pesos monthly - assets-uat.ayalafoundation.org€¦ · productive, creative, self-reliant, and...

PESOS MONTHLY is what a family of five needs to meet their food and non-food needs

(Source: National Statistical Coordination Board, 2012)

Vision

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

Mission

• Understanding community realities and engaging people in the change process

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

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

Values

We have a deep love of country. We believe in shared prosperity. We are creative and innovative. We act with integrity. We strive for excellence. We collaborate and work as a team.

CONTENTS

2 Message from the Chairmen3 Message from the President4 Ayala Foundation, As One We Can6 Our Reach and Impact7 Where We Are8 Education Center of Excellence in Public Elementary Education, Text2Teach

12 Youth Leadership Ayala Young Leaders Congress, Leadership Communities, Careers for Street Youth, LEAD ASEAN Summit, Filipino American Young Leaders Program

16 Sustainable Livelihood Iraya-Mangyan Project; Calauan, Laguna; El Nido, Palawan; Product Fairs

20 Arts and Culture Ayala Museum, Filipinas Heritage Library

24 Special Projects Strengthening the Capacity of Civil Society Organizations in the Philippines, Buklod Bahayan Daycare Center

26 Disaster Response28 Our Board of Trustees30 Special Section: Ayala 180 Years34 Report of Independent Auditors88 Our Management and Staff90 Directory

2013 Annual Report

Throughout its 52 years in operation, the Ayala Foundation has continued to evolve from a purely philanthropic organization to an organization that seeks to provide viable, sustainable, and lasting solutions for the many communities it works with. This path was in large part shaped by the challenges and realities of our times. Today we are faced with the ever-increasing needs of marginalized communities and the challenge of addressing these in a sustainable manner over the long-term. The socioeconomic problems we face today call for more permanent solutions that must go beyond pure philanthropy. Increasingly, they require deeper community engagement and a more holistic understanding of needs that result in integrated and systemic solutions that will put communities in a sustainable path to progress.

We believe that the Ayala Foundation can play a role in this cycle of sustainability and progress. As a bridge between marginalized communities and the business sector, we are in a unique position to help bring together business solutions and market discipline to addressing social issues. We aim to empower the broader base of the pyramid by working with communities through strategic planning, employing relevant programs, and bringing in the right partnerships.

Clearly, this involves multi-sectoral collaboration. Central to this is developing and strengthening our relations with an ever-widening network of stakeholders. Stakeholder engagement is imperative in crafting holistic community solutions and it is an imperative that must be shared among the public, private, and socio-civic sectors. It is important that we build a high level of trust in this process by demonstrating accountability and the responsible stewardship of resources.

Ultimately, the Ayala Foundation believes that developing inclusive programs that create value and prosperity for all stakeholders is the sustainable path forward. This will require imagination and innovative thinking that result in effective and long-lasting programs. We hope to constantly foster a culture of innovation, creativity, and sustainability as we work with our many partners in bringing about progressive solutions to achieve more inclusive growth.

Finally, we remain committed to our goals of enhancing the nation’s pride in its history and culture. We continue to celebrate our artistic achievements, our national cultural heritage and our emerging talent through our museum and Filipinas Heritage library activities.

We thank our many partners, our management team and staff, and the multiple communities we have come to work with for sharing our aspirations and vision for a progressive and inclusive path forward.

Message from the Chairmen

We believe that developing

inclusive programs that

create value and prosperity for

all stakeholders is the

sustainable path forward.

Jaime Augusto Zobel de Ayala CO-CHAIRMAN

Fernando Zobel de Ayala CO-CHAIRMAN

2

Collaboration and Community Solutions—these defined our activities at Ayala Foundation in 2013, which we started by introducing our four program pillars.

Focusing on Education, Youth Leadership, Sustainable Livelihood, and Arts and Culture, our end in mind is communities where people are productive, innovative, self-reliant, and proud to be Filipino.

Aside from these program areas, we have defined certain criteria to guide us in conceptualizing, designing, and implementing projects. Two key factors were public–private partnerships and strategic alliances. Without these, combined with our other criteria, we would not have achieved the milestones of today.

Our Center of Excellence in Public Elementary Education (CENTEX) has seen 39 alumni, out of 75 students that graduated 6th Grade in 2005, fresh out of college holding degrees in Mathematics, Psychology, Nursing, to name a few. The collaboration with the Department of Education was integral in the success of this endeavor.

The Text2Teach alliance, a partnership with various local government units and community advocates, has reached 340 public elementary schools. The project has become an international model for tech-based learning intervention.

In collaboration with the Ayala group of companies, we produced 81 alumni for the Ayala Young Leaders Congress (AYLC), bringing our alumni base to 1,124 in all sectors, all over the nation. Leadership Communities (LeadCom) is all about servant leadership and skill-building. Our partnership with the local government in Calauan, Laguna enabled us to reach out to the youth in that community.

Strong relationships with private collectors and cultural institutions, both local and international, allowed the Ayala Museum to present imaginative exhibitions and compelling educational programs, thus helping it exceed the 100,000 patronage mark. The Filipinas Heritage Library also marked a milestone in its history. It reopened as “a contemporary space for the contemporary researcher” on the sixth floor of the Ayala Museum, with a stronger commitment to harnessing technology for Filipiniana research.

Our most recent program pillar, Sustainable Livelihood, is an encouraging work in progress. Encouraging because, in just a year, we have taken the first steps in helping heads of families become more employable or gain diversified sources of income. We are excited to see what milestones 2014 and beyond will bring to El Nido (Palawan), Calauan (Laguna), and Talipanan (Oriental Mindoro).

According to the National Statistical Coordination Board, the monthly income of the average Filipino family must be at least P=7,890 to meet its basic needs. 7,890—This number is so important that we put it on the cover of our annual report as a reminder that we each have a role to play in helping our communities move past the threshold of poverty.

Improving the quality of life of underserved Filipinos is, without a doubt, a collective effort. We are thankful to you, our partners and stakeholders. We look forward to our continued collaboration in providing integrated and sustainable solutions in Education, Youth Leadership, Sustainable Livelihood, and Arts and Culture, to provide that advantage our fellow Filipinos need to attain a brighter future.

AS ONE, WE CAN. As ONE Nation, We Can.

Message from the President

Maria Lourdes Heras-de LeonPRESIDENT

7,890—This number is so important that we put it

on the cover of our annual report as a reminder

that we each have a role to play in helping our

communities move past the threshold of poverty.

3

Every Filipino has their own vision of a better future. These visions may vary from Filipino to Filipino; each Filipino’s vision for a brighter future may even cover different areas of concern.

If one takes these individual dreams and aspirations together, one would discover they are closely related—they form a bigger picture that breaks boundaries, multiplies possibilities, and includes virtually everybody. The challenge is to for everyone to come together and make their vision of a better future come true.

This is why we developed our official tagline—“As One We Can.”

4

In August, the “Pilipinas: As One We Can” cinema ad premiered in Ayala Cinemas nationwide. This is our way of encouraging Filipinos from all walks of life to come together in building the nation’s future.

The 45-second ad features artworks specially created by some of the most promising young artists in the country today. Each artwork displays a multiplicity of techniques, colors, and styles, and reflects each artist’s unique sensibility and approach to art. However, when the paintings are put beside one another, the word, “PILIPINAS” appears—a symbol for how Filipinos can harness their respective strengths and harmonize the elements together, so they can form a bigger, more compelling picture that celebrates both unity and diversity.

We also launched the “Anthem” campaign in Ayala Cinemas nationwide. By flashing an image of the Philippine flag and the words of the Philippine National Anthem without any musical accompaniment, cinema goers are encouraged to sing the words aloud. By doing so, we hope to see Filipinos singing the National Anthem with pride and conviction.

5

Our Reach and Impact

We invested PhP292,444,798 in our program pillars across the country. Our group of Corporate Enablers—Finance and Corporate Services; Human Resources and Administration; and Strategy, Communications, and Partner Care—also ensured the smooth implementation of our projects.

Our Program Pillars

• Under Education, we have the Center of Excellence in Public Elementary Education (CENTEX) and Text2Teach.• Under Youth Leadership, we have the Ayala Young Leaders Congress (AYLC), Leadership Communities (LeadCom), and Careers for Street Youth.• We are implementing Sustainable Livelihood in the following areas—El Nido, Palawan; Calauan, Laguna; Talipanan, Oriental Mindoro, for the Iraya Mangyans; and for CENTEX parents in Tondo, Manila, and Bauan, Batangas.• Under Arts and Culture, we have the Ayala Museum and Filipinas Heritage Library. • We have a special project, Strengthening the Capacity of Civil Society Organizations in the Philippines, which we implement under a grant from the United States Agency for International Development (USAID).

Program Spending 2013 Education

18.5% • 54,025,914

Youth Leadership

9.7% • 28,298,524

Sustainable Livelihood and Other Community Development Projects

27.1% • 79,175,567

Corporate Enablers

15.4% • 44,943,818

Arts and Culture

29.4% • 86,000,975

Total 292,444,798

18.5% 9.7%

27.1%

29.4

15.4%

Iraya Mangyan

Calauan

El NidoCareers for Street Youth

*AFI as contractor

EDUCATION SUSTAINABLE LIVELIHOODYOUTH LEADERSHIP ARTS & CULTURE

6

Where We Are

of the country’s 81 provinces

48We are in

7

CENTEX

CENTEX offers quality education for bright children from economically disadvantaged families. CENTEX also provides teacher and principal training, with emphasis on thinking skills and classroom management techniques.

Project PartnersDepartment of Education, City Government of Manila, Provincial Government of Batangas, and Private Donors

Geographic ReachTondo, ManilaBauan, Batangas

Year Started1998 (Manila)2000 (Batangas)

E DUCATION

8

Principal and Teacher Training

CENTEX held two major runs of its Principal and Teachers Training program during the year. The first run was held in April, with 200 teachers and 50 principals. The summer training carried the theme “Breaking the Chains of Poverty through Education,” focusing on pedagogy, teaching methodology, and values integration with focus on classroom management, brain-based education, and values education. CENTEX also held the annual training for its teachers and partner schools in November. It carried the theme “Weaving Connections” and had 84 participating teachers. The focus of the training was on critical and caring thinking skills. The training program was supported by JPMorgan Chase & Co. and Prospero World.

High achievement scores

CENTEX students continued to excel academically, exceeding the national average of the National Achievement Test (NAT) administered by DepEd. CENTEX Manila students had an average score of 84.29, while CENTEX Batangas students scored 83.81 (vs. 68.15, national average).

Students recognized internationally

Elwince Magbitang, a grade six CENTEX Manila student, was one of the 18 finalists at the 2013 Asian Grand Prix held in Hong Kong in August. He is a talented ballet dancer under the mentorship of the STEPS Dance Studio. Mikoy, a short film by four CENTEX Manila alumni (Timothy Mendoza, Lowell Mongcal, Nichole Camille Castillo, and Jomelle Tanudra), premiered at the Cinepambata Film Festival in October, where it won the Special Jury Prize. It was screened at the Auburn International Film Festival (Australia) and the 20th Filipino American Cine Festival (United States), and will be screened in 2014 at the Los Angeles Asian Pacific Film Festival. Mikoy was made during a summer workshop in filmmaking and shadow play production at CASA San Miguel in Zambales.

2013 Timeline

First batch of studentsfinish college

Thirty-nine students from the first batch of 75 CENTEX Manila students have completed their college education. The first was Lester Lampano, who graduated with a degree in Mathematics from the De La Salle University. Asbel Elpos, a psychology major from the Far Eastern University with a degree in Psychology, was the first CENTEX student to graduate magna cum laude.

After Hours Music Program

Twenty-four CENTEX Manila students participated in the “After Hours Music Program” recital held at the Ayala Museum on March 23. Renowned violinist Alfonso “Coke” Bolipata served as the mentor of the violin and cello students in the program. Also serving as mentors were members of the Pundaquit Virtuosi, the resident string ensemble of Creative Alternatives for Social Action (CASA) San Miguel Foundation. The After Hours Music Program Recital was supported by The Department of Education, JPMorgan Chase & Co., CASA San Miguel, and Prospero World.

2013 Highlights

GRADE 6 GRADUATES

MANILA BATANGAS

16284.29 83.81

TOTAL ENROLLMENT NAT SCORES

997

PROJECT HIGHLIGHTS1998-2013

Total CENTEX alumni

1,250

Grade 6 cohort survival rate

>95%

E DUCATION E DUCATION

9

Text2Teach

The local version of the BridgeIT program, Text2Teach uses mobile technology as a learning intervention for grade five and six students from public elementary schools. The materials cover such subjects as English, Mathematics, Science, and Values Education.

Project PartnersNokia, Globe Telecom, Department of Education, Pearson Foundation, Toshiba, and Local Government Units

Geographic ReachNationwide

Year Started2003

E DUCATION

10

Nominet 100

Text2Teach made it to the list of the 100 most inspiring social tech innovations as compiled by UK funder for tech projects, Nominet Trust.

‘Exemplary ICT Innovation’

Text2Teach was hailed as one of the “exemplary Information Communications Technology (ICT) innovations for education” at the Asia-Pacific Ministerial Forum on ICT in Education (AMFIE) 2013 in China. The event was organised by the United Nations Educational, Scientific, and Cultural Organisation.

Antique Community Launch

Together with the members of the Text2Teach alliance, we celebrated the connection of 116 public elementary schools in Antique province. On January 17, a community launch was held in partnership with local government units of the province of Antique as well as the local Department of Education.

Text2Teach website

In May, Text2Teach launched its official website

(www.text2teach.org.ph).

2013 Timeline

2013 Highlights


4PROJECTPHASE

PHASE 4 GOAL

SCHOOLS850 340

NEW SCHOOLS REACHED

STUDENTS REACHED

30,000TEACHERS REACHED

2,000

680barangay captains / PTA trained in sustainability

Total Text2Teach Schools Total Students Reached Total Teachers Trained

897 300,000 3,744

Partnership with ULAP

We signed an advocacy agreement with the the Union of Local Authorities of the Philippines (ULAP), an organization of local government officials, on June 28. ULAP will serve as Text2Teach’s advocate among LGUs.

Silay City Launch

Thirteen LGUs in the Visayas signed up for Text2Teach. This now brings the project to 172 public elementary schools in the Visayas. This was celebrated in a launch—the biggest to date—held on August 27 in Silay City.

E DUCATION E DUCATION

11

Ayala Young Leaders Congress

The Ayala Young Leaders Congress (AYLC) is the flagship youth leadership program of the Ayala group of companies. AYLC gathers 81 of the most promising student leaders from the best colleges and universities in the country for a congress designed to hone their leadership skills, nurture their commitment to integrity and principled leadership, foster nationalism and idealism, and encourage faithful stewardship of their communities and the country’s future.

Project PartnersAyala group of companies


Year Started1998

YOUTH LEADE R SH I P

12

15th Congress

Eighty-one students from 52 colleges and universities and representing 12 regions participated in the 15th Ayala Young Leaders Congress held on February 5 to 8. With the congress theme “The Leadership Imperative: Confronting and Adapting to Changing Realities,” the congress featured keynote speaker Justice Marvic Leonen, associate justice of the Supreme Court.

2013 Timeline

Grand Alumni Homecoming

To celebrate its 15th year, AYLC held the third AYLC Grand Reunion on February 9 at the Circuit, Makati, with more than 500 alumni present. The grand reunion was highlighted by the Starfish Fair 2013, a showcase of 10 development projects AYLC alumni have initiated over the years. The fair served as an avenue for alumni to share best practices in running community projects.

2013 Highlights

81NUMBER OF DELEGATES

community-based LEADERSHIP CAMPS

organized by alumni

22 2,641community-based

STUDENT LEADERS trained by alumni


Total Alumni

Number Of Alumni Chapters Nationwide

1,124

22

Ayala Young Leaders Alumni Association

AYLC alumni shared the “AYLC experience” with other partner schools and organizations by way of the Ayala Young Leaders Alumni Association (AYLAA). Now an independent organization registered with the Securities and Exchange Commission, AYLAA has established its own Servant Leadership Camp pool of facilitators and trainers. In 2013 alone, it facilitated 23 camps and trained 2,641 youth leaders all over the country. This is one way for AYLC alumni to pay forward what they have learned from their own congress.

YOUTH LEADE R SH I P YOUTH LEADE R SH I P

13

Leadership Communities

Project Update

During the year, LeadCom reached out to community-based youth organizations, hoping to build in the youth a sense of shared responsibility for their community. At the same time, LeadCom challenges the youth to act on community concerns rather than wait for others to do it for them.

