Ali Strama PDF Free

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ATENEO DE MANILA UNIVERSITY

GRADUATE SCHOOL OF BUSINESS
A STRATEGIC MANAGEMENT PAPER ON

AYALA LAND INCORPORATED
SUBMITTED TO:
Professor Carlos P. Gatmaitan, MBA
In Partial Fulfillment of the Course Requirement for SPSTRAMA
SUBMITTED BY:
Matthew Z. Marte
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Table of Contents
Introduction ............................................................................................................................................................................ 3
Background of the Company............................................................................................................................................... 3
Current Revenue Size and Composition ........................................................................................................................... 10
Research and design methodology ................................................................................................................................... 20
Macro Environmental Analysis ............................................................................................................................................. 21
PESTEL ............................................................................................................................................................................... 21
Industry and Competitor Analysis ......................................................................................................................................... 32
Porters 5 forces Model...................................................................................................................................................... 33
Competitive Profile Matrix (CPM) ..................................................................................................................................... 38
Competitive Profile Matrix................................................................................................................................................ 40
External Factor Evaluation (EFE) matrix ............................................................................................................................ 43
Company Analysis ................................................................................................................................................................. 54
Current Vision and Mission Statement ............................................................................................................................. 54
Company Internal Audit .................................................................................................................................................... 61
Horizontal Analysis ............................................................................................................................................................ 66
Vertical Analysis ................................................................................................................................................................ 72
Key Financial Ratios........................................................................................................................................................... 77
Internal Factor Evaluation (IFE) Matrix ................................................................................................................................. 78
Strengths ........................................................................................................................................................................... 78
Weaknesses ...................................................................................................................................................................... 80
Strategy Formulation ............................................................................................................................................................ 82
Strengths, weaknesses, opportunities and threats (SWOT) Matrix.................................................................................. 82
Strategic Position and action evaluation (SPACE) matrix ................................................................................................. 84
Boston Consulting Group (BGC) Matrix ............................................................................................................................ 86
Grand Strategy Matrix....................................................................................................................................................... 86
QSP Matrix ........................................................................................................................................................................ 87
Strategic Corporate and Functional Objectives and recommended strategies .................................................................... 89
Recommended revised Vision and mission statement ..................................................................................................... 89
Key strategic challenge and recommended corporate strategic objectives..................................................................... 89
Recommended Strategies ................................................................................................................................................. 90
Recommended Department program and Action plans................................................................................................... 94
Financial Projections ......................................................................................................................................................... 96
Projected Financial Ratios ............................................................................................................................................... 115
Strategy evaluation monitoring and control....................................................................................................................... 115
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The Balance scorecard Strategy Map.............................................................................................................................. 115

Balance scorecard performance monitoring dashboard ................................................................................................ 115
Contingency Plan ................................................................................................................................................................ 117
Bibliography ........................................................................................................................................................................ 119
Appendices .......................................................................................................................................................................... 120
Audited Financial statements ......................................................................................................................................... 120
Introduction
Background of the Company
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Ayala Land Inc. (ALI) is the largest property developer in the Philippines with a solid track record in developing
large-scale, integrated, mixed-use, and sustainable estates that are now thriving economic centers.
Following the success of the Makati Central Business District (Makati CBD), Ayala Alabang, Cebu Park District,
Bonifacio Global City (BGC), and Nuvali, ALI continues to increase its footprint by building estates that reach
and benefit more people.
With 11,624 hectares in its land bank, 26 estates, and presence in 57 growth centers across the country, ALI
offers a balanced and complementary mix of residential developments, shopping centers, offices, hotels and
resorts, and strategic investments. Construction and property management services are led by its subsidiaries
Makati Development Corporation and Ayala Property Management Corporation, respectively.
ALI pioneers standards and practices that reflect the value it places on sustainability in all developments. As a
responsible corporate citizen, ALI acts with integrity, foresight, and prudence.
Focused on its vision of “enhancing land and enriching lives for more people,” ALI empowers its employees to
deliver quality products and services and build long-term value for its shareholders.
Nature of the Business
ALI and its Subsidiaries are found in all areas of the real estate business. Its biggest revenue generators are in
the residential sector followed by its leasing services under its retail malls and office leasing brands including.
ALI is also well diversified as it is also involved in construction and property management. Aside from these
major business units, ALI also owns investments in air transportation and health care services.
Property Development
For property development, ALI has a specific group that concentrates on the management of the five brands,
namely AyalaLand Premier, Alveo, Avida, Amaia, and BellaVista. The responsibilities of managing these five
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brands fall under the Residential Business Group. Their scope is the sale and development of both horizontal
and vertical residential spaces, offices, and commercial and industrial lots.
Fig 1. ALI’s residential brands.
AyalaLand Premier (ALP) is the leading brand under ALI. This brand focuses on the luxury sector and is now
the industry leader. ALP offers both horizontal and vertical housing and office item ranges. ALP initiated 12
initiatives in 2018 worth 54.6B Pesos.
Alveo serves the upscale market, it currently stands as one of the leading brands in the segment. It offers
horizontal and vertical residential and office spaces. Alveo launched 15 projects in 2018 with a value of 50.7B
Avida is ALI’s brand for the middle market segment. In 2018 it successfully launched 12 projects with a value of
PHP29.6 billion. It offers residential lots and condominium units found in major central business districts in Metro
Manila and in the rest of the Philippines.
For the affordable housing segment there is Amaia, which launched six projects in 2018 valued at PHP3.8 billion.
And BellaVista which focuses on the socialized market segment and launched 1 new project and expansions in
3 existing projects produced a value of PHP768 million in the same year. BellaVista grew to almost double from
the previous year due to a turnover of 1,201 units.

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2018 Launches and total CAPEX.
Commercial Leasing
ALI’s commercial, retail, and hotel and resorts leasing brands.
ALI’s commercial leasing business is handled by the Commercial Business Group. Under its management are
the Ayala Malls Inc, Ayala Land Offices, Inc., and Ayala Land Hotels and Resorts Corp. Commercial leasing
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products are designed to complement residential developments deliberately. This is in line with the intended
creation of synergy among the products and services ALI has on offer.
ALI’s gross leasable area under Ayala Malls Inc’s shopping centers reached 1.90M sqm in 2018. Due to
successes ALI enjoyed in Makati with Glorietta and in Quezon City with UP Town Center, and Clover Leaf and
its malls in Pasig City revenue was boosted by PHP2.25B or 13%.The average monthly lease rate per square
meter was PHP1,073.00PHP and rental grew 6% from the previous year. Average occupancy rate is at 89%
while stable malls’ occupancy rate is 95%.
1.90 million square meters of GLA as of 2018 under Ayala Malls Inc.
ALI’s Office Leasing refers to the development and lease of office buildings and lease of factory buildings.
Revenues from office leasing rose by 29% to PHP8.61 billion from PHP6.66 billion due to the stabilized
occupancy rates of new offices such as Vertis Corporate Center in Quezon City, Circuit Corporate Center in
Makati City, and The 30th Corporate Center in Pasig City. Office leasing EBITDA margin was sustained at 91%.
The monthly lease rate for offices averaged PHP755 per sq. meter. The average occupancy rate for all offices
was 91%, while the occupancy rate of stable offices was 96%.
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The Company completed four new offices in 2018—Bacolod Capitol Corporate Center with 11,000-sq. meters
GLA, Vertis North Corporate Center 3 with 38,000 sq. meters, Ayala North Exchange HQ Tower with 20,000 sq.
meters and another 22,000 sq. meters in it BPO Tower—bringing the offices’ year-end GLA to 1.11 million sq.
meters.
In 2018, the Company finished four new offices— the 11,000-sq Bacolod Capitol Corporate Centre at 38,000 sq
of gross leasable area, Vertis North Corporate Center with, 20,000 sq. and Ayala North Exchange HQ Tower
with another 22,000 sq. meters. All these investment activities by ALI has reached a year-end office GLA of 1.11
million sq. meters.
1.11 million square meters of Office GLA as of 2018
Hotels and Resorts – development, operation and management of branded and owner-operated hotels; lease of
land to hotel tenants; development, operation and management of eco-resorts.

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Full-year operations of Seda Vertis North, Seda Capitol Central Bacolod and the recently renovated Apulit Island
Resort in El Nido, Palawan coupled with the improved performance of our B&B’s nudged revenues from our
hotels and resorts higher by 14%, to reach PHP6.39 billion from previous year’s P5.62 billion. Average revenue-
peravailable- room (REVPAR) of all hotels and resorts slightly decreased by 1% to PHP3,531 and PHP7,989 a
night, respectively.
Seda Vertis North and Seda Capitol Central Bacolod's annual operation with Apulit Island Resort in El Nido,
Palawan combined with an improved 14%, to achieve PHP6.39 billion compared with P5.62 billion last year. The
average revenue per room for all hotels went down by 1% to PHP7 989 per night and for resorts, the revpar went
down to PHP3,531.
New Leasing Formats
ALI’s new leasing formats as of 2018.
ALI’s new service offering aims to penetrate the co-living market which is a recent market development. As of
2018, it has 196 “multiple occupancy rooms” including communal spaces. This format is unique since it
encourages social interactions among its occupants. Amenities include Wifi, functional rooms in the form of
outdoor spaces and roof deck lounges. It currently enjoys an occupancy rate of 86%. There are currently 2 sites
in existence and one that is looking at year 2021 for launching.
Clock In
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Under the category of co-working spaces, ALI has Clock In. It currently has 433 seats located in 3 sites. These
three sites are in Makati and BGC. An additional 3 sites are set to launch in 2019.
Standard Factory Buildings and Warehouses
To accommodate the growing opportunities in industries such as manufacturing and logistics, ALI has on offer
standard factory buildings for leasing. It currently has 136,874 sq. meters of GLA in the form of standard factory
buildings and warehouse spaces.
Services
This segment is composed of the Company’s construction business through Makati Development Corporation
(MDC); property management, through Ayala Property Management Corporation (APMC), power services,
through Direct Power Services, Inc. (DPSI), Ecozone Power Management, Inc. (EPMI), and Philippine Integrated
Energy Solutions, Inc. (PhilEnergy); and airline services firm AirSWIFT, for the hotels and resorts business. Total
revenues of this segment rose by 5% to PHP76.72 billion from PHP72.81 billion previous year
Current Revenue Size and Composition

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As of 2018, ALI’s total revenue reached PHP163 billion. The biggest contributor, with 73.53%, is its Residential
Development business with a total of PHP 120.39 billion, composed of all five of its residential brands. In second
place is Rental Business that is further comprised of Ayala Malls and Offices with PHP 33.58 billion, contributing
20.51%. Hotels and resorts added PHP 6 billion and its construction business with PHP 2.00 billion at 3.9% and
1.46% respectively.
ALI’s Residential Development business can be further broken down to the following:
All of Ayala Land’s real estate sales from residential development are revenue from contracts with customers
recognized over time.

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Net Income Growth
The annual average growth rate of ALI’s Net income in the last 5 years is 19%. Growth from 2017 to 2018 is
15%.
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ALI’s Net Income can be divided into two major categories; the first is through property development and the
second is through leasing. In 2018, 68% of net income earned came from the recurring income category.
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Markets and Customers Served
ALI’s products and services are offered across the Philippines with a degree of concentration in Luzon,
specifically in the National Capital Region and its immediate neighbors. In Visayas, ALI has assets from El Nido
all the way to Cebu. It also has assets in Misamis Oriental, CDO and Davao down in Mindanao.
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Composition of Customers; Local and Foreign
On the basis of Sales Reservations of a total of PHP 141 billion in 2018, the majority came from Local Filipinos
at 71% or PHP 101.4 billion. Following in second place is are foreign customers at 18% with PHP 24.8 billion
and lastly by Overseas Filipinos with 11% or 15.7 billion.
Percentages are up for Local Filipinos and Overseas Filipinos with 26% and 34% increases respectively due to
Local and Foreign high-net worth individuals driving the demand for upper-mid to luxury developments.
As for the composition of Other Nationalities, the biggest contributions come from Chinese nationals which
comprise 49% of the pie or PHP 10.00 billion. The current number is down 27% from the previous year due to
China’s clamp down on capital leaving its shores, with the current tariffs coming from the trade war with the US,
this downward trend is expected to continue.
Number of Employees
As of end-2018, Ayala Land Group’s total headcount was 5,358, comprising 2,787 women and 2,571 men. There
were 1,109 new hires, 52% women, and 48% men. By age, 70% were below 30 years old; 30% were 30 and
above. By region, 87% were from Luzon; 9% from the Visayas; and 4%, Mindanao. Attrition rate has decreased
to 12.69% from 12.99% in 2017.

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By the end of 2018, the headquarters of Ayala Land Group had totalled 5,358, consisting of 2,787 women and
2,571 men. There were 1,109 new hires, 52% female and 48% male. In regards to age, 70 percent were younger
than 30 years; 30 percent were older than 30 years. By area, 87% came from Luzon; 9% came from the Visayas
and 4% came from Mindanao. The attrition level fell to 12.69% compared to 12.99% in 2017.
In 2018, 86.2% of the employees of APMC were locally recruited in their corresponding operational fields. Ayala
Land has 500 employees in Sicogon in Iloilo and 350 on the island. Seda hotels still hire roughly 90% of their
employees locally and generate jobs in hotel places.
Leadership
The Board is guided by the company mission and vision in fulfilling its tasks. The Board, as part of its
responsibilities, performs an annual evaluation of the vision and mission of the Company, its policies and
corporate governance procedures and performs needed changes. In line with this, the Board also guarantees
the internal checks and balances or power, its ensures risk management procedures are observed, and that
financial reporting is accurate and reliable. The Board also ensures that the company is in compliance with
relevant legislation and regulations. Finally, the Board also ensures the observation of the Company's Code of
Ethics.
The board consists of nine members, among which, over 50% are autonomous and/or non-executive directors.
These Independent directors may only serve on the Board for a maximum of nine years.
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Fig 2. Ayala Land’s Corporate Governance.
The Chairman, Vice-Chairman and CEO have different positions and duties, to ensure that the Board of Directors
and governance operate separately, to create a proper balance of authority and improved responsibility.
Mr. Fernando Zobel de Ayala is Chairman of the Board. He took office in April 1999.
The President oversees all sessions of the board and shareholders, he can appoint his substitute if he is not
accessible. The President also guarantees that every director freely expresses his views on all subjects under
debate.
Mr. Jaime Augusto Zobel de Ayala is the Vice President. Since June 1988 he has served as Director and Member
of the Executive Committee.
Mr. Bernard Vincent O. Dy, President and CEO, took the role in April 2014. Mr Dy implements decisions of the
Board and those of the general meetings of the shareholders.

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Corporate Secretary
The Corporate Secretary guarantees that all Board Members obtain appropriate and prompt data. He also
provides legal advice on the duties and obligations of the managers.
The Corporate Secretary is available to each member of the Board separately and independently.
The Corporate Secretary for Ayala Land is Mr. Solomon M. Hermosura, who took office in April 2011. Mr.
Hermosura has been the Group's General Counsel since April 2015.
Chief Compliance Officer
The Chief Compliance Officer (CCO) ensures compliance with all regulations that govern the firm, and adoption
and implementation of corporate governance best practices across the organization. Ayala Land’s CCO is Mr.
Augusto D. Bengzon. He concurrently serves as the company’s Chief Financial Officer and Treasurer.
The Chief Compliance Officer (CCO) guarantees executive and adoption and implementation of corporate
governance procedures throughout the organization with all regulatory requirements governing the company.
Mr. Augusto D. Bengzon is the CCO of Ayala Land. He also acts as Chief Financial Officer and Treasurer of the
company.
Chief Audit Executive
The Chief Audit Executive (CAE), which reports to the Audit Committee, is responsible for offering the internal
audit group with autonomous, objective insurance and consultancy administration. The Internal Audit Group
provides the Board with the release of its duties and responsibilities as set out in the revised Corporate
Governance Code of the SEC for 2009. Ms Ma. Divina Y. Lopez is the CAE of Ayala Land.
Chief Risk Officer

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The Chief Risk Officer (CRO), reporting to the Board Risk Oversight Committee, it is the CRO’s responsibility to
conduct risk assessments annually, to recognize risks and their impact on the corporation’s business and
determines corresponding measures to address such risks. Mr. Maphilindo L. Tandoc is Ayala Land’s CRO.
Management-Level Committees
Ayala Land’s management-level committees guide critical decision-making on the level of business units. As it
is reflected in the rest of the organization, the committee embraces the importance of adopting and maintaining
clear policies, best practices, and strong internal controls in support of effective corporate governance.
Strategic Business Units and Subsidiaries
Ayala Land’s strategic business units (SBUs) and subsidiaries execute the corporation’s strategies and oversee
day-to-day operations across the company’s diversified product lines. Each of the SBUs and subsidiaries is led
by a group head who reports to the President and CEO.
There are four main business units: the strategic land bank management group is in charge of the acquisition of
land, and the development of large-scale, integrated, mixed-use, and sustainable estates; the residential
business group handles the sale of residential and office condominiums, house and lot developments and
commercial and industrial lots, through its five brands; the commercial business group oversees the development
and lease of shopping centers, offices, and hotels and resorts through Ayala Land Malls, Inc., Ayala Land Offices,
Inc., and Ayala Hotels and Resorts Corp. respectively; and the services group, which is composed of the
company’s construction arm, Makati Development Corporation, and facilities and properties manager, Ayala
Property Management Corporation.
Ayala Land’s policies and practices are principally documented in its articles of incorporation and bylaws, and
are also available in this integrated report, annual corporate governance report, corporate governance manual,
and the investor relations website.

