2016 ANNUAL REPORT
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WE ARE A THOUGHT LEADER IN EVERYTHING WE CREATE.
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GLOBE TELECOM
Technology marvels like Virtual Reality allows us to push the boundaries of the known universe. Similarly, Globe is committed to pushing the limits of the digital lifestyle experience. We bring something new into every product and service, oftentimes challenging convention in the industry. Regardless of how we strategize for the future, we remain firmly grounded in delivering extraordinary value to all of our stakeholders. From our loyal subscribers, to businesses of all sizes, to the larger nation of Filipinos who are waking up to a richer, more connected world, Globe will always Create Wonderful. 2016 ANNUAL REPORT
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About Us
The Globe Purpose
GRI 102-1, 102-3, 102-4, 102-6
GRI 102-16
Globe Telecom, Inc. is the number one mobile
Globe Telecom has risen to become the country’s
company in the Philippines. We provide cellular,
leading mobile company, driving highly customer-
broadband and mobile data services, recognizing
centric value with keen focus on enriching Filipino
the growing preference of our customers towards
lives in the digital age. True to our nature of
content-rich offerings and multimedia applications
innovation and going beyond achieving business
that enrich the Filipino digital lifestyle.
success, Globe sought and found a purpose larger than itself to serve customers more meaningfully.
Supported by 7,180 employees; with over 1.1 million retailers, distributors, suppliers and
Our new purpose is expected to further enhance our
business partners nationwide, serving more than
Circle of Happiness whereby happy and engaged
65 million customers, we operate one of the largest,
employees deliver wonderful customer experiences
most technologically-advanced and robust mobile,
and strong business growth for happy shareholders.
fixed line and broadband networks catering to
As a purpose-led organization, we are poised to
individual customers, small and medium-sized
create wonderful, positive, and sustainable impact to
businesses as well as corporate and enterprise
society.
clients. We believe that with first world internet connectivity, we can help drive a nation that is admired all over the world. Our principal shareholders are Ayala Corporation and Singtel, both industry leaders in their respective countries and in the region. We are a member of Bridge Alliance, a partnership of 34 mobile operators from Asia-Pacific, Middle East and Africa with a combined customer base of over 800 million customers. Globe operates internationally with presence in over 236 calling destinations worldwide. The executive office of Globe is located at The Globe Tower, 32nd Street corner 7th Avenue, Bonifacio Global City, Taguig, Metro Manila, Philippines, 1634.
Vision We see a Philippines where families’ dreams come true, businesses flourish, and the nation is admired.
Mission We create wonderful experiences for people to have choices, overcome challenges, and discover new ways to enjoy life.
Purpose In everything we do, we treat people right to create a Globe of Good.
Values We put customers first. We value people and together, we make the difference. We act with integrity. We care like an owner. We keep things simple. We move fast, we are better, every day.
CONGLOMERATE MAP GRI 102-45
SUBSIDARIES Innove Communications, Inc. (100% ownership) Provides fixed line telecommunications and broadband services, high speed internet and
Asticom Technology, Inc. (Asticom) (100% ownership) Provides shared services, a system integrator and an information technology services provider to domestic and international markets.
Taodharma, Inc. (TAO) (67% ownership) Engaged mainly in the operations of mobile communication devices and accessories in retail stores which are strategically located across the Philippines.
private data networks for enterprise clients, services for internal applications, internet protocol-based solutions and multimedia content delivery. • Techglobal Data Center, Inc.*
Globe Capital Venture Holdings, Inc. (GCVHI) (100% ownership) A holding company through which strategic businesses and initiatives are intented to be
JOINT VENTURES Bridge Mobile Pte. Ltd. (BMPL) (10% ownership) Provides different regional mobile services
consolidated.
to our customers.
G-Xchange, Inc. (GXI) (100% ownership) Provides mobile commerce services under
• Globe Fintech Innovations, Inc. (100% ownership) ■ Fuse Lending, Inc.
Vega Telecom, Inc. (VTI) (50% ownership) Principal activities involve
GCash brand.
• Adspark Holdings, Inc. (100% ownership) ■ Adspark, Inc. ■ Socialytics, Inc.
telecommunications.
(49% ownership)
GTI Business Holding, Inc. (GTI) (100% ownership)
Bow Arken Holdings Company, Inc (BAHC) (50% ownership) A holding company.
Provides VoIP service. • GTI Corporation (100% ownership) • Globe Telecom HK Limited
• Global Telehealth, Inc.* (50% ownership)
(100% ownership) • Globetel Singapore Pte. Ltd. (100% ownership)
(98.57% ownership) Provides data and communications services such as dedicated domestic and international
ASSOCIATES AF Payments, Inc, (AFPI) (20% ownership) A Public-Private Partnership project to
• Globetel European Limited (100% ownership)
leased lines, frame relay services, Internet access, and other managed data services like
design, build, and operate the Automated Fare Collection System (AFCS).
UK Globetel Limited** Globe Mobile’ Italy S.r.l.**
Digital Subscriber Lines (DSL). • Radio Communications of the Philippines,
Yondu (49% ownership)
Globetel Internacional European España, S.L.**
Inc. (RCPI) (91% ownership) • Sky Internet, Incorporated (Sky Internet) (100% ownership)
Provides internet and mobile value-added services, information technology, and technical services including software
Kickstart Ventures, Inc. (KICKSTART) (100% ownership)
• GlobeTel Japan (100% ownership) • BTI Global Communications Ltd. (BTIUK)
development and related services.
Provides aspiring technopreneurs with funds and facilities, mentorship and market access needed to build new businesses.
(100% ownership) • NDTN Land, Inc. (NLI) (65% ownership) • Telecoms Infrastructure Corp. of
■ ■ ■
• Flipside Publishing Services, Inc.** (40% ownership)
Brightshare Holdings Corporation (BHC) (50% ownership) A holding company.
Bayan Telecommunications, Inc. (BTI)
the Philippines (Telicphil) (58% ownership)
*Globe Telecom’s stake in these companies are from a joint venture agreement signed by Globe Telecom’s subsidiary and other joint venture companies. **Ceased operations in 2016 or in the process of winding down.
RECOGNITIONS Telecom Service Provider of the Year
3rd Place, Honored Companies in the Telecommunications Sector
2016 Frost & Sullivan Asia Pacific ICT Award
Ernest Cu: 2nd Place, Overall Best CEO for Telecommunications Ernest Cu: 3rd Place, Sell-Side Best CEO
Asiamoney Best Managed Large Cap Company Philippines
Institutional Investor's 2016 All Asia (ex-Japan) Executive Team
2016 Asiamoney Best Managed Company Awards Ernest Cu (One of the Ten Operators from Asia) 1st in Best Disclosure and Transparency Philippines
2016 Global Telecoms Business Power 100
4th in Best Overall for Corporate Governance Philippines
Philippines Company of the Year 2016 (Top 15)
2016 Asiamoney Corporate Governance Poll
Philippines Diversified Telecommunication Services Company of the Year 2016
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GLOBE TELECOM
Charlton EastColes Corporate Performance Awards 2016
Marriage or Responsible Parenthood for Globe x Star Wars
Platinum Award for Excellence in Governance, CSR and Investor
Campaign
Relations
2016 ARAW Values Awards
The Asset Corporate Awards 2016 Silver Anvil Award in Public Relations Programs Most Committed to Corporate Governance
Directed at Specific Stakeholders:
Best in Investor Relations
Entrepreneurship / Job Generation / SME for
Best CEO: Ernest Cu
Globe myBusiness Inspiring Success Campaign
FinanceAsia: Asia's Best Companies 2016
52nd Anvil Awards
2016 Global High Performance Companies Norm
MEMBERSHIPS
Willis Towers Watson
GRI 102-13
Runner up, Ethics and Governance
1. GSM Association (GSMA)
ASEAN Corporate Sustainability Summit 2016 Awards
2. IT and Business Process Association Philippines (IBPAP) 3. Philippine Association of National Advertisers (PANA) 4. Internet and Mobile Marketing Association of the Philippines
Ranked 77, Top 100 Sustainability Reports Worldwide Ranked 22, Top 80 Sustainability Reports in the Asia Pacific Region
(IMMAP)
Gold Award Worldwide for Sustainability Report
5. Philippine Business for the Environment (PBE)
Bronze Award in the Asia-Pacific Region for Best In-House Report
6. Pollution Control Association of the Philippines, Inc. (PCAPI)
League of American Communications Professionals' 2016
7. Corporate Network for Disaster Response (CNDR)
Visions Awards
8. National Disaster Risk Reduction Management Council (NDRRMC)
Bronze Award in Specialized Annual Report: Combined Annual and Sustainability Report
9. Philippine Disaster Resilience Foundation (PDRF)
REPORTING PARAMETERS
2016 ARC Awards International
GRI 102-46, 102-50, 102-51, 102-52, 102-54, 102-56
Best Payment Deployment in Asia: Globe GCash and Amdocs The 2016 Financial and Sustainability Report covers data
Global Payments Awards
from January 1, 2016 to December 31, 2016. Select data from Top Corporate Governance Awardee
previous year may be included to quantify and show year-on-year
1st Institutional Investors' Corporate
comparison, if applicable.
Governance Awards We have limited the reporting coverage to Globe Telecom, Inc., Mobile Service Provider of the Year
Innove Communications, and G-Xchange, Inc. particularly on the
Telecom Service Provider of the Year
environmental, social and governance aspects. Economic covers
2016 Frost & Sullivan Philippines Excellence Awards
operations from Globe Telecom, Inc. and our subsidiaries with 100% ownership. We have aligned our sustainability reporting with
Branded Communications on Love of Country and Respect for
the Global Reporting Initiative (GRI) Standard framework. This
National Customs and Traditions for Globe myBusiness Inspiring
report has been prepared in accordance with the GRI Standards:
Success Campaign
Core option and 23 Specific Disclosures. Our report has undergone
Advocacy Communications on Reverence for Family Unit or
third party external assurance conducted by DNV-GL.
Marriage or Responsible Parenthood for #LetDadKnow Campaign Branded Communications on Reverence for Family Unit or
2016 ANNUAL REPORT
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WHAT’S INSIDE 12
44
16
50
MESSAGE FROM THE CHAIRMAN
MESSAGE FROM THE PRESIDENT 7 WAYS WE CREATE WONDERFUL EXPERIENCES
GIVING DELIGHTFUL SURPRISES
MAKING LIFE EASIER
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OFFERING THE BEST IN ENTERTAINMENT
24
66
28
96
38
140
FORGING STRONGER BONDS
FUELING GROWTH OF ENTERPRISES
BUILDING A DIGITAL NATION
CREATING A GLOBE OF GOOD
GOVERNANCE
RISK MANAGEMENT
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GLOBE TELECOM
MESSAGE FROM THE CHAIRMAN GRI 102-14
I am happy to report Globe Telecom’s record results
with the company’s own to serve customers more
for 2016, setting new marks in service revenues,
meaningfully, creating a “Globe of Good”. This year,
EBITDA and core net income. Despite the heightened
Globe received a score of 91% in the Sustainable
industry competition, the company delivered
Engagement Index (SEI), 6 points higher than the
double-digit growth across all data-related services,
global telecommunications norm and 5 points
helped in part by the consolidation of Bayan for
higher than the global high performing norm.
the full year. By focusing on customer experience
Once again, we gained recognition on being the
and the enrichment of the Filipino digital lifestyle,
first telecommunications company included in the
Globe gained recognition as the number one mobile
2016 Global High Performance Companies Norm,
company in the Philippines.
comprised of organizations with exemplary financial performance and human resource practices. We
Beyond business success, we are similarly embarking
believe these recognitions validate our efforts in
on a transformation journey to become a truly
developing a culture of empowerment, collaboration,
purpose-led organization that casts a positive and
and innovation at Globe.
sustainable impact to society. We believe that to become successful, we need to start the engagement among our employees. Every Ka-Globe is able to channel his or her personal purpose and align it
2016 ANNUAL REPORT
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2016 PHILIPPINE ECONOMIC PERFORMANCE
Mobile penetration rose to an estimated 120% by the end of the year, with nearly 126 million industry subscribers. The incidence of multi-SIMming
In 2016, the Philippine economy enjoyed its highest
remained high due to the enticing industry data
growth in three years, with gross domestic product
offers, and the increased availability and affordability
(GDP) up by 6.8%, ranking among the highest in
of tablet and portable WiFi devices.
Asia. Growth continued to be broad-based, driven by the increase in both domestic and external demand.
Going forward, we welcome rational competition to
Domestic demand growth was fueled by increases in
unlock more value from the industry, as this allows
consumer spending, government consumption and
the sector to properly monetize growing data traffic,
gross fixed capital formation, while external demand
driven by increasing smartphone penetration and
grew from an increase in both exports and imports of
the Filipino penchant for social networking and
goods and services.
online content. Furthermore, home broadband and corporate data segments represent exciting
With the new government’s thrust to increase fiscal
opportunities as more households and enterprises
investment and infrastructure spending, and to
require broadband and data connectivity.
undertake a comprehensive tax reform program,
OUR VISION OF FIRST WORLD INTERNET CONNECTIVITY IN THE PHILIPPINES
the economy is in a strong position to maintain its current growth trajectory and promote more inclusive growth. This is in spite of the potential external headwinds that may affect the inflow of
In line with our vision for the Philippines to
remittances from overseas Filipinos and the growth
have an Internet connectivity that is at par with
of the Business Process Outsourcing (BPO) sector,
developed markets, the company is fast-tracking the
which, together with a robust tourism sector, have
deployment of LTE services using the 700 megahertz
driven the growth in private consumption in the last
(MHz) and 2600 MHz frequencies obtained from
few years.
the San Miguel deal. We continue to invest heavily on network infrastructure and deployment of
2016 INDUSTRY GROWTH AND COMPETITIVE DYNAMICS
fiber optic cables to bring about a better internet experience in the country. As Information and Communications Technology (ICT) development
The telecommunications sector barely grew in
has a direct impact to the country’s GDP growth,
2016 due to the re-rating of mobile revenues,
Globe has steadily increased its portfolio of business
which accounts for 65% of total operating
solutions to both large multinational companies
revenues, with the continued shift in traffic from
and the small and medium enterprises. Combining
legacy voice and SMS to data, and the heightened
our homegrown knowledge of the Philippine market
industry competition. However, Globe once again
with the latest innovations, Globe is able to provide
outperformed the sector, growing by 5% as we
the right technology, infrastructure, and know-how,
delivered a better customer experience and provided
customized to the needs of our enterprise partners
a wide variety of choice content through our
from a wide range of industries. With this, we are
partnerships with the best of breed internet and
also creating opportunities for growth and progress
content companies.
for the emerging and medium sized businesses.
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GLOBE TELECOM
COMMITMENT TO CREATING SHAREHOLDER VALUE
sports training by FCB Escola in Barcelona. These programs respond to the United Nations Sustainable Development Goal 4 (UN SDG 4) which calls for
Consistent with our commitment to creating
quality education.
shareholder value, Globe paid out a total of P11.7 billion in common share dividends in 2016, which
In closing, I thank our Board of Directors, the
was 6.0% higher than 2015. This represents
management team, and employees for their
approximately 77% of 2015 core net income and
untiring commitment and dedication in serving
is in line with the company’s policy of distributing
our customers. Our board members remained
dividends equivalent to 75% to 90% of prior year’s
engaged across a variety of governance committees
core net income. This translated to a 4.8% dividend
throughout the year and our employee and executive
yield, which remained competitive versus the yields
teams worked determinedly to elevate the way
of government securities and other Philippine listed
we innovate to continuously improve customer
companies.
experience. I also thank our business partners for their support, our customers for their loyal
More than financial gains, we exerted great effort
patronage, and our fellow shareholders for their
to create our lasting contribution to society. We
trust and confidence in our ability to build and create
worked with key partners Singtel and Optus to bring
stakeholder value in the years ahead.
the Digital Thumbprint Program in the Philippines to educate our youth on responsible digital citizenship.
On behalf of the Board of Directors, I take this
This goes hand in hand with our responsibility as
opportunity to welcome Mr. Arthur Lang who will
the purveyor of the Filipino digital lifestyle and
take over from Mr. Mark Chong as one of Singtel’s
the service provider of mobile and fixed internet.
representatives on the Board. I am certain Mr. Lang’s
Together with the Department of Education, we
expertise and experience will contribute significantly
institutionalized the Global Filipino Schools (GFS)
to the governance and management of our company.
program in 80 public schools nationwide. Through
I would also like to acknowledge the significant
this program, teachers and students developed
contributions of Mr. Chong as a member of the
21st century skills such as creativity, critical
Board for a combined five years, including two years
thinking, collaboration and communication. Mobile
as the Co-Vice Chairman, and three years as Vice
applications such as the Mind Museum App and the
Chairman of the Executive Committee, and member
GFS e-library were incorporated into the program.
of the Compensation and Nomination Committees. I wish him continued success as the Group Chief
We also collaborated with one of our content
Technology Officer of Singtel.
partners, Astro in Malaysia to participate in their Astro Kem Bola overseas training program benefitting 49 grassroots football communities comprising 590 participants. Five children with ages 10-12 years old were given the privilege of
Jaime Augusto Zobel de Ayala Chairman
2016 ANNUAL REPORT
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GLOBE TELECOM
MESSAGE FROM THE PRESIDENT AND CEO GRI 102-14, 203-1
Our story in 2016 is an exciting mix of many “firsts”
For the first time in our company’s history, Globe
and going full steam ahead with our network
embarked on a purpose-led transformation that will
expansion amidst the growing public clamor for
be our anchor to win our future. Our new purpose
improved services in the sector.
enabled us to define our vision of seeing a Philippines where families’ dreams come true, businesses
For many years, we have focused on strengthening
flourish, and the nation is admired, as well as our
our portfolio of offerings and drive to enhance
mission of creating wonderful experiences for people
customer experience to be the preferred mobile
to have choices, overcome challenges, and discover
company across all market segments. This year, we
new ways to enjoy life.
achieved a milestone in successfully capturing overall revenue market share, making us the #1 mobile
With changing lifestyles and the continuing digital
company in the country, our first after many years of
shift, internet services have become even more
being a challenger brand in an intensely competitive
pervasive. In June, the United Nations (UN) Human
industry.
Rights Council declared internet access as a basic human right which cemented the global need for
Leadership, however, can only be sustainable if we
connectedness. Expectedly, the public clamor for
play to win the infinite game. So we set our sights
better, more affordable and accessible internet
towards our unique purpose as a business – In
services grew louder, resonating in the halls of
everything we do, we treat people right to do a Globe
lawmakers and opinion leaders alike.
of Good.
2016 ANNUAL REPORT
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Globe is at the forefront of the industry in advocating reforms by bringing out key challenges and solutions
FINANCIAL AND OPERATIONAL PERFORMANCE
to build the much-needed infrastructure the country needs so that all Filipinos may enjoy pervasive
Our consolidated service revenues hit a new record
connectivity. Central to these are the permitting
high of P120.0 billion, a solid 6% from the previous
and right of way issues that hampered network roll
year’s record of P113.7 billion. On the back of these
outs and builds over many years, severely impacting
revenues, our EBITDA also reached a record P50.0
coverage, speed and reliability of mobile services.
billion in 2016, up 9% year-on-year. Net income,
We also engaged various stakeholders in educating
however, dipped 4% to P15.9 billion, which includes
the public about difficulties in deploying fiber to
expenses from our P70-billion acquisition of the
homes and businesses and the necessary capital
stranded telecommunications business of Vega
investments needed to keep up with technology
Telecom owned by San Miguel Corporation in May
shifts as we ride on the digital bandwagon.
2016.
In all these, the timely acquisition of the stranded
We continue to attribute our strong revenue
telco assets of San Miguel Corporation allowed us to
performance to broad-based growth across all
increase capacity and improve network experience by
businesses, particularly as the uptake in data-related
immediately using the valuable 700 MHz and other
services continued to offset the decline in traditional
LTE spectrum, such that for the first time, we were
voice and SMS revenues. Total data-related revenues
able to blanket the entire National Capital Region
accounted for 49% of consolidated services in 2016
and key regional cities with 4G/LTE experience.
from 42%, previously.
With customers having a better network experience,
Mobile revenues grew 1% to P91.9 billion from the
a purpose-led organization, dedicated and passionate
P91.2 billion recorded a year ago as we continued to
corps of talents, Globe once again registered
gain market share as the No. 1 mobile company in
substantial business gains, breaking past records
the country. As of end-2016, our mobile subscriber
anew and solidly building a future where data
base has grown to 62.8 million, up 12% year-on-
overshadows voice and SMS services. Let me share
year. Once again, we have managed to dominate the
the highlights of this transformational year.
postpaid segment with revenues of P34.3 billion, up 1% year-on-year from P34.0 billion in 2015.
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GLOBE TELECOM
This segment accounted for 37% of our mobile
of being a mobile-first company. However in the
revenues and has led to gains in the prepaid segment
past, we were relating to our customers in the
as well. Prepaid revenues grew to P57.6 billion, a
manner of a utility company. A lot has changed
1% increase due to a 13% growth in our prepaid
since then, as we focus on the changing habits of our
subscriber base, which now numbers 60.3 million.
customers and the way they use technology in their daily lives.
This year, we achieved another milestone as smartphone penetration in our network reached
In 2009, we started offering customizable services
61% by the fourth quarter of 2016, breaking past
that put the customers first — giving them the power
the critical 50% mark. As a result, total wireless data
of choice to subscribe to postpaid plans and prepaid
traffic surged by 44% year-on-year. We see this trend
promos that are attuned to their needs and budgets.
persisting as mobile users continue to transition from traditional voice and legacy SMS and towards more
We have since evolved into becoming the purveyor
VoIP-type of communication or messaging platforms
of the digital lifestyle, serving the growing demand
such as Viber, WhatsApp, and Facebook Messenger,
for lifestyle and entertainment-driven connectivity
and enjoy more streaming video and music.
needs: music, video, gaming, information, commerce, shopping, banking, movies and TV series, and social
In step with the surging demand for internet and
media. While still in its early stages, we entered into
data connectivity, our home broadband service
this ecosystem by forging collaborative partnerships
revenues reached P14.5 billion or 28% higher than
with global giants in the world of content, in addition
P11.3 billion in 2015. Meanwhile, corporate data
to our existing content providers such as Spotify,
services hit P9.9 billion, a 28% growth year-on-year,
HOOQ, Disney and NBA.
driven by rising demand for corporate connectivity, managed service solutions, and cloud-based services.
In 2016, we became the mobile and broadband Philippine partner of the foremost video streaming
LEADING THE SHIFT TO THE DIGITAL LIFESTYLE
service Netflix, which boasts of over 81 million members in over 190 countries who are enjoying more than 125 million hours of TV shows and movies
Throughout our company's history, Globe has
per day, including original series, documentaries and
always led innovations in mobile because of strong
feature films.
consumer demand. As a result, we gained recognition
2016 ANNUAL REPORT
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We also brought in Disney Channel and Cartoon
CONNECTING EVERY HOME
Network for our younger audiences, as well as Malaysian media powerhouse Astro to give Filipinos
Offering content that people want to consume
access to eGG Network or Every Good Game,
also drove the use of data at home. However,
Southeast Asia’s first dedicated 24/7 e-Sports
majority of our fixed-line customers only experience
network.
internet speeds ranging from 1-2 Mbps. To improve connectivity at home, we have to roll out fiber and
As we partnered with global iconic brands, we
update our copper infrastructure as fast as we can
likewise altered the landscape of Philippine
so we can extend faster internet connectivity for
entertainment with Globe Studios and Globe Live,
families.
two new businesses designed to stimulate growth in the local entertainment industry. Our opening salvo
For the Philippines to take full advantage of new
was the production of our first full-length movie and
digital opportunities, we need to create an Internet
a nine-episode series airing on HOOQ. By creating
superhighway and provide ultra-fast internet
original shows, live events, and feeding content
connection that will enable growth in every corner
that is relevant to the Filipino, we strengthened our
of our country. We launched an initiative to deploy
stronghold as the preferred mobile content provider
ultra-fast internet service in 20,000 barangays all
of our customers.
over the country within the next five (5) years to provide faster and more reliable internet access in
Revolutionizing the Philippine retail and
about 2 million homes nationwide. We want to make
entertainment industry, we also opened a
use of technological innovations to make internet
US$7-million ICONIC store at Bonifacio Global City
service experience at par with other countries in the
that features a live entertainment venue complete
world.
with two massive Times Square-like LED walls that provide live video feed and on-ground entertainment.
As our “proof of concept” of how we are ushering the Philippines to become a digital nation by 2020,
In 2016, we mounted successful large-scale live
we collaborated with the city government of Manila
events such as Green Day’s American Idiot and the
to install fiber broadband throughout the Binondo
“A Christmas Carol” musical, as well as NBA Fit and a
district, providing world-class internet experience
series of HOOQ Hangouts. Not only does the ICONIC
with speeds of up to 1 Gbps to the world's oldest
store serve as the premiere lifestyle destination of
Chinatown and one of the main hubs of SME activity
Globe, the entertainment facility can lay claim as the
in the metro.
most innovative and experiential retail telco store in the world.
To complement our massive infrastructure buildup, we also launched exciting new revolutionary Globe Broadband plans that allow our customers to make
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GLOBE TELECOM
their home the ultimate hub for groundbreaking
With these, Globe is well on its way of achieving our
entertainment and elevate their digital lifestyle. In
target to deploy about 4,500 multiband, multimode
November 2016, we unveiled a 10-Mbps connection
software-defined radio base station equipment
plan that can be availed for as low as P1,299 a
in 95% of cities and municipalities in the country
month, which includes a 100-gigabyte data allocation
within a 3-year period, as committed to the National
with six-month free subscription to NBA League Pass,
Telecommunications Commission (NTC).
Netflix and HOOQ. Our GoWiFi service, a premium open national WiFi
GOING FULL THROTTLE ON EXPANSION
network launched in 2015, has expanded to over 6,300 access points by the end of 2016. GoWiFi is
To fulfill our commitments, Globe went full throttle
now available in all major airports, water ports, major
in expanding our network infrastructure and capacity
malls, convenience store chains, food and beverage
to enhance the internet experience of our customers.
establishments, schools, universities and government offices.
In May, we initiated the acquisition of additional frequency assets from San Miguel Corporation-
We are also deploying WiFi services at all MRT Line 3
owned Vega Telecom. Most important in the asset
stations and all 20 LRT stations to enable
base was the spectrum in various frequencies: 700
1.5 million daily passengers and Globe customers
MHhz, 1800 MHz and 2600 MHz, which we consider
riding the MRT to efficiently make use of their transit
as prime real estate from which to broadcast the
time through internet access.
LTE spectrum, the main 4G vehicle for mobile data transport. As we roll out and fully maximize the
BUILDING AN ADMIRED NATION
use of these spectrums, the public can expect vast improvements in their overall customer experience
All these efforts are in support of our campaign to
in terms of speed and reliability of mobile internet
make the Philippines an admired nation globally by
services of Globe.
having first-world internet connectivity.
Barely half a year since acquiring the stranded assets
We are emboldened by the fact that the Philippines
of SMC, we hit our target of deploying over 500 LTE
is now the highest among 15 countries in Asia Pacific
sites using the 700 MHz band (L700), a majority of
in terms of average connection speeds for mobile
which were deployed in Metro Manila and other
connection, with 14.3 Mbps speed, according to
highly populated areas where majority of customers
the 4th Quarter Akamai State of Internet Report of
using LTE-based handsets are located. We also
Akamai Technologies. The country also achieved
activated over 1,200 additional LTE sites using the
105.1 Mbps peak mobile speed in the 2nd quarter of
additional spectrum allocation in the 2600 MHz
2016, the third highest in Asia Pacific after Australia
band, which mostly benefitted customers in Metro
and Thailand.
Cebu and Metro Davao.
2016 ANNUAL REPORT
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But there is still much to do. As more and more
As our employees live out our values at the
Filipinos depend on fast and reliable internet
heart of our Circle of Happiness where engaged
connectivity, telco operators must all work
employees result in delighted customers and happy
closely with the national government and local
stakeholders, we are inspired by their collective
government units, particularly in addressing the
dedication to our customers and willingness to do a
circuitous permitting process in the establishment of
Globe of Good. Employee volunteerism reached an
telecommunication infrastructure such as cell sites. It
all time high at 45% of total employee base where
is thus no surprise that the Philippines lags behind its
3,222 employees shared 51,552 man-hours and
Asian neighbors in terms of total cell sites.
P 883,793.77 financial donations.
As we deploy more LTE sites in 2017 using our
One area that showcases employee commitment
additional spectrum assets, we will further accelerate
to Put Customers First is during disaster. In
our network build and collaborate with various local
response to the UN SDG 9 that calls for building
government units, homeowner associations, and
resilient infrastructure to support human well-
other government agencies on workable solutions
being, we continue to build a better network to
that will enable Globe to stay ahead in meeting rising
harness mobile and ICT solutions that empower
consumer demands.
public service and help uplift public welfare — from emergency response to disaster preparedness and
SUSTAINING OUR BUSINESS
management. When different parts of Luzon were devastated by Super Typhoon Lawin and Typhoon
Not many companies can transform their business at
Nina, Globe in partnership with the National
a time of exhilarating change because it puts to test
Disaster Risk Reduction Management Council
the level of employee engagement and resiliency.
(NDRRMC), transmitted mobile disaster alerts via
Globe enters the rank of global high performing
SMS containing vital information that communities
organizations powered by a highly engaged
at risk can use to prepare for and respond to disaster.
workforce that does many things at once: maintain a
This early warning service helps increase survivability
strong core business, bring first-to-market products
rates and reduce cost of damage to properties.
and services, and grow new businesses while being
Immediate disaster response provided by Globe
fueled by an inexorable passion for innovation.
include free calls and text services, free charging and
Underpinning all these is a strong commitment
internet stations in severely hit provinces to connect
to look farther than business by caring for the
families with their loved ones at the most critical
environment and our impact to communities at large.
moment. Priority was also given to relief operations distributing food and water to affected communities.
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GLOBE TELECOM
Yet perhaps the most effective response we gave was
MOVING FORWARD
the immediate restoration of mobile services within 24 hours after the typhoons hit land.
We expect 2017 to bring more opportunities for business growth while creating new challenges,
Having an expansive network also translates to a
particularly as we manage our capex budget, rollout
large business footprint so it is inevitable for us to
more fiber optic connection across cities, develop
recognize our responsibility to mitigate effects of
more compelling content, deliver a pervasive and
climate change. We continue to invest in a low-
reliable internet service where it matters while living
carbon future by encouraging more customers to
out our new purpose of creating a Globe of Good for
shift to paperless billing to reduce waste, as well
our customers, employees, partners, communities,
as raise public awareness on adopting lifestyles
and stakeholders.
that are in harmony with nature. We entered into a five-year partnership with Hineleban Foundation
Much has been achieved in 2016, yet much more still
to preserve and restore rainforests and watersheds,
need to be done especially as we endeavor to remain
involving indigenous peoples in Bukidnon and Lanao
true to our promise of delivering superior customer
del Sur that help provide food security for them.
experience. We are confident that our advocacy to
These programs respond to SDG 12 that calls for
gain reforms in the sector can only translate to the
responsible consumption and production and SDG
fulfillment of our collective aspirations of having
15 on sustaining life on land.
first world internet connectivity in the country. After all, we are armed with two key elements essential
We promote inclusion by having over 1,500
for any company to succeed over the long term: a
Department of Social Welfare and Development
strong, customer-centric culture and a purpose to
(DSWD) beneficiaries employed as broadband sales
build a better future for the nation.
agents and airtime load retailers thus responding to SDG 8 that calls for decent work and economic growth. Filipino micro-enterprises are likewise assisted through our partnership with KIVA, a US-based humanitarian organization present in over 80 countries, by tapping on our customer base to support local entrepreneurs through an
Ernest Cu President and CEO
online donation platform. At least P20 million was generated through various sustainable livelihood programs directly benefitting the base of the pyramid sector.
2016 ANNUAL REPORT
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FORGING STRONGER BONDS
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2016 ANNUAL REPORT
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FORGING STRONGER BONDS FOR A FAMILY SEPARATED BY DISTANCE, TECHNOLOGY PLAYS A VITAL ROLE IN SUSTAINING RELATIONSHIPS AND SHARED DREAMS GRI 102-2
It’s never easy to navigate the challenges of
After several years, her stepfather, Edgar Sabando, a
being a blended family, especially in the face of
welder in Turkmenistan, came along and stepped in
physical distance. But for 28-year-old Bretzy Grace
to be the father they all have in common.
Pitogo, nothing can get in the way of love and understanding.
“He wholeheartedly accepted us as his own children and married my mother despite our peculiar
An early childhood care and development specialist
circumstances,” Bretzy said. At first, she did not warm
working in a government agency, Bretzy does not
up to the idea that her mother, Pilar Sabando, was
shy away from the fact that she and her two siblings,
marrying again.
23-year-old Ryza Faith and 13-year-old Red, have different birth fathers.
WHEN LOVE KNOCKS
“My real father left us when I was just a baby,” Bretzy
Mommy Pilar, the single mother who was making
shared. “My mother decided to work in Japan and
ends meet as a beauty consultant at major
met my sister’s father there, but fate was cruel to
department stores and engaging in buy-and-sell,
them and they had to part ways eventually as well.”
eventually introduced her cute half-Japanese toddler to Edgar as stepdad.
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GLOBE TELECOM
Turning 50 years old this year, Mommy Pilar knew it
possible. Their Globe home broadband subscription
was God talking to her and fulfilling her heart’s desires
enables Mommy Pilar to call Daddy Edgar overseas
when she said “yes” to love again 13 years ago.
three times a day, and video chats with him whenever time permits. She gets connected to her daughters
“You won’t even tell they came from different dads. They
over Facebook Messenger almost every day to check
look so alike and resemble either me or my husband,” she
on how their days went by.
said of her children. “But we are very open about this and are never ashamed of who we are.”
Despite the distance, Mommy Pilar never felt lacking in affection and assurance. “My husband
CONNECTED BY HEART
would tell me about his meals and say ‘I love you’ in the morning, afternoon, and at night. I would take
In early 2016, Mommy Pilar’s health issues led the
pictures of dishes I cook and send it in return,” she
family to arrive at the big decision to move from
shared.
fast-paced, urban Makati to a quiet provincial life in Alfonso, Cavite. In a humble two-unit apartment, the
Her daughters would be treated with home cooking,
newly-designated housewife stays with the seventh-
and would occasionally be asked to convince Red –
grader Red, while Edgar works in the Middle East
who likes playing basketball and hanging out with his
and the two sisters remain in Manila to build their
friends – to sleep early and finish his errands at home.
respective careers. “Over Messenger, Mama sends me pictures of dishes The decision was three years in the making, with each
she cooks, and I come home on weekends with DVDs
family member making individual adjustments: the
for our movie marathons and bonding sessions over
mommy pining for her daughters, who in return
karaoke,” said Bretzy, a Globe postpaid customer for
commute for at least five hours each way to get
five years. Despite her busy schedule, Bretzy makes
home every weekend.
it a point to text, call and even go online to catch up with her Mommy Pilar and rest of her siblings.
