2017 SUSTAINABILITY REPORT Contents

Leadership Message 3 Social Responsibility 73

About this Report 6 Community Engagement 74

Profile of MPIC 8 Community Investment 74

Economic Impacts and Performance 15 Disaster Response and Relief 81

ESG Reporting Methodology 83 PART 1: SUSTAINABILITY AT MPIC ESG Data Summary Table 89 Creating Value for Our Stakeholders 20

Governance for Sustainability 25 PART 2: SUSTAINABILITY HIGHLIGHTS OF OUR MAJOR OPERATING ESG Risk Management 31 COMPANIES

Operational Efficiency 35 MERALCO 95

Energy and Emissions 36 GLOBAL BUSINESS POWER 97

Water and Effluents 43 MAYNILAD 99

Waste 46 METRO PACIFIC TOLLWAYS 101

Service Excellence 47 LIGHT RAIL MANILA CORPORATION 103

Increasing Access to Services 49 METRO PACIFIC HOSPITAL HOLDINGS 105

Commensurate Services 51 Annex: Integrated Management 107 Customer Experience 52 System Certifications

Service Continuity 54 Annex: Corporate Websites of 110 our Major Operating Companies Engaged Workforce 57 and Safe Workplaces Annex: GRI Content Index 111

Head Office Profile of Employment 58 Annex: Independent Assurance 117 Statement MPIC Group Profile of Employment 61

Training and Development 67

Occupational Health and Safety 69 METRO PACIFIC INVESTMENTS CORPORATION

LEADERSHIP MESSAGE

Dear Readers, potable water supply and sewerage treatment, toll roads, healthcare, light rail, and logistics. These essential Metro Pacific Investments Corporation is committed to services contribute to the building blocks of society continuing to enhance transparency and accountability by helping to strengthen communities and promote of our activities in line with global trends and the their prosperity. We believe in empowering the people evolving expectations of our stakeholders. we serve to participate in and benefit from sustainable economic growth. We take pride in delivering high- A year ago, we published our first sustainability report quality, well-run and fairly-priced services. presenting the foundations of our management approaches to Environmental, Social and Governance How we do it (“ESG”) aspects of our business alongside relevant data to quantify our performance in these areas. The process In evaluating our investment prospects, MPIC seeks to of preparing that report and the feedback we received add value for customers and communities by improving on its content have been informative. the quality of infrastructure assets, enhancing the efficiency with which they are run, extending their As you read this report for 2017, we hope you will coverage to more people and working closely with appreciate the progress we are making towards regulators to achieve shared goals. realizing our ambition to develop a portfolio of well- run infrastructure assets delivering excellent service At the core of our strategy, we strive to create value for and good value to the public. In so doing, we aspire to our shareholders by ensuring long-term growth in value contribute to economic development of the Philippines of all parts of our portfolio. With life cycles of 25 years while uplifting the quality of life of the people we serve. or more, our infrastructure projects are by their very nature long-term. This means that our investments are What we do intended to survive many political and economic cycles, and in managing our assets we expect to experience MPIC is primarily focused on investing in infrastructure, various regulatory and funding challenges from time to initially in the Philippines and now also expanding time. into other ASEAN markets. Inadequate supply of infrastructure in the Philippines and other countries in South East Asia affords opportunities for considerable investment. Under well-regulated concession and “We believe in empowering franchise arrangements, these investments should the people we serve to provide fair returns to investors (such as ourselves) participate in and benefit in exchange for the risk involved and achievement of measurable improvements for the public good. from sustainable economic growth. “ Specifically, MPIC has invested in the development and operation of power generation and distribution,

3 2017 SUSTAINABILITY REPORT

We recognize that disruptive technologies, environmental pressures and population growth are “Each of MPIC’s major changing the business landscape in many sectors of our investees is actively economy: enhancing their capacity to • In electricity distribution, this means serving serve the public.“ customers digitally, on-demand and at the touch of a finger through investment in smart meters, smart grid and smart cities.

In order to recover the significant capital costs required • In power generation, the future entails increasing for development and maintenance of high-quality Renewable Energy (solar, wind, run-of-river, hydro and infrastructure, our franchise and concession agreements biomass) and battery storage as well as investing in provide for fair and transparent price increases. highly efficient and environmentally-responsive coal However, just as the physical infrastructure in which and gas-fired plants. we invest is underdeveloped, so, occasionally, are the political and economic institutions that support them. • In toll roads, we are expanding our network and In our water, toll roads and light rail businesses, for implementing digital payments and surveillance example, regulators are reluctant to approve various technologies so that our consumers can enjoy safer tariff adjustments and we are encountering challenges and more convenient journeys. to uphold the terms of our contracts. • In water treatment, we are utilizing new technologies As far as possible, we take a constructive approach in response to changing climatic conditions that are to these difficulties by working together with our contributing to making the quality of raw water more counterparties to find satisfactory resolutions and variable. not allowing setbacks to deter us from our corporate Mission, which is to be the leading Philippine • In hospitals, we are introducing up-to-date infrastructure investment firm. However, beyond medical treatments for our patients and migrating a certain point, this type of friction does inhibit to Electronic Medical Records and integrated our continued investment in certain projects and information management systems to monitor patient jurisdictions. As a consequence, MPIC’s focus is shifting flow and improve financial performance. to investments with shorter-term returns as well as opportunities in other ASEAN countries that may • In light rail, our comprehensive rehabilitation and provide more reliable regulation. modernization program for the existing LRT-1 includes station rehabilitation, complete track What comes next replacement and upgrading of signaling systems for smoother, more reliable journeys. We are also Each of MPIC’s major investees is actively enhancing extending the LRT-1 to improve public transportation their capacity to serve the public. Beyond mere provision for more commuters in the south of Manila. compliance with minimum service standards, our management approaches focus on improving operational efficiency, service excellence, safety and social responsibility through innovation.

4 METRO PACIFIC INVESTMENTS CORPORATION

As we move forward, we recognize the importance of right mix of skills and experience to stay ahead of the cultivating depth and breadth of expertise throughout curve and anticipate new opportunities for growth. our organization, including in the composition of our board and senior leadership teams. As a diversified Finally, we thank you for your continued support. We conglomerate, our leaders must continue to offer the look forward to another successful year.

MANUEL V. PANGILINAN JOSE MA. K. LIM DAVID J. NICOL Chairman President and Chief Executive Officer Chief Financial Officer

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ABOUT THIS REPORT

Welcome to the second Sustainability Report for Please contact us at: Metro Pacific Investments Corporation (“MPIC”, “MPIC Group” or “the Company”), a publicly listed investment and management company with holdings in several METRO PACIFIC INVESTMENTS CORPORATION major investees including Manila Electric Company 10/F MGO Building (“MERALCO”), Global Business Power Corporation Legaspi cor. Dela Rosa Streets Makati City, 0721 (“GBP”), Metro Pacific Tollways Corporation (“MPTC”), Philippines Maynilad Water Services, Inc. (“MWSI” or “Maynilad”), +63 2 888 0888 http://www.mpic.com.ph/contact-us/ MetroPac Water Investments Corporation (“MWIC” or “Metropac Water”), Metro Pacific Hospital Holdings, Inc. (“MPHHI” or “Hospitals Group”), Light Rail Manila Corporation (“LRMC”) and MetroPac Movers, Inc. HOW TO READ THIS REPORT This report provides information about the Environmental, Social and Governance (“ESG” or This report is designed to be read in conjunction with “Sustainability”) impacts of the MPIC Parent Company Metro Pacific Investments Corporation 2017 Annual (“Head Office”) and its major operating companies Report (“MPIC 2017 Annual Report”) and various sources (see Scope of the Report) for the year ending of ESG information from our investees that are available December 31, 2017. It has been prepared in accordance on their respective websites. with the Global Reporting Initiative (“GRI”) Standards: Core option. For a list of relevant websites, please refer to the Annex on page 110. The founders of MPIC have been investing in the future of the Philippines for over 30 years. Although This report is comprised of two main sections: the concept of ‘sustainability’ is deeply embedded in our approach to business, formalized Sustainability Part One: Sustainability at MPIC reporting is relatively new to our organization and Part One addresses our management approach to we are in the process of establishing and applying Sustainability at Group-level, including Governance and consistently high standards for data collection and Risk Management as well as material ESG topics that disclosure across the Group. DNV GL, an independent correspond to the four pillars of our Group Sustainability organization and global provider of certification, Framework, namely Operational Efficiency, Service assurance, assessment, and training services, was Excellence, Engaged Workforce & Safe Workplaces, and engaged to provide assurance on non-financial Social Responsibility. information contained in this report. The scope of work carried out by DNV GL is set out in the assurance Part Two: Sustainability Highlights of our Major statement on page 117. Operating Companies Part Two provides an overview of the Sustainability We welcome feedback on this report and any matter performance of the major operating companies that are concerning the Sustainability performance of our within the scope of this report. business.

6 METRO PACIFIC INVESTMENTS CORPORATION

SCOPE OF THIS REPORT

The scope of ESG information in this report focuses on the MPIC Head Office and its major operating companies across five sectors:

POWER TOLLWAYS HOSPITALS

Featured Toll Roads: Metro Pacific Hospital Holdings, Inc. (“MPHHI” or “Hospitals Group”) – the entity with interests in 14 hospitals

Featured Hospitals: Cavite Infrastructure Corporation (“CIC”) – the entity responsible for Manila–Cavite Expressway (“Cavitex”) Manila Electric Company (“MERALCO”)

Asian Hospital and Medical Center (“AHMC”)

NLEX Corporation (“NLEX Corp”) - the entity holding concession rights to Global Business Power Corporation construct, operate and maintain the (“GBP”) North Luzon Expressway (“NLEX”) and Subic–Clark–Tarlac Expressway (“SCTEX”) Cardinal Santos Medical Center (“CSMC”)

WATER RAIL

Makati Medical Center (“MMC”)

Maynilad Water Services, Inc. Light Rail Manila Corporation (“Maynilad”) (“LRMC”)

A full list of MPIC’s associates and subsidiaries can be found in Notes 10 and 39 of the Audited Consolidated Financial Statements and Schedule V of MPIC’s 2017 SEC Form 17-A, available on the edge website of the Philippine Stock Exchange (http://edge.pse.com.ph).

7 2017 SUSTAINABILITY REPORT

PROFILE OF MPIC

MPIC is a Philippine-based, publicly listed investment ORGANIZATIONAL PROFILE management and holding company registered with the Philippine Securities Exchange Commission (“SEC”). We are a leading infrastructure holding company with a diverse set of assets held through our operating Headquarters: Makati, Philippines companies. Through acquisitions and strategic partnerships, we seek to create value by upgrading Date of incorporation: March 20, 2006 infrastructure, improving operational efficiency, Ownership and legal form: A publicly listed increasing customer coverage and working closely with company with common shares of stock listed regulators and other partners in government. in and traded through the Philippine Stock Exchange (“PSE”).

The overarching objective of our investment and Metro Pacific Holdings, Inc. (“MPHI”), a Philippine management strategy is to create value for our corporation, owns 41.9% of total issued common stakeholders by achieving long-term economic shares in MPIC. As sole holder of the voting Class A Preferred Shares, MPHI’s combined voting success while contributing to inclusive and sustainable interest is estimated at 55.0%. development of our nation. We operate in a number of highly-regulated sectors within a framework of national MPHI’s stockholders are Enterprise Investment laws and regulations including various concession and Holdings, Inc. (60.0%), Intalink B.V. (26.7%) and First Pacific International Limited (13.3%). First franchise agreements. We work hard to uphold our Pacific Company Limited, a company incorporated commitments under these agreements, and we are in Bermuda and listed in Hong Kong, holds 40.0% proud of our legacy over the past ten years of delivering equity interest in EIH. on our promises to rehabilitate, maintain, strengthen and Core businesses: Investment management with improve vital services that help to form the backbone of investments in water utilities, power distribution our economy and society. and generation, toll road operations, hospital operations, light rail, logistics and other services.

Through our operating companies, we strive to deliver Key Metrics* high quality and affordable services for customers, provide safe workplaces and merit-based opportunities Number of Employees: for employees and generate reasonable returns for Head Office: 52 Group: +27,000 (through subsidiaries business partners and investors. On a daily basis our and associates that MPIC manages) operating companies are making a difference to the lives of millions of Filipinos, powering commerce and System Wide Net sales : ₱373.1 billion (including revenues of MERALCO, an associate of MPIC) households, delivering clean and safe water, connecting people and places and making world-class standards of Total capitalization: ₱216 billion healthcare available to all. MPIC Parent gearing ratio: 25.9%

*As of and for the year ended December 31, 2017. This data has been reproduced from the MPIC Annual Report 2017.

8 METRO PACIFIC INVESTMENTS CORPORATION

WHO WE ARE

OUR MISSION OUR VALUES

We are the leading Philippine infrastructure investment firm. We manage, transform and grow our companies while continuously seeking investment opportunities to create long-term value for our shareholders. TEAMWORK AND EMPOWERMENT We recognize the diverse strength and abilities within the team. OUR VISION We enable and inspire people to achieve superior We have a stellar portfolio of infrastructure assets, results. each being the dominant player in its field. We are admired globally for excellence in investing in and transforming infrastructure. We attract, retain and develop world-class talent.

Through our companies and foundation, INTEGRITY AND TRANSPARENCY we significantly contribute to the economic We adhere to the highest ethical and corporate development of the Philippines and thereby uplift governance standards. the quality of life of every Filipino.

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

FINANCIAL DISCIPLINE AND ACCOUNTABILITY We employ rigorous financial analysis to arrive at sound business decisions.

We are results driven and meet our commitments.

9 OUR APPROACH TO VALUE CREATION

MANAGE

We actively manage our investments through controlling positions in major operating companies involving appointment of senior leadership, strategy setting and active participation in the governance and management structure.

TRANSFORM

We strive to increase customer coverage, improve operational efficiency and deliver value for money by incentivizing the leadership teams of our operating companies to achieve high standards of service delivery and by supporting them with capital investment.

GROW

By employing capital from all over the world, including the hard-earned savings of Filipinos, we create new opportunities to grow our business and provide solid returns to our shareholders over the long-term.

10 CENTRAL LUZON OVERVIEW OF CONTRIBUTIONS TOLLWAYS TO BUILDING THE NATION Tarlac H4 MPTC operates and maintains 192 km of Zambales expressway across three major domestic AVERAGE DAILY VEHICLE ENTRIES Pampanga This map helps to visualize the contributions made by MPIC and our business toll road systems. It plans to spend T3 Bulacan approximately ₱122.8 billion in the next five partners to promoting inclusive and sustainable development of our nation. It 237,046 139,208 54,566 H5 years on building highways and toll roads NLEX CAVITEX SCTEX identifies the location of major assets and operations and provides an overview of T1 that will contribute a further 77km of world- Bataan the markets we serve at regional and local levels. Manila class expressway in the Philippines. P7 Cavite Subic NLEX (84 km) connects Metro Manila and the provinces of the Central Luzon P6 T1 For more sustainability highlights from our major operating companies, P8 T2 T2 CAVITEX (14 km) links Manila to Cavite Batangas GREATER MANILA Quezon please refer to Part 2 of this report from page 93 onwards. T3 SCTEX (94 km) connects Subic–Clark–Tarlac

Caloocan Oriental P5 Mindoro

Valenzuela RAIL Quezon City LEGEND: P Power H Hospitals T Tollways W Water R Rail Navotas W2 W1 Iloilo P4 LRMC has a 35-year concession to operate H11 H9 P2 H7 and maintain the 19.65 km LRT-1 in P3 435,199 147.7 million R1 Metro Manila with 20 stations. In 2018, P1 Average Daily Total Passenger Manila H2 R3 H13 Cebu construction is due to begin on the 11.7 H8 Ridership Trips POWER San Juan Bacolod km Cavite Extension. 8 new stations will be H6 Pasig added in the southern part of Metro Manila. H3 Makati R1 LRT-1 GBP is a leading energy company in the Visayas and Mindoro Island. Taguig 4,465 GWh Its power generation portfolio consists of 11 operational power electricity sales R2 R2 LRT1-1 Cavite Extension – construction due to start in 2018 plants with 854 megawatts (“MW”) aggregate capacity. Parañaque Zamboanga R3 MRT-3 - LRMC expects to take over rehabilitation, operation and Las Piñas W3 H10 H14 maintenance of MRT-3 in 2018 (pending endorsement from NEDA). P1 Cebu Energy Development Corporation P4 Panay Power Corporation Cavite H1 Davao (246MW) PPC 1&2 (92 MW) H12 PPC 3 (7.5 MW) Muntinlupa P2 Panay Energy Development Corporation PPC 4 (5 MW) General Santos PEDC 1&2 (164 MW) HOSPITALS PEDC 3 (150 MW) - Expansion plant began P5 GBH Power Resources Inc. commercial operations in 2017 GBH (7.5 MW)

P3 Toledo Power Company MPHHI is the largest hospital operator TPC Sangi (60 MW) in the Philippines with a portfolio of 14 3,211 3,085,638 173,900 TPC 1A (82 MW) hospitals nationwide, including eight Total beds Number of Number of TPC Carmen (40 MW) WATER hospitals in Metro Manila and six hospitals available Outpatients Inpatients around the country.

MERALCO is the largest electricity This report focuses on the operation of H4 Central Luzon Doctors Hospital distribution company in the Philippines. 42,102 GWh 28 Million Maynilad is the drinking water & wastewater services provider for the 9.4 Million three leading hospitals : 757 MCM H5 Sacred Heart Hospital Its franchise area covers 9,685 square electricity Estimated West Zone of Greater Metro Manila. Its concession area covers 540 square Estimated Water supplied kilometers encompassing 36 cities and 75 sales population served kilometers and encompasses 17 cities and municipalities. population served H6 Our Lady of Lourdes Hospital municipalities. H1 Asian Hospital and Medical Center H7 De Los Santos Medical Center La Mesa Treatment Plant 1 is a conventional-type plant with W1 H2 Cardinal Santos Medical Center MERALCO is venturing into power maximum design capacity of 1500 million liters per day (MLD). generation in Luzon with several new H8 Manila Doctors plants that were under development H3 Makati Medical Center W2 La Mesa Treatment Plant 2 is a pulsator-type plant with design H9 Marikina Valley Medical Center in 2017: capacity of 900 MLD. H10 Davao Doctors Hospital San Buenaventura Power Limited 455 Atimonan One Energy Corporation 2X600 P6 P8 W3 Putatan Treatment Plant is the largest membrane-based water MW supercritical coal-fired power plant MW ultra-supercritical coal-fired power treatment plant in the Philippines. H11 Dr. Jesus Delgado Memorial Hospital plant P7 2x300 MW circulating fluidized bed (CFB) H12 St. Elizabeth Hospital power plant H13 Riverside Medical Center

H14 West Metro Medical Center 11 12 METRO PACIFIC INVESTMENTS CORPORATION 2017 SUSTAINABILITY REPORT

CORPORATE MPIC’s PORTFOLIO: BENEFICIAL OWNERSHIP/ ECONOMIC INTEREST This chart summarizes our corporate structure on December 31, 2017. For STRUCTURE further information, please refer to Part V of MPIC’s 2017 SEC Form 17-A available on the PSE edge website (http://edge.pse.com.ph). LEGEND:

In 2017, there were adjustments to MPIC’s In Scope corporate structure as we deepened our participation in the Philippine power Out of Scope sector by acquiring the remaining 25% ownership in Beacon Electric. Following this and related transactions, at year end, MPIC’s economic interest in MERALCO stands at 45.5% and in GBP at 62.4%. TOLLWAYS POWER WATER OTHERS

Outside the scope of this report, MPIC’s other businesses include MetroPac Movers. Inc, which provides warehousing, trucking, and automotive predelivery HOSPITALS RAIL inspection services; AF Payments Inc., which operates an electronic payment system; and Indra Philippines, Inc., which PHILIPPINES 46% 53% is a leading provider of information Manila Electric Company (“MERALCO”) Maynilad Water Services, Inc. (“Maynilad”) technology solutions. 60% 55% Metro Pacific Hospital Holdings, Inc. Light Rail Manila Corporation Outside the Philippines, we have a 76% (MPHHI). • NLEX Corporation growing presence in Thailand, Vietnam Philippine Hydro, Inc. • North Luzon Expressway 62% and recently in Indonesia as part of • Subic-Clark Tarlac Expressway Global Business Power Corporation Amayi Water Solutions Inc. (“GBP”) our strategy to develop a PAN-ASEAN • NLEX-SLEX Connector Road LOGISTICS toll roads business. During 2017, we 86% also made our first investment in water Asian Hospitals, Inc. (the owner of Asian Hospital and and wastewater services in Vietnam. Medical Center) Although we are continuing to explore 100% opportunities for diversification outside • CAVITEX Infrastructure Corporation MetroPac Water Investments • Manila Cavite Expressway Corporation Group our home country, these currently make a • Cavite Laguna Expressway* 76% modest contribution to our Sustainability • Cebu Cordova Link* MetroPac Movers Inc. Framework and are outside the scope of * In pre-operating phase during the reporting period 51% this report. Cardinal Santos Medical Center

REGIONAL 29% Don Muang Tollways (Thailand) 33% 45% Makati Medical Center (“MMC”) CII Bridges & Roads (Vietnam) 48% PT Nusantara (Indonesia)

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ECONOMIC PERFORMANCE AND IMPACTS

At the core of MPIC’s investment and management One of the key metrics we use for evaluating our strategy, is our primary focus on creating value for our financial performance is Core Income, which is net shareholders. Since the public listing in December 2006, income attributable to owners of the Company our financial performance has been consistently strong, excluding one-off gains and losses that we consider to which is a testament to the economic potential of the reflect the true and fair value of underlying earnings of Philippines, particularly with respect to opportunities the Group. for realizing operational efficiency gains in under- performing infrastructure assets given the ability to overcome bottlenecks and deliver service excellence.

MPIC GROUP: GROWTH IN CONSOLIDATED CORE INCOME* (in Billions of Pesos) 14.1 12.1 10.3 8.5 7.2 6.6 2.0 5.1 3.9 0.3 0.03

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Core income is measured as net income attributable to owners of the Company excluding the effects of foreign exchange and derivative gains or losses and non- recurring items (NRI), net of tax effect of aforementioned. NRI represent gains or losses that, through occurrence or size, are not considered usual operating items.

CONSOLIDATED FINANCIAL in Beacon Electric; robust traffic growth on all toll roads; and continuing growth in the Hospital Group. HIGHLIGHTS During the year, Head office expenses, which includes operating costs and wages and benefits for Head For the year ended 31 December 2017, the Group Office amounted to₱ 1.1 billion and Interest expenses recorded a 17% increase in consolidated Core Income amounted to ₱2.7 billion. to ₱14.1 billion. Core Net Income was lifted by our expanded power portfolio following further investment

15 2017 SUSTAINABILITY REPORT

Consolidated Reported Net Income attributable to owners of the parent company rose 15% to ₱13.2 billion in 2017 from ₱11.5 billion in 2016. Non-recurring expenses amounted to ₱953 million, up from ₱650 million a year earlier, and consisted largely of refinancing expenses and project expenses.

At year end, Fully Diluted Core Net Income per share was up 11% to 44.69 centavos and the final dividend per share increased by 12% to 7.6 centavos.

MPIC GROUP: CONSOLIDATED FINANCIAL HIGHLIGHTS

In Millions of Pesos 2017 2016 %Change

MPIC share

Power 9,378 7,229 30%

Toll Roads 3,901 3,517 11%

Water 3,733 3,564 5%

Hospitals 685 589 16%

Rail 283 273 4%

Others (133) (39) 241%

Share of operating income 17,847 15,133 18%

Head office expenses (1,074) (915) 17%

Interest expense (2,669) (2,112) 26%

Core income 14,104 12,106 17%

Non-core expenses (953) (650) 47%

Reported income 13,153 11,456 15%

In Centavos

Diluted EPS on core income 44.69 40.22 11%

Final dividend per share 7.60 6.80 12%

For full disclosure on financial performance of the Group, please refer to the MPIC 2017 Annual Report and SEC Form 17-A, which is available on our Corporate website.

16 METRO PACIFIC INVESTMENTS CORPORATION

MANAGEMENT APPROACH REVENUES

TO DIRECT AND INDIRECT The solid performance of our major operating ECONOMIC IMPACTS companies is underpinned by significant volume increases, supported by years of investment in both In addition to creating value for business partners existing and new infrastructure together with our and investors, we recognize the responsibility we continuing emphasis on operational efficiencies. bear for promoting the economic well-being of The Company monitors the operating results of each all stakeholders—customers, employees, local business unit separately for the purpose of making communities and government—today and over the decisions about resource allocation and performance longer-term. assessment.

We seek to add value by improving the quality of infrastructure assets, enhancing the efficiency with which they are run, extending their coverage to more In addition to information in people and working closely with regulators to achieve this section about the revenue shared goals. Furthermore, through direct and indirect performance, government tax employment and community outreach programs, our payments and capital expenditure of businesses are contributing to economic development our businesses in 2017, please also refer of regional and local economies that are both directly to the Social Responsibility section of and indirectly impacted by their operations. this report for details on the Group’s program of community investments.

MPIC GROUP: EARNINGS CONTRIBUTION MIX

5%

Power Water 22% Toll Roads 2017 52% Hospital and Others 21% 52+22215

17 2017 SUSTAINABILITY REPORT

payments over the past 11 years has exceeded In terms of contribution to the Company’s Net ₱180.0 billion. These figures are net of pass through Operating Income, together, power, water and taxes and exclude taxes paid by operating companies toll roads accounted for 95% in 2017: that are outside the scope of this report.

Power contributed ₱9.4 billion (52% of the total) on the back of strong CAPITAL EXPENDITURE electricity sales. Compared with 2016, MERALCO experienced a 5% increase in MPIC is constantly reinvesting in order to grow. In the volume of electricity sales across all addition to acquiring interests in operating companies classes of residential, commercial and to help transform and grow their operations, the industrial customers. The volume of operating companies invest continuously in enhancing electricity sales for GBP increased 22%. existing infrastructure and developing new projects.