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The strategic business units of Ayala Land and its subsidiaries implement corporate policies and monitor day-
to-day activities across the diverse product lines of Ayala Land. Each of the SBUs and subsidiaries is headed by
a group leader who reports to the President and CEO.
There are four primary company divisions: strategic land bank management group is responsible for the
purchase of property and the creation of large, embedded, mixed-use and sustainable estates; the Residential
business group, through its five subsidiaries, is responsible for the development of residential and office
condominiums.
Research and design methodology

Research Design
The research methodologies used in the writing of this paper includes Qualitative Research to investigate the
relevant critical success factors for real estate firms and while Quantitative Research was used to determine the
basis for weights and ratings that were inferred from data gathered from available literature. The literature used
for the writing of this paper includes public financial records about the company and its competitors and other
public sources of information primarily found on the internet.
The primary data sources for this paper includes the company website of Ayala Land Inc., its public financial
records either uploaded in the company website or found in the Securities and Exchange’s website. Other
primary sources of data include interviews from industry insiders, as mentioned earlier, the internet, news
websites and reports from real estate research firms such as Lamudi and Colliers.
External data sources include the Annual reports and financial statements of Ayala Land’s competitors which
are primarily SM Prime Holdings, Filinvest Land, and Megaworld Corp, as far as this paper is concerned.
Scope and Limitations
This paper is limited to Ayala Land’s ventures in the Philippines. The paper focuses on the competitive
environment in the Philippine market. No feasibility study was conducted as part of this paper. The paper’s main
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focus is on the primary real estate products of Ayala Land Inc. like high rise residential buildings, office sale and
leasing, and retail leasing.
Macro Environmental Analysis

PESTEL
Economic Forces
In 2018 the Philippines just scored behind Vietnam and China with an economic growth rate of 6%. The outlook
for the real estate industry remains positive given that efforts from the Government are adding considerable push
towards growth. Analysts at Colliers Philippines see the Government’s ‘BBB’ as the biggest factor and advice
property developers to align their plans accordingly.
Real Estate, Renting, and Other Business Activities (RERBA)
The Philippines recorded 10.9% RERBA growth in 2018, which was quicker than 7.7% in the past year. The
main reason for this increase is in rent and other businesses, which recorded a development level of 17% in
2018 compared to 11.0% in the prior year. Dwelling's ownership also rose to 2.1% compared to 2.9% last year.
In addition, gross value added in real estate, rental and business activities increased by 10.9% in 2018.
Comprehensive Tax Reform Package
The TRAIN Law or the Tax Reform for Acceleration and Inclusion went into effect in 2018 (Pinnacle, n.d.). The
government's tax revenue goal for 2018 was PHP63.3B. This has a mixed effect on the economy, on one hand
it it helps finance the government-led' BBB' program by ensuring there is available capital. The increase in carbon
and oil tax would also have a significant and instant effect on the costs of constructing buildings and other
infrastructure.
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The TRAIN law, however, also implies changes to taxes on personal income. In accordance with the current law,
taxpayers expect to benefit from reduced taxes against their income. This reduction will only be good for
Philippine consumers because it will lead to a greater purchasing power.
The 2nd TRAIN package, which reduces corporate taxes from 30% to 25% (Rivas, 2018), was received with
mixed feelings within the corporate community. TRAIN 2 removes corporate PEZA incentives, which means a
long list of benefits including fiscal holidays and streamlined import-export processes.
Among other factors, experts at Colliers have observed that the real estate market climate remains favorable in
under the new changes.
BPO’s and KPO’s Boom
The BPO industry is still enjoying a boom in 2018 (David, 2019). It is set to continue the route until 2020 with an
increase of employed workforce from 1.5 million to 1.7 million. This is despite the Trump Administration’s stance
against outsourcing jobs. The industry remains a growth driver and the main source of demand for offices. This
positive trend despite the political backdrop is due in fact to the quality of workers found in the Philippines and
their relatively cheaper salary rates. A young and well-educated workforce is churned out by the Philippines
yearly, with numbers at 500,000 on average.
Coming from 2018, the BPO sector is still riding a positive trend (David, 2019). This is expected to continue until
2020, with BPO and KPO employees increasing from 1.5 million to 1.7 million. This is despite the position of the
Trump Administration against outsourcing employment. The sector continues to be a driver of real estate
development and the primary driver office space demand. This positive trend is due to the quality of workers
found in the Philippines and their relatively cheaper salary rates. A young and well-educated workforce is churned
out by the Philippines yearly, with numbers at 500,000 on average.
OFW Remittances
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The total remittances of OFWs between April and September 2018 was projected at 235,9 billion pesos (Rivas,
OFW sending increases for May 2018, 2018). These included cash that was sent to the Philippines (169.4 billion
pesos), cash taken back overseas (55.2 billion pesos) and in-kind remittances (11.2 billion pesos). Most OFWs
sent remittances via banks (52.8%), the remainder via money transfers.
The remittances from OFW’s has bolstered the retail industry and consequently, positively affects demand for
warehouse and mall leasable areas.
Political/ Legal Forces
Regulatory Efforts
a. Current laws in the Philippines state that property, at 60% minimum, be owned by Filipino citizens,
corporations, partnerships. Leasing of property to foreign citizens or companies can only reach up to a
maximum of 50 years and is renewable for another 25 years.
b. The RESA Law (Real Estate Service Act of the Philippines) professionalizes and regulates the practice
of real estate in the country through the development of technically competent, trained and accountable
real estate practitioners in the country. The Act assists in achieving the objectives of the state, to promote
the development of the capital market, democratize wealth by broadening the participation of Filipinos in
the ownership of real estate in the Philippines, use the capital market as an instrument to help finance
and develop infrastructure projects and protect the investing public by providing an enabling regulatory
framework and environment.
Efforts on Promoting Industry Growth

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On the Residential/ Housing Segment:
Several legislations were established to promote and support the factors involved in residential property
development. The legislation, or regulations, revolve around every stage of a real estate development’s life cycle
or value chain. From regulations regarding financial assistance, to growth and development. As a result of the
government’s initiatives, the following are the financial initiatives brought forth by the Government that support
home ownership either through a specific loans payments scheme or insurance.
Home Guarantee Corp. (HGC)
Home Guarantee Corp. is a “Government Owned and Controlled Corporation” (GOCC) with a mandate to
encourage viable house ownership by guaranteeing risks or tax / fiscal incentives and giving residential loans /
loans and house funding to banking and economic institutions / investors. Major HGC customers include 27
banks, 10 housing developers, 10 other organizations, like insurance firms, SSS, Pag-Ibig (HDMF) and the
National Home Mortgage Finance Corporation. (hgc.gov, n.d.)
National Home Mortgage and Finance Corp. (NHMFC)
The NHMFC is a secondary Mortgage Institution (SMI) operating a feasible house financing scheme by securing
house loans. The NHMFC purchases from the receiving organizations the credit receivables and is converted
into an asset pool for the possible issuance of securities or selling bonds. Furthermore, NHMFC is appointed as
the Amortization Support Program Administrator, the Social Housing Development Fund, and the Mortgage
Trading Support program.
Social Housing Finance Corp. (SHFC)
The SHFC is the lead government agency that carries out social housing programs in the low-income segment.
The SHFC supports both informal and formal settlers. The SHFC and the Abot Kaya Pabahay Fund are
responsible for the development and administration of personal accommodation programs.

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Home Development Mutual Fund (Pag-Ibig)
The Pag-Ibig foundation was founded to meet the needs of the employed in the Philippines that wish
to own their own home. This foundation gives out financial assistance in the form of loans.
Incentives
Under RA 7279 – Urban Development and Housing Act of 1992 Section 20 of RA 7279 or UDHA of 1992,
The following incentives are provided through the RA 7279 also called the Urban Development and Housing Act,
for socialized housing developers to encourage greater private sector participation in socialized housing and
further reduce the cost of housing units for the benefit of the underprivileged and homeless: Reduction and
simplification of qualification and accreditation requirements for participating private developers
Creation of one-stop offices in the different regions of the country for the processing, approval and issuance of
clearances, permits and licenses: Provided, That clearances, permits and licenses shall be issued within ninety
(90) days from the date of submission of all requirements by the participating private developers.
Simplification of financing procedures; and Exemption from the payment of the following; Project-related income
taxes; Capital gains tax on raw lands use for the project; Value-added tax for the project concerned; Transfer tax
for both raw and completed projects; and Donor’s tax for both lands certified by the local government units to
have been donated for socialized housing purposes.
Under EO 226 – Omnibus Investments Code of 1987, as Amended
To encourage more mass housing projects, low cost housing has been included as one of the priority areas in
the annual Investments Priorities Plan (IPP) of the Board of Investments. In return of the incentives given to BOI-
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registered low-cost housing developers is the mandatory compliance to the 20% allocation requirement for
socialized housing under Republic Act No. 7279 to help address the remaining 70% of the total housing backlog.
Developers of low-cost housing projects registered with the BOI are entitled to the following fiscal and non-fiscal
incentives; 3-4 years Income Tax Holiday (ITH), Duty-free importation of capital equipment (EO 70), such as but
not limited to the following eligible equipment: Lift /Elevators (for medium and high-rise buildings, Tower Crane
and its accessories, Concrete Steel Formworks, Stand-by Power Generator, Various Forms such as Foundation,
Modify, Tunnel, and Facade Forms, Employment of Foreign Nationals.
On the Hotel & Leisure Segment:
National Tourism Development Plan (NTDP)
In view of the government’s thrust to promote the tourism industry as means of achieving inclusive growth, the
Department of Tourism (DOT), in cooperation with other government agencies and private stakeholder,
implements the Philippine National Tourism Development Plan (NTDP). The NTDP provides strategic framework
and outline action plans for the employment generation an further growth of the industry. Among the major
programs included in the NTDP are the following:
- Improving access and connectivity
- Developing and marketing competitive tourist destinations and products Improving tourism institutional,
governance and human resource capacities
DOT’s New Standards for Accreditation of Tourism Accommodation Establishments
In May 2012, the DOT approved and issued its Memorandum Circular 2012-02, adopting the five-star grading
system as its new standard for accreditation of tourism accommodation establishments namely; for Hotels,
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Resorts and Apartment Hotels. Prior to the new standards, DOT uses classifications such as De Luxe, First
Class, Standard and Economy for hotels; and A, AA and AAA ratings for resorts.
Continued Inclusion in the Investment Priorities Plan
The Board of Investments continues to grant fiscal and non-fiscal incentives to tourism enterprises that are
located outside Tourism Economic Zones, whose projects are registered with the BOI.
DOT-DPWH Memorandum of Agreement for Convergence Program for Enhancing Tourism Access
In February 2012, the Department of Tourism and the Department of Public Works and Highways (DPWH) signed
a Memorandum of Agreement (MOA) for a “Convergence Program for Enhancing Tourism Access”. The program
aims to boost tourism infrastructure projects in priority tourist destination areas in the country.
The two government agencies will be assisted by the Research, Education and Institutional
Development (REID) Foundation, a policy research and advocacy institute based in Metro Manila, in facilitating
efficient and more coordinated effort between DOT and DPWH in identifying, prioritizing and implementing
technically correct and politically participative road access leading to tourism destinations as identified in the
NTDP.
Technological
Big Data, A.I. and Machine Learning
One of the biggest and most impactful application of Machine Learning on the Real Estate Industry is Zestimate.
Zestimate “was created to give consumers as much information as possible about homes and the housing
market, marking the first-time consumers had access to this type of home value information at no cost.” Currently,
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the median margin of error is down to 5% from 14% when it first started in 2017. It uses 1.7 million data points
mined from publicly available data.
The potential for Machine Learning is yet to be applied in the Philippine Real Estate industry but developers
should keep an eye on technology given its incredible potential. Given enough digital transformation in how Real
estate developers do business, it is inevitable that Machine Learning technologies will play an important role
business success.
Construction or Concrete Printing Technology
Concrete 3d Printing technology was first developed as an experiment in the first decade of the 21st century
where first generation models where constructed. As of 2018 the technology has entered is 2nd generation and
is now capable of printing entire buildings.
What’s notable about this technology is the speed benefit and the cost reduction involved in building structures.
Makers and service providers of the technology have claimed speeds of 2 to 3.5 meters of building material per
hour. Costs have been estimated to be at $10,000 dollars per house but eventually will reach $4,000 dollars per
house as the technology develops more.
Currently, the technology is already for sale on the market, but actual adoption is slow.
Online Portals and Support
Rappler reported on the report released by We Are Social and Hootsuite on metrics regarding internet usage by
country. The Philippines came out number one in 2018, the same spot it was in for the fourth straight year.
“In the Philippines, time spent online daily soared from 9 hours and 29 minutes last year to 10 hours and 2
minutes this year, the highest in the world. Coming in second is Brazil, clocking in at 9 hours and 29 minutes,
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while Thailand is third at 9 hours and 11 minutes. Last year, the Philippines came in second to Thailand at 9
hours and 38 minutes.”
There are massive implications from this phenomenon as far as the real estate industry is concerned. To paint
a picture of this, as an example, Lamudi launched its “Digital Property Seekers Report” in 2018 that primary uses
online metrics to rate customer sentiment and interest regarding the real estate market.
The implication is, if a firm wants to know its customers, it needs to go where they are. Filipino customers are
online.
Socio-Cultural Forces
Population Growth
According to the Commission on Population, the Philippines’ total population is at 107,190,081 as of 2018. About
4,965 are added per day with an annual increase of 1.69 percent vs 1.55 percent in the previous year.
The World Population Review has projections for 2030 population levels to be at 125 million. That means there
is one birth every 14 seconds, one death every 50 seconds and a net gain of one person every 21 seconds.
Population growth is one of the key market drivers for the real estate industry. The population density in one
area, the trends it displays in terms of migration and growth rates directly impact the real estate industry.
Housing Backlog
The current classification for housing market segments recognized in the Philippines are socialized, economic,
low cost, mid end, and high end. This classification of housing market segments is determined by the price range.
Key Shelter Agencies (KSAs) like the Housing and Urban Development Coordinating Council (HUDCC) and
Home Guarantee Corporation (HGC), as well as, private housing developer associations
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like the Subdivision and Housing Development Association (SHDA) uses the this same classification.
The price ranges designated for each segment is as follows;
 Socialized – 400k and below
 Economic – 1.25 million < N >400k
 Low Cost – 3 million < N >1.25 million
 Mid end - 6 million < N >3 million
 High end - >6 million
There is currently a housing backlog in the Philippine that’s projected to reach 6.8 million by 2022. Even at
production rate of 250,000 units produced annually, the Philippines will still have a backlog by 2030.
Most of the demand comes from the economic segment with a price range of 400k to 1.25 million with backlog
of 1.96 million units.
Market Segment Housing demand Housing supply Surplus (Deficit)
Socialized Housing 1,143,048 479,765 (663,283)
Economic Housing 2,503,990 541,913 (1,962,077)
Low Cost Housing 704,406 242,246 (462,160)
Mid Cost Housing 72,592 322,995 250,403
High End Housing 18,235 242,246 224,011
Total backlog: 3,087,520 excluding 832,046 households that are unable to afford a house.
Importance. Summing up numbers from the economic housing segment and the low-cost housing segment, the
size of the market is PHP 0.9 trillion worth of opportunities.
Foreign and Domestic Tourism Demand

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Metro Manila's demand for hotel rooms is still supported by tourists coming from the usual countries such as
South Korea, the United States, China, and Japan. Together they account for around 60 percent of the country's
total international arrivals. Real estate specialists are forecasting a 10 percent increase to 6.6 million in 2018,
slower than the 17 percent or 7 million visitors projected by the department of tourism.
Source: Department of tourism
Domestic travel or "staycations" is anticipated to maintain demand for 3-and 4-star hotels. In addition, budget
hotels are still common among individuals between the ages for 25-35 years old who make up more than half of
local tourists.
Environmental
Climate Change
Climate change remains a major issue, with 2018 being the fourth hottest year since 1880. The effects of global
warming are already being felt in the Philippines, which is why policies for reducing emissions are being
undertaken by real estate developers including the adoption of measures to mitigate climate change vulnerability
in the design and development of property.