Mommy loves the fresh air in her new home, as well as its close proximity to the church and the friends
Bretzy will soon take a teaching licensure exam and
she has made in the small community. “Renting this
is excited to make wedding plans with her fiancé,
property instead of coming home to Iloilo, my home
while Mommy Pilar is setting her sights on putting
province, is a decision I’ve made to keep our family
up a small restaurant business. Daddy Edgar is now
together,” she said.
saving up for the venture that he will ultimately manage with Ryza, who currently works at a dim sum
A STRONG ‘GLUE’
place in San Juan.
Indeed, Mommy Pilar is the glue that keeps the
Life, after all, has taught the family that bridging the
family bond stronger despite the physical distance
gap not only means getting physically and digitally-
that separates them, said Bretzy.
connected, but opening one’s heart to what is still possible, like a new lease in life and love.
The goal is to stay connected with each other amid the physical separation, and technology makes this
This is published for our Annual Report with prior consent by our Globe customer.
2016 ANNUAL REPORT
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FUELING GROWTH OF ENTERPRISES
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GLOBE TELECOM
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FUELING GROWTH OF ENTERPRISES 10 WAYS GLOBE CAN MAKE YOUR BUSINESS FLOURISH GRI 102-2
The world is changing, society is transforming, and
Michael Frausing, Senior Advisor for Enterprise and
every day, we find ourselves at the cusp of another
IT-Enabled Services Group, and Derrick Heng, Senior
technological advancement. Innovation is, and will
Advisor for Globe myBusiness, discuss some of
always be, our primary driver to move and grow
the ways Globe helps drive innovation in business,
businesses built by passion.
whether big or small.
Armed with an intimate understanding of our
1
customers and partners, we provide a full range of wireless or wireline ICT offerings for businesses of any
MORE INDUSTRY-FOCUSED SOLUTIONS
size or type. With the growing trend for enterprises to go fullyThrough Globe Business, we enable large
digital and as part of its commitment to enable a
corporations and catapult their business towards
digital nation, Globe Business is accelerating the
infinite possibilities. Combining our homegrown
adoption of data through cloud technology and
knowledge of the Philippine market with the latest
digital services across Philippine enterprises with its
innovations, Globe Business is able to provide the
industry-focused solutions, leveraging on the latest
right technology, infrastructure, and know-how,
ICT capabilities and innovations that will drive global
customized to the needs of the business from a wide
competitiveness.
range of industries. We create opportunities for growth and progress, not only for enterprises, but
In 2016, Globe Business strengthened its offerings to
also for the entire country.
the retail, IT-BPO, education and logistics industries, helping Philippine enterprises to go fully-digital so
Our Globe myBusiness maximizes the potential of
they can become locally and globally competitive.
micro, small and medium enterprises (MSMEs) so they can take their passion for business onwards and
Companies in the retail industry, for instance, can
upwards to achieve success. Offering customizable
benefit from managed security services, mobility
business solutions designed to fit their needs, Globe
solutions, and connectivity solutions that Globe
myBusiness empowers Filipino MSMEs to embrace
Business offers.
the digital shift, giving them the competitive advantage to improve efficiency and productivity, reduce cost, and further grow their business, allowing them to create their own stories of success.
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GLOBE TELECOM
Globe Business offers BPOs solutions such as Canvas,
In 2016, Globe myBusiness empowered Filipino SMEs
which converts paper-based processes to dynamic,
to embrace the digital shift with its latest portfolio of
feature-rich mobile apps, Globe Work Ready Seats,
postpaid plans and innovative business solutions, giving
as well as Media Storage facilities help BPOs secure
them the competitive advantage to improve efficiency
large files for their customers.
and productivity, reduce cost, and further grow their business.
Finally, the logistics industry can leverage on ICT to boost operations for companies using solutions such
Globe myBusiness launched the new myBusiness
as M2M Fleet Management, managed connectivity
Unli Plus Postpaid Plan, a new mobile postpaid
services, as well as Canvas to save time and resources
plan that gives them more value for their business
from physical processing of forms and other
with built-in unlimited calls and texts to Globe/TM
documents, thereby improving efficiencies in the
numbers, allowing them to focus on choosing the right
workplace.
business solutions that they need with their plan. The myBusiness Unli Plus Postpaid Plan also comes with a choice of freebie such as mobile data services or discounts to business solutions. Globe myBusiness also offered the myBusiness Tracker, a do-it-yourself portable GPS tracking solution that enables users to monitor the real-time location of their vehicles and assets. The Globe myBusiness tracker can help SMEs improve delivery planning, real-time monitoring, improve driving habits and save and avoid unnecessary costs.
2
DIGITIZING MSMEs MSMEs make up 99% of businesses in the country, making them a major engine of growth according to the Philippine Institute for Development Studies (PIDS). Globe myBusiness takes front and center to boost the SME industry in the Philippines as it provides customized digital solutions and empowers MSMEs with knowledge of the latest digital trends.
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31
3
4
Since adopting a “cloud-first” strategy in 2011, Globe
Forging strong partnerships with global industry
has been harnessing the power of cloud technology
leaders such as Google, Microsoft, Huawei and
to help manage costs while pursuing our relentless
Alcatel (now Nokia) allows us to stay ahead of the
drive towards sustainability.
pack in digitizing businesses.
We bring the same benefits of world-class wireless
One of our partners is Shopify, a leading global
solutions to our enterprise clients. These solutions
e-commerce platform that customizes websites
enable their employees to easily access, store,
for any business regardless of product or location.
transmit, and manipulate information, files, and
Shopify has a simple user interface that features
applications virtually using any personal computer,
reports, in-depth analytics, as well as functionalities
tablet or device.
such as loyalty ratings, reviews, social account
TOE TO TOE WITH INNOVATION LEADERS
RIDING THE CLOUD
integration, live chat and embedding of marketing G Suite, from Google Cloud, is a set of intelligent
materials.
apps including Gmail, Docs, Drive and Calendar to connect the people in a company, no matter where in the world they are. Other dynamic cloud platforms include Virtual Private Cloud, Back-up-as-a-Service, Microsoft Office 365 and AppMarket. These solutions not only eliminate the demand for server maintenance, updates, deployment and compliance, but also ensure safer, more accessible email and business operation systems right in the cloud.
With Shopify, Filipino entrepreneurs can start their own business in less than 5 minutes – their gateway to building and managing their own online store. Globe myBusiness has also developed an online bazaar called Digimall powered by Shopify that showcases products from local businesses over the web. A weekend “bazaarista” can now sell to anyone with an internet connection, nationwide, or around the globe, at any time or day.
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GLOBE TELECOM
5
WINDOW TO GLOBAL BEST PRACTICES As part of our commitment to help build a digital nation that sees businesses flourish and succeed, Globe keeps large, medium and small businesses abreast of the latest industry trends by inviting experts and thought leaders. Globe Business holds its annual Enterprise Innovation Forum (EIF) for leaders and corporations to participate in an insightful learning session and sharing of best practices. The highly-anticipated EIF brings together thought leaders and speakers from around the world to instill the importance of innovation in leading businesses and industries. In October 2016, the seventh annual EIF was held
Globe myBusiness and the company’s digital
with the theme “Find your purpose: Transform
advertising business, AdSpark, also organized DigPH,
Business to Greatness,” featuring an elite roster
an annual convention that equips entrepreneurs
of thought leaders topbilled lined by Strategic
with up-to-date knowledge on using effective, cost-
Communications and Leadership Expert Heath
efficient digital tools and platforms to expand and
Slawner.
revolutionize their business. The country’s largest digital and mobile marketing summit also serves
Globe also expanded its presence and reach among
as a venue for entrepreneurs to learn practical tips
MSMEs all over the Philippines through its Globe
on social media, e-commerce techniques, and other
myBusiness Day caravan, a one-stop exhibit for
pressing digital topics that they can apply in their
entrepreneurs that allows MSMEs to explore new
business.
business opportunities, find new ways to increase their revenues, and discover new solutions to stay competitive in the digital age. The caravan also enables MSMEs to meet, be inspired by successful entrepreneurs and participate in insightful speaker discussions.
2016 ANNUAL REPORT
33
6
7
A stronger nation requires a well-educated and
A stronger nation also demands a healthy citizenry.
informed citizenry. Thus we provide schools with
Thus, we help bridge the healthcare gap in the
innovative, interactive, cutting-edge learning tools
country, particularly in remote and rural areas, by
to give students and teachers access to 21st-century
delivering ICT solutions to the healthcare industry.
PROMOTING 21ST-CENTURY LEARNING
BETTER ACCESS TO HEALTHCARE
learning. Our solutions include the following: We launched KonsultaMD in 2015, a 24/7 health •
•
•
Learning Management System for personalized,
hotline service manned by skilled and licensed
adaptive, and monitored learning to address
Filipino doctors who provide over-the-phone medical
student engagement in schools.
assessment and advice, including basic healthcare
School Management System for access to
and permissible medication. This addresses problems
consolidated learning resources and tools for
such as lack of experienced healthcare professionals,
better and faster school management decisions.
limited access to public hospitals and facilities, as
Virtual Private Cloud to eliminate the cost of
well as individual self-medication.
expensive IT equipment to run new applications for teachers and school staff.
We also mounted the Healthcare Industry Forum, which discussed healthcare industry insights and trends, business apps to mobilize the workforce, and a range of digital marketing tools to make Globe the brand of choice for patients.
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GLOBE TELECOM
8
DISASTER-PROOF BUSINESSES We became the first telecommunications company in the country to be certified in business continuity on an enterprise-wide scale (ISO 22301). For our clients and stakeholders, this means assurance that our business is prepared to tackle and survive major calamities and disasters. We share the same approach in business continuity and disaster recovery with companies from various industries. They can outsource their data management requirements and media storage to us to shore up their protection and capabilities in times of unfortunate events.
2016 ANNUAL REPORT
35
9
ENHANCING DATA SECURITY AND PRIVACY The unprecedented growth of technology has made data protection and safety a bigger challenge more than ever. Across all industries, the frequency and sophistication of cyber-attacks and breaches are on the rise, which prompts us to take a more proactive stance. We take a holistic approach to manage threats and security breaches and ease enterprises’ security, compliance, consolidation and cost concerns. Through solutions such as Managed Security Services that leverage on the latest ICT capabilities and innovations, we take the lead in averting cybercrime attacks and threats.
10
We also put a premium on customer education. Through our #ProTECH101 campaign, customers
IMPROVE CUSTOMER EXPERIENCE
learn about the dangers of online crimes and practical tips to keep their accounts and other
Globe Business and Globe myBusiness unveiled the
valuable data safe.
country’s first mobile app designed for large enterprises and SMEs to drive better customer experience via self-service account management. Available for free at the App Store for iOS users and on Google Play for Android users, the mobile app is a self-service, business automation app that gives enterprise and SME customers easier, faster, and more convenient access to their accounts while on the go, providing better and more personalized user control and eliminating the need to transact with traditional customer service channels.
36
GLOBE TELECOM
With the Globe Business mobile app, users can view their account details (account name, account type, billing address, plan details, plan inclusion, DUO number, among others), view their bill details and billing statement, file service modification requests such as changing of SIM and plans as well as activation of roaming services, get access to service modification request dashboard to allow viewing of requests filed and status, and send remarks and converse with an authorized Globe agent. Globe myBusiness also extended its services beyond telecommunications products with the introduction of its free business consultancy services. With this exclusive service, Globe myBusiness helps entrepreneurs review their business processes and operations and provide advice and recommendations to help the business run more efficiently. Entrepreneurs will be able to get in touch with inhouse expert business consultants with certifications on Certified Management Consultants (CMC), Lean Six Sigma, Business Process Reengineering (BPR), EN 16114 Management Consultancy Services, Information Security Management System (ISMS), eSourcing Capability Model, Supply Chain Management, Customer Operations Performance Center (COPC), Total Quality Management for free. To learn more about how Globe makes business flourish, visit http://business.globe.com.ph/ or https://mybusiness.globe.com.ph/.
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BUILDING A DIGITAL NATION
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BUILDING A DIGITAL NATION
HARNESSING TECHNOLOGY TOWARDS A MORE PROGRESSIVE PHILIPPINES GRI 102-12, 103-1, 103-2, 103-3, 203-1, 413-1
More than two decades ago, waiting for a telephone
20 million households, and a million businesses. They
line in the Philippines was often likened to waiting for
all benefit from digital transformation—how we
Godot. It was typical to hear middle-class Filipinos
work, how we play, how we get connected, how we
grumbling about their decade-long application for a
manage our supply chain—almost all the things we
fixed-line subscription, or having a “party line” shared
do everyday use the power of technology powered by
by more than one subscriber.
a telecoms network like Globe,” he added.
The country has grown by leaps and bounds since.
ECONOMIC CONNECTION
Nowadays, many Filipinos can dispense with having a fixed line but cannot go by without a mobile phone.
Getting connected to the information superhighway
Many even have more than one SIM, and households
is the “modern-day equivalent of having farm-to-
can now connect to the internet. Those in the
market roads, bridges, and railways” that enables the
countryside are not only able to exchange messages
country to make economic development a reality, he
via SMS or email, but can also check farm gate
said.
prices, get connected to buyers here and abroad, and transact wherever and whenever they are.
“By overcoming information barriers, augmenting factors, and transforming products, digital
Gil Genio, Chief Technology and Information Officer
technologies can make development more
(CTIO) of Globe, said all these were made possible
inclusive, efficient, and innovative,” according to the
by telecommunications players such as Globe. “Our
World Bank’s World Development Report 2016:
public is made up of about 100 million individuals,
Digital Dividends (http://www.worldbank.org/en/ publication/wdr2016).
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The Philippines, currently one of Asia’s fastestgrowing economies, ranked 15th in the world in terms of number of internet users, with 44 million or 43.5% of its population. It ranked highest among 15 countries in Asia Pacific, in terms of average connection speeds for mobile connection, with a speed of 13.9 Mbps, according to the 3rd quarter Akamai State of Internet Report. Globe believes, however, that the country needs to do more to be at par with the world’s tiger economies and how they harness ICT as catalyst to progress. “We always look at it, not as a beginning with an end, and know that our work will not be done. When you think about this industry, about Globe, and our customers, every year and every month, people are looking for more. There’s always something to improve and something better. What’s important for us is that the work we do today always builds on something better for next month or next year,” Genio said.
NO LONGER THIRD WORLD Guided by its purpose of “treating people right Five years after its successful network modernization
to create a Globe of Good” the company is also
program that saw mobile data exploding in the
aggressively fast tracking a multi-pronged network
Philippines, Globe embarked on a US$1 billion
infrastructure and capacity expansion build to
nationwide infrastructure program to achieve its
provide its customers a better internet experience. As
vision for the Philippines to become an admired
of December 2016, Globe has already installed 500
nation for its first-world internet connectivity.
long-term evolution (LTE) cell sites, mostly in Metro Manila and other highly populated areas. It has also
It has allotted the bulk of its Capital Expenditures
committed to deploy about 4,500 multi-band, multi-
to the deployment of fiber optic cables in 20,000
mode software-defined radio station equipment to
barangays all over the country to provide faster
about 95% of cities and municipalities in the country
and more reliable Internet access in about two
within a 3-year period.
million homes nationwide. The infrastructure build is expected to take five years and will extend network coverage to more areas that currently have no connection or spotty service.
2016 ANNUAL REPORT
41
“If we can leverage modern technologies, pervasive
the physical infrastructure. Most people don’t realize
networks, faster internet speeds, and greater
that building infrastructure takes time. We’re more
efficiency, there will always be a better experience
than willing to provide the needed capital, but we
for everyone. This creates more happiness for people,
need to overcome challenges such as securing
more time with family, more efficient businesses. All
permits to build new cell sites,” he explained. The
these can lead to something positive for the country,”
process usually takes eight months to get at least 25
said Genio.
permits to build one cell site, leading to considerable delay in the deployment of telecommunication
OPPORTUNITIES AND CHALLENGES AHEAD
facilities. Building additional cell sites is critical in improving
In many parts of the world, new trends such as cloud
internet services in the country to deliver more
technology, mobile web services, and e-commerce
bandwidth to customers. While Globe has started to
are already radically changing the digital landscape.
utilize the 700 MHz frequencies from the telecom
Globe views this as an opportunity “to push
assets it acquired from San Miguel Corporation in
individuals and businesses into realizing that there
2016, more cell sites are still needed to provide many
are new ways of doing things, enabled by better
areas in the country with better indoor penetrability
technology, new devices, and better bandwidth.”
and coverage.
However, for this to happen, the needed telecom
As it is, the Philippines has an estimated 16,400 cell
infrastructure must be in place to enable a pervasive
sites servicing about 47.1 million internet users. On
internet network. “Our bigger challenge is putting
the other hand, Vietnam, which is similar in size to
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GLOBE TELECOM
the Philippines, has 70,000 cell sites for its 47.3 million internet users, more than thrice the number of cell sites compared to the Philippines. While the government recognizes the role telcos play in national development and growth, Genio said Globe needs to clearly demonstrate to its other stakeholders the impact of better internet services to the economy including GDP growth, jobs and productivity, among others. A major step towards securing the company’s future is to ensure that our infrastructure is ready for tomorrow’s business needs. Re-energizing our internal Cloud strategy is vital to our workplace and we have made significant headway in building the foundations for our Cloud infrastructure. We
THE LAST MILE
expanded our private cloud portfolio to VMware and Openstack, with the latter being our first venture into
As far as Globe is concerned, Genio said the
Open Source Cloud Computing – cheaper, simpler
Philippines still has a lot of catching up to do in terms
and massively scalable. This engagement gives us
of ICT adoption, led by greater access to a pervasive
the flexibility of public cloud and the benefits of
network. “Insofar as having a fundamental telecom
a private cloud with its subscription-based model
infrastructure that can be accessed by everyone
and flexibility allowing upgrade and downgrades
with reliable value, we are not there yet. But we will
anytime. Applications and systems are more reliable
definitely be. It’s just a matter of time.”
and perform faster on the cloud, thus improving customer experience.
“Our responsibility at Globe is to provide a pervasive and reliable communications network. But let’s not
Globe currently has a backlog of about 3,000 cell
forget there’s a whole ecosystem out there — such
sites owing to difficulties in securing permits from
as those who make mobile phones, laptops, tablets,
various local government units, homeowners
large screens, apps — people who supply what people
associations, and other government agencies. “If we
need. It’s important to sustain this ecosystem,” he
have high-speed internet in their locality, what does
stressed.
that mean? It means government and citizens will have better engagement, better opportunities, better
“All these players have to be motivated by the same
local taxes, and reduced poverty levels,” he added.
goal: how to make the Philippines a nation admired with world-class connectivity. Only good things can happen if we do our jobs well.”
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43
GIVING DELIGHTFUL SURPRISES
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45
GIVING DELIGHTFUL SURPRISES GRI 102-2, 103-1, 103-2, 103-3
Loyalty is its own reward, and every loyal Globe
“We have gone through an inspiring and exciting
customer knows it can unlock the door of wonderful
journey with our customers – from milestone
experiences, too.
services to network upgrades — all bringing us to where we are today. We are grateful to our millions
For the entire month of September, all Globe
of customers for staying with us and making us as
customers, as well as employees and partners
part of their lives. With this 917 celebration, we look
who all made Globe the country’s leading mobile
forward to sharing with our customers, partners,
company, were treated to rewarding giveaways and
and employees delightful treats to make wonderful
on-ground events.
Globe moments with us. We will continue to be inspired by our stakeholders to provide Filipinos
And as the signature Globe prefix ‘917’ always carried
reliable services and fast mobile internet and
a special bond with our customers, our month-
make their digital lifestyle truly wonderful,” Globe
long festival was dubbed ‘917’. The most special
President and CEO Ernest Cu said via Facebook Live
date, September 17, 2016 was marked with a full-
at the Globe Facebook page.
day event for all customers at the Globe ICONIC entertainment zone at BGC Central at the Bonifacio
From trivia to heartwarming stories of family and
Global City in Taguig.
hope, our loyal Globe customers responded with their own wonderful Globe experiences.
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GLOBE TELECOM
From: Grace
From: Patrick
Sent: Oct 9
Sent: Sep 20
Subject: Our Family’s Globe experiences
Subject: Globe experience and why I stayed
My husband and I have been loyal Globe postpaid
I hope this message finds you well, as my enthusiasm
subscribers for more than 12 years now. Globe has
had just pumped up after knowing that I already had
been our means to connect with each other and our
11 years of postpaid subscription to Globe not to
extended family and support groups for both joyful
mention the prepaid era in the beginning.
and challenging times of our journey as a family. I should not be saying I am under a subscription, We would like to thank you for the wonderful gift of
more like... I am in a relationship. You see, there are
900+ points each. These gifts had allowed us to bond
reasons why I stayed in Globe. It’s not a seamless
with our boys after a week long of challenge against
experience, we had fights, annoyance, happiness,
cough, colds and flu virus for the whole family. After
surprises and high expectations. It’s a relationship
our 2nd medical checkup of the week, we were able
really.
to have mini celebration after our doctor assured us we are all recovering or on our way to recovery after
I rely on signals to get my thoughts across other
being down all at the same time from cough, colds,
networks. I look at the Statement of Accounts as if
or flu virus. We had a good treat at Wendy’s in Sta.
I am planning my finances. Logged in to MyGlobe
Lucia Mall. We enjoyed salad, burger, fried chicken,
as if I am checking your Facebook profile. It’s a
fries, rice and iced tea together.
relationship really.
Your gift had also allowed us to honor the head and
I got involved in a rebuttal with persons from another
leader of our family – my husband and the father of
network while comparing the benefits when I am in
our 3 sons. He provides for all our needs with all his
a ‘relationship’, but really any loyalty can be tested
best. He helps at home with laundry. He takes our
across time.
boys on biking adventures. He takes us to the doctor when we are all sick. He takes care of himself by
And this is a proven fact for me.
biking to work everyday. He loves the Lord more than anything else. He is our hero
we were able to
I hope I made my point that Globe is not providing
buy him new polo shirt for office and comfort shirt
subscription but it is building a relationship that can
for recreation activities at Bench store in Robinsons
last.
Metroeast. Have a pleasant day. Thank you for the wonderful gift you have blessed us with for this month.
These are published for our Annual Report with prior consent by our Globe customers.
2016 ANNUAL REPORT
47
GIVING DELIGHTFUL SURPRISES
The signature Globe prefix 917 always had a special bond to most of the company’s customers, especially those who are loyal to the brand for over 10 years. Brought to life through the actual date, September 17, 917 serves as the perfect time to set a wonderful celebration nationwide.
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GLOBE TELECOM
Through delightful and rewarding experiences, Globe expresses its gratitude to all its customers for their continued patronage, making it the country’s leading mobile company. For one day, all Globe customers nationwide were in for an exciting line-up of events, treats and exclusive deals from shopping to food and travel.
2016 ANNUAL REPORT
49
MAKING LIFE EASIER
50
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2016 ANNUAL REPORT
51
MAKING LIFE EASIER HOW INNOVATION IS EMPOWERING FILIPINOS GRI 102-2
Imagine walking 10 kilometers to a health center to
fulfill our social responsibility — doing a Globe of
get a check-up for flu. Or traversing rough roads just
Good — but also ultimately create a wonderful world
to go to the nearest remittance office to get money
for every Filipino. Our passion for innovation extends
sent by a family member.
beyond business. We innovate to create positive societal impact so that more Filipinos can overcome
These scenarios may now be far-fetched, but this is
socio-economic challenges.
how life was when digital technology had yet to exist. And with innovation companies like Globe that have built their business on the idea that change – often radical change – can be very good for business as well
KONSULTAMD: HEALTH ADVICE AT YOUR FINGERTIPS
as for society, the way we do things has been rapidly evolving.
Imagine the convenience of being able to get a doctor on the line anytime you need one, wherever you may
Globe continues to offer relevant and groundbreaking
be. With KonsultaMD, a Globe affiliate, your immediate
solutions that harness the power of information and
health care and medical concerns can now be
communications technology. By so doing, we not only
addressed 24/7 by a licensed Filipino doctor.
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Apart from bringing you easy access to doctors,
TOP 5 INQUIRIES IN 2016
KonsultaMD partnered with several establishments to bring health care within every Filipino’s reach. Several partnerships were forged this year to enrich the whole value chain for customers. MedGrocer, an online pharmacy for door-to-door delivery of medicine and health supplements in GMA area; Lifeline Ambulance Rescue, Inc. for emergency quick-response; Generika drugstore chain to provide a wide range of low cost, high quality generic medicines from approximately 600 outlets in the country; FamilyDOC, a 3-in-1 facility that houses a clinic, a diagnostics laboratory, and a pharmacy. KonsultaMD has also started to cater to overseas Filipino workers (OFWs) in Hong Kong. These OFWs can conduct unlimited calls to a maximun of 5 Globe numbers and gain unlimited access to KonsultaMD for 30 days for just HK$129.
TOTAL SUCCESSFUL HEALTH-RELATED CONSULATIONS
CALLS BY GENDER
Customers acquired
2016 ANNUAL REPORT
53
CALLS BY REGION
60%
KICKSTART VENTURES: BREAKING BARRIERS FOR STARTUPS
5%
No one knows how many aspiring startups have withered on the vine due to lack of funding opportunity. With Kickstart, the wholly-owned corporate venture capital firm of Globe 28 digital tech firms in four countries have had a better shot at growth, with some outstanding ones now starting to bloom and send out shoots across geographic
5%
30%
borders. Along with this, a dynamic #startupPH community of more than 4,000 young minds with big ideas — innovators, investors, mentors, corporate advocates, and policymakers — have begun to collaborate and set the standard for the Philippine startup community through Slingshot Philippines, a National Summit on Startups and Innovation organized by the Department of Trade and Industry
CALLS BY AGE
18-35
(DTI), and supported by Globe Business.
46%
Among the new startups in Kickstart’s portfolio are Zipmatch, a data analytics company focused on the high-value real estate sector, using its brokerage and
24%
listing site to bring together a community of home seekers and real estate professionals; and Coins.ph, Southeast Asia’s leading mobile blockchain-enabled
13%
platform that enables anyone, including the millions of unbanked, to easily access financial services directly from their mobile device. Using Coins.ph, customers
1%
have access to a mobile wallet and services such as remittances, airtime, bill payments, and online shopping at over 63,000 merchants who accept
16%
digital currency. Operating in the Philippines and Thailand, Coins.ph’s mission is to increase financial inclusion by delivering financial services directly to people through their mobile phones.
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GLOBE TELECOM
MYNT: CREATING POSSIBILITIES FOR THE UNBANKED THROUGH FINTECH There are over 400 million people in Southeast Asia who remain unbanked and underserved. Through Mynt, a wholly-owned financial services company of Globe, these sectors in the Philippines can now partake of economic growth without going through formal banking channels. Mynt has so far over three million customers doing P4 billion transaction value per month serviced through a network of more than 12,000 partner outlets. Its subsidiary G-Xchange operates GCash, a mobile money service that taps into the wide customer base of Globe. Moreover, Mynt has recently started its own lending company under the name Fuse, and has disbursed approximately 4,000 loans to 3,000 borrowers in the last quarter of 2016. Millions of Filipinos use their GCash mobile money accounts to easily pay bills, buy prepaid load, and send and receive money, anytime and anywhere, for a fraction of the cost charged by traditional remittance centers. They can also apply for a debit Beep Mastercard to shop and dine in more than 32 million establishments worldwide, shop online, and pay for their MRT/LRT rides.
2016 ANNUAL REPORT
55
Through GCash, Filipino taxpayers can also pay their
2015
2016
2.32M
3.31M
387,747
444,819
7,555
12,255
5,567
8,400
954
1,867
1,034
1,988
3.65
4.62
Disbursed Loans
n/a
4,004
# of Borrowers
n/a
3,302
annual income tax with greater ease. Globe teamed up with the Bureau of Internal Revenue (BIR) and the United States Agency for International Development (USAID) in developing the mobile payment system — a significant milestone for the government’s tax collection effort.
Accound Holders (YoY) Monthly Active Customers Partner Outlets
GCash has also enabled over nine million Filipinos
Luzon
who are Social Security System (SSS) members to
Visayas
pay their contributions and monthly amortizations for salary and real estate loans using their mobile
Mindanao
phones. The GCash payment scheme is available for SSS members registered as self-employed or voluntary, including non-working spouses, Overseas Filipino Workers (OFWs), farmers and fisherfolk.
Mo. Transaction Amount in Bn
GLOBE DIGITAL VENTURES: ENHANCING THE FILIPINO LIFESTYLE THROUGH DIGITAL SOLUTIONS Mobile applications have become an integral part of today’s digitally-connected lifestyle, and through Globe Digital Ventures, the company’s digital services arm, Globe is able to provide services that will upgrade the connected experience. The company’s GMovies app leads the pack in enhancing the digital lifestyle and entertainment
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GLOBE TELECOM
experience. GMovies forged partnerships with SM
Digital Ventures also launched this year a new loyalty
Lifestyle and Entertainment to widen the footprint of
service platform, RUSH, which offers a complete
cinema ticket reservations and booking nationwide.
end-to-end loyalty solution to fit any business. It
Globe also reached greater heights in its partnership
features a white label loyalty suite that provides
with Ayala Land Inc. as GMovies is poised to takeover
both points-based and punch card loyalty, aiming
the revamp and management of Sureseats’ digital
to expand the horizon for loyalty programs that are
channels.
still largely underserved and underdeveloped in the country. Digital Ventures also developed out-of-the-
In addition, cinema-goers now have more options
box products that aim to create value for customers,
to pay for their tickets with GCash and make
one of which is Load Up, a load selling app which
advanced booking and ticket pre-selling for premium
doesn’t require a retailer SIM card and an internet
blockbuster titles as GMovies empowers its
connection. Retailers can get 4.5% load discount
customers to secure cinema seats even weeks before
every time they sell.
their release to create a truly wonderful cinema experience.
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OFFERING THE BEST IN ENTERTAINMENT
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2016 ANNUAL REPORT
59
OFFERING THE BEST IN ENTERTAINMENT 10 WAYS TO ENJOY THE NEW GLOBE LIFE GRI 102-2
You may have been a Globe subscriber for more
Offering these innovations will not be possible
than a decade now, and chances are, you don't leave
without a reliable, affordable, and pervasive network
home without your mobile phone. But how much do
that empowers the digital life of a Globe customer. In
you actually know about us and the many new and
2016, Globe made leaps and bounds to improve the
fascinating ways you can enjoy a wonderful world
internet experience in the Philippines with a series of
with Globe? Take a look at our gallery of fun facts,
improvements in its network infrastructure amid the
1
MAKING FIRST WORLD INTERNET A REALITY
growing demand for internet connectivity. Its top-selling mobile data service GoSURF50 was the company’s response to the rising mobile data adoption, especially among its prepaid customers. In 2016, GoSURF was upgraded with 1GB of mobile data allocation, making it the 2nd most competitive offer across the Asia Pacific region in terms of pricing at only P48.82 per GB in comparison to top prepaid telco offerings in the region including Brunei, Singapore, India, Malaysia, Sri Lanka, and Indonesia. The promo, offered at retail price of only P50, valid for 3 days, also includes unlimited texts to all networks as well as free access to Facebook. GoSURF50’s 1GB of data gives customers 700 MB for surfing while the remaining 300 MB allocation allows access to the customer’s app of choice such as Snapchat, Viber, Spotify Basic, YouTube + Daily Motion, Clash Royale, or Clash of Clans.
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GLOBE TELECOM
As more customers embrace the digital lifestyle, Globe made significant headway with the rollout of its LTE network. With the deployment of LTE sites
2
WATCH ORIGINAL CONTENT
using both the 700 and 2600 bands, Globe is now able to deliver a more comprehensive LTE coverage in Metro Manila, Metro Cebu, Metro Davao and other major urban areas in the country. These infrastructure milestones have paved the way for the country to be recognized for its improvements in connectivity. For the first time in years, American content delivery network and cloud services provider Akamai Technologies included the Philippines in its 2016 ranking for mobile internet speeds. With 13.9 Mbps, the Philippines ranked highest among 15 countries in Asia Pacific, in terms of average connection speeds for mobile connection according to the 3rd quarter Akamai State of Internet
The company also ventured into original local and
Report. The report also reveals that the Philippines
international content creation via its production arm
is among countries where fewer than 25,000 unique
Globe Studios and partnerships with international
IP addresses classified as mobilized were observed in
media outfits such as Astro of Malaysia and Netflix.
the third quarter. Globe has assigned about 10,000
Globe Studios is backed by Viva Films, Reality
public IP addresses to cover our current mobile data
Entertainment, Quantum Films, Spring Films, and
subscribers. Each public IP address can cover up to
Astro.
64,000 data sessions, while each mobile subscriber can take up multiple data sessions, depending on the
In collaboration with HOOQ, Asia’s first and largest
number and type of applications he is using.
premium video-on-demand service, Globe Studios is bringing the most-awaited and star-studded series, On The Job (OTJ), a spinoff from the original blockbuster movie directed by Erik Matti. HOOQ signed a landmark co-production deal with Globe and independent studio Reality Entertainment in 2016 to produce the six-episode story revolving around a hard-hitting topic in Philippine society. Aside from the Philippines, the original mini-series will be released in Thailand, India, and Indonesia. Globe Home Broadband subscribers can also enjoy free access to HOOQ which delivers over 10,000 Hollywood and local movies and TV series starting at Plan 1299.
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Globe Studios also pioneered the country’s first online film festival — the Globe Independent Film Festival (GIFF), which showcased laudable short
4
GET INTO THE GROOVE
films by five esteemed Filipino directors who have garnered numerous recognitions for their body of work. It also produced a seven-episode travel video series dubbed as SceneZoned, which starred its top ambassadors as they embarked on ultimate travel adventures in some of the best destinations in the Philippines.
3
EXPERIENCE LIVE SHOWS AND EVENTS
Musical.ly, currently one of the most popular video communities among Gen Z, seals its first ever telco partnership with Globe. musical.ly is the world’s fastest growing online video community for creating, sharing and discovering 15-second videos. With this collaboration, we aim to give the best online experience to customers through easy access to a platform that allows creation of original content, and published by users themselves. Using your mobile devices, you can also sing more than half a million songs through the popular singing app Sing! by Smule. Share your karaoke-crazy love for music by recording a video duet with your favorite
Globe is also changing the landscape of Philippine
artists like Jessie J and Jason Derulo and beaming it
entertainment with the creation of Globe Live
to a global audience.
designed to produce high-quality live shows, concerts and musical performances, and at the same time tap
Music lovers can also get their groove from Spotify’s
the wide distribution coverage of Globe to promote
music streaming service, as the service gives them
and assemble events that are of international size
on-demand access to over 30 million tracks. To
and quality. Globe Live became the platform for
complement the overall the experience, Spotify
Filipinos to see Green Day’s American Idiot and
makes it easier than ever to discover, manage and
Menken & Ahrens’ A Christmas Carol The Musical.
share music with your friends, while making sure that artists get a fair deal. In addition to that, Spotify Premium lets you create your own playlists, and even download them for offline listening. From Discover Weekly to Daily Mix to New Music Friday, there is something for everyone.