Toll road operations recorded We invest in the highest standards of infrastructure ₱3.9 billion (22% of the total); an 11% that our country can afford, such as reliable, clean and increase from a year earlier, which was efficient coal-fired power generation, robust systems attributable to a 10% increase in average for water treatment using proven technologies, world- daily vehicle entries for NLEX, SCTEX and class expressways and enhanced light rail services. In CAVITEX compared with 2016. this way, we anticipate that our portfolio of high-quality investments will continue to serve our business and The water segment’s contribution stakeholders productively for many years to come. amounted to ₱3.7 billion (21% of the total), mostly attributable to Maynilad, In 2017, MPIC’s group-wide capital expenditure was which continues to have an excellent ₱38.25 billion, including expenditure on contractors, record of service delivery. The volume materials, equipment and auxiliary services to facilitate of water sold grew 3% and the number implementation of CAPEX projects undertaken by of billed customers rose 4% in 2017 the operating companies. In addition, the Company compared with the previous year. invested a further ₱38.9 billion in deepening participation in the power sector in the Philippines and Our investments in Hospitals provided expanding into new markets such as Indonesia. ₱685 million (4% of the total) and Rail, Logistics and Systems delivered ₱150 million (1% of the total.) “MPIC’s group-wide capital expenditure in 2017 was ₱38 billion; all of it contributing to the fabric of our nation and TAXES enhancing our capacity to serve the public.” In 2017, taxes paid to government amounted to ₱28.8 billion, representing a 5% increase from the Jose Ma. K. Lim, ₱27.5 billion paid in 2016. The Group’s total tax President and Chief Executive Officer

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During the year, MPIC’s major operating companies made the following investments to enhance and expand their services:

POWER TOLLWAYS WATER

MERALCO spent In our toll Maynilad spent ₱12.1 billion to roads business, ₱12.0 billion expand, strengthen and ₱4.4 billion was on upgrading and modernize its facilities; spent adding 64 lane building reservoirs and support growth in kilometers to widen pumping stations, laying demand and customer NLEX, completing toll primary pipelines and connections; and ensure reliable, efficient and plaza expansions for constructing wastewater least cost power supply. NLEX, rehabilitating facilities to improve sections of SCTEX, public health. GBP spent modernizing Traffic ₱1.65 billion to Control Rooms for maintain and upgrade SCTEX and CAVITEX, and its power plants and introducing diversified increase capacity. RAIL electronic payment options. Substantial LRMC’s capital progress was made expenditure amounted on construction of to ₱4.6 billion. HOSPITALS the NLEX Harbor Link It has successfully The Hospitals Group Segment 10, which restored 32 Light spent ₱3.5 billion is expected to be Rail Vehicles and is on upgrading operational within 2018. implementing rail-track equipment and facilities replacement and station that will expand improvement projects capacity and enhance that are expected to be services for improved completed in 2018. patient care delivery.

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CREATING VALUE FOR OUR STAKEHOLDERS

MPIC’S SUSTAINABILITY Within the context of our Sustainability Framework, FRAMEWORK MPIC Head Office provides leadership and capital to support the operating companies in their respective areas of service delivery and expertise. We monitor At the core of MPIC’s Sustainability Framework is our and evaluate the Sustainability performance of our Mission to create long-term value through six Core operating companies in four key areas—Operational Drivers that represent the main activities of MPIC Head Efficiency, Service Excellence, Engaged Workforce and Office, namely, Investment Selection and Portfolio Safe Workplaces, and Social Responsibility—intended to Management, Strategy Management and Leadership encompass and incorporate the significant ESG impacts Selection, Ethical Business Practices, Risk Management, of their operations. Employee Welfare and Social Responsibility.

SUSTAINABILITY FRAMEWORK

y nc S ie e ic rv ff ic E e l E a x n c Optimized Infrastructure Development o e Increasing Access to Service ti T l a R le r Investment A n Resource Efficiency e E N c Customer Experience p S e G Selection and F O A Social Clean Operations O Commensurate Services N Portfolio R A Responsibility M Business Continuity M Management Service Continuity

Strategy Management Employee and Welfare Creating Value for Leadership Stakeholders Selection

s e c Good a l p Governance and k Risk r S Ethical Business Management o Community Engagement o W Employee Relations and Diversity c Practices e ia f Educational Support l a Health and Safety R S e d s n Greening Initiatives p a Competency and Skills Development o e ns c ib or Disaster Relief and Response il kf Equal Opportunities ity GROW or W ged Enga

20 METRO PACIFIC INVESTMENTS CORPORATION

STAKEHOLDER ENGAGEMENT

MPIC touches the lives of millions of people each day through the essential services provided by our operating companies.

STAKEHOLDERS OF MPIC AND OUR OPERATING COMPANIES

Customers/ Public Capital and Leadership Services

OPERATING COMPANIES

Employees Creditors Capital Investors Investors Creditors Employees Partners Environment Regulators and Communities

Direct stakeholders

We acknowledge that MPIC’s direct stakeholders— Please refer to our Corporate website Employees, Business Partners, Capital Investors and the section of this report on and Creditors—are interested in disclosure of Governance for Sustainability for information relating to financial and ESG aspects of our more information about our corporate performance. We engage with our stakeholders through governance procedures, investor a variety of channels as part of our commitment to relations and disclosures. enable them to make well-informed assessments and decisions about our business. Please refer to the section of this report on Engaged Workforce and Safe MPIC’s majority shareholder, which is well represented Workplaces for more information about on the MPIC Board, places high priority on respecting, Head Office employee engagement promoting and protecting minority shareholder rights. activities. In addition to publishing regular updates and reports, we respond regularly to inquiries from investors, creditors and business partners, and participate in various global sustainability indices, as needed, to benchmark our performance.

21 2017 SUSTAINABILITY REPORT

Indirect Stakeholders

MPIC’s BUSINESS PARTNERS Ultimately, MPIC’s operating companies exist to serve their customers and the communities in which they operate. Each of the operating companies implements MPIC’s business partners are co-investors in our operating companies: its own processes for dialogue and information exchange with its stakeholders, including customers, employees, local community representatives, regulators The other principal stockholders in MERALCO and GBP are Beacon and non-governmental organizations. Electric Asset Holdings, Inc. and JG Summit Holdings, Inc. Government and Regulators

Maynilad is owned and operated by Many of MPIC’s investments occur in regulated a consortium, which also includes monopoly sectors for which various aspects of service DMCI Holdings Inc. and MCNK JV provision, including service charges, minimum Corporation, a subsidiary of Japan- service standards and rates of investor-returns have listed entity Marubeni Corporation. been specified in detailed concession and franchise agreements. Consequently, through fair and effective LRMC is a joint venture with AC negotiation and enforcement of these contracts, Infrastructure Holdings Corporation and Macquarie Infrastructure government and various regulatory authorities play Holdings (Philippines) PTE Ltd. a key role in shaping, promoting and protecting the interests of all stakeholders.

There are many business partners in our Hospitals Group; a significant In addition to liaising with regulatory authorities in business partner of MPHHI is GIC order to comply with contractual terms of our various Private Limited, formerly known agreements and resolve relevant issues as they arise, as Government of Singapore MPIC Head Office and the operating companies Investment Corporation. participate in industry-wide regulatory briefings and occasionally engage in one-on-one discussions with regulators, particularly during the bidding process for new projects.

Please refer to MPIC’s 2016 Sustainability Report for more information about MPIC’s stakeholder engagement activities, including channels and frequency of engagement, and stakeholders’ concerns.

Please refer to sections of this report on Service Excellence, Engaged Workforce and Safe Workplaces and Social Responsibility for more information about the operating companies’ engagement with relevant stakeholders.

Please refer to websites of our listed operating companies for more information on their investor relations. For a list of relevant websites, please refer to the Annex on page 110.

22 METRO PACIFIC INVESTMENTS CORPORATION

MATERIALITY REGULATORY AGENCIES AND AUTHORITIES

For the purpose of MPIC’s Sustainability reporting, the concept of ‘Materiality’ refers to significant economic, MPIC’s various businesses work with many arms of government and regulatory authorities environmental and social impacts of our business that in the course of operating our franchises and have substantive influence on the assessments and concessions and/ or implementing our strategies decisions of our stakeholders. for further investment in various sectors.

Some notable government and regulatory Our first Materiality assessment identified Material authorities include: topics for our 2016 Sustainability Report with reference to our Enterprise Risk Management framework. Energy Regulatory Commission Building on this assessment, we have recently (“ERC”): Quasi-judicial body created completed a Materiality review to gauge the opinions by the Electric Power Industry Reform of a selection of internal and external stakeholders Act (EPIRA) of 2001 to serve as on our management approaches to ESG and related independent electric power industry regulator for the Philippines. performance, including interviews of representatives of Philippine Department of Energy our Board of Directors, leaders of our major operating (“DOE”): Executive department of the companies and investors and investment analysts with Philippine Government responsible for particular interest in ESG. plans, programs, projects and activities of the Government relating to energy exploration, development, utilization, distribution and conservation. STAKEHOLDERS DIRECTLY ENGAGED IN Metropolitan Waterworks and Sewerage System (“MWSS”): THE PREPARATION OF THIS REPORT Government agency in charge of water privatization in Metro Manila.

Toll Regulatory Board (“TRB”): Investors, Analysts and Government agency that regulates all Creditors toll roads in the Philippines. Department of Transportation (“DOTR”): Executive department of the Philippine Government responsible for maintenance and expansion of transportation systems. Operating Companies Light Rail Transit Authority (“LRTA”): A special authority under the DOTR with primary responsibility for overseeing the construction, operation, maintenance and/or lease of Manila Light Rail Transit System. MPIC Board of Directors

Department of Health (“DOH”): Executive department of the Philippine Government responsible for overseeing the health care sector.

23 2017 SUSTAINABILITY REPORT

The following table shows the GRI Standards that we selected corresponding to Material topics for this year’s report.

GRI STANDARDS CORRESPONDING TO MATERIAL TOPICS FOR THIS REPORT

GRI 201 Economic Performance GRI 203 Indirect Economic Impacts

Profile of MPIC

GRI 205 Anti-corruption GRI 419 Socioeconomic Compliance GRI 307 Environmental Compliance Governance and Risk Management

GRI 302 Energy GRI 303 Water GRI 305 Emissions Operational Efficiency GRI 306 Effluents and Waste

GRI 416 Customer Health and Safety

Service Excellence

GRI 401 Employment GRI 403 Occupational Health and Safety GRI 404 Training and Education Engaged Workforce GRI 405 Diversity and Equal Opportunity and Safe Workplaces

GRI 413 Local Communities

Social Responsibility

Please refer to the Reporting Methodology section of this report for information about topic Boundaries and the GRI Content Index for more information about the location of other relevant disclosures.

24 METRO PACIFIC INVESTMENTS CORPORATION

GOVERNANCE FOR SUSTAINABILITY

At MPIC, ‘good’ governance means unwavering fidelity facilitating feedback from an independent party to our corporate Vision, Mission and Values. We operate with recommendations for improving the Company’s under intense scrutiny from our stakeholders, so our operations. governance and management practices must be as sound and dependable as the infrastructure we In 2017, the Company affirms its material compliance develop. with the Code of Corporate Governance mandated by the SEC, the PSE and other regulatory authorities. CORPORATE GOVERNANCE Corporate Governance at MPIC is the framework we have in place to ensure that Internal Standards and External Evaluation achieve the following objectives in Please refer to www.mpic.com.ph/ accordance with our corporate Values of Transparency, corporate-governance and our 2017 Accountability, Entrepreneurship and Integrity: Annual Report for full disclosure on Corporate Governance at MPIC. Internal Standards • Long-term strategy benefits all stakeholders, with shareholders at the forefront. • The interests of management and shareholders are aligned. The MPIC Board has endorsed and adopted • There is sufficient Board oversight of management’s the following official policies and guidelines tactical implementation. for the MPIC Group, which are available for downloading on our corporate website: External Evaluation • Strategy and business drivers are clearly • Revised Manual on Corporate Governance communicated to equity analysts and shareholders. • Corporate Code of Conduct • Whistleblowing Policy • Benchmarking of our operations with respect to • MPIC Guidelines on Search, Screening and industry best practices. Selection of Directors • Conflict of Interest Policy • Insider Trading Policy We have a strong internal control system in place • MPIC Policy on Gifts, Entertainments and within MPIC Head Office and our operating companies. Sponsored Travel This involves regular and independent audit reviews • Related Party Transaction Policy to provide assurance for our shareholders and other • Policy on Health, Safety and Welfare of Employees stakeholders, benchmarking of our management approaches with industry best-practices, and

25 2017 SUSTAINABILITY REPORT

SUSTAINABILITY Each operating company is responsible for: GOVERNANCE • Assessing sustainability issues that are relevant to their business MPIC’s highest governance body is the Board • Formulating and implementing sustainability of Directors (“MPIC Board”), which is led by the strategies through appropriate organizational Chairman who is ultimately responsible for crafting structures and evaluating ESG strategy and performance of the • Monitoring and reporting on Sustainability Group. In 2017, the MPIC Board approved and adopted performance, as appropriate Revisions to our Annual Corporate Governance Report (“ACGR”) affirming its commitment to disclosure To support the operating companies, MPIC Head Office of economic and ESG information in accordance facilitates information sharing and harmonization of with globally recognized standards for reporting on management approaches across the Group. MPIC’s Sustainability. Head Office and each major operating company have formed Sustainability Working Teams (“SWTs”) MPIC’s operating companies are on the frontline for to collect, analyze and report ESG information and service delivery, customer engagement and regulatory implement Sustainability initiatives. The Head Office coordination. Execution of the Group’s strategies for SWT is responsible for consolidating and reporting sustainable development reside largely in the capable relevant ESG information at Group-level. hands of our operating companies’ leadership teams.

26 METRO PACIFIC INVESTMENTS CORPORATION

GOVERNANCE STRUCTURE FOR SUSTAINABILITY

Board Board of Directors Committees

The MPIC Board is composed of 15 directors. Five regular committees have been established to Following the passing of an independent assist the MPIC Board to oversee and evaluate the director in 2017, the current Board includes performance of the Group, namely, the Corporate three Executive Directors and 11 Non-Executive Governance Committee, Audit Committee, Directors, three of whom are Independent Risk Management Committee, Nomination Directors. It meets on average 8 times a year Committee and Compensation Committee. to oversee management of the Company and ensure implementation of a robust governance The Revised Manual on Corporate Governance framework. In 2017, the composition of the Board contains a charter for each committee setting out included one female Independent Director. All its purpose, structure, procedures, responsibilities members were over the age of 50 years. and powers. Members of each committee must possess relevant skills, knowledge and In accordance with the MPIC Guidelines on experience; and are also empowered to seek Search, Screening and Selection of Directors, support from functional specialists within the members of the MPIC Board comprise of Group and external consultants in order to fulfill individuals with a wide spectrum of skills, their duties. experience and expertise, including leaders from each of our major operating companies. The following three committees are chaired New members to the Board participate in a by Independent Directors and are particularly comprehensive orientation program and it is involved in Governance for Sustainability: compulsory for all members to participate in on- going professional development training. Corporate Governance Committee This committee ensures that the overall governance framework is robust and consistent with best practices. It is responsible for review and implementation of the Group’s Revised Manual on Corporate Governance and supports the Board with oversight and responsibility for Group-strategy on Sustainability.

Risk Management Committee This committee exercises oversight for the Group’s enterprise risk management, including regulatory and ethical compliance monitoring. It recently approved inclusion of ESG risks into the Company’s corporate risk analyses.

Audit Committee This committee has oversight functions on the Company’s financial reporting, internal control system, internal and external audit processes, and compliance with applicable laws and regulations.

27 2017 SUSTAINABILITY REPORT

Training and development opportunities for leaders from across the Group

In accordance with the Revised Manual of Corporate Governance that requires each member of the MPIC Board to participate in at least four hours of continuing education per year, MPIC Head Office organizes an Annual Corporate Governance Enhancement Session (“ACGES”) accredited by the SEC. The content varies each year and covers a range of matters, including traditional corporate governance topics such as audit, internal controls, anti- corruption and risk management as well as new and forward-looking areas of interest.

It is our policy to invite and encourage all members of the senior management team of MPIC Head Office as well as the Board of Directors and senior management representatives of our operating companies to attend these sessions. In 2017, the ACGES was attended by over 100 people including 14 out of 15 members of the MPIC Board and 11 out of 12 members of the MPIC Head Office senior management team.

In 2017, the training program included presentations by three external experts on Charting the Digital Age, Transformation Strategies in the Digital Age and Global Customer Experience Strategies.

INVESTMENT SELECTION initiative can help to promote sustainable development of the country whilst balancing the interests of all AND PORTFOLIO stakeholders. MANAGEMENT Our approach to investment selection, while mindful The rigorous processes for investment selection and of environmental impacts, is primarily geared to what portfolio management that are implemented by MPIC the country and its regulators are willing and able to Head Office are fundamental to ongoing growth afford. In addition to operational and asset upgrades, and development of the Group. Our core business our post-investment strategy for asset management is investing in underperforming or incomplete and transformation frequently involves regularization infrastructure that will rapidly add value through of employment terms for workers and implementation expansion and development in order to deliver of enhanced health, safety and security practices for improved service to the public, achieve near-term workers and the public. We also regularly evaluate capital value appreciation and in the longer term, compliance of our portfolio with respect to regulatory deliver high-inflation protected dividend streams to metrics, including environmental and social impacts investors as the infrastructure becomes optimized. and community engagement, in accordance with the terms of relevant approvals and agreements. When selecting our investments, we recognize that our business is more likely to achieve long-term value creation if our portfolio is sustainable with respect to a broad range of economic, environmental, social and Please refer to the Social governance considerations. The due diligence process Responsibility section of this report. for all new investments take these considerations into account. We conduct environmental and social scanning to determine how our involvement in any new

28 METRO PACIFIC INVESTMENTS CORPORATION

STRATEGY MANAGEMENT ETHICAL BUSINESS AND LEADERSHIP PRACTICES SELECTION MPIC’s Corporate Code of Conduct (the “Code”) stipulates In order to deliver on post-investment operational plans that all employees and officers of the Company will for our operating companies, we prioritize strategy- uphold high standards of business ethics including setting with well-defined business objectives and the specific provisions on compliance, competition and appointment of strong leadership teams. fair dealing, confidentiality of information and proper use of property, conflicts of interest and corporate In addition to relevant skills and experience, the opportunities, disclosure, risk management and ‘right’ individuals for leadership selection share our relationships with shareholders and investors. Directors, corporate Values and demonstrate full commitment officers, and employees of MPIC commit to complying to upholding them in every way. Once appointed, the with the Code, which is incorporated in the conditions of senior management teams of all operating companies their employment. are responsible for day-to-day operations of their businesses and report to MPIC Head Office. The MPIC All Head Office employees receive training on MPIC Board is, in turn, comprised of leaders from our major policies and guidelines, including the Code, and are operating companies. In this way, MPIC has the ability to required to provide notification of any existing or effectively manage and mitigate risk to its investments. potential violation to the corporate governance team at MPIC Head Office. This team has the authority to interpret and decide on issues arising from implementation of the Code and will take any action it considers appropriate Home-grown talent appointed to investigate violations that have been reported to it. If as new President of GBP a violation has occurred, MPIC Head Office reserves the right to take disciplinary and preventive action including dismissal from employment and/or filing of appropriate Effective from May 1, 2017, the Board of Directors civil and criminal claims. of GBP announced the appointment of Jaime T. Azurin as its new President. Mr. Azurin has been with GBP since it began operations in 2003. Prior The operating companies also provide their employees to his promotion, he has served as Chief Finance with ethics training in line with MPIC Head Office’s Officer and Executive Vice President for Business Development and Commercial Operations. policies and guidelines. During his time with GBP, he has gained valuable experience helping to secure and implement MPIC Head Office promotes internal corporate justice via four multi-billion peso loan facilities to fund reporting and investigation of suspected misconduct, the development of GBP’s baseload plants in the Visayas. These projects were instrumental malpractice or irregularity by the Group and/or an in ending the rotating brownouts that afflicted employee of the Group. Our Whistleblowing Policy, the region and helped to spur its economic which is applicable to all employees of MPIC Head Office, development. is designed to encourage employees to raise concerns internally, in a responsible and effective manner.

The operating companies either have in place or are currently developing their own Whistleblowing policies.

29 2017 SUSTAINABILITY REPORT

Where applicable, these policies can be accessed on the and Whistleblowing Policy), the Group is committed operating companies’ respective websites. to strict enforcement of its Conflict of Interest Policy, Insider Trading Policy, Policy on Gifts, Entertainments and In accordance with the procedures outlined in the Sponsored Travel and Related Party Transaction Policy. Whistleblowing, MPIC Head Office is committed to supporting employees raise concerns without fear of We expect all operating companies to design and uphold reprisals, and all reports are treated in a sensitive and a similar set of policies. When negotiating agreements confidential manner. The format and length of any with joint venture partners, we insist upon inclusion investigation, which may take place internally, referred of standard provisions concerning compliance with to our external auditor, and/or form the subject of an applicable laws. In our partnerships with multi-national independent inquiry, varies depending on the nature and companies, for example, we have considered the circumstances of each complaint. reasonable application of anti-corruption laws in other jurisdictions, such as the Foreign Corrupt Practices Act of In accordance with the Code, MPIC’s policy is to comply the United States. in full with all applicable laws and regulations, including those concerning the environment, employment The Group’s anti-corruption policies and procedures (including laws prohibiting child or forced labor), health have been communicated to all members of the MPIC and safety, product responsibility (such as advertising Board and employees of MPIC Head Office. In addition and labeling), bribery, privacy, and non-discrimination. to ACGES training for Directors and senior management In 2017, we were not aware of any significant fines or team members, which includes anti-corruption, all new non-monetary sanctions applied to the Group for non- employees of MPIC Head Office receive training on anti- compliance with laws and regulations. Furthermore corruption as part of their onboarding process. there were no cases brought against the Group through dispute resolution mechanisms. Legal, corporate governance and finance teams at MPIC Head Office monitor conflicts of interest across the Anti-corruption Group. For the past four years, we have reported relevant information to one of our principal investors, First Pacific At MPIC, we recognize that corruption is broadly Company Limited. MPIC materially complies with the linked to negative ESG impacts, such as damage to the governance requirements of the Hong Kong Exchanges environment, abuse of human rights and democracy, and Clearing Limited (“HKEX”), particularly its rules on misallocation of investments and impairment of the connected transactions. rule of law. Our commitment to anti-corruption extends to ensuring compliance with applicable laws and regulations on anti-corruption, anti-bribery and money laundering, among others; as well as adherence to For a list of relevant websites, please standards of conduct to prevent or regulate the offer refer to the Annex on page 110. or receipt of gifts or other advantages that may induce dishonest, improper or illegal conduct, or which may create an actual or potential conflict of interest.

In addition to the corporate governance policies and guidelines mentioned above (namely the Revised Manual on Corporate Governance, Corporate Code of Conduct

30 METRO PACIFIC INVESTMENTS CORPORATION

ESG RISK MANAGEMENT

ENTERPRISE RISK protect and grow the business in an ethical manner. Consequently, we define and identify risks with regards to MANAGEMENT the effects of uncertainty on undermining our ability to achieve those objectives. Across the Group, performance Enterprise Risk Management (“ERM”) is fundamental reviews of each department and operating company are to our business, impacting decisions and activities performed semi-annually to evaluate the achievement in all areas of our day-to-day operations. Our risk status of objectives that were established at the start governance structure has been designed to evaluate of each year. Group-level ERM objectives stated in the and filter risks that are significant enough to warrant Group’s ERM Policy are assessed annually by the Risk active management and to allocate responsibility for Management Committee of the MPIC Board. managing those risks across all levels of the Group, including the MPIC Board, Senior Management Team and The ERM framework is subject periodically to internal other employees at MPIC Head Office and our operating audit and independent verification. MPIC is committed to companies. regularly reviewing the ERM framework and improving it in response to relevant events and changes that In accordance with ISO 31000, our ERM framework substantively affect the Group. is closely linked with our corporate objectives to

This section of the report focuses on business risks specifically associated with ESG impacts of the Group and should be read in conjunction with the Risk Management section of our 2017 Annual Report and SEC Form 17-A, available on our corporate website (www.mpic.com.ph) and the edge website of the PSE (http://edge.pse.com.ph/), respectively.

OUR MANAGEMENT The responsibility for ESG risk management emanates APPROACH TO ESG RISKS from and culminates in the MPIC Board acting through its Risk Management Committee to exercise control In 2017, MPIC’s risk register was updated to incorporate and influence over the operating companies and their additional risks, such as foreign investment risk arising respective ESG risk management. MPIC’s Chief Risk from the Group’s increasing interest in foreign markets, Officer, a member of the senior management team and ESG risks. In February 2018, the Risk Management at MPIC Head Office, is currently designated to lead Committee approved the updated risk register, including Sustainability initiatives, report significant ESG risks, and formal definitions for all risks. This updated risk register integrate ESG risks into the ERM framework. will be advocated for adoption by MPIC’s major operating companies.

Please refer to the risk management section of the MPIC 2017 Annual Report for more information on the Governance Structure of Risk Management at MPIC.