2013 Timeline

2013 Highlights

LeadCom Calauan

LeadCom was brought to Southville 7, the resettlement site in Calauan, Laguna. In partnership with the municipal government of Calauan and the Don Bosco Brothers, LeadCom took the youth through the process of developing self-confidence and positive character, diagnosing community needs, identifying opportunities for youth-led action, and mobilizing stakeholders and community resources for projects that address priority needs. We trained 25 young people and helped them identify community projects that they could work on.

Leadership Communities (LeadCom) empowers the youth to help address pressing needs and issues in their local community through projects they themselves will propose, plan, and implement.

Project PartnersPrivate Funders, Local Government Units, Local Colleges and Universities, Youth Organizations, and Youth-Serving Organizations


Year Started2011

YOUTH-LEDPROJECTS

IMPLEMENTED

4 25YOUTH

TRAINED


Communities Reached Youth Trained

11 833

YOUTH LEADE R SH I P

14

Brunei Pre-Summit

Twenty-five ASEAN youth leaders met in Brunei for a pre-event workshop on October 10. United States Secretary of State John Kerry held a dialogue with the youth leaders.

Manila Summit

One hundred fifty ASEAN youth leaders attended a leadership summit in Manila on December 3 to 5. Geared toward building a youth network and addressing pressing issues in the region, the LEAD ASEAN Youth Summit featured interactive sessions, inspirational talks, and field trips focusing on economic development, environment, education and awareness, and human development. United States President Barack Obama delivered a special message for the delegates via video.

The Filipino American Youth Leadership Program (FYLPro) was staged in 2013, inviting a group of 10 exceptional young Filipino Americans from the United States and Guam. The delegates took part in an immersive program in the Philippines from July 7 to 9, where they met some of the country’s highest officials and policymakers, as well as other industry leaders, artists and cultural experts, entrepreneurs both traditional and social, as well as innovators in different fields.FYLPro was started in 2012 by Philippine Ambassador to Washington, D.C., Jose Cuisia.

Careers for Street Youth

LEAD ASEAN Youth Summit Filipino American YoungLeaders Program

Through Careers for Street Youth (CSY), we establish and nurture partnerships that will help Filipino out-of-school youth develop skills, which can open up for them livelihood opportunities, including employment.

Project PartnersStreet Kids International, and Business Process Association of the Philippines

Year Started2012

Project PartnerUnited States Embassy in Manila

Geographic ReachSoutheast Asia

Year Started2013

Project PartnersEmbassy of the Philippines in Washington, D.C.

Other SupportersABS-CBN–The Filipino Channel (media partner), Ayala Corporation, Chevron, SGV and Co., Planters Bank, Philamlife, Phinma Foundation, and CLSA

Geographic ReachPhilippines, United States, and Guam

Year Started2012

PROJECT HIGHLIGHTIn 2013, Ayala Foundation took on the program. The AFI-led project will be officially launched in 2014.

PROJECT HIGHLIGHTS

PROJECT HIGHLIGHT 2012-2013

4cross-country

collaborative projects

ASEAN Youth Reached

150

FYLPro Alumni

20

YOUTH LEADE R SH I P YOUTH LEADE R SH I P

15

We introduced our latest program pillar, Sustainable Livelihood, during the year, as part of our commitment to nurture communities where people are productive, creative, self-reliant, and proud to be Filipino. Through Sustainable Livelihood, we hope to establish and strengthen partnerships that will help families in our project communities have gainful employment or diversified sources of income. We believe that the bottom of the pyramid and other vulnerable groups can be engaged, even mainstreamed, into the socioeconomic life of their respective communities as providers, suppliers, and producers of human capital, goods, and services. Our Sustainable Livelihood projects are present in three main locations: Talipanan, Oriental Mindoro, among the Iraya-Mangyans; Calauan, Laguna; and El Nido, Palawan.

Iraya-Mangyan

The Iraya-Mangyans are an indigenous people living at the foot of Mt. Malasimbo and near the coast of Puerto Galera, Talipanan, Oriental Mindoro. Many of them continue to live in poverty, with no access to basic services. Aside from providing interventions in health and education, we are implementing sustainable livelihood projects and skills training for the Mangyans.

Project PartnersAyala group of companies, Sisters of Charity of St. Anne, Technical Education Skills Development Authority

Geographic ReachTalipanan, Oriental Mindoro

Year Started1991

Nito Weaving

We are helping our Iraya-Mangyan community revive its tradition of weaving beautiful and functional baskets made from nito, a locally growing vine. These baskets have been showcased in several product fairs, and are available for retail buyers at Greenbelt 5, Ayala Museum Shop, and Glorietta 1. Aside from growing the nito weaving enterprise, we also partnered with various organizations including TESDA to provide training in dressmaking, electrical skills, masonry, and agriculture, among others.

2013 Timeline

Additional Support

With the assistance of the Sisters of Charity of St. Anne, Mangyan children and youth receive early childhood care, education, and feeding. Fifty-six Mangyan students were given educational assistance. A computer center was set up for educational and additional livelihood-skills training.

PROJECT HIGHLIGHTS

product fairs joined to showcase the products of Iraya-Mangyan weavers

3Iraya-Mangyan students who

received educational assistance

56

SUSTAI NABLE LIVE LI HOOD

16

23

Calauan, Laguna

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

Project PartnersMunicipal Government of Calauan, Salesians of Don Bosco, Franciscan Sisters of the Sacred Heart, e-Skills Network, Consuelo Foundation, Habitat for Humanity, and ABS-CBN Foundation

Geographic ReachCalauan, Laguna

Year Started2013

Calauan Job Fair

In partnership with the Municipal Government of Calauan, Makati Development Corporation, and other partner organizations, we organized a job fair for residents of Southville 7. The job fair attracted over 200 job aspirants, with 23 residents hired on the spot.

2013 Timeline

Landscape Training

Twenty-five residents of Southville 7 received training in landscaping, in partnership with TESDA, Makati Development Corporation, and Dualtech. The training aimed to equip them with marketable skills and prepare them for employment.

Mushroom and Ube Enterprises

We piloted mushroom and ube-growing enterprises in Calauan to provide residents and their families a sustainable source of income. We started our mushroom-growing enterprise with 10 families, and our ube-growing enterprise with 12 families. The goal is to expand these enterprises in 2014.

Avviare

Avviare is the brand for our sustainable livelihood initiatives. From the Italian verb avviare, which means “to start, to launch,” the brand signifies our commitment to helping these communities move toward progress. It will be launched in 2014.

PROJECT HIGHLIGHTS

Calauan residents trained in landscaping

families participating in new enterprises

25Calauan residents hired on the spot at

a specially organized job fair

22

SUSTAI NABLE LIVE LI HOOD SUSTAI NABLE LIVE LI HOOD

17

El Nido, Palawan

El Nido, Palawan is one of the prime tourist destinations in the country. We are working with local organizations in developing and strengthening local industries, such as weaving, cashew production, local tourism, and others.

Project PartnersDepartment of Social Welfare and Development, El Nido Local Government, Barangay Council of Sibaltan, and the Sibaltan Heritage Council

Geographic ReachBarangay Sibaltan and Barangay Villa Libertad, El Nido, Palawan

Year Started2013

Sibaltan Buri-Pandan Weavers

Tucked away in El Nido, Palawan, is Barangay Sibaltan, known for its efforts toward discovery and preservation of their rich heritage, customs, and culture. We work with the women weavers of Sibaltan and leverage their weaving talents in producing beautiful buri bags and other buri products. Our goal is to scale their production, improve production processes, and connect weavers to the market.

2013 Timeline

Skills Inventory Training and Scaling Up

We provided training for the weavers of Sibaltan in production scale. We also studied the production time for the weaving process to understand the products and their labor process. As a result, master women weavers have been identified to help speed up the weaving process.

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

PROJECT HIGHLIGHT

women weavers reached through the Sibaltan Buri-Pandan Weavers Association

50

SUSTAI NABLE LIVE LI HOOD

18

Part of our commitment to bringing the products of our communities closer to the public is through our participation in product fairs and other trade events. Through these events, we generate awareness on the products of our communities, while allowing our communities to gain an experience of what it’s like to sell to a larger market, and how to elevate their activities to the level of a sustainable enterprise or business.

Project PartnersAyala group of companies, through the Ayala Group Sustainability Council

Geographic ReachMetro Manila

Year Started2013

Product Fairs

Ayala Group Fair Share Store

The Ayala Group Sustainability Council launched the Ayala Group My Fair Share on July 18 at the Makati Stock Exchange Building in Makati City, as a venue for Ayala-supported communities to showcase their products. Four of our communities—Iraya-Mangyan, El Nido, CENTEX, and Buklod Bahayan (Silang, Cavite) participated. After the success of the initial run, a second Ayala Group Fair Share Store was held on October 10, coinciding with the Ayala Group Sustainability Summit held at the Hotel Intercontinental.

Maarte Fair

Iraya-Mangyan and CENTEX products were also showcased at the Maarte Fair organized by the Museum Foundation of the Philippines on August 23 to 25 at the Rockwell Tent.

PROJECT HIGHLIGHTS

PRODUCTS SOLD:• baskets and other woven products from the Iraya- Mangyan communities• processed cashew from El Nido, Palawan• bags and baskets made from buri-pandan, from El Nido, Palawan• laundry soap and dish-washing liquid from Silang, Cavite

total sales in three product fairs

P104,390

SUSTAI NABLE LIVE LI HOOD SUSTAI NABLE LIVE LI HOOD

2013 Timeline

19

Ayala Museum

As a leading private museum in the country, the Ayala Museum is committed to making history and art more accessible to the public through creative programming, innovative marketing, and strategic partnerships.

Project PartnersPrivate Collectors, Japan Foundation, the Embassy of Japan in the Philippines, the Embassy of France in Manila, Australian Embassy Manila in the Philippines, and PowerMac Center

Geographic ReachNationwide and global

Year Founded1967

ARTS AN D C ULTURE

20

Other Notable Exhibitions and Educational Programs

To keep art and culture relevant and intriguing to the public, we organized other exhibitions, including Terrain: The Works of Nelfa Querubin, Media Art Kitchen Sensorium (with Japan Foundation), and Constancio Bernardo: 1913-2013. Also popular were the History Comes Alive series with historian Ambeth Ocampo, DesignTalks session with ProudRace, the graphic design masterclass with Lucille Tenazas of The New School, and Design Co.Mission (design solutions for social problems) with Plus63.

New Artist Space

The new ArtistSpace opened on January 24, with an exhibition of works by 50 Ilonggo artists.

Images of Nation: H.R. Ocampo

An exhibition on National Artist H.R. Ocampo ran from June to November, with pieces from the Paulino and Hetty Que collection. The exhibit was supported by a ST’ART workshop.

Musical Performances

With the Manila Chamber Orchestra Foundation (MCOF) and the Manila Symphony Orchestra (MSO), we organized musical performances to put classical music in a new light. These included the Chamber Music Festival (February to April), Rush Hour Concerts (6:30 to 7:30 p.m., March and April), and Season’s Symphonies (December).

ImaginArt

Globe Telecom partnered with the Ayala Museum for ImaginArt, a competition that offered young artists the chance to exhibit at the Globe Art Gallery in Globe’s headquarters in Bonifacio Global City. The winner was film and television makeup artist Leo Velasco.

2013 Timeline

Philippines: Archipel des Échanges

Musée du quai Branly in Paris, France, hosted Philippines: Archipel des Échanges, one of the largest exhibitions of Philippine precolonial art and artifacts outside the Philippines. A total of 310 precolonial treasures were on display, including the Ayala Museum’s gold kinnari, limestone burial jars, and musical instruments.

I Love Kusama

The art of acclaimed Japanese artist Yayoi Kusama was the subject of our inaugural Collectors’ Series. I Love Kusama featured pieces from the private collection of Lito and Kim Camacho. Collectors Series, through curated thematic exhibitions, aims to expand the understanding and appreciation of local and international art. It provides the opportunity to view artworks that are usually not seen in public, especially a body of work of a single artist.

Botong Francisco: Film and Traveling Exhibit

In August, the short film Botong Francisco: A Nation Imagined, directed by Peque Gallaga was screened at the Cinemalaya Independent Film Festival. It was produced as part of the Botong Francisco exhibit (December 4, 2012 - March 31, 2013).

We also launched the Botong Francisco traveling exhibition on August 27 at The District North Point Mall, Talisay, Negros Occidental. The exhibit featured 25 reproductions of Botong’s paintings from institutional and private collections. It was also brought to the Museo Negrense de La Salle in Bacolod City, Negros Occidental and Museo Iloilo in Iloilo City, Iloilo.

Greenstallations

Nuvali, the Ayala Land development in Santa Rosa, Laguna, partnered with the Ayala Museum to bring art to nature in August through Greenstallations, featuring artworks by sculptors Mario Mallari Jr., Juan Carlo Calma, Michael Cacnio, and Eduardo Castrillo.

2013 Highlights

111,501TOTAL VISITORS

37workshops and other educational programs

2,743participants

in educational programs

ARTS AN D C ULTURE ARTS AN D C ULTURE

21

Filipinas Heritage Library

A library of rare and contemporary volumes on Philippine history, art, and culture, the Filipinas Heritage Library has reinvented itself as a “contemporary space for the contemporary researcher,” as it moves to make its collections more accessible to the public through digital technology, community programs, and literary events.

Project PartnersLocal Government Units, National Book Development Board, BPI Foundation, Ayala Land, and Globe Telecom

Geographic ReachNationwide and global

Year Started1996

ARTS AN D C ULTURE

22

FHL’s New Home

After 16 years at the historic Nielson Tower, the Filipinas Heritage reopened on the sixth floor of the Ayala Museum on March 19. The new FHL offers enhanced services and facilities, with focus on digitization.

Armengol Collection

The family of former Spanish Ambassador to the Philippines Pedro Ortiz Armengol turned over a prized collection of 573 books on April 20. Armengol was a distinguished writer, historian, traveler, and Philippine scholar, and is considered the primary Spanish scholar on the history and urbanity of Manila.

2013 Timeline

Herencia

To help improve the skills of public school teachers in teaching art, BPI Foundation and FHL partnered for the Herencia Lectures. Now on its fourth year, the lectures were held at the BenCab Museum in Baguio City (April 24-25) with 49 teachers, and the Negros Museum in Bacolod (October 23 to 25) with 41 teachers. The seminar was an offshoot of the Herencia book published in 2008, featuring BPI’s art collection.

POPtastik Pinoy!

With the National Book Development Board (NBDB), we hosted the 4th Philippine International Literary Festival on November 15, where Filipino writers discussed folk and popular literature as shown in komiks, TV, and film. Entitled “POPtastik Pinoy!,” the event featured lectures and sharing sessions on Filipino pop literature. It was supported by an exhibition of costumes from GMA Television Network’s popular fantaseryes (fantasy serials). The exhibit, held at Glorietta and Greenbelt 3, was supported by GMA and Ayala Malls.

OurLibrary

We help communities develop their own libraries through the OurLibrary project. In February we signed a memorandum of agreement with the Local Government Units of Gumaca, Atimonan, and Tagkawayan, Quezon Province. OurLibrary hopes to improve the collection of resource and reading materials in public or school libraries in cities and municipalities; improve library facilities and services; and set up activities that promote a love of reading and learning.

Eat Bulaga! Grant

The Filipinas Heritage Library received a grant from TAPE Inc. to archive more than 30 years’ worth of video materials from the longest running noontime show in the country, Eat Bulaga!

2013 Highlights

450RARE

BOOKS DIGITIZED

RARE BOOKS FUMIGATED / RESTORED

217 1,543researchers served

323people reached through

educational programs

350,341total visitorship of five FHL-managed websites

ARTS AN D C ULTURE ARTS AN D C ULTURE

23

Strengthening the Capacity of Civil Society Organizations in the Philippines A project supported by the

United States Agency for International Development (USAID), SCCSOP seeks to strengthen the organizational effectiveness and accountability of at least 120 civil society organizations (CSOs), increase the pool of trainers and mentors who can assist CSOs in meeting good governance and organizational management standards, and develop the capacities of CSO networks to create mechanisms to proactively respond to capacity gaps of their members.

Project PartnersUSAID, Association of Foundations, Caucus of Development NGO Networks (CODE NGO), Philippine Business for Social Progress, Philippine Council for NGO Certification, University of the Philippines Public Administration Research and Extension Services Foundation


Year Started2011

Continuing provision of package of capacity-building interventions

SCCSOP conducted training sessions in five capacity areas: effective governance; resource mobilization and development; program design, implementation and management, monitoring and evaluation; financial management; and administrative and personnel management. We also fielded one volunteer organizational development mentor per participating CSO, provided technical assistance and templates for manuals.

2013 Timeline

Midproject assessment

Fieldwork for the midproject assessment was conducted from June to August. The project team facilitated the self-assessment of 103 participating CSOs. They assessed how far they have progressed in attaining their OD/capacity-buidling plans.