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Traffic Woes
According to a research undertaken by the Boston Consulting Group, the NCS in the Philippines ranked 3rd in
Southeast Asia's worst traffic and demonstrates that Metro Manila Motorist and Commuters are trafficked for an
average of 66 minutes per day. Drivers also spend an average of 24 minutes per day looking for parking on top
of 66 minutes of traffic experience. In addition, travel time doubles in the morning and in the evening rush hours
Industry and Competitor Analysis

Brief Description of the Industry, Value Chain and WaterFall
The real estate industry comprises a wide range of aspects of property development, that includes the land and
the structure on top of it, the growth and assessment of the property, the relevant rules and regulations that
govern it, the sales and marketing processes surrounding the sale and lease of the property, the actual
construction and development of the structures and property and the continuous management, maintenance and
administrative support over the property. All these steps are part of the real estate value chain.
Real estate value chain and value creating activities from Andreas Mladenow et al. / Procedia Computer Science
63 ( 2015 ) 120 – 127

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The Initiation stage is the start of the development life cycle. This stage is defined as the idea inception. No
formal feasibility study is involved in this stage, simply the entertainment an idea for a property development
project. At this point ideas are considered if they are feasible, in theory, or not.
The real estate industry is complex and involves a lot of resources and talent. Given that it requires massive
capital, the industry is sensitive to economic, social, technological and legal forces. As a result, part of the real
estate life cycle is the continual redevelopment, remodel, upgrade and remake of the property to ensure its
prolonged economic life.
Porters 5 forces Model
Source: Wikipedia
Rivalry among competing firms - MEDIUM

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There are a handful of big, multi-billion pesos property development firms competing in this industry. The market
is still growing, growth rate for 2018 was 10.9 percent. Property prices are also climbing. However, these firms
are like each other in terms of size, product offering, and capabilities. Overall the rivalry among competing firms
is Medium.
Potential entry of new competitors - WEAK
The barriers to entry for new firms in this industry is weak given that the needed capital is high, the industry itself
is highly regulated, and setting up the logistics is difficult since the operation is resource intensive.
Potential development of substitute products - WEAK
The substitute products that concern big property developers is the customer’s capability of constructing and
developing real estate on their own with smaller construction firms. The principle of economies of scale is active
in this situation, the bigger firms will have an upper hand since they would have access to cheaper debt, cheaper
raw materials, and leverage over suppliers. The potential for substitutes is weak.
Bargaining power of suppliers - MEDIUM
Big construction firms are not limited by one big supplier, rather they have a vast number of suppliers they can
choose from. But despite this leverage, the variety of inputs puts some of bargaining power over to suppliers.
The three major resources that property developers need are land, labor and capital. Of the three, labor and
capital carry the potential for gaining leverage over the firms. Labor, for example, can be taken over by unions
and wages are regulated by the DOH. Capital, in the form of debt, are supplied by big banks and are also
regulated by the government. With these points the bargaining power of suppliers is Medium.
Bargaining power of consumers - WEAK

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Given that there are only a handful of property developers that can offer high quality products with prices to
match, the buyer has little bargaining power. The level is weak.
Market Share, Size and Growth trends
Real Estate refers to the land and all those items which are attached to the land. It is the physical, tangible entity,
together with the additions or improvements on, above or below the ground while Real Estate Development
Projects means the development of land for residential, commercial, industrial, agricultural, institutional or
recreational purposes, or any combination of such including, but not limited to, tourist resorts, reclamation
projects, building or housing projects, whether for individual or condominium ownership, memorial parks and
others of similar nature.
Real Estate, Renting and Business Activities was among the main drivers of GDP growth for the 4Q of 2017 of
the country, together with Manufacturing and Trade. The Philippines’ Gross Domestic Product (GDP) posted a
6.6% growth in the 4th quarter of 2017, driving the economy to grow by 6.7 percent for the entire year of 2017.
The Real Estate industry contributed a total of 3.2% to the country’s 2017 GDP. Comparatively, an increase of
12% was posted by the industry with respect to the 2016 values, at current prices
It is seen that the massive thrust of the government in building crucial infrastructure projects through its Build
Build Build (BBB) Program, to usher the “Golden Age of Infrastructure” in the Philippines, is a major contributor
of dispersing property developments not just in major urban areas but also in its peripheries.
Growth Trends
Office Space Market Outlook

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At the end of 2018, an occupancy of over 370.000 sqm of office space (4 million sq feet) was reported which is
over the original forcasted number of 344.000 sq meters (3.7 million sq feet), this is according to a report by
Colliers. The number is 31% greater year on year. Total office space occupied in 2018 reached 1.18 million sq
meters, a record high for Metro Manila, and exceeded the initial projection made by analysts by 1.15 million sq
meters.
Analysts at Colliers predict that the strong demand will continue all throughout 2019, as 28% of buildings
projected to be completed end of 2019 are already pre-leased. Based on data from 2018, Colliers expects
Alabang, Makati CBD, Fort Bonifacio, and the Bay Area to record the strongest occupancy rates in 2019.
For the period from 2019 to 2021, Colliers projects a net consumption of around 900,000 square meters per year
on average. Furthermore, their predictions show that demand is progressing with fresh production. Colliers
sees the completion of approximately 1.2 million sq meters (12.9 million sq feet) of new office space over the
next 12 months with a total occupancy of approximately 1 million sq meters (10.7 million sq. feet). By the
beginning of 2019, this should produce an acceptable vacancy rate of 5.0%.
Metro Manila Residential Condominium Launches and Take-up (units)

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Source: Colliers International Philippines (Joey Roi Bondoc, Dom Fredrick Andaya, 2018)
Residential Market Outlook
Colliers analysts advise that developers look to the margins as sites for future residential development because
of the lack of land in major business districts like Makati CBD and Fort Bonifacio. In the last 12 months, Colliers
noted that in Quezon City, Manila, Caloocan-Malabon-Navotas (CAMANAVA), Ortigas fringes, Makati fringes,
and Pasay-Paranaque, contained 77 per cent of newly constructed units, while the other 23 per cent lie in main
the usual CBDs. They see much of the demand is coming from mid-income households that are moving into
condominiums. Other projects in southern Quezon City are expected to draw in new households from as far as
Bulacan, this view is further supported by the fact that the Metro Rail Transit (MRT) 7 is planned for
implementation in 2021. Projects due for completion in Southern Metro Manila are expected to attract demand
from Cavite and Laguna. By the end of the year an additional 21 400 condominium units are expected to be
delivered, mostly in Manila Bay and Makati.
Source: Colliers International Philippines Research
Hotel Industry Outlook

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The hotels and restaurant subsector continues to drive consumer spending in the country, rising by 6.8%¹ in the
first three quarters of 2018 despite higher inflation. The segment has been growing by an average of 8%¹ since
2010, faster than the country’s GDP growth. (Bondoc, 2018)
The growth in tourists and tourism spending is reflected in tourism’s rising proportion of GDP, which has
increased from 8% in 2010 to 12.2% in 2017, according to latest data from the Philippine Statistics Authority
(PSA). Based on the data from the PSA, this indicates that Filipinos continue to allot a significant portion of their
disposable incomes to restaurants, hotels, and other leisure-related activities.
Competitive Profile Matrix (CPM)
Competitors
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The following are the profiles of the top three (3) competitors of Ayala LAnd. They were chosen on the basis that
they have similar levels of revenue, capex, and similar product offerings.
a. Competitor #1 – SM Prime
SM Prime Holdings, Inc. is one of the largest integrated property developers in Southeast Asia that offers
innovative and sustainable lifestyle cities with the development of malls, residences, offices, hotels and
convention centers.
SM Prime Holdings, Inc. was incorporated in the Philippines in 1994. They started as a mall developer and
operator and grew to be the biggest retail shopping center developer and operator in the Philippines. Currently,
it has 58 malls in and outside Metro Manila and 6 shopping malls in China, totaling 8.5 million square meters of
Gross Floor Area (GFA). In the Philippines, they have a total of 16,8427 tenants and 1,461 tenants in China.
SM Prime goes beyond mall development and management through its units and subsidiaries. SM Development
Corporation (SMDC) is the residential business component that sells affordable condominium units. SM Prime’s
commercial business units, the Commercial Property Group (CPG) is engaged in the development and leasing
of office buildings in Metro Manila, as well as the operations and management of buildings and other land
holdings such as Mall of Asia Arena (MOA Arena). Its hotels and convention centers business unit develops and
manages various hotel and convention centers across the country.
Current Revenue Size:
b. Competitor #2 - Megaworld
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Megaworld was founded by Andrew Tan and incorporated under Philippine law on August 24,1989 under the
name of Megaworld Properties & Holdings, Inc. Megaworld was primarily organized to engage in real estate
development, leasing and marketing.
From 1989 to 1996, it garnered a reputation for building high-end residential condominiums and office buildings
on a stand-alone basis throughout Metro Manila. In 1996, it shifted its focus to providing office buildings to
support BPO businesses when it began development of the Eastwood City community township.
Since its incorporation in 1989, the Company and its affiliates have launched approximately 222 residential
buildings, office buildings and hotels consisting an aggregate of more than 5.7million square meters.
Megaworld's real estate portfolio includes residential condominium units, subdivision lots and townhouses, as
well as office projects and retail space. Its consolidated revenues for the year 2010 were P20,541.8 million. Real
estate sales of residential developments accounted for 64% of the company's consolidated revenues in 2010.
c. Competitor #3 – Filinvest Land
Filinvest Land, Inc. (FLI), a subsidiary of Filinvest Development Corporation (FDC), is one of the country’s leading
full-range property developers. For over 50 years, the company has built a diverse project portfolio spanning the
archipelago, from its core best-value homes, to townships, mixed-use developments, mid-rise and high-rise
condominiums, BPO office buildings, shopping centers, and leisure developments. Staying true to its mission,
FLI continues to build the Filipino dream across the Philippines.
Competitive Profile Matrix

Adequate Capitalization
Intensive capital expenditure is needed to compete in the real estate industry. Annual CAPEX among ALI and
its competitors were matched.
Weighted Score: 0.25

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Broad Product Portfolio
Mixed-use estates, townships and masterplanned communities are currently the rising trend among design
principles followed by big property developers. Not only is the idea built with customer’s lifestyle in mind, but as
well as conforming to trends that put the environment into consideration. Mixed-use estates are the future of
property development, therefore developers that are guided by this design principle would naturally display it in
their products.
Location Accessibility
Location accessibility is one the core factors that are involved in a buyer’s decision making. The property’s
location in relation to central business districts and roads and highways that lead to the CBD’s are taken into
consideration.
Weighted Score: 0.15.
Project Quality
Overall project quality refers to the quality of amenities and good property design that adopted by the developer.
Quality is one the biggest factors that come into play when buyers consider a purchase.

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Wide Distribution Network
To move inventories, an appropriate amount of inner and external sales staff is required. Wide distribution reach
should be extended to local and foreign buyers alike.
Developer Track Record
Another factor client look at is a developer's track record. Buyers tend to select developers with a name and
reputation over small-scale developers who are not partially recognized because of just a few innovations.
Marketing Capability
In order to penetrate its market heavily, a business must advertise its advances through many types of media.
The events are exposed to prospective customers through the media and create an effect in the minds of
consumers.
Ayala Land Mega World SM Prime Filinvest

Weight Rating Score Rating Score Rating Score Rating Score
Adequate
Capitalization 0.25 4.00 1.00 2.00 0.50 4.00 1.00 3.00 0.75
Broad Product
Portfolio 0.2 3.00 0.60 3.50 0.70 3.00 0.60 3.00 0.60
Location Accessibility 0.2 3.50 0.70 3.00 0.60 3.00 0.60 2.00 0.40
Project Quality 0.15 2.00 0.30 3.00 0.45 2.00 0.30 2.00 0.30
Wide Distribution
Network 0.1 4.00 0.40 3.00 0.30 4.00 0.40 3.00 0.30
Developer Track
Record 0.05 4.00 0.20 3.00 0.15 3.00 0.15 3.00 0.15
Marketing Capability 0.05 2.00 0.10 2.00 0.10 4.00 0.20 1.00 0.05
1.00 3.30 2.80 3.25 2.55
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External Factor Evaluation (EFE) matrix
Opportunities
O1. BPO and KPO demand for Office space still strong
The BPO industry in the Philippines is seen to remain still one of the biggest demand drivers for the
office space market. Analysts are attributing the continued surge for demand to rising wages in the United
States and a weaker peso that makes the labor market in the Philippines attractive to multinational firms.
Demand for Office space in the Philippines reached 1.5 million square meters as of end of 2018. Metro Manila
had the biggest demand at 1.16 million sqm according to a report by Leechui Property Consultants.
For those outside Metro Manila, Clark saw the largest office demand at 156,000 sqm., with land values
reaching up to PHP1000,000 per sqm.

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Demand
in 2018
City in sqm
Metro Manila 1160000
Clark 156000
Cebu 133000
Laguna 46000
Davao 28000
Iloilo 17000
Cavite 13000
Nueva Ecija 11000
Bacolod 11000
Bulacan 6000
Rizal 5000
In Metro Manila, average vacancy rates in 2018 was at 5.6%, an acceptable number and quite in the positive
zone according to Colliers.

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2018 Vacancy Rate

16% 15%
14%
12%
10%
8% 7%
6%
6%
4% 3%
2%
2% 1%
0%
In 2018 ALI spent PHP 8.5 billion pesos of its CAPEX in its office business, that’s 7.6% of its total
CAPEX for the year. ALI has also aggressively pursued construction of new office spaces resulting in 1.11
million sqm of office space in 2018. Such an aggressive pursuit for market share shows ALI responsiveness to
the market trends currently at play.
Weighted Score: 20%
ALI’s Score: 4
O2. Strong demand for residential units
Demand remains strong. In 2018, the take-up of pre-sold condominium units throughout Metro Manila,
including fringe locations, reached 54,000 units – surpassing the previous record-high of 52,600 units in 2017,
according to Colliers International. This was mainly due to strong demand from starting families and young
professionals and the influx of Mainland Chinese in the Philippines. Household formation has increased by an
average of 3% every year in the past five years.

46
With a growing population and Chinese tourist flocking the country, the prices of residential units in the Metro
Manila have surged as a direct result.
In 2018 ALI spent PHP 47.4 billion pesos of its CAPEX in construction and expansion of its residential
business. In 2018 alone, ALI launched 48 projects under its residential brands Ayala Premier, Alveo, Avida,
Amaia, and BellaVita. The total value for these projects was PHP139.4 billion.
Weighted Score: 20%
ALI’s Score: 4
O3. Strong demand for retail space

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Colliers analysts sees that the food and beverage (F&B) segment as the major driver of retail space occupancy
in Metro Manila. They note opportunities in home furnishings especially with the entry of major foreign brands
and increased completion of condominium units across Metro Manila.
F&B spending in the country grows by nearly 6% per annum, primarily driven by money sent in by Overseas
Filipino Workers (OFWs) and the business process outsourcing (BPO) workforce, mainly composed of
millennial employees with relatively high purchasing power. Data from the Philippine central bank reveals that
OFW remittances reached USD21.2 billion in the first eight months of the year, up 2.4% YoY.
Despite ALI’s well positioned Mall across the country, it lacks efficient use of the spaces in its malls.
Weighted Score: 10%
ALI’s Score: 3
O4. Consistent tourism growth
Latest data from the Department of Tourism show that foreign tourist arrivals in 2018 reached a record-
high 7.1 million, exceeding arrivals in 2017, but behind the government’s goal of 7.4 million. Manila continues to
lag behind its Asian neighbors in terms of tourist arrivals and average daily rates, but the push to attract more
tourists by investing in better infrastructure and with the implementation programs to support the objective should
support growth both in the average daily arrival rates and hotel occupancy from 2019 to 2021 (The Philippines
Star, n.d.). Colliers encourages developers to establish more homegrown brands; landbank near airports that
are due for modernization; explore air service agreement opportunities; and monitor tourism projects
implemented by relevant government agencies.

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ALI’s hotel brand Seda has been performing well above industry growth rate.
Weighted Score: 10%
ALI’s Score: 3
O5. Government BBB program
Government Spending is going to be the biggest growth factor in the coming years. It is important that property
developers design and plan out towards the direction of Government lead infrastructure projects. The “BBB”
project will create new demands and open new markets that will make significant changes in the real estate
industry.
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In the second half of 2019, government spending in the Philippines improved from 252372.79 PHP Million in the
first half of 2019 to 327068.78 PHP Million.
Government spending in the Philippines from 1981 to 2019 averaged 119414.76 PHP Million, achieving an all-
time high of 327068.78 PHP Million in the second half of 2019 and a record low of 62728.31 PHP Million in the
first half of 1986.
ALI has built its estates among the main thoroughfares in the Metro Manila. Its proliferation of projects is seen
mostly in Makati City and BGC and a number in Quezon City. These are also parts of the route that new subway
system is going to hit. However, ALI needs to put more effort in taking advantage of the Government’s
infrastructure spending.
Weighted Score: 5%
ALI’s Score: 3
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O6. Increase demand for co-working and co-living spaces
According to a published report by The Instant Group, a flexible workspace specialist, in October last year, the
demand for flexible workspaces in the Asia Pacific (APAC) has had the fastest growth in the world over the last
12 months. This type of industry took off later in Asia than it had in US, UK, and the European market but the
supply of flexible workspace is said to have increased to over 50% in some APAC market. This rise made Asia
up to date with the other international market’s status.
According to a study about the coworking conditions in the Philippines conducted by Santos Knight Frank, Inc.
69% of multinational companies are planning to increase their use of coworking spaces, 80% are expecting to
grow their current collaborative spaces over the next three years, and 44% said that they will allot a fifth of their
office space as flexible spaces and they see this as a trend in the next three to five years.
ALI’s brands to accommodate this growing trend is Clock In and The Flats have already started expansion in
2018.
Weighted Score: 5%
ALI’s Score: 3
O7. Emergence of ecommerce
The decline in foreign manufacturing commitments in the first three quarters of 2018 was offset by the rise in
warehousing and logistics investment according to Colliers. Analysts note aggressive warehouse construction
but believes that developers need to recalibrate their facilities to stand out and accommodate the demands of a
fast-evolving e-commerce market.

