COMMITMENT - ayalafoundation.org · Vision Communities where people are productive, creative, self-reliant, and proud to be Filipino. Mission ... barangay Sibaltan, El Nido, Palawan,

C O M M I T M E N TWHAT WE NURTURE

THE 2015 ANNUAL REPORT

When we transform partnerships, we redefine commitment.

We engage the community to be active agents in building their path to progress.

Ayala Foundation empowers future leaders—bridging aspirations toward a productive Filipino society.

About the reportWhen we commit to a bright future, we nurture partnerships. At Ayala Foundation, we collaborate more, so we can inspire the communities we serve. We realize the potential in each Filipino—building a better quality of life in our society.

VisionCommunities where people are productive, creative, self-reliant, and proud to be Filipino.

MissionUnderstanding community realities and engaging people in the change process.

Acting as catalyst for inclusion to bridge community and business aspirations.

Building and nurturing partnerships with public and private groups, civil society, and Ayala to achieve impact, scale, and sustainability for everyone involved.

VALUESWe have a deep love of country.

We believe in shared prosperity.

We are creative and innovative.

We act with integrity.

We strive for excellence.

We collaborate and work as a team.

4MESSAGE FROM THE CO-CHAIRMEN

6MESSAGE FROM THE PRESIDENT

8THE FOUNDATION OF OUR FUTUREOur programs

36partnerships for progressWorking together

with the Ayala group

44REACHING OUT TO THE FILIPINOOur commitment to growth

54LEAVING A LEGACYHow we make an impact

60BOARD OF TRUSTEES AND MANAGEMENT COMMITTEE

63REPORT OF INDEPENDENT AUDITORS

Message from the CO-ChairmENJaime Augusto Zobel de Ayala

&

Fernando Zobel de Ayala

Dear stakeholders,

Our Ayala Foundation has continued to evolve as an institution over the course of fi ve decades and contributed to progressive and purposeful change in our society.

In 2016, we will celebrate our 55th year. From a purely philanthropic endeavor, the foundation has transformed itself into a relevant agent of change, contributing its share to shaping communities where every citizen is productive, creative, self-reliant, and proud to be a Filipino.

We continue to stretch our reach with our youth programs: we educate the youth through our Center of Excellence in Public Elementary Education (CENTEX) program, and we develop tomorrow’s trusted leaders through the Ayala Young Leaders Congress.

We celebrate our art, history, and culture through the Ayala Museum and the Filipinas Heritage Library. In fact, our eff orts to champion our heritage have reached other countries. During the year, pieces from the museum’s priceless collection of precolonial gold, showcasing the Philippines’ rich culture and history, were featured in a successful exhibition at the Asia Society in New York.

We remain committed to helping communities through our various sustainable livelihood programs. Two years after the Bohol earthquake and super-typhoon Yolanda, we continue to contribute to the rehabilitation of devastated communities, making sure that aside from relief eff orts, we provide support for long-term recovery as well.

We carry on building more meaningful linkages between the foundation and the various business units of the Ayala group. In partnership with Globe Telecom, we launched our latest education program, Global Filipino Schools, which provides public elementary schools with an ICT-equipped learning environment and trains teachers in the uses of technology as an educational tool. Th e foundation, through Ayala Corporation and the Singapore Management University, also launched the Ayala Master of Tri-Sector Collaboration scholarship, which trains emerging

leaders from the private, public, and people sectors in professionalizing partnership development and management.

In March, we welcomed our new president Ruel T. Maranan. Ruel brings a wealth of experience from his various leadership roles across the Ayala group and will help bring greater alignment and impact to the foundation’s operations, while building on the successes of his predecessors. With Ruel at the helm, we have every reason to look forward to more collaboration and greater stakeholder engagement, both within the Ayala group and with our external partners.

With a committed leadership and a focused set of programs, the foundation is well positioned to remain an agent of progressive change in our society. We recognize that none of these would be possible without the full trust and support of all our stakeholders. We thank all our partners, donors, and supporters, who have selfl essly shared their talent, time, and resources with us and with our communities. Th ank you for continuing to believe in what Ayala Foundation stands for.

We maintain that the Filipino people deserve nothing less than our collective commitment to uphold integrity, responsibility, and accountability in our continuing efforts for more inclusive and sustainable growth.

Jaime Augusto Zobel de Ayala Fernando Zobel de Ayala

Message from the presidentRuel T. Maranan

Ruel T. Maranan

Dear stakeholders,

Ayala Foundation’s priorities can be defi ned by three words—alignment, focus, and impact.

Filipinos today face problems that are as diverse as they are connected. Technological advances have created new ways of doing things such that, what may be perceived as extraordinary opportunities are also, in fact, new challenges.

I am honored to help shape the future of Ayala Foundation during these exciting times—when there is a need to take stock of who we are, to build a better future for ourselves and the communities we serve.

My fi rst year with the foundation was a good learning experience. I saw many opportunities for greater collaboration.

Th e process of alignment involves continuously appreciating, understanding, and adapting to what is required by the organization and the stakeholders. As we recognize the need to strike the right balance of the “heart” and the discipline called for by business, so should we be mindful of the needs we can fi ll especially within the Ayala group and with our other key program partners.

If we are aligned with the needs of stakeholders as a whole, I believe that we can better focus on creating greater impact in transforming communities where everyone is productive, creative, self-reliant, and proud to be Filipino.

We have seen promising results in our continuing eff orts in our four pillars of education, youth leadership, sustainable livelihood, and arts and culture. Our work also continues in helping rebuild lives in disaster-stricken areas.

I am grateful to Ayala Foundation’s growing number of stakeholders for this chance to be relevant. I wish to thank the board of trustees, in particular, for allowing us to innovate and be fearless for the future of this organization; the Ayala Foundation team for embarking on a new journey of discovery and rediscovery; and our partner organizations and individuals for their enthusiasm and willingness to serve and be part of the change that our country needs.

Th is is only the beginning. We have so much more to do. I believe that our commitment to nation-building defi nes who we are. And if we move as one, we can make it work.

Our programs

THE FOUNDATION OF OUR FUTURE

COM M I T M EN T 10

ayala foundationOur Program Map

I

CAR

II

III

NCR

IV-A

X

V

IV-B

VI

VIII

VII

IX

XII

ARMM

XI

COM M I T M EN T 11

I Ilocos Norte

Ilocos Sur

Pangasinan

II Cagayan

Isabela

Nueva Vizcaya

III Bulacan

Nueva Ecija

Pampanga

Tarlac

Zambales

IV-A Batangas

Cavite

Laguna

Quezon

Rizal

IV-B Occidental Mindoro

Oriental Mindoro

Palawan

V Albay

Camarines Sur

VI Aklan

Antique

Capiz

Iloilo

Negros Occidental

VII Bohol

Cebu

Negros Oriental

Siquijor

VIII Eastern Samar

Leyte

Northern Samar

Samar

Southern Leyte

IX Zamboanga del Norte

Zamboanga del Sur

Zamboanga Sibugay

X Bukidnon

Camiguin

Misamis Oriental

XI Davao del Sur

Davao Oriental

XII Cotabato

Sarangani

South Cotabato

Sultan Kudarat

ARMM Maguindanao

Sulu

Basilan

CAR Benguet

Ifugao

NCR Metro Manila

Region Province E YL SL AC DR Region Province E YL SL AC DR

Education

E

Youth Leadership

YL

Sustainable Livelihood

SL

Arts and Culture

AC

Disaster Response and Special Projects

DR

Aside from Metro Manila, we have reached 52 out of 81 provinces all over the country.

COM M I T M EN T 12

ayala foundationOperating Expenses

Education P41.0 million

Youth Leadership P14.2 million

Sustainable Livelihood P16.1 million

Arts and Culture P94.0 million

Disaster Response and Special Projects P121.1 million

E

YL

SL

AC

DR

CE Corporate Support P49.9 million

P336.3 millionTOTAL

36%

15% 12%

4%

5%

28%

COM M I T M EN T 13

AYALA FOUNDATIONProgram Highlights

COM M I T M EN T 14

COM M I T M EN T 15

CENTEX

The Center of Excellence in Public Elementary Education (CENTEX) provides holistic, high-quality education for bright children from economically disadvantaged families.

Started 1998 in Manila, 2000 in Batangas

Program sites• Tondo, Manila• Bauan, Batangas

Program partners• Department of Education• City Government of Manila• Provincial Government of Batangas• Private donors

1,008Total enrolment for SY 2015-2016

95%Cohort survival rate (vs. 73.5% national average)

Volunteer hours rendered by parents

38,229.5

COM M I T M EN T 16

COM M I T M EN T 17

TEXT2TEACH

Text2Teach uses mobile technology to help teachers deliver engaging lessons for public school children. Each teacher is equipped with a Microsoft phone loaded with over 360 interactive lessons in Math, Science, English, and Values Education.

Started 2003

Program sites nationwide

Program partners• Microsoft• Department of Education• Globe Telecom• Local government units

876Schools reached (out of target 850) for Phase 4

COM M I T M EN T 18

COM M I T M EN T 19

TRAINING INSTITUTE

The two-year teacher and principal training program focuses on four essential elements for lifelong learning—classroom pedagogy, development of critical thinking skills, values clarification, and use of technology in the classroom. It also involves a yearlong mentoring component that allows teachers and principals to apply what they learned.

Started 2012

Program sites• Sagay City, Negros Occidental• Silay City, Negros Occidental• Estancia, Iloilo• Carles, Iloilo• Cagayan de Oro City

Program partners• Department of Education• Local government units

193Teachers trained

7,220Students reached by participating teachers

COM M I T M EN T 20

COM M I T M EN T 21

AYALA YOUNG LEADERS CONGRESS

The Ayala Young Leaders Congress (AYLC), the flagship leadership program of the Ayala group of companies, is an annual student leadership summit for 81 of the most promising student leaders selected from the best colleges and universities in the country.

The congress is designed to build the delegates’ confidence and hone their leadership skills, to nurture their commitment to integrity and principled leadership, to foster nationalism and idealism, and to encourage faithful stewardship of their communities and the country’s future.

Started 1999


Program partners• Ayala Corporation• Ayala Land• Bank of the Philippine Islands• Globe Telecom• Manila Water Company• Integrated Micro-Electronics• LiveIT

22Number of alumni chapters

1,286Number of AYLC alumni

P14.5MValue of projects implemented

68Community projects implemented by 2015 alumni

COM M I T M EN T 22

COM M I T M EN T 23

LEADERSHIP COMMUNITIES

Leadership Communities (LeadCom) harnesses the youth’s potential for leadership and community service by helping them ideate and implement projects that address community issues.

Started 2011


Program partners• Private funders• Local government units• Local colleges and universities• Youth organizations and youth-

serving organizations • Ayala Young Leaders

Alumni Association

2Number of project sites

20Number of projects being implemented

95Number of participants

COM M I T M EN T 24

COM M I T M EN T 25

IRAYA-MANGYAN PROGRAM

Our Iraya-Mangyan Program is committed to the education and skills training of the indigenous Iraya-Mangyan community of Puerto Galera, Talipanan, Oriental Mindoro. For sustainable livelihood, Ayala Foundation helps the Iraya-Mangyan community in Talipanan in reviving their tradition of weaving, particularly in the creation of beautiful and functional nito baskets.

With the help of our donors and partners, we also provide training in dressmaking, electrical skills, masonry, and agriculture, among others.

Started 2003

Program site• Talipanan, Oriental Mindoro

Program partners• Ayala group of companies• Sisters of Charity of St. Anne• Private donors

P4.3MGross income for weaving enterprise

64Mangyan scholars

130Elementary students received daily feeding

P2.4MIncome distributed

COM M I T M EN T 26

COM M I T M EN T 27

EL NIDO PROGRAM

We work with the women weavers of barangay Sibaltan, El Nido, Palawan, and leverage their talents to produce beautiful buri bags and other buri products. Our goal is to scale up their production, improve production processes, and connect weavers to the market.

Aside from working with women weavers, we also made initial steps toward supporting and scaling up community-based enterprises, focusing on cashew production and local “way of life” tourism, in partnership with the Sibaltan Heritage Council.

Started 2013

Program site• Sibaltan, El Nido, Palawan

Program partners• Department of Social Welfare and

Development• Local government of El Nido• Barangay council of Sibaltan• Sibaltan Women Weavers Association• Sibaltan Heritage Council• The Leather Collection

184Program participants (weaving and cultural tours)

41.28%Average increase in income

COM M I T M EN T 28

COM M I T M EN T 29

CALAUAN PROGRAM

Southville 7 in Calauan, Laguna is a 107-hectare relocation site for families displaced by Typhoon Ondoy and the Pasig River rehabilitation. Owned by the National Housing Authority, the property is home to roughly 4,500 families. Together with our partners, we are implementing sustainable livelihood projects (through employment or enterprise) for families in the area.

Started 2012

Program site• Calauan, Laguna

Program partners• Municipal government of Calauan• Salesians of Don Bosco• Franciscan Sisters of the Sacred Heart• Ayala Corporation• Makati Development Corporation• Manila Water Company• Kapwa Greens

111Individuals employed

20

108.56%Average increase in household income

Individuals engaged in AFI-established enterprises

COM M I T M EN T 30

COM M I T M EN T 31

AYALA MUSEUM

As one of the leading private museums in the country, the Ayala Museum makes Philippine history, art, and culture accessible to the public through engaging exhibitions and exciting cultural programs. The Ayala Museum uses traditional and nontraditional platforms to present our country’s rich heritage in fresh, engaging, and innovative ways.

Started 1967

Program sites• Makati City• Nationwide

(through traveling exhibits)• Global

(through items on loan)

Program partners• Private collectors• Ayala group• Local government units

(for traveling exhibits)

82,894Museum visitorship

56,032Reach of traveling exhibitions

6,620Reach of Gold Exhibition in New York City

3,508,304Social media reach

COM M I T M EN T 32

COM M I T M EN T 33

FILIPINAS HERITAGE LIBRARY

3,503Library visitorship

27,527Guests to FHL exhibits

The Filipinas Heritage Library (FHL) houses contemporary and rare volumes on Philippine art, history, and culture; vintage recordings of Philippine music; vintage photographs; and maps, periodicals, and multimedia materials. The library has also embarked on a massive digitization project to make a significant part of its collection available online. In addition, FHL partners with government and private groups to develop community libraries, through the OurLibrary program.

Started 1996

Program sites• Makati City• Nationwide • Global

Program partners• Local government units• BPI Foundation• Ayala Land• Globe Telecom• Private organizations

COM M I T M EN T 34

COM M I T M EN T 35

TYPHOON YOLANDA DISASTER RESPONSE

We are helping communities severely damaged by Yolanda as they work toward complete recovery. Our interventions in these areas take the form of educational and sustainable livelihood support.

Started 2013

Program sites• Estancia, Iloilo• Carles, Iloilo

Program partners• Ayala group of companies• Department of Education• Local government units• Private funders (corporate

and individual)

33

191New fishing boats provided since 2014

New classrooms constructed for affected communities since 2014

Working together with the Ayala group

PARTNERSHIPS FOR PROGRESS

COM M I T M EN T 38

STRENGTHENING OUR TIESWorking together toward a common goal

nrico Louise Tobias is a nine-year-old living in Tondo, Manila. He's bright and talented. He's also a gifted violinist.

At age five, he began learning to play the instrument under the mentorship of internationally acclaimed violinist Alfonso "Coke" Bolipata. In these after-school music lessons, he sharpens not only his technique, but also deepens his appreciation for some of the best-known pieces of classical music. He continues to hone his craft at home; during the summer break, he plays up to five hours daily. His hard work has paid off so far because when he plays the violin, the crowd listens. And when the performance is over, they erupt in a round of applause.

Enrico’s life is one of those that Ayala Foundation has helped change through our different programs for the youth

and for education. From Manila to Mindoro to Mindanao, we remain committed to molding young minds and training them to become leaders and productive members of their respective communities.

Partnerships for Music and for TechnologyThis year, we further strengthened our commitment to our programs by aligning these more closely with our stakeholders and working more collaboratively with other business units of the Ayala group. It is our hope that this close partnership will result in programs that are more focused, and as a consequence deliver enormous impact on the lives we help change.

The Center of Excellence in Public Elementary Education (CENTEX)—where Enrico is one of the students—is where we provide bright students from economically disadvantaged

EAbove Acclaimed violinist Coke Bolipata serves as a mentor to scholars of the CENTEX After-Hours Music Program.Previous Ayala Foundation has partnered with the Makati Development Corporation (the construction arm of Ayala Land) for MDC Greens, which employs farmers from our Calauan community

to cultivate ornamental plants.

COM M I T M EN T 39

Ayala Corporation, through Ayala Foundation, supported the transport and installation of solar panels for the Philippine Science High School, the leading institution for secondary science education in the country.

From Manila to Mindoro

to Mindanao, we remain

committed to molding young

minds and training them to

become leaders and productive

members of their respective

communities.

families with education that's on a par with the top private schools in the country. But more than just classroom instruction, CENTEX also provides enhancement programs that boost students' confidence and self-esteem. This includes the After Hours Music School Program where Enrico studies violin, taking music lessons along with 23 other CENTEX students.

The school has received considerable support from our partners over the years. In May, Volkswagen Philippines has partnered with us and turned over 22 violins and two cellos for the CENTEX After Hours Music Program.