Other workshops

Special workshops on organizational diagnosis, strategic planning, and the Non-US Organization Pre-Award Survey (NUPAS) training were also held. NUPAS is an important tool to determine how fit a non-US nonprofit is to be considered for a USAID grant.

2013 Highlights

training sessions conducted across

five training programs

22participants who

attended the training sessions

747CSOs who received

organizational development

assistance from SCCSOP

131

SPEC IAL PROJECTS

24

Buklod Bahayan Daycare Center

Buklod Bahayan Daycare Center serves the children of residents of Buklod Bahayan, a socialized housing project in Barangay Tartaria, Silang, Cavite.

Project PartnersPrivate Donors, Department of Social Welfare and Development, Local Government of Silang, Residents

Geographic ReachSilang, Cavite

Year Started1998

Project Timeline

Daycare operations

The daycare center had a total enrollment of 92 students, for whom various activities were regularly implemented, such as educational trips, feeding program, and others.

The Entire Nation (TEN) Moves

We implemented TEN Moves, a multi-stakeholder initiative that raised funds for the construction of 10,000 public school classrooms from 2011 to 2013. We officially turned it over to the Philippine Business for Social Progress (PBSP) this year.

Project Partners57-75 Education Reform Movement (Ateneo Center for Educational Development, Eugenia Apostol Foundation, League of Corporate Foundations, Philippine Business for Education, Philippine Business for Social Progress, Synergeia Foundation)


Year Started2011

SPEC IAL PROJECTS SPEC IAL PROJECTS

Livelihood project

A hand-soap and laundry-soap-making project was started for residents of the community.

25

Disaster Response

We undertook fund-raising activities, using both traditional and innovative platforms, for the benefit of our communities. But as the country experienced one disaster after another in the last quarter of the year, we launched several disaster relief drives not only for communities in immediate need, but also for those in need of long-term rehabilitation.

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Laging Handa

We launched Laging Handa, a year-round disaster relief channel through which people could send their cash donations, even before a calamity strikes. Through Laging Handa, we received a total of P=1,145,512, of which P=432,355 was used for the needs of students displaced by the Zamboanga siege in October.

Zamboanga fund-raising

Conflict between extremist groups and the military in Zamboanga displaced numerous families and put the lives of thousands of children in danger. In response to the call from the Department of Education to provide school supplies and other educational needs for the affected school kids. We raised P=267,645, supplemented with P=432,355 raised through the Laging Handa channel. Our partners for this initiative were the DepEd, National Book Store Foundation, and LBC Foundation.

Tugon sa Bohol

Bohol was one of the hardest-hit provinces during the 7.2 earthquake that struck Central Visayas on October 15. It resulted in deaths, injury, damage to property, and the destruction of several heritage churches. In response, the Ayala group launched Tugon sa Bohol, a campaign to raise funds for the rehabilitation of a Bohol heritage church. We partnered with Ayala Land Inc. to hold the Tugon sa Bohol fund-raising concert, which brought to Metro Manila the acclaimed Loboc Children’s Choir. Under the leadership of the Ayala Museum and in partnership with Executive Secretary Paquito Ochoa Jr., we restaged the Kisame exhibition, featuring the ceiling paintings of Bohol’s heritage churches. Many of these paintings are now gone. Through the sale of commemorative items and outright donations, we raised P=1,475,858. The funds were allocated for the pre-rehabilitation work to be undertaken by the Diocese of Tagbilaran.

2013 Timeline

Typhoon Yolanda (Haiyan)

Dubbed the strongest typhoon in recent history, Supertyphoon Yolanda brought unprecedented damage and destruction to many parts of the Visayas in November. Immediately after the typhoon struck, we opened our donation channels and mobilized funds for immediate relief. We partnered with the Department of Social Welfare and Development, World Food Programme of the United Nations, and the Ayala Business Club Cebu. We released P=5.058 million for immediate relief between November and December, and developed a plan for long-term rehabilitation. Focusing on the cities of Sagay and Cadiz in Negros Occidental, we are implementing education and sustainable livelihood programs over the long term. By the end of the year, we received P=40.04 million in cash donations. We also joined the One Big Ayala Volunteer Night to pack relief goods for Yolanda victims.

2013 Highlights

P40,041,118

P267,645

cash donations for Typhoon Yolanda

cash donations for children affected by Zamboanga unrest

cash donations sent through Laging Handa general disaster fund

CASH DONATIONS FOR BOHOL EARTHQUAKE

P 1,475,858

P1,145,512

DI SASTE R RE SPON SE

27

Our Board of Trustees

Alfredo AyalaMEMBER OF THE BOARD OF TRUSTEES

Maria Lourdes Heras-de LeonPRESIDENT AND MEMBER OF THEBOARD OF TRUSTEES

Jaime Augusto Zobel de AyalaFernando Zobel de AyalaCHAIRMEN OF THE BOARD OF TRUSTEES

28

Victoria GarchitorenaMEMBER OF THE BOARD OF TRUSTEES

Antonino Aquino Gerardo Ablaza John Philip Orbeta MEMBERS OF THE BOARD OF TRUSTEES

Jaime Laya Mercedita NolledoMEMBERS OF THE BOARD OF TRUSTEESErnest Cu

MEMBER OF THE BOARD OF TRUSTEES

29

A yala in 2014 celebrates its 180th year. How it evolved into one of the largest and most

innovative Philippine conglomerates—with businesses ranging from real estate, financial services, and telecommunications to investments in water, electronics, automotive, business process outsourcing, power, and transport infrastructure—is the longest narrative in the country’s business history.

A Brief History Oldest Business House

SPECIAL SECTION

of the Philippines’

30

The story begins in 1834 in what was Las IslasFilipinas. At a time when Manila’s business houses were engaged mainly in executing customers’ ordersfor buying and selling of commodities for a fee,landowner and entrepreneur Domingo Roxas and hisyoung industrial partner Antonio de Ayala created acompany that would engage in agribusiness. They built a distillery to derive greater value from cane sugar. It was small but it represented a Philippine step from the purely agricultural to the little-unexplored realm of industry.

When it had grown and become well known, thedistillery exported various products to Europe andgarnered awards and recognition for their quality. This showed that an enterprise in the rural and remote Philippines could compete in the international arena and win. Its best selling brand, Ginebra San Miguel, remains today.

When a Spanish royal decree established El Banco Español-Filipino de Isabela II, Southeast Asia’s first private commercial bank, Antonio de Ayala was appointed director representing the Manila business community. Thus began the Ayala involvement in

banking. Banco Español-Filipino—which issued the first Philippine paper currency—later became Bank of the Philippine Islands.

One of de Ayala’s sons-in-law was the multitalented Jacobo de Zobel: businessman, numismatist, archaeologist, writer; mayor of Manila at age 30; he read and spoke 11 languages, including Arabic and Etruscan. While engaged in the family business and serving on the Banco Español-Filipino board, he introduced the first streetcar system in Manila.

After the turn of the 20th century, the tramcar service was sold to an American company that renamed it Manila Electric Railway and Light Co., or MERALCO. The distillery was also sold, to businessman Carlos Palanca; at the time, it had 3,000 employees, including Filipino and French scientists. It had become a de facto incubator of the country’s chemical industry.

31

INTO MODERN TIMES

A decision attributed to Roxas’ son Jose Bonifacio was the purchase of land in San Pedro de Makati that extended all the way to the banks of the Pasig River. The property was deemed to have little value and had undergone a series of ownership changes when the company bought it for P52,800 in 1851.

When the family’s assets were apportioned in 1914, the Makati property went to the cousins Jacobo, Alfonso, and Mercedes Zobel de Ayala. They and their successors would bring Ayala to what it is today.

Mercedes’ husband, Col. Joseph McMicking, provided a new vision for Ayala, and for developing what remained of the Makati property. The venture was uncertain and at first difficult. When success came, it signified an unprecedented leap in the evolution of local real estate development. From it emerged the Philippines’ first modern Central Business District.

Ayala moved further from being a family business to being morecorporate in character. After a century, it began to employ professionalmanagers. It incorporated in 1968 and became publicly listed in 1976.

With professional teams, Colonel McMicking and his successors in management—Jacobo’s son Enrique Zobel and Alfonso’s son Jaime Zobel—steered Ayala to great success in the 20th century. Today, Jaime Augusto and Fernando Zobel de Ayala share leadership of a modern conglomerate with a much broader impact on the life of the nation.

SPECIAL SECTION

32

BEYOND 180 YEARS: ENABLING ENTREPRENEURSHIP

Ayala has found that the entrepreneurial spirit that has driven it for 18 decades is shared by many Filipinos, including merchants in its malls, retailers of Globe products, overseas workers’ families that bank with BPI, residents’ cooperatives in Manila Water’s distribution zone, and micro-entrepreneurs who benefit from BanKO’s microfinance services. As Ayala continues its expansion and diversification, it keeps an enthusiastic eye for the many thousands of people who will begin and build their own businesses through the ones it creates.

“By emphasizing a social purpose, we achieve a more complete form of doing business and generate a cycle of prosperity,” says the chairman and chief executive officer, Jaime Augusto Zobel de Ayala.

“We have always believed that the development of every individual foregrounds the development of the whole,” adds his brother Fernando, president and chief operating officer.

Ayala’s reputation for integrity, product and service quality, financial strength and prudence, and high professionalism has made it a partner of choice for major international corporations and the employer of choice for many of the best and brightest talents. The respect and trust it enjoys is deemed to have been earned by few other businesses in the Philippines, and these are the core values that it treasures the most.

The conglomerate’s leadership, with Jaime Zobel de Ayala as chairman emeritus, constantly promotes these values, including a deep commitment to Philippine development and to the Filipino.

Ayala’s narrative of pioneering innovation continues into a future full of new opportunity and promise.

33

FS dividerchoose pic from El Nido

Report of Independent

Auditors

34

STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of Ayala Foundation, Inc. is responsible for the preparation and fair presentation of the financial statements for the years ended December 31, 2013 and 2012, including the additional components attached therein, in accordance with the Philippine Financial Reporting Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

The Board of Trustees reviews and approves the financial statements and submits the same to the members.

Sycip Gorres Velayo & Co., the independent auditors appointed by the members, has examined the financial statements of the company in accordance with Philippine Standards on Auditing and in its report to the members, has expressed its opinion on the fairness of presentation upon completion of such examination.

JAIME AUGUSTO ZOBEL DE AYALA Co-Chairman

FERNANDO ZOBEL DE AYALA Co-Chairman

MARIA LOURDES HERAS – DE LEON President

ADITAS VIVIAN L. SANTAMARIA Chief Financial Officer

Signed this____ day of____________ 4th March, 2014

35

36

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Ayala Foundation, Inc. as at December 31, 2013 and 2012, and the statements of activities and its cash flows for the years then ended in accordance with Philippine Financial Reporting Standards.

Report on the Supplementary Information Required Under Revenue Regulations 15-2010

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 15 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of Ayala Foundation, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

SYCIP GORRES VELAYO & CO.

Jessie D. Cabaluna Partner CPA Certificate No. 36317 SEC Accreditation No. 0069-AR-3 (Group A),

February 14, 2013, valid until February 13, 2016 Tax Identification No. 102-082-365 BIR Accreditation No. 08-001998-10-2012,

April 11, 2012, valid until April 10, 2015 PTR No. 4225155, January 2, 2014, Makati City

March 4, 2014

A member firm of Ernst & Young Global Limited

INDEPENDENT AUDITORS’ REPORT The Board of Trustees Ayala Foundation, Inc. 10th Floor, BPI Main Building Ayala Avenue corner Paseo de Roxas Legaspi Village, Makati City Report on the Financial Statements We have audited the accompanying financial statements of Ayala Foundation, Inc. (a non-stock, non-profit corporation), which comprise the statements of financial position as at December 31, 2013 and 2012, and the statements of activities, statements of changes in fund balances and statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

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

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015SEC Accreditation No. 0012-FR-3 (Group A),

November 15, 2012, valid until November 16, 2015


37

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Ayala Foundation, Inc. as at December 31, 2013 and 2012, and the statements of activities and its cash flows for the years then ended in accordance with Philippine Financial Reporting Standards.

Report on the Supplementary Information Required Under Revenue Regulations 15-2010

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 15 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of Ayala Foundation, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.





March 4, 2014


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

December 31 2013 2012

ASSETS

Current Assets Cash and cash equivalents (Notes 4 and 13) P=133,069,407 P=93,752,612 Receivables - net (Notes 5 and 13) 16,945,581 18,265,005 Merchandise inventories - net (Note 6) 16,341,275 16,284,204 Other current assets (Note 7) 7,832,928 8,501,607

Total Current Assets 174,189,191 136,803,428

Noncurrent Assets Property and equipment (Note 8) 161,813,423 148,202,196 Available-for-sale financial assets

(Notes 9 and 13) 2,290,996,965 1,711,200,034 Total Noncurrent Assets 2,452,810,388 1,859,402,230

P=2,626,999,579 P=1,996,205,658

LIABILITIES AND NET ASSETS

Current Liability Accounts and other payables (Notes 10 and 13) P=75,126,583 P=70,190,540

Noncurrent Liability Pension liability (Note 11) 20,555,787 32,114,399

Total Liabilities 95,682,370 102,304,939

Net Assets (Note 12) Unrestricted 18,553,135 1,113,186 Temporarily restricted 288,317,350 190,570,834 Permanently restricted 2,187,714,273 1,653,150,699 Unrealized gain on available-for-sale financial assets (Note 9) 57,285,726 83,954,992 Remeasurement loss on defined benefit obligation (Note 11) (20,553,275) (34,888,992)

Total Net Assets 2,531,317,209 1,893,900,719 P=2,626,999,579 P=1,996,205,658

See accompanying Notes to Financial Statements.

INDEPENDENT AUDITORS’ REPORTON SUPPLEMENTARY SCHEDULE

The Board of Trustees Ayala Foundation, Inc. 10th Floor, BPI Main Building Ayala Avenue corner Paseo de Roxas Legaspi Village, Makati City

We have audited in accordance with Philippine Standards on Auditing, the financial statements of Ayala Foundation, Inc. (the Foundation) as at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012, and have issued our report thereon dated March 4, 2014. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of all the effective standards and interpretations as of December 31, 2013 is the responsibility of the Foundation’s management. This schedule is presented for purposes of complying with Securities Regulation Code Rule 68, As Amended (2011) and is not part of the basic financial statements. This schedule have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state, in all material respects, the information required to be set forth therein in relation to the basic financial statements taken as a whole.





March 4, 2014

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

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

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015SEC Accreditation No. 0012-FR-3 (Group A),

November 15, 2012, valid until November 16, 2015


38

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

December 31 2013 2012

ASSETS

Current Assets Cash and cash equivalents (Notes 4 and 13) P=133,069,407 P=93,752,612 Receivables - net (Notes 5 and 13) 16,945,581 18,265,005 Merchandise inventories - net (Note 6) 16,341,275 16,284,204 Other current assets (Note 7) 7,832,928 8,501,607

Total Current Assets 174,189,191 136,803,428

Noncurrent Assets Property and equipment (Note 8) 161,813,423 148,202,196 Available-for-sale financial assets

(Notes 9 and 13) 2,290,996,965 1,711,200,034 Total Noncurrent Assets 2,452,810,388 1,859,402,230

P=2,626,999,579 P=1,996,205,658

LIABILITIES AND NET ASSETS

Current Liability Accounts and other payables (Notes 10 and 13) P=75,126,583 P=70,190,540

Noncurrent Liability Pension liability (Note 11) 20,555,787 32,114,399

Total Liabilities 95,682,370 102,304,939

Net Assets (Note 12) Unrestricted 18,553,135 1,113,186 Temporarily restricted 288,317,350 190,570,834 Permanently restricted 2,187,714,273 1,653,150,699 Unrealized gain on available-for-sale financial assets (Note 9) 57,285,726 83,954,992 Remeasurement loss on defined benefit obligation (Note 11) (20,553,275) (34,888,992)

Total Net Assets 2,531,317,209 1,893,900,719 P=2,626,999,579 P=1,996,205,658


39

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t P=–

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P=255

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Inve

stm

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nd in

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–

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15

8,50

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183,

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122,

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266,

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312

– –

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266,

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125,

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1,60

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P=1,1

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4,99

2 (P=

34,8

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93,9

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Inve

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–

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15

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266,

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8,38

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125,

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NE

T A

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EN

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P=1,1

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3,95

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34,8

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92)

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93,9

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41

AY

AL

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orpo

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FUN

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S N

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s at b

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of y

ear

P=1,1

13,1

86

P=190

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,653

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P=8

3,95

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2 (P=

34,8

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00,7

19

Exce

ss o

f rev

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, gai

ns a

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ther

supp

orts

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r ex

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17

,439

,949

10

4,31

0,09

0 52

8,00

0,00

0 –

– 64

9,75

0,03

9 Fu

nd a

lloca

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(dis

burs

emen

ts)

–(6

,563

,574

)6,

563,

574

– –

– N

et u

nrea

lized

loss

–

– –

(26,

669,

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–(2

6,66

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emea

sure

men

t gai

n on

def

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ben

efit

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atio

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87,7

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(P=20

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r End

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1, 2

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ealiz

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tal

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ear

P=125

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P=4

45,9

41,2

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2 (P=

4,24

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P=1,6

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46

Exce

ss o

f rev

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ns a

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supp

orts

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r ex

pens

es a

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(exp

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s ove

r rev

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) (1

24,2

98,2

68)

113,

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142

330,

008,

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– –

318,

764,

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Fund

allo

catio

n (d

isbu

rsem

ents

) –

(368

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)36

8,33

3,03

4 –

– (9

2,56

5)

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unr

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ain

– –

– 35

7,24

0 –

357,

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easu

rem

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oss o

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ben

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n –

– –

– (3

0,64

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(30,

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N

et a

sset

s at e

nd o

f yea

r P=1

,113

,186

P=1

90,5

70,8

34

P=1,6

53,1

50,6

99

P=83,

954,

992

(P=34

,888

,992

) P=1

,893

,900

,719

See

acco

mpa

nyin

g N

otes

to F

inan

cial

Sta

tem

ents

.