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Colliers encourages developers to continue constructing and upgrading warehouses; to scout for suitable land
in Northern and Central Luzon and tie up with local developers; to push for the resolution of fiscal incentive
issues; and to align expansion plans with the government’s infrastructure push
Weighted Score: 0.1
ALI’s Score: 2
Threats
T1. Growing intensity among competitors
Despite positive trends occurring in the real estate industry in the Philippines, due to the centralized design of
Metro Manila, space and developable land is becoming scarce. This puts real estate players in a competitive
match to lock in strategic land banks both inside and now, outside of Metro Manila.
A large part of real estate developer’s success in the Philippines is hinged on its ability to conduct strategic
land banking.
As it is, Ayala Land is the biggest and currently the number real estate developer in the country, however it
needs to be committed to continuous improvement to maintain its hold as number 1.
Weighted Score: 0.1
ALI’s Score: 3
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T2. Slow PEZA release
PEZA proclamations have direct effects on one of the real estate’s strongest grow drivers; BPO’s and KPO’s.
Firms looking to manage this slow down should look to accommodate a mixed type of tenants and not just
concentrate on BPOs or KPOs. Also, looking outside of Metro Manila for new PEZA proclamations should be on
priority.
Weighted Score: 10%
ALI’s Score: 3
T3. Interest Hikes
Interests rates ended at 4.75% at the end of the year in 2018. Increasing interess rates directly has an effect
on highly leveraged industries such as the real estate industry. In order to fun massive projects, real estate
developers need to secure big long-term loans that should be at low interest rates.
Ayala Land’s policy-based decision for securing long-term, fixed-rate, and local currency debt allowed it to
weather the economic headwinds posed by rising interest rates and volatile foreign exchange markets in 2018.
Ninety-two percent (92%) of ALI’s debt is contracted on a long-term basis, 89% is locked in fixed rates, and
only 2% is denominated in foreign currencies.
Weighted Score: 5%
ALI’s Score: 4
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T4. Climate Change
According to a World Economic Forum (WEF) report, the real estate is not only affected by climate change but
also plays a major role in managing it. Implications point to changes in regulations that govern the entire
industry in the effort to curtail climate change.
“Global socioeconomic forces will make the environmental impact of real estate sector even more important in
the future. By most projections, by 2030, the global population will exceed 8 billion and over 60 percent of the
world’s population (4.9 billion people) will be living in urban environments,” the WEF report stated.
Ayala Land conducted technical due diligence and environmental scanning for fault lines and possible flooding,
in all its properties and adjacent areas in 2018 according to its annual report. This shows ALI’s commitment to
activities surrounding climate change.
Weighted Score: 5%
ALI’s Score: 3
Opportunities Weight Rating Score

O1. BPO and KPO demand for Office space still
strong 0.2 4 0.8
O2. Strong demand for residential units 0.2 4 0.8
O3. Strong demand for retail space 0.1 3 0.3

O4. Consistent tourism growth 0.05 3 0.15
O5. Government BBB program 0.05 3 0.15

O6. Increase demand for co-working and co-
living spaces 0.05 3 0.15
O7. Emergence of ecommerce 0.05 2 0.1
Threats
T1. Growing intensity among competitors 0.1 3 0.3

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T2. Slow PEZA release 0.1 3 0.3

T3. Interest Hikes 0.05 4 0.2
T4. Climate Change 0.05 3 0.15

TOTAL 3.4
Company Analysis
Current Vision and Mission Statement
Ayala Land’s Vision Statement
Ayala Land’s Vision statement is displays all the elements of what a recommended Vision should be. It is concise
and clearly states a goal to be achieved that is based on Ayala Land’s identity.
“Enhancing land, enriching lives for more people.”
Ayala Land’s Company Vision Evaluation
Parameter Yes / Why
No
Does it clearly answer the Yes The vision statement ends with “for more people”, leaving
question: What do we want the question of growth as unbound. It implies unrelenting
to become? progress and growth in terms of the lives of people that are
positively affected.
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Is it concise enough yet Yes The words “Enhance” and “Enrich” are undeniable positive
inspirational? and inspirational that sends a strong motivation to become
a positive force in world.
Is it aspirational? Yes The key word is “more”. As stated above, the goal is
continuous and unbounded.
Does it give clear No Since the vision is unbounded, no time frames were given.
indication as to when it
should be attained?
Recommended Company Vision
The recommended company vision simply adds another sentence to give more description for the future,
including specifying a time frame.
“Enhancing land, enriching lives for more people. On the course of sustained growth in the next 5 years and
beyond.”
Recommended Company Vision Evaluation
Parameter Yes / Why
No
56
Does it clearly answer the Yes The vision statement ends with “for more people”, leaving
question: What do we want the question of growth as unbound. It implies unrelenting
to become? progress and growth in terms of the lives of people that are
positively affected.
Is it concise enough yet Yes The words “Enhance” and “Enrich” are undeniable positive
inspirational? and inspirational that sends a strong motivation to become
a positive force in world.
Is it aspirational? Yes The key word is “more”. As stated above, the goal is
continuous and unbounded.
Does it give clear Yes An actual time frame is established but still leaves open
indication as to when it unbridled growth.
should be attained?
Ayala Land’s Mission Statement
The mission statement of Ayala Land was actually written as part of the Vision statement intended to be read as
one. As it is, the mission statement continues the thoughts established by the Vision statement and lays out the
“How” of achieving the Vision.

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“By developing integrated, masterplanned and sustainable mixed-use communities in vibrant growth centers all
over the country, we strive to continually elevate the quality of life for all of our customers.
We are a responsible corporate citizen and act with integrity, foresight and prudence.
We empower our employees to deliver products that exceed our customers’ expectations and build long-term
value for our shareholders.”
Ayala Land’s Company Mission Statement Evaluation
Parameter Yes / If yes, which part of the statement
No
1. Customers Yes “… we strive to continually elevate the quality of life for all
of our customers…”
2. Products & services Yes “By developing integrated, masterplanned and sustainable
mixed-use communities in vibrant growth centers all over
the country…”
3. Markets Yes “…vibrant growth centers all over the country…”
4. Technology No
5. Concern for survival, Yes “…build long-term value for our shareholders.”
growth, profitability
58
6. Philosophy Yes “We are a responsible corporate citizen and act with
integrity, foresight and prudence.“
7. Self-concept Yes “We empower our employees to deliver products “
8. Concern for Yes “We are a responsible corporate citizen and act with
employees integrity, foresight and prudence.”
9. Concern for public Yes “We are a responsible corporate citizen and act with
image integrity, foresight and prudence.”
10. Concern for nation Yes “By developing integrated, masterplanned and sustainable
building mixed-use communities in vibrant growth centers all over
the country…”
Recommended Company Mission Statement
The recommended company mission not only adds the idea of using technology to the statement but involves it
in two important portions in the statement. “Tech-infused” is mentioned along with their core business model.
Involving technology in this aspect is not only important, but essential in order to remain competitive in the current
digitally transforming business environment.

59
Another addition is in the third paragraph where employees are being empowered. A key aspect of real estate
where Technology can have a massive impact is in the work force. Better productivity through improved efficiency
and automation will have massive implications for the real estate workforce and eventually will be a central part
of any real estate company’s core functions.
“By developing integrated, masterplanned, tech-infused and sustainable mixed-use communities in vibrant
growth centers all over the country, we strive to continually elevate the quality of life for all of our customers.
We are a responsible corporate citizen and act with integrity, foresight and prudence.
By using the latest techniques and state-of-the-art technology, we empower our employees to deliver
products that exceed our customers’ expectations and build long-term value for our shareholders.”
Recommended Company Mission Statement Evaluation

Parameter Yes / If yes, which part of the statement
No
1. Customers Yes “… we strive to continually elevate the quality of life for all of
our customers…”
2. Products & services Yes “By developing integrated, masterplanned and sustainable
mixed-use communities in vibrant growth centers all over the
country…”
3. Markets Yes “…vibrant growth centers all over the country…”

60
4. Technology Yes “By developing integrated, masterplanned, tech-infused and
sustainable mixed-use communities in vibrant growth
centers all over the country…”
“By using the latest techniques and state-of-the-art
technology, we empower our employees…”
5. Concern for survival, Yes “…build long-term value for our shareholders.”
growth, profitability
6. Philosophy Yes “We are a responsible corporate citizen and act with integrity,
foresight and prudence.“
7. Self-concept Yes “We empower our employees to deliver products “
8. Concern for Yes “We are a responsible corporate citizen and act with integrity,
employees foresight and prudence.”
9. Concern for public Yes “We are a responsible corporate citizen and act with integrity,
image foresight and prudence.”
10. Concern for nation Yes “By developing integrated, masterplanned and sustainable
building mixed-use communities in vibrant growth centers all over the
country…”
61
Company Internal Audit

Management Audit
Audit Questions Assessment Evidence
1. Does Ayala Land use YES Strategic management practices
strategic-management are regularly done in Ayala Land.
concepts? Management goes through the
process from planning to
implementation and finally to
assessment through high level
executive meetings.
2. Are the objectives and goals YES Objectives are set with the
measurable and well corresponding measure in time
communicated? and financial impact. Current
overall object of Ayala Land is to
reach PHP 40 billion in total net
income by 2022.
3. Do managers at all YES The organizational structure in
hierarchical levels plan Ayala Land clearly establishes
effectively? each management level’s area
of responsibility. Measures are in
place to ensure decision making
are inline with company objects
from the Board down to the
numerous business units.
4. Do managers delegate YES Part of ALI’s corporate values is
authority well? the empowerment of its
employees to make decisions to
the best of their abilities and the
limits of their authority. The
company holds them
responsible for their actions.
5. Is the organization’s structure NO The current organizational
appropriate? structure features a limited
capacity for effective
technological implementation.
Currently, the IT division is one
of the main divisions but instead
reports to the finance
department. Currently there is no
Chief Technology Officer in the
company.
6. Are job descriptions and job YES Each area of responsibility is
specifications clear? clearly defined and the level at
which responsibilities function
are clearly established.
7. Is employee morale high? YES ALI has achieved a 90%
engaging score during a 2017
62
survey. This survey is conducted

every 2 years.
8. Are employee turnover and NO ALI is plagued with a high
absenteeism low? attrition rate. As it is, the cause is
from employee piracy. ALI’
employees are seen as high
valued assets because of the
investment in training that the
company bestows in them.
9. Are organizational reward and YES The company currently employs
control mechanisms effective? a rewards and compensation
policy that includes stock options
to employees. This opportunity
opens the doors for employees
to grow in wealth with the rest of
the company.
Marketing Audit
1. Are markets segmented YES Market segments in the real
effectively? estate industry are well defined.
Residential market segments are
defined by price. Some
segmentation metrics are also
used to define segments by area,
such as territories with different
regulation, customer types
(either local, or foreign, or ofw),
revenue type; sale vs lease,
office, and shopping center.
2. Is the organization positioned YES ALI currently dominates the
well among competitors? luxury market segment in the
residential vertical. By revenue, it
is currently the biggest. Presently
it is enjoying market leadership.

63
3. Has the firm’s market share YES ALI’s growth rate has been
been increasing? outpacing the industry growth
rate for the last 5 years. The real
estate growth rate from 2017 to
2018 was 7.4% while in the same
time frame, ALI grew by 17%.
4. Are present channels of YES As market leader, ALI enjoys
distribution reliable and cost advantages in the form of top
effective? choice among consumers and
consumer awareness. This is
evidence for a successful
marketing set up.
5. Does the firm conduct market YES Currently ALI employs data
research? scientists to conduct data
analytics from market research to
topographical analysis.
6. Is customer service good? YES ALI achieved 95% service level
agreement rating. While online
surveys the company conducted
revealed a 86% customer
satisfaction rating.
ALI also attained a residential
property buyer zero punchlist
turnover rating of 98.5%
7. Are the firm’s product and YES Though ALI positions itself on the
services priced appropriately? premium side of the market with

64
its high revenues registered for
Ayala Land Premier, when it
comes to servicing the other
market segments, ALI adheres to
established price ranges.
8. Does the firm have an effective YES In 2018, Ayala Land
promotion, advertising and communications led the real
publicity strategy? estate industry in print, online,
and broadcast media with a 54%
share of voice. ALI also
generated positive news and
feature stories in media for 2018
with an advertising value of
PHP944 million and a public
relations value of PHP1.42
billion.
9. Are marketing, planning and YES
budgeting effective?
10. Do the firm’s marketing YES Marketing managers are usually
managers have adequate veterans in the industry. Either
experience and training? they come directly from
competitors or from some other
competitive industry.
11. Is the firm’s Internet presence NO ALI and its parent company lag
excellent as compared to rivals? behind their biggest competitor,
SM in terms of Facebook likes.

65
Financial Audit
1. Where is the firm financially Current ratio 1.26 Revenue is high, as well as Net
debt-to-equity ratio .85 Income. Growth rate has been
strong and weak as indicated by consistent in the last 10 years.
return on equity 16.52% On the other hand, ALI is highly
financial ratio analyses? leveraged with .85 debt-to-equity
ratio.
Assets outweigh liabilities
1.26:1. Return on equity is in the
double digits with 16.52%
2. Can the firm raise needed NO Quick ratio is currently at 0.82,
short-term capital? ALI is low on short-term capital
3. Can the firm raise long-term YES ALI’s debt situation affords it
capital through debt and/or tremendous amount of capital in
equity? the form of fixed rate long term
debt.
4. Does the firm have sufficient YES The capital available to ALI is
working capital? grounded on favorable debt
situation.
5. Are capital budgeting YES Net Income Ratio is at 21%.
procedures effective? Overall growth went up to 17%
from last years numbers.
6. Are dividend pay-out policies YES In 2018, ALI paid PHP7.5 billion
reasonable? in dividends.
7. Does the firm have good YES ALI commits to making
relations with its investors and information available to its
stockholders? shareholders and stockholders.
The management maintains
transparency in all its dealings.

66
8. Are the firm’s financial YES ALI has a very strong financial
managers experienced and well position directly attributable to its
trained? financial managers.
9. Is the firm’s debt situation YES Though ALI is highly leveraged,
excellent? with a debt-to-equity ratio of .85,
most of the debt comes from
fixed rate long term debts.
Horizontal Analysis
Balance Sheet Horizontal Analysis

VERTICAL
Balance Sheet 2016 2017 2018 2016 2017 2018
ASSETS
CURRENT ASSETS
Cash 20,904,330 20,998,089 23,996,570 4% 4% 4%

Short-term
investments 207,671 4,739,734 3,085,373 0% 1% 0%
Financial assets
at fair value
through profit or
loss 1,964,540 540,606 476,245 0.37% 0.09% 0.07%
Trade
Receivables 97,467,753 75,917,344 78,245,866 18% 13% 12%
Contract assets 48,473,011 0% 0% 7%

Other
Receivables - - - 0% 0% 0%
Inventory 66,727,945 90,845,608 104,371,611 12% 16% 16%

Other Current
Assets 23,739,874 47,810,900 44,181,222 4% 8% 7%
Total Current
Assets 211,012,113 240,852,281 302,829,898 39% 42% 45%
NON-CURRENT
ASSETS
67
Noncurrent
accounts and
notes receivable 35,133,216 44,522,898 3,367,890 6.55% 6.66% 0.50%
Noncurrent
contract assets 35,437,047 0.00% 0.00% 5.30%
Financial assets
at fair value
through other
comprehensive
income 1,495,795 0.00% 0.00% 0.22%
Available-for-sale
financial assets 1,385,172 1,475,241 0.26% 0.26% 0.00%
Land and
improvements 101,456,799 18.91% 0.00% 0.00%
Property and
Equipment 26,504,386 28,524,088 35,749,200 4.94% 4.97% 5.35%
Investment
properties 107,931,032 200,239,815 225,005,910 20.12% 34.89% 33.64%
Investment in an
associate 24,985,317 26,800,823 23,389,752 4.66% 4.67% 3.50%
Deferred tax
asset 9,878,550 10,648,013 13,040,993 1.84% 1.86% 1.95%
Other noncurrent
assets 18,146,410 20,929,175 28,503,997 3.38% 3.65% 4.26%
Total Non-
Current Assets 325,420,882 333,140,053 365,990,584 61% 58% 55%
0% 0% 0%
TOTAL ASSETS 536,432,995 573,992,334 668,820,482 100% 100% 100%
LIABILITIES AND
EQUITY
CURRENT
LIABILITIES
Short-term debt
(Notes 17 and 30) 24,244,350 17,644,350 14,386,717 5% 3% 2%
Accounts and
other payables
(Notes 16 and 30) 141,713,114 137,683,859 171,999,422 26% 24% 26%
Contract
liabilities (Note
15) 21,874,681 0% 0% 3%
Income Tax
Payable 1,470,573 978,433 2,588,669 0% 0% 0%
68
Current portion
of long-term debt
(Notes 17 and 30) 5,187,111 6,572,775 23,265,173 1% 1% 3%
Deposits and
other current
liabilities (Note
18) 15,588,023 21,743,820 6,669,865 3% 4% 1%
Total Current
Liabilities 188,203,171 184,623,237 240,784,527 35% 32% 36%
- - -
NON-CURRENT
LIABILITIES
Long-term debt -
net of current
portion (Notes 17
and 30) 130,369,877 150,168,631 149,446,949 24% 26% 22%
Pension liabilities
(Note 27) 1,498,840 1,535,671 1,550,198 0% 0% 0%
Contract
liabilities - net of
current portion
(Note 15) 8,630,235 0% 0% 1%
Deferred tax
liabilities - net
(Note 24) 4,356,530 3,543,791 5,894,705 1% 1% 1%
Deposits and
other noncurrent
liabilities (Notes
19 and 30) 39,321,390 41,857,646 42,292,671 7% 7% 6%
Total Non-
Current
Liabilities 175,546,637 197,105,739 207,814,758 32.7% 34% 31%
0% 0% 0%
TOTAL
LIABILITIES 363,749,808 381,728,976 448,599,285 67.8% 67% 67%
EQUITY
Equity
attributable to
equity holders of
Ayala Land, Inc.
Paid-in capital 61,562,170 61,948,711 62,350,964 11% 11% 9%

Retained
earnings (Note 2) 91,798,555 109,976,450 132,090,020 17% 19% 20%
69
Stock options
outstanding
(Note 29) 89,697 99,064 65,462 0% 0% 0%
Remeasurement
loss on defined
benefit plans - - -
(Note 27) 356,918 160,015 219,782 0% 0% 0%
Fair value reserve
of financial assets
at FVOCI (Note -
10) 43,594 40,530 454,138 0.008% 0.007% -0.068%
Cumulative
translation
adjustments 1,001,986 868,271 0% 0% 0%
Equity reserves - - -
(Note 1) 5,432,003 6,152,115 7,400,945 -1% -1% -1%
Total
Shareholder's
equity 147,705,095 166,754,611 187,299,852 28% 29% 28%
Non-controlling
interests (Note
20) 24,978,092 25,508,747 32,921,345 5% 4% 5%
Total Equity 172,683,187 192,263,358 220,221,197 32% 33% 33%
- 0%
TOTAL
LIABILITIES AND
EQUITY 536,432,995 573,992,334 668,820,482 100% 100% 100%
i. Income Statement Horizontal Analysis
Horizontal Analysis
2016- 2017-
Balance Sheet 2016 2017 2018 2017 2018
ASSETS
CURRENT ASSETS
Cash 20,904,330 20,998,089 23,996,570 0% 14%

Short-term
investments 207,671 4,739,734 3,085,373 2182% -35%
Financial assets
at fair value
through profit or
loss 1,964,540 540,606 476,245 -72% -12%
Trade
Receivables 97,467,753 75,917,344 78,245,866 -22% 3%
70
Contract assets 48,473,011