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5
6
The Pokémon Company, creators of one of the most
Globe also brings the dynamic world of sports into
popular entertainment properties in the world,
your mobile devices. In collaboration with Twitter,
Niantic, Inc., innovative developer and publisher of
customers enjoy live streaming of two new weekly
‘real world games’, and Globe, are working together
NBA shows with first-of-its-kind elements created
to bring Filipinos a richer and more enjoyable mobile
specifically for integration with Twitter conversation.
entertainment experience centered around Pokémon
As the first official live stream advertising partner
GO. This includes activating Globe retail locations
of Twitter in Asia, Globe lets subscribers watch the
and charging stations as PokéStops and Gyms within
weekly live stream of The Starters Twitter Show,
the game and allowing Filipinos to catch, battle,
and the weekly 30-minute show, The Warmup, both
and train at any of Globe’s outlets throughout the
produced by Turner Sports and featured exclusively
country.
for millions of Twitter followers.
PUT YOUR GAME FACE ON
JUMP INTO THE ACTION
Globe and Malaysian media powerhouse Astro have teamed up to offer the Philippines’ gaming fans a wonderful experience. Through the partnership, Globe subscribers will gain access to Every Good Game (eGG) Network, Southeast Asia’s first dedicated 24/7 e-Sports network, via the Tribe App. e-Sports fans will be able to watch tournaments like League of Legends, Dota 2, Counter Strike: Global Offensive, and many more.
2016 ANNUAL REPORT
63
7
8
ENTERTAIN THE KIDS
STREAM YOUR FAVORITE MOVIES AND TV SHOWS
Globe and Disney tied up to launch the Disney Channels Apps where kids and families in the Philippines can watch Disney Channel, Disney XD, and Disney Junior entertainment channels on their
Globe became the first mobile and broadband
mobile devices, anytime and anywhere. Designed for
Philippine partner of leading video streaming service
kids to watch their favorite Disney shows, the Disney
Netflix which boasts of over 81 million members in
Channels Apps will provide hours of fun in a safe and
over 190 countries who enjoy more than 125 million
kid-friendly digital environment that will immerse
hours of TV shows and movies per day, including
viewers in Disney’s magical world of storytelling and
original series, documentaries and feature films. With
characters.
a Globe home broadband subscription of Plan 1299 and above, customers can a Netflix gift worth of 6
Dialing up the fun is Cartoon Network, the 5th most
months subscriptions.
popular channel across all genres in the Philippines. Apps created by the Turner-owned brand are the Cartoon Network Anything, which is free to Globe subscribers and also available via the Globe Switch app; and Cartoon Network Watch and Play, with premium content available with daily, weekly and monthly offers.
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GLOBE TELECOM
9
10
LOAD UP ON THE LATEST TECH
WEAR GLOBE
Globe collaborated with leading technology and device partners to bring wonderful experiences to homes. Aside from blazing internet speeds powered by fiber broadband technology, you can load up on
You can now sport the new collections of lifestyle
the latest Samsung and TCL smart HD TVs, Bose
apparel and accessories that represent the vibrant
speakers, Harman Kardon headphones, Google
and wonderful world of Globe. With the launch of
Chromecast streaming device, Sony Playstation
Globe Lifestyle, Globe customers will be able to
gaming console, Airties WiFi mesh, and Belkin and
imbibe fresh and wonderful experiences through
Giraffe security cameras with your home broadband
fashion and retail. During the 917 month-long
plans for a complete entertainment and connectivity
celebration in September 2016, two new collections
experience.
— 0917 and Pop Art — were made available in select Globe Gen3 stores nationwide.
2016 ANNUAL REPORT
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CREATING A GLOBE OF GOOD
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2016 ANNUAL REPORT
67
CREATING A GLOBE OF GOOD GRI 102-40, 102-42, 102-43, 102-44,102-46,102-47
DISCUSSION ON MANAGEMENT APPROACH
The management approach on economic
GRI 102-9,102-40,102-42, 102-43, 102-44, 102-46, 102-47
and Management Discussion and Analysis sections.
performance is covered by the Corporate Governance We have undertaken recovery and buy-back
From fundamental shifts in technology, industry
initiatives that address our environment indicators,
structure, and demographics, to climate change
direct financial gains for economic indicators, robust
and natural resource scarcity, our world is facing
employee training and engagement programs that
challenges that will impact generations to come.
address labor practice indicators, diversity at the workplace for human rights, multi-channel platforms
As a leading telecommunications company in
to define customer satisfaction and a suite of
the Philippines, Globe is well positioned to create
products for digital inclusion that pertain to product
innovative solutions to tackle these challenges.
responsibility, and significant community relations
This is not just what our business dictates, but is
programs that answer society indicators.
also driven by our new purpose: to create a Globe of Good in everything we do to benefit customers,
MATERIALITY
stakeholders, and the communities we serve. Prepared in accordance with the GRI Standard Aligned with our purpose is the way we communicate
guidelines and the 2030 UN Sustainable
our sustainability approach, actions and performance
Development Goals, our Sustainability Report
to our different stakeholders. Our Sustainability
follows a process to help us identify material issues
Report presents an opportunity to be transparent
for reporting. Material issues and an update on
and to share the details of our performance on these
the stakeholder map were defined through the
sustainability focus areas: Care for the Environment,
consultancy services of ThePurposeBusiness, Ltd.
Care for our People, Positive Societal Impact, and a
founded in Hong Kong. The Materiality Analysis and
Digital Nation. Globe aligns its four focus areas with
Stakeholder Engagement exercises were done late
the United Nation’s 17 Sustainable Development
2015 which are completed and reported in 2016.
Goals allowing it to contribute to nine (9) of the Global Goals:
STAKEHOLDER ENGAGEMENT Our stakeholders based on their level of influence in terms of environmental, social, and governance performances have been grouped into eight (8) categories after a full stakeholder engagement exercise in 2015. These groups are: customers, frontline vendor partner, service vendor partner, government, parent companies and affiliates, employees, media, and disaster respondents. Stakeholder engagement takes many forms and it
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GLOBE TELECOM
can be formal and informal. Rather than having one-
alignment for our employees (Ka-Globe), regular
off consultations around specific topics, we prefer
townhalls
to take an integrated approach. This means that we
• Program/product launches, forums, conferences
have an ongoing dialogue about our role in society,
and meetings, email correspondences, and round
our products and services, our business performance,
table discussions with media;
and other issues. This is done at both the business unit and Group level.
• Conference, meetings, and/or electronic dialogue, compliance with laws and regulations, and partnerships for government;
The instruments we use to conduct this dialogue include:
• Meetings and SMS text message alerts for disaster respondents;
• Customer hotlines and other self-service channels and/or touchpoints, satisfaction and engagement surveys, field visits, and product launches for customers;
• Board and committee meetings for parent companies and affiliates; • Meetings, alignment and operations review and audit for service vendor partners;
• Engagement surveys, independent development plan discussion, performance evaluation,
• Vendor engagement survey and town halls for frontline vendor partners.
planning, meeting and/or kick-offs, strategy
MATERIALITY MATRIX
2016 ANNUAL REPORT
69
GREENING GLOBE
This is in response to two of the United Nations’
GRI 102-12, 103-1, 103-2, 103-3, 302-1, 302-2, 304-1, 305-1,
Sustainable Development Goals (SDGs): Responsible
305-2, 305-3,305-5, 306-2
Consumption and Production and Climate Action. These two global goals go hand in hand in urgently
Climate change remains a real, immediate threat to
seeking to reduce our ecological footprint and
our existence. Developing countries — particularly
mitigating the drastic effects of climate change
low-lying, coastal areas like the Philippines — bear
— with human and material losses at stake —as
the biggest brunt as they are usually the worst hit
significantly brought about and accelerated by
by droughts, flooding, famine, and extreme weather
human activities.
events. We are relentless in promoting environmental Thus, environmental sustainability emerges as our
sustainability by reducing and managing the
immediate responsibility, especially in the face of
impact of our business operations on the planet.
two contrasting events: global warming and the
This is a mission embraced by all our employees,
rising demand for energy in homes and industries.
partners, and customers which is reflected in our Environmental Sustainability Policy.
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In 2016, we invested P2.371 million on total
Orders, Republic Act 8749, the Philippine Clean
environmental protection, particularly on
Air Act; Republic Act 9136, Electric Power
reforestation programs, solid waste management in
Industry Reform Act of 2001; Republic Act
our corporate offices; and hazardous waste disposal
9003, the Ecological Solid Waste Management
and treatment (including the construction and
Act; and Republic Act 6969, Hazardous Waste
upgrade of Hazwaste staging areas in 40 sites).
Management Act; •
Attained certifications, namely the Quality
At the end of the year, we donated P1.4 million
Management Systems (ISO 9001:2015),
as initial grant for 13,500 seedlings to non-profit
Environmental Management System (ISO
organization Hineleban Foundation, which advocates
14001:2004 and ISO 14001:2015), and
environmental conservation and livelihood
Occupational Health and Safety (OHSAS
development by preserving and restoring mountain
18001:2007) for specific Globe sites.
rainforests and watersheds, as well as providing livelihood opportunities for indigenous people
Globe also complies with the Environmental Impact
in Bukidnon and Lanao del Sur. We leveraged on
Statement (EIS) system of the DENR and pays
our iPhone 7 launch in November to enable our
nominal filing fees required for the submission
recontracting iPhone 7 customers to participate in
of applications for Environmental Clearance
this worthwhile advocacy as we collaborated with
Certificates (ECC) or Certificates of Non-Coverage
Hineleban Foundation to drive the reforestation
(CNC) for all cell sites and other facilities, as
of 4,396 hectares across six mountain ranges at
well as miscellaneous expenses incurred in the
the heart of Mindanao, and jointly entered into
preparation of applications and the related
a memorandum of agreement for a five-year
environmental impact studies.
rainforestation program composed of three key components: reforestation, food security, and
On the operations front, we continued to push our
sustainable livelihood development. Aside from
paperless billing initiative, with electronic billing
financial support, we also provided infrastructure
statements sent to Globe postpaid customers to
capability to enable the public to extend their
eliminate further environmental stress and billing
support to the reforestation efforts of Hineleban
delays. In 2016, we introduced Bill via Text through
Foundation by texting TREE to 2158-8733, an SMS-
GlobeMYBILL, where customers received a text
based donation platform powered by Globe.
from Globe with a link to access their latest billing statements online. On top of Globe myAccount
Our efforts in energy and waste management across
and email, we continuously innovate and introduce
all Globe sites are reflected in our compliance
more channels on how to view customers’ billing
records and certifications:
statements with more ease and flexibility.
•
Fully compliant with the Department of Environment and Natural Resources (DENR), Department of Labor and Employment (DOLE), and Department of Health (DOH) Administrative
2016 ANNUAL REPORT
71
We also set up e-waste recycling bins called Project
pilot year, Globe identified and tracked 84 sites with
1Phone (P1P) stations at Globe stores to entice
PUE greater than 1.4. We implemented both quick
our customers to return electronic products and
environmental fixes and long-term solutions, such
accessories that have reached end-of-life to further
as installing new free cooling systems and replacing
promote environmental awareness and protection.
automatic transmission systems. In addition, 750
We still work with Total Environment Solutions Asset
out of the targeted 797 Globe sites successfully
Material Management (TES-AMM), through its local
adopted “green” solutions. Despite upgrades to sites
arm TES-AMM Philippines, on recovering precious
and additional network capabilities, average PUE
metals and plastics for remanufacture from the
readings dropped from 2.23 to 1.56. We will continue
disposed gadgets. Aside from responsibly collecting
PUE roll-out to more than 1000 additional sites
and recycling our operations’ electronic wastes,
nationwide in the coming years so we can monitor
we continued to expand the scope of this program
the efficiency of our site.
by initiating stronger partnerships with Huawei Technologies Philippines, BPI, Accenture, LeadSurf
As critical partners in our mission, Globe employees
Data Marketing, Unionbank, Oxfam, among others;
help magnify and multiply our environmental efforts.
and exceeding our target of collecting and recycling
Employees are treated to free rides to work through
120,000 kg of e-waste this year.
Globe Shuttle in support of carpooling. We also have bike facilities in numerous Globe locations and offer
Energy management and the constant pursuit of energy
various telecommuting solutions, including online
efficiency are another vital part of our environmental
messaging apps like Google Hangouts and Skype,
policy, a serious step toward achieving the UN’s
Cisco IP conference phone calls, and large-screen
Sustainable Development Goal of affordable and
MondoPad sessions to minimize our employees’
clean energy for all.
carbon footprint when they travel to work.
As we continuously upgrade our sites to cater to
Through constant collaboration with our various
the growing demand of our customers, we also
stakeholders, Globe is able to help make the
look for ways to efficiently use energy so we won’t
Philippines a more environmentally responsible
exhaust our natural resources. We have adopted
nation that will work hard to mitigate climate
the power-usage effectiveness (PUE) calculator, a
impacts for the greater good.
widely accepted benchmarking standards proposed by the Green Grid Association, to determine how energy efficient our infrastructures and facilities are, and to monitor the impact of our efficiency efforts. According to Green Grid, infrastructure with more than 2.5 level of PUE is inefficient. In this regard, as a
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GLOBE TELECOM
ENERGY
EFFLUENTS AND WASTE
GRI 302-1; GRI 302-2
GRI 306-2
2015
2016
8,451,856.46
8,249,735.26
10,729
12,149.26
Gasoline
2016
Solid Wastes disposed and weight by type (in tonnes)
Fuel consumption from generators (in liters) Diesel
2015
Recyclables
24.2
24.4
Residuals
172
178.9
196.2
203.3
Total Diesel
1,568,337.63
1,806,318.21
Gasoline
2,821,659.26
3,604,151.76
EMISSIONS
Hazardous wastes disposed and weight by type (in kg) Used lead acid battery
GRI 305-1, 305-2, 305-3, 305-5
Grease Waste Electronic Waste
58,926.0
231,336.0
8,848.5
5,115.0
124,572.2
143,460.8
844
5,594
5,018
2,714.0
Used oil disposed (in liters) Used oil disposed and treated -from total fuel consumed (transport and gensets)
Hazardous waste disposed (in pcs)
-from purchased electricity
Busted Flourescent Lamps -from business travel via air 255,373.2
2016 ANNUAL REPORT
73
CUSTOMER HEALTH AND SAFETY
measurements of our sites and public hearings to
GRI 416-1, 418-1
Health Organization (WHO). Despite the radiation-
provide awareness based on studies from the World safety certificates from the DOH and assurances
Product responsibility plays a key role in our
from the WHO, several villages have lobbied for
advocacy of creating a Globe of Good. Just as we
the removal of cell sites in their areas because of
have sought for greater cooperation with national
health risk concerns. This resulted in poor mobile
agencies and local government units (LGUs) to allow
services to the detriment of other customers within
faster processing of permits to facilitate building
the five-kilometer radius area. Such villages include
of cell sites, we also cooperate with homeowners’
Sitio Calvary Hills in Barangay Apas, Cebu City, Green
associations (HOAs) to expedite the construction
Meadows Subdivision in Quezon City; and Upper
of cell sites to improve internet services. Globe cell
Market Subdivision, Baguio City.
sites have been issued radiation-safety certificates by the DOH, proof that radio frequency signals
In order to create a wonderful world for our
coming from such facilities do not pose any adverse
customers, partners, and the community, we
health impact. The radiation-safety certificates
prioritize protecting our customers’ data and regard
issued by the DOH are based on the guidelines of the
privacy with utmost importance. We have set and
International Commission on Non-Ionizing Radiation
observe clear-cut measures on:
Protection (ICNIRP) and the Institute of Electrical and Electronics Engineers (IEEE) on maximum
•
Judicious use and collection of customer data,
human exposures to radio frequency fields. Globe
whether the information is personal or non-
also has 10 certified radio-frequency radiation safety
personal
officers, who conduct radio frequency radiation
•
Limiting access to or processing of private data to authorized personnel and with strict confidentiality
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GLOBE TELECOM
•
Abide by Groupe Speciale Mobile (GSM)
Given the rapid growth in connectivity that has
Association’s high-level privacy principles based
become increasingly accessible to minors, it has
on internationally recognized and accepted
become imperative for us to also build awareness
principles on privacy and data protection
and strive to make the internet safe for children. The protection of children against exploitation online is
As part of our mission to promote the intelligent
the goal behind the Memorandum of Understanding
and judicious use of the internet, we also educate
that Globe signed with UNICEF Philippines and the
the youth to better understand the impact of their
Ateneo Human Rights Center (AHRC).
online behavior so they can be responsible digital citizens. This cyber wellness advocacy takes the form
Through the MoU, Globe hopes to determine how
of the award-winning Digital Thumbprint Program
child rights protection can be integrated into our
(DTP), held in partnership with Optus and Singapore
business principles. This will not only ensure our
Telecommunications Ltd. (Singtel), which targeted
compliance with international standards on online
grades 7-12 students in public and private high
child protection, but our employees will also be
schools nationwide.
informed properly about related laws.
An assessment by global consulting firm Karrikins
Intensifying our customer protection efforts, we are
Group of Australia, the country where the program
now entering the second phase of our anti-spam/
started and first succeeded, showed that DTP had a
scam campaign that utilizes a fully automated
very high impact among over 2,200 students of two
anti-spamming tool for blocking messages sent by
pilot schools – Dasmariñas East National High School
other networks. During the first phase rolled out in
in Dasmariñas, Cavite, and Sico 1.0 National High
February 2016, we were able to rid our own network
School in San Juan, Batangas – particularly on the
of 165 million spam/scam messages.
topic of privacy and security settings on social media platforms. In 2016, we cascaded DTP to 64 public and
We continue to work closely with police authorities
private schools, empowering 24 Globe employees
in the implementation of our anti-fraud campaign
and 123 GFS lead teachers, benefitting 703 non-GFS
to prevent illegal activities that involve our products
lead teachers and 4,962 students nationwide.
and services. Dovetailing this is an online advocacy among our customers to step up their online vigilance so they can better protect themselves
Digital Thumbprint Program
4,962 826 64
against becoming victims of online hacks, identify theft, and other cybercrimes. Our #ProTECH101 campaign is aimed at combatting online security
Students
threats, particularly those that involve issues on weak account passwords, the dangers of the auto-fill feature, online sharing of information, and awareness
Teachers
on new software, among others.
Public and Private Schools trained
2016 ANNUAL REPORT
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EMPLOYEE WELFARE
EMPLOYEE WELFARE, HEALTH AND SAFETY, HUMAN RIGHTS, LEARNING AND DEVELOPMENT
GRI 102-7, 102-8, 102-41
GRI 102-7, 102-8, 102-12, 102-43, 103-1, 103-2, 103-3
People Make the Difference Globe believes that empowered employees deliver better and more innovative Globe products and services, that in turn, will make customers feel special and valued. Happy customers, in turn, develop brand affinity and loyalty that redound to higher shareholder value, making shareholders feel confident and rewarded. This is rooted in our philosophy of “Circle of Happiness.” Hence, we put a premium on workplace diversity, just compensation and benefits, engagement, safety and wellbeing, human rights, and continued learning of every employee — our Ka-Globe — and strive to create a wonderful work environment for everyone. By promoting full and productive employment and decent work for all women and men and espousing a safe and secure working environment for all workers, we respond to the UN Sustainable Development Goal of promoting sustained, inclusive, and sustainable economic growth. Incorporated in this mission are factors that spur the desired growth, from labor productivity and eliminating hazardous work, to enhancing trade assistance and access to financial services.
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GLOBE TELECOM
EMPLOYMENT
2015
GRI 401-1, 401-2, 405-1
New Hires
2016
Turnover
2016
2016
HEALTH AND SAFETY Occupational Health and Safety GRI 403-1
Loss Days
2016 ANNUAL REPORT
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Collective Bargaining Agreement
Talent and development
GRI 102-41
GRI 404-2
In conformance with the Department of Labor
In today’s knowledge-based economy, human capital
and Employment’s (DOLE) Collective Bargaining
development as a valuable organizational resource
Agreement (CBA), Globe Telecom Employees Union-
has become central to business strategy. With the
Federation of Free Workers (GTEU-FFW) remains
rising trend towards teamwork and empowerment
active to pledge the right of every Ka-Globe to form a
to hurdle the pace of technological advancement,
collective bargaining unit. Employees may participate
organizational learning and the agility to learn
in the CBA and, through GTEU-FFW, every member is
faster than the competition is seen as the route to
informed and made aware of the mandates.
competitive advantage and market leadership. Globe University is the venue for competency
The company has a longstanding, healthy, and
building requirements of the company, enabling the
constructive relationship with GTEU-FFW,
Next Globe and offer innovative learning solutions
characterized by industrial peace and anchored on a
beyond Globe. Through an emphasis on creating
mutual agreement to focus on shared goals such as
and facilitating a corporate learning culture and
attaining higher levels of productivity and consistent
developing the capability of Globe and its employees,
quality of service to customers across different
it seeks to amplify organizational know-how to
segments.
deliver the industry’s best-trained workforce as a source of competitive advantage.
The strong partnership and mutual understanding between our company and the union has been
Globe University is home to five Academies:
continuously demonstrated throughout the years
Technology and Innovation (from Telco 101 to
and amid many changes and transformations. In
product management), Sales and Marketing (from
fact, Globe and GTEU-FFW renewed a five-year
consultative selling, account management to being a
collective bargaining agreement for year 2016-2020,
certified digital marketer), Professional Development
a testament to a stable and peaceful relationship.
(from Lean Six Sigma programs, presentation skills,
EMPLOYEE WELFARE GRI 405-1
Diversity and Equal Opportunity
project management to business intelligence and analytics), Leadership (from evolving leaders to management development programs partnered with AIM and Ateneo School of Business) and Culture (from onboarding to service-oriented programs). Partnerships with the different training groups as well as individual advocates of learning are nurtured through The Learning Circle. With the need to develop key talent imperatives for the organization, Globe University is a visionary step in the right direction to drive a step change in workforce capabilities and performance.
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GLOBE TELECOM
Globe also developed a Learning Management
we invite graduating students from universities
System to track the progress of an employee’s
nationwide and give them the opportunity to bring
individual development plan, as well as continue
out the most innovative ideas that will change
to offer learning-on-the-go and books-on-the-go
the game in and beyond the telecommunications
so employees will be able to learn at their most
industry. The top 30 qualifiers will advance and
convenient time.
learn more about leadership, innovation, and the digital lifestyle in a fun yet challenging three-day
We have also expanded training and development
business case workshop, who will be mentored
to our partners. 120 retail managers across our
by leaders from Globe. Winners will take home
Premium Dealer-owned stores developed action
gadgets and cash prizes, plus an all-expense-paid
learning projects for their respective branches.
trip to Singapore. They will also get a chance to be
Not only do we nurture our employees and partners,
the next management trainees in the Management
we also look into the future by getting newly
Development Program of Globe. In 2016, we hired 12
graduate students and encourage them to join
management trainees who competed in Globe Game
Globe. Through Globe Game Changer, one of the
Changer in 2015.
country’s premiere digital innovation competition,
2016 ANNUAL REPORT
79
LEARNING AND DEVELOPMENT
partners to adopt these principles;
GRI 404-1
•
Training and Education
Report our occupational safety and health performance to our stakeholders; and
•
Conduct a regular review of our management system to ensure that the commitments of this policy are being delivered, and strive for
Ratio of training hours
22 hours per headcount
24.61 hours per headcount
Executives and Heads
12 hours per headcount
19.45 hours per headcount (62% up vs 2015)
Managers and Senior Specialist
25 hours per headcount
29.76 hours per headcount (18% up vs 2015)
Specialist and CBUs
18 hours per headcount
17.50 hours per headcount (3% down vs 2015)
continual improvement.
Training Courses GRI 403-4
Defensive Driving Industrial Hygiene Industrial Climbing, Hauling, and Rope Access Industrial First-Aid and Basic Life Support
Occupational Health and Safety
Water Safety and Rescue
GRI 403-1, 403-2, 403-4
Collapsed Structure Management We value our workplace’s health and safety. We commit to zero fatality among our employees and strive for best practices by being Occupational Health and Safety (OHSAS 18001:2007) certified in
Articulated Vehicle: Driving Course Advanced Industrial Fire Fighting
select sites. To provide a healthy, happy, and safe workplace, we commit to: •
Continuously assess all health and safety hazards in the workplace and provide programs to eliminate these hazards;
•
Comply with occupational safety and health standards applicable to our business;
•
Train and motivate our employees to work in a safe manner and encourage our business
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GLOBE TELECOM
Human Rights Globe complies with RA 7610 or the Special
fear of discrimination or violation towards any of
Protection of Children Against Child Abuse,
our employees. Our company does not condone the
Exploitation and Discrimination Act, and has full
violation of the rights of indigenous people, nor do
observance of the principles of the Human Rights Act
we promote any operational activities that would
and Child Labor Law. Benchmarking such regulations
pose hazardous risks or damages to children or
generate a happy workplace without presenting any
young employees.
2016 ANNUAL REPORT
81
Heart for Volunteerism We recognize our employees and partners’ passion for service and desire to be agents of societal change. Every Ka-Globe is provided with 2 days of Volunteer Time-Off annually to pursue their advocacy. Globe provides activity-based and skill-based volunteering to support the work of a partner group or community, organizing everyone who wants to join various advocacies and providing pro-bono services, skills transfer, or capacity building. We also offer volunteaming, where employees can freely choose which advocacy they want to support. Since 2011, we have been bringing in volunteers from Singtel and Optus through the Singtel Group Corporate Social Responsibility’s Overseas
an immersive experience inside their classroom,
Volunteering Program to help rebuild communities
additional appliances — electric fans, computers, and
devastated by natural disasters in partnership with
smart TVs — through the funds they raised on their
Gawad Kalinga (GK). In 2016, we extended our
own.
volunteering activities to our contact center agents so they can also co-create a Globe of Good.
In addition to Brigada Eskwela, we also partnered with DepEd on various ICT initiatives for education
In time for the opening of school year 2016-2017, a
such as the Global Filipino Schools and Global
total of 1,187 employee-volunteers participated in
Filipino Teachers programs, and Text2Teach. We have
the annual classroom painting and repair activity
also built and donated classrooms in Aklan to DepEd
of the Department of Education (DepEd) dubbed
as part of the Project 1 Phone e-waste recycling
Brigada Eskwela. Along with partner organizations
advocacy and in support of the rehabilitation and
such as Habitat for Humanity and the Ayala
recovery of the province after the onslaught of Super
Foundation, our volunteers lent their time and
Typhoon Yolanda (Haiyan).
energy to help in the restoration and beautification of 81 public elementary and high schools, in turn
This year’s Gawad Kalinga (GK) five-day Bayani
benefitting over 96,000 learners.
Challenge was attended by over 45 volunteers from Globe, Singtel, Optus and Optus’ local contact center
Not content with simply making the classrooms
partners Convergence and [24]7. The challenge was
presentable and usable, Globe volunteers also
composed of a coastal cleanup in Freedom Island
provided snacks and school supplies for the
wildlife sanctuary inside the Las Pinas Paranaque
children, virtual reality devices for students to have
Critical Habitat and Ecotourism Area (LPPCHEA),
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GLOBE TELECOM
Kalinga Escopa, created a community garden for a group of distressed mothers and abandoned toddlers in the Heart of Mary Villa of the Good Shepherd Convent to help sustain food and vegetable supplies at the center, planted trees at Buhay Punlaan, Caliraya-Lumot Watershed Area in Laguna, re-packed relief goods for victims of Typhoon Lawin, shared joy of reading on how to use technology in Andres Bonifacio Integrated School (ABIS), and distributed Wonderboxes in time for Christmas to the Charity Patients of the Philippine General Hospital together with Amdocs’ employee volunteers and contact center agents of Tech Mahindra, Teleperformance, and Convergys. In addition, our program served as a venue to train house build at GK Manggahan-Kawayanan,
volunteers who share the same passion and cause
Marcelo Green Village, Paranaque, participation in
with other partners. Globe, in partnership with My
Paraisong Pambata workshops doing arts and crafts,
Brave Little Warriors, held workshops and trainings
storytelling, sports, and other games for the youth
to our volunteers who believe that play is an
age ranging from 3-21 years old.
important part of childhood and an essential tool for therapy and healing for young patients with medical
Meanwhile, Globe volunteers played big sisters and
conditions.
brothers and bonded with 580 special children over play, arts, crafts, and dance at “The Kids Festival: La Viva Niño - A Carnival of Wonders” held at the DLSU campus. Globe volunteers also took part in #METamorphosis, a cleanup and restoration campaign to regain the former glory of the longabandoned Metropolitan Theater (MET) in Manila. The volunteers cleared the theater’s arcades, trimmed hedges, and cleared the area of scattered debris to give the MET a new lease in life. Globe also participated in the Servathon 2016 of Hands On Manila Foundation, Inc. where volunteers assembled solar bottle bulbs using soda bottles that will provide daytime light to urban indigent communities in Manila. We also built houses for the community of People with Disabilities in Gawad
2016 ANNUAL REPORT
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CARE FOR OUR PEOPLE Employee Welfare
Sustainable Engagement Score
GRI 102-43, 102-48
5ppts (Global High Performing Norm) 6ppts (Global Telecommunication Norm)
91%
3ppts (Philippine National Norm)
net of retention score
1ppt (PTCN) 4ppts (Ayala Group Norm)
*In 2016, the formula for computing the SEI was changed, by the removal of retention in the SEI formula. As a result, the 2015 Globe Annualand Sustainability Report should reflect 92% SEI score (net of retention) instead of 89%. This change was brought about by the recent study of WillisTowers Watson that the drivers influencing employee retention is different from the drivers of employee engagement.
POSITIVE SOCIETAL IMPACT Community Development and Public Service
Employee Volunteerism
GRI 413-1
Volunteer hours
51,552 (3% higher vs target)
Unique Volunteers
3,222 23 69
Impact
45% of total employee base
international volunteers vendor partners
105 6
LGUs served
54 4
schools serviced
NGOs benefitted National Government agencies engaged
109, 211
individual benefeciaries
P2,011,202.77
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GLOBE TELECOM
donations raised
BUILDING A STRONGER NATION
Education
GRI 102-12, 103-1,103-2, 103-3, 304-1
Through our five-year expanded Global Filipino School (GFS) program, Globe intends to transform
Community Development and Public Service
select public schools into centers of excellence in ICT and innovative teaching methods. This program is expected to benefit all 218 school divisions of the DepEd nationwide by 2020.
As the leader in mobile technology in the Philippines, it is only fitting for Globe to take care of the local
GFS started four years ago in Bilar National High
communities impacted by our business operations
School and is now operating in 80 public schools
and put development programs in place to help
around the country, cumulatively influencing 5,788
improve the quality of life and provide livelihood
teachers and benefitting 151,526 students. Public
opportunities.
Elementary and High School Filipino students are transformed into 21st-century learners through
In accordance to ISO 26000, we constantly embed
unparalleled online connectivity and homeroom
shared value in our business model to create a Globe
teachers’ access to limitless teaching and learning
of Good. We respond to the following Sustainable
engagements available on the internet.
Development Goals of the UN through a wealth of The schools also enjoyed quality education content
overarching principles and practices:
from Mind Museum App and received a Globe Digital • •
•
•
Good Health and Well Being – Promoting sound
Laboratory package containing netbooks/tablets,
mental health and well-being
mobile projectors, printers, and sound systems, while
Quality Education – Helping ensure all youth and
over a thousand educational e-books apt for K-12
a substantial proportion of adults, both men and
learning are made available to more than 15 million
women, have achieved digital literary through
public elementary and high school students and
ICT training by 2030
some 500,000 teachers through GFSLibrary.com.
Decent Work and Economic Growth – Helping
Together with thousands of our postpaid customers,
achieve higher levels of economic productivity
we realized the creation of GFS in General Santos
through diversification, technological upgrading
City, allowing teachers and students to access 21st-
and innovation, including a thorough focus on
century learning within and beyond the classroom.
high-value added and labor-intensive sectors
For every approved iPhone 7 renewed contract,
Peace, Justice and Strong Institutions –
Globe made a donation to selected partner causes,
Contributing to national capacity to prevent
which included the GFS program. For this activity,
violence and crime, starting with our own workplaces and organizational jurisdiction •
Sustainable Cities and Communities – Making human settlements inclusive, safe, and resilient
2016 ANNUAL REPORT
85
Sustainable Livelihood
Global Filipino Schools Program Public schools Teachers Students
80 5,788 151,526
Through a partnership with San Francisco-based nonprofit organization Kiva, Globe provided crowdfunded loans to deserving micro-enterprises in the areas of agriculture, food, retail, and services in the Philippines. Leveraging on our SMS capabilities, GCash mobile money service and Globe Rewards, we made a difference in the lives of millions of local micro-entrepreneurs who are most in need of financial assistance. Kiva is also one of the beneficiaries of the Globe of Good bundle offered during the iPhone 7 launch. As a result, we were able
all proceeds went to General Santos City SPED
to generate P8,161,550 in revenues for Kiva’s micro-
Integrated School (GSCSIS) where one-fourth of
enterprises.
the 4,000 student population comprises of kids with special needs. The transformation of GSCSIS into
We also have ongoing ecotourism efforts that cater
a GFS not only benefits regular students but also
to communities involved in fisheries and aquatic
the special children who require online therapy and
resources. We have partnered with USAID to stage
learning engagements using ICT.
the first Fishackathon in the Philippines that aims to develop usable technology solutions to address the
DepEd also tapped Globe to be its official partner
glaring worldwide problem of overfishing.
for the Adopt-a-School (AAS) Program, which calls for private entities to assist public schools
Fishackathon 2016 was not our only initiative in
in infrastructure, health and nutrition, teaching
line with our sustainability advocacy to create a
skills and development, compute and science lab
#WonderfulPH through positive impact with the
equipment, and learning support.
use of modern technology. Similar programs include partnerships with: •
PUSOD, on the protection and enhancement of Taal Lake in the Batangas ecosystem;
•
Save Philippine Seas, on the protection of thresher sharks through the engagement and education of community stakeholders in Malapascua, Cebu;
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GLOBE TELECOM
•
•
Sangkalikasan Producers Cooperative, on the
the production and sourcing of eco-friendly natural
establishment of an environment hotline center
dyes and fibers and work with artisans in indigenous
in Boracay, Malay, Aklan; and
upland and rural communities, such as members
Casa San Miguel, on livelihood opportunities for
of the Mangyan Alangan, Mangyan Hanunoo and
those living along the coastal barangays of San
Mangyan Iraya from the island of Mindoro.
Antonio, Zambales. As a pilot year, we’ve partnered with the Department Our key ecotourism campaigns benefit sites such
of Social Welfare and Development (DSWD) to
as Taal Lake and the Cordilleras for low-impact
provide livelihood opportunities and create value
alternatives to commercial tourism and sustained
to Pantawid Pamilyang Pilipino Program (4Ps)
conservation of their respective ecosystems.
beneficiaries, out-of-school youths, and technical
Sustainable livelihood also rests on preserving
vocational graduates. At the end of the year,
the very fabric of our culture. We actively support
we oriented a total of 1,559 beneficiaries to be
collaborative programs such as the Indigo
Broadband Sales Agents from Regions 1, 7, 8, 9, 11
Project, which promotes the development and
and the National Capital Region (NCR).
implementation of ecological and social standards in the hand-woven textiles productions. We champion
2016 ANNUAL REPORT
87
We implement the same in certain localities. We have collaborated with the Davao City government to help improve its peace and order situation through the 0917-DUTERTE hotline, which receives calls and texts relating to the security concerns in the city. This accessible and easy-to-remember number for reporting security leads and information comes on the heels of the Davao bombing incident that left 14 dead and 70 injured in a night market in Davao City in September 2016.