AYALA FOUNDATION, INC. (A Non-Stock, Non-Profit Corporation) STATEMENTS OF CASH FLOWS

Years Ended December 31 2013 2012

CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets P=637,416,490 P=288,388,473 Adjustments for:

Remeasurement loss (gain) on defined benefit obligation (Note 11) (14,335,717) 30,641,157 Depreciation and amortization (Note 8) 10,223,149 15,492,425 Loss (gain) on disposal of property and equipment (241,866) 10,665,840 Provision for doubtful accounts (Notes 5 and 12) – 5,283,010Unrealized loss (gain) on AFS financial assets (Note 9) 26,669,266 (357,240) Pension expense (Note 11) 8,351,561 3,043,024 Investment and interest income (Notes 4 and 9) (123,752,054) (133,208,632)

Changes in net assets before changes in working capital 544,330,829 219,948,057 Decrease (increase) in:

Receivables 1,113,657 (2,833,357) Merchandise inventories (57,071) 163,130 Other current assets 668,679 (3,386,162)

Increase (decrease) in: Accounts and other payables 4,936,043 (12,352,249) Pension liability (Note 11) (5,574,456) (9,014,350)

Net cash provided by operating activities 545,417,681 192,525,069

CASH FLOWS FROM INVESTING ACTIVITIES Net disposals (additions) to:

AFS financial assets (Note 9) (606,466,197) (649,989,264) Property and equipment (Note 8) (23,834,376) (13,129,554) Decrease in restricted cash equivalents – 68,900,000Proceeds on disposal of property and equipment 241,866 − Investment and interest income received 123,957,821 133,002,865 Net cash used in investing activities (506,100,886) (461,215,953)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 39,316,795 (268,690,884)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 93,752,612 362,443,496

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4) P=133,069,407 P=93,752,612


42

AYALA FOUNDATION, INC. (A Non-Stock, Non-Profit Corporation) STATEMENTS OF CASH FLOWS

Years Ended December 31 2013 2012

CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets P=637,416,490 P=288,388,473 Adjustments for:

Remeasurement loss (gain) on defined benefit obligation (Note 11) (14,335,717) 30,641,157 Depreciation and amortization (Note 8) 10,223,149 15,492,425 Loss (gain) on disposal of property and equipment (241,866) 10,665,840 Provision for doubtful accounts (Notes 5 and 12) – 5,283,010Unrealized loss (gain) on AFS financial assets (Note 9) 26,669,266 (357,240) Pension expense (Note 11) 8,351,561 3,043,024 Investment and interest income (Notes 4 and 9) (123,752,054) (133,208,632)

Changes in net assets before changes in working capital 544,330,829 219,948,057 Decrease (increase) in:

Receivables 1,113,657 (2,833,357) Merchandise inventories (57,071) 163,130 Other current assets 668,679 (3,386,162)

Increase (decrease) in: Accounts and other payables 4,936,043 (12,352,249) Pension liability (Note 11) (5,574,456) (9,014,350)

Net cash provided by operating activities 545,417,681 192,525,069

CASH FLOWS FROM INVESTING ACTIVITIES Net disposals (additions) to:

AFS financial assets (Note 9) (606,466,197) (649,989,264) Property and equipment (Note 8) (23,834,376) (13,129,554) Decrease in restricted cash equivalents – 68,900,000Proceeds on disposal of property and equipment 241,866 − Investment and interest income received 123,957,821 133,002,865 Net cash used in investing activities (506,100,886) (461,215,953)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 39,316,795 (268,690,884)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 93,752,612 362,443,496

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4) P=133,069,407 P=93,752,612


43

AYALA FOUNDATION, INC. (A Non-Stock, Non-Profit Corporation) NOTES TO FINANCIAL STATEMENTS

1. Organization and Tax Exemption

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

a. To provide financial support, within the Philippines and abroad, for the studies of selectedstudents and for the attendance at scientific conferences by qualified and competent scholars;

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

c. To undertake ventures that will transfer appropriate technology to urban and rural groups thatwill give them additional income and allow them to put up profitable enterprises that willbenefit themselves and the community;

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

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

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

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

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

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

The Foundation is duly accredited by the Philippine Council for Non-Government Organization Certification (PCNC) and renewed its registration as a donee institution on August 6, 2010 in accordance with the provisions of Revenue Regulation No. 13-98. Donations received shall entitle the donors to full or limited deduction pursuant to Section 34 (H) (paragraphs 1 or 2) and exemption from donor’s tax pursuant to Section 101 (A) (3) of the National Internal Revenue Code of 1997. The Certificate of Registration shall be valid until July 01, 2015 unless sooner

revoked by the Bureau of Internal Revenue (BIR) or upon withdrawal of the Certificate of Accreditation by PCNC.

The Foundation’s registered office address is at 10th Floor, BPI Main Building, Ayala Avenue corner Paseo de Roxas, Legaspi Village, Makati City.

The accompanying financial statements were approved and authorized for issue by the Board of Trustees on March 4, 2014.

2. Summary of Significant Accounting Policies

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

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

Statement of ComplianceThe accompanying financial statements have been prepared in compliance with PhilippineFinancial Reporting Standards (PFRS).

Adoption of New and Amended Accounting Standards and InterpretationsThe Foundation will adopt the following amended standards and Philippine Interpretationsenumerated below when these become effective on January 1, 2013. Except as otherwiseindicated, the adoption of the new and amended Standards and Interpretations did not have asignificant impact on the Foundation’s financial statements.

PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and FinancialLiabilities (Amendments)These Amendments require an entity to disclose information about rights of set-off and relatedarrangements (such as collateral agreements). The new disclosures are required for allrecognized financial instruments that are set off in accordance with PAS 32. These disclosuresalso apply to recognized financial instruments that are subject to an enforceable master nettingarrangement or ‘similar agreement’, irrespective of whether they are set-off in accordancewith PAS 32. The Amendments require entities to disclose, in a tabular format, unless anotherformat is more appropriate, the following minimum quantitative information. This ispresented separately for financial assets and financial liabilities recognized at the end of thereporting period:a) The gross amounts of those recognized financial assets and recognized financial liabilities;b) The amounts that are set off in accordance with the criteria in PAS 32 when determining

the net amounts presented in the statement of financial position;

44

revoked by the Bureau of Internal Revenue (BIR) or upon withdrawal of the Certificate of Accreditation by PCNC.

The Foundation’s registered office address is at 10th Floor, BPI Main Building, Ayala Avenue corner Paseo de Roxas, Legaspi Village, Makati City.

The accompanying financial statements were approved and authorized for issue by the Board of Trustees on March 4, 2014.

2. Summary of Significant Accounting Policies

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

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

Statement of ComplianceThe accompanying financial statements have been prepared in compliance with PhilippineFinancial Reporting Standards (PFRS).

Adoption of New and Amended Accounting Standards and InterpretationsThe Foundation will adopt the following amended standards and Philippine Interpretationsenumerated below when these become effective on January 1, 2013. Except as otherwiseindicated, the adoption of the new and amended Standards and Interpretations did not have asignificant impact on the Foundation’s financial statements.

PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and FinancialLiabilities (Amendments)These Amendments require an entity to disclose information about rights of set-off and relatedarrangements (such as collateral agreements). The new disclosures are required for allrecognized financial instruments that are set off in accordance with PAS 32. These disclosuresalso apply to recognized financial instruments that are subject to an enforceable master nettingarrangement or ‘similar agreement’, irrespective of whether they are set-off in accordancewith PAS 32. The Amendments require entities to disclose, in a tabular format, unless anotherformat is more appropriate, the following minimum quantitative information. This ispresented separately for financial assets and financial liabilities recognized at the end of thereporting period:a) The gross amounts of those recognized financial assets and recognized financial liabilities;b) The amounts that are set off in accordance with the criteria in PAS 32 when determining

the net amounts presented in the statement of financial position;

45

c) The net amounts presented in the statement of financial position;d) The amounts subject to an enforceable master netting arrangement or similar agreement

that are not otherwise included in (b) above, including:i. Amounts related to recognized financial instruments that do not meet some or all of

the offsetting criteria in PAS 32; andii. Amounts related to financial collateral (including cash collateral); and

e) The net amount after deducting the amounts in (d) from the amounts in (c) above.

The Amendments have no impact on the Foundation’s financial position or performance.

PFRS 10, Consolidated Financial StatementsPFRS 10 replaced the portion of PAS 27, Consolidated and Separate Financial Statements,that addressed the accounting for consolidated financial statements. It also included the issuesraised in SIC 12, Consolidation - Special Purpose Entities. PFRS 10 established a singlecontrol model that applied to all entities including special purpose entities. The changesintroduced by PFRS 10 require management to exercise significant judgment to determinewhich entities are controlled, and therefore, are required to be consolidated by a parent,compared with the requirements that were in PAS 27.

PFRS 11, Joint ArrangementsPFRS 11 replaced PAS 31, Interests in Joint Ventures, PFRS 11 and SIC 13, JointlyControlled Entities - Non-Monetary Contributions by Venturers. PFRS 11 removes the optionto account for jointly controlled entities using proportionate consolidation. Instead, jointlycontrolled entities that meet the definition of a joint venture must be accounted for using theequity method.

PFRS 12, Disclosure of Interests in Other EntitiesPFRS 12 sets out the requirements for disclosures relating to an entity’s interests insubsidiaries, joint arrangements, associates and structured entities. The requirements in PFRS12 are more comprehensive than the previously existing disclosure requirements forsubsidiaries (for example, where a subsidiary is controlled with less than a majority of votingrights).

PFRS 13, Fair Value MeasurementPFRS 13 establishes a single source of guidance under PFRSs for all fair value measurements.PFRS 13 does not change when an entity is required to use fair value, but rather providesguidance on how to measure fair value under PFRS. PFRS 13 defines fair value as an exitprice. PFRS 13 also requires additional disclosures.

As a result of the guidance in PFRS 13, the Foundation re-assessed its policies for measuringfair values, in particular, its valuation inputs such as non-performance risk for fair valuemeasurement of liabilities. The Foundation has assessed that the application of PFRS 13 hasnot materially impacted the fair value measurements of the Foundation. Additionaldisclosures, where required, are provided in the individual notes relating to the assets andliabilities whose fair values were determined. Fair value hierarchy is provided in Note 13.

PAS 1, Presentation of Financial Statements - Presentation of Items of Other ComprehensiveIncome or OCI (Amendments)These Amendments introduce a grouping of items presented in OCI. Items that will bereclassified (or “recycled”) to profit or loss at a future point in time (for example, uponderecognition or settlement) will be presented separately from items that will never berecycled. The Amendments affect presentation only and have no impact on the Foundation’sfinancial position or performance.

PAS 19, Employee Benefits (Revised)For defined benefit plans, the revised PAS 19 requires all actuarial gains and losses to berecognized in other comprehensive income and unvested past service costs previouslyrecognized over the average vesting period to be recognized immediately in profit or losswhen incurred. The Foundation applied revised PAS 19 for the first time in its financialstatements as at January 1, 2012. The Foundation changed its accounting policy to recognizeall actuarial gains and losses in other comprehensive income and all past service costs in profitor loss in the period they occur.

The revised PAS 19 replaced the interest cost and expected return on plan assets with theconcept of net interest on defined benefit liability or asset which is calculated by multiplyingthe net balance sheet defined benefit liability or asset by the discount rate used to measure theemployee benefit obligation, each as at the beginning of the annual period.

The revised PAS 19 also amended the definition of short-term employee benefits and requiresemployee benefits to be classified as short-term based on expected timing of settlement ratherthan the employee’s entitlement to the benefits. In addition, the revised PAS 19 modifies thetiming of recognition for termination benefits. The modification requires the terminationbenefits to be recognized at the earlier of when the offer cannot be withdrawn or when therelated restructuring costs are recognized.

Changes to definition of short-term employee benefits and timing of recognition fortermination benefits do not have any impact to the Foundation’s financial position andfinancial performance.

PAS 27, Separate Financial Statements (as revised in 2011)As a consequence of the issuance of the new PFRS 10, Consolidated Financial Statements,and PFRS 12, Disclosure of Interests in Other Entities, PAS 27 has been amended. Whatremains of PAS 27 is limited to accounting for subsidiaries, jointly controlled entities, andassociates in the separate financial statements.

PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)As a consequence of the issuance of the new PFRS 11, Joint Arrangements, and PFRS 12,Disclosure of Interests in Other Entities, PAS 28 has been renamed PAS 28, Investments inAssociates and Joint Ventures, and describes the application of the equity method toinvestments in joint ventures in addition to associates.

Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface MineThis Interpretation applies to waste removal (stripping) costs incurred in surface miningactivity, during the production phase of the mine. The Interpretation addresses the accountingfor the benefit from the stripping activity. This new Interpretation is not relevant to theFoundation.

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PAS 1, Presentation of Financial Statements - Presentation of Items of Other ComprehensiveIncome or OCI (Amendments)These Amendments introduce a grouping of items presented in OCI. Items that will bereclassified (or “recycled”) to profit or loss at a future point in time (for example, uponderecognition or settlement) will be presented separately from items that will never berecycled. The Amendments affect presentation only and have no impact on the Foundation’sfinancial position or performance.

PAS 19, Employee Benefits (Revised)For defined benefit plans, the revised PAS 19 requires all actuarial gains and losses to berecognized in other comprehensive income and unvested past service costs previouslyrecognized over the average vesting period to be recognized immediately in profit or losswhen incurred. The Foundation applied revised PAS 19 for the first time in its financialstatements as at January 1, 2012. The Foundation changed its accounting policy to recognizeall actuarial gains and losses in other comprehensive income and all past service costs in profitor loss in the period they occur.

The revised PAS 19 replaced the interest cost and expected return on plan assets with theconcept of net interest on defined benefit liability or asset which is calculated by multiplyingthe net balance sheet defined benefit liability or asset by the discount rate used to measure theemployee benefit obligation, each as at the beginning of the annual period.

The revised PAS 19 also amended the definition of short-term employee benefits and requiresemployee benefits to be classified as short-term based on expected timing of settlement ratherthan the employee’s entitlement to the benefits. In addition, the revised PAS 19 modifies thetiming of recognition for termination benefits. The modification requires the terminationbenefits to be recognized at the earlier of when the offer cannot be withdrawn or when therelated restructuring costs are recognized.

Changes to definition of short-term employee benefits and timing of recognition fortermination benefits do not have any impact to the Foundation’s financial position andfinancial performance.

PAS 27, Separate Financial Statements (as revised in 2011)As a consequence of the issuance of the new PFRS 10, Consolidated Financial Statements,and PFRS 12, Disclosure of Interests in Other Entities, PAS 27 has been amended. Whatremains of PAS 27 is limited to accounting for subsidiaries, jointly controlled entities, andassociates in the separate financial statements.

PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)As a consequence of the issuance of the new PFRS 11, Joint Arrangements, and PFRS 12,Disclosure of Interests in Other Entities, PAS 28 has been renamed PAS 28, Investments inAssociates and Joint Ventures, and describes the application of the equity method toinvestments in joint ventures in addition to associates.

Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface MineThis Interpretation applies to waste removal (stripping) costs incurred in surface miningactivity, during the production phase of the mine. The Interpretation addresses the accountingfor the benefit from the stripping activity. This new Interpretation is not relevant to theFoundation.