Other
Receivables - - -
Inventory 66,727,945 90,845,608 104,371,611 36% 15%

Other Current
Assets 23,739,874 47,810,900 44,181,222 101% -8%
Total Current
Assets 211,012,113 240,852,281 302,829,898 14% 26%
NON-CURRENT
ASSETS
Noncurrent
accounts and
notes receivable 35,133,216 44,522,898 3,367,890 27% -92%
Noncurrent
contract assets 35,437,047
Financial assets
at fair value
through other
comprehensive
income 1,495,795
Available-for-sale
financial assets 1,385,172 1,475,241 7% -100%
Land and
improvements 101,456,799 -100%
Property and
Equipment 26,504,386 28,524,088 35,749,200 8% 25%
Investment
properties 107,931,032 200,239,815 225,005,910 86% 12%
Investment in an
associate 24,985,317 26,800,823 23,389,752 7% -13%
Deferred tax
asset 9,878,550 10,648,013 13,040,993 8% 22%
Other noncurrent
assets 18,146,410 20,929,175 28,503,997 15% 36%
Total Non-
Current Assets 325,420,882 333,140,053 365,990,584 2% 10%
TOTAL ASSETS 536,432,995 573,992,334 668,820,482 7% 17%
LIABILITIES AND
EQUITY
71
CURRENT
LIABILITIES
Short-term debt
(Notes 17 and 30) 24,244,350 17,644,350 14,386,717 -27% -18%
Accounts and
other payables
(Notes 16 and 30) 141,713,114 137,683,859 171,999,422 -3% 25%
Contract
liabilities (Note
15) 21,874,681
Income Tax
Payable 1,470,573 978,433 2,588,669 -33% 165%
Current portion
of long-term debt
(Notes 17 and 30) 5,187,111 6,572,775 23,265,173 27% 254%
Deposits and
other current
liabilities (Note
18) 15,588,023 21,743,820 6,669,865 39% -69%
Total Current
Liabilities 188,203,171 184,623,237 240,784,527 -2% 30%
- - -
NON-CURRENT
LIABILITIES
Long-term debt -
net of current
portion (Notes 17
and 30) 130,369,877 150,168,631 149,446,949 15% -0.48%
Pension liabilities
(Note 27) 1,498,840 1,535,671 1,550,198 2% 1%
Contract
liabilities - net of
current portion
(Note 15) 8,630,235
Deferred tax
liabilities - net
(Note 24) 4,356,530 3,543,791 5,894,705 -19% 66%
Deposits and
other noncurrent
liabilities (Notes
19 and 30) 39,321,390 41,857,646 42,292,671 6% 1%
Total Non-
Current
Liabilities 175,546,637 197,105,739 207,814,758 12% 5%
TOTAL
LIABILITIES 363,749,808 381,728,976 448,599,285 5% 18%
72
EQUITY
Equity
attributable to
equity holders of
Ayala Land, Inc.
Paid-in capital 61,562,170 61,948,711 62,350,964 1% 1%

Retained
earnings (Note 2) 91,798,555 109,976,450 132,090,020 20% 20%
Stock options
outstanding
(Note 29) 89,697 99,064 65,462 10% -34%
Remeasurement
loss on defined
benefit plans - - -
(Note 27) 356,918 160,015 219,782 -55% 37%
Fair value reserve
of financial assets
at FVOCI (Note -
10) 43,594 40,530 454,138 -7% -1220%
Cumulative
translation
adjustments 1,001,986 868,271 -13%
(Note 1) 5,432,003 6,152,115 7,400,945 13% 20%
Total
Shareholder's
equity 147,705,095 166,754,611 187,299,852 13% 12%
Non-controlling
interests (Note
20) 24,978,092 25,508,747 32,921,345 2% 29%
Total Equity 172,683,187 192,263,358 220,221,197 11% 15%
-
TOTAL
LIABILITIES AND
EQUITY 536,432,995 573,992,334 668,820,482 7% 17%
Vertical Analysis
Balance Sheet Vertical Analysis

VERTICAL
73
Balance Sheet 2016 2017 2018 2016 2017 2018

ASSETS
CURRENT ASSETS
Cash 20,904,330 20,998,089 23,996,570 4% 4% 4%

Short-term
investments 207,671 4,739,734 3,085,373 0% 1% 0%
Financial assets at
fair value through
profit or loss 1,964,540 540,606 476,245 0.37% 0.09% 0.07%
Trade Receivables 97,467,753 75,917,344 78,245,866 18% 13% 12%
Contract assets 48,473,011 0% 0% 7%

Other Receivables - - 0% 0% 0%
Inventory 66,727,945 90,845,608 104,371,611 12% 16% 16%
Other Current Assets 23,739,874 47,810,900 44,181,222 4% 8% 7%
Total Current Assets 211,012,113 240,852,281 302,829,898 39% 42% 45%
NON-CURRENT
ASSETS
Noncurrent accounts
and notes receivable 35,133,216 44,522,898 3,367,890 6.55% 6.66% 0.50%
Noncurrent contract
assets 35,437,047 0.00% 0.00% 5.30%
Financial assets at
fair value through
other
comprehensive
income 1,495,795 0.00% 0.00% 0.22%
Available-for-sale
financial assets 1,385,172 1,475,241
Land and
improvements 101,456,799
Property and
Equipment 26,504,386 28,524,088 35,749,200 4.94% 4.97% 5.35%
Investment
properties 107,931,032 200,239,815 225,005,910 20.12% 34.89% 33.64%
Investment in an
associate 24,985,317 26,800,823 23,389,752 4.66% 4.67% 3.50%
Deferred tax asset 9,878,550 10,648,013 13,040,993 1.84% 1.86% 1.95%

Other noncurrent
assets 18,146,410 20,929,175 28,503,997 3.38% 3.65% 4.26%
74
Total Non-Current
Assets 325,420,882 333,140,053 365,990,584 61% 58% 55%
TOTAL ASSETS 536,432,995 573,992,334 668,820,482 100% 100% 100%

100% 100% 100%
LIABILITIES AND
EQUITY
CURRENT LIABILITIES
Short-term debt
(Notes 17 and 30) 24,244,350 17,644,350 14,386,717 5% 3% 2%
Accounts and other
payables (Notes 16
and 30) 141,713,114 137,683,859 171,999,422 26% 24% 26%
Contract liabilities
(Note 15) 21,874,681 0% 0% 3%
Income Tax Payable 1,470,573 978,433 2,588,669 0% 0% 0%

Current portion of
long-term debt
(Notes 17 and 30) 5,187,111 6,572,775 23,265,173 1% 1% 3%
Deposits and other
current liabilities
(Note 18) 15,588,023 21,743,820 6,669,865 3% 4% 1%
Total Current
Liabilities 188,203,171 184,623,237 240,784,527 35% 32% 36%
- - -
NON-CURRENT
LIABILITIES
Long-term debt - net
of current portion
(Notes 17 and 30) 130,369,877 150,168,631 149,446,949 24% 26% 22%
Pension liabilities
(Note 27) 1,498,840 1,535,671 1,550,198 0% 0% 0%
Contract liabilities -
net of current
portion (Note 15) 8,630,235 0% 0% 1%
Deferred tax
liabilities - net (Note
24) 4,356,530 3,543,791 5,894,705 1% 1% 1%
Deposits and other
noncurrent liabilities
(Notes 19 and 30) 39,321,390 41,857,646 42,292,671 7% 7% 6%
Total Non-Current
Liabilities 175,546,637 197,105,739 207,814,758 32.7% 34% 31%
75
0% 0% 0%
TOTAL LIABILITIES 363,749,808 381,728,976 448,599,285 67.8% 67% 67%
EQUITY
Equity attributable
to equity holders of
Ayala Land, Inc.
Paid-in capital 61,562,170 61,948,711 62,350,964 11% 11% 9%

Retained earnings
(Note 2) 91,798,555 109,976,450 132,090,020 17% 19% 20%
Stock options
outstanding (Note
29) 89,697 99,064 65,462 0% 0% 0%
Remeasurement loss
on defined benefit - - -
plans (Note 27) 356,918 160,015 219,782 0% 0% 0%
Fair value reserve of
financial assets at -
FVOCI (Note 10) 43,594 40,530 454,138 0.008% 0.007% -0.068%
Cumulative
translation
adjustments 1,001,986 868,271 0% 0% 0%
(Note 1) 5,432,003 6,152,115 7,400,945 -1% -1% -1%
Total Shareholder's
equity 147,705,095 166,754,611 187,299,852 28% 29% 28%
Non-controlling
interests (Note 20) 24,978,092 25,508,747 32,921,345 5% 4% 5%
Total Equity 172,683,187 192,263,358 220,221,197 32% 33% 33%
- 0%
TOTAL LIABILITIES
AND EQUITY 536,432,995 573,992,334 668,820,482 100% 100% 100%
Income Statement Vertical Analysis
VERTICAL
Income Statement 2016 2017 2018 2016 2017 2018
Revenues
Sales 117,700,488 133,097,831 155,954,816 100% 100% 100%

Other Revenues
Interest income from real estate sales 5,010,993 5,409,944 7,042,078 4% 4% 5%

76
Equity in net earnings of associates and

joint ventures 554,414 865,566 749,924 0% 1% 0%
Interest and investment income 702,964 675,051 958,236 1% 1% 1%
Other Income 659,936 2,248,559 1,540,717 1% 2% 1%
- 6,928,307 9,199,120 10,290,955 6% 7% 7%
Cost of Sales 76,566,404 87,921,064 101,079,130 65% 66% 65%
Gross Profit 48,062,391 54,375,887 65,166,641 41% 41% 42%
Operating Expenses
General, Selling and Admin. 1,156,790 2,095,053 2,782,399 1% 2% 2%

Depreciation and Amortization 5,874,560 5,179,792 6,318,929 5% 4% 4%
Total Operating Expenses 7,031,350 7,274,845 9,101,328 6% 5% 6%

0% 0% 0%
Operating Profit 41,031,041 47,101,042 56,065,313 35% 35% 36%
Financing costs 7,314,387 7,914,326 9,594,003 6% 6% 6%
Other Income (Losses) 1,053,207 1,196,076 1,270,281 1% 1% 1%
Total Other Expenses 8,367,594 9,110,402 10,864,284 7% 7% 7%
Profit Before Tax 32,663,447 37,990,640 45,201,029 28% 29% 29%

0% 0% 0%
Income Tax 8,663,858 10,553,698 11,984,440 7% 8% 8%
Current 10,070,055 11,959,895 13,390,637 9% 9% 9%

- - -
Deferred 1,406,197 1,406,197 1,406,197 -1% -1% -1%
Net Income 23,999,589 27,436,942 33,216,589 20% 21% 21%

Net income attributable to:
Equity holders of Ayala Land, Inc. (Note
28) 20,908,011 25,304,965 29,240,880 18% 19% 19%
Non-controlling interests 3,523,774 2,860,694 3,975,709 3% 2% 3%
24,431,785 28,165,659 33,216,589 21% 21% 21%
77
Key Financial Ratios
Financial Ratio Company 2018 2017

ALI 1.26 1.18
Current SM PRIME 1.45 1.61
Ratio FIL 3.57 3.9
Liquidity MEG 3.88 3.25
Ratio ALI 0.44 0.55
SM PRIME 0.85 1.02
FIL 0.30 0.67
Quick Ratio MEG 0.39 0.37

ALI 0.85 0.91
Debt to equity SM PRIME 1.45 1.61
ratio FIL 3.57 3.9
Solvency/
MEG 3.88 3.25
debt-to-
equity ratios ALI 0.74 0.87
SM PRIME 0.85 1.02
Net Debt to FIL 0.30 0.67
equity ratio MEG 0.39 0.37

ALI 1.26 1.18
Asset to Asset to Equity SM PRIME 1.45 1.61
equity ratios Ratio FIL 3.57 3.9
MEG 3.88 3.25

ALI 3.57 3.44
Asset to Asset to SM PRIME 1.45 1.61
equity ratios Equity Ratio FIL 3.57 3.9
MEG 3.88 3.25
78

ALI 21.30% 20.61%
Net income SM PRIME 31% 30%
margin FIL 29% 30%
MEG 28% 27%
ALI 5.35% 4.94%
Profitability SM PRIME 5.45% 5.22%
ratios Return on FIL 3.82% 4.02%
total assets MEG 5.22% 5.14%
ALI 17.73% 16.45%
SM PRIME 12% 11%
Return on FIL 9% 9%
Equity MEG 10% 10%
Internal Factor Evaluation (IFE) Matrix

Strengths
Strength #1 – Strategic Land Bank
The company is well established in CBD’s, it has 40% of it’s Total Net Income coming from Makati Central
Business District, BGC and Arca. Combined they represent PHP 11.68 billion of ALI’s net income in 2018.
Of all twenty-two CBD’s in the Philippines, the company has properties in thirteen.
Strength #2 – Has a broad product portfolio Solid Track Record of Building Large-Scale, Integrated, Mixed-Use,
and Sustainable Estates
Rating 4 - ALI’s set of products and services is one of the widest and most diverse in the industry. Its investments
range from property development and leasing, to transportation and property management.
ALI takes advantage of the synergy created from designing estates for mix-use. Ayala Land has products for
residential, shopping malls and offices to commit to the idea of live-work-play which is currently dictating design
trends in the real estate industry.
Strength #3 – Diversified Product Lines

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Rating 4 - The company has an advantage of having its own construction firm; Makati Development Corp. Raw
materials and construction services are being sourced within Ayala Land’s parent company which is the Ayala
Corporation. This allows the company to have greater control over costs and quality of its construction initiatives.
Strength #4 – Highly Trusted Brand
Rating 4 - The advantages are, to name a few, the command for premium price because of the status of leader.
We can see that reflected in Ayala Land Premier, ALI’s premium residential brand, currently the single biggest
revenue contributor and the biggest in terms of size in the relative market with a revenue size of PHP 28 billion
and an capex valued at PHP 54.6 billion for 2018.
Other advantages are the ability to leverage economies of scale, consumer loyalty and awareness, overall more
exposure.
Strength #5 – Empowered Organization
Rating 4 – Ayala Land sees organizational development is a key for strategic growth. Ayala Land empowers its
employees by providing them a work environment that promotes personal fulfillment and professional
advancement. Compensation and benefits are based on experience and contributions to the growth of the
company. Ayala Land also makes sure to offer competitive industry rates to retain the best employees.
Strength #6 – Strong Balance Sheet
Rating 4 - Access to capital is one the most critical factors in the real estate development business. Ayala Land
is strongly positioned in terms of funding capacity. It has managed favorable long-term debt agreements with
very favorable interest rates and long-term amortization schedules.
Currently, ALI’s total borrowing is at PHP 187.1 billion and 92% of it is long term debt at PHP172.7 billion.
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Weaknesses
Weaknesses #1 – High employee attrition rate of 12.69% versus 4.99% for the entire industry.
Rating 1 – Employee attrition is disruptive the business. It increases costs through the need to hire replacements,
costs associated to training new hires to reach functional competence and the intangible asset of employee
expertise that’s built from years of experience and business familiarity.
ALI has been able to lower its attrition rate in the last 3 years from a high of 13.57% to its current of 12.69.
Ayala Land has put in measures to curb attrition by conducting organizational climate surveys to determine
employee engagement rates and address concerns, empowerment of employees and professional development
possibilities.
Included in ALI’s initiatives are setting up the proper policies such as succession planning, transfers,
organizational structure design and spearheading retention programs.
Weaknesses #2 – Predominantly invested in upper market segments with a considerably weaker presence in
the low to socialized market segments.
Rating 2 - ALI’s strongly represented in the luxury market segment under residential products. This is good on
its own yet there is an opportunity cost incurred from not taking advantage of opportunities in other market
segments.
Currently BellaVista is Ayala Land’s brand in approaching the economic market segments, Amaia is its brand for
the low middle market segment. These two businesses represent PHP1.15 billion and PHP7.36 billion in
revenues respectively. Given ALI’s state, it can afford to explore new opportunities to increase market share in
these market segments in light of the extreme housing backlog.
Weaknesses #3 – Limited use of new and available technology relevant to the business
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Rating 1 - For its size and status, ALI has yet to migrate to cloud services. It is currently in the pipeline to migrate
from on-premise solutions over to cloud based solutions, however the technology has been around for more than
a decade.
On premise solutions mean ALI has yet to take advantage of unique features from cloud solutions. One is access
to scalable computational speed and space. As systems and applications grow in complexity along with the
nature of the business, on-premise solutions become more expensive since the technological infrastructure
would have to be upgraded to keep up. Not so in cloud computing, in fact, such computational platforms can
fully accommodate growth in size and sophistication of enterprise wide data architectures.
Ayala Land
Internal Factor Evaluation (IFE)
Strengths Weight Rating Score
S1. Strategic Land Bank 20% 4 0.8
S2. Solid Track Record of Building Large-Scale,

Integrated, Mixed-Use, and Sustainable Estates 20% 4 0.8
S3. Diversified Product Lines 15% 4 0.6
S4. Highly Trusted Brand 10% 4 0.4
S5. Empowered Organization 5% 4 0.2

S6. Strong Balance Sheet 5% 4 0.2
Weaknesses Weight
W1. High employee attrition rate of 12.69%

versus 4.99% for the entire industry.
10% 1 0.1
W2. Predominantly invested in upper market
segments with a considerably weaker presence
in the low to socialized market segments. 10% 2 0.2
W3. Limited use of new and available technology
relevant to the business 5% 1 0.1
1.00 3.35
Conclusion
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ALI enjoys the advantages brought on by its successes over the years. However its only prudent for any firm to
consider change and all the possibilities it brings with it, in its approach to the future and its attempts at pursuing
its goals.
Strategy Formulation
Strengths, weaknesses, opportunities and threats (SWOT) Matrix
Strengths Weaknesses
W1. High employee attrition rate
of 12.69% versus 4.99% for the
S1. Strategic Land Bank entire industry.
W2. Predominantly invested in

S2. Solid Track Record of upper market segments with a
Building Large-Scale, considerably weaker presence in
Integrated, Mixed-Use, and the low to socialized market
Sustainable Estates segments.
W3. Limited use of new and
available technology relevant to
S3. Diversified Product Lines the business
S4. Highly Trusted Brand
S5. Empowered Organization
S6. Strong Balance Sheet
Opportunities SO Strategies WO Strategies
O1. BPO and KPO demand SO1 - O1, S3, S2 Increase
for Office space still strong office GLA
WO1 - O2,O3,O4, W3 Build an

integrated Information
Technology system that unifies
information from all business
O2. Strong demand for SO2 - O2, S2, S3, Create new operations that yield insights on
residential units vertical residential units KPI's in real time
O3. Strong demand for retail SO3 - O3, S3, S2 Build more
space shopping malls to increase GLA
83
WO2 - W2, O5 Increase

investments in mid low market
O4. Consistent tourism SO4 - O4,S3, S4 Increase Hotel segments to take advantage of
growth unit rooms decentralization
O5. Government BBB SO5 - O6, S3 Increase GLA for

program co-living and co-working spaces
O6. Increase demand for SO6 - O7, S1, S3 Invest in new
co-working and co-living Industrial Warehouses and
spaces innovative logistics technology
SO7 - O5,S1, S3, Secure land