Public Service We are also a proud partner of HOPELINE, a free We harness mobile and ICT solutions for the welfare
24/7 suicide hotline founded by the Natasha
of the public at large, from emergency response
Goulbourn Foundation (NGF) to echo mental health
to disaster preparedness and management. Globe
awareness and the grim reality of lives being lost to
recognizes that communication is a critical tool
suicide every 40 seconds. Responders for the hotline
for capacity building and an effective emergency
have been trained by psychologists and psychiatrists
response mechanism that is why we have been at the
to provide aid to callers. Globe and TM customers
frontlines of supporting 911 as the new nationwide
can call this hotline toll-free. In addition, we helped
emergency hotline number.
launch “Hope in 40 Seconds�, a 40-seconder animated digital video competition aiming to bring
We have also expedited the migration of our system
the sensitive issue of suicide (as well as cyber
to immediately enable transmission of SMS or text
bullying and its effects on mental health) to the fore.
messages through 8888, and have put in place regular voice charges plus an added P5 per call (when using the 911 hotline) as a way to discourage prank calls and compliance with the law. In addition, we provide inbound and outbound SMS accessibility for 2286 (BATO), an SMS hotline for the public to directly report incidents to the Philippine National Police.
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GLOBE TELECOM
Globe implemented its grassroots development program called TM Sports Para Sa Bayan in 7 key areas. The program utilizes sports to instill the importance of having good values, promote academic excellence and encourage a healthy lifestyle among the youth. In partnership with Astro Malaysia, Green Archers United, and Method Basketball Academy, Globe was able to train 718 participants coming from 53 cities and municipalities and 65 various sports organizations.12 kids were sent to Kuala Lumpur, Malaysia and 6 to Barcelona, Spain to undergo football training conducted by FCB Escola.
Disaster Risk Resilience and Management Disaster risk resilience and management are a
planning and implementation in our workplaces.
cornerstone of our public service roadmap. By 2020,
The Metro Manila Shakedown 2016 is a step
we seek to substantially increase the number of cities
towards cultivating a culture of preparedness for
and human settlements that adopt and implement
metro residents for a 7.2-magnitude earthquake.
integrated policies toward climate change mitigation
•
and resilience to disasters.
Sponsored the development of hazard maps for 54 out of 81 Philippine provinces, which will be used by Phivolcs to assist the provinces in their
Towards this end, we have actively pursued the following programs and partnerships:
disaster management plans. •
Reinforced Ayala ASSIST, an app that enables our Ka-Globe and other Ayala employees to easily
•
Partnered with the Metropolitan Manila
seek assistance during disasters. This makes it
Development Authority (MMDA) and the
easier to alert employees in times of emergency,
Philippine Disaster Recovery Foundation (PDRF),
for people managers to account for their staff,
the Philippines’ primary private sector vehicle
and to request for help.
for disaster management, to create a network
•
Joined six (6) telcos in 6 countries in accelerating
of support during disasters. We also internally
development to enhance the flow of crisis-
participate in the MMDA Shakedrill and Halalan
related information and equip the country’s
Task Force for prompt, proactive, and appropriate
disaster preparedness program to help minimize vulnerabilities when a calamity strikes. This is in line with the company’s commitment as a signatory to GSMA’s Humanitarian Connectivity Charter: http://www.gsma. com/mobilefordevelopment/wp-content/ uploads/2016/12/Charter_Principles_document. pdf
2016 ANNUAL REPORT
89
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GLOBE TELECOM
•
As prescribed by law, we take the lead in
in the event of a major incident or disaster.
transmitting text messages to warn our
Our business continuity protocols include activating
customers of potential dangers. In 2016, we sent
network redundancies that reduce the impact of
out 35 SMS blasts to various areas, from August
service disruption to our customers. For example, we
to December. This included those affected by
have installed generator sets for cell site towers to
Typhoon Lawin, which ravaged Northern Luzon
allow customers to use basic telecommunications
in October 2016, where we sent out 11 Lawin-
services such as calls and text messaging even
related SMS alerts to our customers in Cagayan,
during calamities and disasters. We are also able to
Apayao, Abra, Ilocos Norte, Mt. Province,
deploy Globe technical teams to restore our network
Kalinga, Ifugao, and Calayan Group of Islands
services as soon as weather permits. We likewise
at no cost to them. In December 2016, Globe
coordinate with our on-ground sales team, local
also started transmitting SMS alerts to warn
government units and various government agencies
customers in Catanduanes, Albay, Sorsogon, and
related to the deployment of relief operations, as
Northern Samar against dangers brought by
well as Libreng Tawag and charging stations, in areas
Typhoon Nina. The initiative is in coordination
affected by the typhoons.
with the National Disaster Risk Reduction and Management Council (NDRRMC). We continue
In addition, we have also taken steps to ensure
to support government initiatives in our network
network readiness during earthquakes. These include
to disseminate information for public safety and
enhancing network capacity in our core links that
security.
connect Metro Manila, and Northern and Southern Luzon to minimize service disruption; and setting
After becoming the first telecommunications
up high-capacity microwave links in one of our
company in the country to be re-certified in Business
low-risk areas. These contingencies will not only
Continuity Management System (ISO 22301) on
ease congestion, but also restore Globe call and
an enterprise-wide scale in 2016, we stepped up on
text services, and enable government emergency
the implementation of best practices on business
responders to conduct rescue operations.
resiliency to assure our customers and stakeholders that we are equipped to handle business disruptions
2016 ANNUAL REPORT
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GRI CONTENT INDEX GRI 102-55
PROFILE
Reporting Practice
Strategy
Ethics and Integrity
Governance
92
DISCLOSURE NUMBER
DISCLOSURE TITLE
SECTION
PAGE
102-1
Name of the organization
About Us
102-2
Activities, brands, products, and services
Forging Stronger Bonds Fuelling Growth of Enterprises Giving Delightful Surprises Making Life Easier Offering the Best in Entertaiment
102-3
Location of headquarters
About Us
4
102-4
Location of operations
About Us
4
102-5
Ownership and legal form
Governance
102-6
Markets served
About Us
102-7
Scale of the organization
People Make the Difference
76
102-8
Information on employees and other workers
People Make the Difference
76
102-9
Supply chain
At a Glance Creating a Globe of Good Governance
8 68 117
102-10
Significant changes to the organization and its supply chain
Governance
117
102-11
Precautionary Principle or Approach
Risk Management
142
102-12
External initiatives
Greening Globe People Make the Difference Building a Stronger Nation
102-13
Membership of associations
Memberships
102-14
Statement from senior decision-maker
Message from the Chairman Message from the President and CEO
102-15
Key impacts, risks, and opportunities
Risk Management
102-16
Values, priciples, standards, and norms of behavior
The Globe Purpose
102-17
Mechanism for advice and concerns about ethics
Governance
99 116 123
102-18
Governance structure
Governance
100 123 142
102-19
Delegating authority
Governance
100 142
102-20
Executive-level responsibility for economic, environmental, and social topics
Governance
100 142
102-21
Consulting stakeholders on economic, environmental, and social topics
Governance
100 123
102-22
Composition of the highest governance body and its committees
Governance
100 142
102-23
Chair of the highest governance body
Governance
100 142
102-24
Nominating and selecting the highest governance body
Governance
100 142
102-25
Conflicts of interest
Governance
94
GLOBE TELECOM
4 24 28 44 50 58
98 125 4
70 76 85 6 12 16 116 142 4
PROFILE
Governance
Stakeholder Engagement
Reporting Practice
DISCLOSURE NUMBER
DISCLOSURE TITLE
SECTION
PAGE
102-26
Role of highest governance body in setting purpose, values, and strategy
Governance
100 125
102-27
Collective knowledge of highest governance body
Governance
100 125
102-28
Evaluating the highest governance body’d, performance
Governance
100
102-29
Identifying and managing economic, environmental, and social impacts
Risk Management
140 142
102-30
Effectiveness of risk management purposes
Risk Management
140 142
102-31
Review of economic, environmental, Risk Management and social topics
140 142
102-32
Highest governance body’s role in sustainability reporting
Governance
108
102-33
Communicating critical concerns
Governance
108
102-34
Nature and total number of critical concerns
Governance
108
102-35
Remuneration policies
Governance
100
102-36
Process for determining remuneration
Governance
100
102-37
Stakeholders involvement in remuneration
Governance
100
102-38
Annual total compensation ratio
Governance
100
102-39
Percentage increase in annual total compensation ratio
Governance
100
102-40
List of stakeholder groups
Creating a Globe of Good: Discussion on Management Approach
68
102-41
Collective bargaining agreements
People Make the Difference: Collective Bargaining Agreement
66
102-42
Identifying and selecting stakeholders
Creating a Globe of Good: Discussion on Management Approach
68
102-43
Approach to stakeholder engagement
Creating a Globe of Good: Discussion on Management Approach People Make the Difference
68 76
102-44
Key topics and concerns raised
Creating a Globe of Good: Discussion on Management Approach
68
102-45
Entities included in the consolidated financial statements
Conglomerate Map
102-46
Defining report content and topic boundaries
Reporting Parameter Creating a Globe of Good: Discussion on Management Approach
68
102-47
List of material topics
Creating a Globe of Good: Discussion on Management Approach
68
102-48
Restatements of Information
People Make the Difference: Change in Engagement Score Disclosure in 2015
84
2016 ANNUAL REPORT
6
93
PROFILE
Reporting Practice
Management Approach
DISCLOSURE NUMBER
DISCLOSURE TITLE
SECTION
PAGE
102-49
Changes in reporting
None
0
102-50
Reporting period
Reporting Parameter
6
102-51
Date of most recent report
Reporting Parameter
6
102-52
Reporting cycle
Reporting Parameter
6
102-53
Contact point for questions regarding the report
Location - Inside Back Cover
0
102-54
Claims of reporting in accordance with the GRI Standards
Reporting Parameter
6
102-55
GRI context index
GRI content index
102-56
External assurance
Reporting Parameter
103-1
Explanation of the Material topic and its Boundary
Greening Globe People Make the Difference Building a Digital Nation Giving Delightful Surprises
40 70 76
103-2
The management approach and its components
Greening Globe People Make the Difference Building a Digital Nation Giving Delightful Surprises
40 70 76
103-3
Evaluation of the management approach
Greening Globe People Make the Difference Building a Digital Nation Giving Delightful Surprises
40 70 76
92 6
SPECIFIC DISCLOSURE PROFILE
DISCLOSURE NUMBER
DISCLOSURE TITLE
SECTION
PAGE
ECONOMIC
Economic Performance
201-1
Direct Economic value generated and distributed
At a Glance
Indirect Economic Impacts
203-1
Infrastructure investments and services supported
At a Glance Message of the President and CEO Building a Digital Nation
Procurement Practices
204-1
Proportion of spending on local suppliers
At a Glance
Anti-corruption
205-2
Communication and training about anti-corruption policies and procedures
Governance: Ethics and Integrity
8 8 16 40 8
116
ENVIRONMENT 302-1
Energy consumption within the organization
Greening Globe
73
302-2
Energy consumption outside the organization
Greening Globe
73
304-1
Habitats protected or restored
Greening Globe
70 86
305-1
Direct (Scope 1) GHG emissions
Greening Globe
73
305-2
Energy indirect (Scope 2) GHG emissions
Greening Globe
73
Energy
Biodiversity
Emissions
94
GLOBE TELECOM
PROFILE
Emissions Effluents and Waste
DISCLOSURE NUMBER
DISCLOSURE TITLE
SECTION
PAGE
305-3
Other indirect (Scope 3) GHG emissions
Greening Globe
73
305-5
Reduction of GHG emissions
Greening Globe
73
306-2
Waste by type and disposal method
Greening Globe
73
SOCIAL 401-1
New employee hires and employee turnover
People Make the Difference
77
401-2
Benefits provided to full-time employees that are not provided to temporary or part-time employees
People Make the Difference
77
403-1
Workers representation in formal joint management-worker health and safety committees
People Make the Difference
77
403-2
Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
People Make the Difference
77
403-4
Health and safety topics covered in formal agreements with trade unions
Occupational Health and Safety
80
404-1
Average hours of training per year per employee
Talent and Development
80
404-2
Programs for upgrading employee skills and transition assistance programs
Talent and Development
78
Diversity and Equal Opportunity
405-1
New employee hires and employee turnover
People Make the Difference
76
Local Communities
413-1
Operations with local community engagement, impact assessments, and development programs
Customer Health and Safety People Make the Difference Building a Digital Nation
74 77 38
Customer Health and Safety
416-1
Assessments of the health and safety impacts of product and service categories
418-1
Substantiate complaints concerning breaches of customer privacy and losses of customer date
Employment
Occupation Health and Safety
Training and Education
Customer Privacy
Customer Health and Safety
Customer Health and Safety
2016 ANNUAL REPORT
74
74
95
GOVERNANCE
96
GLOBE TELECOM
2016 ANNUAL REPORT
97
GOVERNANCE GRI 102-5
In 2016, Globe Telecom’s intense Corporate
Asia’s Best Companies for the year, Globe garnered
Governance (CG) campaigns and initiatives were not
“Most Committed to Corporate Governance”, “Best
without recognition. Globe was one of the Awardees
in Investor Relations” and “Best CEO: Ernest Cu”.
at the first Institutional Investors’ Governance Awards
We were also among the candidates in the Ethics
held on October 6 at the Manila Polo Club. We also
and Governance category at the ASEAN Corporate
rose to the top in Best Disclosure and Transparency
Sustainability Summit 2016 Awards.
for the Philippines and placed 4th in Best Overall Corporate Governance for the Philippines in the 2016
In addition to the CG awards and recognition, we
Asiamoney Corporate Governance Poll. The Asset
realize our strategic influence in the capital market
Corporate Awards also recognized us with a Platinum
and, thus, remain determined to further improve and
Award for Excellence in Governance, CSR, and
intensify our governance standards and practices to
Investor Relations. Among FinanceAsia’s awards for
sustain quality service and value for our subscribers
98
GLOBE TELECOM
and stakeholders. We proactively adopt policies and
Corporate Governance Scorecard (ACGS) to raise
practices that are beyond minimum requirements
CG standards and practices. We restructured our
of applicable laws and regulations, and persevere to
corporate website to enhance investor-friendliness
sustain good governance standards embedded in our
and the convenient access of information relevant
corporate culture and business conduct. We always
to shareholders and our various stakeholders. Other
strive to attain a balance between our aggressive
than business, products and services, we created
business environment and upholding a culture of
CG, IR and Sustainability pages in our website to
good governance.
cater to all our stakeholders. These pages contain disclosures and reports, corporate governance
The impact of global conditions and challenges
scorecard and report, press releases and an archive
further underscores the need to uphold Globe
thereof, as well as our corporate policies, charters
Telecom’s high standards of CG to strengthen
and manuals, vision, mission, core values, investor
our structures and processes. The thrust for a CG-
relations program, sustainability and corporate social
proactive business culture emanates from the top.
responsibility activities, among others. We ensure
As strong advocates of fairness, accountability,
that all information included in our company website
transparency and integrity in all aspects of the
are accurate, relevant and up-to-date.
business, our Board of Directors, the management, the officers, and all our employees commit to the
Our Articles of Incorporation and By-Laws maintain
principles and best practices of governance in the
the basic structure of CG while the MCG, charters,
attainment of corporate goals aligned with Globe
policies and Code of Conduct and Ethics act as
Telecom’s strategic direction.
supplements. These legal documents outline the core of our operational framework including the
Our CG practices are principally contained in our
principal duties of the members of the Board with
Articles of Incorporation and By-Laws, complemented
emphasis on the governance structure, composition,
by the Manual of Corporate Governance (MCG),
and diversity in the Board, ensuring that duties and
company policies, Committee charters, and our
responsibilities are performed in a manner that
Code of Conduct and Ethics. We are likewise in
safeguards the interests of the company and protects
full compliance with the Securities and Exchange
our stakeholders amidst an increasingly competitive
Commission’s (SEC) Code of Corporate Governance,
environment.
all listing rules of the Philippine Stock Exchange (PSE), and regulations issued by the SEC for
We revised our MCG and submitted it to the SEC
which an annual Certification of Compliance is
in May 2015 to comply with the SEC-mandated
issued and signed by our Compliance Officer and
provisions that highlight the protection of
countersigned by our President and CEO. This
stakeholders’ interests, among other CG principles.
Certification of Compliance is also posted on our
The same also reflected our strong adherence to best
company website’s CG page and included in this
CG standards and practices espoused in the ACGS.
Report (page 159). We also adopted the ASEAN
2016 ANNUAL REPORT
99
Our MCG will undergo further revisions and updates
We also continued to reach out to our internal
in 2017 to align with the provisions identified in SEC
stakeholders to promote awareness and share
Memorandum Circular No. 19, Series of 2016 or the
internal expertise through our Attorney At Iba Pa
Code of Corporate Governance for Publicly-Listed
(AttyATBP) in November. The CLSG held its second
Companies.
AttyATBP at The Globe Tower office activity area, an initiative that extends corporate and legal services
We understand that governance is beyond regulatory
out of the day-to-day contracts, court hearings and
compliance, reports, and disclosures. We believe that
reports into contributing to the practical needs of
CG’s relevance is most evident when its standards
employees. AttyATBP was a whole-day event that
and practices are embedded in business culture and
brought the services of various government agencies
that having governance integrated in our business
to all Globe employees. There were also plenary
operations is a journey that we chose to invest time
discussions and actual legal consultation open to all
and effort in. We recognize that good governance
Globe employees. Through these kinds of activities,
standards must be present and experienced outside
Globe Telecom is able to extend accountability,
and inside the company such that the principles
sustainability and care to its employees and
of fairness, transparency, integrity, sustainability
communities that surround it. We will continue to
and accountability should also be experienced
sustain these initiatives.
among employees. As such, internal campaigns to bolster awareness and appreciation for CG were
BOARD OF DIRECTORS
developed by collaborations of our Compliance and
GRI 102-18, 102-19, 102-20, 102-21, 102-22, 102-23,102-24,
Governance team, under the Corporate and Legal
102-26, 102-27, 102-28, 102-35, 102-36, 102-37, 102-38, 102-39
Services Group (CLSG), with the Internal Audit, Investor Relations and Corporate Communications
KEY ROLES AND RESPONSIBILITIES
groups in 2016. These collaborations came to fruition through several videos that highlighted the various
Our Board of Directors is our highest governance
elements of CG – stakeholder engagement, investor
body. It establishes our company’s vision, mission,
relations, transparency, sustainability, accountability
and strategic direction, as well as monitor the
and integrity, among others. These videos were
implementation of the corporate strategy and the
disseminated and shown through the monitors of
overall corporate performance of the company to
our office’s public lounges and sent to all employees
ensure transparency, accountability, integrity and
through our internal corporate communication
fairness, and to protect the long-term interests of
channels to encourage understanding and a better
our stakeholders. The Board, through its various
sense of appreciation for CG. Some of the videos are
committees, also oversees and conducts a review
also available in our company website and official
of our overall risk management systems, and our
social media channels.
material controls, covering operational, financial, and compliance areas. Finally, it approves operating expenses and capital budgets, major acquisitions and
100
GLOBE TELECOM
disposal of assets, major investments, and changes
As part of our CG best practices and in
in authority and approval limits. In 2016, we updated
implementation of our board diversity policy in the
our mission, vision, and values as well as reviewed
workplace, we have at least one female independent
our business strategies to reinforce our commitment
director in the Board. None of our independent
to our purpose as a sustainable business for our
directors serve in more than five boards of publicly
customers and stakeholders.
listed companies and have served the company in the same capacity for more than nine years1. Our
The thrust for a CG proactive business culture
executive director does not serve any other publicly-
emanates from the top. The Board of Directors,
listed company’s board.
as part of its functions and responsibilities, leads, develops and reviews Globe strategic direction
The board members are highly qualified and have
and business strategies regularly. The Committees
the ability to thoroughly examine issues and matters
created to support Board functions serve as venues
that affect the company. Prior to election, the
to discuss business strategies and Globe strategic
Nomination Committee, chaired by an independent
direction, among other business matters, in relation
director, reviews the qualification of each member.
to the specific responsibilities of each Committee.
As necessary, we may use professional search firms
Management is entrusted with implementation
or other external sources of candidates (such as
and close monitoring of Board-approved business
director databases set-up by director or shareholder
strategies, and is likewise tasked to conduct Globe
bodies) when searching for candidates to the Board
business with the highest CG standards and conduct.
of Directors. Furthermore, as stated in our Board diversity policy, no director or candidate for director
BOARD COMPOSITION
shall be discriminated upon by reason of gender, age, disability, ethnicity, nationality or political,
Eleven board members are elected and hold
religious, or cultural backgrounds. As such, we have
office for the ensuing year until the next annual
a very diverse mix of directors from different ethnic
stockholders’ meeting (ASM). The President and CEO
backgrounds and nationalities with professional
is elected as the sole executive director while the
backgrounds and experience in various industries
other members as non-executive directors who are
other than the telco industry such as accounting
not involved in the day-to-day management of business.
and audit, sales and marketing, network operations,
Among the board members are three independent
IT solutions, customer and services management,
non-executive directors. Our independent directors,
corporate governance and strategic planning,
as defined in our MCG, are independent of the company, from management and major/substantial shareholders and are free from any business or relationship that could materially interfere in their exercise of independent judgment in carrying out their responsibilities as directors.
1 SEC Memorandum Circular No. 9, Series of 2011 sets the term limit for independent directors, effective January 2, 2012. This is followed by SEC Memorandum Circular No. 19, Series of 2016. As such, all of Globe Telecom’s independent directors remain qualified to serve the company in the same capacity.
2016 ANNUAL REPORT
101
as well as educational backgrounds that include
as directors. Meanwhile, our executive director
biochemistry, business administration, marketing and
does not receive per diem remuneration in addition
finance, metallurgical engineering, and mathematical
to his remuneration as part of the Globe Senior
sciences, among others. Our directors’ profiles are
Management in his role as the President and CEO.
included in this report as well. The following non-executive directors of the Board
BOARD REMUNERATION
received gross per diem remuneration for attending
GRI 102-35, 102-36, 102-37, 102-38, 102-39
board and committee meetings in 2016:
The Board’s remuneration is set at an optimum
DIRECTOR
level to attract and retain high caliber directors
GROSS PER DIEM REMUNERATION (IN P)
Jaime Augusto Zobel de Ayala
2,400,000.00
Mark Chong Chin Kok
2,700,000.00
Fernando Zobel de Ayala
2,600,000.00
Delfin A. Lazaro
1,800,000.00
Samba Natarajan
3,500,000.00
Jose Teodoro K. Limcaoco*
1,700,000.00
Romeo L. Bernardo
2,400,000.00
Globe Telecom’s directors receive P200,000 per
Rex Ma. A. Mendoza
2,300,000.00
diem remuneration for every board meeting and
Manuel A. Pacis
2,000,000.00
stockholders’ meeting attended. This rate was based
Saw Phaik Hwa
2,000,000.00
on a benchmark study against industry rates as well
Gerardo C. Ablaza Jr.*
who continuously and effectively deliver services. In accordance with the company’s By-Laws, the Board shall receive, pursuant to a resolution of the stockholders, fees and other compensation for their services as directors and members of committees of the Board of Directors.
as a previous study in 2010 to standardize the pay of Board of Directors across the Ayala Companies.
Total
23,600,000.00
Mr. Ablaza was a Director until April 13, 2016, while Mr. Limcaoco was elected as Director on April 13, 2016. *
The per diem remuneration of directors remains at P100,000 for every committee meeting attended or such meetings other than those mentioned above. Our stockholders ratified this resolution at our regular ASM in April 2014. Our directors, including the independent non-executive directors, do not receive options, performance shares or bonuses other than their per diem remuneration
102
200,000.00
GLOBE TELECOM
Globe Telecom Board of Directors DIRECTOR
POSITION
NATURE OF APPOINTMENT
Jaime Augusto Zobel de Ayala
Chairman
Non-Executive
Fernando Zobel de Ayala
Co-Vice Chairman
Non-Executive
Mark Chong Chin Kok
Co-Vice Chairman
Non-Executive
Ernest L. Cu
Director, President and CEO
Executive
Delfin L. Lazaro
Director
Non-Executive
Samba Natarajan
Director
Non-Executive
Romeo L. Bernardo
Director
Non-Executive
Jose Teodoro K. Limcaoco
Director
Non-Executive
Manuel A. Pacis
Independent Director
Non-Executive
Rex Ma. A. Mendoza
Independent Director
Non-Executive
Saw Phaik Hwa
Independent Director
Non-Executive
Globe Telecom Key Officers NAME
POSITION
Ernest L. Cu*
President and CEO
Alberto M. de Larrazabal
Chief Commercial Officer (CCO)
Rosemarie Maniego-Eala
Chief Finance Officer (CFO), Treasurer and Chief Risk Officer (CRO)
Carmina J. Herbosa
Chief Audit Executive (CAE)
Gil B. Genio
Chief Technology and Information Officer (CTIO), and Chief Strategy Officer (CSO)
Maria Aurora Sy-Manalang
Chief Information Officer (CIO)
Rebecca V. Eclipse
Chief Customer Experience Officer (CCEO)
Renato M. Jiao
Chief Human Resource Officer (CHRO)
Vicente Froilan M. Castelo
General Counsel
Bernard P. Llamzon
Executive Vice President of Consumer Sales
Solomon M. Hermosura
Corporate Secretary
Marisalve Ciocson-Co
Compliance Officer, Assistant Corporate Secretary, and Vice President of Law and Compliance
Globe Telecom Consultants** NAME
POSITION
Daniel James Horan***
Senior Advisor for Consumer Business
Robert Tan
Chief Technical Advisor
Member, Board of Directors Atty. Rodolfo A. Salalima ceased to be our Chief Legal Counsel and Senior Advisor effective June 30, 2016. Mr. Horan will cease to be our Senior Advisor for Consumer Business effective June 01, 2017.
*
**
***
2016 ANNUAL REPORT
103
BOARD MEETINGS AND ATTENDANCE
The average attendance rate of members of the Board was 96 percent, which is more than compliant
The Board receives board documents containing
with the SEC’s minimum attendance requirement
reports on the company’s strategic, operational,
of 50 percent. All of our independent directors were
and financial performance, and other regulatory
present in all board meetings in 2016.
and relevant matters, at least seven business days in advance of the board meetings. The Board has access to the Corporate Secretary who acts as adviser to directors regarding their responsibilities and obligations, and oversees the flow of information prior to meetings. Discussions with independent views during meetings are encouraged, given due consideration and properly documented through the minutes of meetings. Board meetings are scheduled before the start of the financial year and the schedule is posted on our company website. The non-executive directors also meet separately at least once during the year without any executives present. In 2016, our Board of Directors had a total of seven board meetings. Attendance of each director in board meetings held in 2016 is enumerated below:
Globe Telecom Board of Directors 2016 Board Member
Meetings Attended
Meetings held
Percent Present
Jaime Augusto Zobel de Ayala
7
7
100%
Mark Chong Chin Kok
7
7
100%
Fernando Zobel de Ayala
7
7
100%
Ernest L. Cu
7
7
100%
Romeo L. Bernardo
6
7
86%
Samba Natarajan
7
7
100%
Delfin L. Lazaro
5
7
71%
Jose Teodoro K. Limcaoco*
5
5
100%
Manuel A. Pacis
7
7
100%
Rex Ma. A. Mendoza
7
7
100%
Saw Phaik Hwa
7
7
100%
Mr. Limcaoco was elected as Director on April 13, 2016.
*
104
GLOBE TELECOM
BOARD COMMITTEES
All the Committees have their own charters that are aligned with the objectives and responsibilities of
The Board may create committees as it deems
each Committee. Risk management is a responsibility
necessary, in accordance with the company By-Laws
shared by all Board Committees. Therefore, each
and MCG, to support it in the performance of its
Committee is responsible for identifying and
functions and to aid in CG. Currently, there are five
addressing risk areas and factors that are relevant to
Board Committees.
the duties, functions and objectives of the respective Committee.
BOARD COMMITTEE
Executive
ROLE
MEMBERS
Provides guidance to management in (a) formulating the basic strategies for achieving targets set by the Board; (b) putting in place the infrastructure for control and operational risk management systems that assess risks on an integrated cross-functional approach, and review and assess the adequacy of Globe Telecom’s operational risk management process, specifically on strategic, technology, and operational risk, jointly with Management. This function shall include receiving from Senior Management periodic information on risk exposures and risk management activities; (c) considering and/or completing mergers, acquisitions and strategic investments; and (d) undertaking strategic projects and significant transformation initiatives that include corporate governance campaign and sustainability programs.
Audit
Provide assistance to the Board of Directors in fulfilling its oversight responsibility to the shareholders relating to: • the integrity of the financial statements and the financial reporting process and principles; • internal controls; • the qualifications, independence, remuneration, and performance of the independent auditors; • staffing, focus, scope, performance, and effectiveness of the internal audit function; • risk management; and compliance with legal, regulatory, and corporate governance requirements • functions as separate level risk committee
Compensation and Remuneration
Assists the Board of Directors in governance matters relating to compensation and benefits of Directors, Key Officers, and personnel of the Corporation.
Chairman: Jaime Augusto Zobel de Ayala Members: Mark Chong Chin Kok, Jose Teodoro K. Limcaoco*, Ernest L. Cu and Samba Natarajan
Chairman (Independent Director): Manuel A. Pacis Members (Independent Directors): Saw Phaik Hwa and Rex Ma. A. Mendoza
Chairman (Independent Director): Rex Ma. A. Mendoza Members: Fernando Zobel de Ayala, Romeo L. Bernardo and Mark Chong Chin Kok
Mr. Limcaoco was elected Director on April 13, 2016.
*
2016 ANNUAL REPORT
105
The Committee shall have the following functions: (a) It shall be responsible for installing and maintaining a process to ensure that all directors to be nominated for election at the next Annual General Stockholders’ Meeting have the qualifications and none of the disqualifications for directors stated in the Company’s By-Laws, Manual of Corporate Governance and in relevant laws, rules and regulations. (b) It shall encourage the selection of a mix of competent directors, each of whom can add value and create independent judgment as to the formulation of sound corporate strategies and policies. (c) It shall preview and evaluate the qualifications of all persons nominated to positions in the corporation, which require appointment by the Board.
Nomination
Oversees the Corporation’s financial policy and strategy, including capital structure, dividend policy, acquisitions and divestments, treasury activities, tax strategy and compliance, retirement fund contributions, and financing proposals brought to the Board for approval.
Finance
Chairman (Independent Director): Rex Ma. A. Mendoza Members (Independent Directors): Manuel A. Pacis and Saw Phaik Hwa
Chairman: Delfin L. Lazaro Members: Fernando Zobel de Ayala, Romeo L. Bernardo and Samba Natarajan
The attendance of the board members in their respective Committee meetings is enumerated below: TOTAL MEETINGS
10
BOARD COMMITTEE
Executive
5
Audit
2
Compensation and Remuneration
2
11
Nomination Committee
Finance Committee
MEMBERS
PRESENT
ABSENT
Jaime Augusto Zobel de Ayala Mark Chong Chin Kok Jose Teodoro K. Limcaoco* Ernest L. Cu Samba Natarajan Gerardo C. Ablaza, Jr.**
10 10 7 10 10 1
2
Manuel A. Pacis Saw Phaik Hwa Rex Ma. A. Mendoza
5 5 5
-
Rex Ma. A. Mendoza Fernando Zobel de Ayala Mark Chong Chin Kok Romeo L. Bemardo
2 2 2 1
1
Rex Ma. A. Mendoza Manuel A. Pacis*** Saw Phaik Hwa*** Mark Chong Chin Kok*** Romeo L. Bernardo*** Gerardo C. Ablaza, Jr.**
2 1 1 1 1 1
-
Delfin L. Lazaro Romeo L. Bernardo Fernando Zobel de Ayala Samba Natarajan
8 10 10 11
3 1 1 -
Mr. Limcaoco was elected Director on April 13, 2016. Mr. Ablaza was a Director until April 13, 2016. Mr. Chong Chin Kok and Mr. Bernardo were members of the Nomination Committee until April 13, 2016. Mr. Pacis and Ms. Saw became members of the Nomination Committee on April 13, 2016.
*
**
***
106
GLOBE TELECOM
BOARD PERFORMANCE
In 2016, the non-executive directors met, without our executive director and management, to discuss key
Our Board of Directors, together with management,
issues facing the company.
fully understand that the corporate governance proactive culture begins with leaders of the company.
TRAINING AND CONTINUING EDUCATION PROGRAM
Apart from compliance with internal policies and procedures, the Board of Directors performs an
To execute their roles well, training on CG is given
annual self-assessment exercise to assess their
to directors prior to assuming office. This is also
individual and collective performance as well as their
institutionalized in our MCG. The Board, together
co-directors’ and management’s. The self-assessment
with the key officers, also actively attend training
exercise is done through a self-assessment
programs annually to keep abreast of updates in
questionnaire given to each director to ensure the
CG standards and relevant discussions to support
effectiveness of their governance, to reflect on the
their leadership roles in Globe Telecom. On
performance of top management including the
March 8, members of the Board and key officers
President and CEO, to highlight specific strengths,
participated in the CG Summit conducted by the
and to identify areas of improvement. It also provides
Ayala Group in collaboration with the Institute of
a venue for the board members to identify priorities
Corporate Directors (ICD) in compliance with the
for the Board and the company for the succeeding
SEC directive for all key officers and members of
year. The assessment is comprised of appraisal of the
the Board of publicly-listed companies to attend a
Board, of individual directors, of the different Board
program on CG. Other directors attended various
Committees, as well as of the management. The
CG seminars conducted by SEC-accredited CG
questionnaire covers a thorough evaluation criteria
training providers later during the year, including
focusing on structure, efficiency, and effectiveness
an in-house CG seminar conducted by Risks,
of the Board, participation and engagement of
Opportunities, Assessment and Management
each Board member, contribution of each Board
(ROAM) last December 5. Discussions on topics
member to their respective Committees as well
during these seminars included the SEC Annual
as the performance of management. The criteria
Corporate Governance Report (ACGR), updates on
also reflect the specific duties, responsibilities, and
the ACGS, and the new SEC 2016 Code of Corporate
accountabilities of each Board member assessed
Governance, among others. These seminars also
according to our strategic direction and business
provide a venue for directors and key officers to learn
strategies as provided in the company By-Laws,
about other CG cases relevant to Globe Telecom’s
Manuals, Charters and governing policies. The self-
business.
assessment exercise is facilitated by our Compliance Officer. An annual executive session also takes place dedicated to evaluating and discussing matters concerning the Board, including evaluating the company’s performance and an independent review of its management team.
2016 ANNUAL REPORT
107
The attendance of our Board and key officers to the
approved in accordance with the company’s limits
CG training programs and seminars are properly and
of authority and by the CEO prior to endorsement to
timely disclosed to the SEC, PSE, PDEx, and posted
the Board for approval. Our Consultants also provide
on our company website.
inputs to the Senior Management as required. They all meet at least once a week.