Aside from CENTEX, we also pursue other initiatives in education. In 2015, we began a new project in partnership with Globe Telecom called Global Filipino Schools (GFS). This program, which is aligned with Globe’s goal of enhancing ICT education in the country, trains teachers in using technology as a teaching tool and at the same time provides public elementary schools with an information and communications technology (ICT) laboratory that follows UNESCO standards. So far we have identified eight schools where the program will be implemented in the coming years.

Ayala Foundation champions innovation among the youth. And when it comes to innovation, the Philippine Science High School (PSHS) has been at its forefront by providing science-driven education for secondary students.

In 2015, the PSHS Alumni Batch 1985 and the PSHS Foundation facilitated the donation of solar panels to the PSHS main campus in Quezon City. These were donated by the Renewable Energy Test Center in California, and installed on the rooftop of the campus' Advanced Science and Technology Building. Ayala Corporation, through Ayala Foundation, supported this initiative by donating P1.5 million to transport and install these solar panels.

The installation of the panels aims to reduce energy consumption and promote the use of clean energy in the campus. Meanwhile, any savings brought by this project will go to the PSHS Research Fund, which supports promising student research projects.

Nurturing LeadersOur passion also lies in training the country's future leaders. We make this possible through a combination of our leadership programs and our partnerships with organizations who share our passion for nurturing leaders.

COM M I T M EN T 40

The Ayala Master of Tri-Sector Collaboration Scholarship supports leaders from the private, public, or people sectors who would like to pursue postgraduate studies in partnership development and management at the Singapore Management University. The launch of the scholarship drew the support of top officials from the business, diplomatic, and civil society sectors, including (from left) Ambassador Roland van Remoortele of Belgium, Washington Sycip, Jaime Augusto Zobel de Ayala, and Professor Arnoud de Meyer of the Singapore Management University.

Enrico Louise Tobias (center) is one of CENTEX’s promising violinists under the mentorship of Coke Bolipata. Here, Enrico performs with other members of the CENTEX String Ensemble as their way of thanking Volkswagen Philippines for their donation.

COM M I T M EN T 41

In September, we partnered with the Ayala Corporation to launch the Ayala Master of Tri-Sector Collaboration (MTSC) Scholarship. Our goal is to promote greater collaboration between the government, business, and nonprofit sectors, by honing the knowledge and skills of leaders from civil society and government. Through the scholarship, we also aim to support the global Filipino, one who is committed to national development, but is highly attuned to what goes on in the rest of the world, and can harness these to benefit everyone.

The MTSC at the Singapore Management University is the first advanced degree program in the world that professionalizes partnership development and management. It means that students will come equipped with collaborative and management skills needed to work with leaders in the private, public, and people sectors. This way, they can contribute to the development of sustainable solutions to the world's big problems.

This year, we also worked hard in making our youth leadership programs more inclusive and diverse, and reached out to the youth of Mindanao. Over the years Mindanao has been unfairly tagged as a conflict area, but the fact is, communities in Mindanao have a lot to contribute to national development.

One such high-potential area is Basilan. Through our Leadership Communities (LeadCom) program, we partnered with the Office of the Regional Governor of the Autonomous Region in Muslim Mindanao (ORG-ARMM) and the Eisenhower Fellows Association of the Philippines (EFAP) for the Basilan Young Leaders Program (BYLP). It was a 28-day program that taught 50 youth leaders from 11 municipalities and two cities in Basilan how to become effective leaders. This was done by exposing them to issues that communities face and equipping them with insight and other tools to help address problems within their community.

So far, participants of the BYLP have identified 10 projects for implementation. These projects have received a P100,000 seed fund from Ayala Foundation, while the ORG-ARMM provided an additional P5 million.

The program has also received considerable support from various government agencies. The local office of the Department of Interior and Local Government (DILG) in Basilan will provide administrative and logistical support to the youth leaders, while the Technical Education and Skills Development Authority in the ARMM (TESDA-ARMM) will handle the skills and livelihood training requirements of

Young Filipino-American leaders interacted with members of our Calauan community as part of the Third Filipino American Youth Leadership Program (FYLPro).

We strengthened our programs

by aligning them with our

stakeholders and working

collaboratively with

the Ayala group.

COM M I T M EN T 42

their projects. Moreover, the Armed Forces of the Philippines, along with our partners ORG-ARMM and EFAP, are discussing the potential of expanding LeadCom to three more areas in the ARMM.

The National Youth Commission (NYC) has also partnered with us to pilot LeadCom in three areas in the country. That is just the beginning, however, as the long-term goal is to turn LeadCom into the NYC's training arm for youth leaders all over the country. Partnerships like these not only stand as proof of the program’s effectiveness, but also enable us to reach out to more young Filipinos who can help change the country for the better, one community at a time.

Apart from the local youth, we reached out to young Filipino-Americans through the Filipino-American Youth Leadership Program (FYLPro). The program identifies young Filipino-American professionals aged 18 to 40 who are emerging leaders in their respective communities and are committed to promoting the Philippines’ continued development, even as they continue to grow professionally in the United States. Launched in 2012, FYLPro is the brainchild of Ambassador Jose Cuisia, Jr. and Mrs. Victoria Cuisia, in

partnership with the Department of Foreign Affairs, and counts Ayala Corporation as one of its key proponents.

This year's FYLPro was held in July in Manila, and gave 10 delegates invaluable insight into the business, government, nonprofit, and cultural sectors of the country. Our goal is for these youth leaders to have greater empathy toward Filipino communities in the Philippines and the United States.

The Iraya-Mangyan Program, which counts Doña Bea Zobel as one of its top advocates, is another project that’s close to the heart of Ayala Foundation. In 2015, we continued our partnership with the local Iraya-Mangyan community in Talipanan, Oriental Mindoro, through the support we provide for the members of the Talipanan Iraya-Mangyan community. With the help of our donors and partners, we provide daily feeding, medical assistance, day care, and youth development programs.

The educational support for Iraya-Mangyan students has also produced a good number of professionals, including Ronnel Arma, one of our Iraya-Mangyan students who passed the Licensure Exam for Teachers in October. In addition, we completed the library in Talipanan with the assistance of the Filipinas Heritage Library. We hope that this will further equip our scholars and the local community with the skills and knowledge they need in school, at work, and at home.

• • •

n Volkswagen Philippines' turnover of instruments to CENTEX's After Hours Music School Program, Enrico and the rest of the ensemble

played three minuets by Johann Sebastian Bach, and Ludwig van Beethoven's Ninth Symphony to thank the sponsors for their donation.

The Ninth Symphony is Beethoven's last symphony, and is also considered one of his greatest. It premiered in Vienna in 1824 to a packed theater. So ecstatic was the reception that the audience gave the composer five standing ovations, throwing their hats, handkerchiefs, and hands to the air.

Enrico and his peers' performance might not have had the intense drama that characterized Beethoven's 1824 performance, but the effect on their young minds would have been profound nonetheless. It is proof that if done right, and done often enough, deeds both great and small can create an immense impact on people's lives, much like the work that we do.

It is proof that if done right,

and done often enough, deeds

both great and small can create

an immense impact on people’s

lives, much like the work that

we do at Ayala Foundation.

I

COM M I T M EN T 43

Ayala Automotive President John Philip Orbeta (left) and Ayala Foundation President Ruel Maranan (right) with CENTEX scholars during the official turnover of violins from Volkswagen Philippines.

A young leader from Basilan learned the value of helping find solutions for community issues, as she participated in the Basilan Young Leaders Program (BYLP).

Young LeadCom participants are empowered to develop solutions for some of the problems they see in their communities.

Our commitment to growth

REACHING OUT TO THE FILIPINO

COM M I T M EN T 46

TRANSFORMING OUR COMMUNITIESChampioning Filipino culture and spirit

he Philippines is home to a rich tapestry of cultures and history that dates back to the pre-Hispanic era. It is where Malay, Chinese, Spanish, American,

and various indigenous cultures converge to create an identity that is unmistakably Filipino. Today, a population of over 100 million spread across more than 7,000 islands continues to enrich the country's culture and heritage.

For 54 years, Ayala Foundation has championed Filipino culture and its indomitable spirit through various programs across the country. These are programs that fall under our four pillars of education, youth leadership, sustainable livelihood, and arts and culture.

We further strengthened our commitment to these pillars this year by taking on a more focused approach to our programs, and by building the foundation for even

more impactful ones in the future. From reviewing our 17-year-old Center of Excellence in Public Elementary Education (CENTEX) program to providing greater visibility for the work of our Iraya-Mangyan community, we hope that by taking steps like these, our programs will benefit even more Filipinos.

A Stronger Commitment to EducationPublic education in the country has constantly faced difficulties ranging from the lack of sufficient facilities and limited access to modern teaching methods.

High dropout rates of elementary students transitioning to secondary school are also a problem, often caused by families' lack of sufficient funds for further education. CENTEX was established in 1998 to address this issue by

TAbove Some of our bright students from CENTEX Batangas.Previous Students from one of the Text2Teach schools.

COM M I T M EN T 47

For 54 years,

Ayala Foundation has

championed Filipino culture

and its indomitable spirit

through various programs

across the country.

giving bright children a chance for a better future through high-quality education.

A total of 1,375 students have already graduated from CENTEX's Manila and Batangas campuses since the program started 17 years ago. In CENTEX Manila, 80 percent of its first batch of graduates have either finished or are about to finish their college education.

However, we also recognize that it is also time to look closely at the program, and see whether it has remained responsive to the changing needs of public education and students.

This year, we worked with a third-party education consultant who studied the program's strengths and weaknesses. The study found that the quality of instruction at CENTEX sets it apart from other public elementary schools. Thus we began to plan turning CENTEX into a "hands-on training laboratory" designed for excellent elementary teachers. To achieve this, the program will standardize components across the two campuses in Manila and Batangas, and then document the results. The results will then enable us to create long-term plans for the program.

The result of the review has also reinforced our latest education program, the Training Institute. It is a two-year teacher training program that focuses on four essential elements of lifelong learning—classroom pedagogy, development of critical thinking skills, values clarification, and use of technology in the classroom.

In 2015, we expanded the Training Institute to six new schools in the Visayas and Mindanao, training and mentoring 172 teachers, principals, and district supervisors from Sagay, Negros Occidental; Cagayan de Oro City; and Iloilo City.

To date, the Training Institute has reached over 500 teachers and principals, including Mabel Magallon, principal of the Father William F. Masterson Elementary School in Cagayan de Oro City. According to her, the trainings conducted reminded her that, "I will always be a teacher and not only a principal. I am a servant leader. I am a mentor and a coach too. As educators, we play a big role in breaking the chain of poverty by molding future learners."

We were also able to demonstrate the program's pedagogy at the United Nations Educational, Scientific, and Cultural Organization (UNESCO) Conference on Cultural Concerns in Teaching Philosophy for Children and Youth in the Asia Pacific Region, helping us create more awareness for the different level of training that we provide at the institute.

Text2Teach is another education program implemented with the help of fellow education advocates. It is a public-private partnership program of Ayala Foundation, Microsoft Philippines, Globe Telecom, the Department of Education (DepEd), the Department of Interior and Local Government, and the Union of Local Authorities of the Philippines.

The program was geared for its mainstreaming phase this year, but faced a few challenges along the way, particularly on how it would transition from phase 4, which aimed to provide 850 public elementary schools access to educational videos in English, Mathematics, Science, and Values Education. Nevertheless, Text2Teach exceeded its phase 4 targets, reaching a total of 876 schools.

Since its launch in 2003, the program has reached over 300,000 students from 1,433 schools in 143 cities and municipalities throughout the Philippines.

COM M I T M EN T 48

A total of 1,375 students have graduated from CENTEX Manila and Batangas since the start of the program in 1998.

Some of the top student leaders in the country take to heart the value of servant leadership, championed by the Ayala Young Leaders Congress.

Professor Zosimo Lee (second from left) of the University of the Philippines provides our Training Institute participants a greater appreciation of philosophy for children.

COM M I T M EN T 49

Teaching the Youth Authentic Leadership"Be leaders for change," was Jaime Florcruz's challenge to the participants of the 17th Ayala Young Leaders Congress (AYLC), held from February 10 to 13. Florcruz, a former bureau chief of CNN in Beijing, was the event's keynote speaker. He said while critics of the current generation think that the youth are "a bunch of egotistic, narcissistic, selfish 'me, me, me' brats," he didn't believe them. "But you need to help me prove your critics wrong."

He joined three other speakers—Reese Fernandez-Ruiz of Rags2Riches, Magsaysay Award-winning teacher Randy Halasan, and filmmaker and writer Pepe Diokno—in sharing their own journeys through leadership with 81 of the country's top youth leaders. They also related to participants how their passion—or "#hugot" in colloquial terms—could bring about personal and community transformation.

This year's theme for AYLC was "Being True, Leading True." The event's participants came from the country's top colleges and universities, as well as representatives from military and police academies, and seminaries.

Changing Lives in More CommunitiesOur sustainable livelihood pillar, meanwhile, has seen a number of positive changes in 2015.

First, we created a business development team to develop end markets for our community-made products. By the end of the year, these products made P1,138,835 in sales, with business units of the Ayala group contributing 67 percent to this figure.

We continued to support the livelihood of local families in the village of Sibaltan in El Nido, Palawan, particularly members of the Sibaltan Women Weavers Association (SWWA), which weaves buri bayongs for local resorts in the area. The group took steps toward mainstreaming its operations, having completed their registration with the Securities and Exchange Commission, and sought the necessary permits from the Bureau of Internal Revenue and the municipality.

Meanwhile, we organized several job fairs in the community of Southville 7 in Calauan, Laguna, which helped generate employment for 111 relocatees. Our partnership with MDC Greens generated 10 additional jobs as they hired locals to help grow ornamentals in a 2-hectare farm in the area.

We also work with our Iraya-Mangyan community in Talipanan, Oriental Mindoro, as they work toward preserving their tradition of weaving, while at the same time earning from their efforts to produce beautifully woven items. Sales for the Iraya-Mangyan's unique woven products, available in retail stores in three Ayala Malls (Glorietta, Greenbelt, and Alabang Town Center), have reached P4.3 million. These products were also featured in the Department of Tourism's "Countdown to Christmas: Celebrating the Regions," a products fair that ran from September 21 to December 18. On top of that, we continue to document the mini-tour of the Iraya-Mangyan village and have come up with more plans to make it a tourist hotspot, as Mindoro's popularity as a tourist destination grows.

Championing Filipino Heritage and CreativityThis year was a year of growth for both the Ayala Museum and the Filipinas Heritage Library (FHL). Overall, our arts and culture pillar reached over 4.6 million individuals worldwide, through visitorship, participation in our educational and cultural programs, or through our social media presence.

We branched outside the Ayala Museum’s walls through our traveling exhibitions, which enabled us to bring Kisame, the Ayala Doll Collection, and works of Botong Francisco to more communities around the country. Overall, we reached an estimated 56,000 individuals in our exhibits at festivals and local museums in various parts of the Philippines.

Members of the Sibaltan Women Weavers Association produce buri bags that serve as a source of livelihood for their families, and to preserve the weaving tradition in El Nido, Palawan.

COM M I T M EN T 50

We also presented changing exhibitions throughout the year, including sculptures by Eduardo Olbes; the early works of regionally acclaimed Filipino painter Ronald Ventura; and works of Filipino masters Juan Luna and Fernando Amorsolo. We launched OpenSpace, a new program for outdoor exhibitions held at the Ayala Museum Plaza, with works by Toym Imao and Leeroy New catching the attention of art enthusiasts and casual observers alike.

These exhibitions were made possible with the support of private collectors who entrusted part of their art collection with us. Privately owned artworks that appeared in some of our major exhibitions for the year were valued at P575.7 million.

In May, we joined the rest of the world in celebrating International Museum Day, during which visitors could enter the museum for free. This year's activities kept with the International Council of Museums' theme of Museums for a Sustainable Society. A total of 2,218 visitors flocked to the museum where we featured the culture of Philippine indigenous groups, and businesses that promote the use of local materials and preservation of traditional practices.

The Ayala Museum also reached out to history and music enthusiasts through History Comes Alive, a lecture

The Ayala Museum presented the works of National Artist Cesar Legaspi in the exhibit “Cesar Legaspi: The Brave Modern.”

series featuring historian and award-winning writer Ambeth Ocampo, as well as the Manila Symphony Orchestra's Rush Hour Concerts. As a result, the museum is increasingly popular as a hub for cultural experiences that span classical and contemporary art.

Our Dioramas of Philippine History are one of the longest-running—and most beloved—exhibits at the museum. This year we brought it to a new generation of digital natives with our augmented reality app, which we developed in partnership with Globe and the Harish and Johnsen Group. The app is designed to give visitors a more immersive and enlightening experience of our dioramas.

To encourage even more art enthusiasts to visit the museum, we re-launched the Ayala Museum Membership program in time for the Christmas holiday. The membership package includes a special edition membership card and a copy of the maiden issue of the Ayala Museum Magazine, dubbed the "gift of inspiration for every occasion." Cardholders are treated to different perks, such as unlimited museum access for an entire year, discounts at the museum shop and café, invitations to events, and special benefits with our partner establishments.

The entire year has presented

us with opportunities to change

even more lives for the better,

and bring Filipino heritage

and culture to a bigger part

of the world.