31 2017 SUSTAINABILITY REPORT

ENVIRONMENTAL RISKS SOCIAL RISKS

MPIC’s operations are predominantly located in the Some of the social risks recognized on the Group’s Metro Manila region of the Philippines within the risk register include health and safety risks for Pacific Ring of Fire, where earthquakes and volcanic workers, customers and the public, human capital eruptions may occur. Due to our geographical location, risks and succession planning risks. Risks pertaining MPIC’s operations are also vulnerable to the effects of to resettlement of local communities impacted by tropical typhoons, which are generally associated with infrastructure projects are specific risks recognized by strong winds, storm surge and heavy rains that may the operating companies. give rise to extensive flooding. On average, the country is affected by 20 tropical typhoons per year, out of To illustrate the Group’s management approach to social which four or five are considered “strong”, resulting in risks, we provide some specific examples: human casualties and moderate to heavy destruction of property. TOLLWAYS

Some of the environmental risks that have recently been incorporated into our risk register include climate NLEX Corp. has a dedicated Right-of-Way Task Force change risk, catastrophic risk, air quality and carbon that works closely with the Department of Public Works emissions risk, waste and environmental pollution and Highways to manage and implement right-of-way risk, scarcity of natural resources risk and business acquisition for new projects. The Right-of-Way Task continuity planning risk. Significant environmental risks Force is responsible for liaising with all stakeholders are discussed periodically by the leadership teams of who are affected by road construction, including land our operating companies at their respective Board and owners, Local Government Units and the National Board Committee meetings. Housing Authority, to facilitate resettlement and/ or relocation of Informal Settler Families. It is also Subject to cost considerations reflected in relevant responsible for proper evaluation, management and concession and franchise agreements, our operating settlement of unpaid claims. companies have in place business interruption insurance, environmental risk insurance and other RAIL relevant risk insurance to mitigate the risks of destruction to life and property. They have also established, and are continually improving, business The operation of LRT-1 involves significant safety and continuity processes and disaster recovery programs security risks that were exacerbated by inadequate including crisis management capabilities. maintenance resulting in poor condition of the system prior to MPIC’s investment. To mitigate these risks, LRMC has established a Safety Management System, appointed a strong senior management team with Please refer to the sections of this report extensive light rail experience and is implementing a on Operational Efficiency and Social combination of engineering and administrative controls Responsibility for more information. to enhance operations and maintenance of the LRT-1.

32 METRO PACIFIC INVESTMENTS CORPORATION

Another key risk for LRMC is the risk of terrorism in its trains and stations. This risk is mitigated by the WATER deployment of a regime of strict inspection of incoming passengers, x-ray screening and K9 dogs trained in bomb detection in high density stations as well as Within Maynilad’s operations, social risks are associated banning of wrapped packages, potentially harmful tools with relocation of communities impacted by pipe-laying and chemicals, and the deployment of K9 dogs trained projects and safety-related concerns for employees, in bomb detection. other workers, customers and the general public.

Delayed delivery of government procured items, such For employees and workers, these include the risk of as Right-of-Way, new Light Rail Vehicles (“LRVs”) and the slips, trips and falls into confined spaces, which become Common Station, may undermine service performance more acute in the presence of dangerous gases that and service enhancements on LRT-1. Existing measures workers may be regularly exposed to in water treatment to mitigate these risks include consistently engaging the facilities. Workers are also frequently exposed to risk of regulators on the status of project milestones through chemical exposure, particularly from chlorine, which regular joint performance reviews with the DOTR and is a purifying chemical used for decontamination of the LRTA. waste and effluent water. Maynilad is mitigating these risks by closely monitoring employees at higher risk for exposure and by implementing preventive measures to POWER ensure their safety.

GBP has identified various social risks associated with When laying new pipes or replacing aging pipes, possible hazards for its employees that are common Maynilad informs affected communities in advance in power plant facilities including electrical shocks and works closely with community representatives and burns, boiler fires and pressure vessel explosions, to protect public safety and restore any impacted contact with hazardous chemicals, moving objects and infrastructure/ property. heavy equipment, falls, work in confined spaces, and marine operations.

Please refer to the Social Responsibility GBP is implementing safety measures aimed at reducing section of this report for more and/or eliminating these risks such as manpower safety information about LRMC’s management training, adequate machine safety design, installation of approach to resettlement of local fire protection systems, emergency response equipment communities. and regular emergency response drills, provision of personal protective equipment, machine guarding, site Please refer to the Service Excellence and inspections, regular equipment maintenance and third- Engaged Workforce and Safe Workplaces party certifications as well as monitoring systems for sections of this report for more emergency and security purposes. information on safety management across the Group. All GBP’s plants have been certified to Occupational Health and Safety Management System, OHSAS 18001.

33 2017 SUSTAINABILITY REPORT

GOVERNANCE RISKS

Some of the governance risks recognized on MPIC’s mitigate these risks. Furthermore, the MPIC Board and risk register include fraud risk, ethical risk, corruption MPIC Head Office provide guidance and support to the risk and Board performance risk. As discussed in the operating companies via representation on their various Governance for Sustainability section of this report, Boards and Board Committees and conduct periodic the Group has put in place policies and guidelines to reviews of their governance performance.

Please refer to the section on Governance for Sustainability of this report for more information on managing governance risks.

34 METRO PACIFIC INVESTMENTS CORPORATION

OPERATIONAL EFFICIENCY

To create value for our shareholders and other stakeholders, MPIC’s operating companies must manage their resources productively. This chapter contains disclosures on MPIC’s significant impacts and management approaches to consumption of natural resources and production and disposal of waste.

Please refer to the Reporting Methodology section of this report for information on the basis of calculation for all environmental performance data in this chapter.

35 2017 SUSTAINABILITY REPORT

ENVIRONMENTAL “Benchmarking with MANAGEMENT SYSTEMS international standards is part of our effort to keep To facilitate environmental program management operations efficient and in a comprehensive manner, some of MPIC’s major operating companies have implemented Environmental to provide only the best Management Systems (“EMS”) certified to international service to our customers.” standards. These systems are designed to integrate the operating companies’ internal processes and procedures for training of personnel, monitoring and reporting of Ramoncito S. Fernandez, environmental performance information in order to Maynilad President and CEO achieve continuous improvement.

ENERGY AND EMISSIONS For a full list of EMS certifications please refer to the Annex on page 107.

The energy topic covers consumption of energy in various forms by MPIC’s major operating companies. Naturally, the most significant impacts arise in our The value of aligning our management power business, particularly at GBP, which consumes systems with international standards fuels in its power plants to generate electricity for its customers, and at MERALCO, which sources electricity In 2017, Maynilad received 36 additional ISO from upstream suppliers to distribute electricity to certifications, bringing the total number of consumers throughout its service area. ISO certificates received by the company since 2007 to 245. Triple ISO certifications for The energy topic is closely related to the topic of Quality Management Systems (ISO 9001:2015), Environmental Management Systems (ISO emissions, including Greenhouse Gas (“GHG”) 14001:2015) and Occupational Health and Safety emissions and air pollutants such as nitrogen oxides Management Systems (BS OHSAS 18001:2007) (“NOx”) and sulphur oxides (“SOx”) that are by-products now cover 78 offices and facilities including three new sewage treatment plants in Quezon City. of energy consumption.

During the year, ISO 14001 and OHSAS 18001 certificates were earned for the following six divisions and offices: Program Management, POWER Technical Services, Information Technology Services, and Human Resources Divisions, as well as the offices of the President & CEO and the Chief MPIC’S POWER BUSINESS Operating Officer.

Maynilad has the largest number of ISO MPIC’s investment and management approaches to certifications for multiple sites of any company power generation and distribution focus on developing, in the Philippines and is also the first and only operating and maintaining socially and environmentally water company in the Philippines to receive ISO 14064:2006 certification for greenhouse gas compatible energy sources and infrastructure. accounting and verification.

36 METRO PACIFIC INVESTMENTS CORPORATION

GBP MPIC is investing in the advanced technologies in support of the Philippine GBP strives to be the most efficient energy provider in Energy Plan 2017 - 2040 the Philippines. In partnership with other investors in its five subsidiary companies, GBP owns and operates In 2017, the DOE announced the Philippine Energy Plan 2017 – 2040 containing a comprehensive roadmap 11 power generation facilities with a total combined of programs and projects for the energy sector. MPIC installed capacity of 854 MW. GBP’s subsidiary, Panay is committed to supporting the government achieve Energy Development Corporation, began operation of its objectives of sustainable, stable, secure, sufficient, its 150 MW expansion plant in the first quarter of 2017. accessible and reasonably-priced energy. In addition to ongoing investment by GBP in the power generation Final plant acceptance is expected within the second sector, MERALCO is also committed to developing a quarter of 2018. portfolio of new power generation assets to help meet growing electricity demand. The largest facilities in GBP’s portfolio, namely CEDC, New projects that are currently being developed PEDC 1, 2, 3 and TPC1A utilize technologically advanced include a 455 MW supercritical coal-fired power plant in circulating fluidized bed boiler technology. GBP also Mauban, Quezon, which is scheduled for commissioning has a 2X335 MW supercritical coal-fired power facility in 2019, a 2X300 circulating fluidized bed power plant in Subic, Zambales due for completion in 2020, and an project in La Union at the pre-development stage. 2X600 MW ultra-supercritical coal-fired power plant in In 2017, it acquired 50% interest in Alsons Thermal Atimonan, Quezon that is expected to come on line in Energy Corp., which is a holding company with 2021. These projects are the first to deploy supercritical interests in power plants that are under development in and ultra-supercritical technology in the Philippines. They will consume less coal per unit of electricity than Mindanao, including a 210 MW baseload coal-fired plant conventional coal-fired power stations, resulting in lower in Maasim, Sarangani and a 105 MW baseload coal-fired fuel costs and fewer emissions. plant in Zamboanga City.

GBP: PORTFOLIO OF POWER PLANTS IN OPERATION IN 2017

GBP Subsidiary Facilities Location Size Fuels Age ownership Cebu Energy Development 52.1% CEDC Toledo City, Cebu 246MW Coal, diesel 2011 Corporation

Panay Energy PEDC 1&2 Iloilo City, Panay Island 164 MW Coal, diesel 2011 Development 89.3% Corporation PEDC 3 Iloilo City, Panay Island 150 MW Coal, diesel 2017

TPC Sangi Toledo City, Cebu 60 MW Coal, IFO Pre-2003 Toledo Power Co. 100% TPC1A Toledo City, Cebu 82 MW Coal, diesel 2014 TPC Carmen Toledo City, Cebu 40MW SFO, IFO Pre-2003 72 MW + Iloilo 1 pre-2003 PPC 1&2 Iloilo City, Panay Island HFO, diesel Panay Power 20 MW Iloilo 2 2005 89.3% Corporation PPC 3 Aklan, Western Visayas 7.5 MW HFO, diesel 2006 PPC 4 Aklan, Western Visayas 5 MW HFO, diesel 2005 GBH Power Resources Pinalamayan, Oriental 100% TPC1A 7.5 MW HFO, diesel Pre-2003 Inc Mindoro TOTAL 854 MW

37 2017 SUSTAINABILITY REPORT

In 2017, GBP sold 4,465 gigawatt hours (“GWh”) of GBP: ELECTRICITY SALES AND ENERGY electricity, which is the equivalent of 16,074 terajoules CONSUMPTION (“TJ”) of energy, to bilateral customers comprised of distribution utilities, electric cooperatives and industrial customers, and through the Wholesale Electricity Spot SALES (in terajoules) Market (“WESM”). GBP’s total energy consumption amounted to 30,657 TJ. For the most part, this energy was sourced from coal and other fuels such as diesel 13,125.6 16,074.0 and fuel oil in its power plants.

During the year, GBP implemented energy conservation measures at various sites, including upgrading of 2016 2017 lighting and air-conditioning systems and reducing the operating time of equipment. Solar panels were installed on the roof deck of PEDC’s administration CONSUMPTION (in terajoules) building to reduce house-load requirements. In a pilot project, GBP has also acquired four electric vehicles to replace conventional vehicles for use within its plants. 28,904.8 30,656.5

In 2017, direct (Scope 1) GHG emissions from combustion of fuels in GBP’s power plants and fleet of

vehicles amounted to 4,653.6 metric kilotons of CO2

equivalent (“ktCO2e”). GBP and its power plants also purchased electricity, giving rise to indirect (Scope 2)

GHG emissions of 0.2 ktCO2e.

2016 2017 To ensure compliance with relevant standards and

regulations, GBP monitors the concentration of NOx,

SOx, carbon monoxide and particulate matter in air emissions from its operational power plants. GBP: GREENHOUSE GAS EMISSIONS IN 2017 (in metric kilotons of carbon dioxide equivalent)

Please refer to the ESG Reporting Methodology and ESG Data Summary for more information about the basis of calculation for GBP’s total energy 4,653.6 0.2 consumption and GHG emissions. Scope1* Scope 2

* Total Scope 1 GHG Emissions including emissions from limestone amount to 4,674.6 ktCO2e

38 METRO PACIFIC INVESTMENTS CORPORATION

MERALCO MERALCO: ELECTRICITY SALES AND ENERGY CONSUMPTION In accordance with its franchise obligation and corporate mission to provide the best value in energy products and services, MERALCO manages the supply SALES (in terajoules) of electricity for distribution to its customers from a 144,511.2 151,567.2 range of power sources including independent power producers, retail electricity suppliers and the WESM.

In 2017, MERALCO sold 42,102 GWh of electricity, which is the equivalent of 151,567 TJ of energy: 37% of consolidated distributed electricity was sourced from natural gas plants, 34% from coal-fired power plants, 2% from liquid fuels and the balance was classified as ‘multi-fuel’ i.e. originating from coal, hydro, biomass and geothermal. 2016 2017

In 2017, direct (Scope 1) GHG emissions from combustion of fuels in MERALCO’s vehicle fleet and CONSUMPTION (in terajoules) use of refrigerants in its cooling systems amounted to 10,124.2 9,459.7 32.5 ktCO2e. Consumption of purchased electricity in company facilities and system loss resulted in indirect

(Scope 2) GHG emissions of 1605.2 ktCO2e. 2016 2017 “MERALCO’s distribution system epitomizes operational MERALCO: GREENHOUSE GAS EMISSIONS excellence. In 2017, system IN 2017 (in metric kilotons of carbon dioxide loss declined to even lower equivalent) levels resulting in substantial energy and cost-savings for the public. Considering the circumstances—an above ground network serving a high 32.5 1605.2 residential consumption base Scope1 Scope 2 in a typhoon-affected region— this achievement is all the more Please refer to the ESG Reporting impressive.” Methodology and ESG Data Summary for more information about the basis of calculation for MERALCO’s total energy consumption and GHG emissions. David J. Nicol, MPIC’s Chief Financial Officer

39 2017 SUSTAINABILITY REPORT

As a result of major investments in substation MERALCO: SYSTEM LOSS and distribution infrastructure as well as targeted implementation of system loss management and anti- 6.92% electricity pilferage programs, MERALCO has achieved a 6.49% steady reduction in system loss over the past five years. 6.47% 6.35% The level of system loss in 2017, at 5.91%, had improved 0.4 percentage points compared to the year before. 5.91%

MERALCO estimates that the difference between actual system loss and the regulatory cap of 8.5% over the period 2008-2017 saved its customers in excess of 2013 2014 2015 2016 2017 ₱33.5 billion, which is the equivalent of 10 centavos per kilowatt hour (“kWh”), and also avoided 3,565 ktCO2e of GHG emissions. In 2017, the major operating companies (other than GBP and MERALCO) produced GHG emissions as follows: MPIC’S OTHER BUSINESSES

Maynilad produced 78.8 ktCO2e of GHG emissions, of which 2.9 ktCO e were direct MPIC’s other operating companies consume fuel and 2 (Scope 1) emissions from combustion of electricity, which in addition to having environmental fuels in back-up generators and its fleet impacts, incurs costs for their operations. MPIC supports of vehicles; and 75.8 ktCO2e were indirect all operating companies to reduce their environmental (Scope 2) emissions from consumption of purchased electricity in its water treatment footprints and realize cost savings by improving energy plants, pumping stations and other efficiency and utilizing renewable energy sources when equipment and facilities. it is feasible to do so in a cost-effective way. The Featured Toll Roads produced

8.3 ktCO2e of GHG emissions, of which

3.9 ktCO2e were direct (Scope 1) emissions from combustion of fuels in back-up generators and its fleet of vehicles; and MAJOR OPERATING COMPANIES: 4.5 ktCO2e were indirect (Scope 2) GREENHOUSE GAS EMISSIONS IN 2017 emissions from consumption of purchased (in metric kilotons of carbon dioxide equivalent) electricity in its control rooms and offices.

LRMC generated 31.0 ktCO2e of GHG

emissions, of which 1.6 ktCO2e were direct SCOPE 1 SCOPE 2 (Scope 1) emissions from combustion of fuels in back-up generators and its fleet of vehicles; and 29.5 ktCO e were indirect Maynilad 2.9 75.8 2 (Scope 2) emissions from consumption of purchased electricity for running its trains and for lighting and operating equipment Featured in its depots and stations. 3.9 4.5 Toll Roads The Featured Hospitals generated 31.9

ktCO2e of GHG emissions, of which 0.1

ktCO2e were direct (Scope 1) emissions 1.6 29.5 from combustion of fuels; and 31.8 ktCO e LRMC 2 were indirect (Scope 2) emissions from consumption of purchased electricity. Featured 0.1 31.8 Hospitals

40 METRO PACIFIC INVESTMENTS CORPORATION

MANAGEMENT APPROACH LED lighting improves energy efficiency TO CLIMATE CHANGE and enhances passenger safety

In 2017, LRMC started a new ₱20 million initiative The Philippines is highly vulnerable to the impacts of to upgrade the lighting of all 20 stations on the climate change such as increased frequency of extreme LRT-1 by shifting to light-emitting diode (“LED”) systems. In addition to the environmental benefits weather events, rising temperatures, extreme rainfall associated with using more energy-efficient and sea level rise. We acknowledge the risks associated technology to replace fluorescent bulbs that with climate change for our business and we support contain mercury, a hazardous substance, the LED global efforts to mitigate the long-term effects of lighting also improves illumination quality and thereby enhances passenger safety. climate change by controlling emissions of GHGs.

Starting in 2018, LRMC plans to retrofit its 106 Through the implementation of rigorous and robust LRVs with LED systems. environmental and energy management systems, MPIC’s operating companies demonstrate their commitment to achieving continuous improvement in energy efficiency. In the power and water segments of our business, our major operating companies, GBP, MERALCO and Maynilad, are helping to reduce the emissions intensity of energy and water utilities consumed by their customers by investing advanced and clean technologies.

In the face of uncertainty about the nature, scale and timeframe of environmental and social impacts that could be associated with climate change, MPIC adopts

41 2017 SUSTAINABILITY REPORT

a precautionary approach to implementing cost- resilience to climate change and we are committed to effective measures to manage and mitigate those risks doing so in the form of appropriate infrastructure and in accordance with our long-term business objectives strong management systems that encompass effective and willingness of regulators to approve the cost of business continuity planning and emergency response these initiatives. We recognize the value of building capabilities.

Maynilad is enhancing water infrastructure in response to climate change

Maynilad is upgrading the La Mesa Water Treatment Plants 1 and 2 in Quezon City at a cost of approximately ₱7 billion in response to increasing turbidity levels of water from the Angat and Ipo Dams. Turbidity levels refer to the sediment content of raw water, which has been increasing in recent years due to greater variability in rainfall resulting in soil erosion in the watersheds after heavy rains and scraping of mineral deposits from the bottom of the dams during drought periods. Following the upgrade, which is due to be completed in 2020, process improvement of these plants will allow them to treat up to 2,000 NTU (Nephelometric Turbidity Units) from the current 300 NTU.

Climate change is also affecting the quality of raw water withdrawn from Maynilad’s other important water source, Laguna de Bay, resulting in reduced water output from the Putatan Water Treatment Plant. To address this problem, Maynilad is spending ₱6.75 billion to develop an additional water treatment facility to help stabilize production and ensure 24-hour water supply at 16 psi (pounds per square inch) for customers in Muntinlupa, Las Piñas and Cavite. The new Putatan Water Treatment Plant 2, which is due for commissioning in 2018, will adopt advanced reverse osmosis technology to control for the presence of manganese and eliminate total dissolved solids and other impurities in the lake water.

These projects were part of Maynilad’s ₱42 billion capital expenditure plan for the period 2013 to 2017 to improve water infrastructure and address water security challenges.

42 METRO PACIFIC INVESTMENTS CORPORATION

WATER AND EFFLUENTS MPIC’s major operating company in this sector, Maynilad, withdraws large volumes of raw water for the The water topic concerns MPIC’s significant impacts purpose of supplying its customers. It has direct control on water resources as a result of withdrawal and over the system of raw water treatment, potable water consumption of water by its operating companies. It is distribution and wastewater and sanitation services closely related to the topic of effluents and waste, which that it operates in the National Capital Region’s West includes water discharges; the generation, treatment Zone. It also works closely with regulators, customers and disposal of waste; and spills of chemicals, oils, fuels, and other stakeholders to promote responsible water and other substances. management in areas outside of its direct control, such as protection of important water sources, public health According to some projections, the Philippines may be and water conservation. facing a water crisis by 2025.1 Major cities such as Metro Manila, Metro Cebu and others are likely to be especially vulnerable if growth in supply of water and wastewater WATER services does not keep pace with demand as a result of rapidly increasing population and industrial development. MAYNILAD

MPIC’S WATER BUSINESS In 2017, Maynilad operated three water treatment plants with a combined operating capacity of MPIC’s investment and management approaches in approximately 2,550 million liters per day (“MLD”). The the water sector focus on utilizing water resources in a total volume of raw water withdrawn by Maynilad was sustainable way to meet the needs of customers today 921 million cubic meters (“MCM”), while the amount of without undermining the ability of future generations potable water supplied to customers was 757 MCM. to meet their needs. Of the total volume of raw water withdrawn by Maynilad in 2017, 92% came from Angat Dam and the remaining 8% came from Laguna de Bay.

MAYNILAD: RAW WATER TREATMENT PLANTS IN OPERATION IN 2017

Operating Capacity (MLD) Facilities Water Source

La Mesa Treatment Plant 1 (LMTP 1) 1,500 Conventional-type plant Angat Dam

La Mesa Treatment Plant 2 (LMTP 2) 900 Pulsator-type plant Angat Dam Membrane-based plant using Putatan Treatment Plant 1 (PWTP 1) 150 large-scale microfiltration, Laguna de Bay ultrafiltration and reverse osmosis

1 Challenges of Water Governance in the Philippines, Philippine Journal of Science, December 2015 and Challenges to Water Resource Management: Ensuring Adequate Supply and Better Water Quality for the Present and Future Generations, DLSU Research Congress 2015 De La Salle University, March 2015.

43 2017 SUSTAINABILITY REPORT

MAYNILAD: WATER SUPPLIED MAYNILAD: WATER DISCHARGE AND WITHDRAWN (in million cubic meters) BY DESTINATION IN 2017 (in million cubic meters) SUPPLIED WITHDRAWN

907.5 921.1 711.5 757.0 Manila Bay 41.1

Dario Creek 6.1 Pasong Diablo River 2.7 Talayan Creek 2.6 San Juan River 2.3 San Franciso River 1.8 Mairbolo Creek 1.3 Culiat Creek 0.7 2016 2017 2016 2017 Maypajo Creek 0.7

Maynilad has a comprehensive Non-Revenue Water Estero De Santibanez 0.1 (“NRW”) Reduction Program in place to reduce the TOTAL 59.5 volume of “lost” water due to faulty or leaking pipes, theft, illegal connections and non-payment of water bills. Since 2007, headline NRW, which includes water Maynilad’s wastewater treatment facilities guarantee loss from primary pipes and District Metering Areas, has that the pollution content of its water discharge is decreased from 66% to 32%. within relevant regulatory standards. The flexibility of its treatment facilities enables Maynilad to accept Maynilad’s sewerage and sanitation services include wastewater with diverse pollution concentrations. The collection, transport and treatment of wastewater from amount of pollutant removed is therefore dependent on domestic customers within its concession area. In 2017, the pollution concentration of the wastewater received it operated 17 Sewage Treatment Plants, two Sewage in its combined system. and Septage treatment plants and a Septage treatment plant. Maynilad also provides a desludging service for septic tanks of domestic customers. The septage is collected At the end of the year, sewerage services reached in vacuum trucks, dewatered, processed into biosolids, approximately 15% coverage of Maynilad’s concession treated and safely disposed of by contractors at area. In conjunction with and subject to regulatory specialized composting facilities. approval of capital expenditure and tariffs, Maynilad’s wastewater coverage target for 2037 is 100% of its concession area.

During the year, Maynilad discharged 59.5 MCM of treated water into Manila Bay (69%), Dario Creek (10%) and other creeks and rivers (21%), as summarized in the following table.