There is likewise an annual strategy workshop held at at the beginning of the year to discuss the strategic
Management is mandated to provide complete and
direction of the company for the entire year.
accurate information on the operations and affairs of the company in a timely manner. Management
MANAGEMENT
is also required to prepare financial statements for each preceding financial year in accordance with
GRI 102-32, 102-33, 102-34
Philippine Financial Reporting Standards (PFRS). The President and CEO is accountable to the Board
Management’s statement of responsibility with
for the development and recommendation of
regard to the company’s financial statements is
strategies, and the execution of the defined strategic
included in this annual report.
imperatives. The President and CEO is assisted by the Senior Management.
To monitor and report on the environmental, sustainability and social impacts of the business
The Office of Strategy Management (OSM) reports to
operations, our Chief Sustainability Officer (CSO),
the President and CEO and oversees the company’s
Ms. Ma. Yolanda C. Crisanto, was appointed in
strategy management processes from strategy
2015. Concurrently, our CSO is also the Senior Vice
formulation to execution and performance tracking
President of our Corporate Communications Group
linked to the company’s rewards system.
who reports directly to the President and CEO and is part of senior management. Meanwhile, our
We review and formulate our strategic priorities
Data Privacy Officer (DPO), Mr. Anton Reynaldo M.
annually, which then guide the formulation of the key
Bonifacio, reports directly to our CTIO to uphold
business strategies and goals for the year. Using the
responsibilities aligned with the Data Privacy Act
balanced scorecard framework, each business group
or Republic Act No. 10173. Apart from economic
identifies financial and non-financial objectives,
aspects, environmental and social aspects are
and sets targets and initiatives to achieve them as
reviewed by our CSO yearly as well. Our CSO
reflected in the groups’ Terms of Reference (TOR).
communicates sustainability concerns and initiatives
To ensure line of sight, the group TORs are cascaded
from the management to our Board through the
to all employees, making sure that everyone
President and CEO, who empowers our advocacy
understands and appreciates their contribution to
for sustainability and CG. Our sustainability report,
the group goals.
included in this Annual Report, discusses these aspects, concerns and initiatives.
Key programs, projects, and major organizational initiatives are taken up by our Senior Management, composed of the President and CEO, and the heads of each major business units and support groups. All budgets and major capital expenditures must be
108
GLOBE TELECOM
CORPORATE OBJECTIVES
REMUNERATION OF EXECUTIVE DIRECTOR AND SENIOR MANAGEMENT
Globe disrupted the telco arena through transformative customer experiences, from
Our remuneration philosophy, policy and framework
enhancement in our self-service channels to
are designed to attract, retain and engage talents.
expansion of the Globe GEN3 stores that delivered
These are developed to support the business
relevant value in previous years. Our GEN3 stores
strategies and enhance value of the organization.
changed the seemingly transactional mobile retail
Our policy specifies the relationship between
landscape into a hub that not only features the
remuneration and performance, including but not
latest Globe offerings, but also an interactive space
limited to, specific financial and non-financial metrics.
for customers to be fully immersed in the different facets of digital lifestyle and introduce retail
•
We encourage and nurture a strong
transformation. We will continue developing and
performance-oriented culture; recognize and
launching more of these stores nationwide in 2017.
reward talents who demonstrate and create
Our customers and stakeholders can also expect
value for the organization
us to use these stores to continue enhancing our
•
We position ourselves as a preferred employer in
brand, through our apparel, digital connectors and
providing compelling total rewards experience
our digital lifestyle products with our robust cadre of
encompassing continuous learning and
content partners.
development; competitive and market-driven compensation; pay for performance; and core
We continue to envision a strong business by further
and innovative benefits to meet personal and
strengthening digital lifestyle products and services
family needs.
as we anticipate continued growth of consumers in the mobile space. To create a wonderful world
In order to support our rewards philosophy, our
for our people, business, and nation, we will also
targeted reward strategies are as follows:
continue to collaborate with partners in developing e-governance and develop infrastructure to optimize
•
Adopt a total rewards approach, using both the
the quality of our services and enhance the coverage
tangible and intangible aspects of rewards to
of our network. Our announcement last March
drive the Globe employment experience;
reiterated our goal to deploy fiber optic cables in
•
20,000 barangays in the Philippines to provide faster and more reliable internet access in about
Market driven to attract and retain top talent in the business;
•
Operate on a single-platform-differentiated-
2 million homes nationwide. This infrastructure build
application approach to accommodate different
is expected to take 5 years and will extend network
talent segments;
coverage to more areas that currently require stable
•
connectivity services. We look forward to launching new product and service in 2017, building more cell sites and establishing fiber-optic technology that
Promote relevant reward programs that will be sensitive to employee lifecycles and experiences;
•
Practice transparency, clarity, and consistency in our reward delivery.
supports this thrust towards enabling public wireless
Annual remuneration reviews are conducted
connectivity as well as quality connection in more
considering the company, business unit and
Filipino households.
individual performance. It is also reviewed visà-vis market rates and our financial capability is
2016 ANNUAL REPORT
109
considered for any incentive payout. Performance
executive brings into the company. The Year-on-Year
evaluations for Senior Management are made
increases determined by individual performances,
according to these considerations.
prevailing market rates on annual salary increases, pay positioning, economic indicators, and Globe
Current remuneration initiatives allow for certain
Telecom’s financial capabilities
incentives to be withheld in any year should an executive fail to meet performance requirements
Benefits
or be involved in any misconduct and are given a disciplinary action resulting to suspension or
We provide benefits that are consistent with
demotion. The implementation of this policy is
local market practice and that are relevant to
subject to certain terms and conditions that include,
meet the personal and family needs of the Senior
but are not limited to, the findings from internal
Management. Included here are medical benefits
investigations and assesments on the misconduct
for in-patient and out-patient care, life insurance,
or violation against comapany policies or applicable
retirement benefits, club membership, and car and
laws and timing of the misconduct or investigations
car-related expenses.
within the year.
Short -Term Incentives (Performance Bonus) REMUNERATION COMPONENTS The short term incentive plan is Globe Telecom’s The remuneration structure of the Senior
Variable Pay Program for non-sales, non-unionized
Management is composed of four main components
employees. The incentive is determined by the
– Fixed Remuneration, Benefits, Short Term
achievement of performance targets that are set at
Incentives (Performance Bonus), and Long Term
the beginning of the performance year. It considers
Incentives. The structure is designed such that the
delivery of corporate, business unit, and individual
variable component increases as the executive
performance targets that are defined annually. This
moves up in our corporate ladder. This only applies to
is usually paid out to employees within the second
our employees as our Board of Directors receive per
quarter of the year following the confirmation of all
diem remuneration approved by our shareholders.
performance targets and individual performance.
Fixed Remuneration
Corporate and Business unit targets are financial/ operational targets set in order to support the
The fixed remuneration is composed of the base
overall business goals and thereby increasing our
salary and is reflective of the value of the role in the
value as a company. This incentive plan drives us
prevailing market and the value of the role compared
to work together towards achieving common goals
to the other roles in Globe Telecom. Other factors
and encourages performance in the company. The
that come into play in the base salary are individual
award size for this incentive is differentiated by the
performance, qualifications, experience that the
employee’s level such that higher incentive multiple is at stake as the Senior Management moves up the organization.
110
GLOBE TELECOM
Long Term Incentive Plan
ACCOUNTABILITY AND AUDIT
The new Long Term Incentive Plan was created
It is the policy of Globe to constitute and maintain
to replace the Employee Stock Option which was
an Audit Committee that shall provide assistance
last awarded in 2009. The new plan’s primary
to the Board of Directors in fulfilling their oversight
objective is to drive long term performance in a
responsibility to the shareholders relating to: a) the
highly competitive market by aligning management
integrity of the financial statements and the financial
interest with the shareholders’ interest. It also aims
reporting process and principles; b) internal controls;
to motivate participants to sustain high levels of
c) the qualifications, independence, remuneration,
contribution. Furthermore, it is designed to attract
and performance of the independent auditors; d)
and retain key executives whose contributions
staffing, focus, scope, performance, and effectiveness
are essential to Globe Telecom’s growth and
of the internal audit function; e) risk management;
profitability through a rewards scheme that fosters
and f) compliance with legal, regulatory, and
a sense of genuine loyalty among employees and
corporate governance requirements. The Audit
belongingness within the Globe community thereby
Committee Charter approved by the Board defines
retaining these talents even after payouts are given
clearly the roles and responsibilities of the Audit
out. Lastly, the plan should propel shareholder value
Committee. Management, however, has primary
through superior business performance driven by
responsibility for financial statements and reporting
happy and satisfied employees.
process, internal controls, legal and regulatory compliance, and risk management.
The incentive is delivered through a performance share-based plan where it awards executives with
The Audit Committee is composed of three
company shares contingent upon the achievement
independent and non-executive directors, all of whom
of specified long-term goals over a specified
are appointed by the Board. As such, an independent
performance period.
director also chairs the Audit Committee.
The Plan allows for overlapping performance periods
The Audit Committee meets at least four times
to support rolling multi-year business plans and
during the year and invites the President and CEO,
employee retention. It has a 3-year performance
CFO and concurrently the Treasurer and CRO,
period to support business planning cycle covering
independent auditors, internal auditors, and other
January 1, 2014 to January 1, 2016.
members of management, as needed based on the meeting agenda. During these meetings:
To ensure alignment of Senior Management’s
•
The Committee reviews the financial
interest to that of the company, the plan includes
statements and all related disclosures and
a stock ownership requirement where the Senior
reports prepared and presented by the CFO
Management are required to maintain shares
and released to the public and/or submitted
equivalent to 75 percent to 100 percent of their
to the SEC for compliance with both the
annual base salary.
internal financial management handbook and pertinent accounting standards, including
2016 ANNUAL REPORT
111
regulatory requirements. The Committee,
audit services performed by the independent
after its review of the quarterly unaudited
auditors; and the corresponding audit fees vs.
and annual audited consolidated financial
non-audit fees paid to the independent auditors,
statements of Globe Telecom and Subsidiaries,
in relation to the SEC regulation on “permitted”
including key audit matters, endorses these to
vs. “not permitted” services to be rendered by
the Board for approval. The Board of Directors,
independent auditors and the significance of
in turn, reviews, approves and affirms the true
the fees to the total service revenues of the
and fair representation of the annual audited
independent audit firm and the company’s total
consolidated financial statements and presents
consultancy expenses, respectively.
the same in the ASM. • •
The Committee reviews Globe Internal Audit’s
The Audit Committee also approves the work
activities, staffing, organizational structure and
plan of Globe Internal Audit (IA), as well as the
changes in their work plan, and assesses the
overall scope and work plan of the independent
effectiveness of the internal audit function.
auditors. The Committee meets with the internal auditors and independent auditors to
•
The Committee reviews the results of
discuss the results of their audits, ensuring that
management’s annual risk assessments based on
management is taking appropriate corrective
reports provided by CRO covering information on
actions on internal control issues and areas for
risk exposures and risk management activities,
improvement in a timely manner.
and as supported by results of internal audit reviews.
•
The Committee ensures tenders for independent audit services are conducted on a regular basis. The
•
The Committee reviews and discusses with the
Audit Committee recommends the appointment,
management, the internal auditors and the
retention or discharge of the independent
independent auditors; and reports to the Board
auditors, reviews and recommends audit fees or
of Directors, on an annual basis, the adequacy
the remuneration of the independent auditors
and effectiveness of the company’s internal
to the full Board. The Board, in turn, submits the
controls system and risk management systems,
appointment of the independent auditors and
in all material respects.
audit fees for approval of the stockholders at the ASM. The amount of audit fees is disclosed in this
The collective responsibility over our risk
Annual Report.
management oversight rests with the Board of Directors. To delineate the scope of such
•
112
On an annual basis, the Committee reviews the
responsibility, the various Board Committees are
independent auditors’ performance and assesses
designated with oversight function on specific risks.
the independent auditor’s qualifications, skills,
The Executive Committee has oversight on corporate
resources, effectiveness, and independence.
strategic risks, technology, and operational risk
To limit the possible risk of conflict of interest,
management, putting in place the infrastructure for
the Committee also reviews and approves in
risk management systems that assess risks on an
advance, the proportion of audit services vs. non-
integrated cross-functional approach; reviews and
GLOBE TELECOM
assesses the adequacy of our strategic, technology,
also reviews and assesses the adequacy of its
and operational risk management processes, jointly
Charter annually, seeking Board approval for any
with Management. The Finance Committee oversees
amendments. The most recent Charter review was
our financial risk management, including risks related
done during the 2016 year-end Audit Committee
to capital structure, acquisitions and divestments,
meeting and the Audit Committee approved the
treasury activities, tax strategy and compliance.
retention of the existing Audit Committee Charter
The Audit Committee provides oversight of the
(as amended and approved by the Board on February
financial reporting and operational risks specifically
4, 2015) until the next scheduled review in Q2 2017
on financial statement and reporting, internal
in compliance with the new SEC Code of Corporate
controls, legal or regulatory compliance, corporate
Governance.
governance, risk management and fraud risks. The CRO provides the Audit Committee with periodic
In compliance with our MCG, SEC Memo Circular No.
reports on risk exposures and risk management
4 (Series of 2012), and aligned with the ACGS and
activities by management, while Globe Internal Audit
the SEC Revised Code of Corporate Governance, the
provides assurance on the effectiveness of the risk
Committee conducts an annual assessment of its
management system and processes.
performance to benchmark its practices against the expectations set out in the approved Charter. The
The Board designated the Audit Committee as
results of the self-assessment and any ensuing action
the overall risks aggregator for all of the Board
plans to ensure that the Committee will continue
Committees enabling an integrated approach to
to meet Board’s, management’s, and shareholders’
an enterprise-wide risk management oversight at
expectations are reported to the Board.
Board level and a coordinated view of risks across the enterprise. The Audit Committee reports regularly
On annual basis, our President and CEO, CFO, and
to the Board of Directors on our risk management
CAE provide a written certification to the Audit
efforts providing the Board with a more collaborative
Committee confirming the reliability of financial
and effective review of risks across the company and
statements for the year; full compliance with
assurance over our overall risk management, that
financial and corporate governance regulatory
aids the Board in making strategic decisions for the
requirements and reporting; and attesting that the
company.
company has sound internal controls and compliance system in place.
With guidance provided by the Board, management remains primarily responsible for the development of
INTERNAL AUDIT
the design and implementation of risk management plans and frameworks, policies and systems intended
An Internal Audit function is established as a
to address the identified risks.
fundamental part of Globe Telecom’s CG practices.
The Audit Committee reports after each meeting and
An Internal Audit Charter, adopted by the Audit
provides a copy of the minutes of its meetings to the
Committee/Board, establishes the purpose, authority,
Board.
responsibility, organizational structure, and reporting relationships of the internal audit function.
To ensure compliance with regulatory requirements and assess the appropriateness of the existing Charter for enabling good CG, the Committee
2016 ANNUAL REPORT
113
Internal Audit is a service, providing an independent,
continuously improves the internal audit operating
objective assurance and consulting function within
process and standards and ensures strict compliance
Globe, and sharing our common goal of adding value
with International Standards for the Professional
for our stakeholders through a systematic approach
Practice of Internal Auditing (the Standards) and
in evaluating the effectiveness of governance, risk
global best practices. Additional responsibilities
management, control processes after consideration
include, among others, strengthening leadership and
of objectives, strategies and risks. Globe Internal
talent bench, uplifting performance management
Audit provides reasonable assurance to the
and managing internal costs.
Board, management and the stockholders on the integrity of the financial statements and financial
Globe IA maintains, reviews, and assesses the adequacy
reporting processes and principles against material
of its Charter annually to ensure conformance with
misstatements; effectiveness and appropriateness
the Standards and appropriateness for enabling good
of internal controls on the safeguarding of assets,
CG. The result of the periodic assessment and any
operations, and information systems; and compliance
arising revisions are communicated and approved by
with laws, rules and regulations.
the Audit Committee.
Globe IA also assists and supports management in
Globe IA governs its internal audit activities in
continuously instilling and nurturing Control Self-
conformance with the Institute of Internal Auditor’s
Assessment (CSA) environment at Globe through
Code of Ethics, and our Code of Conduct. The
facilitation of self-assessment activities among
CAE is responsible for overall conformance with
various business groups. The Audit Committee
the Standards. The CAE develops, maintains, and
regards its relationship with Internal Audit as having
communicates an appropriate and effective quality
a vital role in supporting the Audit Committee in
assurance and improvement program (QAIP) that
the effective discharge of its oversight role and
covers all aspects of internal audit reviews and
responsibilities.
activities. The Audit Committee also receives periodic reports on the status of internal audit activities,
Globe IA performs its auditing functions faithfully by
achievement of key performance indicators, and
maintaining independence from management and
QAIP. To ensure consistent conformance with the
controlling shareholders as it reports functionally
Standards, Globe IA periodically undergoes an
to the Board, through the Audit Committee and
independent external Quality Assurance Review
administratively, to the President and CEO. The
(QAR). In the most recent external QAR in 2013,
Committee, having appointed our CAE, also concurs
Globe IA achieved the highest rating, “Generally
in his/her replacement, reassignment, or dismissal.
Conforms”, that can be achieved in the QAR process.
The CAE works closely with the Audit Committee in maintaining an effective internal audit function
Globe IA adopts a risk-based audit approach in
by managing the entire operations, and strongly
developing its annual work plan ensuring that all risks,
supports the attainment of corporate objectives
mapped to eTOM (enhanced telecommunications
through coverage of most critical processes in the
operations map) based processes, with integrated
conduct of risk-based assurance reviews. The CAE
risk assessments for processes across the enterprise,
ensures risks/issues are timely called-out, escalated,
are captured in the audit universe. Globe IA’s annual
and monitored while management remains primarily
work plan is reassessed quarterly to consider
responsible for resolving the risks/issues. The CAE
emerging risks and the changing dynamics of the
114
GLOBE TELECOM
telecommunications business, thereby allowing
performance appraisal. From the results, the Audit
maximum and timely coverage of key/critical risk
Committee evaluates and proposes to the Board
areas. The Audit Committee reviews and approves
for endorsement and approval of the stockholders,
the annual work plan and all deviations. The Audit
the appointment of the independent auditors. The
Committee also ensures that audit resources are
endorsement is presented to the stockholders for
adequately allocated and focused on the areas of
approval at the ASM. The representatives of the
highest risk.
independent auditors are expected to be present at the ASM to have the opportunity to make a
To instill excellence, Globe IA provides for continuing
statement on the company’s financial statements
professional and personal development for all
and results of operations if they desire to do so and
internal auditors to equip them in the conduct of
be available to respond to appropriate questions
reviews, with focus on acquiring expertise on our
during the meeting.
business processes, network and IT systems, internal controls, new accounting and auditing standards
In the meeting last 13 April 2016, the shareholders
and regulatory updates. The audit team is composed
appointed the accounting firm of Navarro Amper
of professionally certified accountants, internal
& Co./Deloitte Philippines (NA/DP), an affiliate
auditors, IT and information security auditors, control
of Deloitte Southeast Asia Ltd. (a member firm
self-assessors, and licensed engineers, among others.
of Deloitte Touche Tohmatsu Limited) as the
In addition, Globe IA has been actively participating
independent auditor of Globe Telecom, Inc. and
in Ayala Group and Singtel Internal Audit Networks
Subsidiaries (Globe Group) for the calendar year 2016.
to benchmark and share knowledge on leading
NA/DP has been the independent auditor of Globe
global best practices including information on
Group since 2015. In accordance with regulations
methodology, process improvement and audit tools
issued by the SEC, the audit partner principally
to develop a network of world class, multi-skilled,
handling the company’s account shall be rotated
internal audit professionals.
every five years or sooner.
EXTERNAL AUDIT
There were no disagreements with NA/DP, on any matter of accounting principles or practices,
The company engages the services of independent
financial statement disclosures, or auditing scope or
auditors to conduct an audit and obtain reasonable
procedures.
assurance on whether the financial statements and relevant disclosures are free from material
Fees approved in connection with the audit and
misstatements. The independent auditors are directly
audit-related services rendered by NA/DP pursuant
responsible to the Audit Committee in helping
to the regulatory and statutory requirements for the
ensure the integrity of the company’s financial
years ended 31 December 2016 and 2015 amounts
statements and reporting process.
to P16.96 million and P15.36 million, respectively,
It is the practice of the company every three years or
inclusive of 7.5% out-of-pocket expenses (OPE). In
sooner to tender bid for the external audit services
addition to performing the audit of Globe Group’s
of independent auditors. The last tender bid process
financial statements, NA/DP was selected in
was conducted in Q4/2014. The company also
accordance with established procurement policies to
conducts on an annual basis an independent auditors’
provide non-audit services in 2016.
2016 ANNUAL REPORT
115
The Audit Committee has an existing policy to review
Tax Fees. The company has not engaged NA/DP for
and to pre-approve the audit and non-audit services
any tax-related services for fiscal years 2016 and
rendered by Globe Group’s independent auditors.
2015, respectively. There were no tax fees incurred
It does not allow the Globe Group to engage
for the said years.
the independent auditors for certain non-audit services expressly prohibited by SEC regulations
Non-Audit Fees for 2016 pertains to services
to be performed by independent auditors for its
rendered by NA/DP on the transfer of knowledge
audit clients. This is to ensure that the independent
through a series of trainings and supervised
auditors maintain the highest level of independence
workshops to enable Globe to assess its current
from the company, both in fact and appearance.
state and transition to Philippine Financial Reporting
The Audit committee has reviewed and approved
Standards (PFRS) 15: Revenue from Contracts
in advance the nature of all non-audit services
with Customers and will not involve design and
rendered in 2016 by NA/DP and the corresponding
implementation of an accounting system. Non-Audit
fee, and concluded that these do not impair their
fees in 2016 do not outweigh fees for audit and
independence. For 2016, NA/DP has confirmed to the
audit-related services. NA/DP was not engaged to
Audit Committee that the non-audit services reflect
perform non-audit services for 2015.
permissible services for an audit client. The fees presented above include out-of-pocket The aggregate fees billed by NA/DP are shown
expenses incidental to the independent auditors’
below:
services.
ETHICS AND INTEGRITY
(Amount in millions of Pesos) 2016 Audit and Audit-Related Fees* Non-Audit Fees Total
2015
P16.96
P15.36
5.49
-
P22.45
P15.36
*Excludes 2016 audit fees for GTI HK of P540K (P687K for 2015) performed by Deloitte HK; P224K in 2016 (P308K in 2015) for GT EU; and P158K in 2016 (P215K for 2015) for GT SG performed by Ardent.
GRI 102-15, 102-17, 205-2
We respect the rights of our stakeholders. We have adopted a Code of Conduct, and promulgated policies governing the following matters: (i) Conflict of Interest, (ii) Whistleblowers, (iii) Insider Trading, (iv) Related Party Transactions and (v) Health, Safety
Audit and Audit-Related Fees represent audit of Globe
and Welfare of Employees. We also have existing
Group’s annual financial statements and review of
formal policies concerning unethical, corrupt, and
quarterly financial statements in connection with the
other prohibited practices covering our employees,
statutory and regulatory filings or engagements for
members of the Board, subsidiaries, and affiliates.
the years ended 2016 and 2015. These also include
These policies serve as guide to matters involving
assurance and related services that are reasonably
work performance, dealings with employees,
related to the Globe Group’s 2016 financial
customers and suppliers, handling of assets,
statements pursuant to the regulatory requirements.
records and information, avoidance of conflict of
NA/DP was not engaged to perform audit-related
interest situations and corrupt practices, as well
services for 2016 and 2015.
as the reporting and handling of complaints from whistleblowers. These documents are the key to the balance of control and governance in Globe Telecom.
116
GLOBE TELECOM
These policies, together with the Anti-Corruption
•
Train and motivate our employees to work in
Policy, Policy on Related Party Transactions,
a safe manner and encourage our business
and others, are also on the company website for
partners to adopt these principles;
investors and other stakeholders to refer to at their
•
convenience. We also include our Code of Conduct at our on-boarding program discussions for newly-
Report our occupational safety and health performance to our stakeholders;
•
Conduct a regular review of our management
hired employees, including Board and management,
system to ensure that the commitments of this
and include a statement for employees to sign
policy are being delivered; and that we strive for
upon assuming employment in Globe Telecom.
continual improvement.
Our internal HR Portal also contains this document and we are currently planning to conduct refresher
REWARDS OR COMPENSATION POLICY
courses for continued education on our Code of Conduct, good CG and business ethics among our
We attract, retain and engage our talents to support
employees.
our business strategies and enhance value of the organization through our remuneration philosophy
CUSTOMER WELFARE
and framework.
We put our customers first. We truly make a
VENDOR AUDIT
difference through superior, end-to-end customer
GRI 102-9, 102-10
experience brought to life by a genuine culture of service and caring. We embed service into our Globe
We follow socially responsible procurement practices
culture, as well as to our vendor partner, sustaining
for vendors. The team maximizes value through
the momentum of our Circle of Happiness where our
commodity management, selection of best-in-
happy employees create happy customers.
class suppliers, and pursuit of process excellence in procurement and supply chain management. Vendor
EMPLOYEE WELFARE
partners undergo a comprehensive accreditation process which includes assessment of their legal,
We are committed to providing the best protection
technical, and financial capability from business
for the overall welfare, health and safety of our
continuity to conflict of interest, safety, health, and
employees. We do the same to the communities
environmental policies. Grounded on the practice
surrounding our operations. It is the management’s
of fair, ethical and governance policies, opportunity
primary objective and the employee’s individual and
is equitably provided to the appropriate suppliers
collective responsibility to meet this commitment. To
through competitive bidding and auctions. Proposals
this end, we shall:
are evaluated on the basis of best-value including a consideration of their environmental and social
•
•
Continuously assess all health and safety hazards
policies and practices. Given equivalent proposals,
in the workplace and provide programs towards
preference for purchase award is given to local
its eliminations;
suppliers.
Comply to all occupational safety and health news applicable to our telecommunication business;
2016 ANNUAL REPORT
117
Relationships with suppliers are also highly valued,
operations to the environment and we shall achieve
with each considered a business partner. We
this together with the help of our employees,
continue to recognize and foster strong business
business partners, and clients. We have robust
relations with our partners through the Business
systems in place to manage our environmental
Partner Awards. Vendors also provide learning
impact and integrate these into our corporate social
opportunity through plant visits and technology
responsibility management.
briefings. Conversely, Vendor Clinics are initiated for selected vendors to help improve their performance
COMMUNITY INTERACTION
and competitiveness. Through Globe Bridging Communities, the Corporate As strong advocates of fairness, accountability,
Social Responsibility platform of Globe, and our
transparency, and integrity in all aspects of the
subsidiaries, we aim to transform underserved
business, Globe commits to the principles and best
communities nationwide through relevant and
practices of corporate governance and responsibility
innovative solutions that harness the power of
in the attainment of our corporate goals and
collaboration and inclusivity through information
strategic direction.
and communications technology. The objective is to ensure sustainability by creating shared value across
Furthermore, we recognize the importance of
our employees, customers, and our stakeholders in
institutionalizing sustainability practices in the
areas where we operate. As our business continues
pursuit of its goals. The Globe Telecom Supplier
to grow, we contribute to nation-building and
Code of Ethics establishes standards of quality and
shareholder value with an engaged and empowered
business integrity to ensure that working conditions
work force committed to do a Globe of Good.
are safe, workers are treated with respect and dignity and that business operations are environmentally
We adopt best practices of ISO 26000 Social
responsible and conducted ethically.
Responsibility enabling us to operate in a socially responsible way across the organization and seek
The Supplier Code of Ethics shall be applicable to all
continuous innovative solutions in creating a
vendors of the Globe Group of companies.
wonderful world. ISO 26000 helps businesses and
Globe expects its vendors to acknowledge and
organizations translate principles into effective
actively support the Code and to continually seek to
actions and shares best practices relating to social
conform to the standards contained therein.
responsibility, globally.
Globe expects that the principles apply to vendors,
CONFLICT OF INTEREST
their parent entities and subsidiaries or affiliate entities, and with other entities with whom they do business including employees, suppliers,
Globe is above board and, at all times, exercises
subcontractors, and other parties.
discretion, prudence, and mature judgement when entering transactions for the company. In carrying
ENVIRONMENTAL SUSTAINABILITY POLICY
out their duties with integrity and in the interest of the company, it is the duty of board members to withdraw themselves from discussions that put them
We are committed to promote environmental
in a conflicted situation. It is the obligation of every
sustainability by reducing the impact of our business
regular employee, officers and directors of Globe and our subsidiaries, including consultants/project hires
118
GLOBE TELECOM
seconded to or engaged on a full-time basis by Globe,
Employees are reminded through internal
to declare and divulge in writing to the company
communications channel to fill out gift disclosures
his own involvement in any conflict of interest with
especially during national festivities. The form is then
the company. Our Code of Conduct provides for
submitted to employees’ respective group heads
the definition, guidelines and procedures, including
who will decide whether the gift shall be returned or
the reportorial of any such circumstance, involving
kept by the employee or be surrendered to Human
conflict of interest.
Resources Group for possible use during company events.
In general, conflict of interest will be deemed to exist where an employee has or may possibly have
We conduct periodic lectures and seminars on anti-
a financial or personal interest divergent with or
corruption initiatives by Human Resources Group to
in conflict with his professional obligations, or
all employees.
where financial or other personal considerations
WHISTLE-BLOWING
may compromise, or have the appearance of compromising the employee’s judgment in the administration, management, decision-making, and
We are committed to compliance with laws and
discharge of his official functions. Personal interest
regulations to which we are subject and conduct
is not confined to the personal involvement of the
our business in accordance with ethical standards.
employee himself — it may also arise from the
All officers and employees of the company, and all
employee’s family or close personal relationship with
suppliers and business partners of the company, are
a contractor, sub-contractor, customer, competitor,
thus required to observe and practice high standards
creditor, or any other entity that does business with
of business and personal ethics in the conduct of
the company.
their duties and responsibilities.
At the start of the year, Globe Human Resource
Through various channels which includes a hotline
Group requires all employees to submit the Related
(0917-8189934), portal, an email address
Party Disclosure Form, regardless if an employee has
(gt_whistleblower@globe.com.ph) as well as specific
any declaration or none.
group under the HR Employee Relations department, we provide a mechanism that allows employees
ANTI-CORRUPTION
and even third parties to report suspected violations of company policies by an employees,
The employee, by virtue of his employment, is bound
officers, directors, and partners, on unethical and
not to betray that trust by seeking to gain any undue
corrupt practices, misappropriation of company
personal or pecuniary advantage (other than the
assets, fraudulent reporting practices, and other
rightful proceeds of employment) from his dealings
violations of the company Code of Conduct, Stock
with or for and in behalf of Globe.
Transaction Policy, Code of Corporate Governance, and Securities Regulation Code. Disclosures — in
Our employees maintain the highest standards of
whatever form, including verbal — made in good
honesty and professional conduct. Seeking undue
faith will be investigated according to the protocols
financial and material advantage from transactions
established in this policy and protected by keeping
with Globe is a breach of trust between the employee
the information confidential. The identity and
and the company.
source of the information are likewise protected to the extent required by law.These are by no means 2016 ANNUAL REPORT
119
the only channels by which disclosures may be
Audit Committee, and Legal for possible criminal
received. Persons or units within the organization
case/action. The Whistleblower will also receive an
who receive disclosures shall, however, forward
update if no merits were found on the complaint
or relay the disclosures through the company’s
filed.
different whistleblower channels. Upon receipt of the complaints raised, HR Employee Relations will review
INSIDER TRADING
and evaluate the details of the report provided. If a whistleblower involves a third party, the report is
We restrict trading of securities (buying or selling)
endorsed to Security for investigation. If the report
by covered persons considered to have knowledge
involves employees, HR Employee Relations will
of material information, during the blackout period,
conduct the investigation. HR Employee Relations
except in accordance with this policy.
is also in charge of administering the different whistleblower channels, and receiving, collating,
We also prohibit key officers and employees with
and submitting all disclosures to the Disclosure
access to the quarterly results in the course of its
Committee (DC), who is composed of the company’s
review, from trading in company shares 10 trading
Corporate Secretary, HR, Internal Audit, ERM and
days before and three trading days after any
Legal Services. If and when disclosure involves a
structured report/disclosure, and three trading days
member of the Board or ERM or the complaint
before and three trading days after an unstructured
administrator, the disclosure shall be transmitted
report/disclosure.
directly to the Corporate Secretary for handling.
RELATED PARTY TRANSACTIONS (RPTS)
Meanwhile, if disclosure involves the Disclosure Committee, the disclosure will then be endorsed to the Board.
We disclose, review, and approve related party transactions, in accordance with the principles of
Once disclosure is submitted, the Whistleblower
transparency and fairness, to ensure that they are at
shall receive a notice that the complaint has been
arm’s length, the terms are fair, and they will inure to
received and that it shall be processed in accordance
the best interest of Globe Telecom, its subsidiaries or
with the policy. Disclosures will then be investigated
affiliates and all shareholders.
by Security and HR Employee Relations. If with financial and reputation risk, Security will forward
The RPTs are disclosed in our financial statement
the report to DC for proper endorsement to the
(page 244), annual reports, and other applicable
Office of the President, Audit Committee and Legal
filings in accordance with the relevant rules and
for possible criminal case/action. Meanwhile, for
issuance of the SEC and other applicable regulatory
employee related activities, HR Employee Relations
bodies. The disclosure includes, but is not limited
will implement appropriate disciplinary proceedings
to, the name of the related party, relationship with
in accordance with due process. If with financial
the corporation for each RPT, the nature and value
(P1 million and up) and reputation risk, HR Employee
for each RPT. Such disclosure is also made publicly
Relations will do the same and forward to DC for
available by the corporation, for the benefit of all
proper endorsement to the Office of the President,
shareholders and other stakeholders, through our website and such other media channels as applicable.
120
GLOBE TELECOM
Under our RPT policy, shareholders, including
Statements, Certificate of No Default, and CFO
minority shareholders, and other stakeholders are
Certification on compliance with financial ratios
provided with proper guidelines and procedures
ensure the Creditors of the company’s financial
for right of action and remedies that are readily
soundness.
accessible in order to redress corporate conduct in case of any abuse on such transactions (e.g. email
We provide prompt and accurate reports of our
account and hotline numbers), as necessary. The
financial standing to creditors by providing them our
policy contains this whistle-blowing mechanism,
financial and operating results, Management and
provides for the creation of a dedicated committee
Discussion Analysis and Financial Statements on a
for the review of RPTs and also identifies materiality
periodic basis that allow the creditors to continuously
thresholds of such transactions.
evaluate and monitor our performance and credit standing.