COM M I T M EN T 51

Col. Emmanuel de Ocampo, a veteran of the Second World War, shares some of his experiences during the commemoration of the 70th anniversary of the Battle for Manila, organized by the Filipinas Heritage Library.

National Artist BenCab at the opening of the show “BenCab Portraits.”

As part of its partnership with the Prince’s School of Traditional Arts, the Ayala Museum held a workshop on geometry and biomorphic design found in nature. This is in line with the “Art and the Order of Nature” exhibition.

COM M I T M EN T 52

The works of the abstract artist Fernando Zobel, as well as some elements from his studio, are featured at the Ayala Museum’s Third Floor Galleries.

Guests view a map of the walled city of Intramuros, before it was severely damaged by the Battle for Manila in 1945. This was part of the “Manila, My City at War” exhibit organized by the Filipinas Heritage Library.

COM M I T M EN T 53

These are lessons that will

guide us moving forward,

and inspire us to continue

with all the good work done

by everyone at the foundation,

our partners, and stakeholders.

These events and initiatives at the museum have helped it gain international media attention from the likes of the Asian Financial Times and the New York Times. It has also received top positive reviews from the popular travel review website TripAdvisor, helping increase our foreign visitorship by 12.32 percent compared with the previous year.

Social media also helped turn the spotlight on the museum, with recommendations coming from sources as varied as local airline Cebu Pacific and millennials. To date, we have reached over 3.5 million people on different social media platforms.

For its part, the Filipinas Heritage Library (FHL) continued its advocacy in preserving Filipino history and culture with a series of events that commemorated the past, and by building a bridge that connects the past with the future.

In February, we commemorated the 70th anniversary of the Battle for Manila through Manila, My City at War. The month-long commemoration featured carefully curated pocket events and emotional testimonials from survivors of the battle that finally ended Japanese military rule of the Philippines in World War II. This proved to be one of the best-received events in Metro Manila during the month, as it attracted 11,371 visitors.

Also remarkable was the reception for our signature lecture-exhibit combination that featured photographs of the Filipino photographer Felix Laureano, images of Batanes, and the 125th birth anniversary of former Philippine President Elpidio Quirino. A combined total of 13,853 attended these events, with 88 percent of our guests being converted into paying patrons in August, compared with 47 percent in February.

We also began to work on digitizing the Ulahingan, an epic of the indigenous Manobo group in Mindanao. It is an oral tradition passed from generation to generation, and has 79 episodes with each episode having 4,000 to 6,000 lines. This project recently placed third in EMC Corporation's Heritage Trust contest, providing it with a grant worth US$5,000 that can help in preserving and enabling access to this epic. A multinational IT company, EMC runs the competition to support cultural initiatives with an emphasis on digital preservation. We were the first Filipino entry that reached the competition's finals round.

Acting as a bridge between the past and the future, we also revamped our content strategy and improved our online presence. These help us bring the country's rich history closer

to a younger audience, and maintain FHL's stature as a leading digital resource for Filipino history and culture.

Taken together, the entire year has presented us with opportunities to change even more lives for the better, and bring Filipino heritage and culture to a bigger part of the world. We grabbed those opportunities, and by doing so, we learned a lot of things. These are lessons that will guide us moving forward, and inspire us to continue with all the good work done by everyone at the foundation, our partners, and stakeholders.

How we make an impact

LEAVING A LEGACY

COM M I T M EN T 56

t Ayala Foundation, we are passionate about making a difference in people's lives. Whether it is making fellow Filipinos proud of their heritage, helping

them rebuild after a disaster, or inspiring people everyday with art, we do all these and more in pursuit of that passion.

This year, we went beyond the walls of the Ayala Museum, built new structures in the Visayas, and tore down barriers with kindness and creativity. This is the story of how we made our mark in people's minds in 2015.

Showcasing the Philippines’ Finest TreasuresSeveral hundreds of years before the Spanish Empire colonized the Philippines, civilized societies already flourished in different parts of the archipelago. While they

RAISING OUR FLAGCultivating Filipino pride with culture, compassion, and kindness

AAbove Our donors and partners helped us build a disaster-resilient, two-story school building for the teachers and students of Carles Central School in Carles, Iloilo—one of the areas

severely affected by Typhoon Yolanda.Previous A gold object in the shape of a kinnari, which dates between the 10th to 13th century, found in Surigao. This is part of the Ayala Museum’s precolonial gold collection,

which wowed audiences when it was displayed at the Asia Society in New York.

left little evidence of their existence, those that survived continue to astonish to this day.

Their gold ornaments endure—proof of the country's vast resources of gold, and of our ancestors' artful transformation of this element into a thing of beauty. Many of these eventually fell into the hands of private collectors, not to be appreciated in all their glory until recently.

In September, we exhibited some of the Ayala Museum's finest examples of Philippine goldwork in Philippine Gold: Treasures of Forgotten Kingdoms at the Asia Society in New York. Displayed alongside items from the precolonial gold collection of the Bangko Sentral ng Pilipinas, some items from the Ayala Museum’s gold collection were put on view outside of the Philippines for the first time. The landmark event ran

COM M I T M EN T 57

from September 11 to January 3 the following year, and was made possible with our partnership with the Asia Society.

The New York Times called it "a gorgeous and historically intriguing exhibition." It received an exceptionally warm reception during its run, with 6,620 visitors seeing it as of October 31.

Rising from the RubbleWe also continued to preserve our heritage at home. We helped in the reconstruction of a historic structure destroyed during the 7.2-magnitude earthquake that hit central Visayas in 2013.

In April, we officially turned over the Dauis Church Watchtower to the parish of Our Lady of Assumption in Dauis, Bohol. A team of 29 Boholanos played a key role in the historic watchtower's restoration. They received training in heritage reconstruction through Ayala Foundation's partnership with Escuela Taller de Filipinas Foundation, the Diocese of Tagbilaran, the provincial government of Bohol, and the municipal government of Dauis. Each scholar underwent rigorous training in traditional masonry for 12 months, including hands-on training in the restoration of the watchtower. After this project, the team is expected to contribute in the restoration of other damaged churches in Bohol and other heritage structures in central Visayas.

Our work in helping in the recovery of victims of typhoon Haiyan in 2013 also continued this year, even after much of the local and international support for these communities had tapered off one year after the tragedy. In Carles, Iloilo, we turned over two disaster-resilient school buildings with a combined total of 12 classrooms to Carles Central School and Cawayan Elementary School. These buildings can withstand 250-kph winds, and are equipped with emergency alarm systems and shower areas in order to accommodate evacuees in times of disaster.

In addition, we began a feeding program in Carles that will run until school year 2016–2017. Teachers will also receive skills enhancement through our Training Institute program.

Meanwhile, we handed over 66 fishing boats to affected families in barangay Poblacion and Cawayan. The Negrense Volunteers for Change Foundation's Peter Project oversaw the construction of these boats. They also helped identify and monitor the progress of the recipient families. To date, we have handed over 191 boats in Negros Occidental, Capiz, Leyte, and Iloilo.

This is the story of how we

made our mark in people’s

minds in 2015.

One of the families from northern Iloilo who received a fishing boat, as part of our post-Yolanda rehabilitation initiatives.

COM M I T M EN T 58

artists also shared their time and talent for free in this year's event, including Leeroy New and his Bangaw installation, Valerie Chua's ethereal illustrations, and performances by the Manila Symphony Orchestra and TAGO Jazz Artists.

In just two years, Inspire Every Day! has become one of the most awaited events at the Ayala Museum. This year, 4,400 visitors participated in our different activities throughout the day.

Making a difference in people's lives has been Ayala Foundation’s passion for 54 years. This will remain, as long as there are promising youth who wish to change the country for the better, families who strive to rise again even after a disaster, and creative people who want to build a more beautiful world with their art. We will always be there to give them our support and inspiration. And we will do all these while proudly raising the flag of this archipelago that we call home, the Philippines.

Moreover, we constructed eight additional disaster-resilient classrooms in Cano-An Elementary School in Estancia, Iloilo. The school will also be a part of our feeding program, while its teachers will participate in the Training Institute program. Select families of the municipality were provided with seeds and fertilizers to help rehabilitate 63 hectares of farmlands there.

Our partnerships helped make providing aid in the Central Visayas possible. For the construction of the classrooms, we partnered with the Makati Development Corporation, with additional support from Globe and Ayala Land. Meanwhile, our private donors will continue to help us with our feeding programs until the end of the 2017 school year.

Overall, our rehabilitation work covers 300 hectares of farmlands in Iloilo, Leyte, and Negros Occidental. We also provided sari-sari stores, pedicabs, and fishing boats for select families in various areas, to aid in their continued recovery from the onslaught of typhoon Haiyan.

Our work will continue in the foreseeable future as several communities in Iloilo still require assistance. In 2016, we will provide additional boats for fishing families in Binuluangan Island, Carles, and start constructing five classrooms for Dayhagan Elementary School, also in Carles. These will replace the current set of severely damaged and makeshift classrooms, and provide an extra one for the school's incoming Grade 7 students.

Spreading the Gift of InspirationAside from preserving our heritage and helping in the recovery of families in disaster-stricken areas, we also make a difference by inspiring people through art. In July, the Ayala Museum ushered the return of its Inspire Every Day! campaign. It is a free admissions day that encourages people to explore Philippine culture and history through the museum’s various exhibitions, musical performances, and conversations with the country's top artists.

This year's event revolved around the concept of kindness. In exchange for viewing the exhibitions and joining other pocket events of the day for free, visitors were challenged to explore volunteer opportunities with Ayala Foundation. They could volunteer as storytellers or as futsal and ping-pong coaches at CENTEX, as photographers in our various events, or as graphic artists, video editors, or photo editors of some of our marketing collaterals. Some of the country’s well-known

Making a difference

in people’s lives has been

Ayala Foundation’s passion

for 54 years.

COM M I T M EN T 59

When the Ayala Museum opened its gates for free to kick off “Inspire Every Day! ”, over 4,400 guests came—many of whom even signed up for possible volunteerism activities.

The “Bangaw ” installation from acclaimed young artist Leeroy New at the Ayala Museum fountain area welcomed guests who participated in its “Inspire Every Day! ” campaign.

We partnered with the Negrense Volunteers for Change Foundation to provide fishing boats for Yolanda-affected communities in Negros Occidental, Leyte, Iloilo, and Capiz.

Jaime Augusto Zobel de AyalaCo-Chairman

ayala foundation BOARD OF TRUSTEES

Gerardo Ablaza, Jr.Trustee

Alfredo AyalaTrustee

Victoria GarchitorenaTrustee

Jaime LayaTrustee

Fernando Zobel de AyalaCo-Chairman

Ruel MarananPresident

Ernest Lawrence CuTrustee

Bernard Vincent DyTrustee

Mercedita NolledoTrustee

John Philip OrbetaTrustee

Ruel T. MarananPresident

Romualdo L. KatigbakSenior Director for Finance and Chief Financial Officer

Maria Elizabeth L. GustiloSenior Director, Arts and Culture

Ma. Fatima C. MijaresSenior Director, Human Resources and Corporate Services

Erwin P. LocsinSenior Director and Chief Information Officer

Celerina R. AmoresSenior Director, Corporate Communications

ayala foundation MANAGEMENT COMMITTEE

COM M I T M EN T 63

STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of Ayala Foundation Inc. is responsible for the preparation and fair presentation of the financial statements for the years ended December 31, 2015 and 2014, including the additional components attached therein, in accordance with Philippine Financial Reporting Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. The Board of Directors reviews and approves the financial statements and submits the same to the stockholders. Sycip Gorres Velayo & Co., the independent auditors, appointed by the stockholders, has examined the financial statements of the company in accordance with Philippine Standards of Auditing, and in its report to the stockholders, has expressed its opinion on the fairness of presentation upon completion of such examination. JAIME AUGUSTO ZOBEL DE AYALA Co-Chairman FERNANDO ZOBEL DE AYALA Co-Chairman RUEL T. MARANAN President ROMUALDO L. KATIGBAK Chief Finance Officer Signed this 30th day of March, 2016

.

STATEMENT OF MANAGEMENT’S RESPONSIBILITYFOR FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REPORT The Board of Trustees Ayala Foundation, Inc. 8th Floor, 111 Paseo de Roxas Building Paseo de Roxas corner Legaspi Street Legaspi Village, Makati City Report on the Financial Statements We have audited the accompanying financial statements of Ayala Foundation, Inc. (a non-stock, non-profit corporation), which comprise the statements of financial position as at December 31, 2015 and 2014, and the statements of activities, statements of changes in fund balances and statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines

Tel: (632) 891 0307 Fax: (632) 819 0872 ey.com/ph

BOA/PRC Reg. No. 0001, December 14, 2015, valid until December 31, 2018 SEC Accreditation No. 0012-FR-4 (Group A), November 10, 2015, valid until November 9, 2018

A member firm of Ernst & Young Global Limited

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Ayala Foundation, Inc. as at December 31, 2015 and 2014, and the statements of activities and its cash flows for the years then ended in accordance with Philippine Financial Reporting Standards. Report on the Supplementary Information Required Under Revenue Regulations 15-2010 Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 16 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of Ayala Foundation, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. SYCIP GORRES VELAYO & CO. Jessie D. Cabaluna Partner CPA Certificate No. 36317 SEC Accreditation No. 0069-AR-3 (Group A), February 14, 2013, valid until April 30, 2016 Tax Identification No. 102-082-365 BIR Accreditation No. 08-001998-10-2015, March 4, 2015, valid until March 23, 2018 PTR No. 5321616, January 4, 2016, Makati City March 30, 2016


INDEPENDENT AUDITORS’ REPORT ON SUPPLEMENTARY SCHEDULE The Board of Trustees Ayala Foundation, Inc. 8th Floor, 111 Paseo de Roxas Building Paseo de Roxas corner Legaspi Street Legaspi Village, Makati City We have audited in accordance with Philippine Standards on Auditing, the financial statements of Ayala Foundation, Inc. (a non-stock, non-profit corporation) (the Foundation), as at and for the years ended December 31, 2015 and 2014, and have issued our report thereon dated March 30, 2016. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of all the effective standards and interpretations as of December 31, 2015 is the responsibility of the Foundation’s management. This schedule is presented for purposes of complying with Securities Regulation Code Rule 68, As Amended (2011) and is not part of the basic financial statements. This schedule have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state, in all material respects, the information required to be set forth therein in relation to the basic financial statements taken as a whole. SYCIP GORRES VELAYO & CO. Jessie D. Cabaluna Partner CPA Certificate No. 36317 SEC Accreditation No. 0069-AR-3 (Group A), February 14, 2013, valid until April 30, 2016 Tax Identification No. 102-082-365 BIR Accreditation No. 08-001998-10-2015, March 4, 2015, valid until March 23, 2018 PTR No. 5321616, January 4, 2016, Makati City March 30, 2016

SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines

Tel: (632) 891 0307 Fax: (632) 819 0872 ey.com/ph

BOA/PRC Reg. No. 0001, December 14, 2015, valid until December 31, 2018 SEC Accreditation No. 0012-FR-4 (Group A), November 10, 2015, valid until November 9, 2018


COM M I T M EN T 67

AYALA FOUNDATION, INC. (A Non-Stock, Non-Profit Corporation) STATEMENTS OF FINANCIAL POSITION December 31 2015 2014

ASSETS

Current Assets Cash and cash equivalents (Notes 4 and 14) P=125,065,263 P=114,193,521 Receivables - net (Notes 5 and 14) 6,655,133 12,773,842 Merchandise inventories - net (Note 6) 14,989,308 15,370,483 Other current assets (Note 7) 10,976,697 14,354,232 Total Current Assets 157,686,401 156,692,078

Noncurrent Assets

Property and equipment (Note 8) 193,053,397 191,518,970 Software cost (Note 9) 1,335,312 1,894,895 Available-for-sale financial assets (Notes 10 and 14) 2,374,047,659 2,410,772,645 Pension asset - net (Note 12) 6,236,931 7,333,916 Total Noncurrent Assets 2,574,673,299 2,611,520,426 P=2,732,359,700 P=2,768,212,504

LIABILITIES AND NET ASSETS

Current Liability Accounts and other payables (Notes 11 and 14) P=83,633,730 P=84,366,695

Net Assets (Note 13) Unrestricted 19,418,454 19,768,030 Temporarily restricted 317,090,206 304,980,860 Permanently restricted 2,187,714,273 2,187,714,273 Net unrealized gain on available-for-sale financial assets

(Note 10) 117,971,385 164,060,597 Remeasurement gain on defined benefit obligation

(Note 12) 6,531,652 7,322,049 Total Net Assets 2,648,725,970 2,683,845,809 P=2,732,359,700 P=2,768,212,504 See accompanying Notes to Financial Statements.