44 METRO PACIFIC INVESTMENTS CORPORATION

MAYNILAD: WASTEWATER TREATMENT MAJOR OPERATING COMPANIES: IN 2017 WATER WITHDRAWN IN 2017 (in thousand cubic meters) Unit 2017 3,313.9

Wastewater Treated and Discharged MCM 59.5

Volume of Septage Desludged MCM 0.2 Pollution Load Abatement BOD (Biological Oxygen tons 2,092.8 Demand) 765.5 COD (Chemical Oxygen 439.4 tons 3,209.5 Demand) 0.1 79.5 TSS (Total Suspended Solids) tons 1,240.9 MERALCO GBP FEATURED LRMC FEATURED Oil and Grease tons 51.9 TOLL ROADS HOSPITALS

MPIC’S OTHER BUSINESSES MAJOR OPERATING COMPANIES: Apart from Maynilad, MPIC’s other major operating WATER DISCHARGED IN 2017 companies consume and discharge water in the course (in thousand cubic meters) of their daily operations. 463.8

119.8 212.9 POWER 0.0 0.0

GBP withdraws significant quantities of water for MERALCO GBP FEATURED LRMC FEATURED TOLL ROADS HOSPITALS cooling and steam generation in its power plants. In 2017, GBP withdrew 3.3 MCM of water, of which 31% was seawater and the remainder was freshwater sourced from groundwater (46%), reservoirs (8%) GBP: WATER DISCHARGE BY DESTINATION and local water service-providers (15%). GBP pays IN 2017 (in thousand cubic meters) for all water withdrawn from public water sources in compliance with water permits that have been issued Discharge Location by the National Water Resources Board. Guimaras Strait 102.1

During the year, GBP discharged 463,800 CBM of water Luray Creek 329.1 into the sea, rivers, canals and creeks as summarized in Jaro River 18.0 the table. Unidos River 0.8 Mabilo River 1.2 Brgy. Canal 0.2 Sigpit River 12.4 TOTAL 463.8

45 2017 SUSTAINABILITY REPORT

WASTE Water withdrawn and discharged by the major In accordance with their Environmental Management operating companies (other than Maynilad and GBP) in 2017: Systems, the major operating companies implement waste management and waste reduction initiatives from the design phase of new infrastructure developments MERALCO consumed 439,400 CBM to operations and service delivery, including recycling of water, of which 95% was sourced from the local utility and 5% was and/or responsible disposal of waste in accordance sourced from groundwater. MERALCO with applicable regulations. DENR-accredited service discharged 119,800 CBM of process companies have been engaged to collect and dispose of water after treatment in its sewage water treatment facilities. hazardous waste. Waste separation and recycling is also implemented across many sites. The Featured Toll Roads consumed 100 CBM of water from local utilities. Since only domestic sewerage was discharged, zero water discharge was recorded. HOSPITALS LRMC consumed 79,500 CBM of water from the local utility in its depot and stations. Some used water was Featured Hospitals collected and recycled for washing the LRV fleet, however since only In 2017, the Featured Hospitals disposed of 606 metric domestic sewerage was discharged, zero water discharge was recorded. tons of hazardous (including medical) waste. Disposal of hazardous Hospital wastes is contracted out to Featured Hospitals consumed DENR-accredited service companies. As an example 765,500 CBM of water from local of how they achieve an appropriate balance between utilities. AHMC and CSMC discharged 212,900 CBM of effluents after mitigating the social risk of infection versus reducing treatment in their sewage water the environmental burden of excessive waste, the treatment facilities. At MMC, only Featured Hospitals dispose of gowns and drapes that domestic sewerage was discharged have been worn by patients with infectious diseases but and therefore zero water discharge was recorded. launder and re-use linen that has been used by patients with non-infectious diseases.

Waste Management is Everyone’s Responsibility at CSMC

CSMC’s Waste Management Committee implements a comprehensive waste reduction program, which focuses on minimizing hazardous waste; promoting waste segregation and increasing the rate of waste recycling. The hospital waste awareness campaign covers all staff and patients. New hires receive Proper Waste Management training as part of their orientation program.

CSMC’s ‘Vegetables for a Cause’ project is conducive to its waste reduction program and also helps to achieve other social responsibility objectives. Vegetables such as pechay, saluyot and okra are grown in empty alcohol dispensers and sold to hospital employees. All proceeds go to the Cardinal Medical Charities Foundation Inc.

46 METRO PACIFIC INVESTMENTS CORPORATION

SERVICE EXCELLENCE

Through the essential services delivered by our operating companies, MPIC touches the lives of millions of people each day and tens of millions of people each year. We measure the scale of our services in various ways to reflect the differing nature of our business segments.

47 2017 SUSTAINABILITY REPORT

The Groups’ approach to Service Excellence focuses on integrated management systems, expanding our customer base by improving access to services, meeting and exceeding contractual standards, monitoring customer experience and ensuring service continuity in order to mitigate the impacts on our customers of disruptions to our services.

MPIC GROUP: SCALE OF SERVICES SUPPORTED

NUMBER OF BILLED CUSTOMERS NUMBER OF PATIENTS SERVED BY THE (AT YEAR END) HOSPITALS GROUP (YEAR TO DATE)

MERALCO MAYNILAD

No. of No. of Inpatients Outpatients

2016 160,581 2,702,996 1,312,223 1,358,758 6,038,407 6,326,691

2017 173, 939 3,085,638 2016 2017 2016 2017

VOLUME OF ELECTRICITY SOLD VOLUME OF WATER SUPPLIED AND BILLED (in GWh) BY MAYNILAD (in MCM)

GBP MERALCO

Water Water Supplied Billed

2016 711.5 498.6 40,142 42,102 3,646 4,465

2017 757.0 511.7 2016 2017 2016 2017

AVERAGE DAILY VEHICLE ENTRIES* AVERAGE DAILY RIDERSHIP ON LRT-1

NLEX SCTEX CAVITEX 128,137 139,208 45,025 54,566 220,010 237,046 435,199 409,595

2016 2017 2016 2017 2016 2017 2016 2017

*Outside the scope of this report, combined average daily vehicle entries of three toll roads in Vietnam and Thailand rose to 458,175 during the reporting period.

48 METRO PACIFIC INVESTMENTS CORPORATION

QUALITY MANAGEMENT In 2017, notable growth in service delivery was SYSTEMS achieved by all major operating companies as follows:

MERALCO experienced a 5% increase in MPIC is committed to setting the gold standard for customer accounts with 5% growth of service provision in the country. To help achieve residential customers, 2.7% growth of this objective, our operating companies ascribe to commercial customers and 1.9% growth of accounts in the industrial sector. MERALCO Quality Management System (“QMS”) certifications estimates that through its 6.33 million to standardize their technical processes and provide billed customers, MERALCO serves over assurance for our customers and other stakeholders. 28 million people each day. In 2017, LRMC, became certified compliant for the At year end, Maynilad had 1.36 million international standard in Quality Management Systems billed customers; an increase of 4% year on (ISO 9001:2015) as well as Environmental Management year. Through its expanded infrastructure Systems (ISO 14001:2015). In doing so, it has become and water-lines, Maynilad estimates that it serves more than 9.4 million people within the first and only railway system in the Philippines to its concession area based on a survey have attained these ISO certifications. conducted in 2017.

We recognize that service quality and the health and Average daily vehicle entries on NLEX, SCTEX and CAVITEX rose to over 430,000. safety of our customers are intimately linked. Maynilad Traffic on NLEX grew 8% and surged by 21% provides customers with piped-in water supply that on SCTEX following integration of these meets the Philippine National Standards for Drinking two roads in 2016. Seamless integration of NLEX and SCTEX has resulted in reduced Water of the DOH. Two of its water treatment facilities, toll booth waiting times, resulting in La Mesa Treatment Plant 1 and La Mesa Treatment Plant greater convenience for our customers and 2, are also ISO 9001:2015-certified. fewer emissions from idling vehicles. Traffic on CAVITEX rose 9% in line with growth of residential communities in Cavite and INCREASING ACCESS TO tourism in Batangas. In our hospital operations, outpatient visits SERVICES increased by 14% to 3.09 million, and in- patient admissions rose 8% to over 170,000.

We are confident about the prospects for continued LRMC reports that it served an average growth in the scale and reach of our services. For ridership of approximately 435,000 on LRT-1, an increase of 6%. Between 2016 and example, in our toll roads business we are implementing 2017, passenger capacity increased 15% to infrastructure enhancements to keep pace with rapidly over 644,108 passenger trips per day and growing demand and, during 2017, LRMC broke ground total train trips increased 8% to 176,090. on pre-construction work for the LRT-1 Cavite Extension to connect the existing line with an 11.7-kilometer alignment comprising eight additional passenger stations in Parañaque, Las Piñas and Cavite.

Please refer to the Operational Efficiency section of this report for more information about the volume of electricity supplied by GBP and MERALCO and volume of water supplied by Maynilad.

For a full list of QMS certifications, please refer to the Annex on page 107.

49 2017 SUSTAINABILITY REPORT

Pursuant to recent implementation of the ERC’s Retail into an agreement for the supply of electricity to a Competition and Open Access (“RCOA”) scheme, GBP is number of shopping malls in the Visayas. broadening its service offering, having recently entered

Commemorating 10 years of public-private partnership for the provision of water services

2017 marked the 20th anniversary of public-private partnership for the provision of water services in Metro Manila and the 10th anniversary of Maynilad’s take over by a joint venture between MPIC and DMCI Holdings, Inc. (DMCI) in January 2007. Since its re-privatization, Maynilad has embarked on an aggressive investment program to improve and expand its water services, successfully rehabilitating its operations to bring about safe and reliable supply of water to over 9 million people residing in its concession area, including over 175,000 low income households and households receiving senior citizen discounts.

Extensive pipe-laying projects have allowed Maynilad to increase its customer base from only 677,985 accounts in 2006 to 1,358,758 at the end of 2017. During the year, 23 kilometers of water pipes were installed, expanding its distribution network to 7,675 kilometers, which is 67% longer than 10 years ago. At the end of the year, drinking water supply and sewerage coverage were 98% and 15% of the population in the concession area, respectively, with 24-hour service and average water pressure over 7 psi at 100%.

Maynilad has been embroiled in a five-year struggle with its regulator, MWSS, and the Republic of the Philippines, to resolve a tariff matter and revenue claim that is hampering financing of further capital expenditures. Despite this dispute, constructive and collaborative dialogue is ongoing regarding Maynilad’s 2018-2022 five-year Business Plan. United in our shared desire to continue to make our country a better and stronger nation, we are committed to working together with our partners in government to resolve all outstanding matters in a fair and equitable way.

In the meantime, Maynilad is in the process of developing six new sewage treatment plants that, once completed, will extend the provision of sewer services to approximately 1.34 Million Maynilad customers. In 2017, Maynilad also signed a PhP10.8-billion loan agreement with Japan International Cooperation Agency and three of Japan’s largest private commercial banks to fund Non-Revenue Water and water expansion capital expenditure projects over the next four years. Aside from improving operational and network efficiency, the capex programs will help Maynilad to continue to meet its service obligations and achieve sustainable growth.

MAYNILAD: CUSTOMER DEMOGRAPHICS

2017 2016

Total number of customers 1,358,758 1,312,223

Water 1,292,574 1,246,202 Water and Sewer 66,184 66,021 Number of lifeline customers* 292,657 280,547 Number of low-income households served 176,388 169,076 Number of households receiving senior citizen discounts 2,460 2,270

*Lifeline customers consume less than 10 CBM of water per month

50 METRO PACIFIC INVESTMENTS CORPORATION

Innovation along the medical frontier

Our Hospitals Group is not only rapidly expanding the reach of its services by increasing the number of hospitals in its portfolio but also extending the range of services on offer to keep up with developments in international best practice.

In 2017, CSMC’s Section of Nuclear Medicine successfully conducted its first Selective Internal Radiation Therapy (SIRT) procedure, opening up new opportunities for treatment of liver cancer that were not previously available in the Philippines. During the year, CSMC also announced the launch of its Positron Emission Tomography (PET) and Computed Tomography (CT) scans. This state-of-the-art imaging technology is especially useful in cancer care, including disease staging, monitoring response to therapy and aiding in the preparation for radiation treatment. Other notable uses for PET/CT include evaluation of brain and cardiac abnormalities.

COMMENSURATE SERVICES POWER

For the model of public-private infrastructure provision to be sustainable, it is essential that all parties adhere MERALCO fully to the contracted terms of relevant concession and franchise agreements. As the operational and service MERALCO has consistently outperformed standards set metrics of our operating companies demonstrate, by the ERC for system reliability and availability, power since MPIC made its first investment in Maynilad over quality, system loss, time to process applications and a decade ago, we have conscientiously demonstrated energize new customers, and Call Center performance. our ability to uphold our commitments by meeting, and In 2017, MERALCO showed continued improvement in often exceeding, the outputs and outcomes that we KPIs for reliability of electricity distribution as a result of promise to achieve. sustained capital expenditures in sub-transmission and distribution systems as well as continued operational MPIC’s operating companies coordinate closely with excellence of MERALCO’s networks, customer retail and relevant regulatory authorities to share data on shared services teams. performance, review contractual agreements and resolve issues. Compared with 2016, the System Average Interruption Frequency Index improved by 15% to 1.86 times and the total pre-arranged System Average Interruption Duration Index was 53.69 minutes, representing an improvement of 2%.

MERALCO: KEY PERFORMANCE INDICATORS FOR RELIABILITY

2017 2016

System Average Interruption Frequency Index (SAIFI) 1.86 times 2.18 times

System Average Interruption Duration Index (SAIDI) 53.69 minutes 54.68 minutes

51 2017 SUSTAINABILITY REPORT

GBP CUSTOMER EXPERIENCE

GBP produces a reliable and cost-efficient supply of Our operating companies invest time, resources and power using technologically advanced circulating management attention to collecting, hearing and fluidized bed boiler technology in its Cebu and Iloilo responding to the feedback of their customers. facilities and by continually improving plant operations and business processes and systems. In 2017, the duration of forced outages of GBP plants was 45.6 days. Feedback and testimonials are at the center of our hospital’s approach to RAIL patient-centric care Hospitals in our portfolio track levels of patient satisfaction with in-patient and out- LRMC patient services and encourage customers to share their experiences of treatment through online testimonials. In 2017, the percentage Starting in 2017, LRMC is implementing a ₱1-billion of “delighted” patients at each of the Featured program for restoration of LRVs and improvements in Hospitals was 93% or above. system reliability. While awaiting the procurement of 120 new LRVs by the Philippine Government, which are due to be delivered in 2020, it has restored 32 LRVs and the fleet from 77 to 109 LRVs at the end of 2017. In 2017, passengers’ waiting time reduced to 3.4 minutes from POWER over five minutes when LRMC took over the concession in September 2015. MERALCO

MERALCO’s ongoing Customer Experience LRMC: SELECTED KEY PERFORMANCE Transformation Program (“CxTP”) involves automation of INDICATORS back-end processes and platforms to deliver simple, fast, and convenient service in every customer interaction. 2017 2016 To implement the program, Meralco has studied global Average train cycle time (minutes) 102.5 106.0 industry best practices, partnered with reputable Average train waiting time during vendors and is adopting the latest technologies. 3.4 4.0 peak hours (minutes) Average train waiting time during In 2017, MERALCO implemented a Customer 4.3 5.0 non-peak hours (minutes) Information System to support service improvements Number of train failure incidents 14.0 16.4 such as more informative billing statements, account- (minutes) based handling of payments and credits and more Frequency of train failure incidents 11.3 43.0 effective management of customer concerns. Customer satisfaction is monitored through a semi-annual study In 2017, LRMC’s services were suspended for 4 days conducted by a third-party consultant. The results for due to scheduled preventive maintenance and in 2017 show continued improvement in reported levels observance of Holy Week. of satisfaction for all customer segments as well as improvement in the overall score from 8.29/ 10 in 2016 to 8.39/ 10 in 2017.

52 METRO PACIFIC INVESTMENTS CORPORATION

The prepaid electricity service, known as Kuryente Load or “KLoad” allows customers to reload their accounts 24 MERALCO: CUSTOMER SATISFACTION hours-a-day, 7 days a week via an extensive network of SURVEY RESULTS loading stations, BayadCenters and MERALCO Business Centers in convenient credit denominations as low 2017 2016 as ₱100. Previous analysis indicates that MERALCO’s customers place declining importance on electricity Residential 8.42 8.19 rates and meter reading services and increasing General Services 8.09 8.36 importance of customer communications and convenient payment procedures. Local Government Units 8.47 8.44

Businesses 8.15 8.35

Corporate 8.49 8.35

Advanced Metering Infrastructure is the National Government Offices 8.56 8.21 way of the future Overall 8.39 8.29 If there is one thing that can set our services apart from competitors, it is the use of innovative technology. In 2017, MERALCO Biz Partners (the segment dedicated to serving WATER the energy needs of businesses consuming between 5 and 499 kWh per month) partnered with First Golden Achievers to energize one of its property developments using prepaid MAYNILAD electricity. The development is España Grand Residences located in Sampaloc, Manila, which Under the banner of its Next Generation (“NextGen”) caters to young families and students of nearby program, Maynilad is implementing a comprehensive colleges and universities. It is one of the first buildings to offer prepaid electricity to unit three-year roadmap (2016-2018) to shift its focus owners and tenants. from revenue and billed volume to a customer-centric mindset, for example, by adopting a new Workflow Prepaid electricity services are enabled by Advanced Metering Infrastructure (“AMI”) Management System to better monitor new customer comprising an integrated system of smart applications and other customer concerns. meters, communication platforms and data collection and management processes. A key indicator of Maynilad’s relationship with its MERALCO hopes to roll out prepaid services to all customers in the near future with support customers are CSAT scores based on customer survey from the ERC. In addition to facilitating prepaid results. In 2017, CSAT scores for all classes of complaints subscriptions, the full deployment of AMI and requests increased, indicating that Maynilad is will support real-time detection of power consistently “Exceeding Standards”. Service related outages and allow customers to manage their accounts by providing electricity consumption complaints decreased 6% year on year, and the information on a daily, weekly and monthly resolution rate increased to 99.7% within 10 working basis. days. Furthermore, 99.9% of application and installation requests received during the year were processed satisfactorily within 10 working days.

53 2017 SUSTAINABILITY REPORT

Maynilad’s online billing service, known as the MyWaterBill program allows customers to register for payment notifications via SMS/e-mail and to view their account balance and make online payments through the MyWaterBill website. In 2017, the number of customers availing of this service continued to increase.

MAYNILAD: RESOLUTION OF CUSTOMER COMPLAINTS AND REQUESTS

2017 2016

Number of Number of Resolution Rate CSAT Resolution Rate CSAT complaints/ complaints/ (within 10 days) Score (within 10 days) Score requests requests

Service-related complaints 54,185 99.7% 3.4 57,898 98.3% 3.3

Billing-related complaints 56,652 99.4% 3.4 56,735 98.6% 3.1

Application requests 42,081 99.9% 3.8 46,628 99.4% 3.5

Installation requests 30,121 99.9% 3.9 37,476 98.9% 3.6

SERVICE CONTINUITY A strong culture of safety Disruption to the continuity and quality of services can have significant impacts on the health and safety Asian Hospital and Medical Center of our operating companies’ customers and the AHMC strives to continuously improve its culture of safety public at large. We recognize our responsibility to using the Institute for Healthcare Improvement’s Safety uphold regulations and voluntary codes concerning Climate Survey to monitor the success of its initiatives. health and safety impacts of our services. In addition As a testament to the success of this approach, the to strong, integrated management systems that hospital’s infection prevention and control program achieved an excellent result of only 0.56 avoidable health promote and protect customer safety, other relevant care-associated infections per 1000 patient days in 2017. management approaches include investment in The hospital has consistently surpassed international appropriate technologies and fostering a strong benchmarks set by the National Health and Safety Network and the International Nosocomial Infection safety culture. Control Consortium.

In 2017, no significant instances of non-compliance Cardinal Santos Medical Center with regulations and/or voluntary codes concerning Faced with the challenge of underreporting of safety the health and safety of services provided by the incidents, CSMC’s Quality Improvement and Patient Safety operating companies were reported. Committee launched a new On-line Incident Reporting System in March 2017. The web-based application enables users to report incidents using computers that are available throughout the hospital or via an app that can be downloaded onto employees’ smart phones and tablets. The new technology has resulted in a remarkable increase of 256% in the rate of reporting of safety incidents and near misses in 2017 compared with the previous year. Data collected in this way is invaluable for identifying the causes of safety issues and implementing new measures to avoid their reoccurrence.

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POWER TOLLWAYS

MERALCO FEATURED TOLL ROADS

As the country’s longest serving provider of electricity Safety and security protocols in our toll road operations distribution services, MERALCO has established and revolve around the Traffic Control Room of each toll maintains its record of strict compliance with relevant road system. Traffic management and safety personnel industry standards, striving to mitigate all safety risks are on duty 24 hours a day, 7 days a week to respond to from its operations for customers and members of disturbances or emergency situations with an average the public. Such risks may arise from power supply expected response time of 20 minutes. All toll roads are interruptions affecting critical community facilities, equipped with CCTV monitoring systems. Patrol crews accidents involving power distribution infrastructure are empowered to direct road users and clear debris located near neighboring communities, and unsafe use in order to ensure the smooth flow of traffic. They are of electricity. MERALCO’s corporate website features also authorized to conduct road accident investigations safety tips for Home Safety–including Typhoon, and refer cases to the Philippine National Police, as Earthquake and Fire Safety– and Construction Safety. appropriate.

In the event of an accident, emergency medical protocols are in place to coordinate first-aid and Building resilience with the paramedic care from our Emergency Medical Service latest technologies teams and a network of medical aid specialists with extraction and air transport capability. Advanced Life When a 5.5 magnitude earthquake shook at least Support-equipped ambulances are also available to 19 cities and towns in Metro Manila, Southern provide critical care of accident victims, when required. Tagalog and Central Luzon in April 2017, MERALCO sustained zero damage to its facilities In 2017, CAVITEX maintained its record of zero fatalities and networks. from vehicular accidents despite a significant increase in traffic volume. This can be attributed to various As a testament to the efficacy of MERALCO’s safety measures that are in place, such as anti-speeding ongoing program of investment in information and operational technology, its electricity service technology, known as Pro-Laser Video, and an anti- remained stable after the point of restoration overloading system using a HAENNI Weighing Scale and throughout the service area despite ongoing Processor. trigger events, such as rolling brownouts following post-earthquake jolts and tremors. CAVITEX has also installed Intelligent Video Analytics (“IVA”) and a 3x3 videowall in its newly renovated Traffic Control Room. The IVA Cameras help to detect vehicular accidents, stalled vehicles and illegal pedestrians and provide alerts to traffic control room staff through an audible and visual alarm system. The 3x3 videowall facilitates flexible display for better viewing and monitoring of incidents giving rise to increased rates of incident detection, faster response time and better awareness of traffic incidences on the carriageway.

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FEATURED TOLL ROADS: SAFETY MEASURES AND METRICS

2017 2016

NLEX Corp CIC NLEX Corp CIC

Number of customers fined for over-speeding 10,786 929 8,369 0

Emergencies resolved 41,627 472 43,047 670

2017 Patrol Assistance Average Medical Service Average Traffic Incident Accident Response Time Response Time Response Time 12.5 15.1 13.0 11.2 9.1 9.3

RAIL of the light rail system prior to MPIC’s investment in September 2015. To mitigate these risks, LRMC has established a Safety Management System, appointed LRMC a strong senior management team with extensive light rail experience and is implementing a combination of LRMC’s Quality Policy, issued in January 2017, applies engineering and administrative controls to enhance to all employees and contractors and contains a clear operations and maintenance of the LRT-1. statement of commitment to consistently exceeding the expectations of customers by seeking to provide During the year, LRMC completed the pilot phase of its excellence in product and service delivery through ₱500 million Station Improvement Project. The newly continual improvement and risk management strategies restored Doroteo Jose station is the interconnection and meeting or exceeding all standards prescribed in between LRT-1 and LRT-2 and serves an average of relevant agreements, contracts, codes and statutory 27,000 passengers daily. The Station Improvement obligations. Project includes enhancement of the passenger exchange and the advertising environment in all Operation of the LRT-1 involves significant operational 20 stations and is expected to be completed in 2019. safety and security risks that were exacerbated by inadequate maintenance resulting in poor condition

56 METRO PACIFIC INVESTMENTS CORPORATION

ENGAGED WORKFORCE AND SAFE WORKPLACES

Our people are our greatest asset. Continued success of our business depends on the dedication of thousands of highly skilled and experienced individuals who overcome immense challenges to develop, operate and maintain complex physical infrastructure and management systems in order to deliver high quality, customer- oriented services 24 hours a day, seven days a week.

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MPIC values its people and supports and encourages talent, we provide competitive compensation and all operating companies to foster a safe, enabling and benefits packages, including an incentive plan linked to engaging work environment for their employees. Our profitability and share price performance, allowances, management approaches to employment align with paid leave, life and accident insurance, and a retirement our corporate Values. We are focused on promoting plan. employee well-being and productivity, rewarding performance and fostering a culture of inclusion, equal opportunities and mutual respect. MPIC HEAD OFFICE: EMPLOYMENT PROFILE As part of our commitment to good governance, the (at year end 2017) MPIC Board, acting through its Audit Committee, oversees compliance of the Group’s policies and 60% practices with relevant laws and regulations concerning employment and employee welfare, including the Labor Code of the Philippines and the National Health Insurance Act. BY GENDER Male Female

Please refer to the Governance for Sustainability section of this report for more information. 4040% +60 100% HEAD OFFICE PROFILE OF EMPLOYMENT BY CONTRACT Regular The number of employees at MPIC Head Office has TYPE Project-based increased from 16 to 52 since 2007. At the end of 2017, our team consisted of 31 women and 21 men on regular contracts. During the year, we hired 8 new people, all of whom were under the age of 30 years. Even so, at year end, more than two thirds of team members were above 15%10031% the age of 30.

The value we place on diversity and gender equality is reflected in the composition of our Head Office Below 30 years leadership team, with women occupying 50 % of senior BY AGE 30 to 50 years management positions and representing close to 70 % GROUP Over 50 years of middle managers and supervisors.

At only 6% in 2017, MPIC Head Office has a low rate of employee turnover. To attract and retain the right 3154% +5415

58 METRO PACIFIC INVESTMENTS CORPORATION

MPIC HEAD OFFICE: PERCENTAGE OF EMPLOYEES PER EMPLOYEE CATEGORY (at year end 2017)

BY GENDER BY AGE GROUP

Female Male

Below 30 30 to 50 Over 50 Senior Manager 7 7 years years years

Senior Manager 0 9 5 Middle Manager 12 5 Middle Manager 4 11 2

Supervisor 6 3 Supervisor 5 4 0

Rank and File 6 6 Rank and File 7 4 1

MPIC HEAD OFFICE: NEW HIRES AND EMPLOYEE TURNOVER IN 2017

Number of Rate of Number of Rate of Employee New Hires New Hires Employee Turnover Turnover

TOTAL 8 15% TOTAL 3 6%

Male 3 14% Male 0 0%

Female 5 16% Female 3 9%

Below 30 years 8 50% Below 30 years 1 6%

30 to 50 years 0 0% 30 to 50 years 1 4%

Over 50 years 0 0% Over 50 years 1 13%

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At MPIC Head Office, our corporate culture fosters open communication. All employees receive regular and constructive feedback on their performance. Our employee training and engagement programs are continuously evolving to meet the needs of our growing business and expanding team in order to optimize employee productivity, satisfaction and well-being. We conduct an employee satisfaction survey every year to receive feedback and implement improvements.

