President & CEO Message
Dear Fellow Stakeholders,
No, this message was not written by ChatGPT. But the day has finally come where it certainly could have. Welcome to 2024. A few years ago, a “Great Transformation” (GT) into a “techglomerate” seemed almost crazy, but with the way technology is suddenly accelerating again, it now seems natural. We are at a point in history where not only transformation but continuous transformation is required for safe passage into the future.
2023 was an ambitious year for the big steps we took towards expansion, diversification, innovation, and synergy. We made significant investments over the past two years, including the acquisitions of Citi’s Philippine consumer business, Coca-Cola Bottlers Philippines, the Mactan Cebu International Airport, and just last month, our stake in the Philippines’ first integrated LNG facility—and now the smart thing to do is to consolidate and focus on the future returns of these investments. We cast a pretty wide net last year and we expect a good harvest.
Our Business Units
AboitizPower (AP) had a strong year in 2023, with record profits, high plant availability, and industry-leading retail market share. We have already disclosed over 1,000 megawatts of renewable energy projects, and we will deliver an additional 3,700 megawatts of attributable renewable energy capacity with these projects by 2030.
UnionBank took another big step to become the largest retail bank in the Philippines with the acquisition of Citi’s consumer business, and UnionDigital—one of the first few banks in the Philippines to receive its digital banking license—is already making a profit in its first year of operations. City Savings Bank was recognized as the Most Customer-Centric Savings Bank, and UBX continues to be the Philippines’ leading digital transformation provider and open finance platform.
The Food Group framed its Dual Transformation strategy of strengthening our core businesses while pioneering new growth engines, resulting in an increase in our net income. Despite animal diseases, the Food Group remains one of the few operators supplying locally sourced premium quality pork in the Philippines. We also introduced The Good Meat and are now one of the leading meat retailers in the Philippines. We also launched new premium cat and rabbit food products, a specialty nutrition product for swine and poultry, and aquaculture brands in Vietnam.
Aboitiz InfraCapital (AIC) had a busy year with its focus on Economic Estates, data towers, water systems, and airports—all contributions to nation-building. Our Economic Estates created 45,000 new jobs and Apo Agua Infrastructura successfully completed the Davao City Bulk Water Supply Project, which began supplying water to over one million Davaoeños.
Also in 2023 we took over operations of the Mactan Cebu International Airport (MCIA) and saw an 81% increase in passenger traffic compared to the previous year. Unity Digital closed the transfer of 67% of 1,097 sale-and-leaseback cell sites from PLDT-Smart and Globe, and constructed close to 350 towers.
Aboitiz Land caps a three-year streak of hitting and surpassing sales targets, and pioneering the end-to-end digital customer experience in real estate. With OneVecino, it revolutionized the way it services its homeowners, from property search, easy payment options, accessible customer support, and digitized property management services.
Aboitiz Data Innovation is in the process of collecting, tagging, analyzing, and sharing data sets from all across the Group in order to create the synergies needed to achieve a true techglomerate premium. It is now serving several clients outside the Group and the Philippines.
Aboitiz Foundation began its own transformation with a renewed mandate to scale its operations with innovation and synergy. Our goal is to tap global funds to affect real societal changes in the Philippines, through solutions that move the needle in Education, Jobs, and Climate Action. This new direction balances economic success with environmental stewardship and social responsibility.
Private Sector Advisory Council
On a national level, the Private Sector Advisory Council (PSAC) has played a critical role in our country’s economic development by providing the government with quick-win recommendations and real-time, on-ground insights from the private sector. Our regular engagement with the President, with two meetings per month, draws parallels with similar advisory bodies like the National Infrastructure Advisory Council (NIAC) in the United States, and emphasizes the global importance and unique position of PSAC in shaping national policy. We thank the 30 CEOs in PSAC for their commitment.
The President’s dedication to listening and engaging with the council underlines a mutual belief in the power of private-public collaboration, which is a cornerstone of our government’s national development strategy. This very robust partnership between our government and the private sector is iconic and unique for the Philippines. Nowhere else can you find a president that gives this much time and attention to the private sector. It’s a rare opportunity for real collaboration and we shouldn’t take it for granted, but rather appreciate it for the real value it can create for our country. It’s a responsibility we can’t ignore.
The President’s proactive approach to incorporating private sector perspectives will help position the Philippines as “the next big thing in Asia.” Through PSAC we fully support OPAIEA (Office of the Presidential Adviser for Investment & Economic Affairs) in its efforts to raise the confidence of investors, especially those that could benefit social sectors such as health, education, and agriculture.
As a member of the APEC Business Advisory Council (ABAC), we hosted the ABAC III Meetings in July 2023 at the NUSTAR Convention Center in Cebu City. Attended by 163 delegates from 21 APEC Economies, the discussions led to policy recommendations to APEC Leaders and Ministers.
Our Great Transformation
A key learning from 2023 was recalibrating the proportions between future-proofing our core businesses and operations, and making bold bets on the future—we shifted more focus on the former and toned down the latter. Constant experimentation has always been part of the GT’s entrepreneurial spirit, and therefore we continue to explore innovative ways of working and delivering value to our stakeholders on every level.
Based on our learnings from 2023, we will proceed to think and act on two levels: managing the business today by driving value and revenue, and parallel to that, actively thinking about how to withstand disruption. In other words, how can we be efficient today so that we can buy time for further transformation tomorrow—and to do this we need to continue to transform our culture based on our A+10 Behaviors.
In 2024 we realize that it is not easy building a culture of fast, simple, and innovative teams; there are multiple hurdles to cross, but we are doing the best we can. We are also doubling down on opportunities for synergy within the Group’s ecosystem, as mandated through the establishment of the Synergy Team in 2023.
In the past year, becoming a techglomerate has been an aggressive pursuit of growth and transformation. Our new investments show that we are committed to our diversification strategy. It is our responsibility however to make sure these investments pay off in good time through careful stewardship and strategic patience.
Looking Ahead
It is important that we practice prudence and austerity as we await the harvest of the seeds planted in 2023. This period of consolidation is not about standing still; it’s about moving forward with intention and focus on increasing the pie. It’s about ensuring that every action we take is aligned with our GT vision and the techglomerate premium we are committed to achieving.
Furthermore, as team members we need to stretch ourselves and our capabilities as far as we can. Telling team members they can do better is like a coach pushing a team to win; it means the leader believes in them. Instead of being discouraged, team members should see this as motivation to improve and reach their full potential—which leaders believe they have.
I’ve said this many times before and will continue to do so: our people and stakeholders have always been the foundation upon which our success is built. They are the secret to our success. To our partners, customers, and shareholders: your continued trust and support are what inspire us to strive for excellence in everything we do, every single day.
Sabin M. Aboitiz
President & CEO
Aboitiz Group