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13)

Tem

pora

rily

Restr

icte

d(N

ote

13)

Perm

anen

tlyR

estri

cted

(Not

e 13

)

Unr

ealiz

edG

ain

on A

FSFi

nanc

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sset

s(N

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Rem

easu

rem

ent

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n (L

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on

Def

ined

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fit O

blig

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n(N

ote

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Tota

l

Rev

enue

, gai

ns a

nd o

ther

supp

orts

:

Publ

ic su

ppor

t P=–

P=328

,447

,711

P=–P=–

P=–P=3

28,4

47,7

11

In

vestm

ent a

nd in

tere

st (N

otes

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nd 1

0)

60,0

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005,

183,

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––

– 6

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4,86

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s –

284,

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–28

4,03

3

364,

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113

29,0

52,8

62–

––

393,

914,

975

Expe

nses

and

loss

es:

Proj

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Not

e 13

) 33

0,40

4,30

7–

––

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0,40

4,30

7

Gen

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and

adm

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rativ

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44,0

10,8

16–

––

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,010

,816

Net

loss

from

oth

er a

ctiv

ities

(Not

e 15

) –

12,3

89,3

52–

––

12,3

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52

37

4,41

5,12

312

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,352

––

–38

6,80

4,47

5

Exce

ss (d

efic

it) o

f rev

enue

, gai

ns a

nd o

ther

supp

orts

ove

r ex

pens

es a

nd lo

sses

(9

,553

,010

)16

,663

,510

––

–7,

110,

500

Net

unr

ealiz

ed (g

ain)

loss

on

avai

labl

e-fo

r-sal

e fin

anci

al a

sset

s –

––

117,

542,

776

–11

7,54

2,77

6 Re

mea

sure

men

t gai

n on

def

ined

ben

efit

oblig

atio

n –

––

–27

,875

,324

27,8

75,3

24

CH

AN

GES

IN N

ET A

SSET

S (9

,553

,010

)16

,663

,510

–11

7,54

2,77

627

,875

,324

152,

528,

600

NET

ASS

ETS

AT

BEG

INN

ING

OF

YEA

R

29,3

21,0

4028

8,31

7,35

02,

187,

714,

273

46,5

17,8

21(2

0,55

3,27

5)2,

531,

317,

209

NET

ASS

ETS

AT

END

OF

YEA

R

P=19,

768,

030

P=304

,980

,860

P=2,1

87,7

14,2

73P=1

64,0

60,5

97P=7

,322

,049

P=2,6

83,8

45,8

09

Se

e ac

com

pany

ing

Not

es to

Fin

anci

al S

tate

men

ts.

AY

ALA

FO

UN

DA

TIO

N, I

NC

. (A

Non

-Sto

ck, N

on-P

rofit

Cor

pora

tion)

ST

ATE

MEN

TS O

F C

HA

NG

ES IN

FU

ND

BA

LAN

CES

Yea

r En

ded

Dec

embe

r 31

, 201

5

Unr

estr

icte

d Te

mpo

rari

lyR

estr

icte

d Pe

rman

ently

Res

tric

ted

Unr

ealiz

edG

ain

(Los

s) o

nA

FSFi

nanc

ial A

sset

s

Rem

easu

rem

ent

Gai

n (L

oss)

on

Def

ined

Ben

efit

Obl

igat

ion

Tota

l FU

ND

BA

LAN

CES

N

et a

sset

s at b

egin

ning

of y

ear

P=19,

768,

030

P=304

,980

,860

P=2

,187

,714

,273

P=1

64,0

60,5

97

P=7,3

22,0

49

P=2,6

83,8

45,8

09

Exce

ss (d

efic

it) o

f rev

enue

, gai

ns a

nd o

ther

supp

orts

over

exp

ense

san

d lo

sses

(3

49,5

76)

12,1

09,3

46

– –

– 11

,759

,770

N

et u

nrea

lized

gai

n (lo

ss) o

n av

aila

ble-

for-s

ale

finan

cial

ass

ets

– –

– (4

6,08

9,21

2)–

(46,

089,

212)

Re

mea

sure

men

t gai

n (lo

ss) o

n de

fined

ben

efit

oblig

atio

n –

– –

– (7

90,3

97)

(790

,397

) N

et a

sset

s at e

nd o

f yea

r P=

19,4

18,4

54

P=317

,090

,206

P=2

,187

,714

,273

P=1

17,9

71,3

85

P=6,5

31,6

52

P=2,6

48,7

25,9

70

Yea

r End

ed D

ecem

ber 3

1, 2

014

Unr

estri

cted

Tem

pora

rily

Restr

icte

dPe

rman

ently

Res

trict

ed

Unr

ealiz

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ain

on A

FSFi

nanc

ial A

sset

s

Rem

easu

rem

ent

Gai

n (L

oss)

on

Def

ined

Bene

fit O

blig

atio

nTo

tal

FUN

D B

ALA

NC

ES

Net

ass

ets a

t beg

inni

ng o

f yea

r P=2

9,32

1,04

0 P=2

88,3

17,3

50

P=2,1

87,7

14,2

73

P=46,

517,

821

(P=20

,553

,275

)P=2

,531

,317

,209

Ex

cess

(def

icit)

of r

even

ue, g

ains

and

oth

er su

ppor

ts ov

er e

xpen

ses

and

loss

es

(9,5

53,0

10)

16,6

63,5

10

– –

– 7,

110,

500

Net

unr

ealiz

ed g

ain

(loss

) on

avai

labl

e-fo

r-sal

e fin

anci

al a

sset

s –

– –

117,

542,

776

– 11

7,54

2,77

6 Re

mea

sure

men

t gai

n (lo

ss) o

n de

fined

ben

efit

oblig

atio

n –

– –

– 27

,875

,324

27

,875

,324

N

et a

sset

s at e

nd o

f yea

r P=1

9,76

8,03

0 P=3

04,9

80,8

60

P=2,1

87,7

14,2

73

P=164

,060

,597

P=7

,322

,049

P=2

,683

,845

,809

See

acco

mpa

nyin

g N

otes

to F

inan

cial

Sta

tem

ents

.

COM M I T M EN T 71

AYALA FOUNDATION, INC. (A Non-Stock, Non-Profit Corporation) STATEMENTS OF CASH FLOWS Years Ended December 31 2015 2014

CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets (P=35,119,839) P=152,528,600Adjustments for: Net unrealized loss (gain) on AFS financial assets (Note 10) 46,089,212 (117,542,776) Investment and interest income (Notes 4 and 10) (97,684,500) (65,183,231) Remeasurement loss (gain) on defined benefit obligation

(Note 12) 790,397 (27,875,324) Depreciation and amortization (Note 8 and 9) 11,099,962 9,387,299 Pension expense (Note 12) 5,706,971 9,097,394 Provision for doubtful accounts (Notes 5 and 13) − 1,393,553 Provision for inventory loss (Note 6) 37,991 − Gain on disposal of property and equipment (603,999) (203,097)Changes in net assets before changes in working capital (69,683,805) (38,397,582)Decrease (increase) in: Receivables 6,118,709 411,794 Merchandise inventories 343,184 970,792 Other current assets 3,377,535 (4,154,912)

Pension asset (Note 12) (5,400,383) (9,111,773)Increase (decrease) in accounts and other payables (732,965) 9,240,112Net cash used in operating activities (65,977,725) (41,041,569)

CASH FLOWS FROM INVESTING ACTIVITIES Net disposals (additions) to: Property and equipment (Note 8) (11,894,730) (39,454,646) Software cost (Note 9) (225,000) (1,835,000) AFS financial assets (Note 10) 21,069,444 (708,658)Proceeds on disposal of property and equipment 648,923 505,002Investment and interest income received 67,250,830 63,658,985Net cash provided by investing activities 76,849,467 22,165,683

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 10,871,742 (18,875,886)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 114,193,521 133,069,407

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4) P=125,065,263 P=114,193,521

See accompanying Notes to Financial Statements.

COM M I T M EN T 72

AYALA FOUNDATION, INC. (A Non-Stock, Non-Profit Corporation) NOTES TO FINANCIAL STATEMENTS 1. Organization and Tax Exemption

Ayala Foundation, Inc. (the Foundation) was registered with the Securities and Exchange Commission (SEC) on December 28, 1961 as a non-stock, non-profit corporation primarily for the following purposes:

a. To provide financial support, within the Philippines and abroad, for the studies of selected

students and for the attendance at scientific conferences by qualified and competent scholars;

b. To undertake community development and livelihood projects designed to improve the quality of life of disadvantaged Filipinos;

c. To undertake ventures that will transfer appropriate technology to urban and rural groups that

will give them additional income and allow them to put up profitable enterprises that will benefit themselves and the community;

d. To provide scholarships to poor but deserving urban and rural youth in vocational, technical,

livelihood and entrepreneurial courses;

e. To preserve and enhance Philippine Art and Culture by, among other things, establishing and maintaining museums, supporting ethnic artisans and craftsmen, and undertaking related activities that will encourage Filipinos, especially our youth, to appreciate their heritage;

f. To organize, staff and finance research projects which may be established in furtherance of the

purposes and objectives of the Foundation; and

g. To promote, support, and finance the publication of reports prepared under the auspices of the Foundation.

On February 15, 2010, the Foundation amended its Articles of Incorporation: (a) extending the term for which the Foundation is to exist for another fifty (50) years from December 28, 2011 and (b) to declassify the Foundation as a science and research foundation.

As a non-stock, non-profit corporation, the Foundation falls under Section 30 (E) of the Republic Act No. 8424 entitled, “An Act Amending the National Internal Revenue Code, as Amended, and for Other Purposes”. The receipts from activities conducted in pursuit of the objectives for which the Foundation was established are exempt from income tax. However, any income arising from its real or personal properties, or from activities conducted for profit, regardless of the disposition made of such income, is subject to income tax.

The Foundation is duly accredited by the Philippine Council for Non-Government Organization Certification (PCNC) and renewed its registration as a donee institution on August 10, 2015 in accordance with the provisions of Revenue Regulations No. 13-98. Donations received shall entitle the donors to full or limited deduction pursuant to Section 34 (H) (paragraphs 1 or 2) and exemption from donor’s tax pursuant to Section 101 (A) (3) of the National Internal Revenue Code of 1997. The Certificate of Registration shall be valid until February 17, 2018 unless sooner revoked by the Bureau of Internal Revenue (BIR) or upon withdrawal of the Certificate of Accreditation by PCNC.

COM M I T M EN T 73

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The Foundation’s registered office address is at 8th Floor, 111 Paseo de Roxas Building, Paseo de Roxas corner Legaspi Street, Legaspi Village, Makati City.

The accompanying financial statements were approved and authorized for issue by the Board of Trustees on March 30, 2016.

2. Summary of Significant Accounting Policies

Basis of Preparation The financial statements of the Foundation have been prepared using the historical cost basis, except for available-for-sale (AFS) financial assets that have been measured at fair value. The accompanying financial statements are presented in Philippine Peso (P=) which is the Foundation’s presentation and functional currency. All amounts are rounded off to the nearest peso unit unless otherwise indicated.

Consistent with the requirement of Philippine Accounting Standard (PAS) 8, Accounting Policies, Changes in Accounting Estimates and Errors, the Foundation applied Statement of Financial Accounting Standards No. 117, Financial Statements of Not-for-Profit Organizations. This Statement establishes standards for general-purpose external financial statements provided by a not-for-profit organization. It specifies that those statements include a statement of financial position, a statement of activities, statement of changes in fund balances and a statement of cash flows.

Statement of Compliance The accompanying financial statements have been prepared in compliance with Philippine Financial Reporting Standards (PFRS).

Adoption of New and Amended Accounting Standards and Interpretations The accounting policies adopted in the preparation of the financial statements are consistent with those of the previous financial years except for the new and amended PFRS, PAS and Philippine Interpretations which became effective January 1, 2015. Unless otherwise indicated, the adoption of the following new and amended standards and interpretations did not have any significant impact on the Foundation’s financial statements.

PAS 19, Employee Benefits – Defined Benefit Plans: Employee Contributions (Amendments)

Annual Improvements to PFRSs (2010-2012 cycle) The Annual Improvements to PFRSs (2010-2012 cycle) are effective for annual periods beginning on or after January 1, 2015 and did not have a material impact on the Foundation. They include:

PFRS 2, Share-based Payment – Definition of Vesting Condition PFRS 3, Business Combinations – Accounting for Contingent Consideration in a Business

Combination PFRS 8, Operating Segments – Aggregation of Operating Segments and Reconciliation of the

Total of the Reportable Segments’ Assets to the Entity’s Assets PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets – Revaluation Method

– Proportionate Restatement of Accumulated Depreciation and Amortization PAS 24, Related Party Disclosures – Key Management Personnel

COM M I T M EN T 74

- 3 -

Annual Improvements to PFRSs (2011-2013 cycle) The Annual Improvements to PFRSs (2011-2013 cycle) are effective for annual periods beginning on or after July 1, 2014 and did not have a material impact on the Foundation. They include:

PFRS 3, Business Combinations – Scope Exceptions for Joint Arrangements PFRS 13, Fair Value Measurement – Portfolio Exception PAS 40, Investment Property

Standards and Interpretation issued but not yet effective The Foundation will adopt the following new and amended Standards and Philippine Interpretations of International Financial Reporting Interpretations Committee (IFRIC) enumerated below when these become effective. Except as otherwise indicated, the Foundation does not expect the adoption of these new and amended standards and Philippine Interpretations to have significant impact on the financial statements.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 was issued in May 2014 and establishes a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15 revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in IFRS 15 provide a more structured approach to measuring and recognizing revenue. The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under IFRS. Either a full or modified retrospective application is required for annual periods beginning on or after January 1, 2018 with early adoption permitted. The Foundation is currently assessing the impact of IFRS 15 and plans to adopt the new standard on the required effective date once adopted locally.

Effective January 1, 2016

PAS 1, Presentation of Financial Statements – disclosure initiative PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets – Clarification of

Acceptable Methods of Depreciation and Amortization (Amendments) PAS 16, Property, Plant and Equipment, and PAS 41, Agriculture – Bearer Plants

(Amendments) PAS 27, Separate Financial Statements – Equity Method in Separate Financial Statements

(Amendments) PFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operations

(Amendments) PFRS 10, PFRS 12 and PAS 28, Investment Entities: Applying the Consolidation Exception PFRS 14, Regulatory Deferral Accounts

Annual Improvements to PFRSs (2012-2014 cycle) The Annual Improvements to PFRSs (2012-2014 cycle) are effective for annual periods beginning on or after January 1, 2016 and are not expected to have a material impact on the Foundation. They include:

PFRS 5, Non-current Assets Held for Sale and Discontinued Operations – Changes in

Methods of Disposal PFRS 7, Financial Instruments: Disclosures – Servicing Contracts

COM M I T M EN T 75

- 4 -

Applicability of the Amendments to PFRS 7 to Condensed Interim Financial Statements PAS 19, Employee Benefits – regional market issue regarding discount rate PAS 34, Interim Financial Reporting – disclosure of information ‘elsewhere in the interim

financial report’ Effective January 1, 2018

PFRS 9, Financial Instrument

In July 2014, the IASB issued the final version of IFRS 9, Financial Instruments, the new standard (renamed as PFRS 9) reflects all phases of the financial instruments project and replaces PAS 39, Financial Instruments: Recognition and Measurement, and all previous versions of PFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. PFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. Early application of previous versions of PFRS 9 (2009, 2010 and 2013) is permitted if the date of initial application is before February 1, 2015. The Foundation did not early adopt PFRS 9. The adoption of PFRS 9 may have an effect on the classification and measurement of the Foundation’s financial assets and impairment methodology for financial assets, but will have no impact on the classification and measurement of the Foundation’s financial liabilities. The Foundation is currently assessing the impact of adopting this standard.

The following standard issued by the IASB has not yet been adopted by the FRSC

IFRS 16 Leases

On January 13, 2016, the IASB issued its new standard, IFRS 16, Leases, which replaces IAS 17, the current lease standard, and related Interpretations. Under the new lease standard, lessees will no longer classify their leases as either operating or finance leases in accordance with IAS 17. Rather, lessees will apply the single-asset model. Under this model, lessees will recognize the asset and related liabilities for most of leases on their balance sheets, and subsequently, will depreciate the lease assets and recognize interest on the lease liabilities in their profit or loss. Lease with a term of 12 months or less or for which the underlying asset is of low value are exempted from these requirements. The accounting by lessors is substantially unchanged as the new standard carries forward the principles of lessor accounting under IAS 17. Lessors, however, will be required to disclose more information in their financial statements, particularly on the risk exposure to residual value. The new standard is effective for annual period beginning on or after January 1, 2019. Entities may early adopt IFRS 16 but only if they have also adopted IFRS 15. When adopting IFRS 16, an entity is permitted to use either the full retrospective approach or a modified retrospective approach, with options to use certain transition reliefs. The Foundation is currently assessing the impact of IFRS 16 and plans to adapt the new standard on the required effective date once adopted locally.

Cash and Cash Equivalents Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three

COM M I T M EN T 76

- 5 -

months from dates of acquisitions or less and that are subject to an insignificant risk of changes in value.

Financial Instruments Date of recognition The Foundation recognizes a financial asset or a financial liability in the statement of financial position when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace are recognized on the trade date.

Initial recognition of financial instruments All financial assets and financial liabilities are initially recognized at fair value. Except for financial assets and financial liabilities at fair value through profit or loss (FVPL), the initial measurement of financial assets and liabilities includes transaction costs. The Foundation classifies its financial assets in the following categories: financial assets at FVPL, held-to-maturity (HTM) financial assets, available-for-sale (AFS) financial assets, and loans and receivables. The Foundation classifies its financial liabilities into financial liabilities at FVPL and other financial liabilities. The classification depends on the purpose for which the investments were acquired or liabilities incurred and whether they are quoted in an active market. The Foundation determines the classification of its investments at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date.

