Guided by purpose and brand promise to drive change for a better world by advancing business and communities, Aboitiz remains committed to best practices and good corporate governance, for which it is consistently recognized as among the best not only in the Philippines but also the ASEAN region.
Over the last hundred years, the Aboitiz Group has proven its resilience to rise above the challenges of the times. For generations, what remained constant was its commitment to its time-honored values of integrity, teamwork, innovation, and responsibility.
Sabin Aboitiz, Aboitiz Group president and chief executive officer, is at the forefront of building a culture of values and engaging people at all levels.
Since the start of his leadership in January 2020, the human resources department has constantly introduced efforts to engage its workforce beyond the usual programs like SuperDuperCon, Welcome Aboard, UpClose with SMA, MyBen and MyTX, including first-of-its-kind virtual contests, engagement surveys, recognition programs, and international and local holiday celebrations.
These initiatives have opened the door for better collaboration among business units through sharing of best practices and became a way for the organization to challenge the norm, grow through different perspectives, embrace diversity, and promote inclusion.
Always putting its people first, it has ensured a balanced pursuit of financial gains and sustainability. Its rich history has shown that using its values as its compass has enabled the company to drive change while advancing business and communities.
Digital transformation path
The most pronounced new strategy has been a doubling down the company’s digital transformation path, which helped serve its existing banking customers and sign up many new ones at the height of the pandemic.
As of the first nine months of 2021, the group continued to gain traction in its digital take-up. It posted another record high in terms of number of sign-ups across its UnionBank online and portal platforms at more than 666,000, bringing its total app users to 3.6 million as of end-September 2021.
Similarly, the company has posted the highest number of new accounts opened in a fully-digital manner via the app in a single quarter with more than 278,000 accounts in the third quarter of 2021. This brings its total digital accounts opened to 1.1 million or 30 percent out of our total digital users.
Moreover, digital transactions continued to grow by 1.8 times to more than 7.3 million transactions in the month of September as the company onboards more users onto its digital channels and as they become more familiar with transacting digitally. Digital transactions also continued to significantly surpass branch and ATM transactions by as much as 3.5 times.
UnionBank was the only Philippine private bank among six entities granted a three-year digital banking license by the central bank, which has capped the number to six after the remaining applicants failed to meet the requirements.
UnionDigital will be Aboitiz’s vehicle to tap the lower-end of the pyramid who are usually unbanked and underserved by traditional banks.
This complements and further expands the banking group’s customer base to cover all portions of the pyramid. The bank aims to leverage on a community banking approach whereby it can acquire customers en masse as it provides products and services that cater to the needs of its specific communities.
UnionDigital, on the other hand, is essential in its overall digital strategy as it fast-tracks the onboarding of more customers onto its digital channels.
On top of this, Aboitiz started a company focused on data science and artificial intelligence called Aboitiz Data Innovation, but it could be discussed separately.
The group’s COVID-19 response
The group’s response to COVID-19 was focused on three areas: people, process, and technology.
On people, which is the Aboitiz Group’s greatest concern, it has established a system in monitoring the COVID-19 cases across the Aboitiz Group. It has developed a “Re-Entry Assessment and Management Program” with its healthcare provider in case there is an urgent need to go to the workplace. The Aboitiz Group started planning its COVID-19 vaccination program for the free inoculation of its team members as early as March this year.
The Group developed and regularly updates the “Group-wide Return to Office Playbook,” aligned with the government’s guidelines and ensures access by all team members online.
In technology, the company ensured that the Aboitiz Group’s virtual private network and endpoint security, threat intelligence, and cyber-attack response installation are completed for all team members as a protection during the work from home set-up. The Aboitiz Group has maximized the use of digital channels for activities that would normally require face to face interactions, while monitoring on a daily basis VPN utilizations, information technology security and IT infrastructure.
When COVID-19 was just starting in the country, the Aboitiz Group earmarked a total of P900 million to help its team members cope with the pandemic.
This amount only covers the early release of salaries and 13th or 14th month pay of over 11,000 team members across strategic business units. The amount spent has increased since then to cover COVID-19 testing, setting up safe spaces, and other protocols, including vaccination.
The human resources group has rolled out various activities that would help maintain both mental and physical fitness, including ‘e-Zoomba,’ yoga, barre and mindfulness, among others. Online clinics and virtual consultations are also made readily available for the TMs.
For vaccination efforts, of November 2021, 90 percent of the company’s organic TMs group-wide has been vaccinated, either through the local government units or company-initiated vaccination programs.
