandila patuloy na lilipad Patuloy ang pagsulong sa kinabukasan Patuloy na mananalig Kasama ang pag-asang hindi natitinag

Matapos man ang unos, iwawagayway pa rin ang bandila Para sa bansang minumutya

Philippine Airlines, Ang Puso ng Pilipino

Video Commercial Link: https://fb.watch/4NqzuwPBdK/ 72 PAL Holdings, Inc. Sustainability Report 2020