The financial assets of the Foundation are of the nature of loans and receivables and AFS financial assets, while its financial liabilities are of the nature of other financial liabilities (other than liabilities covered by other accounting standards such as pension liability).

Determination of fair value The Foundation measures financial instruments at each statement of financial position date. Also, fair values of financial instruments measured at amortized cost are disclosed in Note 14.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Foundation.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Foundation uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, as described in Note 14.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Foundation determines whether transfers have occurred between Levels in the hierarchy by

COM M I T M EN T 77

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reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

A committee usually composed of members of the Board of Trustees and officers of the Foundation determines the policies and procedures for the valuation of financial assets as well as the allocation of the Foundation’s asset portfolio.

For the purpose of fair value disclosures, the Foundation has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained in Note 14.

“Day 1” difference Where the transaction price in a non-active market is different to the fair value from other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable market, the Foundation recognizes the difference between the transaction price and fair value (a “Day 1” difference) in the statement of activities under the “Investment and interest” account. In cases where use is made of data which is not observable, the difference between the transaction price and model value is only recognized in the statement of activities when the inputs become observable or when the instrument is derecognized. For each transaction, the Foundation determines the appropriate method of recognizing the “Day 1” difference amount.

Loans and receivables Loans and receivables are nonderivative financial assets with fixed or determinable payments and fixed maturities that are not quoted in an active market. They are not entered into with the intention of immediate or short-term resale and are not designated as AFS financial assets or financial assets at FVPL. This accounting policy relates to the statement of financial position captions “Cash and cash equivalents” and “Receivables.”

After initial measurement, the loans and receivables are subsequently measured at amortized cost using the effective interest rate (EIR) method, less allowance for impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the EIR. The amortization is included in the “Investment and interest” account in the statement of activities. The losses arising from impairment of such loans and receivables are recognized in the statement of activities.

Loans and receivables are included in current assets if maturity is within twelve (12) months from the reporting date, otherwise these are classified as noncurrent assets.

AFS financial assets AFS financial assets are those nonderivative financial assets which are designated as such or do not qualify to be classified in any of the other three categories. They are purchased and held indefinitely, and may be sold in response to liquidity requirements or changes in market conditions. AFS financial assets include equity investments.

After initial measurement, AFS financial assets are measured at fair value. The unrealized gains and losses arising from the fair valuation of AFS financial assets are excluded from reported earnings and are reported as “Net unrealized gain (loss) on AFS financial assets” account in the statement of activities.

When the security is disposed of, the cumulative gain or loss previously recognized in the statement of activities are then included under the “Revenue, gains and other supports” account.

COM M I T M EN T 78

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Where the Foundation holds more than one investment in the same security these are deemed to be disposed of on a first-in first-out basis. Interest earned on holding AFS financial assets are reported as investment income using the EIR. Dividends earned on holding AFS financial assets are recognized in the statement of activities when the right to receive payment is established. The losses arising from impairment of such investments are recognized under “Net unrealized gain (loss) on AFS financial asset” account in the statement of activities.

When the fair value of AFS financial assets cannot be measured reliably because of lack of reliable estimates of future cash flows and discount rates necessary to calculate the fair value of unquoted equity instruments, these investments are carried at cost, less any allowance for impairment losses.

AFS financial assets are classified as noncurrent assets unless the intention is to dispose such assets within 12 months from reporting date. Other financial liabilities Other financial liabilities pertain to issued financial instruments that are not classified or designated at FVPL and contain contractual obligations to deliver cash or other financial assets to the holder or to settle the obligation other than the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares. After initial measurement, other financial liabilities are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on the issue and fees that are an integral part of the EIR.

This accounting policy applies primarily to the Foundation’s “Accounts and other payables” (except statutory payables as these are not financial liabilities covered by any PFRS) and other obligations that meet the above definition.

Derecognition of Financial Assets and Liabilities Financial asset A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when:

a. the rights to receive cash flows from the asset has expired; b. the Foundation retains the right to receive cash flows from the asset, but has assumed an

obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or

c. the Foundation has transferred its rights to receive cash flows from the asset and either (i) has transferred substantially all the risks and rewards of the asset, or (ii) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Foundation has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Foundation’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of original carrying amount of the asset and the maximum amount of consideration that the Foundation could be required to repay.

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Financial liability A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the statement of activities.

Impairment of Financial Assets The Foundation assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Loans and receivables For loans and receivables carried at amortized cost, the Foundation first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Foundation determines that no objective evidence of impairment exists for individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses for impairment. Those characteristics are relevant to the estimation of future cash flows for groups of such assets by being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognized are not included in a collective assessment for impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred). The carrying amount of the asset is reduced through use of an allowance account and the amount of loss is charged to the statement of activities. Interest income continues to be recognized based on the original EIR of the asset. Loans and receivables, together with the associated allowance accounts, are written off when there is no realistic prospect of future recovery and all collateral has been realized. If, in a subsequent year, the amount of the estimated impairment loss decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in statement of activities, to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date.

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of such credit risk characteristics as industry, past-due status and term.

Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar

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to those in the group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Foundation to reduce any differences between loss estimates and actual loss experience.

AFS financial assets For AFS financial assets, the Foundation assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. In case of equity investments classified as AFS financial assets, this would include a significant or prolonged decline in the fair value of the investments below its cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the statement of activities - is removed from the “Net unrealized gain (loss) on AFS financial assets” account and recognized as an expense. Impairment losses on equity investments are not reversed through revenue. Increases in fair value after impairment are recognized directly under “Net unrealized gain (loss) on AFS financial assets” account in the statement of activities.

In the case of debt instruments classified as AFS financial assets, impairment is assessed based on the same criteria as financial assets carried at amortized cost. Future interest income is based on the reduced carrying amount and is accrued using the rate of interest used to discount future cash flows for the purpose of measuring impairment loss and is recorded as part of “Investment and interest” account in the statement of activities. If, in subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in the statements of activities, the impairment loss is reversed through the statement of activities.

Offsetting Financial Instruments Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Merchandise Inventories Merchandise inventories consist of books and other items held for sale. Merchandise inventories are valued at the lower of cost or net realizable value (NRV). Cost is determined using the first-in, first-out method. NRV is the estimated selling price in the ordinary course of business less estimated costs necessary to make the sale.

Input Value-Added Tax (VAT) Input VAT arises from the purchase of goods and services. These are applied against output VAT. The remaining balance is recoverable in future periods.

Property and Equipment Property and equipment except for land, are carried at cost less accumulated depreciation and amortization and any impairment in value. Land is carried at cost less any impairment in value. The initial cost of property and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the property and equipment have been put into operation, such as repairs and maintenance, are normally charged to expense in the period in which the costs are incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in

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an increase in the future economic benefits expected to be obtained from the use of an item of property and equipment beyond its originally assessed standard of performance, the expenditures are capitalized as an additional cost of property and equipment.

Depreciation and amortization of property and equipment commences once the property and equipment are available for use and is computed using the straight-line method over the following estimated useful lives of the property and equipment:

Years Leasehold and land improvements 5-20 Office furniture and equipment 3-5 Transportation equipment 5

Leasehold improvements are amortized over the estimated useful life (EUL) of the improvements or the terms of the lease, whichever is shorter.

The useful lives and depreciation and amortization method are reviewed annually based on expected asset utilization to ensure that the period and method of depreciation and amortization are consistent with the expected pattern of economic benefits from items of property and equipment.

Construction in progress is stated at cost. This includes cost of construction of property and equipment and other direct costs. Construction in progress is not depreciated until such time the relevant assets are complete and are put into operational use.

When property and equipment are retired or otherwise disposed of, the cost and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is credited to or charged against current operations.

Fully depreciated property and equipment are retained in the accounts until they are no longer used and no further depreciation and amortization is charged against current operations.

Intangible Assets The Foundation’s intangible assets include the value of network and software cost. An intangible asset is recognized only when its cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to it will flow to the Foundation. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be finite. Intangible assets lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortization period and the amortization method for an intangible asset is reviewed at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets is recognized in the statement of activities allocated to “Project” and “General and administrative” under expenses and losses.

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Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of income when the asset is derecognized.

Software cost Costs related to software purchase by the Foundation for use in operations are amortized on a straight line basis over the EUL of 2-5 years. The amortization period and the amortization method for software cost are reviewed periodically to ascertain consistency with the changes in the expected useful life of the expected pattern of consumption of future economic benefits embodied in the asset.

Impairment of Non-financial Assets The Foundation assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Foundation makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognized in the statement of activities in those expense categories consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation and amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of activities unless the asset is carried at revalued amount, in which case, the reversal is treated as a revaluation increase. After such reversal the depreciation and amortization charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining EUL.

Provisions Provisions are recognized when the Foundation has a present obligation (legal or constructive) as a result of a past event, it is probable (i.e., more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Foundation expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. Provisions, if any, are reviewed at each reporting date and adjusted to reflect the current best estimate.

Restricted Net Assets The Foundation reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily

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restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Donations consisting of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted net assets.

Revenue Recognition Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Foundation and the amount of the revenue can be reliably measured.

Public support Public support revenue represents contributions received by the Foundation. Unconditional contributions received, including unconditional promises to give cash or other assets, are recognized as revenue in the period received at their fair value. Conditional promises to give are recognized when the conditions are met. Assets received subject to conditions are accounted for as refundable advances until the conditions are met.

Investment and interest income Investment income represents interest income earned on cash and cash equivalents and AFS financial assets and realized gains or losses on sale of investments. Income is recognized on a time proportion basis computed on the outstanding principal using the applicable rate.

Expenses and Losses Expenses arise in the course of the ordinary operations of the Foundation. Expenses constitute costs of administering the Foundation’s activities and are recognized in the statement of activities as incurred. These usually take the form of an outflow of assets.

Museum Collections Artworks, ethnographic, archeological and rare book collections purchased for or donated to the museum are not included in the accompanying financial statements. Gifts of cash or property used for the purchase of the museum collections are classified as public support revenue when acquisitions are made in accordance with the terms of the gifts. The cost of objects purchased or donated is reported as a project expense.

Defined Benefit Plan Pension cost and net defined benefit liability or asset is calculated annually by independent actuaries using the projected unit credit method.

Pension costs comprise the following:

Service cost Net interest on the net defined benefit liability or asset Remeasurements of net defined benefit liability or asset

Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognized as expense in profit or loss. Past service costs are recognized when plan amendment or curtailment occurs. These amounts are calculated periodically by independent actuaries.

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by

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applying the discount rate based on the zero-coupon bond yields to the net defined liability or assets. Net interest on the net defined benefit liability or asset is recognized as expense or income in statement of activities.

Remeasurements comprising actuarial gains and losses and return on plan assets are recognized immediately in other comprehensive income in the period in which they arise. Remeasurements are not reclassified to statement of activities in subsequent periods.

Plan assets are assets that are held by a long-term employee benefit fund. Plan assets are not available to the creditors of the Foundation, nor can they be paid directly to the Foundation. Fair value of plan assets is based on market price information. When no market price is available, the fair value of plan assets is estimated by discounting expected future cash flows using a discount rate that reflects both the risk associated with the plan assets and the maturity or expected disposal date of those assets. If the fair value of the plan assets is higher than the present value of the defined benefit obligation, the measurement of the resulting defined benefit asset is limited to the present value of the economic benefits available in form of refunds from the plan or reductions in the future contributions to the plan.

The net defined benefit liability or asset recognized in the Foundation’s statement of financial position in respect of the defined benefit pension plan is the aggregate of the present value of the defined benefit liability at the reporting date less the fair value of the plan assets. The present value of the defined benefit liability is determined by discounting the estimated future cash outflows using risk-free interest rates of government bonds that have terms to maturity approximating to the terms of the related pension liability.

Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a result of either an entity’s decision to terminate an employee’s employment before the normal retirement date, an employee’s decision to accept an offer of benefits in exchange for the termination of employment or termination beyond the employee’s control.

A liability or expense for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of those benefits and when the entity recognizes related restructuring costs. Initial recognition and subsequent changes to termination benefits are measured in accordance with the nature of the employee benefit, as either post-employment benefits or short-term employee benefits.

Foreign Currency Transactions Transactions denominated in foreign currencies are recorded using the exchange rate at the date of the transactions. Outstanding foreign currency-denominated monetary assets and liabilities at year-end are translated to Philippine peso at prevailing Philippine Dealing System (PDS) rate at reporting dates. Exchange gains or losses arising from foreign currency transactions are credited to or charged against changes in net assets.

Contingencies Contingent liabilities are not recognized in the financial statements. These are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.

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Events After the Financial Reporting Period Post year-end events that provide additional information about the Foundation’s position at the reporting date (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements when material.

3. Significant Accounting Judgments and Estimates

The preparation of the accompanying financial statements in conformity with PFRS requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The judgments, estimates and assumptions used in the accompanying financial statements are based upon management’s evaluation of relevant facts and circumstances as of the date of the financial statements. Actual results could differ from such estimates.

Judgments In the process of applying the Foundation’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognized in the financial statements:

Classification of financial instruments The Foundation exercise judgment in classifying a financial instrument, or its component parts, on initial recognition as a financial asset, financial liability or an equity instrument in accordance with the substance of the contractual agreement and the definitions of a financial asset, financial liability or an equity instrument. The substance of a financial instrument, rather than its legal form, governs its classification in the statement of financial position.

Financial assets not quoted in an active market The Foundation classifies financial assets by evaluating, among others, whether the asset is quoted or not in an active market. Included in the evaluation on whether a financial asset is quoted in an active market is the determination on whether quoted prices are readily and regularly available, and whether these prices represent actual and regularly occurring market transaction on an arm’s length basis.

Impairment of AFS financial assets The Foundation treats AFS financial assets as impaired when there has been a significant or prolonged decline in the fair value below its cost or where other objective evidence of impairment exists. The determination of what is ‘significant’ or ‘prolonged’ requires judgment. The Foundation treats ‘significant’ generally as 20% or more and ‘prolonged’ as greater than 6 months for quoted equity securities. In addition, the Foundation evaluates other factors, including normal volatility in share price for quoted equities and the future cash flows and the discount factors for unquoted equities.

If there is an objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, the amount of the loss is measured as the difference between the carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

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Management’s Use of Estimates The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Estimating allowance for impairment losses The Foundation maintains allowance for impairment losses based on the result of the individual and collective assessment under PAS 39. Under the individual assessment, the Foundation is required to obtain the present value of estimated cash flows using the receivable’s original EIR. Impairment loss is determined as the difference between the receivables’ carrying balance and the computed present value. The collective assessment would require the Foundation to group its receivables based on the credit risk characteristics (industry, past-due status and term) of the customers. Impairment loss is then determined based on historical loss experience of the receivables grouped per credit risk profile. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. The methodology and assumptions used for the individual and collective assessments are based on management's judgment and estimate. Therefore, the amount and timing of recorded expense for any period would differ depending on the judgments and estimates made for the year.

The carrying values of receivables amounted to P=6.66 million and P=12.77 million as of December 31, 2015 and 2014, respectively (see Note 5).

Estimating allowance for inventory loss The Foundation estimates its allowance for inventory loss based on periodic specific identification. The Foundation provides inventory loss allowance of 100% for previous year calendars, 10% for slow moving books and catalogs, and 50% for other specifically identified as obsolete inventories. Merchandise inventories of the Foundation, net of allowance for inventory loss as of December 31, 2015 and 2014 amounted to P=14.99 million and P=15.37 million, respectively. Allowance for inventory loss amounted to P=0.71 million and P=0.67 million as of December 31, 2015 and 2014, respectively (see Note 6).

Estimating useful lives of property and equipment and software costs The Foundation estimates the useful lives of its property and equipment and software cost based on the period over which these assets are expected to be available for use. The estimated useful lives of property and equipment and software costs are reviewed at least annually and are updated if expectations differ from previous estimates due to physical wear and tear and technical or commercial obsolescence on the use of these assets. It is possible that future results of operations could be materially affected by changes in estimates brought about by changes in factors mentioned above.

As of December 31, 2015 and 2014, the carrying values of the Foundation’s property and equipment and software cost follow:

2015 2014Property and equipment (Note 8) P=193,053,397 P=191,518,970Software cost (Note 9) 1,335,312 1,894,895

Evaluation of asset impairment The Foundation reviews property and equipment and software cost for impairment. This includes considering certain indications of impairment such as significant changes in asset usage,

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significant decline in assets’ market value, obsolescence or physical damage of an asset, significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. If such indications are present and where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

As described in the accounting policy, the Foundation estimates the recoverable amount as the higher of the net selling price and value in use. In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the Foundation is required to make estimates and assumptions that may affect property and equipment and software costs. The Foundation believes that the carrying amounts of its assets approximate the recoverable amounts and, as such, no impairment loss was recognized for the years ended December 31, 2015 and 2014.

As of December 31, 2015 and 2014, the carrying values of the Foundation’s property and equipment and software cost follow:

2015 2014 Property and equipment (Note 8) P=193,053,397 P=191,518,970 Software cost (Note 9) 1,335,312 1,894,895

Estimating pension obligation and other retirement benefits The cost of defined benefit pension plans and other retirement benefits as well as the present value of the pension obligation are determined using actuarial valuations. The actuarial valuation involves making various assumptions. Those assumptions are described in Note 12 and include, among others, discount rates, future salary increases, mortality rates and turn-over rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, defined benefit liability are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting dates. Net pension asset amounts to P=6.24 million and P=7.33 million as of December 31, 2015 and 2014, respectively (see Note 12).