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PFRS 1, First-time Adoption of International Financial Reporting Standards - GovernmentLoans (Amendments)These Amendments require first-time adopters to apply the requirements of PAS 20,Accounting for Government Grants and Disclosure of Government Assistance, prospectivelyto government loans existing at the date of transition to PFRS. However, entities may chooseto apply the requirements of PAS 39, Financial Instruments: Recognition and Measurement,and PAS 20 to government loans retrospectively if the information needed to do so had beenobtained at the time of initially accounting for those loans. These Amendments are notrelevant to the Foundation.

Annual Improvements to PFRSs (2009-2011 cycle) The Annual Improvements to PFRSs (2009-2011 cycle) contain non-urgent but necessary amendments to PFRSs. The Foundation adopted these amendments for the current year.

PFRS 1, First-time Adoption of PFRS - Borrowing CostsThe Amendment clarifies that, upon adoption of PFRS, an entity that capitalized borrowingcosts in accordance with its previous generally accepted accounting principles, may carryforward, without any adjustment, the amount previously capitalized in its opening statement offinancial position at the date of transition. Subsequent to the adoption of PFRS, borrowingcosts are recognized in accordance with PAS 23, Borrowing Costs. The Amendment does notapply to the Foundation as it is not a first-time adopter of PFRS.

PAS 1, Presentation of Financial Statements - Clarification of the requirements forcomparative informationThese Amendments clarify the requirements for comparative information that are disclosedvoluntarily and those that are mandatory due to retrospective application of an accountingpolicy, or retrospective restatement or reclassification of items in the financial statements. Anentity must include comparative information in the related notes to the financial statementswhen it voluntarily provides comparative information beyond the minimum requiredcomparative period. The additional comparative period does not need to contain a completeset of financial statements. On the other hand, supporting notes for the third balance sheet(mandatory when there is a retrospective application of an accounting policy, or retrospectiverestatement or reclassification of items in the financial statements) are not required. As aresult, the Foundation has not included comparative information in respect of the openingstatement of financial position as at January 1, 2012. The Amendments affect disclosures onlyand have no impact on the Foundation’s financial position or performance.

PAS 16, Property, Plant and Equipment - Classification of servicing equipmentThe Amendment clarifies that spare parts, stand-by equipment and servicing equipment shouldbe recognized as property, plant and equipment when they meet the definition of property,plant and equipment and should be recognized as inventory if otherwise. The Amendmentdoes not have any significant impact on the Foundation’s financial position or performance.

PAS 32, Financial Instruments: Presentation - Tax effect of distribution to holders of equityinstrumentsThe Amendment clarifies that income taxes relating to distributions to equity holders and totransaction costs of an equity transaction are accounted for in accordance with PAS 12,Income Taxes. The Amendment does not have any significant impact on the Foundation’sfinancial position or performance.

PAS 34, Interim Financial Reporting - Interim financial reporting and segment informationfor total assets and liabilitiesThe Amendment clarifies that the total assets and liabilities for a particular reportable segmentneed to be disclosed only when the amounts are regularly provided to the chief operatingdecision maker and there has been a material change from the amount disclosed in the entity’sprevious annual financial statements for that reportable segment. The Amendment affectsdisclosures only and has no impact on the Foundation’s financial position or performance.

Future Changes in Accounting Policies The Foundation will adopt the following amended standards and Philippine Interpretations enumerated below when these become effective. Except as otherwise indicated, the Foundation does not expect the adoption of these new and amended PFRS and Philippine Interpretations to have significant impact on the Foundation’s financial statements.

Effective 2014

PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets(Amendments)These Amendments remove the unintended consequences of PFRS 13 on the disclosuresrequired under PAS 36. In addition, these Amendments require disclosure of the recoverableamounts for the assets or cash-generating units (CGUs) for which impairment loss has beenrecognized or reversed during the period. These Amendments are effective retrospectively forannual periods beginning on or after January 1, 2014 with earlier application permitted,provided PFRS 13 is also applied.

Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27)These Amendments are effective for annual periods beginning on or afterJanuary 1, 2014 provide an exception to the consolidation requirement for entities that meetthe definition of an investment entity under PFRS 10. The exception to consolidation requiresinvestment entities to account for subsidiaries at fair value through profit or loss.

Philippine Interpretation IFRIC 21, LeviesIFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggerspayment, as identified by the relevant legislation, occurs. For a levy that is triggered uponreaching a minimum threshold, the interpretation clarifies that no liability should beanticipated before the specified minimum threshold is reached. IFRIC 21 is effective forannual periods beginning on or after January 1, 2014.

PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives andContinuation of Hedge Accounting (Amendments)These Amendments provide relief from discontinuing hedge accounting when novation of aderivative designated as a hedging instrument meets certain criteria. These Amendments areeffective for annual periods beginning on or after January 1, 2014.

PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and FinancialLiabilities (Amendments)These Amendments clarify the meaning of “currently has a legally enforceable right to set-off” and also clarify the application of the PAS 32 offsetting criteria to settlement systems(such as central clearing house systems) which apply gross settlement mechanisms that are notsimultaneous. The Amendments to PAS 32 are to be retrospectively applied for annualperiods beginning on or after January 1, 2014.

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PAS 34, Interim Financial Reporting - Interim financial reporting and segment informationfor total assets and liabilitiesThe Amendment clarifies that the total assets and liabilities for a particular reportable segmentneed to be disclosed only when the amounts are regularly provided to the chief operatingdecision maker and there has been a material change from the amount disclosed in the entity’sprevious annual financial statements for that reportable segment. The Amendment affectsdisclosures only and has no impact on the Foundation’s financial position or performance.

Future Changes in Accounting Policies The Foundation will adopt the following amended standards and Philippine Interpretations enumerated below when these become effective. Except as otherwise indicated, the Foundation does not expect the adoption of these new and amended PFRS and Philippine Interpretations to have significant impact on the Foundation’s financial statements.

Effective 2014

PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets(Amendments)These Amendments remove the unintended consequences of PFRS 13 on the disclosuresrequired under PAS 36. In addition, these Amendments require disclosure of the recoverableamounts for the assets or cash-generating units (CGUs) for which impairment loss has beenrecognized or reversed during the period. These Amendments are effective retrospectively forannual periods beginning on or after January 1, 2014 with earlier application permitted,provided PFRS 13 is also applied.

Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27)These Amendments are effective for annual periods beginning on or afterJanuary 1, 2014 provide an exception to the consolidation requirement for entities that meetthe definition of an investment entity under PFRS 10. The exception to consolidation requiresinvestment entities to account for subsidiaries at fair value through profit or loss.

Philippine Interpretation IFRIC 21, LeviesIFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggerspayment, as identified by the relevant legislation, occurs. For a levy that is triggered uponreaching a minimum threshold, the interpretation clarifies that no liability should beanticipated before the specified minimum threshold is reached. IFRIC 21 is effective forannual periods beginning on or after January 1, 2014.

PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives andContinuation of Hedge Accounting (Amendments)These Amendments provide relief from discontinuing hedge accounting when novation of aderivative designated as a hedging instrument meets certain criteria. These Amendments areeffective for annual periods beginning on or after January 1, 2014.

PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and FinancialLiabilities (Amendments)These Amendments clarify the meaning of “currently has a legally enforceable right to set-off” and also clarify the application of the PAS 32 offsetting criteria to settlement systems(such as central clearing house systems) which apply gross settlement mechanisms that are notsimultaneous. The Amendments to PAS 32 are to be retrospectively applied for annualperiods beginning on or after January 1, 2014.

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PAS 19, Employee Benefits -Defined Benefit Plans: Employee Contributions (Amendments)The Amendments apply to contributions from employees or third parties to defined benefitplans. Contributions that are set out in the formal terms of the plan shall be accounted for asreductions to current service costs if they are linked to service or as part of theremeasurements of the net defined benefit asset or liability if they are not linked to service.

Contributions that are discretionary shall be accounted for as reductions of current service costupon payment of these contributions to the plans. The Amendments to PAS 19 are to beretrospectively applied for annual periods beginning on or after July 1, 2014.

Annual Improvements to PFRSs (2010-2012 cycle) The Annual Improvements to PFRSs (2010-2012 cycle) contain non-urgent but necessary amendments to the following standards:

PFRS 2, Share-based Payment - Definition of Vesting ConditionThe Amendment revised the definitions of vesting condition and market condition and addedthe definitions of performance condition and service condition to clarify various issues. ThisAmendment shall be prospectively applied to share-based payment transactions for which thegrant date is on or after July 1, 2014. This Amendment does not apply to the Foundation as ithas no share-based payments.

PFRS 3, Business Combinations - Accounting for Contingent Consideration in a BusinessCombinationThe Amendment clarifies that a contingent consideration that meets the definition of afinancial instrument should be classified as a financial liability or as equity in accordance withPAS 32. Contingent consideration that is not classified as equity is subsequently measured atfair value through profit or loss whether or not it falls within the scope of PFRS 9 (or PAS 39,if PFRS 9 is not yet adopted). The Amendment shall be prospectively applied to businesscombinations for which the acquisition date is on or after July 1, 2014.

PFRS 8, Operating Segments - Aggregation of Operating Segments and Reconciliation of theTotal of the Reportable Segments’ Assets to the Entity’s AssetsThe Amendments require entities to disclose the judgment made by management inaggregating two or more operating segments. This disclosure should include a briefdescription of the operating segments that have been aggregated in this way and the economicindicators that have been assessed in determining that the aggregated operating segments sharesimilar economic characteristics. The Amendments also clarify that an entity shall providereconciliations of the total of the reportable segments’ assets to the entity’s assets if suchamounts are regularly provided to the chief operating decision maker. These Amendments areeffective for annual periods beginning on or after July 1, 2014 and are applied retrospectively.The Amendments are not applicable to the Foundation.

PFRS 13, Fair Value Measurement - Short-term Receivables and PayablesThe Amendment clarifies that short-term receivables and payables with no stated interest ratescan be held at invoice amounts when the effect of discounting is immaterial.

PAS 16, Property, Plant and Equipment - Revaluation Method – Proportionate Restatement ofAccumulated DepreciationThe Amendment clarifies that, upon revaluation of an item of property, plant and equipment,the carrying amount of the asset shall be adjusted to the revalued amount, and the asset shallbe treated in one of the following ways:a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation

of the carrying amount of the asset. The accumulated depreciation at the date ofrevaluation is adjusted to equal the difference between the gross carrying amount and thecarrying amount of the asset after taking into account any accumulated impairment losses.

b. The accumulated depreciation is eliminated against the gross carrying amount of the asset.

The Amendment is effective for annual periods beginning on or after July 1, 2014. The Amendment shall apply to all revaluations recognized in annual periods beginning on or after the date of initial application of this amendment and in the immediately preceding annual period. The amendment has no impact on the Foundation’s financial position or performance.

PAS 24, Related Party Disclosures - Key Management PersonnelThe Amendments clarify that an entity is a related party of the reporting entity if the saidentity, or any member of a group for which it is a part of, provides key management personnelservices to the reporting entity or to the parent company of the reporting entity. TheAmendments also clarify that a reporting entity that obtains management personnel servicesfrom another entity (also referred to as management entity) is not required to disclose thecompensation paid or payable by the management entity to its employees or directors. Thereporting entity is required to disclose the amounts incurred for the key management personnelservices provided by a separate management entity. The Amendments are effective for annualperiods beginning on or after July 1, 2014 and are applied retrospectively. The Amendmentsaffect disclosures only and have no impact on the Foundation’s financial position orperformance.

PAS 38, Intangible Assets - Revaluation Method - Proportionate Restatement of AccumulatedAmortizationThe Amendments clarify that, upon revaluation of an intangible asset, the carrying amount ofthe asset shall be adjusted to the revalued amount, and the asset shall be treated in one of thefollowing ways:a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation

of the carrying amount of the asset. The accumulated amortization at the date ofrevaluation is adjusted to equal the difference between the gross carrying amount and thecarrying amount of the asset after taking into account any accumulated impairment losses.

b. The accumulated amortization is eliminated against the gross carrying amount of the asset.

The Amendments also clarify that the amount of the adjustment of the accumulated amortization should form part of the increase or decrease in the carrying amount accounted for in accordance with the standard.

The Amendments are effective for annual periods beginning on or after July 1, 2014. The Amendments shall apply to all revaluations recognized in annual periods beginning on or after the date of initial application of this amendment and in the immediately preceding annual period. The Amendments have no impact on the Foundation’s financial position or performance.

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PAS 16, Property, Plant and Equipment - Revaluation Method – Proportionate Restatement ofAccumulated DepreciationThe Amendment clarifies that, upon revaluation of an item of property, plant and equipment,the carrying amount of the asset shall be adjusted to the revalued amount, and the asset shallbe treated in one of the following ways:a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation

of the carrying amount of the asset. The accumulated depreciation at the date ofrevaluation is adjusted to equal the difference between the gross carrying amount and thecarrying amount of the asset after taking into account any accumulated impairment losses.

b. The accumulated depreciation is eliminated against the gross carrying amount of the asset.

The Amendment is effective for annual periods beginning on or after July 1, 2014. The Amendment shall apply to all revaluations recognized in annual periods beginning on or after the date of initial application of this amendment and in the immediately preceding annual period. The amendment has no impact on the Foundation’s financial position or performance.

PAS 24, Related Party Disclosures - Key Management PersonnelThe Amendments clarify that an entity is a related party of the reporting entity if the saidentity, or any member of a group for which it is a part of, provides key management personnelservices to the reporting entity or to the parent company of the reporting entity. TheAmendments also clarify that a reporting entity that obtains management personnel servicesfrom another entity (also referred to as management entity) is not required to disclose thecompensation paid or payable by the management entity to its employees or directors. Thereporting entity is required to disclose the amounts incurred for the key management personnelservices provided by a separate management entity. The Amendments are effective for annualperiods beginning on or after July 1, 2014 and are applied retrospectively. The Amendmentsaffect disclosures only and have no impact on the Foundation’s financial position orperformance.

PAS 38, Intangible Assets - Revaluation Method - Proportionate Restatement of AccumulatedAmortizationThe Amendments clarify that, upon revaluation of an intangible asset, the carrying amount ofthe asset shall be adjusted to the revalued amount, and the asset shall be treated in one of thefollowing ways:a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation

of the carrying amount of the asset. The accumulated amortization at the date ofrevaluation is adjusted to equal the difference between the gross carrying amount and thecarrying amount of the asset after taking into account any accumulated impairment losses.

b. The accumulated amortization is eliminated against the gross carrying amount of the asset.

The Amendments also clarify that the amount of the adjustment of the accumulated amortization should form part of the increase or decrease in the carrying amount accounted for in accordance with the standard.

The Amendments are effective for annual periods beginning on or after July 1, 2014. The Amendments shall apply to all revaluations recognized in annual periods beginning on or after the date of initial application of this amendment and in the immediately preceding annual period. The Amendments have no impact on the Foundation’s financial position or performance.

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Annual Improvements to PFRSs (2011-2013 cycle) The Annual Improvements to PFRSs (2011-2013 cycle) contain non-urgent but necessary amendments to the following standards:

PFRS 1, First-time Adoption of Philippine Financial Reporting Standards – Meaning of‘Effective PFRSs’The Amendment clarifies that an entity may choose to apply either a current standard or a newstandard that is not yet mandatory, but that permits early application, provided either standardis applied consistently throughout the periods presented in the entity’s first PFRS financialstatements. This Amendment is not applicable to the Foundation as it is not a first-timeadopter of PFRS.

PFRS 3, Business Combinations - Scope Exceptions for Joint ArrangementsThe Amendment clarifies that PFRS 3 does not apply to the accounting for the formation of ajoint arrangement in the financial statements of the joint arrangement itself. The Amendmentis effective for annual periods beginning on or after July 1 2014 and is applied prospectively.

PFRS 13, Fair Value Measurement - Portfolio ExceptionThe Amendment clarifies that the portfolio exception in PFRS 13 can be applied to financialassets, financial liabilities and other contracts. The Amendment is effective for annual periodsbeginning on or after July 1, 2014 and is applied prospectively. The Amendment has nosignificant impact on the Foundation’s financial position or performance.

PAS 40, Investment PropertyThe Amendment clarifies the interrelationship between PFRS 3 and PAS 40 when classifyingproperty as investment property or owner-occupied property. The Amendment stated thatjudgment is needed when determining whether the acquisition of investment property is theacquisition of an asset or a group of assets or a business combination within the scope ofPFRS 3. This judgment is based on the guidance of PFRS 3. This Amendment is effective forannual periods beginning on or after July 1, 2014 and is applied prospectively. Theamendment has no significant impact on the Foundation’s financial position or performance.