In 2017, we held an Innovation Congress and Internal Customer Service training to cultivate our culture of innovation, collaboration and putting customers first. In addition to holding workshops for employees on Personal Financial Planning and Personality Development, as part of our Business Communication Series, we also conducted training on Advanced Presentation Skills and Written Business Communications.

During the year, our established employee engagement channels and events continued to receive high levels of support and participation from team members including the Annual Team Development Program, Christmas party and service awards, Thank God It’s Friday social activities and Halloween family gathering.

MPIC GROUP PROFILE OF At the end of 2017, the gender composition of employees at MERALCO, GBP, Maynilad and LRMC was EMPLOYMENT predominantly male; the composition of employees at the Featured Hospitals was predominantly female; and at The major operating companies within the scope of this the Featured Toll Roads, the ratio of men and women was report directly employed over 17,100 people at the end close to 50:50. of 2017. MERALCO was the largest single employer within the Group with 5,539 employees. The three Featured More than 50% of employees at each of the major Hospitals, namely CSMC, AHMC and MMC, employed operating companies, excluding the Featured Hospitals, 1,032, 1,419 and 2,635 regular employees, respectively, was within the age group of 30 to 50 years. At MERALCO, with a combined total of 5,086. The employee headcount GBP, Maynilad* and LRMC, the share of employees aged at Maynilad, LRMC and GBP was 2,477, 1,454 and 973, over 50 years was 19%, 20%, 19% and 15%, respectively. respectively. The Featured Toll Roads combined had 1,589 Conversely, 58% of employees at the Featured Hospitals employees. were below 30 years of age and only 4% were over 50 years.

*For Maynilad, employment by age group breakdown refers to employees with regular employment contracts only.

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Across all operating companies, most employees were MAJOR OPERATING COMPANIES: engaged on ‘regular’ employment contracts, which EMPLOYMENT BY AGE GROUP means they enjoy the rights and responsibilities of permanent employees in accordance with Philippines Below 30 30 to 50 Over 50 employment law. In 2017, only the Featured Toll Road years years years companies employed a significant number of people MERALCO 1,367 3,105 1,067 on ‘project-based’ contracts (i.e. 14% of total employee GBP 200 582 191 headcount), of which 143 were men and 115 women. MAYNILAD* 668 1,103 420 FEATURED 697 832 60 TOLL ROADS MAJOR OPERATING COMPANIES: LRMC 353 890 211 EMPLOYMENT BY CONTRACT TYPE FEATURED 2,926 1,941 219 HOSPITALS

*For Maynilad, employment by age group breakdown refers to employees with regular employment contracts only. Regular Project-based

MERALCO 5,539 0

MAJOR OPERATING COMPANIES: GBP 958 15 TOTAL EMPLOYMENT

5,539 5,086 MAYNILAD 2,191 286

2,477 FEATURED TOLL ROADS 1,589 258 1,589 1,454 973 LRMC 1,418 36

FEATURED MERALCO GBP MAYNILAD FEATURED LRMC FEATURED 5,086 TOLL ROADS HOSPITALS HOSPITALS*

*For Featured Hospitals in 2017, we report on employees with regular MAJOR OPERATING COMPANIES: employment contracts only. EMPLOYMENT BY GENDER

Female Male

MERALCO 1,118 4,421

GBP 176 797

MAYNILAD 614 1,863

FEATURED 778 811 TOLL ROADS

LRMC 462 992

FEATURED 1,689 HOSPITALS 3,397

61 2017 SUSTAINABILITY REPORT

MAJOR OPERATING COMPANIES: CONTRACT TYPE BY GENDER

REGULAR PROJECT-BASED

Female Male Female Male

MERALCO 1,118 4,421 MERALCO 0 0

GBP 175 783 GBP 1 14

MAYNILAD 562 1,629 MAYNILAD 52 234

FEATURED FEATURED TOLL ROADS 663 668 TOLL ROADS 115 143

LRMC 459 959 LRMC 3 33

FEATURED HOSPITALS 3,397 1,689

MANAGEMENT APPROACH TO WORKERS WHO ARE NOT EMPLOYEES

In accordance with the needs of their various businesses, our major operating companies engage contractors to provide important services such as design and construction of civil work projects. The operating companies have policies and procedures in place to ensure that all workers’ rights are respected and upheld on their worksites.

LRMC implements a proactive and systematic approach to managing and controlling risks arising from work performed by its contractors. All potential vendors go through an accreditation process, including a thorough review of legal documentation, such as Work Permits, and on-site inspections to ensure compliance with high standards for Health, Safety, Environment and Quality (“HSEQ”). Once selected, all contractors receive a comprehensive safety orientation. Oversight for contractors’ performance is provided by a cross-functional team including project managers and representatives of LRMC’s HSEQ, Finance and Legal divisions.

In our Hospitals Group, doctors, including residents and fellows, are frequently engaged as consultants rather than employees. Reflecting the fact that the roles and responsibilities carried out by these consultants are fundamental to the operations of each hospital, they benefit from training opportunities and staff engagement and wellbeing initiatives in a similar way to regular employees.

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CHANGES IN EMPLOYMENT

In 2017, the Featured Toll Roads and Featured Hospitals had the highest rate of new hires, at 38% and 26% respectively. At both Maynilad** and LRMC, the rate of new hires was 12%, while at MERALCO and GBP it was 7% and 5%, respectively. The rate of new hires among women exceeded the rate of new hires among men at all the operating companies, with the exception of LRMC, where the rate of new hires for women and men was 10% and 13%, respectively.

MAJOR OPERATING COMPANIES: TOTAL NUMBER OF NEW HIRES IN 2017

By Gender By Age

Below 30 30 to 50 Over 50 TOTAL Female Male years years years

MERALCO 383 129 254 351 31 1

GBP 52 22 30 10 40 2

Maynilad** 266 78 189 176 89 1

Featured Toll Roads 607 364 243 * * *

LRMC 174 46 128 88 77 9

Featured Hospitals 1,319 928 391 1,100 217 2

MAJOR OPERATING COMPANIES: RATE OF NEW HIRES IN 2017

By Gender By Age

Below 30 30 to 50 Over 50 TOTAL Female Male years years years

MERALCO 7% 12% 6% 26% 1% 0%

GBP 5% 13% 4% 5% 7% 1%

Maynilad** 12% 14% 12% 26% 8% 0%

Featured Toll Roads 38% 47% 30% * * *

LRMC 12% 10% 13% 25% 9% 4%

Featured Hospitals 26% 27% 23% 38% 11% 1%

*Data on new hires by age group is not available for Featured Toll Roads in 2017. **For Maynilad, all data on new hires refers to employees with regular employment contracts only.

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Employee turnover reflects the number of employees who leave the organization voluntarily or due to dismissal, retirement, or death in service. In general, the overall rate of employee turnover at the operating companies was low; ranging from 3% and 7% at MERALCO, GBP, Maynilad** and LRMC. At the Featured Hospitals, the overall rate of employee turnover was 24%, which was largely attributed to high turnover (30%) among employees below 30 years of age.

MAJOR OPERATING COMPANIES: TOTAL NUMBER OF EMPLOYEE TURNOVER IN 2017*

By Gender By Age

Below 30 30 to 50 Over 50 TOTAL Female Male years years years

MERALCO 413 92 321 77 126 210

GBP 56 19 37 6 38 12

Maynilad** 73 29 44 44 29 0

LRMC 60 13 47 13 39 8

Featured Hospitals 1,215 819 396 886 302 27

MAJOR OPERATING COMPANIES: RATE OF EMPLOYEE TURNOVER IN 2017*

By Gender By Age

Below 30 30 to 50 Over 50 TOTAL Female Male years years years

MERALCO 7% 8% 7% 6% 4% 20%

GBP 6% 11% 5% 3% 7% 6%

Maynilad** 3% 5% 23% 7% 3% 0%

LRMC 4% 3% 5% 4% 4% 4%

Featured Hospitals 24% 24% 23% 30% 16% 12%

*Data on employee turnover for Featured Toll Roads is not available in 2017. **For Maynilad, data on employee turn-over refers to employees with regular employment contracts only.

64 METRO PACIFIC INVESTMENTS CORPORATION

MANAGEMENT APPROACH TO COLLECTIVE HOSPITALS BARGAINING

In recognition of the costs associated with high The Philippine Labor Code is the key legislation on employee turnover, such as additional recruitment and industrial relations, dispute settlement and social training expenses and lower productivity, the Featured dialogue that guarantees the rights of workers Hospitals provide a range of employment benefits to organize unions for the purpose of collective to help retain their staff and reward loyalty, such as bargaining in the Philippines. The MPIC Group respects yearly salary increases and/ or bonuses, retirement and upholds these rights in various ways across our plans and life insurance coverage. MMC, for example, operating companies. provides a Free Hospitalization Benefit for Employees and offers a discount of 30% to 65% on hospital bills for employees’ dependents. In addition to generous leave WATER allowances for vacation, sickness, and bereavement, the hospitals also provide various expense allowances for communication, transport and food. At Maynilad, 64% of employees participated in collective bargaining agreements in 2017.

65 2017 SUSTAINABILITY REPORT

POWER

In 2017, close to 77% of MERALCO’s employees were involved in collective bargaining agreements through participation in two unions representing the interests of rank and file employees and supervisory employees. MERALCO takes a proactive and collaborative approach to maintaining open communication and meaningful engagement with both unions, including monthly coordination meetings and quarterly briefings, regular corporate events and other activities.

RAIL

MANAGEMENT APPROACH TO DIVERSITY AND At LRMC, no collective bargaining agreements were EQUAL OPPORTUNITIES in place during 2017, however two workers unions had been registered with the Department of Labor MPIC is committed to supporting all employees to do and Employment. LRMC’s management team is their best work by ensuring that they are treated with committed to working together with elected employee dignity and respect in the workplace. We do not tolerate representatives from these unions. harassment or unlawful discrimination of any kind, including breaches of relevant employment law such as the Magna Carta for Women, Anti-Age Discrimination HOSPITALS Law and the Paternity Leave Act. MPIC Head Office provides training to assist employees to understand their rights and obligations with respect to equal At CSMC and MMC, collective bargaining agreements opportunities and non-discrimination in accordance covered 35% and 74% of staff, respectively, at the end of with our Code of Conduct. 2017. To cope with the diverse challenges of our business, Collective bargaining agreements were not in place at we recognize the value of cultivating diversity of GBP or the Featured Toll Roads during 2017. experience and expertise among our leadership that will strengthen decision-making and help to make our organization more resilient.

For more information, please refer to the Governance for Sustainability section of this report.

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TRAINING AND DEVELOPMENT

The operating companies invest time and resources in instruction including onsite training, offsite training and training and development to ensure that their workforces personal and professional development programs. have the breadth and depth of skills and experience they need to continue to achieve MPIC’s business goals in a sustainable way. Please refer to Governance for In 2017, the amount of training delivered by the major Sustainability as well as the section below operating companies within the scope of this report ranged on Occupational Health and Safety for from approximately six hours to 65 hours per employee details of the training that took place. in 2017. In this context, ‘training’ refers to all types of

MAJOR OPERATING COMPANIES: AVERAGE TRAINING HOURS BY GENDER AND EMPLOYEE CATEGORY

Featured Toll Featured Average Hours of Training MERALCO GBP Maynilad* LRMC Roads Hospitals

Total Average Hours of Training 26.9 24.2 30.7 7.1 5.8 64.5

Male 25.2 24.8 32.4 3.2 4.6 63.2 By gender Female 33.6 21.4 31.7 3.4 4.5 65.1

Senior Management 36.5 15.3 33.6 19.5 21.7 49.3

Middle Management 29.7 32.5 53.7 35.4 24.0 111.6 By employee category Supervisors n/a 28.7 42.9 17.7 14.7 101.4

Rank & File 25.0 20.2 28.3 2.0 0.6 55.7

* For Maynilad, average training hours by employee category refers to employees with regular employment contracts only.

MAJOR OPERATING COMPANIES: TRAINING IN 2017

Number of Training Programs/ Sessions Recorded

MERALCO 415

GBP 134

MAYNILAD 16 (4 core programs, one training each quarter)

FEATURED TOLL ROADS CIC: 13 NLEX Corp: 31

LRMC 14

FEATURED HOSPITALS AMC: 89 CSMC: 273 MMC: 859

67 2017 SUSTAINABILITY REPORT

The GBP Institute for Energy in Iloilo is the country’s premiere training facility dedicated to fostering technological advancement in the power generation industry. It is the hub of GBP’s learning and development programs and features state-of-the- art training facilities related to its operations and maintenance practices such as a Circulating Fluidized Bed boiler simulator.

LEADERSHIP TRAINING

As part of its Leadership Development program, Maynilad implements training to help its employees develop the behaviors and abilities they need to fulfil management roles. In 2017, the Featured Toll Road companies implemented a number of training programs for frontline leaders including Performance Coaching and Leading Change.

TRAINING ON INTEGRATED MANAGEMENT ONBOARDING PROCESS SYSTEMS

As part of the recruitment process, new hires participate The major operating companies are implementing in aptitude tests and receive training to develop their integrated management systems to achieve continuous technical competence and skills. LRMC and AHMC, for improvement in various aspects of their operations, example, run staff orientation programs once each including environmental performance, service quality quarter to ensure that all new hires receive the training and health and safety. These initiatives involve extensive and support they require to settle quickly and efficiently training of personnel at all levels to ensure that into their new roles. everyone is on board with the transformation processes that are underway. TECHNICAL TRAINING In 2017, GBP conducted training on ISO 14001:2015 Our major operating companies, such as Maynilad, have Environmental Management System and ISO 9001:2015 developed tailored Professional Development programs Quality Management System to support its IMS to address technical and functional competencies Committee to implement relevant changes and updates required to perform specific functions or roles. In 2017, in their respective work areas. NLEX Corp implemented LRMC implemented a Station Supervisor Development training on Quality Assurance & Quality Control systems Program and Lead Station Supervisor Development for participants to learn about site investigations, Program. MMC also implemented tailored training remediation and monitoring of materials, design and programs throughout the year for staff in different work. departments, such as Nursing & Patient Care, Radiology and Pharmacy.

68 METRO PACIFIC INVESTMENTS CORPORATION

OTHER BEST PRACTICES WORKPLACE FATALITIES, INJURIES AND OCCUPATIONAL DISEASES MPIC’s major operating companies also implement a range of other training initiatives to encourage their In 2017, Maynilad recorded one workplace fatality of an employees to develop personal and professional employee. No other work-related fatalities of employees interests. Maynilad has a Foundational Competency were recorded by other major operating companies Development program with courses on business within the scope of this report. writing, presentation skills and computer literacy, while the Featured Hospitals provide training on English language and interview skills. In 2017, LRMC hosted an Innovation Congress for employees to practice working Please refer to Maynilad’s 2017 together by collaborating on projects associated with Sustainability Report for more information. creating a Culture of Innovation.

2017 is the first year for which MPIC Head Office has OCCUPATIONAL HEALTH collected data from the major operating companies AND SAFETY on the rate of injuries and occupational diseases for all employees. This rate reflects the number of injuries At MPIC, health and safety at work involves both the and occupational diseases that occurred during the prevention of harm and the promotion of health and year, divided by the total number hours worked well-being. and multiplied by 200,000. Data for MERALCO, GBP, Maynilad and LRMC is summarized in the table below. The major operating companies implement occupational We are working on improving our data management health and safety management systems with the aim system with respect to this and other relevant metrics of continuously improving safety performance within for occupational health and safety and we plan to their workplaces. In accordance with these management report on our progress in future. systems, they assume responsibility for the occupational health and safety of all employees and other workers, for example construction workers, who are working on their sites. The core principles and practices of these MAJOR OPERATING COMPANIES: INJURY management systems involve developing appropriate AND OCCUPATIONAL DISEASE RATE FOR policies, analyzing and controlling health and safety EMPLOYEES* risks, providing training, and recording and investigating health and safety incidents. 2017

MERALCO 0.26

GBP 0.64

MAYNILAD 0.35 For a full list of OHS certifications, please refer to the Annex on page 107. LRMC 0.57

*Data on injury and occupational disease rate for Featured Toll Roads and Featured Hospitals is not available in 2017.

69 2017 SUSTAINABILITY REPORT

POWER GBP’s Behavioral-Based Safety program adopts a proactive approach to preventing accidents by engaging employees in identifying hazards at the MERALCO workplace and intervening whenever necessary. A Safety Observation Card System allows employees MERALCO’s Zero Lost Time Incident Program is aligned to report any observed unsafe conditions and at-risk with the requirements of the Department of Labor behaviors so that appropriate corrective actions and and Employment. Its Safety, Occupational Health and preventive measures will be put in place; and safety Environment Management team works relentlessly to has been incorporated into the company’s Individual enhance the culture of safety among all employees Behavior Appraisal System. and workers. The Networks Operational Safety Council provides strong support to ensure that work tasks GBP also has comprehensive employee wellness involving significant hazards are properly assessed programs in place, including weight loss programs, and addressed. Meanwhile the Business Continuity vaccinations, annual physical examinations and Management team is responsible for strategy and executive medical check-ups. In 2017, a number of governance of company-wide business continuity learning sessions were conducted for employees plans with the objective of enhancing safety and on health and wellness topics such as Living with organizational resilience. Low Vision, Responsible Parenthood and HIV/AIDs Awareness. GBP

The management teams at each GBP power plant implement Hazard Zoning and Personal Protective Equipment (“PPE”) mapping by classifying areas within GBP: HEALTH AND SAFETY TRAINING 2017 the plant according to the degree of hazards and providing safety signage to indicate the required PPEs • Fire Prevention and Suppression/ Fire Safety in hazardous areas. Any activities that pose a hazard to • Emergency Preparedness and Response safety are governed by a Permit-To-Work process and a Training No Permit-No Work policy is strictly implemented. • Occupational First Aid Training • Construction Occupational Safety and Health As part of GBP’s proactive Emergency Prevention Training and Response system, each power plant has been • Scaffolding Safety fitted with a variety of fire suppression, alarm, and • Heavy Equipment Training detection systems that are regularly inspected, tested • Advanced Security Management and maintained. Emergency response teams are • Bomb Identification, Disposal and Bomb equipped with various emergency response equipment. Threat Incident Awareness Emergency response procedures have been established • Job Safety Analysis and are the subject of regular training and drills. • Hazard Identification, Risk Assessment and Control GBP’s safety policies cover all work tasks and activities • Incident Investigation and Reporting undertaken by contractors. Safety requirements have • Environment and Safety Observation Card been incorporated into the process for contractor • Defensive Driving selection and evaluation. All contractors go through site safety orientation training.

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WATER

MAYNILAD All employees and their dependents enjoy access to emergency, out-patient and in-patient services through Maynilad has Health Management Programs in place Maynilad’s health service provider and are eligible to including annual physical examinations and random benefit from an annual vaccination program and oral drug testing in accordance with the requirements of the cavity reduction program. In addition to three in-house Department of Labor and Employment. satellite clinics that are located within the concession area, Maynilad also conducts monthly roving medical All employees have access to in-house health education and dental consultations in other business areas. Since and fitness and nutrition initiatives, including health 2016, Maynilad has also offered discounted medications forums and bulletins, gym facilities and group exercise for employees and dependents through its online activities. In addition to free medical screening tests pharmacy. for Early Disease Detection and Prevention, health support clubs are available for employees who have been diagnosed with diabetes and hypertension. Furthermore, employees who are at higher risk for exposure to chemical and physical hazards are closely monitored through regular chemical hazard surveillance and audiometry testing.

71 2017 SUSTAINABILITY REPORT

RAIL improvement projects in its depots to reduce hazards for employees and other workers. These initiatives include posting safety signs, reminders and guidelines LRMC at strategic locations, constructing pedestrian walkways to prevent accidental contact with vehicular traffic and Training is a key feature of LRMC’s successful drive to installing concrete pathways to reduce slip, trip and fall improve occupational health and safety since taking hazards. over operations and maintenance of the LRT-1 in 2015. LRMC conducts emergency drills on a regular basis In 2017, LRMC conducted workshops for senior to ensure that all employees can implement safety managers to enhance leadership on safety issues. procedures for different kinds of emergencies. With During the year, more than 380 employees underwent support from the Bureau of Fire Protection, in 2017 basic safety inductions as part of their onboarding LRMC conducted two 40-hour training sessions on fire process. Maintenance supervisors and personnel were safety for its emergency response teams. In addition, trained on working safely at heights, safe use of power station supervisors, tellers, and other LRMC personnel tools and hand tools, and welding safety. Various skills received training on first aid and basic life support. training workshops were also conducted in partnership with the Technical Education and Skills Development Authority, including training for maintenance staff on forklift and scaffolding safety.

LRMC has implemented a number of safety

72 METRO PACIFIC INVESTMENTS CORPORATION

SOCIAL RESPONSIBILITY

As part of our corporate culture to give back to the people we serve, all major operating companies within the scope of this report have implemented local community engagement initiatives and investment programs to suit their specific circumstances in key areas such as poverty alleviation, educational support, environmental protection, and disaster response and relief.

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We recognize that the Group’s investments and daily to ensure that the relocation site was supplied with business activities have significant economic, social adequate water and power utilities and that appropriate and environmental impacts on local communities. security and estate management systems were put in In accordance with our Sustainability Framework, place. we strive to ensure that these impacts are positive. Our ERM framework drives us to collaborate with local community stakeholders to address needs and POWER vulnerabilities arising for specific groups, such as communities who are due to be relocated to make way for major infrastructure projects. In order to ensure good quality and reliable services, MERALCO has partnered with local government units Under the Philippine Environmental Impact Assessment from the municipalities of Binangonan, Cardona, (“EIA”) System, the Department of Environment and Morong, Pililia, Tanay and Teresa in the Province of Rizal Natural Resources, oversees preparation and approval under its Energizing Partnerships Program. The benefits of Environmental Risk Assessment, Environmental of the partnership include disaster preparedness and Management Plans and Proposals for Environmental safety initiatives as well as community electrification Monitoring for relevant projects. Beyond compliance, projects. MERALCO also participates in strategic utility MPIC Head Office implements project screening to planning with each municipality to take account of understand the actual and potential social impacts of regional development plans and power requirements new investments as part of our approach to Responsible when developing its electrical capital projection. Investment Selection and Portfolio Management. COMMUNITY INVESTMENT For more information, please refer to the Governance for Sustainability section of METRO PACIFIC INVESTMENTS FOUNDATION this report. Metro Pacific Investments Foundation (“MPIF”) is a constituent of the Corporate Social Responsibility Council “Tulong Kapatid” of the Manuel V. Pangilinan COMMUNITY ENGAGEMENT group of companies. It has a newly-formed Board of Advisors and is managed by MPIC Head Office with the The major operating companies manage environmental objective of complementing MPIC’s investment and and social risks in their concession and franchise areas management strategy in physical infrastructure and by engaging with stakeholders. public services by helping alleviate poverty, provide high-quality educational opportunities for children and promote conservation of our natural environment. RAIL We recognize that there are always ways to improve and enhance the impacts of our community investments by LRMC has worked closely with the LRTA on relocation approaching social responsibility in a more concerted of informal settlers displaced by construction of the way across the Group. Wherever possible, we are LRT-1 Cavite Extension project. Under the terms of working towards linking the Foundation’s initiatives its Concession Agreement, implementation of the with activities and programs of our major operating relocation program is the obligation of the government; companies. however, LRMC has actively participated in the process

74 METRO PACIFIC INVESTMENTS CORPORATION

New MPIF initiative to compliment infrastructure development in Cordova, Cebu

One of the most significant endeavors of the MPIF in its first ten years of operation has been establishment of Mangrove Propagation and Information Centers in Alaminos City in Pangasinan and Del Carmen in Surigao del Norte, which help to protect coastal and marine environments and boost ecotourism in these areas.

Building on our success in these locations, in 2017, MPIF launched a new Mangrove Propagation and Information Center in Barangay Day-as, Municipality of Cordova, Cebu. The center will conduct mangrove and beach forest assessments, promote awareness about environmental protection and implement environmental protection initiatives in the region near MPTC’s 8.2-kilometer Cebu Cordova Link Expressway (“CCLEX”) project, which is due to start construction in June 2018.

METRO PACIFIC INVESTMENTS FOUNDATION: KEY PROGRAMS

SHORE IT UP

2017 marked the 10th year of MPIF’s Shore It Up environmental program.

Aim To work with municipalities on cleaning up, restoring and protecting valuable eco-systems in coastal areas to help them reach their potential for eco-tourism.

Key activities Environmental rescue, restoration and revival such as mangrove planting, tree planting, giant clam seeding, giant clam moving and artificial reef installation.

Membership More than 250 volunteers by the end of 2017

2017 Highlights

In March 2017, MPIF hosted a gathering of Shore groups—to share experiences and discuss opportunities It Up partners—local government units, national for collaboration on comprehensive and long-term government agencies, community organizations, environmental programs. scientific organizations, students, and civil society

75 2017 SUSTAINABILITY REPORT

During her keynote address, Senator Cynthia Villar, Other ongoing initiatives current chairperson of the Senate Committee on Environment and Natural Resources, spoke about her During the year, MPIF supported other community efforts to protect and preserve the Las Piñas-Parañaque projects, including: Training for eco-guides at our Critical Habitat and Ecotourism Area. The MPIF has Mangrove Propagation and Information Center in pledged support to the Senator’s wetlands advocacy in Alaminos, Pangasinan under our “green jobs” program; this area. coral reef rehabilitation and restoration in Mabini, Batangas; and, a site visit and underwater assessment in At the 2-day event, MPIF also signed new agreements Dumaguete, Apo Island. with local governments in Cordova, Cebu, and Medina, Misamis Oriental to develop new opportunities for collaboration.

2017 Diving Resort and Travel Expo

Shore It Up participated as an exhibitor at the 2017 Dive, Resort & Travel Expo to improve awareness about our work. During the 3-day event, our booth attracted over 800 visitors and enrolled 200 new members to our membership program, including 65 certified Professional Association of Diving Instructors who can assist in our underwater clean ups and coral reef restoration efforts.