The independent directors form the independent committee that is tasked to review and monitor
Moreover, we adopted an expanded corporate
material RPTs, among others, to ensure our best
governance approach in managing business risks.
interest, our shareholders’, and all other stakeholders’,
A Revised Enterprise Risk Management Policy was
and that the RPTs are executed with fair and
developed to provide a better understanding of the
transparent terms prior to endorsement to our Board
different risks that could threaten the achievement of
for approval.
our vision, mission, strategies, and goals. The policy also highlights the vital role that each individual
Non-compliance with any of the provisions of the
plays in the organization from Senior Management
policy on RPT shall result in the nullification of any
to staff in managing risks and in ensuring that the
agreement or contract involved in the execution
company’s business objectives are attained. With
of the RPT. A director, officer, employee, or Related
this, it assures the creditors that we are proactive
Party is subject to the corresponding procedures and
in managing our risks and are committed to
penalties under our Code of Conduct and relevant
sustaining the growth of the company. As part of the
laws, as applicable.
implementation, we regularly submit our quarterly financial results to the PSE and SEC.
Our independent directors met in 2016 to review and discuss RPTs stated in this report.
The loan agreements with banks and other financial institutions provide for certain restrictions and
CREDITORS’ RIGHTS
requirements with respect to, among others, maintenance of financial ratios and percentage of
It is our policy to protect the rights of our creditors
ownership of specific shareholders, incurrence of
by maintaining, at all times, our good credit
additional long-term indebtedness or guarantees and
standing. We thus strictly observe contractual
property encumbrances.
obligations, and regard fair and truthful disclosure and transparency of financial records and dealings
BOARD DIVERSITY POLICY
of utmost importance to assure creditors of our continued credit worthiness. Our periodic reports
In addition to the qualifications, disqualifications, and
to our creditors such as our latest certified Financial
other criteria set forth in our corporate documents
2016 ANNUAL REPORT
121
and relevant law in relation to the nomination and
(ISDP), which is a fully operationalized, separate and
election of members of the Board, we are committed
independent group that focuses on Globe Telecom’s
to promote and observe diverse membership among
privacy and cybersecurity matters.
our directors. We respect customer and stakeholder privacy and The Board of Directors, led by the Chairman,
intellectual property. As such, we secure and protect
encourages our shareholders to nominate
Customer Data with proper safeguards to ensure
candidates who will diversify membership in the
confidentiality and privacy; prevent loss, theft, or
Board. Therefore, as company policy, no director or
use for unauthorized purposes; and comply with
candidate for directorship shall be discriminated
the requirements of the law. We use international
upon by reason of gender, age, disability, ethnicity,
and global frameworks as a reference for our
nationality or political, religious or cultural
control environment and utilize the latest tools
backgrounds. Our MCG reiterates this policy and
and technologies that allows us to prevent, detect,
further states that our Board must be composed of
investigate, and respond to the various threats in
at least three independent directors, one of whom
our environment. We have a Security Operations
shall be a female, at all times. Directors must also
Center (SOC) that monitors our technology
have understanding of the telecommunications
infrastructure and environment, operates 24x7,
industry or sufficient professional experience and
and manned by a dedicated team. All systems and
competence in other relevant industries, which
processes in the organization go through extensive
further encourages a diversified collaboration of
assessments and reviews, targeting information
views and skillset within our Board.
collection, storage, and processing practices, to guard against unauthorized access, alteration, disclosure,
DATA PRIVACY AND INTELLECTUAL PROPERTY RIGHTS
or destruction. The status of all our privacy and cybersecurity programs and operations are presented to and reviewed by the Audit Committee
Our Privacy Policy outlines our policy in relation to
of the Board on a quarterly basis.
the collection, use, and protection of Customer Data to provide customers and other stakeholders with a
Among other safeguards, we keep our records
wonderful experience. We notify all customers and
as accurate as possible. If customer personal
relevant stakeholders with any update on our Privacy
information is wrong, we give ways to update it.
Policy by posting it on our website for easy reference.
Registered customers may access account details,
We also initiate internal campaigns on data privacy
correct personal information and report abuse of
and cybersecurity to ensure our internal stakeholders
privacy or intellectual property rights by contacting
are also fully aware of their rights and responsibilities
the Globe Customer Care (+632 7301000 or 211
in relation to the use of the products and services
using your mobile phone) or his/her designated
that the digital lifestyle offers. The appointment
relationship manager, as may be applicable; or by
of our DPO, Mr. Anton Reynaldo M. Bonifacio,
visiting any Globe Store or our website at www.globe.
establishes further, Globe Telecom’s adherence to
com.ph. Contact details of our Data Privacy Officer
the country’s Data Privacy Act of 2012 (Republic
are likewise publicly available through our website
Act 10173). Unlike most organizations, we have
and effective procedures are in place in case of a
our Information Security and Data Privacy Division
122
GLOBE TELECOM
report or complaint on data privacy or intellectual
year-end, in compliance with the ACGS standard that
property. Rest assured, we do our utmost to comply
is earlier than the local regulatory deadline. These
with relevant rules and laws on data privacy and
reports are made available to the analysts after
intellectual property rights.
disclosure, as well as released through various media channels, on our company website.
DISCLOSURE AND TRANSPARENCY
In case of mergers, acquisitions and/or takeovers requiring shareholders’ approval, the board of directors of the offeree company shall appoint an
GRI 102-17, 102-21,102-32
independent party to evaluate the fairness of the Our management is continuously committed to
transaction price. Such shall be disclosed in our
high standards of disclosure, transparency, and
financial statement and relevant reports. We shall
accountability. The management established the
also ensure our compliance with applicable law,
sustainability policy and reviews its adequacy at the
rules, and regulations prescribed by the SEC and
highest level periodically and allocated resources
the PSE. Any market-sensitive information such as
to ensure effective implementation. The practice of
dividend declaration is also disclosed to the SEC and
sustainability reporting was implemented as a means
PSE and then released through various modes of
to provide fair, accurate, and meaningful assessment
communication.
of its overall performance on triple bottom line (Economic, Environment, and Social) responsibility to
In accordance with our strong advocacy for CG, we
our stakeholders including investors.
recognize the importance of regular communication with our investors, and are committed to high
As a listed company in the PSE and PDEx, with
standards of disclosure, transparency, and
reportorial requirements, rules and applicable laws
accountability through our Investor Relations (IR)
as well as regulations of relevant regulatory agencies,
program. Our IR Program is geared towards fulfilling
we aim to provide a fair, accurate, complete and
our commitment to a transparent disclosure regime
meaningful assessment of our company’s financial
and accessibility for all stakeholders.
performance and prospects through the annual report, quarterly financial reports, and analyst
In addition to the ASM, we extend various venues
presentations. We practice regular disclosure of
for stakeholders to communicate effectively with
our financial results. Quarterly financial results
us through the conduct of analysts’ briefings, ad-
are immediately disclosed after the approval by
hoc briefings, investor conferences, media briefings,
the Board to PSE and SEC. Quarterly and year-end
one-on-one or small group meetings, and investor
financial statements and detailed management’s
days that are organized by our IR Department and/or
discussion and analysis are filed within 45 and 105
Corporate Communications Group or in partnership
calendar days, respectively from the end of the
with our shareholders, broker or other partner
financial period. Our financial reporting disclosures
institutions. Other than keeping the company
are in compliance with the PSE and SEC requisites.
website up-to-date, these venues provide another
Beginning last year, we have driven management
means for us to discuss our quarterly financial
and respective departments to release our audited financial statements within 60 days from financial
2016 ANNUAL REPORT
123
results, announcements, material disclosures and
FINANCIAL PERFORMANCE INDICATOR
other relevant information with stakeholders. In the past years, we have been further streamlining
We are committed to efficiently managing our
communication efforts and opening-up several
resources and enhancing shareholder value. We
new customer touch points, enabling them to
regularly review our performance against our
interact with us at their convenience. Among other
operating and financial plans and strategies, and use
enhancements, we utilized email, live chat, SMS,
key performance indicators to monitor our progress.
website, and social media channels (e.g., Facebook,
Except for net income, our financial performance
Twitter, Instagram) to provide our customers with
indicators are not measurements in accordance with
real-time information and quicker responses to
Philippine Financial Reporting Standards (PFRS) and
concerns. A conference call facility is setup during
should not be considered as an alternative to net
analysts’ briefings and meetings to enable wider
income or any other measure of performance which
participation among shareholders and other
are in accordance with PFRS.
stakeholders. We also participate in both local and international investor conferences, which host various shareholders and other stakeholders. Details
NON-FINANCIAL PERFORMANCE INDICATOR
and information on these conferences are published on our corporate website. We have sustained this
We also use a non-financial performance indicator to
convenient and accessible line of communication
measure the success of the business and emphasize
through our IR Program in the last financial year and
our commitment to sustainability. These include:
will continue to enhance this in the succeeding years.
(1) employee engagement score; (2) customer
We fully understand that the changes and progress
satisfaction; (3) environmental and social impacts;
in digital lifestyle include the fast-paced character
among others. These indicators are disclosed in our
of our customers, shareholders and different
Financial and Sustainability Report, aligned with the
stakeholders. Because of this, our company website
Global Reporting Initiative (GRI).
must also be an effective channel of information and a manifestation of CG advocacy. Among other
DIVIDEND POLICY
information, we keep our website up-to-date with corporate announcements, reports and disclosures
We declare dividends to our common stockholders
that are accessible to all stakeholders.
on a regular basis as may be determined by the Board of Directors. We return to our shareholders,
Our website is regularly reviewed and maintained.
dividends equivalent to 75 percent-90 percent of the
Thus, we encourage our subscribers and stakeholders
prior year’s core net income. Dividends declared on
to explore the CG and IR pages of our website to
our stocks are payable in cash or in additional shares
learn more about our wonderful corporate culture
of stock. As a policy and as much as practicable, we
apart from our products and services.
observe a 30-day period for the payment of dividends to shareholders from the declaration date of such dividends.
124
GLOBE TELECOM
DEALINGS IN SECURITIES
The Board regularly reviews our dividend policy, including the frequency of its distribution, taking into account our operating results, cash flows, debt
We have adopted strict policies and guidelines for
covenants, capital expenditure levels, and liquidity.
trades involving the company’s shares made by
The payment of dividends in the future will depend
directors and key officers and those with access to
upon our earnings, cash flow, and financial condition.
material non-public information. Directors and key officers and those with access to the quarterly results
OWNERSHIP STRUCTURE
in the course of its review are prohibited from trading
102-5, 102-24, 102-26, 102-27
Globe shares starting from the time when quarterly results are internally reviewed until after we publicly
We regularly disclose the top 100 shareholders
disclose its results. Notices of trading blackouts are
of our common and preferred equity. Disclosure
regularly issued to the directors and key officers
is also made of the security ownership of certain
concerned and to those with access to such material
record and beneficial owners who hold more than
non-public information.
5% of our common and preferred shares. Finally, the shareholdings and percentage ownership
All directors and key officers are required, within
of the directors and key officers are disclosed in
three trading days upon change in their ownership
the Definitive Information Statement sent to the
of securities, to submit the statement of changes of
shareholders prior to the ASM.
ownership in securities (SEC Form 23-B) in relation to their trades to the Compliance Officer for immediate submission and disclosure to the SEC and the PSE. Once submission and disclosure to pertinent regulatory agencies are completed, the same is reflected in our relevant reports and the company website under PSE/SEC Disclosures of our IR webpage.
DECLARATION DATE
PER SHARE (IN P)
February 5, 2016
22.00
May 4, 2016
AMOUNT (IN P MILLION)
RECORD DATE
PAYABLE DATE
2,920
February 22, 2016
March 4, 2016
22.00
2,921
May 19, 2016
June 3, 2016
August 2, 2016
22.00
2,921
August 16, 2016
September 1, 2016
November 4, 2016
22.00
2,921
November 18, 2016
December 2, 2016
2016 ANNUAL REPORT
125
NONVOTING PREFERRED
% OF NONVOTING PREFERRED
COMMON
Ayala Corp
41,164,276
31.01%
-
0.00%
-
-
41,164,276
13.22%
Singtel
62,646,487
47.19%
-
0.00%
-
-
62,646,487
20.13%
-
-
158,515,016
100.00%
-
0.00%
158,515,016
50.92%
161,910
0.12%
5
0.00%
47,500
0.24%
209,415
0.07%
Public
28,785,915
21.68%
-
0.00%
19,952,500
99.76%
48,738,415
15.66%
Total
132,758,588
100.00%
158,515,021
100.00%
20,000,000
100.00%
311,273,609
100.00%
STOCKHOLDERS
Asiacom Directors, Officers, ESOP
VOTING PREFERRED
% OF VOTING PREFERRED
% OF COMMON
TOTAL OUTSTANDING
% OF TOTAL OUTSTANDING
GLOBE TELECOM BOARD OF DIRECTORS TITLE OF CLASS AND NATURE OF OWNERSHIP
Jaime Augusto Zobel de Ayala Mark Chong Chin Kok
Ernest L. Cu
2016 BEGINNING BALANCE IN COMPANY SHARES 2
-
2
Common (indirect)
1
-
1
Common (indirect)
2
-
2
Common (direct)
65,255
-
65,255
Common (indirect)
1,000
1,000 (A) January 8, 2016: 1,000 (A) January 12, 2016; 1,000 (A) January 14, 2016
4,000
Voting Preferred (direct)
Delfin L. Lazaro
END BALANCE IN COMPANY SHARES AS OF 31 DECEMBER 2016
Common (direct)
Non-voting Preferred (indirect) Romeo L. Bernardo
2016 CHANGE/S IN SHAREHOLDINGS
Common (indirect)
1
-
1
16,700
-
16,700
500
-
500
1
-
1
Voting Preferred (indirect) Common (direct) Non-voting Preferred (indirect)
1
-
1
2,800
-
2,800
Jose Teodoro K. Limcaoco
Common (direct)
1
-
1
Fernando Zobel de Ayala
Common (indirect)
1
-
1
Samba Natarajan
Common (direct)
2
-
2
Rex Ma. A. Mendoza
Voting Preferred (direct)
1
-
1
Saw Phaik Hwa
Voting Preferred (direct)
1
-
1
100
-
100
1
-
1
Manuel A. Pacis
126
Common (direct) Voting Prefered (indirect)
GLOBE TELECOM
GLOBE TELECOM KEY OFFICERS TITLE OF CLASS AND NATURE OF OWNERSHIP Common (direct)
Alberto M. de Larrazabal
2016 BEGINNING BALANCE IN COMPANY SHARES
2016 CHANGE/S IN SHAREHOLDINGS
END BALANCE IN COMPANY SHARES AS OF 31 DECEMBER 2016
4,322
-
4,322
1,000 (A) January 6, 2016;
Common (indirect)
-
Non-voting Preferred (direct)
2,000
-
2,000
Common (indirect)
51,838
6,800 (A) January 14, November 142016 , 2016
58,638
Non-voting Preferred (direct)
20,000
-
20,000
Common (direct)
-
130 (A) January 6, 2016
130
Common (indirect)
-
285 (A) March 7, 2016
285
Common (indirect)
18,915
-
18,915
Non-voting Preferred (direct)
4,000
-
4,000
Common (direct)
814
-
814
Common (indirect)
-
700 (A) November 21, 2016
700
Non-voting Preferred (direct)
2,000
-
2,000
-
-
-
-
Common (direct)
20
-
20
Common (indirect)
-
1,000 (A) November 17, 2016
1,000
Marisalve Ciocson-Co
Common (direct)
1,539
-
1,539
Rosemarie Maniego-Eala
Common (indirect)
3
3,000 (A) November 11, 2016
3,003
Common (direct)
179
-
179
Common (indirect)
-
500 (A) November 23, 2016
500
Gil B. Genio
Renato M. Jiao
Rebecca V. Eclipse Vicente Froilan M. Castelo
Carmina J. Herbosa
Bernard P. Llamzon
Solomon M. Hermosura
Maria Aurora Sy-Manalang
1,000 (A) January 12, 2016;
2,000
(A) Acquired (D) Disposed of
None of the members of our Board of Directors and management owns 2% or more of the outstanding capital stock of Globe.
2016 ANNUAL REPORT
127
BOARD OF DIRECTORS
128
GLOBE TELECOM
JAIME AUGUSTO ZOBEL DE AYALA CHAIRMAN, NON-EXECUTIVE DIRECTOR • Globe Director since March 1989 and last re-elected on April 13, 2016 • Globe Board Committee membership: - Executive Committee (Chairman) • Number of directorships in other publicly-listed companies: 5 Mr. Zobel, 57, Filipino, has served as Chairman of our Board since December 1996 and as a Director since March 1989. He is also the Chairman and CEO of Ayala Corporation and holds various positions in other companies: Chairman of Bank of the Philippine Islands, and Integrated MicroElectronics, Inc.; Vice-Chairman of Ayala Land, Inc. and Manila Water Company, Inc. He is also the Co-Chairman of Ayala Foundation, Inc.; Chairman of Harvard Business School Asia Pacific Advisory Board; Vice-Chairman of the Makati Business Club; and member of the Harvard Global Advisory Council, Mitsubishi Corporation International Advisory Committee, JP Morgan International Council, and Endeavor Philippines. He was the Philippine Representative to the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council from 2010 to December 2015. He graduated with B.A. in Economics (Cum Laude) degree from Harvard College in 1981 and obtained an MBA from the Harvard Graduate School of Business in 1987. Mr. Zobel holds directorship in Ayala Corporation; Bank of the Philippine Islands; Integrated Micro-Electronics, Inc.; Manila Water Company, Inc.; and Ayala Land, Inc. All of which are publicly-listed companies on the Philippine Stock Exchange.
2016 ANNUAL REPORT
129
MARK CHONG CHIN KOK CO VICE-CHAIRMAN, NON-EXECUTIVE DIRECTOR • Globe Director since October 2009 and last re-elected on April 13, 2016 • Globe Board Committee memberships: - Executive Committee - Compensation and Remuneration Committee • Number of directorships in other publicly-listed companies: 1 Mr. Chong, 53, Singaporean, previously served as a Director for one year, from October 6, 2009 to October 8, 2010. He was elected again as Director at the ASM on April 16, 2013 and has since been re-elected to the Globe Telecom Board. Mr. Chong was appointed CEO of International, Group Consumer, of Singtel on January 14, 2013 to oversee the growth of Singtel Group’s international affiliates, strengthen its relationship with overseas partners, and drive regional initiatives for scale and synergies. He is also a Director of Bharti Infratel Limited. Prior to this appointment, he was Chief Operating Officer of Advanced Info Service Plc (AIS), the Group’s associate in Thailand. He has also held senior executive roles in the Consumer, Enterprise and Network groups in Singtel. Mr. Chong graduated with a Bachelor of Electronics Engineering and Master in Research in Electronic Systems from ENSERG, Grenoble, France and obtained his Master of Business Administration from the National University of Singapore. He is also a senior fellow with the Singapore Computer Society. Mr. Chong also holds directorship in is Bharti Infratel Limited, a publicly-listed company on the National Stock Exchange of India and Bombay Stock Exchange.
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FERNANDO ZOBEL DE AYALA CO VICE-CHAIRMAN, NON-EXECUTIVE DIRECTOR • Globe Director since October 1995 and last re-elected on April 13, 2016 • Globe Board Committee memberships: - Compensation and Remuneration Committee - Finance Committee • Number of directorships in other publicly-listed companies: 4 Mr. Zobel, 56, Filipino, is the President and Chief Operating Officer of Ayala Corporation, one of the Philippines’ largest conglomerates involved in real estate, financial services, telecommunications, water, electronics, automotive, power, transport, education, and healthcare. He is Board Chairman of Ayala Land and Manila Water Company and sits on the board of various companies in the Ayala group, including the Bank of the Philippine Islands, and the Ayala Foundation. Mr. Zobel de Ayala is a member of the INSEAD East Asia Council, and the World Presidents’ Organization. He is a board member of Habitat for Humanity International and chairs the steering committee of its Asia Pacific Capital Campaign. He also serves on the board of the Asia Society and is a member of the Asia Philanthropy Circle. In the Philippines, he is a board member of the Philippine National Museum, Caritas Manila, Pilipinas Shell Corporation, and Pilipinas Shell Foundation. Mr. Zobel de Ayala holds a liberal arts degree from Harvard College and a CIM from INSEAD, France. The other publicly-listed companies he holds directorship in include Ayala Corporation; Ayala Land, Inc.; Manila Water Company, Inc.; and Bank of the Philippine Islands. All of which are publicly-listed companies on the Philippine Stock Exchange.
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ERNEST L. CU EXECUTIVE DIRECTOR, PRESIDENT AND CEO • Globe Director since April 2009 and last re-elected on April 13, 2016 • Globe Board Committee membership: - Executive Committee • Number of directorships in other publicly-listed companies: none Mr. Cu, 56, Filipino, has served as Director since April 2009. He is currently our President and CEO. Mr. Cu joined Globe in October 2008 as Deputy CEO, and was officially appointed as our President and CEO on April 2, 2009. Since then, Mr. Cu has been passionately driving a sweeping transformation across the company, including modernizing its network and IT infrastructure, creating a strong collaborative and service-oriented culture, and product innovations in its core business segments. Under Mr. Cu’s visionary leadership, Globe embarked on a purpose-led transformation to create a more sustainable organization with its renewed mission, vision, and core values, collectively embodied in the Globe Purpose, where the company sees itself as a catalyst in driving forward the nation’s progress. In 2016, Mr. Cu was named Best CEO by Finance Asia for the third time, since 2010. For the third year in a row, he was cited among the 100 most influential telecom leaders worldwide by Londonbased Global Telecoms Business Magazine Power 100. Mr. Cu was also recognized among the Overall Best CEO category for Telecommunications and Sellside Best CEO category by Institutional Investor Magazine’s 2016 AllAsia Executive Team. In 2014, Mr. Cu was honored as the Telecommunications Executive of the Year by the International Business Awards (Stevies). He also earned international accolade in 2012 as CEO of the Year by Frost & Sullivan Asia Pacific. Prior to Globe, Mr. Cu was President and CEO of SPi Technologies from 1997 to 2008. At the cusp of the new millennium, Mr. Cu spurred the beginning of the BPO business model for the Philippines, earning him the recognition as one of the founding fathers of BPO in the country. Lauding his pioneering spirit and drawing great highlight to his career then was a recognition from Ernst & Young in 2003 as the ICT Entrepreneur of the Year. Mr. Cu has a Bachelor of Science Degree in Industrial Management Engineering from De La Salle University in Manila, and an M.B.A. from the J.L. Kellogg Graduate School of Management, Northwestern University. Mr. Cu is not a director in any other publicly-listed company.
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DELFIN L. LAZARO NON-EXECUTIVE DIRECTOR • Globe Director since January 1997 and last re-elected on April 13, 2016 • Globe Board Committee membership: - Finance Committee • Number of directorships in other publicly-listed companies: 4 Mr. Lazaro, 70, Filipino, has served as Director since January 1997. His other significant positions include: Chairman of Atlas Fertilizer & Chemicals Inc.; Vice- Chairman and President of Asiacom Philippines, Inc.; Director of AC Energy, Holdings, Inc.; A.C.S.T. Business Holdings, Inc.; AC International Finance; Ayala International Holdings, Inc.; AYC Holdings, Inc.; Bestfull Holdings, Inc.; Philwater Holdings. Co., Inc.; Purefoods International, Ltd.; Ayala Infrastructure; and Ayala Industrial. He is also Director of Ayala Corporation, Ayala Land, Inc., Integrated MicroElectronics, Inc., Manila Water Company, Inc., Probe Productions, Inc. and Trustee of Insular Life Assurance Co., Ltd. He was named Management Man of the Year 1999 by the Management Association of the Philippines for his contribution to the conceptualization and implementation of the Philippine Energy Development Plan and to the passage of the law creating the Department of Energy. He was also cited for stabilizing the power situation that helped the country achieve successive high growth levels up to the Asian crisis in 1997. Mr. Lazaro earned his Bachelor of Science in Metallurgical Engineering from the University of the Philippines, and his Masters of Business Administration (with distinction) from the Harvard Graduate School of Business. The other companies he holds directorship in include Ayala Corporation; Ayala Land, Inc.; Integrated MicroElectronics, Inc.; and Manila Water Company, Inc. All of which are publicly-listed companies on the Philippine Stock Exchange.
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SAMBA NATARAJAN NON-EXECUTIVE DIRECTOR • Globe Director since April 7, 2015 and last re-elected on April 13, 2016 • Globe Board Committee memberships: - Executive Committee - Finance Committee • Number of directorships in other publicly-listed companies: none Mr. Natarajan, 51, US citizen, is the CEO of Group Digital Life, Singtel, effective April 2015. Group Digital is the digital innovation business for the Singtel group and is currently focused on capturing opportunities in three main areas: Digital Marketing, Over-the-top Video and Data analytics while also managing the corporate venture fund, Innov8, that invests in cutting edge technologies. He joined Singtel in May 2014 as Managing Director of Digital Enterprise leading a team focused on identifying, executing, and operationalizing enterprise growth opportunities from emerging technology trends. He brings more than 25 years of corporate and consulting experience across a wide range of senior roles in the areas of strategy, business development and finance. He worked for Citibank from 1988 to 1997 and McKinsey & Company since 1999. In his last role with McKinsey, he was the Leader of Southeast Asia TMT practice, consulting with C-level executives in the areas of growth, transformation, corporate finance and commercial operations. Mr. Natarajan sits on the board of several digital subsidiaries of the Singtel group, including Amobee, HOOQ and Trustwave. He also sits on the advisory board of the McKinsey Digital Campus and on the Board of Governors of the Singapore American School. Mr. Natarajan holds a Bachelor of Engineering degree in Electrical Engineering with distinction from the Birla Institute of Technology and Science in Pilani, India; a Post Graduate Diploma in Management from the Indian Institute of Management in Ahmedabad, India where he was an industrial scholar and an MBA from the Wharton School, University of Pennsylvania, USA, where he was a Hope Fellow, Ford Fellow and Palmer Scholar. He was profiled in “Leaders for the Global Markets”, Wharton School, 1999–2000. Mr. Natarajan is not a director in any other publicly-listed company.
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ROMEO L. BERNARDO NON-EXECUTIVE DIRECTOR • Globe Director since September 2001 and last re-elected on April 13, 2016 • Globe Board Committee memberships: - Compensation and Remuneration Committee - Finance Committee • Number of directorships in other publicly-listed companies: 4 Mr. Bernardo, 62, Filipino, is Managing Director of Lazaro Bernardo Tiu and Associates (LBT), a financial advisory firm based in Manila. He is also a GlobalSource economist in the Philippines. He is Chairman of ALFM Family of Funds and Philippine Stock Index Fund. He is likewise a director of several companies and organizations including Aboitiz Power, Bank of the Philippine Islands, RFM Corporation, Philippine Investment Management (PHINMA), Inc., BPIPhilam Life Assurance Corporation, National Reinsurance Corporation of the Philippines (NRCP) and Institute for Development and Econometric Analysis. He is a member of the Philippine World Bank Advisory Group and a member of the Panel of Conciliators of the International Centre for Settlement of Investment Disputes. He previously served as Undersecretary of Finance and as Alternate Executive Director of the Asian Development Bank. He was an Advisor of the World Bank and the IMF (Washington D.C.). Mr. Bernardo holds a degree in Bachelor of Science in Business Economics from the University of the Philippines (magna cum laude) and a Master’s Degree in Development Economics at Williams College from Williams College in Williamstown, Massachusetts. The other companies he holds directorship in include Aboitiz Power; Bank of the Philippine Islands; RFM Corporation; and National Reinsurance Corporation of the Philippines. All of which are publicly-listed companies on the Philippine Stock Exchange.
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JOSE TEODORO K. LIMCAOCO NON-EXECUTIVE DIRECTOR • Globe Director and first elected on April 13, 2016 • Globe Board Committee membership: - Executive Committee • Number of directorships in other publicly-listed companies: 2 Mr. Limcaoco, 54, Filipino, is currently the Chief Finance Officer and Finance Group Head of Ayala Corporation. He is a director of Integrated Micro-Electronics, Inc. and an independent director of SSI Group, Inc. He is the Chairman of Darong Agricultural and Development Corporation and Zapfam Inc. He is the Chairman, President and CEO of Water Capital Works, Inc. He is the President of Liontide Holdings, Inc. and of Philwater Holdings Company, Inc. He is a Director of Ayala Hotels, Inc.; AC Energy Holdings, Inc.; Ayala Healthcare Holdings, Inc.; Ayala Aviation Corporation; Ayala Education, Inc.; Asiacom Philippines, Inc.; AG Counselors Corporation; Michigan Holdings, Inc.; AC Industrial Technology Holdings, Inc. (formerly Ayala Automotive Holdings Corporation); LICA Management Inc. and Just For Kids, Inc. He joined Ayala Corporation as a Managing Director in 1998. Prior to his appointment as CFO in April 2015, he held various responsibilities including President of BPI Family Savings Bank, President of BPI Capital Corporation, Officer-in-Charge for Ayala Life Assurance, Inc. and Ayala Plans, Inc., Trustee and Treasurer of Ayala Foundation, Inc., President of myAyala.com, and CFO of Azalea Technology Investments, Inc. He served as the President of the Chamber of Thrift Banks from 2013-2015. He has held prior positions with JP Morgan & Co. and with BZW Asia. He graduated from Stanford University with a BS Mathematical Sciences (Honors Program) in 1984 and from the Wharton School of the University of Pennsylvania with an MBA (Finance and Investment Management) in 1988. The other companies he holds directorship in include Integrated Micro-Electronics, Inc. and SSI Group, Inc. Both are publicly-listed companies on the Philippine Stock Exchange.
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Mr. Mendoza, 54, Filipino, is the Founder and Managing Director of Rampver Financials, a dynamic niche player in financial services specializing in investments, and one of the biggest non-bank distributors of mutual funds in the Philippines. He was previously Senior Adviser to the AIA Group CEO for Marketing and Distribution. AIA is the leading pan-Asian insurance company and is the parent firm of the Philippine American Life and General Insurance Company (Philam Life). Prior to this role, he was the President and CEO of Philam Life, one of the country’s most trusted financial services conglomerates. He was responsible for bringing Philam Life back on its strong growth track. From being last among 17 countries in terms of business performance in 2011, Philam Life won the coveted Overall Gold Cup, and was the number one country operation of AIA in 2013. He also sits as a director of Prime Orion Philippines, Inc. (formerly Prime Orion Properties, Inc.); FLT Prime Insurance, Esquire Financing, Inc.; the Cullinan Group; TechnoMarine Philippines; Seven Tall Trees Events Company, Inc.; The Freeport Area of Bataan and is a Trustee of the Bataan Peninsula State College. Mr. Mendoza is also a member of Bro. Bo Sanchez’s Mastermind Group, and is cited by many as one of the best leadership and business speakers in the country. Prior to his return to Philam Life, he was previously Senior Vice President and Chief Marketing and Sales Officer of Ayala Land, Inc. He was also Chairman of Ayala Land International Sales, Inc.; President of Ayala Land Sales, Inc.; and Avida Sales Corporation. He was also President and CEO of Philam Asset Management, Inc. (PAMI) and is considered as one of the pioneers behind the resurgence of the Philippines’ mutual fund industry.
REX MA. A. MENDOZA NON-EXECUTIVE AND INDEPENDENT DIRECTOR • Globe Director since April 8, 2014 and re-elected on April 13, 2016 • Globe Board Committee membership: - Nomination Committee (Chairman) - Compensation and Remuneration Committee (Chairman) - Audit Committee • Number of directorships in other publicly-listed companies: 1
He was a professor of Marketing and Computational Finance at the De La Salle University Graduate School of Business. He taught strategic marketing, services marketing and services strategy. He has served as Chairman of the Marketing Department and was awarded as one of the University’s most outstanding professors. He has a Master’s Degree in Business Management with distinction from the Asian Institute of Management and was one of the 10 Outstanding Graduates of his batch at the University of the Philippines where he obtained a BSBA degree with a double major in marketing and finance. Mr. Mendoza was awarded Most Distinguished Alumnus of the UP Cesar Virata School Business. He is also a Fellow with Distinction at the Life Management Institute of Atlanta, Georgia, USA, a Registered Financial Planner (RFP) and a four-time member of the Million Dollar Round Table. Mr. Mendoza also holds directorship in Prime Orion Philippines, Inc., a publicly-listed company on the Philippine Stock Exchange.
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MANUEL A. PACIS NON-EXECUTIVE AND INDEPENDENT DIRECTOR • Globe Director since April 2011 and re-elected on April 13, 2016 • Globe Board Committee memberships: - Nomination Committee - Audit Committee (Chairman) • Number of directorships in other publicly-listed companies: none Mr. Pacis, 72, Filipino, was formerly a Vice President for Finance of the Procter & Gamble Company (P&G) in Cincinnati, Ohio. He held positions of increasing responsibility in the Philippines, the US, Mexico, China, and Japan including Chief Financial Officer of P&G Asia, and a Global Business Unit (GBU). He also served as Vice President for Internal Controls Worldwide and Financial Systems Worldwide at P&G. His wide-ranging experiences throughout his business career have included leadership roles in corporate governance, strategic planning, internal audit, management systems/information technology, mergers and acquisitions, joint ventures, and finance and accounting. Mr. Pacis graduated with a Bachelor of Business Administration (magna cum laude) from the University of the East in 1963. Mr. Pacis is not a Director in any other publicly-listed company. 1 SEC Memorandum Circular No. 19, Series of 2016 updated the term limit for independent directors with reckoning year from 2012 in connection with SEC Memorandum Circular No. 9, Series of 2011. Therefore, Mr. Pacis remains qualified to serve the Company as an Independent Director.
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SAW PHAIK HWA NON-EXECUTIVE AND INDEPENDENT DIRECTOR • Globe Director since April 7, 2015 and re- elected on April 13, 2016 • Globe Board Committee memberships: - Nomination Committee - Audit Committee • Number of directorships in other publicly-listed companies: 1 Ms. Saw, 62, Singaporean, was the Group CEO of Auric Pacific Group, listed on the Mainboard of the Singapore Exchange, which has diverse business interests ranging from distribution of fast moving consumer food, food manufacturing and retailing, management of restaurant and food court operations to other strategic investments including fund investment. The Group operates in various countries throughout Asia including Singapore, Malaysia, Indonesia, Hong Kong and China. Ms. Saw retired as its CEO on May 1, 2015. Prior to this, Ms. Saw was the President and CEO of SMRT Corporation Ltd from December 2002 to January 2012, Singapore’s first multi-modal public transport service provider. During her tenure, she enhanced the public travel experience in Singapore by introducing commuter-centric initiatives and adding lifestyle conveniences at stations to make public transport a choice mode of travel for all. She was also instrumental in broadening SMRT’s geographical footprint as well as establishing SMRT’s presence overseas with the opening of offices in the Middle East and China which serve as springboards to opportunities in those regions. From 1984 to 2002, Ms. Saw was the Regional President in charge of businesses in Singapore, Indonesia, and Malaysia for DFS Venture Singapore. Ms. Saw holds a Second Upper Class Honours in Biochemistry from the University of Singapore and has attended the Advanced Management Programme in the University of Hawaii. Ms. Saw also holds directorship in Hour Glass Limited, a publicly-listed company on the Singapore Stock Exchange.