PFRS 9, Financial Instruments PFRS 9, as issued, reflects the first and third phases of the project to replace PAS 39 and applies to the classification and measurement of financial assets and liabilities and hedge accounting, respectively. Work on the second phase, which relate to impairment of financial instruments, and the limited amendments to the classification and measurement model is still ongoing, with a view to replace PAS 39 in its entirety. PFRS 9 requires all financial assets to be measured at fair value at initial recognition. A debt financial asset may, if the fair value option (FVO) is not invoked, be subsequently measured at amortized cost if it is held within a business model that has the objective to hold the assets to collect the contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding. All other debt instruments are subsequently measured at fair value through profit or loss. All equity financial assets are measured at fair value either through other comprehensive income (OCI) or profit or loss. Equity financial assets held for trading must be measured at fair value through profit or loss. For liabilities designated as at FVPL using the fair value option, the amount of change in the fair value of a liability that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change relating to the entity’s own credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. All other PAS 39 classification and measurement requirements for financial liabilities have been carried forward to PFRS 9, including the embedded

derivative bifurcation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will potentially have no impact on the classification and measurement of financial liabilities.

On hedge accounting, PFRS 9 replaces the rules-based hedge accounting model of PAS 39 with a more principles-based approach. Changes include replacing the rules-based hedge effectiveness test with an objectives-based test that focuses on the economic relationship between the hedged item and the hedging instrument, and the effect of credit risk on that economic relationship; allowing risk components to be designated as the hedged item, not only for financial items, but also for non-financial items, provided that the risk component is separately identifiable and reliably measurable; and allowing the time value of an option, the forward element of a forward contract and any foreign currency basis spread to be excluded from the designation of a financial instrument as the hedging instrument and accounted for as costs of hedging. PFRS 9 also requires more extensive disclosures for hedge accounting.

PFRS 9 currently has no mandatory effective date. PFRS 9 may be applied before the completion of the limited amendments to the classification and measurement model and impairment methodology. The Company will not adopt the standard before the completion of the limited amendments and the second phase of the project.

Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate This Interpretation covers accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors. The SEC and the Financial Reporting Standards Council have deferred the effectivity of this interpretation until the final Revenue standard is issued by International Accounting Standards Board and an evaluation of the requirements of the final Revenue standard against the practices of the Philippine real estate industry is completed.

Cash and Cash Equivalents Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months from dates of acquisitions or less and that are subject to an insignificant risk of changes in value.

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

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

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derivative bifurcation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will potentially have no impact on the classification and measurement of financial liabilities.

On hedge accounting, PFRS 9 replaces the rules-based hedge accounting model of PAS 39 with a more principles-based approach. Changes include replacing the rules-based hedge effectiveness test with an objectives-based test that focuses on the economic relationship between the hedged item and the hedging instrument, and the effect of credit risk on that economic relationship; allowing risk components to be designated as the hedged item, not only for financial items, but also for non-financial items, provided that the risk component is separately identifiable and reliably measurable; and allowing the time value of an option, the forward element of a forward contract and any foreign currency basis spread to be excluded from the designation of a financial instrument as the hedging instrument and accounted for as costs of hedging. PFRS 9 also requires more extensive disclosures for hedge accounting.

PFRS 9 currently has no mandatory effective date. PFRS 9 may be applied before the completion of the limited amendments to the classification and measurement model and impairment methodology. The Company will not adopt the standard before the completion of the limited amendments and the second phase of the project.

Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate This Interpretation covers accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors. The SEC and the Financial Reporting Standards Council have deferred the effectivity of this interpretation until the final Revenue standard is issued by International Accounting Standards Board and an evaluation of the requirements of the final Revenue standard against the practices of the Philippine real estate industry is completed.

Cash and Cash Equivalents Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months from dates of acquisitions or less and that are subject to an insignificant risk of changes in value.

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

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

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

Determination of fair value The Foundation measures financial instruments at each statement of financial position date. Also, fair values of financial instruments measured at amortized cost are disclosed in Note 13.

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

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

liability

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

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

The Foundation uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, as described in Note 13.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Foundation determines whether transfers have occurred between Levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Foundation has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained in Note 13.

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

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

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

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

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

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

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

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

AFS financial assets are classified as noncurrent assets unless the intention is to dispose such assets within twelve (12) months from reporting date.

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

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

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

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

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

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

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

AFS financial assets are classified as noncurrent assets unless the intention is to dispose such assets within twelve (12) months from reporting date.

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

This accounting policy applies primarily to the Foundation’s “Accounts and other payables” and other obligations that meet the above definition.

Derecognition of Financial Assets and Liabilities Financial asset A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when: a. the rights to receive cash flows from the asset has expired;b. the Foundation retains the right to receive cash flows from the asset, but has assumed an

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

c. the Foundation has transferred its rights to receive cash flows from the asset and either (i) hastransferred substantially all the risks and rewards of the asset, or (ii) has neither transferred norretained substantially all the risks and rewards of the asset, but has transferred control of theasset.

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

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

Impairment of Financial Assets The Foundation assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

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

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

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

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

AFS financial assets For AFS financial assets, the Foundation assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired.

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Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

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

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

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

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

AFS financial assets For AFS financial assets, the Foundation assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired.

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

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

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

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

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

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

Years Leasehold improvements 5-25 Office furniture and equipment 3-5 Transportation equipment 5

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Restricted Net Assets The Foundation reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

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

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

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

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

Project revenue Project revenue represents sales of hand-woven products of the Mindoro Mangyan communities, commemorative items such as plates, cards, program merchandise, and other similar items. It also includes space rentals, and recoveries of telephone and internet expenses from locators at the UP Technology Business Incubator facility.

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

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

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

Pension costs comprise the following: Service cost Net interest on the net defined benefit liability or asset Remeasurements of net defined benefit liability or asset

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

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by applying the discount rate based on the zero-coupon bond yields to the net defined liability or assets. Net interest on the net defined benefit liability or asset is recognized as expense or income in statement of activities.

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

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

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

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

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

Pension costs comprise the following: Service cost Net interest on the net defined benefit liability or asset Remeasurements of net defined benefit liability or asset

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

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by applying the discount rate based on the zero-coupon bond yields to the net defined liability or assets. Net interest on the net defined benefit liability or asset is recognized as expense or income in statement of activities.

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

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

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

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

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

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

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

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

3. Significant Accounting Judgments and Estimates

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

JudgmentsIn the process of applying the Foundation’s accounting policies, management has made thefollowing judgments, apart from those involving estimations, which have the most significanteffect on the amounts recognized in the financial statements:

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

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

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

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

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

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

The carrying values of receivables amounted to P=16.95 million and P=18.27 million as of December 31, 2013 and 2012, respectively (see Note 5).

Estimating allowance for inventory loss The Foundation estimates its allowance for inventory loss based on periodic specific identification. The Foundation provides 100% for previous year calendar, 10% for books and catalogs and 50% allowance for inventory loss for other specifically identified as obsolete inventories. Merchandise inventories of the Foundation, net of allowance for inventory loss as of December 31, 2013 and 2012 amounted to P=16.34 million and P=16.28 million, respectively. Allowance for inventory loss amounted to P=0.76 million as of December 31, 2013 and 2012 (see Note 6).

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

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

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

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

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

The carrying values of receivables amounted to P=16.95 million and P=18.27 million as of December 31, 2013 and 2012, respectively (see Note 5).

Estimating allowance for inventory loss The Foundation estimates its allowance for inventory loss based on periodic specific identification. The Foundation provides 100% for previous year calendar, 10% for books and catalogs and 50% allowance for inventory loss for other specifically identified as obsolete inventories. Merchandise inventories of the Foundation, net of allowance for inventory loss as of December 31, 2013 and 2012 amounted to P=16.34 million and P=16.28 million, respectively. Allowance for inventory loss amounted to P=0.76 million as of December 31, 2013 and 2012 (see Note 6).

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

As of December 31, 2013 and 2012, the carrying values of property and equipment amounted to P=161.81 million and P=148.20 million, respectively (see Note 8).

Evaluation of asset impairment The Foundation reviews property and equipment and other current assets for impairment. This includes considering certain indications of impairment such as significant changes in asset usage, significant decline in assets’ market value, obsolescence or physical damage of an asset, significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. If such indications are present and where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

As described in the accounting policy, the Foundation estimates the recoverable amount as the higher of the net selling price and value in use. In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the Foundation is required to make estimates and assumptions that may affect property and equipment and other noncurrent assets. The Foundation believes that the carrying amounts of its assets approximate the recoverable amounts and, as such, no impairment loss was recognized for the years ended December 31, 2013 and 2012.

Estimating pension obligation and other retirement benefits The cost of defined benefit pension plans and other retirement benefits as well as the present value of the pension obligation are determined using actuarial valuations. The actuarial valuation involves making various assumptions. Those assumptions are described in Note 11 and include, among others, discount rates, future salary increases, mortality rates, turn-over rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, defined benefit liability are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting dates. As of December 31, 2013 and 2012, the pension liability amounted to P=20.56 million and P=32.11 million, respectively (see Note 11).

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

The mortality rate is based on unisex annuity table and is modified accordingly with estimates of mortality improvements (if any). Future salary increases are derived from the Foundation’s estimated salary expenses for the next period. Further details about the assumptions used are provided in Note 11.

Fair value of financial instruments Where the fair values of financial assets and financial liabilities recorded and disclosed in the statement of financial position cannot be derived from active markets, they are determined using internal valuation techniques using generally accepted market valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimates are used in establishing fair values. These estimates may include considerations of liquidity, volatility, and correlation. See Note 13 for the related balances.

4. Cash and Cash Equivalents

This account consists of:

2013 2012 Cash on hand and in banks P=79,269,601 P=27,752,612 Cash equivalents 53,799,806 66,000,000

P=133,069,407 P=93,752,612

Cash in banks earn interests at the respective bank deposit rates. Cash equivalents are made for varying periods of up to three months depending on the immediate cash requirements of the Foundation and earn interest at the respective short-term investment rates 3.75% to 4.40% and 2.93% to 4.40% in 2013 and 2012, respectively.

As of December 31, 2013 and 2012, interest income earned on cash in banks and cash equivalents amounted to P1.41 million and P5.22 million, respectively.

5. Receivables

This account consists of the following:

2013 2012 Trade:

Services P=11,811,851 P=12,227,898 Products 471,799 1,915,152 Advances to cooperative 5,912,346 6,263,147 Nontrade 4,107,971 5,431,803 Advances to officers and employees 2,528,128 1,876,713 Accrued interest – 205,767 Others 2,388,896 1,995,929

27,220,991 29,916,409 Less allowance for impairment losses 10,275,410 11,651,404

P=16,945,581 P=18,265,005

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

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

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Fair value of financial instruments Where the fair values of financial assets and financial liabilities recorded and disclosed in the statement of financial position cannot be derived from active markets, they are determined using internal valuation techniques using generally accepted market valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimates are used in establishing fair values. These estimates may include considerations of liquidity, volatility, and correlation. See Note 13 for the related balances.

4. Cash and Cash Equivalents


2013 2012 Cash on hand and in banks P=79,269,601 P=27,752,612 Cash equivalents 53,799,806 66,000,000

P=133,069,407 P=93,752,612

Cash in banks earn interests at the respective bank deposit rates. Cash equivalents are made for varying periods of up to three months depending on the immediate cash requirements of the Foundation and earn interest at the respective short-term investment rates 3.75% to 4.40% and 2.93% to 4.40% in 2013 and 2012, respectively.

As of December 31, 2013 and 2012, interest income earned on cash in banks and cash equivalents amounted to P1.41 million and P5.22 million, respectively.

5. Receivables

This account consists of the following:

2013 2012 Trade:

Services P=11,811,851 P=12,227,898 Products 471,799 1,915,152 Advances to cooperative 5,912,346 6,263,147 Nontrade 4,107,971 5,431,803 Advances to officers and employees 2,528,128 1,876,713 Accrued interest – 205,767 Others 2,388,896 1,995,929

27,220,991 29,916,409 Less allowance for impairment losses 10,275,410 11,651,404

P=16,945,581 P=18,265,005

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

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

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= =

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

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

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

Receivables amounting to P=10.28 million and P=11.65 million as of December 31, 2013 and 2012, respectively, were individually impaired and fully provided for. Movements in the allowance for impairment losses follow:

2013 2012 Balance at beginning of year P=11,651,404 P=6,368,394 Provisions during the year (Note 12) – 5,283,010Written off during the year (1,375,994) – Balance at end of year P=10,275,410 P=11,651,404

6. Merchandise Inventories

Inventories consist of books, catalogs and other merchandise.

Movements in the inventories account are as follows:

2013 2012 Inventories at beginning of year P=17,042,064 P=17,205,194 Add: Net cost of purchases 9,409,125 3,996,613 Total goods available for sale 26,451,189 21,201,807 Less cost of sales 9,352,963 4,159,743

17,098,226 17,042,064 Less allowance for inventory loss 756,951 757,860

P=16,341,275 P=16,284,204

7. Other Current Assets


2013 2012 Input tax P=5,448,577 P=4,111,240 Deposits to suppliers 2,043,081 3,848,100 Prepaid expenses 341,270 542,267

P=7,832,928 P=8,501,607

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

Deposits to suppliers pertain to advance payments made by the Foundation to suppliers and other entities.

Prepaid expenses include prepayments for insurance, rent, subscription fees, repairs and maintenance and others.

8. Property and Equipment

The rollforward analysis of this account follows:

December 31, 2013

Land Leasehold

Improvements

Office Furniture and

Equipment Transportation

Equipment Construction-

in-Progress Total

Cost At January 1 P=99,368,375 P=43,270,594 P=84,831,057 P=2,992,048 P=8,561,602 P=239,023,676 Additions 52,800 – 10,523,313 1,879,000 11,379,263 23,834,376 Disposals – – (1,264,372) (1,164,048) – (2,428,420) Transfers – 19,879,337 – – (19,879,337) – At December 31 99,421,175 63,149,931 94,089,998 3,707,000 61,528 260,429,632

Accumulated Depreciation and Amortization

At January 1 – 12,948,248 75,295,884 2,577,348 – 90,821,480 Depreciation and

amortization – 2,799,735 7,170,497 252,917 – 10,223,149 Disposals – – (1,264,372) (1,164,048) – (2,428,420) At December 31 – 15,747,983 81,202,009 1,666,217 – 98,616,209 Net Book Value P=99,421,175 P=47,401,948 P=12,887,989 P=2,040,783 P=61,528 P=161,813,423

December 31, 2012

Land Leasehold

Improvements




in-Progress Total

Cost At January 1 P=99,218,375 P=73,517,264 P=81,820,357 P=2,992,048 P=– P=257,548,044 Additions 150,000 331,135 4,086,817 – 8,561,602 13,129,554 Disposals – (30,577,805) (1,076,117) – – (31,653,922) At December 31 99,368,375 43,270,594 84,831,057 2,992,048 8,561,602 239,023,676



amortization – 3,105,355 12,215,470 171,600 – 15,492,425 Disposals – (20,096,113) (891,969) – – (20,988,082) At December 31 – 12,948,248 75,295,884 2,577,348 – 90,821,480 Net Book Value P=99,368,375 P=30,322,346 P=9,535,173 P=414,700 P=8,561,602 P=148,202,196

Depreciation and amortization charged against unrestricted net assets amounted to P=10.22 million and P=15.49 million in 2013 and 2012, respectively.

Transfers from construction in progress to leasehold improvements pertain to completed renovations made in the Museum during the year.

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

Fully depreciated property and equipment still being used by the Foundation amounted to P=38.21 million in 2013 and P=35.15 million in 2012.

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Prepaid expenses include prepayments for insurance, rent, subscription fees, repairs and maintenance and others.

8. Property and Equipment

The rollforward analysis of this account follows:

December 31, 2013

Land Leasehold

Improvements




in-Progress Total

Cost At January 1 P=99,368,375 P=43,270,594 P=84,831,057 P=2,992,048 P=8,561,602 P=239,023,676 Additions 52,800 – 10,523,313 1,879,000 11,379,263 23,834,376 Disposals – – (1,264,372) (1,164,048) – (2,428,420) Transfers – 19,879,337 – – (19,879,337) – At December 31 99,421,175 63,149,931 94,089,998 3,707,000 61,528 260,429,632



amortization – 2,799,735 7,170,497 252,917 – 10,223,149 Disposals – – (1,264,372) (1,164,048) – (2,428,420) At December 31 – 15,747,983 81,202,009 1,666,217 – 98,616,209 Net Book Value P=99,421,175 P=47,401,948 P=12,887,989 P=2,040,783 P=61,528 P=161,813,423

December 31, 2012

Land Leasehold

Improvements




in-Progress Total

Cost At January 1 P=99,218,375 P=73,517,264 P=81,820,357 P=2,992,048 P=– P=257,548,044 Additions 150,000 331,135 4,086,817 – 8,561,602 13,129,554 Disposals – (30,577,805) (1,076,117) – – (31,653,922) At December 31 99,368,375 43,270,594 84,831,057 2,992,048 8,561,602 239,023,676



amortization – 3,105,355 12,215,470 171,600 – 15,492,425 Disposals – (20,096,113) (891,969) – – (20,988,082) At December 31 – 12,948,248 75,295,884 2,577,348 – 90,821,480 Net Book Value P=99,368,375 P=30,322,346 P=9,535,173 P=414,700 P=8,561,602 P=148,202,196

Depreciation and amortization charged against unrestricted net assets amounted to P=10.22 million and P=15.49 million in 2013 and 2012, respectively.