“Shore It Up Medina MO”

In 2017, Shore It Up focused on helping to protect and preserve a 30-hectare Marine Protected Area in the province of Misamis Oriental (“MO”) that is home to some 2,000 species of clams, mollusks, and crustaceans, 22 species of whale and dolphin, over 900 species of seaweed and more than 200 species of coral. In recent years, this fragile ecosystem has been adversely affected by pollution and a “cold storm” associated with the northeast monsoon that hit the area in 2009.

After scuba diver volunteers conducted an assessment of the condition of the reef, MPIF organized an underwater and coastal clean-up in nine coastal barangays (districts) of Medina. We also hosted eco- tourism workshops and launched a Junior Environment Scouts program in local schools.

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MANO AMIGA

MANO AMIGA is a non-profit organization established in 2008. With support from MPIF, it has developed into a highly impactful social development program.

Aim To provide quality education for children from low- income families.

Key activities Operation of a school for Kindergarten thru 12th grade following the Integral Formation method of Christian education. Students are provided with necessary learning tools, such as school supplies, books and uniforms.`

2017 Highlights

Creative transformation of the learning environment Mentorship of young scholars

With MPIF support, MANO AMIGA relocated to a larger MPIC cultivates a culture of social responsibility by school campus in Parañaque City in 2016. In 2017, we encouraging Head Office employees to participate helped to transform the new classrooms into more in MPIF’s community investment projects. In 2017, creative learning spaces by working together with representatives from MPIC Head Office continued students and teachers from grade 1, 2 and 3 to create to volunteer as part-time mentors for MANO AMIGA mural paintings based on three themes—environment, students. progress, and careers.

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In 2017, GBP also implemented various small Upcycle Your Trash 2017: infrastructure development projects in Iloilo City, Toledo Christmas tree-cycling contest City, Aklan and Oriental Mindoro. The 2017 Social Development Program in Iloilo, for example, involved Since 2015, MPIC has conducted an annual group- wide competition at Christmas time to come improvements and repairs to community health up with the best environment-friendly holiday centers, day care centers and street-lighting as well display. 2017’s friendly but serious competition as road concreting, construction of waiting sheds and entitled Upcycle Your Trash encouraged installation of a portable fire hydrant, among others. participants to reduce waste, celebrate a ‘green’ Christmas and reinforce MPIC’s environmental advocacy. In the process, it also promoted MERALCO teamwork, creativity and camaraderie among MPIC employees. MERALCO engages communities through One Divided into seven teams, over 60 employees MERALCO Foundation, which is its social development worked together to design and put up Christmas arm established in 2012. The Foundation leverages trees made of recyclable materials. The winning the company’s expertise and resources to promote entries were displayed in the Company’s lobby, saving an estimated ₱50,000 worth of Christmas community electrification, grassroots partnerships, and decorations through this creative recycling emergency preparedness and disaster response. campaign. In 2017, MERALCO energized 8,276 low-income households and 36 schools through its community electrification program. Network engineers also visited POWER 223 public schools within the franchise area to make electrical safety inspections as part of its annual “Safe Ang School Ko” campaign. GBP During the year, over 7,300 hundred youths participated GBP’s community investment initiatives provide support in youth development programs and computers were for health and wellness, education, environmental donated to 12 schools and 10 local government units. protection and social development in local MERALCO estimates that in total over 56,000 families communities. benefited from its social development programs and 17,000 families received help through its disaster In 2017, GBP spent ₱2.18 million to provide training response initiatives. for community health workers and ensure a consistent supply of over-the-counter medicines in community clinics under its Adopt-A-Health Center program. It also spent ₱3.84 million on scholarships for 754 students under its education program.

GBP’s environmental protection programs focus on preserving natural resources in its areas of operation, including “Kabilin” in Cebu and “Handumanan” in Iloilo. In addition to rehabilitating 100 hectares of forestland Since 2012, MERALCO has energized in the Malubog Watershed Area near Toledo City, 206 schools, benefiting over GBP is preparing to reforest about 150 hectares in 14,600 students. Lambunao, Iloilo.

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WATER

MAYNILAD

Maynilad’s far-reaching environmental and social outreach programs promote public health, sanitation and hygiene, watershed and waterways conservation, social entrepreneurship and disaster response.

Through its “Lingkod Eskwela”, “Daloy Dunong” and “Samahang Tubig Maynilad” programs, it forges partnerships with stakeholders to address water access, promote responsible water use and provide livelihood opportunities. Plant for Life is a multi-site reforestation program working in the areas along the coastlines of Laguna de Bay and Manila Bay to help reforest the watershed in Angat, Ipo and La Mesa.

In 2017, Maynilad volunteers refurbished classrooms TOLLWAYS and updated water facilities in 88 schools, installed drink-wash facilities in 77 schools and engaged more than 14,000 students about the importance of water, FEATURED TOLL ROADS good hygiene and environmental responsibility. During the year, Maynilad also supported members of the In our toll roads business, our core community Dumagat indigenous community living within the Ipo outreach programs promote road safety for drivers and Watershed to produce and sell traditional sculptures. environmental protection in our concession areas.

NLEX Corp.’s “Gusto Ko, Ligtas Tayo” program, is a road safety education program designed to increase awareness of good road safety practices in local communities and schools. The “See Clearly. Drive Safely” project provides free comprehensive eye care for drivers who regularly use the NLEX and SCTEX.

CIC’s Living in an Environment of Aqua Flora and Fauna (“LEAF”) and Care for the Restoration of Environment (“CARE”) initiatives support the Las Piñas-Parañaque Critical Habitat and Ecotourism Area that is situated In 2017, Maynilad volunteers engaged more along the Las Piñas-Parañaque carriageway. This is the than 14,000 students about the last significant natural mangrove area south of Metro importance of water, good hygiene and Manila. In 2017, CIC volunteers participated in tree environmental responsibility growing activities, coastal clean up and environment appreciation tours.

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RAIL

Please refer to Part 2 of this report LRMC for highlights of LRMC’s social responsibility initiatives in 2017. Since 2016, LRMC has been spearheading the Live for the Rivers Movement Coalition to help address river pollution along the Estero de Tripa de Gallina. In addition to organizing an annual river clean-up event with hundreds of volunteers from government agencies, surrounding communities and employees, LRMC helps to promote sustainable livelihoods for local communities by providing training and materials to produce, install and implement traditional water- pollution abatement technologies.

HOSPITALS

FEATURED HOSPITALS

The Hospitals Group extends high-quality healthcare to communities throughout the country. Individual hospitals leverage their expertise and resources to deliver on their commitment to social responsibility.

CSMC, for example, operates the Cardinal Medical Charities Foundation Inc. to help improve access to its medical services for indigent patients. In 2017, it spent over ₱15.8 million to provide free outpatient and inpatient care. In 2017, AHMC conducted 19 medical MMC’s Strategic Hospital Alliance Program aims to bring missions for over 3,700 world-class medical services to patients throughout beneficiaries, including the Cavitex the country through partnerships with hospitals, clinics Medical Missions at Paranaque Elementary and facilities outside of Metro Manila. MMC estimates School and Silang Cavite, which are estimate to that over 6,700 people benefited from 15 medical missions in 2017, including one mission that took place have served 425 members of the in partnership with Maynilad at the San Andres Sports local community. Complex, Pasay City, attended by 150 people.

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DISASTER RESPONSE AND Helping to clean up and restore an important RELIEF eco-system south of Metro Manila

CAVITEX traverses the Las Piñas- Parañaque Critical We operate in a country that is prone to natural Habitat and Ecotourism Area that is situated disasters, so we construct suitable physical along the Las Piñas- Parañaque carriageway. In recognition of the fact that it is the last significant infrastructure and implement integrated management natural mangrove area south of Metro Manila and systems to be resilient. As part of our commitment to an important feeding ground for many migratory Social Responsibility, we also support relief efforts in bird species, CIC is implementing a holistic affected communities by deploy life-saving resources program for hazard prevention, pollution control, and habitat protection. and helping to provide access to disaster sites.

Prior to MPIC’s investment in the area, it had been In 2017, MPIF donated ₱1 Million to Alagang Kapatid used as a dumping ground for domestic and commercial waste for many years giving rise to a Foundation, Inc., the CSR arm of TV5 Network, to critical situation for flora and fauna. Through two support rehabilitation of Marawi City where tension community investment initiatives, known as LEAF persisted between government troops and the Maute and CARE, CIC is helping to propagate endemic terrorist group. The fund was used to implement mangrove species along the embankments of CAVITEX and in surrounding coastal waters. a week-long feeding program serving the various Growth of planted mangroves is being recorded evacuation centers and barangays (districts) in MarawI and monitored by the DENR and flora is also directly after the Armed Forces declared that the being geotagged so that community investment area was cleared of terrorist forces. The donation partners and volunteers can help to do their own wildlife monitoring using Google Maps. also supported a livelihood program to preserve the Maranao culture of weaving and help Marawi get back to economic stability.

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WATER TOLLWAYS

Maynilad’s “Mission Ginhawa” program provides In 2017, Metro Pacific Tollways Corporation signed a donations of clean water, compact micro-filtration memorandum of agreement with the Metropolitan systems and technical assistance to help with disaster- Manila Development Authority to reinforce the agency’s relief. In October 2017, Maynilad’s volunteers visited highway-emergency response capabilities by providing areas in Kalinga, Apayao, Tuguegarao, and Penablanca, Frequency Identification sticker tags to over 160,000 Cagayan after super-typhoon Lawin struck the region registered emergency vehicles that will facilitate causing widespread devastation. In addition to uninterrupted entry to major toll plazas on NLEX, SCTEX delivering donations of clean water and water filters, the and CAVITEX. team provided training to the local community on how to avoid disease by managing their own water resources until public utility services were fully restored.

In 2017, Maynilad’s “Mission Ginhawa” program provided water and water-access solutions In 2017, MPTC’s relief operations for disaster victims for 1,400 disaster-affected assisted 560 beneficiaries. families.

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ESG REPORTING METHODOLOGY

The 2017 MPIC Sustainability Report has been prepared in accordance with the GRI Standards: Core Option. The data presented in this report has taken into account the requirements of relevant GRI Standards for MPIC’s Material topics, with additional explanations and supporting notes set out in this section.

BASIS OF REPORTING

In this report, all performance indicators are reported on a 100% basis and therefore do not reflect MPIC’s shareholdings in various operating companies.

REPORT SCOPE AND TOPIC BOUNDARIES

I. List of companies that have provided information for the 2017 Sustainability Report

MPIC PARENT COMPANY

• Metro Pacific Investments Corporation

MAJOR OPERATING COMPANIES

• Manila Electric Company (“MERALCO”)

• Global Business Power Corporation (“GBP”)

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

• Metro Pacific Tollways Corporation (“MPTC”) Featured Toll Roads: »» NLEX Corporation (“NLEX Corp”) – the entity holding concession rights to construct, operate and maintain the North Luzon Expressway (“NLEX”) and Subic–Clark–Tarlac Expressway (“SCTEX”) »» Cavite Infrastructure Corporation (“CIC”) – the entity responsible for Manila–Cavite Expressway (“Cavitex”)

• Metro Pacific Hospital Holdings, Inc. (“MPHHI” or “Hospitals Group”) – the entity with interests in 14 hospitals Featured Hospitals: »» Asian Hospital and Medical Center (“AHMC”) »» Cardinal Santos Medical Center (“CSMC”) »» Makati Medical Center (“MMC”)

• Light Rail Manila Corporation (“LRMC”)

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II. Changes in scope compared with MPIC’s 2016 Sustainability Report

There has been no significant change to the scope of reporting compared with MPIC’s previous sustainability report.

III. Boundaries of reporting for Material topics

The following table summarizes the topic Boundaries within the organization of each of the Material GRI topics covered in this report.

Material Topics MPHHI Hospitals Featured LRMC Parent Company Parent MERALCO GBP Maynilad MPTC Roads Toll Featured

GRI 201 Economic Performance X

GRI 203 Indirect Economic X X X X X X X Impacts

GRI 205 Anti-corruption X

GRI 419 Socioeconomic X Compliance

GRI 307 Environmental Com- X pliance

GRI 302 Energy X X X X X X

GRI 303 Water X X X X X

GRI 305 Emissions X X X X X X

GRI 306 Effluents and Waste X X X X X X

GRI 416 Customer Health and X X X X X X Safety

GRI 401 Employment X X X X X X X

GRI 403 Occupational Health X X X X X X and Safety

GRI 404 Training and Education X X X X X X

GRI 405 Diversity and Equal X Opportunity

GRI 413 Local Communities X X X X X X

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PERFORMANCE INDICATORS FOR MATERIAL TOPICS

Energy

Direct energy is reported in terajoules. The quantity of direct energy consumption has been calculated by multiplying the mass of each fuel by corresponding heating values. The heating values of fuel consumed in GBP’s plants in 2017 have been sourced from fuel suppliers as follows:

Heating value Fuel type Location of fuel consumption (kcal/kg)

Coal CEDC 4,447

Coal TPC 1A 4,210

Coal TPC SPS 3,957

Coal PEDC 1&2 4,377

Coal PEDC 3 4,489

Diesel Vehicles at CEDC, TPC 1A, TPC Sangi and TPC Carmen 10,236

Diesel PEDC 1&2, PEDC 3, PPC 1&2, PPC 3, PPC4 and GPRI (including vehicles at these plants) 18,424

Gasoline Vehicles at CEDC, TPC 1A, TPC Sangi and TPC Carmen 10,691

Gasoline Vehicles at PEDC 1&2, PEDC 3, PPC 1&2, PPC 3, PPC4 and GPRI 19,243

HFO PPC 1&2, PPC 3, PPC4 and GPRI 17202

IFO TPC Sangi, TPC Carmen 9,572

SFO TPC Carmen 10,026

ADO CEDC, TPC 1A 10,216

For all other operating companies (i.e. MERALCO, Maynilad, Featured Toll Roads, LRMC and Featured Hospitals) the source of heating values for diesel and gasoline is the IEA Energy Statistics Manual as follows:

Heating value Fuel type (GJ/metric ton)

Diesel 43.38

Gasoline 44.75

Indirect energy is reported in terajoules. Each gigawatt hour of purchased electricity consumed by the operating companies represents 3.6 terajoules.

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Emissions

Greenhouse Gas Emissions are calculated in accordance with the Greenhouse Gas Protocol (“GHG Protocol”) developed by World Resources Institute and World Business Council on Sustainable Development. The following gases are included in GHG calculations: carbon dioxide (CO2), methane, sulphur dioxide and nitrous oxide. These are expressed in carbon dioxide equivalents (CO2e).

Direct emissions for GRI reporting are the same as Scope 1 emissions under the GHG Protocol. Indirect emissions for GRI reporting are the same as Scope 2 emissions under the GHG Protocol.

Scope 1 Emissions

The quantity of direct emissions is calculated by multiplying the mass of fuel and refrigerants consumed by the operating companies with corresponding emissions factors. The source for these emission factors is the GHG Protocol Calculations Tool (http://www.ghgprotocol.org).

For GBP in 2017, the calculation of scope 1 GHG emissions excludes emissions from limestone.

Scope 2 Emissions

The quantity of indirect emissions is calculated by multiplying purchased electricity by corresponding emissions factors as follows:

Data source Value

IGES (Institute for Global Environmental Strategies) / Philippine DOE 0.6032 tCO2/MWh

For MERALCO, scope 2 GHG emissions include emissions associated with system loss. System loss is defined as the total energy loss from all causes for an electric utility.

Water

Data reported by the operating companies has been sourced from direct measurements. Please refer to Maynilad’s Sustainability Report for more information about the basis of calculation for data on Maynilad’s water sales, consumption and discharges.

In accordance with the guidelines for GRI Disclosure 306-1, collected rainwater and domestic sewage has been excluded from the reported volume of planned and un¬planned water discharge.

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Employment, Training & Education, Diversity & Equal Opportunity

In accordance with the definition from GRI Disclosure 102-8, a permanent employment contract is a contract with an employee for an indeterminate period. Across the MPIC Group, regular contract staff (including staff under probation) are considered ‘permanent’. In contrast, a temporary employment contract is of limited duration and is terminated by a specific event, including the end of a project or work-phase. Across the MPIC Group, project-based staff (including contractual staff) are considered ‘temporary.’

When compiling the information specified in Disclosures 401-2, 404-1 and 405-1, data on total employee headcount at the end of the reporting period from Disclosure 102-8 has been used. Disclosure 404-1 (average training hours) reflects total training hours for each category of employee divided by total headcount for each category of employee as at December 31, 2017.

For Featured Hospitals, only employees with regular employment contracts have been reported.

For Maynilad, data on new hires and employee turnover (401-1), average training hours (404-1) and breakdown of employment by age group (405-1) refers to employees with regular employment contracts only.

Occupational Health & Safety

We are in the process of improving our data collection and management system for Occupational Health and Safety (“OHS”) data. In 2017, no OHS data is available for workers who are not employees. Please refer to the GRI Content Index for a full account of data omissions for Disclosure GRI 403-2.

For selected operating companies, we report employee fatalities, Injury and Occupational Disease Rate for employees and Lost Day Rate for employees as follows:

1. An employee fatality is a loss of life of an employee as the result of a work-related incident. 2. Injury and Occupational Disease Rate: The number of recorded cases per 100 equivalent employees per year. It is calculated as the total number of cases multiplied by 200,000 and then divided by total hours worked. 200,000 is the annual hours worked by 100 employees, based on 40 hours per week for 50 weeks a year. 3. Lost Day Rate: A Lost Day occurs when an employee cannot work due to injury or disease. Lost Days are counted as calendar days beginning on the first day following the injury and ending on the day when the person returns to full duty, receives a permanent job transfer or leaves employment. The Lost Day Rate represents the number of lost work days per 100 equivalent employees per year. It is calculated as the total lost days multiplied by 200,000 and then divided by total hours worked. 200,000 is the annual hours worked by 100 employees, based on 40 hours per week for 50 weeks a year.

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88 METRO PACIFIC INVESTMENTS CORPORATION 2017 SUSTAINABILITY REPORT

ESG DATA SUMMARY TABLE Please refer to the ESG Reporting Methodology section of this report for explanations and supporting notes on the basis of reporting and calculation for various KPIs. This table summarises ESG performance data for the major operating companies within the reporting period.

POWER WATER FEATURED TOLL ROADS LIGHT RAIL FEATURED HOSPITALS

Key Performance Indicators Units MERALCO GBP Maynilad NLEX Corp CIC Total LRMC CSMC AHMC MMC Total

Operational Efficiency Total Energy Consumption within the organization TJ 9,459.7 30,656.5 492.8 67.7 11.8 79.4 178.0 36.4 68.5 86.5 191.3 = a+b+c+d-e a. Non-renewable fuels consumed TJ 110.5 46,729.0 40.2 46.8 5.8 52.6 2.0 0.1 1.0 0.6 1.6 b. Renewables consumed TJ 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 c. Electricity purchased for consumption TJ 160,916.4 1.3 452.6 20.8 6.0 26.82 176.0 36.3 67.5 85.9 189.7

d. Self-generated electricity which is not consumed TJ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

e. Electricity sold TJ 151,567.2 16,074.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Water Withdrawal '000 CBM 439.4 3,313.9 921,064.2 35.3 38.8 74.1 79.5 249.2 205.3 311.0 765.5 Scope 1 & Scope 2 Greenhouse Gas Emissions (Combined) metric kilotons CO e 1,637.7 4,653.8 78.8 6.9 1.4 8.3 31.0 6.1 11.4 14.4 31.9 = a+b 2

a. Direct (Scope 1) GHG Emissions metric kilotons CO2e 32.5 4,653.6 2.9 3.4 0.4 3.9 1.6 0.0 0.1 0.0 0.1

b. Indirect (Scope 2) GHG Emissions metric kilotons CO2e 1605.2 0.2 75.8 3.5 1.0 4.5 29.5 6.1 11.3 14.4 31.8 Total Water Discharge '000 CBM 119.8 463.8 59,490.4 0.0 0.0 0.0 0.0 7.6 205.3 0.0 212.9 Customer accounts Customer accounts Vehicles Riders Patients Service Excellence (Year-end) (Year-end) (Year to date) (Year to date) (Year to date)

Customers served 6,326,691 n/a 1,358,758 51,111 50,810,726 50,861,837 157,033,989 307,058 231,010 962,681 1,500,749

Average customers served each day n/a n/a n/a 140 139,207 139,347 445,958 984 759 2,911 4,654 Engaged Workforce and Safe Workplaces Total Employees 5,539 973 2,477 1,459 130 1,589 1,454 1,032 1,419 2,635 5,086

Regular contract 5,539 958 2,191 1,265 66 1,331 1,418 1,032 1,419 2,635 5,086

Project-based 0 15 286 194 64 258 36 0 0 0 0

Male 4,421 797 1,863 735 76 811 992 365 490 834 1,689

Female 1,118 176 614 724 54 778 462 667 929 1801 3,397 Total Rate of Employee Participation in 77% n/a 64% n/a n/a n/a n/a 35% 0% 74% 45% Collective Bargaining Agreements Number of New Hires 383 52 266 565 42 607 174 322 415 582 1,319 Male 254 30 189 218 25 243 128 105 112 174 391 Female 129 22 78 347 17 364 46 217 303 408 928 Below 30 years 351 10 176 * 27 * 88 253 339 508 1100 30 to 50 years 31 40 89 * 14 * 77 67 76 74 217 Over 50 years 1 2 1 * 1 * 9 2 0 0 2 Rate of New Hires 7% 5% 12% 39% 32% 38% 12% 31% 29% 22% 26% Male 6% 4% 12% 30% 33% 30% 13% 29% 23% 21% 23% Female 12% 13% 14% 48% 31% 47% 10% 33% 33% 23% 27% Below 30 years 26% 5% 26% * * * 25% 46% 42% 32% 38% 30 to 50 years 1% 7% 8% * * * 9% 16% 13% 8% 11% Over 50 years 0% 1% 0% * * * 4% 3% 0% 0% 1%

*Data omission. Reason for omission: Data is not available for this reporting period. We are working to improve our data collection and management systems across the Group in order to disclose this data in future reports.

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POWER WATER FEATURED TOLL ROADS LIGHT RAIL FEATURED HOSPITALS

Key Performance Indicators Units MERALCO GBP Maynilad NLEX Corp CIC Total LRMC CSMC AHMC MMC Total

Engaged Workforce and Safe Workplaces Number of Employee Turnover 413 56 73 * * * 60 348 310 557 1,215

Male 321 37 44 * * * 47 121 102 173 396

Female 92 19 29 * * * 13 227 208 384 819

Below 30 years 77 6 44 * * * 13 229 228 429 886

30 to 50 years 126 38 29 * * * 39 101 81 120 302

Over 50 years 210 12 0 * * * 8 18 1 8 27

Rate of Employee Turnover 7% 6% 3% * * * 4% 34% 22% 21% 24%

Male 7% 5% 2% * * * 5% 33% 21% 21% 23%

Female 8% 11% 5% * * * 3% 34% 22% 21% 24%

Below 30 years 6% 3% 7% * * * 4% 42% 28% 27% 30%

30 to 50 years 4% 7% 3% * * * 4% 24% 14% 13% 16%

Over 50 years 20% 6% 0% * * * 4% 29% 2% 7% 12%

Average Hours of Training/ Employee/ Year 26.9 24.2 30.7 6.1 5.5 5.8 7.1 17.5 129.7 46.3 64.5

Male 25.2 24.8 32.4 6.6 2.5 4.6 3.2 15.5 134.0 40.2 63.2

Female 33.6 21.4 31.7 5.6 3.5 4.5 3.4 18.6 127.5 49.1 65.1

Senior Management 36.5 15.3 33.6 40.5 2.9 21.7 19.5 65.2 29.7 53.0 49.3

Middle Management 29.7 32.5 53.7 47.3 0.6 24.0 35.4 47.9 234.3 52.5 111.6

Supervisors n/a 28.7 42.9 29.0 0.5 14.7 17.7 26.4 234.3 43.3 101.4

Rank & File 25.0 20.2 28.3 1.0 0.1 0.6 2.0 15.5 107.0 44.7 55.7

Thousand Hours Worked 11,675 2,185 1,808 * * * 3,132 1,895 2,303 5,686 9,884

Injury and Occupational Disease Rate 0.26 0.64 0.35 * * * 0.57 1.48 * 7.63 *

Lost Day Rate 8.65 1.37 * * * * * * * 0.18 *

Employee Fatalities nil nil 1 nil nil nil nil nil nil nil nil

*Data omission. Reason for omission: Data is not available for this reporting period. We are working to improve our data collection and management systems across the Group in order to disclose this data in future reports.