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RISK MANAGEMENT
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RISK MANAGEMENT GRI 102-11, 102-15, 102-29, 102-30, 102-31,
Globe Telecom believes that effective Risk Management (RM) practices are crucial to sustaining its profitability and resiliency as a company. Hence, we ensure that RM remains a core capability and an integral part of how decisions are made in the organization to deliver value to our shareholders. We live out our RM philosophy via three key pillars - Structure, Process and Culture. STRUCTURE We strive to cultivate an organizational structure that supports strong corporate
PROCESS
CULTURE We strive to nurture a risk aware culture by setting the appropriate tone at the
governance, clearly defines risk taking responsibility and authority, facilitates ownership and accountability for risk
We strive to sustain sound processes that facilitate the identification, assessment, quantification, mitigation, management, monitoring and communication of risks at the enterprise and operational level. We
taking, and ensures proper segregation of duties.
also regularly review our RM processes and policies on a continuing basis and stay
adjusted decisions, recognizing appropriate risk-taking attitudes, and embedding the right risk skills across the organization.
abreast of current developments to ensure that we remain robust and relevant, through benchmarking against industry and global
top, defining clear accountability for risks, espousing transparency and timeliness in sharing risk information, enabling risk-
best practices.
ROLES AND RESPONSIBILITIES
Given the overlapping oversight functions of the various committees, and to enable an integrated
BOARD OF DIRECTORS
and holistic approach to RM oversight at the Board, the Audit Committee was designated as the overall
The Board of Directors oversees and conducts an
consolidator of risks for all the committees. The Audit
annual review of our material controls, covering
Committee regularly reports to the Board of Directors
operational, financial and compliance areas and
on our RM efforts, thus, providing the Board with a
overall RM systems. The overall responsibility for
more coordinated and effective review of risks across
our RM oversight rests with the Board. To enable
the company and assurance over our overall RM.
the Board to effectively discharge our RM function,
To that effect, the Audit Committee functions as a
various Board committees have been designated to
separate level risk committee.
provide RM oversight for specific risk areas.
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BOARD RISK MANAGEMENT OVERSIGHT EXECUTIVE COMMITTEE
AUDIT COMMITTEE
• Provides oversight on corporate
• Provides oversight on financial reporting
strategic risks, technology, and operational risks • Provides guidance in setting up integrated and cross-functional risk management systems and controls
risks • Provides oversight on operational risks, specifically on financial statements and reporting, internal controls, legal or regulatory compliance, corporate
infrastrusture • Reviews, jointly with management, the adequacy of risk management processes for strategic, operational, and technology risks
governance, risk management, and fraud • Consolidates risks for all committees for Board review
MANAGEMENT
FINANCE COMMITTE • Provides oversight on the company’s financial risk management including risks related to capital structure, acquisitions, divestments, treasury activities, tax strategy, and compliance
• Reviews the continuing effectiveness and relevance of the RM framework, processes,
With guidance provided by the Board, our
organization and tolerances, as assisted by
management is fully responsible for decision-making
the Chief Risk Officer; and
over the day-to-day affairs of Globe including the design, development and implementation of the RM
• Ensures that RM activities are linked to the Risk Owners’ Key Result Areas.
strategies, policies and systems intended to address the identified risks.
CHIEF RISK OFFICER
CHIEF RISK EXECUTIVE
The Chief Finance Officer (CFO) and concurrent Chief Risk Officer (CRO) supports the CRE at the
The President and Chief Executive Officer (CEO)
management level. The CRO ensures that:
acting as the Chief Risk Executive (CRE) is ultimately responsible for RM priorities, including strategies,
• There is adequate supervision and guidance over
tolerances and policies which he recommends to the
the development, implementation,
Board for approval. The CRE:
maintenance and continuous improvement of RM policies, processes and documentation;
• Acts as the final enforcer of the RM process; • Establishes organizational structure, assigns authority and designates management of key
• Risk Management processes and activities are embedded within the organization’s policies, business cycles and operational decisions;
risks to Risk Owners to ensure that the RM activities are carried out effectively;
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• Responsibilities for managing specific risks by Senior Management are clear;
ENTERPRISE RISK MANAGEMENT SERVICES DIVISION
• The level of risk accepted by the company is appropriate;
The Enterprise Risk Management Services Division
• An effective control environment exists for the company as a whole; and
(ERMSD), headed by a Risk Management Program Officer, supports the CRO in undertaking her role.
• In collaboration with the CEO/CRE and Senior
Key functions of the ERMSD include:
Management, the Audit Committee, the Board, and other Stakeholders are provided periodic
•
Facilitating Management Team’s annual risk
information on the results of the annual
assessment exercise and reporting the results
risk assessment exercise and updates on the
thereof;
status of top risks, key risk mitigation activities,
•
Coordinating with Risk owners to gather updates
key risk and performance indicators and
on the status of risks and Risk Management/
emerging risks that could impact the attainment
mitigation activities;
of our objectives.
•
The CRO reports quarterly to the Board through the Audit Committee regarding our critical risks, control issues and key mitigation plans and provides insights on the following:
Facilitating the execution of Line Management’s risk and controls assessment exercise; and
•
Developing and implementing programs to embed RM discipline and drive sustained risk awareness across the organization.
INTERNAL AUDIT
• Risk management processes are working as intended; • Risk measures and mitigation plans are reported
The Internal Audit Team provides assurance on the
and continuously reviewed by risk owners for
effectiveness of RM systems and processes. Internal
effectiveness; and
Audit’s examinations cover a regular evaluation of
• Established risk policies and procedures are being complied with.
adequacy and effectiveness of RM and control processes encompassing the company’s governance, operations, information systems, reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets and compliance with laws, rules and regulations.
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RISK OWNER
Heads. The Management Team monitors enterprise level risks such as strategic risks, major program
The Risk owner has overall accountability for the
risks, and regulatory risks while the business team
assigned risk/s and is granted authority to enable
and group heads monitor the operational, legal, and
effective management of a particular risk. The Risk
project risks. Our key RM activities include:
owner’s function also includes: • Identification of top enterprise risks including • Understanding the risk/s and determining its drivers;
(but not limited to) those that relate to economic, environmental, social and governance, that can
• Planning for and executing appropriate RM strategies and mitigation plans for key risks identified;
impact the achievement of the company’s key objectives; • Prioritization of risks based on the degree of
• Securing required resources needed to effectively manage the risks;
impact to business objectives and the likelihood of occurrence based on pre-defined risk
• Monitoring and reviewing the level of risk
categories and parameters
exposures and continuing relevance of RM
• Scenario and mitigation planning
strategies and plans; and
• Business continuity planning
• Providing timely updates on the status of RM activities to concerned stakeholders.
• Crisis planning and management • Program risk management
RISK MANAGEMENT APPROACH
• Monitoring and reporting on the status of risks and corresponding RM plans • Establishing a risk register with clearly defined,
The ISO 31000 framework for Risk Management is used as the basis for our RM process. The established framework also ensure that compliance processes and procedures are effectively guided by the RM policy.
prioritized and residual risks • Identification, assessment and management of operational risks by line management • Establishment of operational risk thresholds for monitoring • As necessary, contract independent reviews by
Globe has institutionalized a process to closely
3rd party consultants to assess/identify risk
monitor the RM plans and actions being taken to
exposures and the verify soundness of
address critical risks, including the establishment of
controls.
key risk indicators and key performance indicators to ensure that critical risks are appropriately managed. This process includes a review made by the Management Team, Business Team and Group
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An enterprise-wide assessment of risks is performed
GLOBE PRINCIPAL RISKS
by the Management and Business Team as part of our annual planning and budgeting process,
The achievement of our key business objectives can
results of which are reported to and reviewed by
be affected by a wide array of risk factors. Some of
the Board. This assessment focuses on identifying
these risk factors are universal while some are unique
the key risks that threaten the achievement of our
to the telecommunications industry. The risks vary
business objectives at corporate and business unit
widely in occurrence and severity, some of which
level, as well as the assignment of risk owner/s and
are beyond our control. There may also be risks
development of plans in managing such risks. The
that are either presently unknown or not currently
established strategies and plans to address the risks
assessed as significant, which may later prove to be
are continuously developed, updated, improved, and
material. At Globe, we aim to mitigate the exposures
reviewed for effectiveness. On a regular basis, the
through appropriate RM strategies, strong internal
Management Team discusses the current risk levels
controls and capabilities, close monitoring of risks
and status of implementation of mitigation plans.
and mitigation plans. The section below sets out the principal risk types, listed in no particular order of
We also established a coordinated end-to-end
significance:
operational risk assessment program to identify, assess, treat, monitor and report risks for effective
POLITICAL AND SOCIO-ECONOMIC RISKS
and informed business decisions. Management believes that this program is an essential foundation
Our growth and profitability may be influenced by
for a strong ERM process as it reinforces the lines of
the overall political and economic situation of the
defense against key operational risks, while providing
Philippines. Any political instability in the Philippines
relevant insights to some of the top enterprise risks.
could negatively affect the country’s general
The Management Team is apprised of the results of
economic conditions which, in turn, could adversely
the assessments, particularly, the most significant
affect our business, financial condition or results
risks for inputs on strategies and action plans and
of operations, including the ability to enhance the
guidance on issues needing further review.
growth of its customer base, improve its revenue base and implement its business strategies.
When necessary, we seek external technical support from 3rd party experts to aid our Management Team and Board in the performance of their duties and responsibilities including RM.
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The newly-elected administration is seen to bring
There are no assurances that declines in the
potential changes that can positively or negatively
value of the peso will not occur in the future or
affect the telecommunications industry. These
that the availability of foreign exchange will
include:
not be limited. Recurrence of these conditions may adversely affect our financial condition and
• Pressure to improve network performance (i.e.,
results of operations.
network connectivity) • Possible pressure on pricing
b) Interest Rate Risk
• Potential entry of foreign telecom players
In order to fund our major expenditures, Globe
• Potential improved LGU support
has entered in various short and long-term debt
• Promise of increased infrastructure spend
obligations, which exposes us to the risk of changes in interest rates.
A regular environmental scanning exercise is performed to ensure the identification of any
Our exposure to interest rate risk and currency risk
uncertainties arising from political and socio-
are being managed by:
economic factors. Management is closely monitoring the shift in policies to anticipate the potential impact
• Using a mix of fixed and variable rate debt that
to the business plans as well as maintaining open
are meant to achieve a balance between cost and
communication lines with the various government
volatility.
sectors.
• Entering into interest rate swaps, in which we agree to exchange, at specified intervals, the
FINANCIAL MARKETS RISK
difference between fixed and variable interest amounts calculated by reference to an agreed-
a) Foreign Exchange Risk
upon notional principal amount.
Exposure to foreign exchange risks remains a
• Using a combination of natural hedges and
risk to Globe. Our foreign exchange risk
derivative hedging to manage its foreign
results primarily from movements of the
exchange exposure.
Philippine peso against the US dollar (USD) with respect to our USD-denominated financial assets,
We also regularly evaluate our projected and actual
liabilities, revenues and expenditures.
cash flows and continuously assess conditions in the financial markets for opportunities to pursue fund raising activities, in case any requirements arise.
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COMPETITION RISK
We continue to assert our market position through the offering of personalized plans and attractive
a) Traditional Competition
product/device bundles, and launching innovative
Competition remains intense in the Philippine
products and services that are relevant and
telecommunications industry amidst a maturing
responsive to the needs of the customers and
mobile market and high growth data business,
focusing on superior customer experience. We
as current operators seek to increase market
also partner with leading providers of content,
share with aggressive offerings while potential
mobile messaging, social media and other popular
new entrants continue to further heighten the
applications in order to provide products and
competitive dynamics amidst a maturing
services that anticipate and cater to shifting
mobile market. The Philippine
customer preferences.
telecommunications industry continues to be a two-player market following the withdrawal of
REGULATORY RISK
a new player in 2016, as such, the PLDT Group (composed of PLDT, Smart, and Digitel)
We are regulated by the National
continues to be our principal competitor.
Telecommunications Commission (NTC), an attached agency of the Department of Information
b) Alternative Competition
and Communications Technology (DICT), for our
The competitiveness of the industry is further
telecommunications business, and by the Securities
underlined by cheap alternatives to
and Exchange Commission (SEC) and the Bangko
communication such as instant messaging,
Sentral ng Pilipinas (BSP) for other aspects of our
social network services and voice over
business. On the other hand, the newly-formed
internet protocol. These alternatives are also
Philippine Competition Commission (PCC) has
driven by the proliferation of affordable
oversight on our mergers, acquisitions, and other
smartphones and internet-capable mobile devices.
similar transactions as it is tasked to effectively level the playing field among businesses and penalize
The continued growth and development of the
anti-competitive agreements and abuse of market
telecommunications industry will depend on many
dominance.
factors. Any significant economic, technological, or regulatory development could result in either a
The introduction of, changes in, or the inconsistent
slowdown or growth in demand for mobile services
application of laws or regulations from time to time,
and may impact our business, revenues, and net
may materially affect our operations, and ultimately
income.
our earnings which could impair our ability to service
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debt. There is no assurance that the regulatory
Our data network is continuously being enhanced
environment will support any increase in our
by deploying new mobile and data technologies,
business and financial activity.
increasing our network capacities and coverage and modernizing the fixed line data infrastructure.
We manage our regulatory risks through regular monitoring of regulatory rulings especially those that
CHANGE PROGRAM RISK
could negatively impact our businesses and proactive engagement with the regulators.
Globe is in the process of transforming our businesses and such changes permeate into our
CUSTOMER PREFERENCE AND TECHNOLOGY SHIFT RISK
Network and IT systems and supporting processes. Crucial changes in our network infrastructure are being pursued mainly to improve network quality,
Our ability to recognize and quickly respond to
anticipate the surge in voice and data traffic,
changes in customer preferences by upgrading our
decrease total cost of ownership and make the
existing infrastructure and systems may impact our
network robust enough to meet future needs. IT
competitiveness in the marketplace.
transformation programs are set to re-engineer our IT systems and key processes to enhance our
Mobile data applications and the rising popularity
ability to deliver superior customer experience and
of smartphones and mobile and connected devices
understand what our customers value, while being
are key contributors to the explosion of data traffic.
able to roll out products to the market in a more
This phenomenon is placing a strain on our network
efficient and effective manner.
capacity as well as the supporting back end systems, negatively impacting customer experience.
Should our ambitious and complex transformation programs fail to achieve the desired outcomes, we
Our business, product and technical teams continue
could ultimately lose market share thus impacting
to keep abreast of the latest innovations and trends
our financial results.
in telecommunications technologies, devices and gadgets. The information and insights gathered
We have institutionalized the appropriate program
are considered in the roadmap of future products
governance organizations with Management Team
and services and our network and IT infrastructure
oversight and accountability to ensure program
evolution. Proper timing of investments in
risks are properly considered and managed aimed
technology and infrastructure always consider its
at achieving key program objectives and improving
strategic implications, velocity of technology cycles
customer experience. We ensure that a competent
and customer adoption.
program office and project organization is in place for major change programs. Supporting processes
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have been established to closely monitor and provide
Various people-related programs designed to engage
a venue for regular progress updates, alignment of
and motivate employees are being implemented
efforts, discussion of critical implementation issues
in order to retain and attract key talents. Globe
and challenges and help ensure successful execution
University was formally organized to address the
of our change programs.
growing competency and development needs of Globe. With the need to develop key talent
ORGANIZATIONAL AGILITY RISK
imperatives, it is a significant move towards achieving key improvements in workforce capabilities and
Leading the digital lifestyle for our customers and
performance.
diversification of our business portfolio is critical
REPUTATIONAL RISK
to maintain our market competitiveness. Failure to drive the entire organization to quickly adapt work practices and make the right shift in skills and
We are recognized as one of the Philippines’ top
competencies necessary for us to lead in the digital
companies providing innovative services and
space and forge into adjacent spaces may lead to
delivering superior customer experience while
missed business opportunities.
maintaining a socially responsible business. We are exposed to reputational risks which may result from
We have initiated cultural change programs that
our actions or that of our competitors; indirectly
focus on customer centricity and innovation.
due to the actions of an employee; or consequently
Opportunistic hiring of talents required for
through actions of outsourced partners, suppliers or
innovation and new investment areas are also
joint venture partners.
carefully considered. Further, through Kickstart Ventures we invested in building to scale the
Damage to our reputation and erosion of brand
technical foundation of digital and technology
equity could also be triggered by the inability to
start-up businesses operating in the Philippines. We
swiftly and adequately handle negative social media
continue to build the right leadership structures and
sentiments on our products and services triggered
system team that will support an agile, future-ready
by various factors such unfavorable customer
and customer-centric organization.
experience, among others.
HUMAN CAPITAL RISKS
Regular process effectiveness and efficiency reviews on existing customer impacting processes are
We are exposed to risks in staffing our critical
being conducted to identify and address existing
functions with competent management and
gaps, thus minimizing exposure to reputational
technical expertise. Our greatest asset is our people
risks arising from problem areas. Front line staff are
and our success is largely dependent on our ability
regularly trained to enable them to effectively handle
to attract highly skilled personnel and to retain and
customer cases. On the other hand, close monitoring
motivate our best employees. Our people is the
of customers’ online sentiments is being performed
glue that brings everything together which is why it
to quickly detect customer issues being surfaced in
is crucial to ensure that we are able to acquire the
social media and be able to manage them early on.
right people and enhance their exceptional abilities further.
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COMPLIANCE RISKS
b) Data Privacy
a) Cyber Threats
In the course of regular business, we acquire
The cyber security landscape is rapidly
personal information of our customers and
evolving and users are heavily relying on
retain the same either electronically or
digitized information and sharing vast amounts
via hard copies. Existing laws require that
of data across complex and inherently vulnerable
these information be adequately protected
networks. This exposes us to various forms of
against unauthorized access and or/disclosure.
cyber-attacks which could result in disruption of
The risk of data leakage is high with the level
business operations, damage to reputation, legal
of empowerment granted to in-house and
and regulatory fines and customer claims.
outsourced employees handling sales and after
New technologies and systems being installed in
sales support transactions to enable the efficient
the name of advanced capabilities and
discharge of their functions.
processing efficiencies may introduce new risks which could outpace the organization’s ability
Employee awareness on data protection
to properly identify, assess and address such
and loss prevention is reinforced through
risks. Further, new business models that rely
regular corporate dissemination channels.
heavily on global digitization, use of cloud,
Further, employees are made accountable for
big data, mobile and social media exposes the
maintaining the confidentiality of data handled,
organization to even more cyber-attacks.
including disclosures and information shared in various social media platforms. Controls over
We continue to strengthen and enhance our
processes that require handling of customer’s
existing security detection, vulnerability
personal information are being tightened,
and patch management, configuration
coupled with enhancements in existing security
management, identity access management,
capabilities to prevent compromise of customer
events monitoring, data loss prevention and
data.
network/end-user perimeter capabilities to ensure that cyber threats are effectively managed.
Management recently announced the appointment of the Chief Information
As part of our mission to promote the intelligent
Security Officer and concurrent Data Protection
and judicious use of the internet, we also educate
Officer to strengthen management of risks
the youth to better understand the impact of
relating to the confidentiality and integrity of
their online behavior so they can be responsible
customer information while ensuring
digital citizens, thereby lessening cyber threats to
compliance with Data Privacy Act of 2012
Globe. This cyber wellness advocacy takes the
(Republic Act 10173).
form of the award-winning Digital Thumbprint Program (DTP), held in partnership with Optus and Singapore Telecommunications Ltd. (Singtel).
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c) Business Disruptions
d) Revenue Leakage
The quality and continued delivery of our
The telecommunications industry is inherently
services are highly dependent on our
vulnerable to revenue leakage, with the
network and IT infrastructure which are
dynamic changes in networks and IT
vulnerable to damages caused by extreme
systems and the multitude of its service/
weather disturbances, natural calamities, fire,
bundle/plan offerings. Given the pace at which
acts of terrorism, intentional damage, malicious
new offers are launched in the market and the
acts and other similar events which could
speed of technological innovations being adopted
negatively impact the attainment of revenue
by Globe to support such offers, the need to
targets and our reputation.
identify and plug revenue leakages becomes an even more important capability in maximizing
We are continuously enhancing our incident
revenues and returns.
and crisis management plans and capabilities and have incorporated disaster
We strengthen our capabilities through the
risk reduction and response objectives in our
identification and embedding of
business continuity planning. Part of our Business
appropriate revenue assurance controls into
Continuity Management Program initiatives
new products, services, and new systems as
include:
well as the implementation of sound controls on existing products and services.
• Partnering with the Metropolitan Manila
We continuously improve our control
Development Authority (MMDA) and the
effectiveness, efficiency, and coverage through
Philippine Disaster Recovery Foundation (PDRF),
periodic controls review exercises, controls
to create a network of support during disasters.
discovery, and controls automation initiatives.
• Sponsored the development of hazard maps for 54 out of 81 Philippine provinces, which will
e) Fraud
be used by Phivolcs to assist the provinces in
We run the risk of falling victim to fraud
their disaster management plans.
perpetrated by unscrupulous persons or
• Reinforced Ayala ASSIST, an app that enables
syndicates either to avail of “free”
our Ka-Globe and other Ayala employees to
services, to take advantage of device
easily seek assistance during disasters.
offers or defraud our customers. With the
• Re-certification in Business Continuity on an enterprise-wide scale
increased complexity of technologies, network elements and IT infrastructure, new types of fraud that are more difficult to detect or
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combat could also arise. This risk also involves
• Provide hazard identification and risk assessment
irregularities in transactions or activities
for Globe Telecom’s operations, activities, events,
executed by employees for personal gain.
and infrastructure;
We remain committed in preventing and
• Facilitate implementation of risk control and
detecting fraud by institutionalizing processes
mitigation measures for safety and environmental
and building capabilities that enable the
management, in collaboration with operational
early detection, investigation, resolution and
and business groups;
enforcement of sanctions and legal options,
• Provide and facilitate risk transfer and business
close monitoring and timely reporting of various
protection solutions through insurance or
instances of fraudulent activities. We have
contractor liability agreements;
initiated various programs to equip our
• Establish an effective framework of business
customers with the right information so that
continuity management for the organization
they do not fall victims to fraudsters. Moreover,
to effectively respond to threats such as natural
we closely coordinate with law enforcement
disasters, equipment failure, data breaches and,
agencies to help protect our customers as well as
in effect, protect its business interests.
from the activities meant to defraud them.
OPERATIONAL RISKS Realizing the need to protect the business from losses arising from failures in internal processes, people and systems or external events, which, is an integral part of our RM responsibility, an Operational Risk Management and Business Protection (ORB) department was established. ORB’s primary objective is to provide end-to-end support for all activities under risk management, overseeing safety, environment, infrastructure hazard management, insurance, as well as enterprise business continuity management. ORB reports to the Head of Logistics and Administrative Services who directly reports to the CFO/CRO. The department is mandated to do the following:
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MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL HIGHLIGHTS: RESULTS OF OPERATIONS Globe Telecom, Inc. registered another record year, 2016
20151
YoY CHANGE
119,969
5%
service revenues of close to P120.0, 6% higher
NET OPERATING REVENUES 126,184
than the previous record level of P113.7 billion in 2015. The sustained revenue momentum, despite the competitive intensity during the second half of
SERVICE REVENUES 119,990
as we posted our highest full-year consolidated
113,679
6%
91,243
1%
2016, was driven by the solid growth in data related products across all segments.
MOBILE2 91,887
Mobile revenues slightly grew year-on-year, at P91.9 billion in 2016 from the P91.2 billion reported a
HOME BROADBAND3 14,460
11,320
year ago, driven by the continued shift from core
28%
voice and SMS in favor of data as more of our customers adopt the digital lifestyle. TM, our mass-
CORPORATE DATA4 9,873
7,698
market brand, registered 3% revenue growth from
28%
last year, while Globe Postpaid revenues posted a
FIXED LINE VOICE4 3,780
slight 1% improvement from 2015, partly offset 3,418
11%
by Globe Prepaid revenues, which posted a yearon-year decline of 1%. At the end of December
NON-SERVICE REVENUES 6,194
6,290
2016, our mobile subscriber base reached 62.8
-2%
million, up a robust 12% from the 56.2 million subscribers reported in 2015, driven by the record-
1 2015 service revenues have been restated to reflect the change in the presentation of fully mobile broadband to be part of mobile business (which was reported under broadband previously) 2 Includes mobile voice, sms, data revenues and fully mobile broadband services. 3 Includes revenues from wired and fixed wireless, 4 Includes international and domestic data services, corporate internet access, and data center solutions. 5 Includes revenues from landline and DUO services.
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level prepaid gross acquisitions during the year despite the increase in blended churn rates. On a product perspective, mobile data is now the biggest contributor to our total mobile revenues (38%), outpacing voice (37%), despite the industry
GLOBE TELECOM
aggression in data pricing in the second half of the
regional media powerhouse Astro, Filipino gaming
year. Mobile data service revenues reached P34.6
fans can now have access to eGG Network or Every
billion in 2016, 25% higher than the P27.7 billion
Good Game, Southeast Asia’s first dedicated 24/7
reported a year ago.
ESports network. In addition, the popular singing application Sing! by Smule allows our subscribers
Our home broadband business likewise sustained
to record video duets with their favorite artists
its growth momentum at P14.5 billion in 2016,
and share it with a global audience. Meanwhile,
increasing revenues by 28% year-on-year, with
Tribe currently offers live and on-demand content
total subscriber base now reaching 1.13 million.
with a wide selection of Korean entertainment
The impressive growth in revenues was driven by
shows. Through our partnership with Disney, we
the continued subscriber expansion in our fixed
also introduced in 2016 the Globe myStarter Plan
wireless (+23%) solutions, given the favorable
bundled with the latest Disney Mobile smartphones.
customer response to our home broadband’s latest
Globe is the first telco in Southeast Asia to offer
plans, which not only incorporate fully-upgraded
Disney Mobile smartphones.
speeds and data allocation, but also comes bundled with their choice of premium content, and the
As part of our commitment to address the growing
most cutting-edge devices for a full on-demand
customer demand for constant connectivity, we
entertainment experience.
launched in the third quarter of 2016 GoWiFi, a premium open national WiFi network open to
Despite the intense industry competition and the
any customer with a WiFi-enabled device. Both
shift towards digital services, our continued efforts
Globe and non-Globe customers can enjoy the free
to innovate and create partnerships with global
premium 30 minutes access by simply registering
content providers kept us a step ahead of the
their mobile number. Globe GoWiFi hotspots include
competition. For content, we forged new strategic
the major airports and bus terminals, Manila Metro
partnerships with world-class leaders in their
Rail Transit System (MRT) stations, Ayala Malls,
respective categories to complement our HOOQ,
Starbucks coffeehouse chain, select convenience
Disney and NBA partnerships namely, Netflix, Turner,
stores and fast food chains. Globe is also the
Sports Illustrated, Astro, Smule, and Tribe. We also
country’s first telecommunications company to
expanded ourcontent offerings to include Turner-
provide free Wi-Fi services in all 20 LRT and all 13
owned applications, such as Cartoon Network.
MRT stations along EDSA.
Through Sports Illustrated, our subscribers can access in-depth exclusive sports news coverage of
Complementing the growth of our mobile and home
American sports programming including basketball,
broadband segments, our corporate data business
the NFL, NHL, and ESports, among others. With
likewise improved year-on-year at P9.9 billion as of
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end 2016 or 28% higher from the P7.7 billion posted
acquisition of Vega Telecom, Inc. (“VTI”), including
in 2015, as demand for data connectivity continues
our share in net losses of joint venture, spectrum
to surge, impacting our customer expansion, circuit
amortization and interest expenses related to the
count increase and higher usage. The strong
additional debt incurred from the VTI transaction. In
demand for internet and domestic leased lines, as
comparison, Globe recorded one-time gains in 2015
well as cloud computing solutions, contributed to
coming from the sale of a 51% equity stake in Yondu,
the revenue growth of our corporate data business.
Inc. (“Yondu”) and the acquisition of a 98.6% stake
The growth was likewise aided by the revenue
in Bayan. Normalized income for 2016, excluding
contribution from Bayan’s corporate data revenues.
the impact of the strategic transactions mentioned
Our traditional fixed line voice revenues, also posted
above, would have been 12% higher year-on-year
an 11% increase year-on-year at P3.8 billion as
from P15.0 billion in 2015 to P16.9 billion in 2016.
of end 2016 due to the continued popularity of
Our core net income, which excludes the impact of
our new home broadband bundled plans. In the
non-recurring charges, and foreign exchange and
fourth quarter of 2016, Globe signed a separate
mark-to-market charges, likewise grew by 6% year-
memorandum of confirmation with Huawei and
on-year to reach P16 billion from P15.1 billion in
Nokia relating to a capacity expansion program for
2015.
our corporate data network. The fixed line network modernization project will improve the quality of
Our consolidated Return on Average Equity (ROE)
our corporate network with capabilities, capacities,
registered at 26% as of end-December 2016,
features, and functionalities that will be constantly
compared to 29% in 2015 using net income and
responsive to our business and enterprise customer
based on average equity balances for the year ended.
requirements.
Using our annualized core net income excluding the effects of non-recurring expenses, foreign exchange
We posted another record-level consolidated
loss, one-time gains on net income, return on average
EBITDA, ending the year with close to P50 billion,
equity for the year just ended was at 26% compared
up a robust 9% from a year ago. Our total operating
to 27% of 2015.
expenses and subsidy grew in step with revenues, or higher by 3% year-on-year to P70.0 billion from
Our consolidated basic earnings per common share
P67.7 billion last year, as we continued to re-invest
were P115.45 and P120.11, while consolidated
our gains to support the growing subscriber base
diluted earnings per common share were P115.27
and the aggressive expansion of our data network.
and P119.92 as of end-December 2016 and
EBITDA margin was at 42%, higher than the previous
2015, respectively.
year’s margin of 40%. Our balance sheet and cash flows remain strong with Despite the strong growth in EBITDA, the increase
ample liquidity and gearing comfortably within bank
in our non-operating expenses as well as higher
covenants. We ended the year with gross debt to
depreciation expenses recognized during the year
equity ratio on a consolidated basis at 1.67:1 from
led to Globe posting a 4% decline in net income at
1.22:1 in 2015, while our net debt to equity was at
P15.9 billion, as against the P16.5 billion reported
1.53:1 as of end 2016 from 1.02:1 last year.
in 2015. Note that this year’s non-operating expenses included P1.1 billion of costs related to our
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Our consolidated assets as of 31 December 2016
of Brightshare Holdings Corporation (“BHC”). The
amounted to P250.0 billion compared to P195.7
remaining 50% equity stake in VTI, BAHC and BHC
billion in 2015. Consolidated cash, cash equivalents
was acquired by Philippine Long Distance Telephone
and short term investments (including investments
Company (“PLDT”). The total enterprise valuation of
in assets available for sale and held to maturity
VTI, BAHC and BHC was P70.0 billion, including total
investments) was at P8.6 billion as of end December
liabilities of P17.2 billion. In a bid to expeditiously
of 2016 compared to P11.8 billion as of end
harness the benefits of the company’s new spectrum
December 2015.
assets, we began the deployment of LTE sites using the 700 MHz band in June of 2016 following the
Our net cash flows provided by operating activities
50% acquisition of San Miguel’s telecommunication
for the year just ended were at P37.5 billion, grew
assets, which also included spectrum resources in the
by 4% year on year.
1800 MHz, 2300 MHz, and 2600 MHz.
Meanwhile, net cash used in investing activities
Consistent with our commitment to improve the
amounting to P57.7 billion, was 77% higher than last
internet service in the country, we already hit our
year. Consolidated cash capital expenditures as of
target of deploying 500 LTE sites using the 700
end of December 2016 amounted to P36.7 billion, up
megahertz band (L700). Majority of the our L700
by 14% from last year’s P32.1 billion
sites were deployed mostly in Metro Manila and other highly-populated areas, where majority of
Consolidated net cash provided by financing
customers using LTE-based handsets are located.
activities amounted to nearly P17.0 billion in 2016
We had set aside an additional network investment
versus last year’s net cash used of P8.4 billion for
of $300 million in October, bringing the our total
financing activities in 2015. This year’s increase was
capital expenditure for 2016 to $1 billion. We plan
mainly due to additional borrowings. Consolidated
to deploy more LTE sites in 2017 using the additional
total debt, likewise, increased by 46% from P72.2
spectrum assets to further accelerate our network
billion at the end of 2015 to reach P105.7 billion at
build and enable us to stay ahead of the growing
the end of December 2016.
consumer demands. We also plan to deploy fiber optics in 20,000 barangays by 2020 that will provide
Our total cash capital expenditures stood at about
ultra-fast internet access to around 2 million homes
P36.7 billion (approximately $772 million), 14%
nationwide. Our completed deployment of fiber
higher than last year’s level of P32.1 billion.
broadband technology was done in selected areas
On May 30, 2016, our Board of Directors through
of Metro Manila, North and South Luzon, Cebu and
our Executive Committee, approved last May 30,
Davao.
2016, the acquisition and signing of a sale and share purchase agreement and other related definitive
Lastly, we paid out P11.7 billion in common cash
agreements for the following entities from San
dividends in 2016, representing 77% of 2015 core
Miguel Corporation (“SMC”): 50% of the issued
net income. This was in line with our dividend policy
and outstanding capital stock of Vega Telecom, Inc.
of distributing 75% to 90% of prior year’s core net
(“VTI”); 50% of the issued and outstanding capital
income.
stock of Bow Arken Holdings Company Inc. (“BAHC”); and, 50% of the issued and outstanding capital stock
2016 ANNUAL REPORT
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Independent assurance statement Scope and approach Globe Telecom, Inc. commissioned DNV GL AS Philippines Branch (“DNV GL”) to undertake independent assurance of the 2016 Financial and Sustainability Report (the “Report”) for the year ended 31 December 2016. We performed our work using DNV GL’s assurance methodology VeriSustainTM1, which is based on our professional experience, international assurance best practice including International Standard on Assurance Engagements 3000 (ISAE 3000). We evaluated the performance data using the reliability principle together with available collated data. The performance data in scope included economic, environmental and social data. Financial information from the annual report was excluded as these had been independently audited by a 3rd party accountant, the following sections were also excluded from the scope of assurance - Management Discussion and Analysis, as this was a summary of the 20-IS figure submitted to regulatory authorities (Philippines Stock Exchange – Securities and Exchange Commission). We understand that the reported financial data and information are based on data from Globe Telecom, Inc.’s Audited Financial Statements [posted February 28, 2017], which are subject to a separate independent audit process. The review of financial data taken from the Audited Financial Statements is not within the scope of our work. We planned and performed our work to obtain the evidence we considered necessary to provide a basis for our assurance opinion. We are providing a ‘limited level’ of assurance. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement; and consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. DNV GL conducted the assurance based on GRI reporting principles. The scope of assurance carried out by DNV GL’s multi-disciplinary team of sustainability and assurance specialists covered operations of Globe Telecom, Inc. Globe Fintech Innovations, Inc., Kickstart Ventures, Inc., Innove Communications, and G-Xchange, Inc. in the Philippines.
Responsibilities of the Directors of Globe Telecom, Inc. and of the assurance providers The Directors of Globe Telecom, Inc. have sole responsibility for the preparation of the Report. In performing our assurance work, our responsibility is to the management of Globe Telecom, Inc.; however our statement represents our independent opinion and is intended to inform all of Globe Telecom, Inc. stakeholders. DNV GL was not involved in the preparation of any statements or data included in the Report except for this Assurance Statement. We have no other contract with Globe Telecom, Inc. and this is the second year that we have provided assurance. DNV GL’s assurance engagements are based on the assumption that the data and information provided by the client to us as part of our review have been provided in good faith. DNV GL expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on this Assurance Statement.