The discount rate used is the single-weighted uniform discount rate using bootstrapped-derived zero rates from PDST-R2 index, which when applied to the same cash flows, results in the same present value as of reporting date. Present values of cash flows as of reporting date was determined using the rates from derived zero yield curve.

The mortality rate is based on unisex annuity table and is modified accordingly with estimates of mortality improvements (if any). The turn-over rates used are based on actual data on employee turn-over for the prior year. Future salary increases are derived from the Foundation’s estimated salary expenses for the next period. Further details about the assumptions used are provided in Note 12.

Fair value of financial instruments Where the fair values of financial assets and financial liabilities recorded and disclosed in the statement of financial position cannot be derived from active markets, they are determined using internal valuation techniques using generally accepted market valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimates are used in establishing fair values. These estimates may include considerations of liquidity, volatility, and correlation. See Note 14 for the related balances.

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4. Cash and Cash Equivalents

This account consists of:

2015 2014 Cash on hand and in banks P=53,175,207 P=89,052,965 Cash equivalents 71,890,056 25,140,556 P=125,065,263 P=114,193,521

Cash in banks earn interests at the respective bank deposit rates. Cash equivalents are made for varying periods of up to three months depending on the immediate cash requirements of the Foundation and earn interest at the respective short-term investment rates 0.875% to 4.40% and 0.625% to 4.40% in 2015 and 2014, respectively. As of December 31, 2015 and 2014, interest income earned on cash in banks and cash equivalents amounted to P=2.68 million and P=2.39 million, respectively.

5. Receivables

This account consists of the following:

2015 2014 Trade: Services P=2,623,164 P=4,375,841 Products 1,280,951 1,909,444 Nontrade 2,852,462 3,048,119 Advances to cooperative 1,328,820 5,928,981 Advances to officers and employees 1,293,909 3,114,233 Accrued interest 314,512 599,186 Others 2,259,757 1,809,292 11,953,575 20,785,096 Less allowance for impairment losses 5,298,442 8,011,254 P=6,655,133 P=12,773,842

Trade receivables are collectibles from various entities arising from purchase of products and availment of program services provided by the Foundation. These are collectible within one year.

Nontrade receivables pertain to collectibles for activities outside the main revenue-generating projects of the Foundation which are noninterest bearing and are due and demandable.

Advances to cooperative pertain to cash advance for social credits which are collectible within one year.

Advances to officers and employees pertain to salary loans and advances made by regular employees of the Foundation for business related expenses and are subject for liquidation. This amount is collectible within one year.

Others receivables are non-interest bearing and are due and demandable.

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Receivables amounting to P=5.30 million and P=8.01 million as of December 31, 2015 and 2014, respectively, were individually impaired and fully provided for (see Note 14). Movements in the allowance for impairment losses follow:

2015 2014 Balance at beginning of year P=8,011,254 P=10,275,410 Provisions during the year (Note 13) − 1,393,553 Reversals during the year (2,438,996) − Written off during the year (273,816) (3,657,709)Balance at end of year P=5,298,442 P=8,011,254

6. Merchandise Inventories

Merchandise inventories consist of books, catalogs and other merchandise. Movements in the inventories account are as follows:

2015 2014 Inventories at beginning of year P=16,039,709 P=17,098,226 Add net cost of purchases 1,660,034 1,049,554 Total goods available for sale 17,699,743 18,147,780Less cost of sales 2,003,218 2,108,071 15,696,525 16,039,709 Less allowance for inventory loss 707,217 669,226 P=14,989,308 P=15,370,483

7. Other Current Assets


2015 2014 Input VAT P=6,186,823 P=6,344,943 Creditable withholding tax 3,023,625 2,830,882 Deposits 950,220 2,533,093 Prepaid expenses 794,899 1,907,594 Others 21,130 737,720 P=10,976,697 P=14,354,232

Input VAT is applied against output VAT. The input VAT is recoverable in future periods.

Creditable withholding tax consists of tax withheld by customers and is creditable against any future income tax due from the Foundation.

Deposits pertain to advance payments made by the Foundation to suppliers and other entities. Prepaid expenses include prepayments for insurance, rent, subscription fees, repairs and maintenance and others.

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8. Property and Equipment

The rollforward analysis of this account follows:

December 31, 2015

Land

Leasehold and Land

Improvements

OfficeFurniture and

EquipmentTransportation

EquipmentConstruction-

in-Progress TotalCost At January 1 P=102,869,175 P=59,400,655 P=82,184,453 P=4,818,000 P=29,090,710 P=278,362,993Additions – 2,864,027 4,045,594 – 4,985,109 11,894,730Disposals – (317,273) (3,405,588) (1,828,000) – (5,550,861)Transfers (Note 9) – 27,378,740 212,500 – (27,378,740) 212,500At December 31 102,869,175 89,326,149 83,036,959 2,990,000 6,697,079 284,919,362Accumulated

Depreciation and Amortization

At January 1 − 14,557,203 70,073,203 2,213,617 – 86,844,023Depreciation and

amortization – 5,217,890 4,640,489 669,500 – 10,527,879Disposals – (317,273) (3,360,664) (1,828,000) – (5,505,937)At December 31 – 19,457,820 71,353,028 1,055,117 – 91,865,965Net Book Value P=102,869,175 P=69,868,329 P=11,683,931 P=1,934,883 P=6,697,079 P=193,053,397

December 31, 2014

Land

Leasehold and Land

Improvements

OfficeFurniture and

EquipmentTransportation

EquipmentConstruction-

in-Progress TotalCost At January 1 P=99,421,175 P=63,149,931 P=87,112,855 P=3,707,000 P=61,528 P=253,452,489Additions 3,448,000 2,414,936 3,451,528 1,111,000 29,029,182 39,454,646Disposals – (6,164,212) (8,379,930) – – (14,544,142)At December 31 102,869,175 59,400,655 82,184,453 4,818,000 29,090,710 278,362,993Accumulated

Depreciation and Amortization

At January 1 – 15,747,983 74,316,011 1,666,217 – 91,730,211Depreciation and

amortization – 4,671,527 4,137,122 547,400 – 9,356,049

Disposals – (5,862,307) (8,379,930) – – (14,242,237)At December 31 – 14,557,203 70,073,203 2,213,617 – 86,844,023Net Book Value P=102,869,175 P=44,843,452 P=12,111,250 P=2,604,383 P=29,090,710 P=191,518,970

Depreciation and amortization charged against unrestricted net assets amounted to P=10.53 million and P=9.36 million in 2015 and 2014, respectively.

Construction-in-progress includes the construction of road network, drainage system and water service line as part of livelihood projects in Laguna.

Land amounting to P=92.65 million, which was donated in 2003, is subject to a leasehold right existing thereon with a third party.

Fully depreciated property and equipment still being used by the Foundation amounted to P=69.01 million and P=63.11 million as of December 31, 2015 and 2014, respectively.

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9. Software Cost

The rollforward analysis of this account follows:

2015 2014 Cost At January 1 P=8,812,144 P=6,977,144 Additions 225,000 1,835,000 Transfers (212,500) –Disposals (536,965) – At December 31 8,287,679 8,812,144 Accumulated Amortization At January 1 6,917,249 6,885,999 Amortization 572,083 31,250 Disposals (536,965) − At December 31 6,952,367 6,917,249 Net Book Value P=1,335,312 P=1,894,895

Depreciation and amortization charged against unrestricted net assets amounted to P=0.57 million and P=0.03 million in 2015 and 2014, respectively.

10. Available-for-sale Financial Assets

This account consists of investments in:

2015 2014 Common trust fund P=1,461,597,010 P=1,575,841,562 Shares of stock: Quoted securities 909,800,206 832,267,539 Unquoted securities 2,650,443 2,663,544 P=2,374,047,659 P=2,410,772,645

AFS financial assets consist of shares in various listed and unlisted companies held under a trust fund and are carried at market value.

The rollforward of unrealized gain on AFS financial assets are as follows:

2015 2014 Balance at beginning of year P=164,060,597 P=46,517,821 Unrealized gain (loss) recognized directly in

net assets (15,655,542) 119,067,022 Realized gain transferred to income (30,433,670) (1,524,246)Balance at end of year P=117,971,385 P=164,060,597

COM M I T M EN T 92

- 21 -

The breakdown of investment income is as follow:

2015 2014 Debt instruments P=36,420,501 P=36,588,650 Realized gain from AFS 30,433,670 1,524,246 Dividends 18,568,955 14,790,857 Government securities 5,671,604 5,825,840 Loans 2,507,973 2,434,079 Others 1,401,701 1,626,830 P=95,004,404 P=62,790,502

11. Accounts and Other Payables


2015 2014 Trade P=39,120,298 P=25,276,912 Accrued expenses 34,113,929 49,215,430 Payable to consignors 7,571,461 7,452,332 Others 2,828,042 2,422,021 P=83,633,730 P=84,366,695

Trade payables include payables to suppliers that are noninterest-bearing and are normally settled on 30- to 60-day terms.

Accrued expenses pertain to the unbilled balances for charges associated with the renovations and maintenance of the Ayala Museum building and other expenses incurred by the Foundation for its activities.

Payable to consignors pertain to proceeds on sale of goods consigned to the Foundation.

Other payables are non-interest bearing and are normally settled within one year.

12. Defined Benefit Plan

The Foundation has funded, noncontributory defined benefit retirement plan covering substantially all of its regular permanent employees. The benefits are generally based on defined contribution formula with minimum lump-sum guarantee of 1.5 months’ basic salary per year of service.

The Foundation’s annual contributions to the plan consist principally of payments which covers the current service cost for the year and the required funding relative to the guaranteed minimum benefits as applicable. The funds are administered by a trustee bank of the Foundation and subject to the investment objectives and guidelines established by the Foundation’s Employee Welfare and Retirement Fund Investment Committee (the Committee) and rules and regulations issued by Bangko Sentral ng Pilipinas (BSP) covering assets under trust and fiduciary agreements. The Committee is responsible for the investment strategy of the plan.

COM M I T M EN T 93

- 22 -

Republic Act 7641, The New Retirement Law, requires a provision for retirement pay to qualified private sector employees in the absence of any retirement plan in the entity, provided however that the employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided under the law. The law does not require minimum funding of the plan.

The components of pension expense included in salaries, wages and employee benefits under “General and administrative” in the statements of activities are as follows (see Note 13):

2015 2014 Current service cost P=6,044,331 P=7,987,382 Net interest expense (income) (337,360) 1,110,012 Total pension expense P=5,706,971 P=9,097,394

The amounts recognized under pension asset - net in the statements of financial position are as follows:

2015 2014 Plan assets P=52,453,470 P=49,733,019 Benefit obligations (46,216,539) (42,399,103)Asset to be recognized P=6,236,931 P=7,333,916

Changes in the present value of the defined benefit obligation are as follows:

2015 2014 Balance at January 1 P=42,399,103 P=67,201,834 Current service cost 6,044,331 7,987,382 Interest expense 1,950,359 3,628,899 Benefits paid (4,928,092) (8,936,927)Transferred-out liabilities (3,804,609) − Remeasurement loss (gain) arising from changes in

financial assumptions 4,555,447 (27,482,085)Balance at December 31 P=46,216,539 P=42,399,103

Changes in the fair value of plan assets are as follows:

2015 2014 Balance at January 1 P=49,733,019 P=46,646,047 Contributions 5,400,383 9,111,773 Interest income on plan assets 2,287,719 2,518,887 Remeasurement gain on plan assets 3,765,050 393,239 Benefits paid (4,928,092) (8,936,927)Transferred-out assets (3,804,609) − Balance at December 31 P=52,453,470 P=49,733,019

COM M I T M EN T 94

- 23 -

The fair value of plan assets by each classes as at the end of the reporting period are as follows:

2015 2014 Debt instruments P=34,587,818 P=32,795,807 Equity instruments 12,400,000 11,757,904 Cash 5,465,652 5,179,308 P=52,453,470 P=49,733,019

All equity instruments held have quoted prices in active market while debt instruments do not have quoted market prices in active market. The plan assets do not have any concentration on risk.

The assumptions used to determine pension benefits for the Foundation for the years ended December 31, 2015 and 2014 are as follows:

2015 2014Discount rate 4.90% 4.60% Salary increase rate 5.00% 5.00% Turn-over rate nil to 100.00% nil to 100.00% Mortality rate 0.05 to 0.74% 0.05 to 0.74%

There were no changes from the previous period in the methods and assumptions used in preparing sensitivity analysis.

Below shows the sensitivity analysis determined based on reasonably possible changes of each significant assumptions stated above, assuming all other assumptions were held constant:

2015 Discount Rate Salary Increase Rate +.50% (.50%) +.50% (.50%)

Accrued liability P=43,883,144 P=48,742,050 P=48,529,775 P=44,056,232 Current fund assets (52,453,470) (52,453,470) (52,453,470) (52,453,470)Unfunded accrued liability (P=8,570,326) (P=3,711,420) (P=3,923,695) (P=8,397,238)

2014Discount Rate Discount Rate

+.50% +.50% +.50% +.50% Accrued liability P=40,195,393 P=44,791,528 P=44,587,462 P=40,361,381 Current fund assets (49,733,019) (49,733,019) (49,733,019) (49,733,019)Unfunded accrued liability (P=9,537,626) (P=4,941,491) (P=5,145,557) (P=9,371,638)

The Foundation does not perform any Asset-Liability Matching Study. The overall investment policy and strategy of the retirement plan is based on the suitability assessment, as provided by its trust bank, in compliance with the BSP requirements. It does not, however, ensure that there will be sufficient assets to pay the retirement benefits as they fall due while attempting to mitigate the various risks of the plan. For the current year, the plan assets consist of 26.70% of equity instruments, 64.70% of debt instruments and 8.60% of cash.

The Foundation expects to make additional contributions of P=4.60 million to its retirement fund in 2016.

The average duration of the defined benefit liability at the end of the reporting period is 13 years. Amounts for the current and the previous periods follow:

COM M I T M EN T 95

- 24 -

2015 2014 2013 2012 2011Benefit obligation P=46,216,539 P=42,399,103 P=67,201,834 P=79,723,128 P=41,697,676Plan assets (52,453,470) (49,733,019) (46,646,047) (47,608,729) (34,253,108)Deficit (excess) (P=6,236,931) (P=7,333,916) P=20,555,787 P=32,114,399 P=7,444,568

The following table shows the maturity profile of the Foundation’s defined benefit obligation based on undiscounted benefit payments:

2015 2014 More than 1 year to 5 years P=16,274,685 P=13,057,949 More than 5 years to 10 years 39,647,519 16,379,779 P=55,922,204 P=29,437,728

Experience adjustments on plan assets and obligation are as follows:

2015 2014 2013 2012 Gain (loss) on experience

adjustments on defined benefit obligation (P=6,046,450) P=22,320,772 P=15,470,398 (P=24,665,252)

Gain (loss) on experience adjustments on plan assets 1,491,003 5,161,313 (1,703,992) (10,305,200)

13. Net Assets

Unrestricted net assets are those net assets that are neither temporarily restricted nor permanently restricted. It includes all net assets with uses not restricted by donors, by Board of Trustees or by law. Temporarily restricted net assets refer to those net assets whose use by the Foundation is limited by donors to later periods of time or after specified dates or specified purposes.

Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes or by occurrence of other events specified by donors.

Permanently restricted net assets are those assets that the donor stipulates must be maintained by the Foundation in perpetuity. Permanently restricted net assets increase when Foundation receives contributions for which donor-imposed restrictions limiting the Foundation’s use of an asset or its economic benefits neither expire with the passage of time nor can be removed by the Foundation’s meeting certain requirements. Permanently restricted net assets generally come from: (1) contributions, with donor-imposed permanent restrictions; (2) increase or decrease in existing assets that are subject to permanent restrictions by donor or by law (such as unrealized gains, interest income); and (3) reclassification from another net asset class as a result of donor stipulation or by law.