Transfers from construction in progress to leasehold improvements pertain to completed renovations made in the Museum during the year.

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

Fully depreciated property and equipment still being used by the Foundation amounted to P=38.21 million in 2013 and P=35.15 million in 2012.

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9. Available-for-sale Financial Assets

This account consists of investments in:

2013 2012 Common trust fund P=1,510,389,977 P=1,137,494,118 Shares of stock:

Quoted securities 777,956,544 571,774,215 Unquoted securities 2,650,444 1,931,701

P=2,290,996,965 P=1,711,200,034

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

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

2013 2012 Balance at beginning of year P=83,954,992 P=83,597,752 Unrealized gain recognized directly

in net assets 33,820,633 68,966,203 Realized gain transferred to income (60,489,899) (68,608,963) Balance at end of year P=57,285,726 P=83,954,992

The breakdown of investments’ income is as follow:

2013 2012 Realized gain from AFS P=60,489,899 P=68,608,963 Debt instruments 33,342,110 28,462,130 Government securities 12,404,752 14,931,393 Dividends 9,169,990 10,124,631 Loans 3,131,368 2,200,050 Others 3,120,283 2,778,437

P=121,658,402 P=127,105,604

10. Accounts and Other Payables


2013 2012 Accrued expenses P=34,615,161 P=23,503,551 Trade 31,536,501 38,061,974 Payable to consignors 5,942,516 6,700,376 Others 3,032,405 1,924,639

P=75,126,583 P=70,190,540

Accrued expenses pertain to the unbilled balances for completed renovations in the Museum and other expenses incurred by the Foundation for its activities.

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

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

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

11. Defined Benefit Plan

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

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

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

The components of pension expense included in salaries, wages and employee benefits under“General and administrative expenses” in the statements of activities are as follows (see Note 12):

2013 2012 Current service cost P=6,488,926 P=5,312,448 Net interest expense 1,862,635 528,564 Transferred obligation – (2,797,988)Total pension expense P=8,351,561 P=3,043,024

The amounts recognized under pension liability in the statements of financial position are as follows:

2013 2012 Benefit obligations P=67,201,834 P=79,723,128 Plan assets (46,646,047) (47,608,729) Liability to be recognized P=20,555,787 P=32,114,399

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

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

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

11. Defined Benefit Plan

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

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

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

The components of pension expense included in salaries, wages and employee benefits under“General and administrative expenses” in the statements of activities are as follows (see Note 12):

2013 2012 Current service cost P=6,488,926 P=5,312,448 Net interest expense 1,862,635 528,564 Transferred obligation – (2,797,988)Total pension expense P=8,351,561 P=3,043,024

The amounts recognized under pension liability in the statements of financial position are as follows:

2013 2012 Benefit obligations P=67,201,834 P=79,723,128 Plan assets (46,646,047) (47,608,729) Liability to be recognized P=20,555,787 P=32,114,399

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

2013 2012 Balance at January 1 P=79,723,128 P=41,697,676 Current service cost 6,488,926 5,312,448 Interest expense 4,623,941 2,960,535 Benefits paid (9,867,755) (4,410,904) Remeasurement loss (gain) arising from changes in

financial assumptions (13,766,406) 34,970,452 Transferred obligation – (807,079)Balance at December 31 P=67,201,834 P=79,723,128

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

2013 2012 Balance at January 1 P=47,608,729 P=34,253,108 Contributions 5,574,456 9,014,350 Interest income on plan assets 2,761,306 2,431,971 Remeasurement gain on plan assets 569,311 4,329,295 Transferred asset – 1,990,909Benefits paid (9,867,755) (4,410,904) Balance at December 31 P=46,646,047 P=47,608,729

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

2013 2012 Debt instruments P=24,666,430 P=35,468,503 Equity instruments 12,300,562 12,140,226 Cash 9,679,055 – Balance at end of year P=46,646,047 P=47,608,729

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

The assumptions used to determine pension benefits for the Foundation for the years ended December 31, 2013 and 2012 are as follows:

2013 2012 Discount rate 5.40% 5.80% Salary increase rate 7.00 7.00 Turn-over rate 0.50 to 100.00 0.50 to 100.00 Mortality rate 0.10 to 0.74 0.10 to 1.20

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

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

2013 Discount Rate Salary Increase Rate

+.50% (.50%) +.50% (.50%) Accrued liability P=65,220,061 P=68,794,304 P=68,757,179 P=65,237,401 Current fund assets 46,646,047 46,646,047 46,646,047 46,646,047 Unfunded accrued liability P=18,574,014 P=22,148,257 P=22,111,132 P=18,591,354



The Foundation does not perform any Asset-Liability Matching Study. The overall investment policy and strategy of the retirement plan is based on the suitability assessment, as provided by its trust bank, in compliance with the BSP requirements. It does not, however, ensure that there will be sufficient assets to pay the retirement benefits as they fall due while attempting to mitigate the various risks of the plan. For the current year, the allocation of assets consist of 26.37% of equity instruments, 52.88% of debt instruments and 20.75% of cash.

The Foundation expects to make additional contributions of P=5.93 million to its retirement fund in 2014.

The average duration of the defined benefit liability at the end of the reporting period is 13 years.

Amounts for the current and the previous periods follow:

2013 2012 2011 2010 2009 Benefit obligation P=67,201,834 P=79,723,128 P=41,697,676 P=31,735,889 P=27,090,768 Plan assets (46,646,047) (47,608,729) (34,253,108) (24,982,336) (20,881,334) Deficit P=20,555,787 P=32,114,399 P=7,444,568 P=6,753,553 P=6,209,434

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

2013 2012 More than 1 year to 5 years P=17,924,893 P=18,407,682 More than 5 years to 10 years 21,772,709 34,359,906 More than 10 years to 15 years – 28,288,108

P=39,697,602 P=81,055,696

Experience adjustments on plan assets and obligation are as follows:

2013 2012 2011 2010 Gain (loss) on experience adjustments

on defined benefit obligation P=15,470,398 (P=24,665,252) P=1,339,268 P=294,644 Gain (loss) on experience adjustments

on plan assets (1,703,992) (10,305,200) (6,051,845) 2,639,310

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





The Foundation does not perform any Asset-Liability Matching Study. The overall investment policy and strategy of the retirement plan is based on the suitability assessment, as provided by its trust bank, in compliance with the BSP requirements. It does not, however, ensure that there will be sufficient assets to pay the retirement benefits as they fall due while attempting to mitigate the various risks of the plan. For the current year, the allocation of assets consist of 26.37% of equity instruments, 52.88% of debt instruments and 20.75% of cash.

The Foundation expects to make additional contributions of P=5.93 million to its retirement fund in 2014.

The average duration of the defined benefit liability at the end of the reporting period is 13 years.

Amounts for the current and the previous periods follow:

2013 2012 2011 2010 2009 Benefit obligation P=67,201,834 P=79,723,128 P=41,697,676 P=31,735,889 P=27,090,768 Plan assets (46,646,047) (47,608,729) (34,253,108) (24,982,336) (20,881,334) Deficit P=20,555,787 P=32,114,399 P=7,444,568 P=6,753,553 P=6,209,434

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

2013 2012 More than 1 year to 5 years P=17,924,893 P=18,407,682 More than 5 years to 10 years 21,772,709 34,359,906 More than 10 years to 15 years – 28,288,108

P=39,697,602 P=81,055,696

Experience adjustments on plan assets and obligation are as follows:

2013 2012 2011 2010 Gain (loss) on experience adjustments

on defined benefit obligation P=15,470,398 (P=24,665,252) P=1,339,268 P=294,644 Gain (loss) on experience adjustments

on plan assets (1,703,992) (10,305,200) (6,051,845) 2,639,310

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Compensation of key management personnel by benefit type (included in the “Salaries, wages and employee benefits” account) in the Foundation expenses (see Note 12) follows:

2013 2012 Short term employee benefits P=16,949,890 P=11,338,022 Post-employment benefits 1,972,333 7,087,685

P=18,922,223 P=18,425,707

12. Net Assets

Unrestricted net assets are those net assets that are neither temporarily restricted nor permanentlyrestricted. It includes all net assets with uses not restricted by donors, by Board of Trustees or bylaw.

Temporarily restricted net assets refer to those net assets whose use by the Foundation is limitedby donors to later periods of time or after specified dates or specified purposes.

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

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

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

2013 2012 Unrestricted P=18,553,135 P=1,113,186 Temporarily restricted:

Property and equipment 161,813,424 148,202,196 Education programs 43,471,856 35,223,796 Programs for community development 83,032,070 7,144,842

288,317,350 190,570,834 Permanently restricted:

Investment in perpetuity, the income of which is expendable to support education and other programs 2,187,714,273 704,994,160

Endowment requiring income to be added to original gift to build up the fund – 948,156,539

2,187,714,273 1,653,150,699 Unrealized gain on AFS financial assets 57,285,726 83,954,992 Remeasurement loss on defined benefit obligation (20,553,275) (34,888,992)

P=2,531,317,209 P=1,893,900,719

Details of the Foundation’s expenses as of December 31 follow:

Project Expenses

2013 2012 Project implementation:

Special projects P=60,260,817 P=63,339,219 Education 46,080,537 59,175,764 Youth Development 18,387,632 10,375,782 Arts and Culture 17,527,135 19,398,527 Sustainable Livelihood 4,610,655 4,561,989

Project management: Salaries wages, and employee benefits 43,375,404 55,557,955

Monitoring and administrative 5,035,930 20,218,528 Building overhead 26,269,395 33,539,548

P=221,547,505 P=266,167,312

General and Administrative Expenses

2013 2012 Salaries, wages and employee benefits (Note 11) P=30,615,181 P=22,644,711 Repairs and maintenance 2,775,714 5,284,867 Advocacy and public information services 2,498,301 1,426,830 Professional and service fees 2,002,958 1,904,174 Depreciation and amortization 898,220 1,240,857 Communication and postage 738,437 1,092,779 Supplies 489,031 343,443 Transportation and travel 201,625 322,723 Trainings and seminars 190,046 628,708 Taxes and licenses 64,920 27,319 Provision for doubtful accounts (Note 5) – 5,283,010Miscellaneous 864,574 1,636,909

P=41,339,007 P=41,836,330

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

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

2013 2012 Net Assets Unrestricted P=18,553,135 P=1,113,186 Temporarily restricted 288,317,350 190,570,834 Permanently restricted 2,187,714,273 1,653,150,699 Unrealized gain on AFS financial assets (Note 9) 57,285,726 83,954,992

P=2,551,870,484 P=1,928,789,711

72

Details of the Foundation’s expenses as of December 31 follow:

Project Expenses

2013 2012 Project implementation:

Special projects P=60,260,817 P=63,339,219 Education 46,080,537 59,175,764 Youth Development 18,387,632 10,375,782 Arts and Culture 17,527,135 19,398,527 Sustainable Livelihood 4,610,655 4,561,989

Project management: Salaries wages, and employee benefits 43,375,404 55,557,955

Monitoring and administrative 5,035,930 20,218,528 Building overhead 26,269,395 33,539,548

P=221,547,505 P=266,167,312

General and Administrative Expenses

2013 2012 Salaries, wages and employee benefits (Note 11) P=30,615,181 P=22,644,711 Repairs and maintenance 2,775,714 5,284,867 Advocacy and public information services 2,498,301 1,426,830 Professional and service fees 2,002,958 1,904,174 Depreciation and amortization 898,220 1,240,857 Communication and postage 738,437 1,092,779 Supplies 489,031 343,443 Transportation and travel 201,625 322,723 Trainings and seminars 190,046 628,708 Taxes and licenses 64,920 27,319 Provision for doubtful accounts (Note 5) – 5,283,010Miscellaneous 864,574 1,636,909

P=41,339,007 P=41,836,330

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

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

2013 2012 Net Assets Unrestricted P=18,553,135 P=1,113,186 Temporarily restricted 288,317,350 190,570,834 Permanently restricted 2,187,714,273 1,653,150,699 Unrealized gain on AFS financial assets (Note 9) 57,285,726 83,954,992

P=2,551,870,484 P=1,928,789,711

73

13. Financial Instruments

Fair Value Measurement

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

December 31, 2013 Fair value measurement using

Total

Quoted prices in active markets

(Level 1)

Significant observable inputs

(Level 2) Assets measured at fair value: Available-for-sale

Common trust fund P=1,510,389,977 P=1,510,389,977 P=− Quoted securities 777,956,544 777,956,544 − Unquoted securities 2,650,444 – 2,650,444

P=2,290,996,965 P=2,288,346,521 P=2,650,444

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

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

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

that are not based on observable market data

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

AFS quoted financial assets - Fair values are based on quoted prices published in markets.

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

There were no transfers between fair value categories for assets and liabilities measured at fair value in 2013 and 2012.

Financial Risk Management Objectives and Policies

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

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

The Foundation’s risk management policies are summarized below:

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

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

As of December 31, 2013 and 2012, the carrying amounts of accounts and other payables will be settled within one year.

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

December 31, 2013

Within 1 Year 1-5 Years More than

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

(excluding cash on hand) P=132,843,776 P=– P=– P=132,843,776 Receivables

Trade 4,958,194 − − 4,958,194 Advances to cooperative 5,912,346 − − 5,912,346 Nontrade 1,158,017 − − 1,158,017 Advances to officers and employees 2,528,128 − − 2,528,128 Others 2,388,896 – – 2,388,896

149,789,357 – – 149,789,357 AFS financial assets

Common trust fund – 1,510,389,977 – 1,510,389,977Quoted securities – 777,956,544 – 777,956,544Unquoted securities – – 2,650,444 2,650,444

– 2,288,346,521 2,650,444 2,290,996,965 Total Financial Assets P=149,789,357 P=2,288,346,521 P=2,650,444 P=2,440,786,322

Other Financial Liabilities Accounts and other payables

Accrued expenses P=34,615,161 P=– P=– P=34,615,161 Trade 31,536,501 – – 31,536,501 Payable to consignors 5,942,516 – – 5,942,516 Others 3,032,405 – – 3,032,405

Total Other Financial Liabilities P=75,126,583 P=– P=– P=75,126,583

74

The Foundation’s risk management policies are summarized below:

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

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

As of December 31, 2013 and 2012, the carrying amounts of accounts and other payables will be settled within one year.

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

December 31, 2013




Trade 4,958,194 − − 4,958,194 Advances to cooperative 5,912,346 − − 5,912,346 Nontrade 1,158,017 − − 1,158,017 Advances to officers and employees 2,528,128 − − 2,528,128 Others 2,388,896 – – 2,388,896

149,789,357 – – 149,789,357 AFS financial assets

Common trust fund – 1,510,389,977 – 1,510,389,977Quoted securities – 777,956,544 – 777,956,544Unquoted securities – – 2,650,444 2,650,444

– 2,288,346,521 2,650,444 2,290,996,965 Total Financial Assets P=149,789,357 P=2,288,346,521 P=2,650,444 P=2,440,786,322


Accrued expenses P=34,615,161 P=– P=– P=34,615,161 Trade 31,536,501 – – 31,536,501 Payable to consignors 5,942,516 – – 5,942,516 Others 3,032,405 – – 3,032,405


75

P111,751,597 P1,709,268,333

December 31, 2012




Trade 5,812,177 − − 5,812,177 Advances to cooperative 6,263,147 − − 6,263,147 Nontrade 2,111,272 − − 2,111,272 Advances to officers and employees 1,876,713 − − 1,876,713 Accrued interest 205,767 – – 205,767 Others 1,995,929 – – 1,995,929

P111,751,597 P=– P– P111,751,597 AFS financial assets

Common trust fund P=– P=1,137,494,118 P=– P=1,137,494,118 Quoted securities – 571,774,215 – 571,774,215Unquoted securities – – 1,931,701 1,931,701

– 1,709,268,333 1,931,701 1,711,200,034 Total Financial Assets


Accrued expenses P=23,503,551 P=– P=– P=23,503,551 Trade 38,061,974 – – 38,061,974 Advances 6,700,376 – – 6,700,376 Others 1,924,639 – – 1,924,639


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

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

2013 2012 Cash and cash equivalents P=132,843,776 P=93,486,592 Receivables

Trade 4,958,194 5,812,177 Advances to cooperative 5,912,346 6,263,147 Nontrade 1,158,017 2,102,085 Advances to officers and employees 2,528,128 1,876,713 Accrued interest receivable – 205,767 Others 2,388,896 1,995,929

(Forward)

P1,931,701 P1,822,951,631

2013 2012 AFS financial assets

Common trust fund P=1,510,389,977 P=1,137,494,118 Quoted securities 777,956,544 571,774,215 Unquoted securities 2,650,444 1,931,701

P=2,440,786,322 P=1,822,942,444

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

The Foundation’s exposure to the risk for change in market value relates primarily to the Foundation’s AFS financial assets. The Foundation’s AFS financial assets are managed by a trustee bank.