1
The VeriSustain protocol is available upon request from DNV GL Website (www.dnvgl.com)
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Basis of our opinion We undertook the following activities as part of the assurance process • •
• •
• •
•
Review of the current sustainability issues that could affect Globe Telecom, Inc. and are of interest to stakeholders; Review of Globe Telecom, Inc. approach to stakeholder engagement and recent outputs of a stakeholder engagement process conducted through a third party that included the vendors, government, parent companies and affiliates, and media and disaster respondents. Stakeholder engagement with employees and customers was carried out directly by Globe Telecom, Inc.; Review of information provided to us by Globe Telecom, Inc. on its reporting and management processes; Interviews with selected Directors and senior managers responsible for management of sustainability issues and review of selected evidence to support issues discussed. DNV GL was free to choose personnel from various functions for the interview so as to ensure adequate coverage of the report. Functions interviewed included uman Resources, Enterprise Risk Management, Corporate Communications, Property Management, and Corporate Social Responsibility; Site visits to Globe Telecom, Inc. , Kickstart Ventures, Inc., Globe niversity and MK2 Data Centre were carried out for review of process and systems. Kickstart Ventures and Globe niversity both contributed stories for the Report; Review of supporting evidence for key claims and data in the report. ur checking processes were prioritised according to materiality and we based our prioritisation on the materiality of issues at a consolidated corporate level; Review of the processes for gathering and consolidating the data.
pinion n the basis of the work undertaken, nothing came to our attention to suggest that the Report does not properly describe Globe Telecom, Inc.’s adherence to the Principles for defining Report Content in GRI Standards. DNV GL believes that the report is in line with the In accordance ‘Core’ option of reporting requirements of the GRI Standards. Further conclusions and observations on the adoption of reporting principles are made below.
Limitations The engagement excludes the sustainability management, performance and reporting practices of Globe Telecom, Inc. associated companies, suppliers, contractors and any third-parties mentioned in the Report. The company position statements and key addresses are excluded from the scope of our work. DNV GL did not interview external stakeholders as part of this Assurance Engagement. Economic performances based on the financial data were cross-checked with internal documents and the audited consolidated financial statements. Limited depth of evidence gathering including inquiry and analytical procedures and limited sampling at lower levels in the organi ation were applied. The baseline data for Environmental and Social performance are not verified, while the aggregated data at the corporate level are used for the verification.
bservations Without affecting our assurance opinion we also provide the following observations The verification team has observed that there is general awareness of sustainability context across all different levels of the organi ation. The stakeholder engagement process is established and involves processes for identification of stakeholders and planned engagement with key stakeholders to identify significant sustainability concerns. The disclosures related to sustainability issues and performances are fairly reported in a neutral tone, in terms of content and presentation. Further opinions with regards to the adherence to the following Principles are made below;
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aterialit Globe Telecom, Inc. has identified four focus areas such as Care for the Environment, Care for our People, Positive Societal Impact, and a Digital Nation based on internal consultation with project and operating teams, media research on the recurring themes, and customer surveys. The corresponding GRI performance indicators with the four focus areas are addressed in the Report. A comprehensive materiality assessment was completed in late 201 and material issues identified are explained in this Report. Globe Telecom., Inc. could, in the future, also consider conducting regular review of material issues internally as well as emerging stakeholder concerns and issues related to the telecommunications sector. ompleteness The Report has covered the sustainability strategy, management approach and sustainability performances of Globe Telecom, Inc. The current reporting boundaries are dependent on subsidiaries that Globe Telecom, Inc., has ownership of, and not where it may exercise management control. Globe Telecom, Inc. could consider including in its boundaries all entities that generate significant sustainability impacts and those over which it exercises significant influence. Accurac and Reliabilit The document allows the reader to examine both the positive and the negative trend of Globe Telecom, Inc. performance in 2016. Globe Telecom, Inc. has selected, compiled and reported information in a relatively consistent manner. The data used for reporting of the sustainability performance presented in the Report is collected from the subsidiaries by a centrally, dedicated function in Globe Telecom, Inc. headquarters and consolidated for reporting. Any errors or misstatements identified during the assurance engagement were communicated for correction prior to the Report being published. Data owners were able to demonstrate the origin and interpretation of the data in a reliable manner. The data was identifiable and traceable.
pportunities for Improvement With regards to the reporting principles of GRI standard, we noted that Globe Telecom, Inc. is working on alignment of the Disclosure on Management Approach (DMA) to identified material issues. Globe Telecom, Inc. could consider in the future, to have commitments, goals and targets identified for short, medium and long term, and reporting on performance against these material issues in its DMA.
or and on behalf of DNV GL AS Philippines Branch arch
Grace Cheah Lead Verifier DNV GL – usiness Assurance
Nandkumar Vadakepatth Assurance Reviewer DNV GL – usiness Assurance
------------------------------------------------------------------------------------------------DNV GL usiness Assurance is part of DNV GL Group and a global provider of certification, verification, assessment and training services, helping customers to build sustainable business performance. www.dnvgl.com
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(In Thousand Pesos)
See accompanying Notes to Consolidated Financial Statements.
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(In Thousand Pesos, Except Per Share Figures)
(Forward)
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(In Thousand Pesos, Except Per Share Figures)
See accompanying Notes to Consolidated Financial Statements.
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(Forward)
(In Thousand Pesos)
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See accompanying Notes to Consolidated Financial Statements.
(In Thousand Pesos)
(In Thousand Pesos)
(In Thousand Pesos)
(Forward)
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(In Thousand Pesos)
See accompanying Notes to Consolidated Financial Statements.
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*Deconsolidated in 2016. **Ceased operations in 2016. *** Accounted for as Investment in Associate in 2015 (refer to Note 9.2)
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.
Amendments to PFRS 7: Financial Instruments: Disclosures
Amendment to PAS 19: Employee Benefits
Amendment to PAS 34: Interim Financial Reporting
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.
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Revenue from Contracts with Customers
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Amendments to PFRS 1 - First-time Adoption of International Financial Reporting Standards
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Amendments to PFRS 12 - Disclosure of Interests in Other Entities
Amendments to PAS 28 - Investments in Associates and Joint Ventures
188
GLOBE TELECOM
Application of PFRS 15 "Revenue from Contracts with Customers" on Sale of Residential Properties under Pre-completion Contracts
Revenue Recognition
2016 ANNUAL REPORT
189
Service Revenue 2.6.1.1.1
190
Subscribers
GLOBE TELECOM
2.6.1.1.2
Traffic
2.6.1.1.3 GCash
2.6.1.1.4
Fuse Revenue
Nonservice Revenues
Others
2016 ANNUAL REPORT
191
Subscriber Acquisition and Retention Costs
Cash and Cash Equivalents
Financial Instruments General 2.6.4.1.1 Initial Recognition and Measurement
192
GLOBE TELECOM
2.6.4.1.2 Financial Assets or Financial Liabilities at FVPL
2016 ANNUAL REPORT
193
2.6.4.1.3 HTM Investments
2.6.4.1.4 Loans and Receivables
194
GLOBE TELECOM
2.6.4.1.5 AFS Investments
2.6.4.1.6 Other Financial Liabilities
2.6.4.1.7 Derivative Instruments General
2016 ANNUAL REPORT
195
Recognition and Measurement
Types of Hedges
Fair Value Hedges
196
GLOBE TELECOM
Cash Flow Hedges
Other Derivative Instruments Not Accounted for as Accounting Hedges
2016 ANNUAL REPORT
197
Offsetting
Impairment of Financial Assets
2.6.4.2.1 Assets Carried at Amortized Cost
2.6.4.2.1.1 Subscribers
198
GLOBE TELECOM
2.6.4.2.1.2 Traffic
2016 ANNUAL REPORT
199
2.6.4.2.1.3 Other receivables
2.6.4.2.2 AFS Investments Carried at Cost
2.6.4.2.3 AFS Investments Carried at Fair Value
Derecognition of Financial Instruments 2.6.4.3.1 Financial Asset
200
GLOBE TELECOM
2.6.4.3.2 Financial Liability
Fair Value Measurement
2016 ANNUAL REPORT
201
Inventories and Supplies
Prepayments
Value Added Tax (VAT)
Property and Equipment
202
GLOBE TELECOM
ARO
Intangible Assets
2016 ANNUAL REPORT
203
Business Combinations and Goodwill
204
GLOBE TELECOM
Investments in Associate and Joint Venture
2016 ANNUAL REPORT
205
Related Party Transactions
Impairment of Nonfinancial Assets
206
GLOBE TELECOM
Unearned Revenues
Income Tax Current Income Tax
Deferred Income Tax
2016 ANNUAL REPORT
207
Provisions
Share-based Payment Transactions
208
GLOBE TELECOM
Capital Stock
Additional Paid-in Capital
Treasury Stock
Other Comprehensive Income
Retained Earnings
Pension Cost
2016 ANNUAL REPORT
209
Borrowing Costs
Leases
210
GLOBE TELECOM
Globe Group as Lessee
Globe Group as Lessor
General, Selling and Administrative Expenses
Foreign Currency Transactions
2016 ANNUAL REPORT
211
Fair Value of Financial Instruments
EPS
Operating Segment
Contingencies
Events after the Reporting Period
212
GLOBE TELECOM
Leases Operating Lease Commitments as Lessor
Operating Lease Commitments as Lessee
Finance Lease
Financial Assets not Quoted in an Active Market
2016 ANNUAL REPORT
213
Allocation of Goodwill to Cash-Generating Units
Determination of Whether the Globe Group is Acting as a Principal or an Agent
Provisions and Contingencies
214
GLOBE TELECOM
Assessment of Investment in Automated Fare Payments Inc. (AFPI) [formerly Automated Fare Collection Services (AFCS))]
Assessment of Investment in Yondu
Assessment of Investment in GTHI
Assessment of Investment in TechGlobal
2016 ANNUAL REPORT
215
Assessment of Investment in VTI, BAHC and BHC
Revenue Recognition
Customer Loyalty Programmes
Allowance for Impairment Losses on Receivables
Obsolescence and Market Decline
216
GLOBE TELECOM
ARO
EUL of Property and Equipment, Investment Properties and Intangible Assets
2016 ANNUAL REPORT
217
Asset Impairment Impairment of Nonfinancial Assets Other Than Goodwill
218
GLOBE TELECOM
Impairment of Goodwill
Deferred Income Tax Assets
Financial Assets and Financial Liabilities
2016 ANNUAL REPORT
219
Pension and Other Employee Benefits
Provision for Restructuring Costs
220
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
221
(In Thousand Pesos)
(In Thousand Pesos)
222
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
223
224
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
2016 ANNUAL REPORT
225
226
GLOBE TELECOM
*Goodwill solely related to Yondu acquisition.
2016 ANNUAL REPORT
227
228
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
229
(In Thousand Pesos)
230
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
231
(In Thousand Pesos)
232
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
233
Investment in Associates
234
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
235
Investment in Joint Ventures
(In Thousand Pesos)
236
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
237
(In Thousand Pesos)
(In Thousand Pesos)
238
GLOBE TELECOM
2016 ANNUAL REPORT
239
240
GLOBE TELECOM
2016 ANNUAL REPORT
241
(In Thousand Pesos)
(In Thousand Pesos)
242
GLOBE TELECOM
(In Thousand Pesos)
Provisions, Contingent Liabilities and Contingent Assets
2016 ANNUAL REPORT
243
(In Thousand Pesos)
244
GLOBE TELECOM
Composed of notes payable, long term debt and net derivative liabilities.
2016 ANNUAL REPORT
245
(In Thousand Pesos)
(In Thousand Pesos)
246
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
2016 ANNUAL REPORT
247
(In Thousand Pesos)
(In Thousand Pesos)
(In Thousand Pesos)
248
GLOBE TELECOM
2016 ANNUAL REPORT
249
250
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
(In Thousand Pesos)
2016 ANNUAL REPORT
251
252
GLOBE TELECOM
2016 ANNUAL REPORT
253
(In Thousand Pesos and Number of Shares)
(In Thousand Pesos and Number of Shares)
(In Thousands, Except for Issue/Offer price)
*Initial number of registered shares only
Non-Voting Preferred Stock
254
GLOBE TELECOM
Voting Preferred Stock
2016 ANNUAL REPORT
255
(In Thousand Pesos and Number of Shares)
(In Thousand Pesos, Except Per Share Figures)
256
GLOBE TELECOM
Other Reserves
2016 ANNUAL REPORT
257
(In Thousand Pesos)
(In Thousand Pesos)
258
GLOBE TELECOM
Executive Stock Option Plan
(In Thousand Number of Shares Except per Share Figures)
2016 ANNUAL REPORT
259
Long-Term Incentive Plan
260
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
Present value of defined benefit obligation
(In Thousand Pesos)
2016 ANNUAL REPORT
261
Fair value of plan assets
(In Thousand Pesos)
(In Thousand Pesos)
262
GLOBE TELECOM
2016 ANNUAL REPORT
263
(In Thousand Pesos)
(In Thousand Pesos)
264
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
2016 ANNUAL REPORT
265
(In Thousand Pesos)
*This account is net of the amount capitalized borrowing costs (see Note 7).
(In Thousand Pesos)
(In Thousand Pesos)
266
GLOBE TELECOM
(a) (b)
Sum-of-the-years digit method Straight-line method
2016 ANNUAL REPORT
267
(a) (b)
268
Sum-of-the-years digit method Straight-line method
GLOBE TELECOM
(In Thousand Pesos) *2016 consist of Innove, GXI, BTI and Asticom *2015 consist of Globe Telecom, Innove, GXI, BTI and Asticom
(In Thousand Pesos)
(In Thousand Pesos)
(In Thousand Pesos)
2016 ANNUAL REPORT
269
(In Thousand Pesos)
in thousands
270
GLOBE TELECOM
Operating lease commitments
(In Thousand Pesos)
25.1.2
Finance lease commitments
2016 ANNUAL REPORT
271
(In Thousand Pesos)
272
GLOBE TELECOM
2016 ANNUAL REPORT
273
274
GLOBE TELECOM
2016 ANNUAL REPORT
275
276
GLOBE TELECOM
2016 ANNUAL REPORT
277
278
GLOBE TELECOM
2016 ANNUAL REPORT
279
280
GLOBE TELECOM
(In Thousand Pesos and Number of Shares Except per Share Figures)
2016 ANNUAL REPORT
281
Market Risk
282
GLOBE TELECOM
Interest Rate Risk
(In Thousand Pesos)
2016 ANNUAL REPORT
283
Foreign Exchange Risk
(In Thousand Pesos)
(In Thousand Pesos)
284
GLOBE TELECOM
Credit Risk
2016 ANNUAL REPORT
285
286
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
2016 ANNUAL REPORT
287
(In Thousand Pesos) Â
288
GLOBE TELECOM
(In Thousand Pesos)
Liquidity Risk
2016 ANNUAL REPORT
289
290
GLOBE TELECOM
*Used month-end USD LIBOR and Philippine Dealing and Exchange Corporation (PDEX) rates. * Using ₱49.769 - USD exchange rate as of December 31, 2016.
2016 ANNUAL REPORT
291
*Used month-end USD LIBOR and Philippine Dealing and Exchange Corporation (PDEX) rates. * Using ₱47.118 - USD exchange rate as of December 31, 2015.
292
GLOBE TELECOM
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities. **Deliverable and non-deliverable
*Excludes taxes payable which is not a financial instrument.
2016 ANNUAL REPORT
293
*Excludes taxes payable which is not a financial instrument.
Hedging Objectives and Policies
(In Thousands) Cash flow hedges
Freestanding Embedded
*The embedded currency forwards are at a net buy position.
(In Thousands) Cash flow hedges
Embedded
*The embedded currency forwards are at a net buy position.
294
GLOBE TELECOM
2016 ANNUAL REPORT
295
Currency Swaps and Cross Currency Swaps
Interest Rate Swaps
Deliverable and Nondeliverable Forwards
296
GLOBE TELECOM
Interest Rate Swaps
Deliverable and Non-deliverable Forwards
Embedded Currency Forwards
2016 ANNUAL REPORT
297
(In Thousand Pesos)
(In Thousand Pesos)
*This consists of cash and cash equivalents, short-term investments and long-term investments, receivables, other nontrade receivables and loans receivables. **This consists of accounts payable, accrued expenses, accrued project cost, traffic settlement-net, dividends payable, notes payable, long-term debt (including current portion) and other long-term liabilities (including current portion).
298
GLOBE TELECOM
2016 ANNUAL REPORT
299
(In Thousand Pesos)
Non-Derivative Financial Instrument
Derivative Instrument
300
GLOBE TELECOM
Fair Value Hierarchy
(In Thousand Pesos)
2016 ANNUAL REPORT
301
Operating Segments
(In Thousand Pesos)
(Forward)
302
GLOBE TELECOM
(In Thousand Pesos)
1 2
Computed as non-service revenues less cost of sales Net of final tax
(In Thousand Pesos)
1
Computed as non-service revenues less cost of sales Net of final tax Starting June 2016, Globe Group presented equity in net losses as a non-operating income and expense below EBITDA, previously under other income above EBITDA. This change resulted to retroactive adjustments of 2015 and 2014 reported figures.
2 3
2016 ANNUAL REPORT
303
(In Thousand Pesos)
1
Computed as non-service revenues less cost of sales Net of final tax Starting June 2016, Globe Group presented equity in net losses as a non-operating income and expense below EBITDA, previously under other income above EBITDA. This change resulted to retroactive adjustments of 2015 and 2014 reported figures.
2 3
304
GLOBE TELECOM
(In Thousand Pesos)
(In Thousand Pesos)
(In Thousand Pesos)
Net of taxes
2016 ANNUAL REPORT
305
Mobile communication voice net service revenues include the following:
Mobile SMS service revenues
Mobile communication data net service revenues
Wireline voice service revenues
306
GLOBE TELECOM
Wireline data service revenues
Broadband service revenues
Consumers
2016 ANNUAL REPORT
307
Corporate/SME clients full
(In Thousand Pesos)
(In Thousand Pesos)
308
GLOBE TELECOM
2016 ANNUAL REPORT
309
310
GLOBE TELECOM
SCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONS UNDER THE PHILIPPINE FINANCIAL REPORTING STANDARDS (PFRS) DECEMBER 31, 2016
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS
Adopted
Not Not Adopted Applicable
Framework for the Preparation and Presentation of Financial Statements Conceptual Framework Phase A: Objectives and qualitative characteristics PFRSs Practice Statement Management Commentary Philippine Financial Reporting Standards PFRS 1 (Revised)
First-time Adoption of Philippine Financial Reporting Standards Amendments to PFRS 1 and PAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to PFRS 1: Additional Exemptions for First-time Adopters Amendment to PFRS 1: Limited Exemption from Comparative PFRS 7 Disclosures for First-time Adopters Amendments to PFRS 1: Severe Hyperinflation and Removal of Fixed Date for First-time Adopters Amendments to PFRS 1: Government Loans Annual Improvements to PFRSs 2009-2011 Cycle Amendments to PFRS 1: First-Time Adoption of PFRS Annual Improvements to PFRSs 2011-2013 Cycle Amendments to PFRS 1: First-time Adoption of International Financial Reporting Standards (Changes to the Basis for Conclusions only)
PFRS 2
Share-based Payment Amendments to PFRS 2: Vesting Conditions and Cancellations Amendments to PFRS 2: Group Cash-settled Sharebased Payment Transactions Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PFRS 2:Definition of Vesting Condition
2016 ANNUAL REPORT
311
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS Amendments to PFRS 2: Classification and Measurement of Share-based Payment Transactions* PFRS 3 (Revised)
Business Combinations Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PFRS 3: Accounting for Contingent Consideration) Annual Improvements to PFRSs 2011-2013 Cycle Amendments to PFRS 3: Scope of Exception for Joint Ventures
PFRS 4
Insurance Contracts Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts
PFRS 5
Non-current Assets Held for Sale and Discontinued Operations Annual Improvements to PFRSs 2012-2014 Cycle Amendments to PFRS 5: Changes in methods of disposal
PFRS 6
Exploration for and Evaluation of Mineral Resources
PFRS 7
Financial Instruments: Disclosures Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets - Effective Date and Transition Amendments to PFRS 7: Improving Disclosures about Financial Instruments Amendments to PFRS 7: Disclosures - Transfers of Financial Assets Amendments to PFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities Amendments to PFRS 7: Mandatory Effective Date of PFRS 9 and Transition Disclosures Amendments to PFRS 7: Hedge Accounting Disclosures Annual Improvements to PFRSs 2012-2014 Cycle Amendments to PFRS 7: Servicing contracts and Applicability of the amendments to PFRS 7 to condensed interim financial statements
312
GLOBE TELECOM
Adopted
Not Not Adopted Applicable
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS PFRS 8
Adopted
Not Not Adopted Applicable
Operating Segments Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PFRS 8: Aggregation of Segments and Reconciliation of Segment Assets
PFRS 9
Financial Instruments (2014)*
PFRS 10
Consolidated Financial Statements Amendments to PFRS 10: Consolidated Financial Statement: Transition Guidance Amendments to PFRS 10:Transition Guidance and Investment Entities Amendments to PFRS 10: Sales or contributions of assets between an investor and its associate/joint venture* Amendments to PFRS 10: Investment Entities: Applying the Consolidation Exception
PFRS 11
Joint Arrangements Amendments to PFRS 1: Joint Arrangements: Transition Guidance Amendments to PFRS 11: Accounting for Acquisitions of Interests in Joint Operations
PFRS 12
Disclosure of Interests in Other Entities Amendments to PFRS 12: Disclosure of Interests in Other Entities: Transition Guidance Amendments to PFRS 12: Transition Guidance and Investment Entities Amendments to PFRS 12: Investment Entities: Applying the Consolidation Exception
PFRS 13
Fair Value Measurement Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PFRS 13: Fair Value Measurement (Amendments to the Basis of Conclusions Only, with Consequential Amendments to the Bases of Conclusions of Other Standards) Annual Improvements to PFRSs 2011-2013 Cycle Amendments to PFRS 13: Portfolio Exception
PFRS 14
Regulatory Deferral Accounts
PFRS 16
Leases *
2016 ANNUAL REPORT
313
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS Philippine Accounting Standards PAS 1 (Revised)
Presentation of Financial Statements Amendment to PAS 1: Capital Disclosures Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Amendments to PAS 1: Presentation of Items of Other Comprehensive Income Annual Improvements to PFRSs 2009-2011 Cycle Amendments to PAS 1: Comparative Information Amendments to PAS 1: Disclosure Initiative
PAS 2
Inventories
PAS 7
Statement of Cash Flows Amendments to PAS 7: Disclosure Initiative
PAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
PAS 10
Events after the Reporting Period
PAS 11
Construction Contracts
PAS 12
Income Taxes Amendment to PAS 12: Deferred Tax: Recovery of Underlying Assets Amendment to PAS 12: Recognition of Deferred Tax Assets for Unrealized Losses*
PAS 16
Property, Plant and Equipment Annual Improvements to PFRSs 2009-2011 Cycle Amendments to PAS 16, Servicing Equipment Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PAS 16: Revaluation Method Proportionate Restatement of Accumulated Depreciation Amendments to PAS 16: Clarification of Acceptable Methods of Depreciation Amendments to PAS 16: Agriculture: Bearer Plants
314
PAS 17
Leases
PAS 18
Revenue
GLOBE TELECOM
Adopted
Not Not Adopted Applicable
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS
Adopted
Not Not Adopted Applicable
PAS 19 Employee Benefits (2011) (Amended) Amendments to PAS 19: Defined Benefit Plans: Employee Contributions Annual Improvements to PFRSs 2012-2014 Cycle Amendments to PAS 19: Discount rate: regional market issue PAS 20
Accounting for Government Grants and Disclosure of Government Assistance
PAS 21
The Effects of Changes in Foreign Exchange Rates Amendment to PAS 21: Net Investment in a Foreign Operation
PAS 23 (Revised)
Borrowing Costs
PAS 24 (Revised)
Related Party Disclosures
PAS 26
Accounting and Reporting by Retirement Benefit Plans
Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PAS 24: Key Management Personnel
PAS 27 Separate Financial Statements (Amended) Amendments to PAS 27: Transition Guidance and Investment Entities Amendments to PAS 27: Equity Method in Separate Financial Statements PAS 28 Investments in Associates and Joint Ventures (Amended) Amendments to PAS 28: Sales or contributions of assets between an investor and its associate/joint venture* Amendments to PAS 28: Investment Entities: Applying the Consolidation Exception PAS 29
Financial Reporting in Hyperinflationary Economies
PAS 32
Financial Instruments: Disclosure and Presentation Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Amendment to PAS 32: Classification of Rights Issues
2016 ANNUAL REPORT
315
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS Annual Improvements to PFRSs 2009-2011 Cycle Amendments to PAS 32: Tax Effect of Equity Distributions Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities PAS 33
Earnings per Share
PAS 34
Interim Financial Reporting Annual Improvements to PFRSs 2009-2011 Cycle Amendments to PAS 34: Interim Reporting of Segment Assets Annual Improvements to PFRSs 2012-2014 Cycle Amendments to PAS 34: Disclosure of information 'elsewhere in the interim financial report'
PAS 36
Impairment of Assets Amendments to PAS 36: Recoverable Amount Disclosures for Non-Financial Assets
PAS 37
Provisions, Contingent Liabilities and Contingent Assets
PAS 38
Intangible Assets Annual Improvements to PFRSs 2010-2012 Cycle Amendments to PAS 38: Revaluation Method Proportionate Restatement of Accumulated Amortization Amendments to PAS 38: Clarification of Acceptable Methods of Amortization
PAS 39
Financial Instruments: Recognition and Measurement Amendments to PAS 39: Transition and Initial Recognition of Financial Assets and Financial Liabilities Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions Amendments to PAS 39: The Fair Value Option Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets
316
GLOBE TELECOM
Adopted
Not Not Adopted Applicable
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS
Adopted
Not Not Adopted Applicable
Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives Amendment to PAS 39: Eligible Hedged Items Amendment to PAS 39: Novation of Derivatives and Continuation of Hedge Accounting Amendment to PAS 39: Hedge Accounting Application PAS 40
Investment Property Annual Improvements to PFRSs 2011-2013 Cycle Amendments to PAS 40: Clarifying the Interrelationship of IFRS 3 and IAS 40 When Classifying Property as Investment Property or OwnerOccupied Property
PAS 41
Agriculture Amendments to PAS 41: Agriculture: Bearer Plants
Philippine Interpretations IFRIC 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities
IFRIC 2
Members' Share in Co-operative Entities and Similar Instruments
IFRIC 4
Determining Whether an Arrangement Contains a Lease
IFRIC 5
Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IFRIC 6
Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment
IFRIC 7
Applying the Restatement Approach under PAS 29 Financial Reporting in Hyperinflationary Economies
IFRIC 8
Scope of PFRS 2
IFRIC 9
Reassessment of Embedded Derivatives Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives
IFRIC 10
Interim Financial Reporting and Impairment
IFRIC 11
PFRS 2- Group and Treasury Share Transactions
IFRIC 12
Service Concession Arrangements
2016 ANNUAL REPORT
317
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS IFRIC 13
Customer Loyalty Programmes
IFRIC 14
The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Amendments to Philippine Interpretations IFRIC- 14, Prepayments of a Minimum Funding Requirement
IFRIC 16
Hedges of a Net Investment in a Foreign Operation
IFRIC 17
Distributions of Non-cash Assets to Owners
IFRIC 18
Transfers of Assets from Customers
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine
IFRIC 21
Levies
SIC-7
Introduction of the Euro
SIC-10
Government Assistance - No Specific Relation to Operating Activities
SIC-15
Operating Leases - Incentives
SIC-21
Income Taxes- Recovery of Revalued Non-depreciable Assets
SIC-25
Income Taxes - Changes in the Tax Status of an Entity or its Shareholders
SIC-27
Evaluating the Substance of Transactions Involving the Legal Form of a Lease
SIC-29
Service Concession Arrangements: Disclosures
SIC-31
Revenue - Barter Transactions Involving Advertising Services
SIC-32
Intangible Assets - Web Site Costs
PIC Q&A Revenue Recognition for Sales of Property Units Under No. 2006-01 Pre-Completion Contracts PIC Q&A No. 200602
Clarification of Criteria for Exemption from Presenting Consolidated Financial Statements
PIC Q&A No. 200703
Valuation of Bank Real and Other Properties Acquired (ROPA)
PIC Q&A Rate Used in Discounting Post-employment Benefit No. 2008-01 Obligations
318
GLOBE TELECOM
Adopted
Not Not Adopted Applicable
PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS PIC Q&A No. 200802
Adopted
Not Not Adopted Applicable
Accounting for Government Loans with Low Interest Rates under the Amendments to PAS 20
PIC Q&A Financial Statements Prepared on a Basis Other than No. 2009-01 Going Concern PIC Q&A Rate Used in Determining the Fair Value of No. 2010-01 Government Securities in the Philippines PIC Q&A Basis of Preparation of Financial Statements No. 2010-02 PIC Q&A Current/non-current Classification of a Callable Term No. 2010-03 Loan PIC Q&A Common Control Business Combinations No. 2011-02 PIC Q&A Accounting for Inter-company Loans No. 2011-03 PIC Q&A Costs of Public Offering of Shares No. 2011-04 PIC Q&A Fair Value or Revaluation as Deemed Cost No. 2011-05 PIC Q&A Acquisition of Investment Properties – Asset Acquisition No. 2011-06 or Business Combination? PIC Q&A Application of the Pooling of Interests Method for No. 2012-01 Business Combinations of Entities under Common Control in Consolidated Financial Statements PIC Q&A Cost of a New Building Constructed on Site of a No. 2012-02 Previous Building PIC Q&A Accounting for Employee Benefits under a Defined No. 2013-03 Contribution Plan Subject to Requirement of Republic (Revised) Act (RA) 7641: The Philippine Retirement Law PIC Q&A Conforming Changes to PIC Q&As - Cycle 2015 No. 2015-01 *These are the new and revised accounting standards and interpretations that are effective for annual period beginning on or after the reporting period ended December 31, 2016
2016 ANNUAL REPORT
319
Â
320
GLOBE TELECOM
2016 ANNUAL REPORT
321
322
GLOBE TELECOM
2016 ANNUAL REPORT
323
324
GLOBE TELECOM
2016 ANNUAL REPORT
325
326
GLOBE TELECOM
2016 ANNUAL REPORT
327
328
GLOBE TELECOM
(In Thousand Pesos)
2016 ANNUAL REPORT
329
330
GLOBE TELECOM
2016 ANNUAL REPORT
331
332
GLOBE TELECOM
PROJECT LEAD Ma. Yolanda Crisanto, APR
CORPORATE INFORMATION
PROJECT MANAGERS
HEAD OFFICE
EJ Francisco Monday Gonzalez
PROJECT ASSISTANTS Kristel Or-Tan Apple Evangelista
COLLABORATORS Aaron Paul Panis Ada Hernandez Alberto Arago Allan Alicer Angel Padua Apple Evangelista Benjo Garcia Bernadette Jimenez Bianca Wong Carmina Herbosa Cecille Fernandez Charles Diu Chris Manguera Clarita Magsino Cloyd Masaudling Dada Dyquiangco Danilo Jose Yarcia Darleen Celesta Gabriel Earl Concina-Fetalvero Ellison Chua Elroy Shawn Sy Emily San Gabriel Enrique Tumang Erika Gatmaitan Fernando Esguerra Gaby Santos Imeric Dumaual John Borlaza John Rubio Jose Mari Fajardo Joshua Dimaculangan Joven Cabingao Julie Estrella-Diño Lyn Sebial
The Globe Tower 32nd Street corner 7th Avenue Bonifacio Global City, Taguig Trunkline: (02) 730-2000 Website: www.globe.com.ph
OFFICE OF CORPORATE SECRETARY Lynn Cano Marc Arthur Garcia
28th Floor, The Globe Tower 32nd Street corner 7th Avenue
Maridol Ylanan Maria Virginia Tolentino-Uy Atty. Marisalve Ciocson-Co May Santos – Genove Michi Mariano
Bonifacio Global City, Taguig Email: corporatesecretary@globe.com.ph
Miguel Bermundo Mike Andrade De Guzman
32nd Street corner 7th Avenue Bonifacio Global City, Taguig
Minette Navarrete Missy Castillo
Email: ir@globe.com.ph
INVESTOR RELATIONS 10th Floor, The Globe Tower
Nadja Ava Romano Nature Calderon
CORPORATE COMMUNICATIONS
Nino Guardino Pc Magnaye Peterson Fernandez
32nd Street corner 7th Avenue Bonifacio Global City, Taguig Email: gtcorpcomm@globe.com.ph
Pia Bernal Rasia Winnie Tan
STOCK TRADING INFORMATION
Raul Macatangay Raul Taroy Raymond Martin Aguilar
Globe Telecom is listed on the Philippine Stock Exchange. Ticker symbol: GLO
Rhea Carlos Rizza Salvino Robert Gonzales Rofil Magto Rolando Fabros Ronald Testa Roy Dela Cruz Shiela Sawit Thomafaith Kalingking Vercheer Dela Cruz Vinchi Syquia Winny Ko
PHOTOGRAPHY Cyrus Panganiban Jilson Tiu
CONCEPT Publicis JimenezBasic
WRITING Writer’s Edge
DESIGN AND LAYOUT Medium3
Globe Telecom, Inc.
26th Floor, The Globe Tower
SUBSIDIARIES
SHAREHOLDER SERVICES
INNOVE COMMUNICATIONS, INC. The Globe Tower-Cebu
For inquiries regarding dividend payments, change of address, account status, and lost/damaged stock certificates, please contact our stock transfer agent:
Samar Loop corner Panay Road Cebu Business Park 6000 Cebu City Trunkline: (032) 415-8822 / (032) 730-2000
BANK OF THE PHILIPPINE ISLANDS (BPI) Stock Transfer Office 16th Floor, BPI Building Ayala Avenue corner Paseo de Roxas Makati City Tel. (02) 816-9067 / (02) 816-9321 Fax. (02) 845-5515
G-XCHANGE, INC. 32nd Floor, Trade and Financial Tower 32nd Street corner 7th Avenue Bonifacio Global City, Taguig Website: www.globe.com.ph/gcash
KICKSTART VENTURES, INC. 55 Paseo de Roxas Avenue Makati City Trunkline: (02) 625-8723 Website: www.kickstart.ph
ASTICOM TECHNOLOGY, INC. 4th Floor, Globe Telecom Plaza 1 Pioneer Street corner Madison Street Mandaluyong City
AFFILIATE YONDU 7th Floor, Panorama Tower 34th Street corner Lane A Bonifacio Global City, Taguig City Trunkline: (02) 847-2732 locals 133, 134 and 135 Website: http:// www.yondu.com/
For further information regarding the annual report, please contact:
MA. YOLANDA C. CRISANTO, APR Senior Vice President, Corporate Communications Email: gtcorpcomm@globe.com.ph
2016 ANNUAL REPORT
335
2016 ANNUAL REPORT
336