COM M I T M EN T 96

- 25 -

Details of the Foundation’s net assets as of December 31 are as follows:

2015 2014 Unrestricted P=19,418,454 P=19,768,030 Temporarily restricted: Property and equipment 194,388,707 193,413,865 Livelihood and other community development

programs 102,511,397 86,375,855 Education and youth leadership programs 20,190,102 25,191,140 317,090,206 304,980,860 Permanently restricted: Investment in perpetuity, the income of which is

expendable to support education and other programs 2,187,714,273 2,187,714,273

Unrealized gain on AFS financial assets 117,971,385 164,060,597 Remeasurement gain (loss) on defined benefit

obligation 6,531,652 7,322,049 P=2,648,725,970 P=2,683,845,809

Details of the Foundation’s expenses follow:

Project Expenses

2015 2014 Project implementation: Disaster relief and other special projects P=116,535,437 P=156,640,047 Education 24,573,789 62,948,190 Arts and Culture 11,232,498 9,666,205 Youth Leadership 8,401,628 12,334,288 Sustainable Livelihood 5,578,807 5,727,442 Project management: Salaries, wages and employee benefits 41,073,378 49,498,085 Monitoring and administrative 5,663,429 4,568,025 Building overhead 24,689,984 29,022,025 P=237,748,950 P=330,404,307

General and Administrative Expenses

2015 2014 Salaries, wages and employee benefits (Note 12) P=28,883,087 P=24,968,485 Professional and service fees 9,390,521 7,057,893 Premises, utilities and maintenance 3,603,324 2,908,755 Depreciation and amortization 1,797,431 1,133,078 Advocacy and public information services 1,579,691 2,551,161Communication and postage 1,241,403 1,138,576 Transportation and travel 775,736 312,508 Supplies 406,501 672,710 Taxes and licenses 196,270 25,533 Trainings and seminars 177,851 74,179 Provision for doubtful accounts (Note 5) − 1,393,553 Others 1,825,971 1,774,385 P=49,877,786 P=44,010,816

COM M I T M EN T 97

- 26 -

Capital management The primary objectives of the Foundation’s capital management policies are to devote its funds to charitable projects, scholarship grants and cultural activities, to afford the financial flexibility to support its operations and to protect and preserve capital to ensure financial sustainability of the Foundation.

The Foundation’s source of capital is its total net assets, which is composed of unrestricted, temporarily restricted and permanently restricted net assets, plus the net unrealized gain on AFS financial assets.

2015 2014Net Assets Unrestricted P=19,418,454 P=19,768,030 Temporarily restricted 317,090,206 304,980,860Permanently restricted 2,187,714,273 2,187,714,273 Unrealized gain on AFS financial assets (Note 10) 117,971,385 164,060,597 P=2,642,194,318 P=2,676,523,760

14. Financial Instruments

Fair Value Measurement

The following table shows an analysis of the Foundation’s financial assets and liabilities by level of the fair value hierarchy:

December 31, 2015 Fair value measurement using

Total

Quoted prices in active markets

(Level 1)

Significantobservable inputs

(Level 2)Assets measured at fair value: Available-for-sale financial assets Common trust fund P=1,461,597,010 P=1,461,597,010 P=− Quoted securities 909,800,206 909,800,206 − Unquoted securities 2,650,443 – 2,650,443 P=2,374,047,659 P=2,371,397,216 P=2,650,443 December 31, 2014 Fair value measurement using

Total

Quoted prices in active markets

(Level 1)

Significantobservable inputs

(Level 2)Assets measured at fair value: Available-for-sale financial assets Common trust fund P=1,575,841,562 P=1,575,841,562 P=− Quoted securities 832,267,539 832,267,539 − Unquoted securities 2,663,544 – 2,663,544 P=2,410,772,645 P=2,408,109,101 P=2,663,544

COM M I T M EN T 98

- 27 -

The Foundation uses the following hierarchy for determining and disclosing the fair value of its assets and liabilities by valuation technique:

Level 1: quoted (unadjusted prices) in active markets for identical assets and liabilities Level 2: other techniques for which all inputs which have a significant effect on the recorded

fair value are observable, either directly or indirectly Level 3: techniques which use inputs which have a significant effect on the recorded fair value

that are not based on observable market data

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: AFS financial assets - Fair values are based on quoted prices published in markets.

Management assessed that the fair values of loans and receivables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

There were no transfers between fair value categories for assets and liabilities measured at fair value in 2015 and 2014.

Financial Risk Management Objectives and Policies

The Foundation has various financial instruments such as cash and cash equivalents, receivables, AFS financial assets, and accounts and other payables which arise directly from its operations.

The main purpose of the Foundation’s financial instruments is to fund its operational and capital expenditures. The main risks arising from the use of financial instruments are liquidity risk, credit risk, market risk and foreign exchange risk.

The Foundation’s risk management policies are summarized below:

Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from either the inability to sell financial assets quickly at their fair values; or the counterparty failing on repayment of a contractual obligation; or inability to generate cash inflows as anticipated.

The Foundation maintains a level of cash and cash equivalents deemed sufficient to finance operations. As part of its liquidity risk management, the Foundation regularly evaluates its projected and actual cash flows. It also continuously assesses conditions in the financial markets for opportunities to pursue fund-raising activities. Fund-raising activities include investments in quoted and unquoted securities.

As of December 31, 2015 and 2014, the carrying amounts of accounts and other payables will be settled within one year.

COM M I T M EN T 99

- 28 -

The following table shows the maturity profile of the Foundation’s financial assets and liabilities based on contractual undiscounted payments:

December 31, 2015

Within 1 Year 1-5 Years More than

5 Years Total Gross Financial Assets Loans and receivables Cash and cash equivalents

(excluding cash on hand) P=124,756,763 P=– P=– P=124,756,763 Receivables

Trade 1,746,422 − − 1,746,422 Advances to officers and

employees 1,280,788 − − 1,280,788 Nontrade 1,053,654 − − 1,053,654 Accrued interest 314,512 − − 314,512 Others 2,259,757 – – 2,259,757

131,411,896 – – 131,411,896AFS financial assets Common trust fund – 1,461,597,010 – 1,461,597,010 Quoted securities – 909,800,206 – 909,800,206 Unquoted securities – – 2,650,443 2,650,443 – 2,371,397,216 2,650,443 2,374,047,659 Total Financial Assets P=131,411,896 P=2,371,397,216 P=2,650,443 P=2,505,459,555

Other Financial Liabilities Accounts and other payables Trade P=39,120,298 P=– P=– P=39,120,298 Accrued expenses 34,113,929 – – 34,113,929 Payable to consignors 7,571,461 – – 7,571,461 Others 225,470 – – 225,470 Total Other Financial Liabilities P=81,031,158 P=– P=– P=81,031,158

December 31, 2014


5 Years Total Gross Financial Assets Loans and receivables Cash and cash equivalents

(excluding cash on hand) P=113,920,480 P=– P=– P=113,920,480 Receivables

Trade 2,897,032 − − 2,897,032 Advances to officers and

employees 3,101,112 − − 3,101,112 Nontrade 1,339,903 − − 1,339,903 Accrued interest 599,186 − − 599,186 Advances to cooperative 3,027,317 − − 3,027,317 Others 1,809,292 – – 1,809,292

126,694,322 – – 126,694,322 (Forward)

COM M I T M EN T 100

- 29 -

December 31, 2014


5 Years Total Gross AFS financial assets Common trust fund P=– P=1,575,841,562 P=– P=1,575,841,562 Quoted securities – 832,267,539 – 832,267,539 Unquoted securities – – 2,663,544 2,663,544 – 2,408,109,101 2,663,544 2,410,772,645 Total Financial Assets P=126,694,322 P=2,408,109,101 P=2,663,544 P=2,537,466,967

Other Financial Liabilities Accounts and other payables Accrued expenses P=49,215,430 P=– P=– P=49,215,430 Trade 25,276,912 – – 25,276,912 Advances 7,452,332 – – 7,452,332 Others 319,065 – – 319,065 Total Other Financial Liabilities P=82,263,739 P=– P=– P=82,263,739

Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Foundation’s holding of cash and cash equivalents exposes the Foundation to credit risk of the counterparty. Credit risk management involves dealing only with institutions for which credit limits have been established. The treasury policy sets credit limits for each counterparty. Given the Foundation’s diverse base of counterparties, it is not exposed to large concentrations of credit risk.

The table below shows the maximum exposure to credit risk for the components of the statements of financial position:

2015 2014

Cash and cash equivalents (excluding cash on hand) P=124,756,763 P=113,920,480 Receivables Trade 1,746,422 2,897,032 Advances to officers and employees 1,280,788 3,101,112 Nontrade 1,053,654 1,339,903 Accrued interest 314,512 599,186 Advances to cooperative – 3,027,317 Others 2,259,757 1,809,292 AFS financial assets: Common trust fund 1,461,597,010 1,575,841,562 Quoted securities 909,800,206 832,267,539 Unquoted securities 2,650,443 2,663,544 P=2,505,459,555 P=2,537,466,967

- 30

-

The

agin

g an

alys

is of

rece

ivab

les p

rese

nted

per

cla

ss, a

re a

s fol

low

s:

Dec

embe

r 31

, 201

5 N

eith

er P

ast

Due

nor

Impa

ired

In

divi

dual

lyIm

pair

edTo

tal

Past

Due

but

not

Impa

ired

<3

0 D

ays

30-6

0 D

ays

61-9

0 D

ays

91-1

20 D

ays

>120

Day

sTo

tal

Trad

e P=1

,684

,706

P=–P=5

2,61

1P=9

,105

P=–P=–

P=61,

716

P=2,1

57,6

93P=3

,904

,115

N

ontra

de

461,

048

139,

358

121,

671

71,3

4050

,548

209,

689

592,

606

1,79

8,80

82,

852,

462

Adv

ance

s to

coop

erat

ive

−–

––

––

−1,

328,

820

1,32

8,82

0 A

dvan

ces t

o of

ficer

s and

em

ploy

ees

1,26

6,65

914

,129

––

––

14,1

2913

,121

1,29

3,90

9 A

ccru

ed in

tere

st 31

4,51

2–

––

––

−–

314,

512

Oth

ers

2,25

9,75

7−

−−

−−

−−

2,25

9,75

7

P=5,9

86,6

82P=1

53,4

87P=1

74,2

82P=8

0,44

5P=5

0,54

8P=2

09,6

89P=6

68,4

51P=5

,298

,442

P=11,

953,

575

Dec

embe

r 31,

201

4 N

eith

er P

ast

Due

nor

Impa

ired

In

divi

dual

lyIm

paire

dTo

tal

Past

Due

but

not

Impa

ired

<30

Day

s30

-60

Day

s61

-90

Day

s91

-120

Day

s>1

20 D

ays

Tota

lTr

ade

P=1,2

74,4

45P=1

,057

,580

P=42,

951

P=11,

500

P=19,

679

P=490

,877

P=1,6

22,5

87P=3

,388

,253

P=6,2

85,2

85

Non

trade

45

0,46

558

,233

121,

176

135,

215

80,0

9449

4,72

088

9,43

81,

708,

216

3,04

8,11

9 A

dvan

ces t

o co

oper

ativ

e 3,

027,

317

––

––

–-

2,90

1,66

45,

928,

981

Adv

ance

s to

offic

ers a

nd e

mpl

oyee

s 2,

261,

200

346,

276

105,

446

320,

492

4,36

863

,330

839,

912

13,1

213,

114,

233

Acc

rued

inte

rest

599,

186

––

––

–-

–59

9,18

6 O

ther

s 1,

809,

292

−−

−−

−-

−1,

809,

292

P=9

,421

,905

P=1,4

62,0

89P=2

69,5

73P=4

67,2

07P=1

04,1

41P=1

,048

,927

P= 3,

351,

937

P=8,0

11,2

54P=2

0,78

5,09

6

- 31

-

The

tabl

e be

low

show

s the

cre

dit q

ualit

y of

the

Foun

datio

n’s f

inan

cial

ass

ets:

Dec

embe

r 31

, 201

5 N

eith

er P

ast D

ue n

or Im

pair

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Past

Due

but

Not

Impa

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In

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dual

lyIm

pair

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Tota

l H

igh

Gra

de

Med

ium

Gra

de

Low

Gra

de

Tota

l Ca

sh a

nd c

ash

equi

vale

nts (

excl

udin

g ca

sh o

n ha

nd)

P=124

,756

,763

P=–

P=–

P=1

24,7

56,7

63

P=–

P=–

P=124

,756

,763

Re

ceiv

able

s:

Tr

ade

1,67

9,76

1 4,

945

– 1,

684,

706

61,7

16

2,15

7,69

3 3,

904,

115

N

ontra

de

272,

213

188,

835

− 46

1,04

8 59

2,60

6 1,

798,

808

2,85

2,46

2

Adv

ance

s to

coop

erat

ive

– –

– –

– 1,

328,

820

1,32

8,82

0

Adv

ance

s to

offic

ers a

nd e

mpl

oyee

s 1,

266,

659

− −

1,26

6,65

9 14

,129

13

,121

1,

293,

909

A

ccru

ed in

tere

st 31

4,51

2 −

– 31

4,51

2 −

− 31

4,51

2

Oth

ers

2,25

9,75

7 −

– 2,

259,

757

− −

2,25

9,75

7 A

FS fi

nanc

ial a

sset

s:

Co

mm

on tr

ust f

und

1,46

1,59

7,01

0 –

– 1,

461,

597,

010

– –

1,46

1,59

7,01

0

Quo

ted

secu

ritie

s 90

9,80

0,20

6 –

– 90

9,80

0,20

6 –

– 90

9,80

0,20

6

Unq

uote

d se

curit

ies

2,65

0,44

3 –

– 2,

650,

443

– –

2,65

0,44

3

P=2,5

04,5

97,3

24

P=193

,780

–

P=2,5

04,7

91,1

04

P=668

,451

P=5

,298

,442

P=2

,510

,757

,997

Dec

embe

r 31,

201

4 N

eith

er P

ast D

ue n

or Im

paire

d Pa

st D

ue b

utN

ot Im

paire

d In

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dual

lyIm

paire

d To

tal

Hig

h G

rade

M

ediu

m G

rade

Lo

w G

rade

To

tal

Cash

and

cas

h eq

uiva

lent

s (ex

clud

ing

cash

on

hand

) P=1

13,9

20,4

80

P=–

P=–

P=113

,920

,480

P=–

P=–

P=1

13,9

20,4

80

Rece

ivab

les:

Trad

e 40

9,40

0 86

5,04

5 −

1,27

4,44

5 1,

622,

587

3,38

8,25

3 6,

285,

285

N

ontra

de

2,86

5 33

2,91

4 11

4,68

6 45

0,46

5 88

9,43

8 1,

708,

216

3,04

8,11

9

Adv

ance

s to

coop

erat

ive

3,02

7,31

7–

– 3,

027,

317

–2,

901,

664

5,92

8,98

1

Adv

ance

s to

offic

ers a

nd e

mpl

oyee

s 2,

261,

200

− −

2,26

1,20

0 83

9,91

2 13

,121

3,

114,

233

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9,18

6 −

− 59

9,18

6

Oth

ers

1,80

9,29

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– 1,

809,

292

− −

1,80

9,29

2 A

FS fi

nanc

ial a

sset

s:

Com

mon

trus

t fun

d 1,

575,

841,

562

– –

1,57

5,84

1,56

2 –

– 1,

575,

841,

562

Q

uote

d se

curit

ies

832,

267,

539

– –

832,

267,

539

– –

832,

267,

539

U

nquo

ted

secu

ritie

s 2,

663,

544

– –

2,66

3,54

4 –

– 2,

663,

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P=2

,532

,802

,385

P=1

,197

,959

P=1

14,6

86

P=2,5

34,1

15,0

30

P=3,3

51,9

37

P=8,0

11,2

54

P=2,

545,

478,

221


- 32 -

Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.

The Foundation’s exposure to the risk for change in market value relates primarily to the Foundation’s AFS financial assets. The Foundation’s AFS financial assets are managed by a trustee bank. The following table demonstrates the sensitivity to a reasonably possible change in the market prices, with all variables held constant, of the Foundation’s net assets on December 31, 2015 and 2014.

Increase (decrease) Effect on Net Assets

2015 20145% P=118,702,383 P=120,538,632

(5%) (118,702,383) (120,538,632) The credit quality of the financial assets was determined as follows:

Cash and cash equivalents - based on the nature of the counterparty and the Foundation’s internal rating system.

Receivables - high grade pertains to receivables from Ayala Group of Companies and debtors without past due accounts; medium grade pertains to receivables with past due accounts not exceeding 12 months; and low grade pertains to receivables with past due accounts exceeding 12 months.

AFS financial assets - the quoted and unquoted financial assets are unrated.

Foreign exchange risk The Foundation’s foreign exchange risk results primarily from movements of the Philippine Peso against the United States Dollar (US$).

The Foundation’s foreign currency-denominated financial instruments included in cash and cash equivalents amount to US$0.12 million in 2015 and US$0.56 million in 2014. The Philippine Peso values of these instruments amounted to P=5.58 million and P=25.10 million in 2015 and 2014, respectively.

In translating the foreign currency-denominated monetary assets into peso amounts, the exchange rate used was P=47.06:$1 and P=44.72:$1, based on the Philippine Peso - US dollar exchange rate as of December 31, 2015 and 2014, respectively.

The following table demonstrates the sensitivity to a reasonably possible change in the US dollar rate, with all variables held constant, of the Foundation’s result of activities (due to changes in the fair value of monetary assets) as of December 31, 2015 and 2014:

US$ depreciates (appreciates) Effect on Net Assets

2015 2014 P=1.0 P=118,618 P=561,343(1.0) (118,618) (561,343)


- 33 -

15. Other Activities

Statements of revenue and expenses of the Foundation’s museum, library and other revenue-earning community development projects for the years ended December 31, 2015 and 2014 are as follows:

2015 2014 Revenue P=34,181,318 P=33,902,784 Expenses (48,722,493) (46,292,136) Net loss P=14,541,175 P=12,389,352

16. Supplementary Tax Information Under Revenue Regulations (RR) 15-2010

RR No. 15-2010 are promulgated to amend certain provisions of RR No. 21-2002 prescribing the manner of compliance with any documentary and/or procedural requirements in connection with the preparation and submission of financial statements accompanying tax returns. In addition to the disclosures mandated under PFRS, RR No. 15-2010 requires disclosures regarding information on taxes, duties and license fees paid or accrued during the taxable year.