O7. Emergence of banking areas surrounding the
ecommerce planned subway station.
Threats ST Strategies WT Strategies
ST1 - T1, S1, S2 Establish
T1. Growing intensity partnerships to target key land
among competitors banks for development
ST2 - S2, T1 Invest in the
construction of mixed used
T2. Slow PEZA release estates outside of Metro Manila
ST3 - T3, S6 Target fixed rate
T3. Interest Hikes long term debt
T4. Climate Change
S-O Strategies
SO1 - O1, S3, S2 Increase office GLA
SO2 - O2, S2, S3, Create new vertical residential unit
SO3 – O3, S3, S2 Build more shopping malls to increase GLA
SO4 - O4, S3, S4 Increase Hotel unit rooms
SO5 - O6, S3 Increase GLA for co-living and co-working spaces
SO6 - O7, S1, S3 Invest in new Industrial Warehouses and innovative logistics technology
SO7 - O5, S1, S3, Secure land banking areas surrounding the planned subway station.
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S-T Strategies
ST1 - T1, S1, S2 Establish partnerships to target key land banks for development
ST1 - S2, T1 Invest in the construction of mixed used estates outside of Metro Manila
ST2 - T3, S6 Target fixed rate long term debt
W-O Strategies
WO1 - O2, O3, O4, W3 Build an integrated Information Technology system that unifies information from all business
operations that yield insights on KPI's in real time
Strategic Position and action evaluation (SPACE) matrix
SPACE MATRIX
FINANCIAL POSITION (FP) RATING
Biggest real estate firm in terms of revenue 7
16% income growth rate YoY 6
85
Return on Asset ratio at 5% 6

TOTAL 19
AVERAGE 6.33
COMPETITIVE POSITION (CP)
Current market leader -1
broad product portfolio -1
strong market presence in the mid to high-income market segments with Alveo and Ayala
Premier -1
TOTAL -3
AVERAGE -1.00
INDUSTRIAL POSITION (IP)
Demand continues to be strong for Office spaces with the current pre-leased rate at 28% 6
Residential supply gap, around 4mil supply gap for low income segment 7
Property prices in CBD's are climbing with a projected yearly increase of 5% 2
Vacancy rate is projected to decline by 2021 to 10.3% from 10.5% 5
TOTAL 20
AVERAGE 5
STABILITY POSITION (EP)
The country’s gross domestic product (GDP) grew by 6.2% in 2018, slower than its 2017 growth
of 6.7% but still within the five-year average of 6%. -2
Average inflation in 2018 reached 5.2%, above the government’s inflation target of 2-4% due to
higher international crude oil prices and rice supply-side issues. -2
According to the latest national census (2015), the Philippines had a total population of 100.98
million, 83.2% of whom were between 18 and 59 years old, with a median age of 24.2 years. -2
TOTAL -6
AVERAGE -2
CONCLUSION
X - Axis (CP average + IP average) 4.00
Y- Axis (FP average + CP average) 5.33
The SPACE Matrix shows that Ayala Land’s Financial, Industry, Competitive, and Stability Positions arrived at
the Aggressive Profile Quadrant. Its X and Y values reflect an organization, whose financial and competitive
strengths dominate the real estate industry. Given the result, Ayala Land can implement various Backward,
Forward, and Horizontal Integration, Market Penetration, Market Development, Product Development, and
Related or Unrelated Diversification.

86
Boston Consulting Group (BGC) Matrix
Grand Strategy Matrix

Rapid Market Growth
Quadrant II Quadrant I
1. Market development 1. Market development

2. Market penetration 2. Market penetration
3. Product development 3. Product development
4. Horizontal integration 4. Forward integration
5. Divestiture 5. Backward integration
6. Liquidation 6. Horizontal integration
7. Related diversification
Weak Competitive Strong Competitive

Position Position
1. Retrenchment 1. Related diversification

2. Related diversification 2. Unrelated diversification
3. Unrelated diversification 3. Joint ventures
4. Divestiture
5. Liquidation
Quadrant III Quadrant IV
Slow Market Growth

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Summary of Strategies
Strategy Option SWOT SPACE BCG GSM IE Total

Integration Strategies
1 Forward Integration 1 1 1 1 4
2 Backward Integration 1 1 1 1 4
3 Horizontal Integration 1 1 1 1 4
Intensive Strategies
4 Market Penetration 1 1 1 1 1 5
5 Market Development 1 1 1 1 1 5
6 Product Development 1 1 1 1 1 5
Diversification Strategies
7 Related Diversification 1 1
Unrelated
8 Diversification 1 1
Defensive Strategies
9 Retrenchment 0
10 Divestiture 0
11 Liquidation 0
QSP Matrix
QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)
MARKET MARKET PRODUCT

KEY FACTORS WEIGHT PENETRATION DEVELOPMENT DEVELOPMENT
AS TAS AS TAS AS TAS
Opportunities
O1. BPO and KPO demand for Office 20% 4 0.60 1 0.15 1 0.15
space still strong
20% 4 0.80 3 0.30 1 0.10

O2. Strong demand for residential units
10% 3 0.30 4 0.40 2 0.20
O3. Strong demand for retail space
5% 4 0.20 3 0.30 1 0.10

O4. Consistent tourism growth
5% 1 0.05 2 0.32 3 0.48

O5. Government BBB program
O6. Increase demand for co-working 5% 4 0.20 2 0.00 2 0.00
and co-living spaces
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5% 4 0.20 2 0.20 2 0.20

O7. Emergence of ecommerce
Threats
T1. Growing intensity among 10% 3 0.30 4 0.40 2 0.20
competitors
T2. Slow PEZA release 10% 3 0.30 3 0.24 4 0.32
5% 3 0.15 2 0.10 4 0.20

T3. Interest Hikes
T4. Climate Change 5% 2 0.10 3 0.24 4 0.32
Total Weight 100%
Strengths
S1. Strategic Land Bank 20% 4 0.80 3 0.60 1 0.20
S2. Solid Track Record of Building
Large-Scale, Integrated, Mixed-Use, 20% 4 0.80 2 0.30 3 0.45
and Sustainable Estates
15% 4 0.60 3 0.21 1 0.07

S3. Diversified Product Lines
10% 4 0.40 2 0.18 1 0.09

S4. Highly Trusted Brand
S5. Empowered Organization 5% 4 0.20 3 0.21 2 0.14
5% 4 0.20 3 0.21 2 0.14

S6. Strong Balance Sheet
Weaknesses
High employee attrition rate of 12.69% 10% 4 0.40 2 0.30 1 0.15

versus 4.99% for the entire industry.
Predominantly invested in upper
market segments with a considerably 10% 2 0.20 4 0.24 1 0.06
weaker presence in the low to
socialized market segments.
Limited use of new and available 5% 2 0.10 3 0.21 4 0.28
technology relevant to the business
Total Weight 100% 6.90 5.11 3.85
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Strategic Corporate and Functional Objectives and recommended strategies
Recommended revised Vision and mission statement
Recommended Vision
“Enhancing land, enriching lives for more people. On the course of sustained growth in the next 5 years and
beyond.”
Recommended Mission
“ By developing integrated, masterplanned, tech-infused and sustainable mixed-use communities in
vibrant growth centers all over the country, we strive to continually elevate the quality of life for all of our
customers.
We are a responsible corporate citizen and act with integrity, foresight and prudence. By using the latest
techniques and state-of-the-art technology, we empower our employees to deliver products that exceed our
customers’ expectations and build long-term value for our shareholders.”
Key strategic challenge and recommended corporate strategic objectives
Strategic Objective:
Ayala Land’s strategic objective is to secure its position as market leader in the Philippine real estate industry
and to widen the gap between itself and its competitors by continuing aggressive market development strategies
such as building large-scale, mixed use integrated communities. Specifically, the strategic objective is intended
to be achieved by increasing gross leasable area with the construction of new shopping malls and office buildings
and by directly focusing on operational capacity to address the massive housing supply gap in the lower market
segments that promises tremendous returns and growth potential.
Financial Objective:
Furthermore, Ayala Land is expanding its service businesses, with external contracts accounting for an
increasing share of its services income.
Ayala Land aims to maintain its CAGR of 17 – 20% annually, to reach 40 billion net income by 2022
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Recommended Strategies
Market Penetration Strategy 1: Increase Office GLA
Ayala Land’s current Office GLA is 1.11 million sqm, the lease is on average PHP755/sqm/month. The
revenue that it adds to the total is up to PHP8.61 billion, a 29% increase from the previous year. Expanding its
Office GLA has been ALI’s priority among other things over the last 5 years where its shows an average growth
of 8.5% year on year.
The current demand for Office space is still outpacing the supply. In 2018, the current uptake for office
space was at 450,000 sqm annually. At the current rate of supply, only about 120,000 to 150,000 sqm is available
for companies to occupy, leaving much to be desired. The continues growth of the office space market is a sign
that further developments by Ayala Land in this direction is merited.
CAPEX requirement for continued construction and expansion for 2019 is PHP7.8 billion which is 6% of the total
PHP130 billion CAPEX for the year.
Market Penetration Strategy 1: Create new Vertical Residential Units
Colliers expects a supply gap for vertical residential units, this put merit for property developers like Ayala
Land to pursue a more aggressive and strategic landbanking.
The demand will be coming from new locations as a result of the government’s new initiatives. More
specifically, Colliers points to Quezon City, Ortigas Center, Manila Bay Area and the so-called fringe areas for
potential development for residential property. Real estate firms should likewise maximize the potential
opportunities arising from the government’s “Build, Build, Build” initiative.
A main point of interest is the Manila subway and its overall effect. It will have the first three stations in
Quezon City—Mindanao Avenue, Tandang Sora and North Avenue and with it are opportunities for Ayala Land
to take advantage of in its pursuit to expand its residential business.

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Ayala Land’s business revenue is deeply hinged in its residential brands. Total revenues for its residential
business topped PHP94.63 billion in 2018.
CAPEX requirement for continued construction and expansion for 2019 is PHP53.3 billion which is 41% of the
total PHP130 billion CAPEX for the year.
Market Penetration Strategy 3: Build more shopping malls to increase GLA
Current total GLA for ALI’s shopping mall business was at 1.90 million sqm. Its average occupancy rate
was at 89%. The average rent ALI earns from its shopping mall business is P1,073/sqm/month, and in 2018 the
revenues it contributed was at PHP19.91 billion.
On the other hand, analysts and industry observers are noting growth in the retail space. Average
vacancy registered at around 3.0% across Metro Manila. The demand is coming from foreign brands entering
the Philippine market. The main drive, specifically, is from the food and beverage industry that lead 2018’s market
demand. Fast fashion brands in the like of clothing and apparel, shoes and bags also dominated the retail market
Since a large sum of ALI’s revenues are hinged in its shopping mall revenue, this positive growth trend should
be pursued.
CAPEX requirement for continued construction and expansion for 2019 is PHP15.6 billion which is 12% of the
Market Penetration Strategy 4: Increase Hotel Rooms
Ayala Land Hotels and resorts has 2,973 units as of 2018 yearend, with an additional 3,096 units under
construction. Total revenue for ALI’s operations under this brand increased by 14%, to reach PHP6.39 billion
from previous year’s P5.62 billion.

92
According to reports, the Philippines received an estimated 7.1 million tourists in 2018. It is expected to
grow up to about 6 to 7% every year in the next 5 years. It means that the demand for hotel rooms is expected
to increase as well. With this rising demand, other players in the construction, casino and resorts, transportation,
and many more all over the country and abroad can take advantage of this growing market.
The main demand for hotel units is coming from Paranaque where it commands the highest occupancy,
this the result of demand coming from casino gamers and pushed further by its proximity to NAIA, the end result
is an occupancy rate of about 90% up. Other areas including Makati and BGC are also positively affected by
this.
CAPEX requirement for continued construction and expansion for 2019 is PHP6.5 billion which is 5% of the total
PHP130 billion CAPEX for the year.
Market Penetration Strategy 5: Increase GLA for co-living and co-working spaces
JLL noted the trend for co-living and co-working concepts in the Philippines as early as 2017. The attractiveness
of the idea for young Filipinos comes from four appealing factors; convenience, cost, community and
collaboration. The Philippine co-living market is evident through the presence of dormitels, a combination of a
dorm and hotel services that young professionals consider due to affordability, location, convenience, and safety.
The main drivers that fuel the demand for these concepts are the shifting nature of remote work and demand for
affordable housing.
Ayala Land’s the Flats and Clock In are its two brands to take advantage of this growing trend. There is merit
now to expand these businesses not only because of the demand from users but also the availability of
developable land in the Metro Manila. These factors are forcing real estate developers to be more efficient in its
use of available land.

93
CAPEX requirement for Strategy 5 which refers to expansion and continued operation is PHP 500 million which
is 0.3% of the total PHP130 billion CAPEX for the year.
Market Penetration Strategy 6: Invest in New Industrial Warehouses and innovative logistics technology
The end of 2018 saw massive growth in the ecommerce in the Philippines. A report by Statista said that
the Philippine e-commerce market revenue grew to $840 million or about P44 trillion in 2018 from $688 million
or about P36 trillion in 2017. Revenue is expected to grow about 10.5% annually leading to a market volume of
$996 million dollars or about P53 trillion pesos by 2019.
All that activity will greatly affect the Warehousing industry in the Philippines. Colliers reports the demand
for industrial warehouses is partly driven by a thriving e-commerce market. Personal consumption has also been
growing steadily which propels the demand for fast-moving consumer goods. The efficient delivery of goods
requires an efficient logistics network.
ALI currently has 136,874 sqm total GLA for standard factory building and warehousing across multiple
locations.
CAPEX requirement for continued construction and expansion for 2019 is PHP 500 million which is 0.3% of the
Market Penetration Strategy 7: Secure land banking areas surrounding the planned subway station.
There are areas that are directly in the path of the planned MRT-7 and its stations which are located in
Quezon City. There is a total of 13 stations situated all over Quezon City that will have great effect in the
surrounding areas that Ayala Land should secure for land banking.
Colliers sees a spot as ideal for townships. The area around the North Avenue station is prime land for
townships since it’s in the middle of interconnecting mass transportation systems. While the stations in Tandang
Sora will be providing residential support to offices in the North Avenue station.
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Colliers also sees North Avenue as a practical choice for hotel projects as it sees it capturing demand
from Northern Metro Manila and nearby provinces such as Bulacan.
Colliers expects massive redevelopment in the area around Anonas station as a result of the new
developments including improved access to it. The overall effect Colliers is expecting in the rea is the need for
more low to mid-rise residential condominiums and shophouse retail projects and some room for middle- to
upper-middle class condominium projects. The East Avenue station would be a feasible location for more
institutional projects such as schools and hospitals while the Quezon Avenue station should serve as an
extension of commercial activities along North Avenue. Lastly, Colliers doesn’t see much potential for Katipunan
due to limited developable land.
CAPEX requirement for Strategy 7 in 2019 is PHP 19.5 billion which is 15% of the total PHP130 billion CAPEX
for the year.
Responsible Person/ Other

ACTION Timetable Expected Output Team Stakeholders
Presentation
material of
recommended
Cascade of Strategic mission/vision, The Board and
Management Paper strategies and Management
findings to the Board Q3 2019 action plans. Proponent Committee
Communication
Plan for all media
outlets as well
internal and Investor
Cascade of Proposed external stake Communications and Employees
Vision/Mission Q3 2019 holders Compliance Customers
Recommended Department program and Action plans

Expected Responsible
Strategy No. Action Timetable Output Person/Team Stakeholders
95
Analyze relevant
data and sketch Decision to Management-
out rough project continue with Strategic Land Bank Level
Initial Planning parameters Q3 2019 the plan Management Committees
Site assessment
and conducts
feasibility
assessments. Management-Level
Discussions with Committees, Management-
Planning relevant parties Assessment Strategic Land Bank Level
Refinement are conducted Q3 2019 report Management Committees
Management-Level
Market Study to Committees, Management-
Feasibility estimate market Feasibility Strategic Land Bank Level
Study absorption. Q3 2019 report Management Committees
Contracts are
negotiated, other
joint venture Binding
agreements are Contract
investigated. agreement Strategic Land Bank Management-
Contract Permits are Q3 2019 - Drafts, Management/Bidding Level
Negotiations granted Q4 2019 Permits Committee Committees
Contracts are
signed. Purchase
of land, purchase
of insurance, and Signed Management-
Formal pre-release contracts and Management-Level Level
Commitment agreements Q4 2019 agreements Committees Committees
Formal
accounting is
conducted.
Marketing
committee gets Management-
involved. Level
Operations go Q1 2020 - Actual Management-Level Committees/The
Construction underway Q3 2025 construction Committees Board
Operating staff
comes in to
manage the
property. Local
government
approvals come
in, utilities are
connected,
tenants start Opening of
Completion moving in. the project to Management-
and Formal Construction loan tenants and Level
Opening is paid off. Q3 2025 the market Marketing Team Committees
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Property
management,
Property, reconfigure, Marketing
Asset, and remodel, and engagements Property Management-
Portfolio remarket space. and property Management Level
Management Maintenance. Q4 2025 management Subsidiary Committees
Financial Projections
The following table shows the comparison of values in the income statement of Ayala Land taken from the the
consolidated balance sheet, income statement and statement of cash flows from 2017 to 2018 which also
contains 2016 numbers. The items in the first column are used as basis for calculating the financial projections
for the succeeding years. The economic and financial assumptions used as basis for the projections for the next
3 years, 2019-2022 will be discussed in the succeeding sections.
Assumptions on Accounts
Note
Number Account Definition Assumption
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 (3) months or
less from dates of
placement and that are annual interest rates will
Notes 2, 4 subject to an insignificant vary between 1.6% to
and 30 Cash and Cash Equivalents risk of change in value. 6.9%
Short-term investments
consist of money market
placements made for
varying periods of more
than
three (3) months and up to
one (1) year and earn
interest at the respective annual interest rates will
short-term investment vary between 1.8% to
Note 5 Short-term Investments rates. 3.7%
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Composed of investments in
ARCH Capital Fund and
Unit Investment Trust Funds
Note 6 Financial Assets at FVTPL (UITF)
Trade receivables of the
Group consists of
Residential and office
development sale,
Corporate business leasing,
Shopping centers leasing,
Construction contracts,
Management fees and
receivables from hotel
operations and other 7% average growth from
Note 7 Accounts and Notes Receivable support services 2016 to 2021
The account is comprised of
Residential and commercial
lots at cost, Residential and
condominium units at cost 14% average growth from
Note 8 Inventories and Offices - at cost 2016 to 2021
Consists of Value-added
input tax, Prepaid expenses,
Advances to contractors,
Creditable withholding aggressive growth due to
taxes, Materials, parts and Market Penetration
Note 9 Other Current Assets supplies - at cost, Others strategies
the investments in the

investee companies are
carried in the consolidated
statement of financial
position at cost plus post-
acquisition changes in the
Group’s share in the net
assets of the investee
Investments in Associates and Joint companies, less any
Note 11 Ventures impairment in values.
Includes costs of land,
buildings and construction in average 34% due to land
Note 12 Investment Properties progress banking strategy
Includes Land, Buildings
and Improvements,
Machinery and Construction
Equipment, Furniture,
Fixtures and Equipment,
Transportation Equipment,
Hotel Property and will grow in proportion to
Note 13 Property and Equipment Equipment capex
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This account consists of