91 92 SUSTAINABILITY HIGHLIGHTS OF OUR MAJOR OPERATING COMPANIES MERALCO 42,102 GWh 1.42 Electricity Sales ₱12.1 billion 5.91% Average (an increase of 5% CAPEX System Loss Distribution Rate Manila Electric Company (“MERALCO”) is the largest private sector electricity distribution utility company in the Philippines with a year on year) franchise area that includes the country’s most significant industrial, commercial, and population centers. Now in its 115th year of service, MERALCO strives to be the Philippines total energy solutions provider of choice; upholding its legacy of supplying safe, reliable, and competitively priced electricity to its rapidly growing base of customers. The principal stockholders are Beacon Electric Asset 1.86 times 53.69 minutes 8.39 Holdings, Inc., JG Summit Holdings, Inc. and MPIC. 6.3 million SAIFI Pre-arranged SAIDI Overall Customer Customer accounts (Total System Average (Total Pre-arranged System Average Service score Interruption Frequency Index) Interruption Duration Index)

PROVIDING POWER FOR SUSTAINABLE MERALCO’s franchise area covers DEVELOPMENT IN LUZON 9,685 square kilometers encompassing 36 cities and 75 In 2017, MERALCO distributed about 55% of total power municipalities. consumed in the Philippines to its customer base, which exceeds 28 million people. During the year, several significant capital expenditure projects were completed Zambales that increased MERALCO’s power transformer capacity by 512 MVA and circuit length by 66 km. This included construction of two new additional substations (Lucena SUPPORT FOR THE “BUILD, BUILD, BUILD” New substations: Bulacan and Pulilan) and a 115-kV line from the Paco substation; INFRASTRUCTURE DEVELOPMENT Lucena and Pulilan and the expansion of three existing substations (San PROGRAM Miguel, Balintawak, Veinte Reales). Expansion of existing substations: San Miguel, Balintawak, Veinte Reales NCR Leveraging on its proven ability to coordinate with Build, Build, Build Project: Looking to the future, MERALCO will help to satisfy many stakeholders, MERALCO’s long-standing Muntinlupa Cavite Expressway growing electricity demand in Luzon by developing a relationship with the Government has culminated in portfolio of new power generation assets, including the MERALCO is venturing into power Cavite its support for the Philippine President’s Build, Build, Build, Build, Build Project: country’s first supercritical and ultra-supercritical coal-fired generation in Luzon with several new Build infrastructure development program that is NAIA Expressway Phase 2 power plants plants under development. “clearing the way” for various public infrastructure projects around the country, such as the Muntinlupa Cavite Expressway and the NAIA Expressway Phase DIGITAL TRANSFORMATION TO ENHANCE Quezon 2. Over the next four years, MERALCO is committed CUSTOMER EXPERIENCE AND IMPROVE to assisting the Department of Public Works and OPERATIONAL EFFICIENCY Highways and the DOTR to implement 16 additional large-scale projects. San Buenaventura Power Limited 455 MW supercritical MERALCO is harnessing rapid advancements in web- coal-fired power plant, Mauban (under development) based solutions to undergo a digital transformation. To meet growing demand for personalized services from its ONE MERALCO FOUNDATION: SHARING THE digitally-savvy customer base, it has introduced MERALCO 2x300 MW circulating fluidized bed (CFB) power BENEFITS OF ELECTRIFICATION Online and MERALCO Mobile. These services allow plant, Subic (under development) customers to access their MERALCO accounts via web The One MERALCO Foundation implements Atimonan One Energy Corporation ultra-supercritical browser and mobile app, view their bills, pay, subscribe Oriental Mindoro community electrification projects to bring the coal-fired power plant, Atimonan (under development) to paperless billing, and report outages. MERALCO Online benefits of electrification to low-income communities, and MERALCO Mobile both come with an inquiry facility One Meralco Foundation beneficiary: including informal settlers, isolated communities and that allows customers to ask about their MERALCO Service. Waring Elementary School, Bulalacao off-grid public schools in remote areas. 206 public In addition, customers who enroll their credentials in schools, for example, have been electrified since MERALCO’s digital platform can receive notifications on 2012. Waring Elementary School is one of 36 remote planned outages and payment reminders. public schools that were electrified in 2017.

95 96 4,465 GWh GLOBAL BUSINESS POWER 1.65 billion 45.6 days Electricity Sales ₱ Forced outages (an increase of CAPEX Global Business Power Corporation (“GBP”) is a leading energy company in the Visayas and Mindoro Island, delivering flexible 22% year on year) (duration) energy solutions to distribution utilities, electric cooperatives and large industrial consumers. GBP is a joint venture among Beacon PowerGen Holdings, Inc., JG Summit Holdings, Inc. and Meralco PowerGen. In 2017, it entered into partnership with Alsons Consolidated Resources, Inc., when it acquired a 50% stake in Alsons Thermal Energy Corporation (“ATEC”). NEW PARTNERSHIP FORGED TO BOLSTER SUSTAINABLE DEVELOPMENT IN MINDANAO

LIBERALIZATION OF THE RETAIL MARKET VISAYAS MINDANAO Mindanao, the second largest island group in the CREATING NEW BUSINESS OPPORTUNITIES Philippines, has long suffered from intermittent GBP’s power generation portfolio ATEC’s power generation portfolio power and rotating blackouts due to a lack of energy consists of 11 operational power consists of 3 power plants, two of Pursuant to the ERC’s new RCOA scheme, GBP’s infrastructure. In recent years, the situation has been plants with 854 MW aggregate which are under development, with licensed Retail Electricity Supplier, Global Energy aggravated by the effects of extreme drought and capacity. 315 MW aggregate capacity. Supply Corporation, has signed several agreements rising temperatures on its hydropower generation for the supply of electricity to new customers, facilities. The new partnership with Alsons has including two of the country’s biggest property La Union enabled GBP to gain foothold in Mindanao and to ӹӹ Cebu Energy Development ӹӹ Sarangani Energy Corporation Unit 1 developers that operate shopping malls in the become part of the solution to the power supply Corporation (246MW) (105 MW) Visayas. RCOA is a provision under the Electric Power problems experienced in this region. Industry Reform Act that allows certain energy ӹӹ Panay Energy Development ӹӹ Sarangani Energy Corporation Unit 2 consumers to freely choose their electricity supplier. Corporation (105 MW) - under development »» PEDC 1&2 (164 MW) ACCOLADES FOR COMMENDABLE ENVIRONMENTAL PERFORMANCE »» PEDC 3 (150 MW) - Expansion plant ӹӹ San Ramon Power (105 MW) - under began commercial operations in development In 2017, Top Pollution Control Officer awards were 2017 presented by the Pollution Control Association of ӹӹ In 2017, the ERC granted provisional authority the Philippines to Suzette L. Gunda from the Cebu Oriental ӹӹ Toledo Power Company for the NGCP to proceed with its Visayas- LUZON site and Rex Q. Debuque from the Panay site in Mindoro »» TPC Sangi (60 MW) Mindanao Interconnection Project. recognition of their outstanding achievements in GBP is also in the pre-development »» TPC 1A (82 MW) the implementation of effective Environmental stage for a new 670 MW power »» TPC Carmen (40 MW) Management Systems. At the same ceremony, GBP’s plant in La Union. Cebu site received a Certificate of Appreciation for its ӹӹ Panay Power Corporation Resource Conservation and GHG Reduction Program »» PPC 1&2 (92 MW) and Panay Energy Development Corporation (“PEDC”) »» 2 X 335 MW supercritical coal-fired Cebu »» PPC 3 (7.5 MW) Iloilo received 1st runner up for the Mother Nature Award. power plant, La Union (under »» PPC 4 (5 MW) development) During the year, GBP’s Cebu and Panay sites were also ӹӹ GBH Power Resources Inc. finalists in the Philippine Chamber of Commerce and »» GBH (7.5 MW) Industry’s Excellence in Ecology and Economy Award. The Cebu site won the Gawad Tugas Award from the Department of Environment and Natural Resources (“DENR”) Region 7 for its significant and outstanding contribution to the protection, conservation and Zamboanga management of environmental and natural resources, while and PEDC won the Gawad EMB Award from the DENR Region 6 in recognition of its effort to protect the environment and continued support for EMB Sarangani programs.

97 98 MAYNILAD 757 MCM 511.7 MCM 31.7% ₱12.0 billion Water supplied Water billed Non-Revenue Water CAPEX (an increase of 6% year on year) (an increase of 3% year on year) Maynilad Water Services, Inc. (“Maynilad”) is the water and wastewater services provider for the West Zone of the Greater Metro Manila area and the largest water concessionaire in terms of customer base in the Philippines. It is managed by DMCI- MPIC Water Company, Inc., which is owned and operated by MPIC, DMCI Holdings Inc. (DMCI) and Marubeni Corp. The MPIC- DMCI consortium took control of Maynilad in January 2007. 98% 1,358,758 Population coverage with 15% Billed customers 24-hour drinking water Population coverage for (an increase of 4% year on year) supply at 7 psi of pressure sewerage services EXPANDING THE REACH OF SAFE AND AFFORDABLE WATER AND SANITATION SERVICES OVERCOMING ALL OBSTACLES TO CONTINUOUS Maynilad’s concession area In 2017, additional pipe laying by Maynilad expanded IMPROVEMENT covers 540 square kilometers its water distribution line to 7,675 kilometers, which and encompasses 17 cities and helped to increase the number of billed customers Bulacan In 2017, Maynilad was recognized for having the most municipalities. enjoying safe and affordable drinking water and number of ISO certifications in multiple sites of any sanitation services by 4% or about 4,500 additional organization in the country. It is continuously enhancing connections. The new connections are estimated to the efficiency of its water withdrawal and production Metro Manila: serve up to 1 million people at a price of less than processes by expanding and refurbishing its infrastructure »» Manila (certain areas) 1 centavo a liter. As of December 2017, Maynilad and strengthening its management systems to meet the »» Quezon City (certain areas) Angat Dam estimates that the total population served through its needs of its customers, lower the NRW rate and achieve »» Makati (certain areas) billed customer accounts was 9.4 million. Rizal sustainable growth. »» Caloocan »» Pasay Despite an excellent record of service delivery and two »» Parañaque COMMUNITY INVESTMENT PROGRAMS arbitration awards in its favor, the issue of tariff adjustment »» Las Piñas PROMOTING EQUITY AND PUBLIC HEALTH and related compensation claims for Maynilad’s 2013- »» Muntinlupa 2 2017 Business Plan period remains unresolved. In order to »» Valenzuela Metro Maynilad has various social investment programs in raise finance for its ongoing investment plans, Maynilad »» Navotas Manila Ipo Watershed place to promote equitable development and public has secured a₱10.8 billion loan facility from the Japan health among other social and environmental causes. International Cooperation Agency and three of Japan’s Cavite Province: La Mesa Under its “Samahang Tubig Maynilad” (water for the largest private commercial banks. These plans are expected »» Cavite Treatment Plant poor) program, for example, it supplies affordable Muntinlupa to benefit more than 5 million customers and generate »» Bacoor potable water to more than 3,000 households in 2 employment for around 8,700 local people. »» Imus underprivileged communities within its concession »» Kawit Cavite area. At the end of 2017, 13 STM communities had »» Noveleta Province Laguna been established, benefitting some 19,400 people. BUILDING RESILIENCE FOR LONG-TERM WATER »» Rosario Putatan SECURITY During the year, Maynilad installed drink-wash Treatment Plant stations in 70 public schools as part of its “Lingkod In recent years raw water from Maynilad’s primary water Eskwela” program. The new facilities provide an Laguna de Bay sources, namely Angat Dam in the northeast and Laguna estimated 170,000 elementary, high school and de Bay in the south, has exhibited rising levels of turbity, college students with free and safe supply of potable which is associated with lower productivity from its water water. Under the “Daloy Dunong” water education Maynilad publishes a comprehensive Sustainability treatment facilities and higher water treatment costs. In program, some 110,000 students from 350 public Report of its operations on an annual basis. order to address this problem, Maynilad is upgrading the schools have been recruited to champion water, To download a copy of its latest report, please visit La Mesa Water Treatment Plants 1 and 2 in Quezon City health, and the environment among their family and http://www.mayniladwater.com.ph/. and building a new enhanced treatment facility near the friends. Putatan Water Treatment Plant in Muntinlupa.

99 100 METRO PACIFIC TOLLWAYS ₱9,719 million ₱1,867 million ₱1,521 million ₱4.4 billion Toll Revenues – NLEX Toll Revenues – SCTEX Toll Revenues – CAVITEX Capital Expenditure by (an increase of 10% year on year) (an increase of 8% year on year) (an increase of 12% year on year) MPTC Metro Pacific Tollways Corporation (“MPTC”) is a wholly owned subsidiary of MPIC and the holding company for MPIC’s interests in the featured Toll Road operating companies of this report, namely: • NLEX Corporation (“NLEX Corp”), which holds the concession rights to construct, operate, and maintain the North Luzon Expressway (NLEX), and the Subic-Clark-Tarlac Expressway (SCTEX); and, 237,046 139,208 54,566 • Cavite Infrastructure Corporation (“CIC”), which holds the concession rights for operation and maintenance of the Manila-Cavite Toll Average Daily Vehicle Average Daily Vehicle Average Daily Vehicle Expressway (CAVITEX) Entries – NLEX Entries – CAVITEX Entries – SCTEX (an increase of 8% year on year) (an increase of 9% year on year) (an increase of 21% year on year)

KEEPING UP WITH FAST-PACED DEVELOPMENT AND HEIGHTENED ECONOMIC ACTIVITY

In response to increasing traffic congestion that threatens to undermine continued economic and productivity growth in Central Tarlac Toll Plaza Luzon, various new projects have been implemented on NLEX to San Miguel Interchange TECHNOLOGICAL SOLUTIONS FOR alleviate traffic bottlenecks. ENHANCING TOLL PLAZA THROUGHPUT

The San Fernando Interchange in the vicinity of SM San Fernando and Zambales Tarlac CAVITEX experienced a remarkable 22% increase in daily Robinsons Malls, for example, is an extremely busy interchange— vehicle entries in 2017. To ensure that the additional possibly one of the busiest in the region. In late 2017, a new and Concepcion Interchange traffic volume does not result in congestion at its expanded interchange was completed, involving the construction of NLEX, SCTEX, and CAVITEX Dolores Interchange toll plazas, CIC has invested in various technological two new bridges, widening of four traffic lanes in each direction and promote economic and social Clark North Interchange solutions to improve traffic flow. Sta. Ines Toll Plaza integration of Northern, Central, Mabalacat Interchange/NLEX Exit installation of new automated traffic signals. SCTEX Exit and Southern Luzon with the Clark South Interchange Dau Interchange Electronic Toll Collection (“ETC”) services make use of Porac Interchange During the year, 64 lane kilometers of new expressway lanes were greater metropolitan area by Angeles Interchange Radio Frequency Identification, stored value cards and opened on NLEX to improve travel time between Bulacan and enabling safe and efficient passage Mexico Interchange credit and debit cards with pay wave technology. Lane Pampanga. In Manbalcat, a full-diamond interchange has been for motorists and other commuters. San Fernando Interchange Bulacan management also helps to speed up processing of Floridablanca Interchange San Simon Interchange created at Mabiga with new entry and exit toll plazas that will toll transactions with clustered lanes for ETC and fast Pampanga Pulilan Interchange improve motorists’ access between SCTEX and MacArthur Highway. Sta. Rita Interchange opening traffic control gates. Retrofitting works have also been implemented to improve the Dinalupihan Interchange Balagtas Interchange strength and durability of the main bridge at the San Simon Tipo Toll Plaza Tabang Toll Plaza During the year, the penetration rate for intensified interchange. NLEX (84 km) Bocaue Toll Plaza ETC increased from 24% to 28%. connects Metro Manila Marilao Interchange with Central Luzon Meycauayan Interchange Valenzuela Interchange SAFEGUARDING THE SAFETY AND SECURITY OF ALL Bataan Mindanao Toll Plaza PLANS FOR LARGE-SCALE INVESTMENT IN CUSTOMERS Balintawak Toll Plaza NEW ROAD INFRASTRUCTURE

Kawit Toll Plaza NCR In 2017, CAVITEX recorded an unprecedented zero fatality rate for Zeus Intersection MPTC plans to spend over ₱122 billion in the next five Marulas Exit CAVITEX (14 km) MIA Intersection roadway users despite experiencing a significant increase in traffic Kabihasnan Toll Plaza years on building highways and toll roads around the links Manila with Cavite Parañaque Toll Plaza volume. This can be attributed to various safety measures that are in Zapote Interchange Philippines. The scheduled program of investment place, such as anti-speeding technology, known as Pro-Laser Video, assumes that there will be satisfactory resolution of and an anti-overloading system using a HAENNI Weighing Scale and various overdue tariff adjustments on different parts Processor. CAVITEX has also installed Intelligent Video Analytics (“IVA”) of the existing network. In April 2016, for example, and a 3x3 videowall in its newly renovated Traffic Control Room. arbitration cases were filed regarding delayed tariff SCTEX (94 km) During the year, CAVITEX employees issued 949 citations for speeding Cavite increases for NLEX and CAVITEX. MPTC is hopeful that and 179 citations for overloading. connects Subic–Clark–Tarlac there will be a resolution of these matters in 2018.

101 102 LRMC 435,199 109 49% vs. 51% 147.7 million Available Light Rail Single Journey Ticket vs. Average Daily Ridership Total Passenger Trips Light Rail Manila Corporation (“LRMC”) is a joint venture between MPIC’s Metro Pacific Light Rail Corporation, AC Infrastructure Holdings (an increase of 6% year on year) Vehicles at year end Stored Value Card usage Corporation and Macquarie Infrastructure Holdings (Philippines) PTE Ltd. LRMC has a 35-year concession to operate and maintain the LRT Line 1 in Metro Manila. 237,046 3.4 minutes (peak) 108 minutes IMPROVING PERFORMANCE THROUGH CAPITAL LRT-1 fully elevated route is Scheduled weekday 4.3 minutes (off-peak) Total cycle time (an improvement of 10 minutes INVESTMENT AND ENHANCED MANAGEMENT SYSTEMS in length and train trips 19.65 km (an increase of 11% year on year) Average waiting time year on year) services 20 stations in Metro LRMC has invested more than ₱4 billion since September 2015 to Manila. upgrade the LRT-1. As of the end of 2017, LRMC has successfully restored 32 LRVs; increasing the total number available to 109 from * Upgrading works have PUTTING CUSTOMERS FIRST IN EVERYTHING WE DO 77, and reduced passengers waiting time to 3.4 minutes from more recently been completed in than five minutes when LRMC took over. six (6) stations: Customer satisfaction is integral to LRMC’s business model. As part of its commitment to service

»» R. Papa MalvarBalintawak RooseveltNorth Ave. excellence, all LRMC personnel undergo customer relations training and customer-commendation During this period, LRT-1 has become the first and only railway Monumento North Ave. awards have been introduced to reward personnel for receiving positive feedback from passengers. »» Abad Santos Betty-Go Belmonte Katipunan system in the Philippines to receive ISO certifications for its »» Doroteo Jose 5th Ave. Anonas Quality Management Systems (ISO 9001:2015) and Environmental »» United Nations *R. Papa In 2017, restoration works were completed at six stations as part of LRMC’s Station Improvement Management Systems (ISO 14001:2015). New protocols have been »» Pedro Gil *Abad Santos Gilmore Program, which prioritizes people-oriented changes ‘from entrance to platform to train’ and are on Bluementritt J. Ruiz put in place to reduce passenger boarding/ alighting time. A new »» Gil Puyat Tayuman Araneta Santolan par with international transport standards. Previous concerns about passenger safety, accessibility Center-Cubao overnight train parking system at Roosevelt station has reduced the Bambang and security have been fully addressed with improved lighting, restoration of elevators and Santolan *Doroteo Jose number of non-revenue trains running outside of service hours and V. Mapa escalators, and new color schemes that create a more visually appealing environment. Recto LRMC will construct an Carriedo Legarda Pureza lengthened the period of time available for daily maintenance of the 11.7-km extension to the Central Terminal mainline. Ortigas During the year, LRMC also partnered with Maynilad to install GINHAWASH drinking fountains that LRT-1 from Baclaran to Cavite, *United Nations Shaw Blvd. provide free and safe supply of potable water in ten LRT-1 stations. adding 8 new stations. *Pedro Gil Boni As a result of all these enhancements, metrics for system Quirino Ave. Construction is due to begin Guadalupe performance, such as train cycle time, train waiting time and the Vito Cruz 100% COMMITMENT TO HEALTH AND SAFETY in 2018. number and frequency of train failure incidents, have improved *Gil Puyat Buendia Ayala significantly. Libertad In November 2017, LRMC employees achieved 5.8 million man-hours without a Lost Time Injury. Magallanes EDSA During the year, 11 members of the LRMC Management Committee and 25 other employees In September 2017, MPIC was Baclaran Taft DEVELOPING NEW INFRASTRUCTURE TO SUPPORT Aseana participated in a day-long safety workshop where they pledged personal commitment to creating granted original proponent SUSTAINABLE DEVELOPMENT OF METRO MANILA MIA an incident and injury-free culture. Part of this commitment includes monthly Safety Management status for rehabilitation, by Walking Around (“SMBWA”) sessions, at which senior managers make first-hand observations of operation and maintenance of Asia World LRMC’s ₱24 billion loan facility involving three local banks, namely, operational facilities to identify hazards, listen to safety concerns of front-line workers and oversee MRT-3. Pending endorsement Ninoy Aquino Metropolitan Bank & Trust Company, Security Bank Corporation implementation of preventative and corrective actions. from NEDA, LRMC will be Dr. Santos and Rizal Commercial Banking Corporation, won Transport Deal ready to take up operations of of the Year in the Triple ‘A’ Asia Infrastructure category of the Asset HELPING TO FIND LONG-TERM SOLUTIONS TO CLEAN UP AN IMPORTANT LOCAL the MRT-3 line upon approval. Zapote Las Piñas Asian Awards 2017. This award recognizes the contribution made by WATERWAY »» EDSA (interchange station LRMC’s investment in public infrastructure to promoting economic for MRT-3) Niog growth. LRMC has established the Live for the Rivers Movement Coalition to help contain and reduce river pollution along the Estero de Tripa de Gallina. In addition to organizing an annual river clean-up The 15-year omnibus loan and security agreement will mostly be event that was attended by over 800 hundred volunteers, in 2017, LRMC also helped to promote utilized to finance construction of the 11.7-kilometer LRT-1 Cavite sustainable livelihoods for affected local communities by providing training and materials to LRT-2 Extension project. Once completed in 2021, this extension line is produce, install and implement traditional water-pollution abatement technologies such as expected to serve an additional 300,000 daily passengers in the pontoons made of vetiver grass and ‘mabuhay balls’ made of beneficial organisms that break down southern part of Metro Manila and help to ease worsening traffic toxins in food waste. conditions in the Parañaque-Las Piñas-Cavite corridor.

103 104 6,640 METRO PACIFIC HOSPITAL HOLDINGS ₱22,464 million 8,057 No. of enrollees in ₱3.5 billion Number of Accredited Revenues Capital Expenditure medical colleges and (an increase of 14% year on year) Doctors at year end Metro Pacific Hospital Holdings, Inc. (MPHHI), a wholly owned subsidiary of MPIC, is the largest hospital operator in the Philippines, universities investing in the provision of first class healthcare services combining state-of-the-art technologies with excellent patient care. As at the end of 2017, MPHHI managed a portfolio of 14 hospitals including the three Featured Hospitals that are the focus of this report, namely, Asian Hospital and Medical Center (“AHMC”), Cardinal Santos Medical Center (“CSMC”) and Makati Medical Center (“MMC”). 3,211 68.3% 173,939 3,085,638 Total beds available Occupancy rate for Number of Inpatients No. of Outpatients ASIAN HOSPITAL AND MEDICAL CENTER MPHHI is headquartered in Makati. (an increase of 13% at year end standard beds (an increase of 14% Its investment portfolio of eight year on year) year on year) Established in 2002, AHMC is located in the south of Manila. Accredited hospitals in Metro Manila and six by the Joint Commission International (“JCI”), it adheres to the highest hospitals in other parts of the country, LEGEND standards of patient care services, quality of care, patient safety, including two healthcare colleges and Hospitals organizational and facility management and occupational safety. three primary care clinics. Primary care clinics Health care colleges Sacred Heart Hospital AHMC is committed to innovation in healthcare. In recent years, it has MAKATI MEDICAL CENTER launched the Asian Cancer Institute, the Asian Brain Institute and the Asian Makati Medical Center Cardiovascular Institute with the aim of leading the way in multi-disciplinary Recent recognition from international and national medical bodies approaches to cancer care; promoting healthy brain aging through Cardinal Santos reinforces MMC’s position as one of the most prestigious hospitals in collaborative partnerships, groundbreaking research and clinical trials; and, In 2017, MPHHI acquired Central Luzon Doctors Medical Center the country. As testament to its commitment to upholding world-class Hospital providing the highest standards of cardiac healthcare in a state-of-the-art, 65% of Dr. Jesus C. Delgado Our Lady of Lourdes health and safety standards, in 2017 MMC was the first hospital in the holistic facility. Memorial Hospital and an 80% Hospital Philippines to receive accreditation against the new and more rigorous NCR stake in St. Elizabeth Hospital. 6th edition of the JCI Accreditation Standards for Hospitals. De Los Santos In 2017, AHMC launched “My Asian Story” to communicate its success in Metro Manila Medical Center providing accessible, world-class compassionate and integrative healthcare During the year, the MMC Institutional Review Board received Level III services. Consisting of genuine testimonials from AHMC patients, the Top Health Medical re-accreditation from the Philippine Council for Health Research and campaign shares inspiring stories of recovery and healing through an online Development. Level III Accredited Research Ethics Committees may be Dr. Jesus Delgado library. During the year, this initiative received the highly acclaimed Anvil invited to conduct regulatory reviews of food, drugs and devices on Memorial Hospital Awards in Public Relations. behalf of the Philippines’ Food & Drug Administration. Manila Doctors

CARDINAL SANTOS MEDICAL CENTER The Megaclinic CREATING AN INTEGRATED NETWORK OF WORLD-CLASS HOSPITALS As one of the Philippines’ leading hospitals specializing in the brain, heart, Riverside Medical Marikina Valley cancer and minimally invasive surgery, CSMC has recently invested in a Center Medical Center MPIC’s hospital network benefits from MPHHI’s group purchasing range of new technologies to strengthen its portfolio of treatments in Asian Hospital Medical initiatives. Instead of each hospital negotiating individually with Bacolod cardiology, neurology, cancer, renal care, and rehabilitation medicine. Una Konsulta Center suppliers, MPHHI organizes group purchases to enable its hospitals Through the Cardinal on Wheels program, it offers high quality outpatient to buy medicines, supplies, and equipment at possibly the lowest diagnostic and prescription services in patients’ homes, and in 2017, it Riverside College cost in the country. Savings from this initiative enable MPHHI opened an offsite facility for outpatient dialysis services. hospitals to invest in newer technologies, and, most importantly, reduce prices for their customers. CSMC implements a comprehensive Quality Improvement and Patient Davao Doctors Safety Program to foster a culture of safety involving all hospital staff, Hospital In September 2017, MPHHI also embarked on a new synergy project Davao partners and patients. In order to address the problem of underreporting Zamboanga in partnership with LSI Medience and Marubeni Corp. through the West Metro Davao Doctors College of health and safety hazards and incidents that can compromise health establishment of Medilinx Central Lab within Makati Medical Center. Medical Center and safety in the hospital, CSMC has successfully implemented a web- This initiative aims to centralize the group’s clinical laboratory based Online Incident Reporting System to support its management team operations and align its hospitals further with best practices in many St. Elizabeth Hospital to implement preventive measures and corrective actions in a timely and first world countries. effective way. General Santos

105 106 METRO PACIFIC INVESTMENTS CORPORATION ANNEX INTEGRATED MANAGEMENT SYSTEM CERTIFICATIONS

CERTIFICATION OF ENVIRONMENTAL MANAGEMENT SYSTEMS

Certification Standard Achieved and Scope Certified Entities Date of Certification (or expected) (or expected)

MERALCO ISO 14001:2004 Environmental Management System May 16, 2017 • Balintawak Sector • Valenzuela Sector • Plaridel Sector • Manila Sector • Rizal Sector • Pasig Sector • Paraňaque Sector • Dasmariňas Sector • San Pablo Sector • Santa Rosa Sector • Sub-Transmission Services

GBP subsidiaries ISO 14001:2004 Environmental Management System April 3, 2017 • Cebu Energy Development • Power Generation Corporation • Panay Energy Development Corporation • Toledo Power Co. • Panay Power Corporation • GBH Power Resources Inc.