New, pandemic-proof initiatives
The group’s businesses are “pandemic proof” as they are categorized as essential industries, and they will be the last to be foregone by consumers in the event of another COVID-19 surge or pandemic.
Aboitiz’s businesses are supporting economic recovery in the countries where it operates despite lingering risks. The resources it has spent building its digital infrastructure and strengthening its business continuity plans have paid off despite telework arrangement.
Also, the strategic partnership with JERA enables AboitizPower’s 10-year RE expansion journey. It also releases significant cash for AEV to grow and diversify its portfolio.
Balance sheet is battle-tested and remains strong, to be fortified by JERA proceeds, providing more financial muscle. As it crosses over to 2022 and pursues its 10-year growth ambitions, it includes serving 70 percent of the unbanked adult Filipinos (with the help of its digital bank) and building a leading share of the 50,000 additional common towers needed by the country (through unity).
Managing losses during pandemic
While the group’s 2020 revenue was affected by the pandemic due to lower demand across the industries its businesses are operating in, its various business units contributed to keeping the country’s economic engine running.
Within a short span of time, it made frequent COVID-19 advisories and implemented measures following its business continuity plan.
A strong enterprise-wide risk management system provided the company with an early-warning of the health threat.
The company is truly fortunate to be guided by its special technical working group in implementing its business continuity management especially as it finds out that many in the industry had their sow population completely wiped out.
It credits its barn structure and strategy of batching the sow levels, accompanied by highly stringent biosecurity measures in safeguarding our farms.
The group’s existing digital infrastructure and a strong innovation mindset helped power through many physical roadblocks.
Moving their operations to the cloud was like flipping a switch for Aboitiz.
It was already doing remote work and had the corresponding guidelines and related tools in place, thanks to its team members who embraced the agile working environment with remarkable openness and enthusiasm.
Aboitiz quickly moved to provide its stakeholders with a “lifeline.” With the early release of salaries and bonuses, it wanted to demonstrate to its team that it acknowledged the uncertainty of the pandemic and that it was a significant burden for them and their families.
The company has a unique position in that and while it has grown to be a business with overseas presence, it is known for its roots in the Visayas and Mindanao. Its headquarters may be in the National Capital Region, but its communities are spread out all over the country, so it decided early on that it will extend support as equitably as it can.
By the end of 2020, the group had extended in value worth P2.2 billion toward COVID-19 support.
Pre- and post-pandemic environment
The pandemic may have caused the group to revisit and revise some of its plans, but its focus areas and growth trajectory remain the same, further enabled by its strategic partnership with JERA.
It aspires to grow at a rate faster than the Philippine economy. It will achieve this by leveraging its leading positions in power, banking, food, and infrastructure.
At the end of the decade, power’s share of the group’s beneficial EBITDA portfolio will be about 50 percent, from its current share of about 70 percent. It anticipates its other businesses will grow at faster rates to eventually account for the balance, near its current proportions.
Its overseas activity will double its current beneficial EBITDA share from six percent to about 10 percent. Over the next ten years, it will clearly step up its contributions to achieve some of the United Nations’ sustainable development goals.
UnionBank was the only Philippine private bank among six entities granted a three-year digital banking license by the central bank, which has capped the number to six after the remaining applicants failed to meet the requirements.
Outlook for 2022
From the positive performances across most of the company’s strategic business units, it continues to see some headway in its recovery and growth plans. Government initiatives, such as the passage of the CREATE bill, should help businesses recover and return to their growth paths.
Considering the potential threat of the Omicron variant on the country’s fragile economic recovery, the company approaches the future with caution, as it optimizes the strength of its balance sheet.
Its JERA partnership, once completed, will release significant cash that provides the financial flexibility to pursue growth initiatives across our businesses, and accelerate the diversification of its portfolio.
Aboitiz continues to take steps to protect its team members who sustain its businesses.
They are 90 percent vaccinated and are working on their booster program, and commit to continue to work hand in hand with the national government until the Philippines succeeds in achieving population protection.
Advancing business and communities
With major investments in power, banking, food, infrastructure, and real estate, the group’s longevity and success are a testament to a solid foundation and a continuing legacy of excellence.
Guided by purpose and brand promise — to drive change for a better world by advancing business and communities — Aboitiz remains committed to best practices and good corporate governance, for which it is consistently recognized as among the best not only in the Philippines but also in the Association of Southeast Asian Nations region.