Advances to contractors,
Prepaid expenses,
Leasehold rights, Deferred
input VAT, Deposits –
others, Net pension assets,
Note 14 Other Noncurrent Assets Development rights, Others
Accounts payable and

accrued expenses are
noninterest-bearing and are
normally settled on
30- to 60-day terms, except
Note 16 Accounts and Other Payables for accrued project costs.
PHP 12,332,530, PHP

4,000,000,
PHP12,650,000 are
current long term debt
portions due in 2019, 2020
Note 17 Short-term and Long-term Debts and 2021 respectively
Consists of Security
deposits, Customers’
deposits and Other current
liabilities mostly pertain to
estimated liability on
property development and
unearned
NOte 18 Deposits and Other Current Liabilities income.
Consists of Deposits,
Contractors payable,
Liability for purchased land,
Retentions payable,
Deferred Output VAT, DRP
Deposits and Other Noncurrent obligation, Subscriptions Increase in proportion to
Note 19 Liabilities payable, and Other liabilities liabilities
Maintain CAGR 13% and
all the rest of accounts
under equity will maintain
Note 20 Equity same proportions
Consists of Revenue from
contracts with customers
under Residential
development, hotels and
resorts, construction, others, Revenue will grow 17%
as well as rental income and yoy based on historical
Equity in net earnings of data and favorable
Note 21 Revenue associates and joint venture economic climate
99
Real estate costs and

expenses consisting of
COGS, Marketing
Management fees,
Depreciation and
amortization, Rental, Hotel
operations, Manpower
Costs and Expenses and Other costs, Materials and Maintain proportion to
Note 23 Charges overhead, and OPEX Revenue
Note 24 Income Tax stays at 27% of Revenue
100
Income Statement – Vertical analysis

Vertical Analysis
REVENUE (Note 21) 2018 F2019 F2020 F2021 2018 F2019 F2020 F2021
Real estate sales (Notes 21 and
31) 155,954,816 182,837,099 213,919,406 250,285,705 94% 94% 94% 94%
Interest income from real estate
sales (Note 7) 7,042,078 7,780,302 9,102,953 10,650,456 4% 4% 4% 4%
Equity in net earnings of
associates and joint ventures
(Notes 11 and 21) 749,924 0 0 0 0% 0% 0% 0%
163,746,818 190,617,401 223,022,359 260,936,160 98% 98% 98% 98%
Interest and investment income
(Notes 6, 22 and 26) 958,236 1,945,076 2,275,738 2,662,614 1% 1% 1% 1%
Other income (Notes 22 and 25) 1,540,717 1,945,076 2,275,738 2,662,614 1% 1% 1% 1%
2,498,953 3,890,151 4,551,477 5,325,228 2% 2% 2% 2%
166,245,771 194,507,552 227,573,836 266,261,388 100% 100% 100% 100%
COSTS AND EXPENSES

Real estate sales (Note 23) 101,079,130 118649606.8 138820039.9 162419446.7 61% 61% 61% 61%
General and administrative
expenses
(Notes 23, 27 and 29) 9,101,328 9725377.604 11378691.8 13313069.4 5% 5% 5% 5%
Interest and other financing
charges (Note 23) 9,594,003 11670453.12 13654430.16 15975683.28 6% 6% 6% 6%
Other expenses (Note 23) 1,270,281 1945075.521 2275738.359 2662613.88 1% 1% 1% 1%
121,044,742 141,990,513 166,128,900 194,370,813 73% 73% 73% 73%
INCOME BEFORE INCOME

TAX 45,201,029 52,517,039 61,444,936 71,890,575 27% 27% 27% 27%
PROVISION FOR INCOME TAX

(Note 24)
Current 13,390,637 15,560,604.17 18,205,906.87 21,300,911.04 8% 8% 8% 8%

- - -
Deferred -1,406,197 1,945,075.52 2,275,738.36 2,662,613.88 -1% -1% -1% -1%
101
11,984,440 13,615,528.64 15,930,168.51 18,638,297.16 7% 7% 7% 7%
NET INCOME 33,216,589 38,901,510 45,514,767 53,252,278 20% 20% 20% 20%

Equity holders of Ayala Land,
Inc. (Note 28) 29,240,880 35011359.37 40963290.47 47927049.85 18% 18% 18% 18%
Non-controlling interests 3,975,709 3890151.041 4551476.718 5325227.761 2% 2% 2% 2%
33,216,589 38,901,510 45,514,767 53,252,278 20% 20% 20% 20%
Earnings Per Share (Note 28)

Net income attributable to equity
holders of Ayala Land,
Inc.:
Basic and diluted 1.98
Other comprehensive income

(loss) 200,501 972,538 1,137,869 1,331,307 0.12% 0.50% 0.50% 0.50%
Total comprehensive income 33,417,090 38,901,510 45,514,767 53,252,278 20% 20% 20% 20%
Total comprehensive income
attributable to:
Equity holders of of Ayala Land,
Inc. 29,701,636 35,011,359 40,963,290 47,927,050 18% 18% 18% 18%
Non-controlling interests 3,978,319 3,890,151 4,551,477 5,325,228 2% 2% 2% 2%
33,679,955 38,901,510 45,514,767 53,252,278 20% 20% 20% 20%
Income Statement – Horizontal analysis

Horizontal Analysis
2018- F2019- F2020-
REVENUE (Note 21) 2018 F2019 F2020 F2021 F2019 F2020 F2021
102
Real estate sales (Notes 21 and

31) 155,954,816 182,837,099 213,919,406 250,285,705 17% 17% 17%
Interest income from real estate
sales (Note 7) 7,042,078 7,780,302 9,102,953 10,650,456 10% 17% 17%
Equity in net earnings of
associates and joint ventures
(Notes 11 and 21) 749,924 0 0 0 -100% 0% 0%
163,746,818 190,617,401 223,022,359 260,936,160 16% 17% 17%
Interest and investment income
(Notes 6, 22 and 26) 958,236 1,945,076 2,275,738 2,662,614 103% 17% 17%
Other income (Notes 22 and 25) 1,540,717 1,945,076 2,275,738 2,662,614 26% 17% 17%
2,498,953 3,890,151 4,551,477 5,325,228 56% 17% 17%
166,245,771 194,507,552 227,573,836 266,261,388 17% 17% 17%
COSTS AND EXPENSES

Real estate sales (Note 23) 101,079,130 118649606.8 138820039.9 162419446.7 17% 17% 17%
General and administrative
expenses
(Notes 23, 27 and 29) 9,101,328 9725377.604 11378691.8 13313069.4 7% 17% 17%
Interest and other financing
charges (Note 23) 9,594,003 11670453.12 13654430.16 15975683.28 22% 17% 17%
Other expenses (Note 23) 1,270,281 1945075.521 2275738.359 2662613.88 53% 17% 17%
121,044,742 141,990,513 166,128,900 194,370,813 17% 17% 17%
INCOME BEFORE INCOME

TAX 45,201,029 52,517,039 61,444,936 71,890,575 16% 17% 17%
PROVISION FOR INCOME TAX

(Note 24)
Current 13,390,637 15,560,604.17 18,205,906.87 21,300,911.04 16% 17% 17%

- - -
Deferred -1,406,197 1,945,075.52 2,275,738.36 2,662,613.88 38% 17% 17%
11,984,440 13,615,528.64 15,930,168.51 18,638,297.16 14% 17% 17%
NET INCOME 33,216,589 38,901,510 45,514,767 53,252,278 17% 17% 17%

103

Equity holders of Ayala Land,
Inc. (Note 28) 29,240,880 35011359.37 40963290.47 47927049.85 20% 17% 17%
Non-controlling interests 3,975,709 3890151.041 4551476.718 5325227.761 -2% 17% 17%
33,216,589 38,901,510 45,514,767 53,252,278 17% 17% 17%
Other comprehensive income

(loss) 200,501 972,538 1,137,869 1,331,307 385% 17% 17%
Total comprehensive income 33,417,090 38,901,510 45,514,767 53,252,278 16% 17% 17%
Total comprehensive income
attributable to:
Equity holders of of Ayala Land,
Inc. 29,701,636 35,011,359 40,963,290 47,927,050 18% 17% 17%
Non-controlling interests 3,978,319 3,890,151 4,551,477 5,325,228 -2% 17% 17%
33,679,955 38,901,510 45,514,767 53,252,278 16% 17% 17%
Balance Sheet – Vertical Analysis
VERTICAL
Balance Sheet 2018 (f)2019 (f)2020 (f)2021 2018 F2019 F2020 F2021
ASSETS
CURRENT ASSETS
104
Cash and Cash

equivalents 23,996,570 25,316,381 26,708,782 28,177,765 4% 3% 3% 3%
Short-term
investments 3,085,373 3,147,080 3,210,022 3,274,223 0% 0% 0% 0%
Financial assets at
fair value through
profit or loss 476,245 567,983 664,540 777,511 0.07% 0.07% 0.07% 0.07%
Accounts and Notes
Receivable 78,245,866 92,196,703 108,958,287 128,078,197 12% 11% 12% 12%
Contract assets 48,473,011 7% 0% 0% 0%

Other Receivables 0% 0% 0% 0%
Inventory 104,371,611 134,072,988 150,849,441 170,949,858 16% 17% 16% 16%
Other Current Assets 44,181,222 65,732,696 85,218,511 108,205,658 7% 8% 9% 10%
Total Current Assets 302,829,898 321,033,831 375,609,583 439,463,212 45% 40% 40% 40%
- - -
NON-CURRENT
ASSETS
Noncurrent accounts
and notes receivable 3,367,890 53,025,538 62,039,879 72,586,659 0.50% 6.61% 6.61% 6.61%
Noncurrent contract
assets 35,437,047 5.30% 0.00% 0.00% 0.00%
Financial assets at
fair value through
other
comprehensive
income 1,495,795 0.22% 0.00% 0.00% 0.00%
Available-for-sale
financial assets
Land and
improvements
105
Property and
Equipment 35,749,200 47,036,877 55,033,146 64,388,780 5.35% 5.86% 5.86% 5.86%
Investment
properties 225,005,910 311,263,389 364,178,166 426,088,454 33.64% 38.78% 38.78% 38.78%
Investment in an
associate 23,389,752 14,446,522 16,902,431 19,775,845 3.50% 1.80% 1.80% 1.80%
Deferred tax asset 13,040,993 15,649,192 18,309,554 21,422,178 1.95% 1.95% 1.95% 1.95%
Other noncurrent
assets 28,503,997 40,129,229 46,951,198 54,932,901 4.26% 5.00% 5.00% 5.00%
Total Non-Current
Assets 365,990,584 481,550,747 563,414,374 659,194,818 55% 60% 60% 60%
TOTAL ASSETS 668,820,482 802,584,578 939,023,957 1,098,658,029 100% 100% 100% 100%
- - -
LIABILITIES AND
EQUITY
CURRENT LIABILITIES
Short-term debt
(Notes 17 and 30) 14,386,717 15,824,787 18,515,001 21,662,551 3% 3% 3% 3%
Accounts and other
payables (Notes 16
and 30) 171,999,422 189,192,172 221,354,841 258,985,164 38% 35% 35% 35%
(Note 15) 21,874,681 24,061,234 28,151,644 32,937,424 5% 4% 4% 4%
Income Tax Payable 2,588,669 2,847,428 3,331,490 3,897,844 1% 1% 1% 1%

Current portion of
long-term debt
(Notes 17 and 30) 23,265,173 12,332,530 4,000,000 12,650,000 5% 2% 1% 2%
106
Deposits and other

current liabilities
(Note 18) 6,669,865 7,336,573 8,583,790 10,043,034 1% 1% 1% 1%
Total Current
Liabilities 240,784,527 251,594,723 283,936,766 340,176,017 54% 47% 45% 46%
- - - -
NON-CURRENT
LIABILITIES
of current portion
(Notes 17 and 30) 149,446,949 206,273,271 251,768,787 290,590,684 33% 38% 40% 39%
Pension liabilities
(Note 27) 1,550,198 2,035,544 2,381,587 2,786,456 0% 0% 0% 0%
net of current
portion (Note 15) 8,630,235 20,066,383 23,477,668 23,477,669 2% 4% 4% 3%
Deferred tax
24) 5,894,705 7,065,926 8,267,134 9,672,547 1% 1% 1% 1%
Deposits and other
(Notes 19 and 30) 42,292,671 50,695,820 59,314,109 69,397,508 9% 9% 9% 9%
Total Non-Current
Liabilities 207,814,758 286,136,944 345,209,285 395,924,863 46% 53% 55% 54%
TOTAL LIABILITIES 448,599,285 537,731,668 629,146,051 736,100,880 100% 100% 100% 100%
- - -
EQUITY
Equity attributable
Ayala Land, Inc.
Paid-in capital 62,350,964 66,793,862 78,148,819 91,434,118 9% 8% 8% 8%

107
Retained earnings
(Note 2) 132,090,020 141,502,265 165,557,650 193,702,450 20% 18% 18% 18%
Stock options
outstanding (Note
29) 65,462 70,127 82,048 95,996 0% 0% 0% 0%
Remeasurement loss
on defined benefit - - - -
plans (Note 27) 219,782 235,443 275,468 322,298 0% 0% 0% 0%
financial assets at - - - -
FVOCI (Note 10) 454,138 486,498 569,203 665,967 -0.068% -0.061% -0.061% -0.061%
Cumulative
translation
adjustments 868,271 930,141 1,088,265 1,273,270 0% 0% 0% 0%
Equity reserves - - - -
(Note 1) 7,400,945 7,928,309 9,276,121 10,853,062 -1% -1% -1% -1%
Total Shareholder's
equity 187,299,852 200,646,145 234,755,989 274,664,507 28% 25% 25% 25%
Non-controlling
interests (Note 20) 32,921,345 64,206,766 75,121,917 87,892,642 5% 8% 8% 8%
Total Equity 220,221,197 264,852,911 309,877,906 362,557,150 33% 33% 33% 33%
- - - - 0%
TOTAL LIABILITIES
AND EQUITY 668,820,482 802,584,578 939,023,957 1,098,658,029 100% 100% 100% 100%
Balance Sheet – Horizontal Analysis
HORIZONTAL
2018- 2019- 2020-
Balance Sheet 2018 (f)2019 (f)2020 (f)2021 2019 2020 2021 CAGR
ASSETS
108
CURRENT ASSETS
Cash and Cash
equivalents 23,996,570 25,316,381 26,708,782 28,177,765 5% 6% 6% 6%
Short-term
investments 3,085,373 3,147,080 3,210,022 3,274,223 2% 2% 2% 74%
Financial assets at
fair value through
profit or loss 476,245 567,983 664,540 777,511 19% 17% 17% -17%
Accounts and Notes
Receivable 78,245,866 92,196,703 108,958,287 128,078,197 18% 18% 18% 6%
Contract assets 48,473,011