Maynilad ISO 14001:2015 Environmental Management System Most recent certification: December 7, 2017 • 78 offices and facilities

MNTC ISO 14001:2004 Environmental Management System September 18, 2017 • Operation and maintenance management of toll roads • Construction management including outsourced designs and construction implementation

Maynilad ISO 14001:2015 Environmental Management System

NLEX Corp. (ISO 14001:2015 Environmental Management System) (2018)

LRMC (LRT-1) ISO 14001:2015 Environmental Management System August 9, 2017

107 2017 SUSTAINABILITY REPORT

CERTIFICATION OF QUALITY MANAGEMENT SYSTEMS

Certification Standard Achieved and Scope Certified Entities Date of Certification (or expected) (or expected)

MERALCO ISO 9001:2015 Quality Management System (June 6, 2018) • Supply Chain Management

GBP ISO 9001:2008 Quality Management System • Provision of policy direction and support services to GBP’s power plants

GBP subsidiaries ISO 9001:2008 Quality Management System April 3, 2017 • Cebu Energy Development • Power Generation Corporation • Panay Energy Development Corporation • Toledo Power Co. • Panay Power Corporation • GBH Power Resources Inc.

Maynilad ISO 9001:2008 Quality Management System Most recent certification: December 7, 2017 • 78 offices and facilities

MNTC ISO 9001:2008 Quality Management System September 18, 2017 • Operation and maintenance management of toll roads • Construction management including outsourced designs and construction implementation

NLEX Corp. • (ISO9001:2015 Quality Management System) (2018)

CIC • (ISO9001:2015 Quality Management System) (2018)

Maynilad ISO 9001:2015 Quality Management System August 14, 2015

LRMC (LRT-1) ISO 9001:2015 Quality Management System August 9, 2017

CSMC ISO 9001:2015 Quality Management System June 25-26, 2018 • Scope: Provision of health care services

AHMC Joint Commission International, Gold Seal of Approval* September 17, 2016

MMC Joint Commission International, Gold Seal of Approval* November 19, 2017

*US-based accreditation body that monitors the quality of medical services in more than 90 countries and is the world’s most prestigious entity in patient safety and quality improvement.

108 METRO PACIFIC INVESTMENTS CORPORATION

CERTIFICATION OF OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEMS

Certification Standard Achieved and Scope Certified Entities Date of Certification (or expected) (or expected)

MERALCO OHSAS 18001: 2007 Occupational Health and Safety Assessment May 16, 2017 Series • Balintawak Sector • Valenzuela Sector • Plaridel Sector • Manila Sector • Rizal Sector • Pasig Sector • Paraňaque Sector • Dasmariňas Sector • San Pablo Sector • Santa Rosa Sector • Sub-Transmission Services

GBP subsidiaries OHSAS 18001:2007 Occupational Health and Safety Assessment April 3, 2017 • Cebu Energy Development Series Corporation • Panay Energy Development Corporation • Toledo Power Co. • Panay Power Corporation • GBH Power Resources Inc.

Maynilad OHSAS 18001:2007 Occupational Health Safety Assessment Series Most recent certification: • 78 offices and facilities December 7, 2017

MNTC OHSAS 18001:2007 Occupational Health Safety Assessment Series • Operation and maintenance management of toll roads • Construction management including outsourced designs and construction implementation

NLEX Corp. (OHSAS 18001 Occupational Health and Safety Assessment Series) (2018)

LRMC (ISO 45001 Occupational Health and Safety) (2019)

OTHER CERTIFICATIONS

Certification Standard Achieved and Scope Certified Entities Date of Certification (or expected) (or expected)

MERALCO ISO/IEC 17025:2005 October 14, 2013 • Metering Services Asset Management – Testing Laboratory (Expected renewal: May 2018)

109 2017 SUSTAINABILITY REPORT ANNEX CORPORATE WEBSITES FOR OUR MAJOR OPERATING COMPANIES

POWER

MERALCO https://www.meralco.com.ph/

GBP http://www.gbpc.com.ph/

WATER

Maynilad http://www.mayniladwater.com.ph/

FEATURED TOLL ROADS

NLEX Corporation http://nlex.com.ph/

CIC http://cavitexpressway.com/

RAIL

LRMC http://lrmc.ph/

HOSPITALS GROUP

Metro Pacific Hospital Holdings, Inc. http://www.mpic.com.ph/investments-hospitals-overview/

Makati Medical Center http://www.makatimed.net.ph/

Cardinal Santos Medical Center http://cardinalsantos.com.ph/

Asian Hospital and Medical Center http://www.asianhospital.com/

Riverside College, Inc. http://www.riverside.edu.ph/

Riverside Medical Center, Inc. http://www.rivermedcenter.net/

Central Luzon Doctors' Hospital, Inc. http://www.cldh.com.ph/

De Los Santos Medical Center, Inc. http://delossantosmed.ph/

Colinas Verdes Hospital Managers Corporation http://cardinalsantos.com.ph/

East Manila Hospital Managers Corporation http://www.ollh-manila.com/

Lipa Medix Cancer Center Corporation http://www.lipamedix.com.ph/

TopHealth Medical Clinics, Inc. http://tophealthmed.com.ph/

110 METRO PACIFIC INVESTMENTS CORPORATION ANNEX GRI CONTENT INDEX

GRI 102: General Disclosures 2016

GRI Description References and Remarks Indicator

102-1 Name of the organization Profile of MPIC p. 8

Profile of MPIC p. 8 - 12 102-2 Activities, brands, products, and services Corporate Structure p. 13 - 14

102-3 Location of headquarters Profile of MPIC p. 8

102-4 Location of operations Corporate Structure p. 13 - 14

102-5 Ownership and legal form Profile of MPIC p. 8

Profile of MPIC p. 11 - 12 102-6 Markets served PART 2: Sustainability Highlights of our Major Operating Companies p. 93 - 106

Profile of MPIC p. 8 102-7 Scale of the organization Overview of Contributions p. 11 - 12

Profile of MPIC p.8 Engaged Workforce and Safe Workplaces p. 58 - 62 Performance Data Summary Table p. 89 - 92 Organizational Profile 102-8 Information on employees and other workers Not disclosed: Total number of employees by employment type (full-time and part-time), by gender. This data has not been collected from the operating companies and is therefore not available for disclosure.

The supply chain for MPIC’s major operating companies consists primarily of contractors and materials suppliers 102-9 Supply chain for design, construction and maintenance of infrastructure projects.

Significant changes to the organization and its 102-10 There were none. supply chain

102-11 Precautionary Principle or approach Management Approach to Climate Change p. 41 - 42

Annex: Integrated Management System Certifications 102-12 External initiatives p. 107 - 109

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

Statement from the most senior decision-maker of Strategy and Analysis 102-14 Leadership Message p. 3 - 5 the organization

Ethics and Integrity 102-16 Values, principles, standards and norms of behavior Profile of MPIC p. 9 - 10

Governance 102-18 Governance structure Sustainability Governance p. 26 - 27

111 2017 SUSTAINABILITY REPORT

GRI Description References and Remarks Indicator

102-40 List of stakeholder groups Stakeholder Engagement p. 21 - 23

102-41 Collective bargaining agreements Management Approach to Collective Bargaining p. 65 - 66

Stakeholder 102-42 Identifying and selecting stakeholders Stakeholder Engagement p. 21 - 23 Engagement 102-43 Approach to stakeholder engagement Stakeholder Engagement p. 21 - 23

Stakeholder Engagement p. 21 - 23 102-44 Key topics and concerns raised Materiality p. 23 - 24

Notes 10 and 39 of MPIC’s 2017 Audited Financial Statement Entities included in the consolidated financial 102-45 Schedule V of MPIC’s 2017 SEC Form 17-A statements (http://edge.pse.com.ph)

Materiality p. 23 - 24 102-46 Defining report content and topic Boundaries. Report Scope and Topic Boundaries p. 83 - 84

102-47 List of Material topics Materiality p. 23 - 24

102-48 Restatements of information There were none.

102-49 Changes in reporting Report Scope and Topic Boundaries p. 83 - 84 Reporting practice 102-50 Reporting period About this Report p. 6

102-51 Date of most recent report January 1 - December 31, 2016

102-52 Reporting cycle Annual

102-53 Contact point for questions regarding the report About this Report p. 6

102-54 Claims of reporting in accordance with GRI Standards About this Report p. 6

About this Report p. 6 102-56 External assurance Annex: Assurance Statement p. 117 - 120

GRI 103: Management Approach 2016 & Topic-specific Disclosures (Economic)

GRI Description References and Remarks Indicator

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Economic Performance and Impacts p. 15 - 19 GRI 201: Economic 103-3 Evaluation of the management approach Performance 2016 Economic Performance and Impacts p. 15 - 19 Within the scope of this report, it is not significant to 201-1 Direct economic value generated and distributed disclose Economic Value Generated and Distributed separately at country, regional or market levels.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Overview of Contributions to Building the Nation p. 11 - 12 GRI 203: Economic Performance and Impacts p. 15 - 19 103-3 Evaluation of the management approach Indirect Economic Impacts 2016 Overview of Contributions to Building the Nation p. 11 - 12 Economic Performance and Impacts p. 15 - 19 203-1 Infrastructure investments and services supported Sustainability Highlights of our Major Operating Comanies p. 93 - 104

112 METRO PACIFIC INVESTMENTS CORPORATION

GRI Description References and Remarks Indicator

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Ethical Business Practices p. 29 - 30 GRI 205: 103-3 Evaluation of the management approach Anti-corruption 2016

Ethical Business Practices p. 29 - 30 Communication and training on anti-corruption 205-2 Within the scope of this report, 100% of MPIC’s operations policies and procedures have been assessed for risks related to corruption.

GRI 103: Management Approach 2016 & Topic-specific Disclosures (Environmental)

GRI Description References and Remarks Indicator

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Energy and Emissions p. 36 - 41 GRI 302: 103-3 Evaluation of the management approach Energy 2016 Energy and Emissions p. 36 - 41 302-1 Energy consumption within the organization ESG Data Summary Table p. 89 - 90 ESG Reporting Methodology p. 86

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Water and Effluents p. 43 - 46 103-3 Evaluation of the management approach Community Investment (Maynilad) p. 79

Water and Effluents p. 43 - 46 ESG Data Summary Table p. 89 - 90 GRI 303: ESG Reporting Methodology p. 86 Water 2016 Sustainability Highlights (GBP and Maynilad) p. 95 - 98

DATA OMISSIONS: 303-1 Water withdrawal by source Size and designation of all water sources as protected areas, biodiversity value and importance to local communities and indigenous peoples. Reason for omission: The data is not currently available. We are working on improving our data collection system and plan to report progress in future.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components ESG Risk Management: Environmental Risks 103-3 Evaluation of the management approach Energy and Emissions p. 36 - 41

GRI 305: Energy and Emissions p. 36 - 41 Emissions 2016 305-1 Direct (Scope 1) GHG emissions ESG Data Summary Table p. 89 - 90 ESG Reporting Methodology p. 86

Energy and Emissions p. 36 - 41 305-2 Indirect (Scope 2) GHG emissions ESG Data Summary Table p. 89 - 90 ESG Reporting Methodology p. 86

113 2017 SUSTAINABILITY REPORT

GRI Description References and Remarks Indicator

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Water and Effluents p. 43 - 46 103-3 Evaluation of the management approach

Water and Effluents p. 43 - 46 ESG Data Summary Table p. 89 - 90 GRI 306: ESG Reporting Methodology p. 86 Effluents and Waste 2016 To MPIC’s knowledge, none of the water discharged by the operating companies was reused by another organization. 306-1 Water discharge by quality and destination DATA OMISSIONS: Destination and quality of the water including treatment method for two operating companies (MERALCO and Featured Hospitals). Reason for omission: The data is not currently available. We are working on improving our data collection system and plan to report progress in future.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Investment Selction and Portfolio Management p. 28 GRI 307: ESG Risk Management p. 31 - 33 Environmental 103-3 Evaluation of the management approach Environmental Management Systems p. 36 Compliance 2016 Within the scope of this report, MPIC Head Office is not Non-compliance with environmental laws and aware of any significant fines or non-monetary sanctions 307-1 regulations for non-compliance with environmental laws and/or regulations.

114 METRO PACIFIC INVESTMENTS CORPORATION

GRI 103: Management Approach 2016 & Topic-specific Disclosures (Social)

GRI Description References and Remarks Indicator

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Head Office Profile of Employment p. 58 - 60 MPIC Group Profile of Employment p. 60 - 65 103-3 Evaluation of the management approach

Head Office Profile of Employment p. 58 - 60 MPIC Group Profile of Employment p. 63 - 65 ESG Data Summary Table p. 89 - 92 GRI 401: ESG Reporting Methodology p. 87 Employment 2016 We do not report this data by region because only operations in the Philippines fall within the scope of this 401-1 New employee hires and employee turnover report.

DATA OMISSIONS: New hires by age group and employee turnover for Featured Toll Roads. Reason for omission: The data is not currently available. We are working on improving our data collection system and plan to report progress in future.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components ESG Risk Management p. 31 - 33 Management Approach to Workers who are not Employees p. 62 Occupational Health & Safety p. 69 - 72 103-3 Evaluation of the management approach Annex: Integrated Management System Certifications p. 107 - 109 GRI 403: Occupational Health Occupational Health & Safety p. 69 and Safety 2016 Data Summary Table p. 91 - 92 ESG Reporting Methodology p. 87

DATA OMISSIONS: Type of injury and rates of injury, occupational • 403-2 a) All data except rate of injury and occupational 403-2 diseases, lost days, and absenteeism, and total diseases for employees at four operating companies number of work-related fatalities (MERALCO, GBP, Maynilad and LRMC). • 403-2 b) All data for workers at all operating companies. Reason for omission: The data is not currently available. We are working on improving our data collection system and plan to report progress in future.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components GRI 404: Training and Development p. 67 - 69 Training and 103-3 Evaluation of the management approach Education 2016 Training and Development p. 67 404-1 Average hours of training per year per employee Data Summary Table p. 91 - 92 ESG Reporting Methodology p. 87

115 2017 SUSTAINABILITY REPORT

GRI Description References and Remarks Indicator

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Management Approach to Diversity and Equal Opportunities p. 66 103-3 Evaluation of the management approach

Board of Directors p. 27 GRI 405: Head Office Profile of Employment p. 58 - 60 Diversity and Equal MPIC Group Profile of Employment p. 60 - 62 Opportunity 2016 Data Summary Table p. 91 - 92 ESG Reporting Methodology p. 87 405-1 Diversity of governance bodies and employees At the end of 2017, 1/14 (i.e. 7% of) Board members was female, 13/14 (i.e. 93% of) Board members were male, and all Board members were within the age range of 50 years and above. Other indicators of diversity for the Board of Directors and employees are not reported as they are not considered relevant.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Social Responsibility p. 73 - 82 Sustainability Highlights of our Major Operating Comanies 103-3 Evaluation of the management approach p. 93 - 104 GRI 413: Local Communities 2016 Social Responsibility p. 73 - 82 Sustainability Highlights of our Major Operating Comanies p. 93 - 104 Operations with local community engagement, 413-1 impact assessments, and development programs Within the scope of this report, 100% of major operating companies and MPIC Head Office implement local community engagement and devleopment programs.

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components ESG Risk Management p. 31 - 33 GRI 416: Quality Management Systems p. 49 Customer Health and 103-3 Evaluation of the management approach Service Continuity p. 54 - 56 Safety 2016

Quality Management Systems p. 49 Assessment of the health and safety impacts of 416-1 Annex: Integrated Management System Certifications product and service categories p. 107 - 109

103-1 Explanation of the Material topic and its Boundary Report Scope and Topic Boundaries p. 83 - 84

103-2 The management approach and its components Corporate Governance p. 25 GRI 419: Ethical Business Practices p. 29 - 30 Socioeconomic ESG Risk Management p. 31 - 33 Compliance 2016 103-3 Evaluation of the management approach Quality Management Systems p. 49

Within the scoe of this report, MPIC Head Office is not aware Non-compliance with laws and regulations in the 419-1 of any significant fines or non-monetary sanctions for non- social and economic area compliance with socioeconomic laws and/or regulations.

116 INDEPENDENT ASSURANCE STATEMENT

INTRODUCTION

Metro Pacific Investments Corporation (“MPIC”) commissioned DNV GL Business Assurance Philippines Branch (“DNV GL”), part of DNV GL Group to undertake independent assurance of sustainability/non-financial disclosures in MPIC’s 2017 Sustainability Report (the “Report”) for the year ended 31st December 2017. This assurance engagement was planned and carried out using DNV GL’s assurance methodology VeriSustainTM1 (Version 5.0) which is based on our professional experience, international assurance best practice including the International Standard on Assurance Engagement 3000 (ISAE3000) Revised2 and the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.

SCOPE OF ASSURANCE

The scope of assurance included a review of sustainability disclosures and performance data from MPIC and its operating companies including Manila Electric Company (MERALCO), Global Business Power Corporation (GBP), Maynilad Water Services, Inc. (Maynilad or MWSI), featured toll roads of Metro Pacific Tollways Corporation (MPTC), featured hospitals of Metro Pacific Hospital Holdings, Inc.(MPHHI) and Light Rail Manila Corporation (LRMC). The boundary of the Report for identified material topics and topic-specific disclosures are set out in the following sections About this report, Materiality and ESG reporting methodology. We evaluated the Report for adherence to the reporting principles for defining the sustainability report content as set forth in the GRI Standards. We understand that the reported financial data and information are based on MPIC’s Annual Report3 and financial statements which are subject to a separate independent audit process. The review of financial data taken from the audited financial statements is not within the scope of our work.

RESPONSIBILITIES OF MPIC AND OF THE ASSURANCE PROVIDER

The Board of MPIC has sole responsibility for the integrity of the Report. The responsibility includes designing, implementing, and maintaining internal controls over collection, analysis, aggregation and preparation, fair presentation of the information, and data that are free from material misstatement including maintenance of integrity of their website. In performing our assurance work, our responsibility is solely towards the management of MPIC in accordance with the terms of reference agreed on, however our statement represents our independent opinion and is intended to inform MPIC’s stakeholders. DNV GL’s responsibility is to form an independent opinion, based on the procedures we have performed and the sample evidence we have obtained. DNV GL is responsible for planning and performing the engagement to obtain limited assurance about whether the selected information is accurate and reliable and generally meets the disclosure requirements.

1 The VeriSustain protocol is available on request from www.dnvgl.com. 2 Assurance Engagements other than Audits or Reviews of Historical Financial Information 3 Posted on 17 April 2018, http://edge.pse.com.ph/

117 BASIS OF OUR OPINION

We formed our opinion based on the principles of reliability i.e. to test the reliability of data and the robustness of the data aggregation process including related management approach for identified material topics, a multidisciplinary team of sustainability and assurance specialists performed the verification activities at MPIC’s headquarters in Makati City and its business units in the Philippines, from April to May 2018. As part of this verification, we planned and performed our activities based on DNV GL’s Risk Based Approach to obtain the evidence that we considered necessary to provide a basis for our assurance opinion. Within the framework of our assessment, we performed the following procedures and other activities including; • conducted interview with data owners from MPIC and its investees to understand the key processes and controls for reporting business units’ performance data; • assessed the robustness of the underlying data and information flow and controls; • performed data analysis using a risk-based approach and materiality; and • challenged the sustainability-related disclosure, statements and claims; • performed limited testing on a sampling basis of the selected information at MPIC’s Headquarters and operating companies’ Headquarters and to check that the selected environmental and social data had been properly measured, gathered, recorded, collated and reported. Headquarters of operating companies that were visited included MERALCO, GBP, LRMC, Makati Medical Center (a subsidiary of MPHHI) and the North Luzon Expressway (NLEX) operations of MPTC.

We also performed the following activities to assess the adherence to reporting principles related to report content and quality; • interviewed the Chief Financial Officer, and other members of senior management team of MPIC and representatives from the in scope operating companies who are responsible for sustainability reporting and made enquiries to determine their understanding of stakeholder engagement and materiality; • reviewed the current sustainability issues that could affect MPIC and could be of interest to stakeholders.

CONCLUSION

Based on the work undertaken, nothing has come to our attention that causes us to believe that the reported data and information disclosed in the Report does not give a fair representation of MPIC’s related sustainability performance. Without affecting our assurance opinion, we also provide the following observations regarding the adherence to the reporting principles for defining the sustainability report content and for defining report quality as defined in the GRI Standards;

Stakeholder Inclusiveness The process of stakeholder identification and engagement is well established. i.e. • MPIC has identified key direct and indirect stakeholder groups. • MPIC and the operating companies engage with the stakeholders through various channels to identify sustainability concerns and expectations. • The selected investor and investment analyst were engaged as part of the report preparation process. The detailed discussion on MPIC stakeholder engagement is cross-referenced to the 2016 Sustainability Report.

118 Sustainability Context The Report presents MPIC’s non-financial performance in the wide context of sustainability. MPIC’s sustainability framework describes how MPIC endeavours to implement its mission to create long-term values with six core drivers. MPIC provides the leadership and capital to support the operating companies to improve sustainability performance. In addition to the current activities, MPIC and its operating companies may consider developing and implementing sustainability initiatives aligned to national and/or global sustainability issues which could impact MPIC and help to create positive environmental and social impacts in the local communities.

Materiality MPIC completed the first materiality assessment in 2016 and has revisited its identified material topics with the engagement of selected stakeholders in the course of writing their 2017 Sustainability Report. The detailed description on materiality assessment process is cross-referenced to the 2016 Sustainability Report. The materiality matrix brings out GRI topic-specific disclosures corresponding to six material topics. Based on our review of materiality assessment carried out by MPIC, nothing has come to our attention to believe that the Report has not identified key material topics nor that the process of materiality assessment has not met the disclosure requirements in GRI Standards considering the local sustainability context.

Completeness The Report has fairly attempted to disclose its responses to key material topics and relevant topic-specific disclosures. Material sustainability performance of operating companies are addressed in the Report, although omissions are reported in some disclosures. MPIC could improve the completeness by measuring, monitoring and collecting the data corresponding to material topics and its impact in its future reports.

Additional opinion on adherence to the reporting principles for defining the sustainability report quality MPIC has selected, compiled and reported information in a relatively consistent manner. Data owners could demonstrate the origin and interpretation of the data in a reliable manner. Any errors or misstatements identified during the assurance engagement were communicated and corrected prior to the Report being published. MPIC could improve the data collection process and present the sustainability performance for the last 2-3 years to allow for comparability over time. The information presented in the Report is communicated in a simple way by using table and infographic, which helps stakeholders find the specific information they want without unreasonable effort. This is the second sustainability report which MPIC publishes yearly. The information in the Report indicates the time period to which it relates. The tone in the Report is generally balanced and we did not come across any obvious and deliberate intent to unduly influence the stakeholders.

LIMITATION

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

119 and examples are excluded from the scope of our work. We did not interview external stakeholders as part of this assurance engagement. The reported disclosures related to Economic performances are based on the financial disclosures and data, which were cross-checked with internal documents and the audited consolidated financial statements. The baseline data for Environmental and Social performance are verified with samples randomly taken by and the aggregated data at the corporate level are used for the verification. The procedures performed in a limited assurance engagement vary in nature and timing, and are less in extent than for a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained if a reasonable assurance engagement had been performed. We expressly disclaim any liability or co-responsibility for any decision a person or an entity may make based on this Assurance Statement.

STATEMENT OF COMPETENCE AND INDEPENDENCE

DNV GL applies its own management standards and compliance policies for quality control, in accordance with ISO/ IEC 17021:2011 - Conformity Assessment Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the DNV GL Code of Conduct4 during the assurance engagement and maintained independence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability assurance professionals. DNV GL was not involved in the preparation of any statements or data included in the Report except for this Assurance Statement. DNV GL maintains complete impartiality toward stakeholders interviewed during the assurance process. DNV GL did not provide any services to MPIC and its investees in the scope of assurance during 2017 that could compromise the independence or impartiality of our work.

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

15 May 2018 / Manila, Philippines Seung Hyun Kwak Nandkumar Vadakepatth Lead Assuror Assurance Reviewer Head – Regional Sustainability Operations Region India and Middle East DNV GL Business Assurance India Pyt. Ltd. India

DNV GL Business Assurance is a global provider of certification, verification, assurance, assessment and training services, helping customers to build sustainable business performance. www.dnvgl.com

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

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