The Foundation also reported and/or paid the following types of taxes for 2015:

Value-added Tax (VAT) The NIRC of 1997 also provides for the imposition of VAT on sales of goods and services. Accordingly, the Foundation’s sales from other activities are subject to output VAT while its importations and purchases from other VAT-registered individuals or corporations are subject to input VAT. Republic Act No. 9337 increased the value added tax rate from 10.0% to 12.0%, effective February 1, 2006.

a. Output VAT

Net Sales/

Receipts Output VAT Taxable sales Leasing income P=14,432,541 P=1,731,904 Sales of services 9,056,231 1,086,748 Sale of goods 9,810,197 1,177,224 P=33,298,969 P=3,995,876

The Foundation’s sales of services are based on actual collections received, hence, may not be the same as amounts accrued in the statement of activities.


- 34 -

b. Input VAT

Balance at January 1 P=6,344,943 Current year’s domestic purchases/payments for: Services lodged under other accounts 3,385,453 Goods other than for resale or manufacture 452,303 10,182,699 Claims for tax credit/refund and other adjustments (3,995,876)Balance at December 31 P=6,186,823

c. Importations

Dutiable value P=187,280 Duties and taxes 42,325Storage and handling fee 12,407 Total landed cost P=242,012

d. Excise Tax

The Foundation did not enter into any transaction subject to excise tax.

e. Documentary stamp tax

The Foundation paid documentary stamp taxes amounting to P=150.

f. All other local and national taxes

This includes all other taxes, local and national, including real estate taxes, licenses and permit fees lodged under the ‘Project’ and ‘General and administrative’ accounts both in the Foundation’s statement of activities:

Details consist of the following:

Project

Expenses

General and Administrative

Expenses Total License and permits fees P=243,106 P=54,294 P=297,400 Real estate taxes 271,659 – 271,659 Income taxes – 139,311 139,311 Others – 2,515 2,515 P=514,765 P=196,120 P=710,885

g. Withholding Taxes

Withholding taxes on compensation and benefits P=15,944,157 Expanded withholding taxes 6,271,590 Final withholding taxes 229,907 Withholding VAT 91,963

P=22,537,617


- 35 -

h. Tax assessments

As of December 31, 2015, the Foundation has not received any final assessment notice from the BIR.


AYALA FOUNDATION, INC. SCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONS PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS Effective as of December 31, 2015

Adopted Not Adopted

Not Applicable

Framework for the Preparation and Presentation of Financial Statements Conceptual Framework Phase A: Objectives and qualitative characteristics

PFRSs Practice Statement Management Commentary Philippine Financial Reporting Standards

PFRS 1 (Revised)

First-time Adoption of Philippine Financial Reporting Standards

Amendments to PFRS 1 and PAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

Amendments to PFRS 1: Additional Exemptions for First-time Adopters

Amendment to PFRS 1: Limited Exemption from Comparative PFRS 7 Disclosures for First-time Adopters

Amendments to PFRS 1: Severe Hyperinflation and Removal of Fixed Date for First-time Adopters

Amendments to PFRS 1: Government Loans

Amendments to PFRS 1: Borrowing costs

Amendments to PFRS 1: Meaning of ‘Effective PFRSs Not early adopted

PFRS 2 Share-based Payment

Amendments to PFRS 2: Vesting Conditions and Cancellations

Amendments to PFRS 2: Group Cash-settled Share-based Payment Transactions

Amendments to PFRS 2: Definition of Vesting Condition

PFRS 3 (Revised)

Business Combinations

Amendments to PFRS 3: Accounting for Contingent Consideration in a Business Combination

Amendments to PFRS 3: Scope Exceptions for Joint Arrangements

PFRS 4 Insurance Contracts

Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts


- 2 -

PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS Effective as of December 31, 2015

Adopted Not Adopted

Not Applicable

PFRS 5 Non-current Assets Held for Sale and Discontinued Operations

Amendments to PFRS 5: Changes in Methods of Disposal

PFRS 6 Exploration for and Evaluation of Mineral Resources

PFRS 7 Financial Instruments: Disclosures

Amendments to PFRS 7: Transition

Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets

Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition

Amendments to PFRS 7: Improving Disclosures about Financial Instruments

Amendments to PFRS 7: Disclosures - Transfers of Financial Assets

Amendments to PFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities

Amendments to PFRS 7: Mandatory Effective Date of PFRS 9 and Transition Disclosures

Amendments to PFRS 7: Amendments to PFRS 7: Servicing Contracts

Applicability of the Amendments to PFRS 7 to Condensed Interim Financial Statements

PFRS 8 Operating Segments

Amendments to PFRS 8: Aggregation of Operating Segments and Reconciliation of the Total of the Reportable Segments’ Assets to the Entity’s Assets

PFRS 9 Financial Instruments (2010 version)

Financial Instruments - Hedge Accounting and amendments to PFRS 9, PFRS 7 and PAS 39 (2013 version)

Financial Instruments Not early adopted Amendments to PFRS 9: Mandatory Effective Date of PFRS 9 and Transition Disclosures


- 3 -


Adopted Not Adopted

Not Applicable

PFRS 10 Consolidated Financial Statements

Amendments to PFRS 10, PFRS 12 and PAS 27: Investment Entities

Amendment to PFRS 10: Investment Entities: Applying the Consolidation Exception

Amendment to PFRS 10 and PAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture*

PFRS 11 Joint Arrangements

Amendment to PFRS 11: Accounting for Acquisitions of Interests in Joint Operations

PFRS 12 Disclosure of Interests in Other Entities


PFRS 13 Fair Value Measurement

Amendments to PFRS 13: Short-term receivable and payables

Amendments to PFRS 13: Portfolio Exception

PFRS 14 Regulatory Deferral Accounts Not early adopted

IFRS 15 Revenue from Contracts with Customers** Not early adopted

IFRS 16 Leases** Not early adopted

Philippine Accounting Standards

PAS 1 (Revised)

Presentation of Financial Statements

Amendment to PAS 1: Capital Disclosures

Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation

Amendments to PAS 1: Presentation of Items of Other Comprehensive Income

Amendments to PAS 1: Clarification of the requirements for comparative information

Amendment to PAS 1: Disclosure Initiative Not early adopted

PAS 2 Inventories

PAS 7 Statement of Cash Flows

PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

PAS 10 Events after the Balance Sheet Date

PAS 11 Construction Contracts


- 4 -


Adopted Not Adopted

Not Applicable

PAS 12 Income Taxes

Amendment to PAS 12 - Deferred Tax: Recovery of Underlying Assets

PAS 16 Property, Plant and Equipment

Amendment to PAS 16: Classification of servicing equipment

Amendment to PAS 16 and PAS 38: Revaluation Method - Proportionate Restatement of Accumulated Depreciation

Amendment to PAS 16 and PAS 38: Clarification of Acceptable Methods of Depreciation and Amortization

Amendments to PAS 16 and PAS 41: Bearer Plants

PAS 17 Leases

PAS 18 Revenue

PAS 19 Employee Benefits

Amendments to PAS 19: Actuarial Gains and Losses, Group Plans and Disclosures

PAS 19 (Amended)

Employee Benefits

Amendments to PAS 19: Defined Benefit Plans - Employee Contributions

Amendments to PAS 19: Regional Market Issue regarding Discount Rate Not early adopted

PAS 20 Accounting for Government Grants and Disclosure of Government Assistance

PAS 21 The Effects of Changes in Foreign Exchange Rates

Amendment: Net Investment in a Foreign Operation

PAS 23 (Revised)

Borrowing Costs

PAS 24 (Revised)

Related Party Disclosures

Amendments to PAS 24: Key Management Personnel

PAS 26 Accounting and Reporting by Retirement Benefit Plans

PAS 27 (Amended)

Separate Financial Statements


Amendment to PAS 27: Equity Method in Separate Financial Statements


- 5 -


Adopted Not Adopted

Not Applicable

PAS 28 (Amended)

Investments in Associates and Joint Ventures

Amendment to PFRS 10 and PAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture*

PAS 29 Financial Reporting in Hyperinflationary Economies

PAS 31 Interests in Joint Ventures

PAS 32 Financial Instruments: Disclosure and Presentation

Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation

Amendment to PAS 32: Classification of Rights Issues

Amendment to PAS 32: Presentation – Tax effect of distribution to holders of equity instrument

Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities

PAS 33 Earnings per Share

PAS 34 Interim Financial Reporting

Amendments to PAS 34: Interim financial reporting and segment information for total assets and liabilities

Amendments to PAS 34: Disclosure of Information ‘elsewhere in the interim financial report’

PAS 36 Impairment of Assets

Amendments to PAS 36: Recoverable Amount Disclosures for Non-Financial Assets

PAS 37 Provisions, Contingent Liabilities and Contingent Assets

PAS 38 Intangible Assets

Amendments to PAS 16 and PAS 38: Revaluation Method - Proportionate Restatement of Accumulated Amortization

Amendments to PAS 16 and PAS 38: Clarification of Acceptable Methods of Depreciation and Amortization


- 6 -


Adopted Not Adopted

Not Applicable

PAS 39 Financial Instruments: Recognition and Measurement

Amendments to PAS 39: Transition and Initial Recognition of Financial Assets and Financial Liabilities

Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions

Amendments to PAS 39: The Fair Value Option

Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts

Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets

Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition

Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives

Amendment to PAS 39: Eligible Hedged Items

Amendment to PAS 39: Novation of Derivatives and Continuation of Hedge Accounting

PAS 40 Investment Property

Amendment to PAS 40: Interrelationship between PFRS 3 and PAS 40

PAS 41 Agriculture

Amendment to PAS 16 and PAS 41: Bearer Plants

Philippine Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

IFRIC 2 Members' Share in Co-operative Entities and Similar Instruments

IFRIC 4 Determining Whether an Arrangement Contains a Lease

IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

IFRIC 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment

IFRIC 7 Applying the Restatement Approach under PAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 8 Scope of PFRS 2


- 7 -


Adopted Not Adopted

Not Applicable

IFRIC 9 Reassessment of Embedded Derivatives

Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives

IFRIC 10 Interim Financial Reporting and Impairment

IFRIC 11 PFRS 2- Group and Treasury Share Transactions

IFRIC 12 Service Concession Arrangements

IFRIC 13 Customer Loyalty Programmes

IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

Amendments to Philippine Interpretations IFRIC- 14, Prepayments of a Minimum Funding Requirement

IFRIC 15 Agreements for the Construction of Real Estate*

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 18 Transfers of Assets from Customers

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

IFRIC 21 Levies

SIC-7 Introduction of the Euro

SIC-10 Government Assistance - No Specific Relation to Operating Activities

SIC-12 Consolidation - Special Purpose Entities

Amendment to SIC - 12: Scope of SIC 12

SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers

SIC-15 Operating Leases - Incentives

SIC-25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease

SIC-29 Service Concession Arrangements: Disclosures.

SIC-31 Revenue - Barter Transactions Involving Advertising Services

SIC-32 Intangible Assets - Web Site Costs ** Effectivity has been deferred by the SEC and FRSC ** New standard issued by the IASB has not yet been adopted by the FRSC


ayala foundation directoryAyala Foundation, Inc.8F 111 Paseo Building Paseo de Roxas corner Legaspi StreetLegaspi Village 1229Makati City, PhilippinesTel (632) 717 5800Fax (632) 813 4488www.ayalafoundation.org

Ayala MuseumMakati Avenue corner De la Rosa StreetGreenbelt ParkMakati City, PhilippinesTel (632) 759 8288Fax (632) 757 2787www.ayalamuseum.org

Filipinas Heritage Library6F Ayala MuseumMakati Avenue corner De la Rosa StreetGreenbelt ParkMakati City, PhilippinesTel (632) 759-8288 local 36www.filipinaslibrary.org.ph

Visayas Operations4F Krizia BuildingGorordo Avenue, LahugCebu City, PhilippinesTel/Fax (6332) 412 2405

Mindanao Operations2F Climbs Building, Tiano Brothers cor. Cayetano Pacana StreetCagayan de Oro City, PhilippinesTel (638822) 729 497


Corporate DirectoryREAL ESTATEAyala Land Inc.30F Tower One and Exchange PlazaAyala Triangle, Ayala Avenue, Makati City 1226 PhilippinesTel (632) 908 3000Fax (632) 848 5336www.ayalaland.com.ph

FINANCIAL SERVICESBank of the Philippine Islands6768 Ayala Avenue,Makati City 1226 PhilippinesTel (632) 818 5541Express Phone Banking (632) 89 100Fax (632) 845 5267www.bpiexpressonline.com

TELECOMMUNICATIONSGlobe TelecomThe Globe Tower, 32nd Street corner 7th AvenueBonifacio Global City 1634 Taguig, PhilippinesLandline: (632) 730 2000 (Trunk Line)(632) 730 1000 (Customer Care)(632) 730 1010 (Sales)(632) 730 1300 (Loyalty)Mobile: 211www.globe.com.ph

WATER INFRASTRUCTUREManila Water Company Inc.MWSS Administration Building489 Katipunan Road, Balara, Quezon City 1105 PhilippinesTel (632) 917 5900Hotline (632) 1627Fax (632) 928 2450www.manilawater.com

ELECTRONICS MANUFACTURINGIntegrated Micro-Electronics Inc.North Science Avenue, Special Export Processing ZoneLaguna Technopark, Biñan, Laguna4024 PhilippinesTel (632) 756 6840Fax (6349) 544 0311www.global-imi.com

BPO AND EDUCATIONLiveIt Investments Ltd.Ayala Education Inc.33F Tower One, Ayala TriangleAyala Avenue, Makati City1226 PhilippinesTel (632) 908 3455Fax (632) 892 5112

INTERNATIONALAG Holdings Limited250 North Bridge Road#32-03A Raffles City TowerSingapore 179101Tel (65) 6311 5151Fax (65) 6311 5160

AUTOMOTIVEAyala Automotive Holdings CorporationHonda Cars Makati Inc.1 Pres. Sergio Osmeña Highway Magallanes, Makati City 1232 PhilippinesTel (632) 902 9393Fax (632) 852 6593www.hondamakati.com.ph

Isuzu Automotive Dealership Inc.Alabang-Zapote Road corner Acacia AvenueAyala Alabang, Muntinlupa City1780 PhilippinesTel (632) 807 1788Fax (632) 807 6011www.isuzuautodealer.com.ph

Automobile Central Enterprise Inc.11F Bonifacio One Technology Tower3030 Rizal Drive West cor. 31st StreetBonifacio Global City, Taguig City1634 PhilippinesTel (632) 459 4555www.volkswagen.com.ph

ENERGYAC Energy Holdings Inc.32F Tower One, Ayala TriangleAyala Avenue, Makati City 1226 PhilippinesTel (632) 908 3321Fax (632) 751 6511

INFRASTRUCTUREAC Infrastructure Holdings Corporation32F Tower One, Ayala TriangleAyala Avenue, Makati City 1226 PhilippinesTel (632) 908 3320Fax (632) 751 6511

SOCIAL COMMITMENTAyala Foundation Inc.8F 111 Paseo Building Paseo de Roxas corner Legaspi StreetLegaspi Village 1229Makati City, PhilippinesTel (632) 717 5800Fax (632) 813 4488www.ayalafoundation.org


L I F EWHAT WE MAKE OF IT

C O M M I T M E N T WHAT WE NURTURE

L i f e s t y l eHOW WE LIVE FULLY

A s p i r at i o n sWHAT WE MAKE HAPPEN

e v e r y d ayWHAT KEEPS US GOING

G R O W T HWHAT WE ACHIEVE TOGETHER

F O R W A R DWHERE THE FUTURE TAKES US

C O M M I T M E N TTh e front cover of the Ayala

Foundation 2015 Annual Report

features the works of the artist

Fernando Zóbel (1924–1984), from

left: Tropical Garden (1953), Boy with

Kite (1952), Untitled (Maiden beside

Fruitstand) (1953). All from the Ayala

Museum collection.

Acknowledgements

Editorial and Design DirectionAyala Foundation, Inc.

Photography

Wig Tysmans (cover, additional management)

Paco Guerrero (management)

Vincent Coscolluela, Peck Imson (operations)

Neal Oshima (photograph of kinnari from the Ayala Museum collection, page 54)

Ayala Foundation (additional)

Concept, Design, Copy, and Layout Medium3

This report cover is printed on FSC®-certifi ed Neenah Classic Crest, which is made with 100% post-consumer waste. The main pages of this report are printed on 9Lives offset, a premium-grade recycled paper that is carbon-neutral, FSC®-certifi ed and made of 100% post-consumer waste.

AYALA FOUNDATION, INC.8F 111 Paseo Building

Paseo de Roxas corner Legaspi StreetLegaspi Village, Makati City, Philippines 1229

Tel (632) 717 5800 • Fax (632) 813 4488www.ayalafoundation.org

Our commitment to nation-building defines who we are. And if we move as one, we can make it work.

Ruel T. MarananPresident, Ayala Foundation

Documents

COMMITMENT - ayalafoundation.org · Vision Communities where people are productive, creative, self-reliant, and proud to be Filipino. Mission ... barangay Sibaltan, El Nido, Palawan,