Other Receivables
Inventory 104,371,611 134,072,988 150,849,441 170,949,858 28% 13% 13% 21%
Other Current Assets 44,181,222 65,732,696 85,218,511 108,205,658 49% 30% 27% 35%
Total Current Assets 302,829,898 321,033,831 375,609,583 439,463,212 6% 17% 17% 16%
- - -
NON-CURRENT
ASSETS
Noncurrent accounts
and notes receivable 3,367,890 53,025,538 62,039,879 72,586,659 1474% 17% 17% 16%
Noncurrent contract
assets 35,437,047 -100% #DIV/0! #DIV/0! 0%
Financial assets at
fair value through
other
comprehensive
income 1,495,795 -100% #DIV/0! #DIV/0! 0%
Available-for-sale
financial assets
Land and
improvements
109
Property and
Equipment 35,749,200 47,036,877 55,033,146 64,388,780 32% 17% 17% 19%
Investment
properties 225,005,910 311,263,389 364,178,166 426,088,454 38% 17% 17% 32%
Investment in an
associate 23,389,752 14,446,522 16,902,431 19,775,845 -38% 17% 17% -5%
Deferred tax asset 13,040,993 15,649,192 18,309,554 21,422,178 20% 17% 17% 17%
Other noncurrent
assets 28,503,997 40,129,229 46,951,198 54,932,901 41% 17% 17% 25%
Total Non-Current
Assets 365,990,584 481,550,747 563,414,374 659,194,818 32% 17% 17% 15%
TOTAL ASSETS 668,820,482 802,584,578 939,023,957 1,098,658,029 20% 17% 17% 15%
- - -
LIABILITIES AND
EQUITY
CURRENT LIABILITIES
Short-term debt
(Notes 17 and 30) 14,386,717 15,824,787 18,515,001 21,662,551 10% 17% 17% -2%
Accounts and other
payables (Notes 16
and 30) 171,999,422 189,192,172 221,354,841 258,985,164 10% 17% 17% 13%
(Note 15) 21,874,681 24,061,234 28,151,644 32,937,424 10% 17% 17% #NUM!
Income Tax Payable 2,588,669 2,847,428 3,331,490 3,897,844 10% 17% 17% 22%
Current portion of
long-term debt
(Notes 17 and 30) 23,265,173 12,332,530 4,000,000 12,650,000 -47% -68% 216% 20%
110
Deposits and other

current liabilities
(Note 18) 6,669,865 7,336,573 8,583,790 10,043,034 10% 17% 17% -8%
Total Current
Liabilities 240,784,527 251,594,723 283,936,766 340,176,017 4% 13% 20% 13%
- - - - 0%
NON-CURRENT
LIABILITIES 0%
of current portion
(Notes 17 and 30) 149,446,949 206,273,271 251,768,787 290,590,684 38% 22% 15% 17%
Pension liabilities
(Note 27) 1,550,198 2,035,544 2,381,587 2,786,456 31% 17% 17% 13%
net of current
portion (Note 15) 8,630,235 20,066,383 23,477,668 23,477,669 133% 17% 0% #NUM!
Deferred tax
24) 5,894,705 7,065,926 8,267,134 9,672,547 20% 17% 17% 17%
Deposits and other
(Notes 19 and 30) 42,292,671 50,695,820 59,314,109 69,397,508 20% 17% 17% 12%
Total Non-Current
Liabilities 207,814,758 286,136,944 345,209,285 395,924,863 38% 21% 15% 18%
0%
TOTAL LIABILITIES 448,599,285 537,731,668 629,146,051 736,100,880 20% 17% 17% 15%
- - -
EQUITY
Equity attributable
Ayala Land, Inc.
Paid-in capital 62,350,964 66,793,862 78,148,819 91,434,118 7% 17% 17% 8%

111
Retained earnings
(Note 2) 132,090,020 141,502,265 165,557,650 193,702,450 7% 17% 17% 16%
Stock options
outstanding (Note
29) 65,462 70,127 82,048 95,996 7% 17% 17% 1%
Remeasurement loss
on defined benefit - - - -
plans (Note 27) 219,782 235,443 275,468 322,298 7% 17% 17% -2%
financial assets at - - - -
FVOCI (Note 10) 454,138 486,498 569,203 665,967 7% 17% 17%
Cumulative
translation
adjustments 868,271 930,141 1,088,265 1,273,270 7% 17% 17%
Equity reserves - - - -
(Note 1) 7,400,945 7,928,309 9,276,121 10,853,062 7% 17% 17% 15%
Total Shareholder's
equity 187,299,852 200,646,145 234,755,989 274,664,507 7% 17% 17% 13%
Non-controlling
interests (Note 20) 32,921,345 64,206,766 75,121,917 87,892,642 95% 17% 17% 29%
Total Equity 220,221,197 264,852,911 309,877,906 362,557,150 20% 17% 17% 16%
- - - -
TOTAL LIABILITIES
AND EQUITY 668,820,482 802,584,578 939,023,957 1,098,658,029 20% 17% 17% 15%
Cash Flow Forecast
2018 (f)2019 (f)2020 (f)2021

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax 45,201,029 52,517,039.06 61,444,935.70 71,890,574.77

Adjustments for:
112
Interest and other financing charges (Note 23) 9,594,003 11,253,651.23 13,166,771.94 15,405,123.16
Depreciation and amortization (Notes 12, 13, 14 and 23) 6,318,929 7,212,745.04 7,619,047.62 7,619,048.62
Dividends received from investees (Note 11) 331,461 625,202.85 731,487.33 855,840.18
Provision for impairment losses (Note 23) 146,974 625,202.85 731,487.33 855,840.18
Cost of share-based payments (Note 29) 98,519 625,202.85 731,487.33 855,840.18

Unrealized gain on financial assets at fair value through profit or loss (Note - - -
22) -4,633 3,764.71 4,404.71 5,153.52
Realized gain on financial assets at fair value
through profit or loss (Note 22)
Gain on sale of available-for-sale investments

Gain on sale of investment in associates and jointly -
controlled entities -588 - - 951.71
- - -
Gain on sale of property and equipment (Note 22) -46,570 58,206.95 111,950.30 75,375.69
- -
Gain on business combination (Note 22) -59,475 292,357.52 - 96,263.03
Equity in net earnings of associates and joint - - -
ventures (Note 11) -749,924 861,771.23 1,392,927.17 1,213,786.54
- - -
Interest income -7,952,628 8,752,839.84 10,240,822.62 11,981,762.46
Operating income before changes in working capital 52,877,097 62,520,284.59 73,148,732.97 85,584,017.58
Changes in operating assets and liabilities:
Decrease (increase) in:
Accounts and notes receivable – trade -83,557,042 -13950836.61 -16761584.84 -19119909.38
-
Inventories (Note 8) 12,136,508 16,699,457.76 -16776452.33 -20100417.65
Other current assets (Note 9) 3,629,678
Increase (decrease) in:
Accounts and other payables 25,998,377 17192749.74 32162669.2 37630322.96
113
Deposits and other current liabilities (Note 18) 15,430,961

Deposits and other current liabilities (Note 18) -45,240
Cash generated from operations 26,470,339 49,062,739.96 71,773,365.00 83,994,013.51

Interest received 7,940,610
Income tax paid -12,832,593
deferred tax -1436977.159 -1459155.077 -1707211.44
Interest paid -9,810,439
Net cash provided by operating activities 11,767,917 47,625,763 70,314,210 82,286,802
CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from:
Sale/redemption of short-term investments 2,519,341
Sale/redemption of financial assets at FVTPL 71,690
Sale of investments in FVOCI (Note 10) 51,384
Disposal of property and equipment (Note 13) 3,744,743
Disposal of investment properties (Note 12) 1,722,933
Disposal of investments in associates and jointly
controlled entities 83,957
Additions to:
Short-term investments -865,006 -865,006 -865,006
Financial assets at fair value through profit or loss -2,696 -2,696 -2,696
Available-for-sale financial assets (Note 10)
Investments in associates and joint ventures (Note 11) -3,724,958 -3,724,958 -3,724,958
- - -
Investment properties (Note 12) -32,803,016 17,192,749.74 32,162,669.20 37,630,322.96
- - -
Property and equipment (Note 13) -2,842,787 2,186,553.37 4,090,409.84 4,785,779.52
Net decrease (increase) in:
Accounts and notes receivable – nontrade (Note 7) 41,657,193
Other noncurrent assets (Note 14) -7,906,689
Net decrease in cash from business combination (Note 25) -4,684,335
Net cash used in investing activities -2,978,246 -23,971,963 -40,845,739 -42,416,102
114
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from short and long-term debt (Note 17) 128,994,834 128,994,834 128,994,834 128,994,834
-
Payments of short and long-term debt (Note 17) 119,970,061 -119,970,061 -119,970,061 -119,970,061
Increase (decrease) in deposits and other noncurrent
liabilities -5,584,237 -5,584,237 -5,584,237 -5,584,237
Acquisition of non-controlling interest (Note 20) -1,758,426 -1,758,426 -1,758,426 -1,758,426

Proceeds from capital stock subscriptions (Note 20) 270,132 270,132 270,132 270,132
Dividends paid to non-controlling interests -1,035,040 -1,035,040 -1,035,040 -1,035,040
Dividends paid to equity holders of Ayala Land, Inc.
(Note 20) -7,181,498 -7,181,498 -7,181,498 -7,181,498
Increase (decrease) in non-controlling interests

Net cash provided by (used in) financing activities -6,264,296 -6,264,296 -6,264,296 -6,264,296
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,525,375 2,525,375 2,525,375 2,525,375
EFFECT OF CHANGES IN FOREIGN CURRENCY 473,106 473,106 473,106 473,106
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 20,998,089 23,996,570 26,995,051 29,993,532
CASH AND CASH EQUIVALENTS AT END
OF YEAR (Note 4) 23,996,570 26,995,051 29,993,532 32,992,013
115
Projected Financial Ratios

2017 2018 (f)2019 (f)2020 (f)20201
Current 1.30 1.26 1.21 1.21 1.21
Quick Ratio 0.55 0.44 0.46 0.45 0.44
Debt to Equity Ratio 0.91 0.85 0.89 0.89 0.90
Net Debt to Equity
Ratio 0.87 0.74 0.79 0.79 0.80
Asset to Equity Ratio 3.44 3.57 4.00 4.00 4.00
Net Income Margin 21% 21% 21% 21% 21%
Return on total assets 5% 5% 5% 5% 5%
Return on equity 16% 18% 19% 17% 17%
Strategy evaluation monitoring and control

The Balance scorecard Strategy Map
Balance scorecard performance monitoring dashboard

Strategic
Measurements Targets Programs/Initiatives
Objectives
Financial 285 billion by Maintain aggressive land
Perspective Top line growth Revenue 2021 banking initiatives. Execute
116
market penetration,
Bottom Line 46 billion by development and product
growth Net Income 2021 development strategies
Execute more construction
projects with the
corresponding increase in
Increase Mall Total Mall GLA 8.5% growth CAPEX
Revenue
generation Mall Occupancy
Rate Above 90% Marketing initiatives should
Stay at annual be geared towards attracting
Mall Rental Growth 6% foreign brands.
Maintain total borrowing at
Maintain at or healthy levels, current
Maintain improve beyond economic climate favors
profitability Return on Equity 17% long term debt sources
As part of ALI's aggressive
Total Office GLA 8.5% growth land banking initiatives,
Office GLA growth should be
targeted by securing a mix
Increase Office tenancy profile to reduce
Revenue Office Occupancy exposure to possible BPO
generation Rate Above 90% slow down
Maintain healthy
debt levels Net Debt to Equity Secure favorable long-term
Ratio Below 3.0 loaning agreements and
Average Cost of keep interests rates below
Borrowing Below 5% 5%.
80% relative
market revenue
share in
in the Property
development
market
Increase key
metrics in all
Customer major social
media platforms
(Facebook,
Instagram,
Improve relative Increase relative Twitter) by Marketing focus on middle
market market increasing likes to lower middle customers
share leadership share and increase on Facebook to 2 Launch and grow online
and metrics in million by 2021, presence on social media
grow online Facebook, twitter 50,000 followers platforms by producing
presence and on Instagram online content
117
and Twitter by
2021
Contingency Plan
b. Factors and Action Plan
Factors Proposed Action Plan

ALI should implement solutions from a technological
standpoint and an administrative standpoint to directly
address cyber security breaches defined as unauthorized
Cyber Security access to sensitive data with risk. Regular penetration testing
should be undergone on top of continuous updating of
security protocols and communicating it throughout the
company.
ALI should ensure its workers and supervisors have adequate

training in all areas of their responsibility. They should
particularly be update to date in standard operating
procedures in performing operationally critical or hazardous
activities.
Mandatory training for safety that occurs right before the

Product and Service Quality start of a hazardous task should be top priority. This also
and Safety Risk includes making sure officers who oversee safety perform
their duties even if it means overriding their superiors,
especially when standard safety measures are being
circumvented.
Improving the system in place for overseeing all permits for

heal and safety, including licenses, should be a top priority.
This is especially essential in ensuring MDC can perform its
work
118
Scheduling and planning regarding project timelines should

be through rigid standards and improvement loops in order
to achieve higher efficiencies in operations. A continuous
improvement of how each business unit interact and
operate together as well as with external partners such as
suppliers should be pursued.
ALI should grow its contractor base by tapping lower local

Project Execution and Timely suppliers enrolled with the Philippine Contractor's
Delivery Risk, and Partnership Accreditation Board. Proper choice of qualified vendors,
and Alliances Risk distributors and subcontractors, certified by the relevant
agencies, should guarantee that project managers engage
with only skilled, licensed and competent sellers, distributors
and subcontractors.
Improve self-performance and the capacity for self-
manufacturing to improve quality control and speed of
development. ALI should look to continuous cooperation
with appropriate government agencies.
Continuous on-site inspections, activities and documents of
partners and suppliers should be carried under strict
compliance.
Undertake effective property acquisition and development

operations at main growth centers, intensively increase
recurring revenues through the use mixed-use model,
streamline consumer offers and differentiate client needs,
enhance value-for-money and cost-production to maintain
Risk of Being Marginalized by competitiveness, enhance product quality and guarantee
Competitors timely delivery.
ALI should also continue working closely with the Philippine
Competition Commission (PCC) on anti-competitive
strategies, including reporting on incidents where collusion
with prospective rivals, monopolies and price fixing is
involved.
119
Bibliography
Ayala Land Inc. (2018). Ayala Land Integrated Report 2018.
Bondoc, J. R. (2018). HOTEL | MANILA | RESEARCH | . Retrieved from Colliers: https://www.colliers.com/-

/media/files/colliers%20quarterly%20manila%20q4%202018%20hotel-revised.pdf?la=en-gb
David, e. A. (2019, March 17). The IT-BPO Boom in the Philippines in 2018. Retrieved from Doing Business in the
Philippines: https://doingbusinessinthephilippines.com/offshoring-outsourcing-it-bpo-industry-in-the-
philippines/
Fred R. David, F. R. (2017). Strategic Management. In A Compettitve Advantage Approach. Pearson education Limited.
hgc.gov. (n.d.). FREQUENTLY ASKED QUESTIONS. Retrieved from HGC GOV: http://www.hgc.gov.ph/faqs.html
JLL. (2019, January 11). The Outlook of the Philippine Real Estate Industry in 2019. Retrieved from JLL:
https://www.jll.com.ph/en/newsroom/the-outlook-of-the-philippine-real-estate-industry-in-2019
Joey Roi Bondoc, Dom Fredrick Andaya. (2018). COLLIERS QUARTERLY - OFFICE - MANILA | RESEARCH | Q4 2018 | 6
FEBRUARY 2019. COLLIERS.
Joey Roi Bondoc. Dom Fredrick Andaya. (2018). PEZA DILEMMA, Lack of Philippine Economic Zone Authority proclaimed
space stymies occupiers. COLLIERS QUARTERLY.
Kattleson Carpo Consulting. (n.d.). PROPERTY OWNERSHIP. Retrieved from Kattleson Carpo Consulting:
https://kittelsoncarpo.com/property-ownership/
Pinnacle. (n.d.). Real Estate Tax aboard the TRAIN Law. Retrieved from Pinnacle: https://pinnacle.ph/research/real-
estate-aboard-train
Real Estate Development Principles and Process 5th Edition. (2015). In L. M. Mike E. Miles. Urban Land Institute.
Rivas, R. (2018, August 7). 2nd TRAIN package now called Trabaho; revenue loss expected. Retrieved from Rappler:
https://www.rappler.com/business/208993-tax-reform-law-2nd-package-new-name
Rivas, R. (2018, July 16). OFW remittances rise in May 2018. Retrieved from Rappler:
https://www.rappler.com/business/207451-overseas-filipino-workers-remittances-may-2018
SM PRIME. (2017). 2017 ANNUAL REPORT SM PRIME.
The Philippines Star. (n.d.). Higher Foreign Arrivals and Improve Hotel Rates. Retrieved from The Philippines Star:
https://www.philstar.com/business/2019/02/11/1892561/higher-foreign-arrivals-improve-hotel-rates
120
Appendices
Audited Financial statements
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
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1

ATENEO DE MANILA UNIVERSITY

A STRATEGIC MANAGEMENT PAPER ON

Professor Carlos P. Gatmaitan, MBA

In Partial Fulfillment of the Course Requirement for SPSTRAMA

The Balance scorecard Strategy Map.............................................................................................................................. 115

and benefit more people.

Makati Development Corporation and Ayala Property Management Corporation, respectively.

Nature of the Business

Fig 1. ALI’s residential brands.

initiatives in 2018 worth 54.6B Pesos.

Manila and in the rest of the Philippines.

the previous year due to a turnover of 1,201 units.

the previous year due to a turnover of 1,201 units.

2018 Launches and total CAPEX.

the previous year due to a turnover of 1,201 units.

ALI’s commercial, retail, and hotel and resorts leasing brands.

while stable malls’ occupancy rate is 95%.

million sq. meters.

1.11 million square meters of Office GLA as of 2018

land to hotel tenants; development, operation and management of eco-resorts.

New Leasing Formats

ALI’s new leasing formats as of 2018.

in existence and one that is looking at year 2021 for launching.

Standard Factory Buildings and Warehouses

buildings and warehouse spaces.

Current Revenue Size and Composition

recognized over time.

Net Income Growth

Markets and Customers Served

Composition of Customers; Local and Foreign

and lastly by Overseas Filipinos with 11% or 15.7 billion.

this downward trend is expected to continue.

to 12.69% from 12.99% in 2017.

employees locally and generate jobs in hotel places.

Fig 2. Ayala Land’s Corporate Governance.

of the Executive Committee.

Board and those of the general meetings of the shareholders.

provides legal advice on the duties and obligations of the managers.

Chief Compliance Officer

Chief Audit Executive

Chief Risk Officer

Strategic Business Units and Subsidiaries

by a group head who reports to the President and CEO.

Property Management Corporation.

and the investor relations website.

a group leader who reports to the President and CEO.

Research and design methodology

public sources of information primarily found on the internet.

Scope and Limitations

leasing, and retail leasing.

Macro Environmental Analysis

property developers to align their plans accordingly.

Real Estate, Renting, and Other Business Activities (RERBA)

Comprehensive Tax Reform Package

Philippine consumers because it will lead to a greater purchasing power.

under the new changes.

BPO’s and KPO’s Boom

yearly, with numbers at 500,000 on average.

out by the Philippines yearly, with numbers at 500,000 on average.

warehouse and mall leasable areas.

Political/ Legal Forces