The following table demonstrates the sensitivity to a reasonably possible change in the market prices, with all variables held constant, of the Foundation’s equity on December 31, 2013 and 2012.

Increase (decrease) Effect on Net Assets

2013 2012 5% P=114,549,848 P=85,560,002

(5%) (114,549,848) (85,560,002)

76

= =

= = = =

2013 2012 AFS financial assets

Common trust fund P=1,510,389,977 P=1,137,494,118 Quoted securities 777,956,544 571,774,215 Unquoted securities 2,650,444 1,931,701

P=2,440,786,322 P=1,822,942,444

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

The Foundation’s exposure to the risk for change in market value relates primarily to the Foundation’s AFS financial assets. The Foundation’s AFS financial assets are managed by a trustee bank.

The following table demonstrates the sensitivity to a reasonably possible change in the market prices, with all variables held constant, of the Foundation’s equity on December 31, 2013 and 2012.

Increase (decrease) Effect on Net Assets

2013 2012 5% P=114,549,848 P=85,560,002

(5%) (114,549,848) (85,560,002)

77

The

agin

g an

alys

is o

f rec

eiva

bles

pre

sent

ed p

er c

lass

, are

as f

ollo

ws:

Dec

embe

r 31

, 201

3 N

eith

er P

ast

Due

nor

Im

pair

ed

Tot

al

Indi

vidu

ally

Im

pair

ed

Tot

al

Past

Due

but

not

Impa

ired

<30

Day

s 30

-60

Day

s 61

-90

Day

s 91

-120

Day

s >1

20 D

ays

Trad

e P=3

,848

,474

P=8

96,1

20

P=17,

265

P=–

P=69,

369

P=126

,966

P=1

,109

,720

P=7

,325

,456

P=1

2,28

3,65

0 A

dvan

ces t

o co

oper

ativ

e 5,

912,

346

– –

– –

– –

–5,

912,

346

Non

trade

45

6,67

7 12

1,43

2 68

,880

91

,227

14

0,42

8 27

9,37

3 70

1,34

0 2,

949,

954

4,10

7,97

1 A

dvan

ces t

o of

ficer

s and

em

ploy

ees

2,51

5,00

7 −

− −

− 13

,121

13

,121

−

2,52

8,12

8 O

ther

s 2,

388,

896

− −

− −

− −

− 2,

388,

896

P=15,

121,

400

P=1,0

17,5

52

P=86,

145

P=91,

227

P=209

,797

P=4

19,4

60

P=1,8

24,1

81

P=10,

275,

410

P=27,

220,

991

Dec

embe

r 31,

201

2 N

eith

er P

ast

Due

nor

Im

paire

d To

tal

Indi

vidu

ally

Im

paire

d To

tal

Past

Due

but

not

Impa

ired

<30

Day

s 30

-60

Day

s 61

-90

Day

s 91

-120

Day

s >1

20 D

ays

Trad

e P=1

,424

,671

P=1

,083

,743

P=9

48,1

33

P=933

,205

P=1

60,6

81

P=1,2

61,7

44

P=4,3

87,5

06

P=8,3

30,8

73

P=14,

143,

050

Adv

ance

s to

coop

erat

ive

6,26

3,14

7 –

– –

– –

– –

6,26

3,14

7N

ontra

de

4,15

5 12

7,09

2 17

7,15

0 48

,924

20

3,24

1 1,

550,

710

2,10

7,11

7 3,

320,

531

5,43

1,80

3 A

dvan

ces t

o of

ficer

s and

em

ploy

ees

1,82

2,57

4 50

,365

−

− 3,

774

− 54

,139

−

1,87

6,71

3 A

ccru

ed in

tere

st

205,

767

– –

– –

– –

–20

5,76

7O

ther

s 1,

995,

929

− −

− −

− −

− 1,

995,

929

``

P=11,

716,

243

P=1,2

61,2

00

P=1,1

25,2

83

P=982

,129

P=3

67,6

96

P=2,8

12,4

54

P=6,5

48,7

62

P=11,

651,

404

P=29,

916,

409

The

tabl

e be

low

show

s the

cre

dit q

ualit

y of

the

Foun

datio

n’s f

inan

cial

ass

ets:

Dec

embe

r 31

, 201

3 N

eith

er P

ast D

ue n

or Im

pair

edT

otal

Pa

st D

ue b

ut

Not

Impa

ired

In

divi

dual

ly

Impa

ired

T

otal

H

igh

Gra

de

Med

ium

Gra

de

Low

Gra

de

Cas

h an

d ca

sh e

quiv

alen

ts (e

xclu

ding

cas

h on

ha

nd)

P=132

,843

,776

P=–

P=–

P=1

32,8

43,7

76

P=–

P=–

P=132

,843

,776

R

ecei

vabl

es:

Trad

e 2,

986,

170

832,

904

29,4

00

3,84

8,47

4 1,

109,

720

7,32

5,45

6 12

,283

,650

A

dvan

ces t

o co

oper

ativ

e 5,

912,

346

– –

5,91

2,34

6 –

– 5,

912,

346

Non

trade

33

3,49

0 −

123,

187

456,

677

701,

340

2,94

9,95

4 4,

107,

971

Adv

ance

s to

offic

ers a

nd e

mpl

oyee

s 2,

515,

007

− −

2,51

5,00

7 13

,121

−

2,52

8,12

8 O

ther

s 2,

388,

896

− –

2,38

8,89

6 −

− 2,

388,

896

AFS

fina

ncia

l ass

ets:

C

omm

on tr

ust f

und

1,51

0,38

9,97

7 –

– 1,

510,

389,

977

– –

1,51

0,38

9,97

7 Q

uote

d se

curit

ies

777,

956,

544

– –

777,

956,

544

– –

777,

956,

544

Unq

uote

d se

curit

ies

2,65

0,44

4 –

– 2,

650,

444

– –

2,65

0,44

4 P2,437,976,650

P=8

32,9

04

P152

,587

P2,438,962,141

P1,824,181

P=1

0,27

5,41

0 P=2

,451

,061

,732

Dec

embe

r 31,

201

2 N

eith

er P

ast D

ue n

or Im

pair

edTo

tal

Past

Due

but

N

ot Im

paire

d In

divi

dual

ly

Impa

ired

Tota

l H

igh

Gra

de

Med

ium

Gra

de

Low

Gra

de

Cas

h an

d ca

sh e

quiv

alen

ts (e

xclu

ding

cas

h on

ha

nd)

P=93,

486,

592

P=–

P=–

P=93,

486,

592

P=–

P=–

P=93,

486,

592

Rec

eiva

bles

: Tr

ade

616,

481

754,

114

54,0

76

1,42

4,67

1 4,

387,

506

8,33

0,87

3 14

,143

,050

A

dvan

ces t

o co

oper

ativ

e 6,

263,

147

– –

6,26

3,14

7 –

– 6,

263,

147

Non

trade

4,

155

− −

4,15

5 2,

107,

117

3,32

0,53

1 5,

431,

803

Adv

ance

s to

offic

ers a

nd e

mpl

oyee

s 1,

822,

574

− −

1,82

2,57

4 54

,139

−

1,87

6,71

3 A

ccru

ed in

tere

st

205,

767

– –

205,

767

– –

205,

767

Oth

ers

1,99

5,92

9 −

– 1,

995,

929

− −

1,99

5,92

9 A

FS fi

nanc

ial a

sset

s:

Com

mon

trus

t fun

d 1,

137,

494,

118

– –

1,13

7,49

4,11

8 –

– 1,

137,

494,

118

Quo

ted

secu

ritie

s 57

1,77

4,21

5 –

– 57

1,77

4,21

5 –

– 57

1,77

4,21

5 U

nquo

ted

secu

ritie

s 1,

931,

701

– –

1,93

1,70

1 –

– 1,

931,

701

P=1,8

15,5

94,6

79

P=754

,114

P=5

4,07

6 P=1

,816

,402

,869

P=6

,548

,762

P=1

1,65

1,40

4 P=1

,834

,603

,035

78

The

tabl

e be

low

show

s the

cre

dit q

ualit

y of

the

Foun

datio

n’s f

inan

cial

ass

ets:

Dec

embe

r 31

, 201

3 N

eith

er P

ast D

ue n

or Im

pair

edT

otal

Pa

st D

ue b

ut

Not

Impa

ired

In

divi

dual

ly

Impa

ired

T

otal

H

igh

Gra

de

Med

ium

Gra

de

Low

Gra

de

Cas

h an

d ca

sh e

quiv

alen

ts (e

xclu

ding

cas

h on

ha

nd)

P=132

,843

,776

P=–

P=–

P=1

32,8

43,7

76

P=–

P=–

P=132

,843

,776

R

ecei

vabl

es:

Trad

e 2,

986,

170

832,

904

29,4

00

3,84

8,47

4 1,

109,

720

7,32

5,45

6 12

,283

,650

A

dvan

ces t

o co

oper

ativ

e 5,

912,

346

– –

5,91

2,34

6 –

– 5,

912,

346

Non

trade

33

3,49

0 −

123,

187

456,

677

701,

340

2,94

9,95

4 4,

107,

971

Adv

ance

s to

offic

ers a

nd e

mpl

oyee

s 2,

515,

007

− −

2,51

5,00

7 13

,121

−

2,52

8,12

8 O

ther

s 2,

388,

896

− –

2,38

8,89

6 −

− 2,

388,

896

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l ass

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ust f

und

1,51

0,38

9,97

7 –

– 1,

510,

389,

977

– –

1,51

0,38

9,97

7 Q

uote

d se

curit

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777,

956,

544

– –

777,

956,

544

– –

777,

956,

544

Unq

uote

d se

curit

ies

2,65

0,44

4 –

– 2,

650,

444

– –

2,65

0,44

4 P2,437,976,650

P=8

32,9

04

P152

,587

P2,438,962,141

P1,824,181

P=1

0,27

5,41

0 P=2

,451

,061

,732

Dec

embe

r 31,

201

2 N

eith

er P

ast D

ue n

or Im

pair

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tal

Past

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but

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divi

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ly

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l H

igh

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de

Med

ium

Gra

de

Low

Gra

de

Cas

h an

d ca

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quiv

alen

ts (e

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ding

cas

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nd)

P=93,

486,

592

P=–

P=–

P=93,

486,

592

P=–

P=–

P=93,

486,

592

Rec

eiva

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616,

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754,

114

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4,

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4,15

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Adv

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574

− −

1,82

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ccru

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205,

767

– –

205,

767

– –

205,

767

Oth

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1,99

5,92

9 −

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995,

929

− −

1,99

5,92

9 A

FS fi

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Com

mon

trus

t fun

d 1,

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118

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– –

1,93

1,70

1 –

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931,

701

P=1,8

15,5

94,6

79

P=754

,114

P=5

4,07

6 P=1

,816

,402

,869

P=6

,548

,762

P=1

1,65

1,40

4 P=1

,834

,603

,035

79

==

==

The credit quality of the financial assets was determined as follows:

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

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

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

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

The Foundation’s foreign currency-denominated financial instruments are included in cash and cash equivalents amounting to US$0.01 million in 2013 and US$0.04 million in 2012. The Philippine peso values of these instruments amounted to P=0.55 million and P=1.75 million in 2013 and 2012, respectively.

In translating the foreign currency-denominated monetary assets into peso amounts, the exchange rate used was P=44.40:$1 and P=41.05:$1, based on the Philippine Peso - U.S. dollar exchange rate as of December 31, 2013 and 2012, respectively.

The following table demonstrates the sensitivity to a reasonably possible change in the US dollar rate, with all variables held constant, of the Foundation’s result of activities (due to changes in the fair value of monetary assets) as of December 31, 2013 and 2012:

US$ depreciates (appreciates) Effect on Net Assets

2013 2012 P=1.0 P=12,376 P=42,579 (1.0) (12,376) (42,579)

14. Other Activities

Statements of revenue and expenses on the Foundation’s museum and library operations for theyears ended December 31, 2013 and 2012 are as follows:

2013 2012 Revenue P=20,494,960 P=22,092,147 Expenses 29,558,286 31,135,103 Net loss P=9,063,326 P=9,042,956

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

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

The Foundation also reported and/or paid the following types of taxes for 2013:

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

a. Output VAT

Net Sales/ Receipts Output VAT

Taxable sales Leasing income P=11,916,608 P=1,429,993 Sales of services 5,288,881 634,666 Sale of goods 3,289,471 394,737

P=20,494,960 P=2,459,396

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

b. Input VAT

Balance at January 1 P=4,111,240 Current year’s domestic purchases/payments for:

Services lodged under other accounts 3,493,927 Goods other than for resale or manufacture 337,608

7,942,775 Claims for tax credit/refund and other adjustments 2,494,198 Balance at December 31 P=5,448,577

c. Importations

The Foundation did not have any purchases from outside the country.

d. Excise Tax

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

80

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

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

The Foundation also reported and/or paid the following types of taxes for 2013:

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

a. Output VAT

Net Sales/ Receipts Output VAT

Taxable sales Leasing income P=11,916,608 P=1,429,993 Sales of services 5,288,881 634,666 Sale of goods 3,289,471 394,737

P=20,494,960 P=2,459,396

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

b. Input VAT

Balance at January 1 P=4,111,240 Current year’s domestic purchases/payments for:

Services lodged under other accounts 3,493,927 Goods other than for resale or manufacture 337,608

7,942,775 Claims for tax credit/refund and other adjustments 2,494,198 Balance at December 31 P=5,448,577

c. Importations

The Foundation did not have any purchases from outside the country.

d. Excise Tax

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

81

e. Documentary stamp tax

The Foundation did not enter into any transaction which requires payment of any documentarystamp taxes.

f. All other local and national taxes

This includes all other taxes, local and national, including real estate taxes, licenses and permitfees lodged under the ‘Project Expenses’ and ‘General and administrative expenses’ accountsboth in the Foundation’s statement of activities:

Details consist of the following:

Project Expenses

General and Administrative

Expenses Total Real estate taxes P=2,231,792 P=– P=2,231,792 License and permits fees 62,799 10,135 72,934 Others 26,058 54,785 80,843

P=2,320,649 P=64,920 P=2,385,569

g. Withholding Taxes

Withholding taxes on compensation and benefits P=14,747,351 Expanded withholding taxes 2,937,960

P=17,685,311

h. Tax assessments

As of December 31, 2013, the Foundation has not received any final assessment notice fromthe BIR.

AYALA FOUNDATION, INC. SCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONS

PHILIPPINE FINANCIAL REPORTING STANDARDS AND INTERPRETATIONS Effective as of December 31, 2013

Adopted Not Adopted

Not Applicable

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

PFRS’s 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

PFRS 2 Share-based Payment

Amendments to PFRS 2: Vesting Conditions and Cancellations

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

PFRS 3 (Revised)

Business Combinations

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

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

82

AYALA FOUNDATION, INC. SCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONS


Adopted Not Adopted

Not Applicable

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

PFRS’s 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

PFRS 2 Share-based Payment

Amendments to PFRS 2: Vesting Conditions and Cancellations

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

PFRS 3 (Revised)

Business Combinations

PFRS 4 Insurance Contracts


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

PFRS 6 Exploration for and Evaluation of Mineral Resources

PFRS 7 Financial Instruments: Disclosures



Amendments to PFRS 7: Improving Disclosures about Financial Instruments

83


Adopted Not Adopted

Not Applicable

Amendments to PFRS 7: Disclosures - Transfers of Financial Assets

Amendments to PFRS 7: Disclosures - Offsetting Financial Assets and Financial Liabilities Not Early Adopted

Amendments to PFRS 7: Mandatory Effective Date of PFRS 9 and Transition Disclosures Not Early Adopted

PFRS 8 Operating Segments

PFRS 9 Financial Instruments

Amendments to PFRS 9: Mandatory Effective Date of PFRS 9 and Transition Disclosures Not Early Adopted

PFRS 10 Consolidated Financial Statements

PFRS 11 Joint Arrangements

PFRS 12 Disclosure of Interests in Other Entities

PFRS 13 Fair Value Measurement Not Early Adopted

Philippine Accounting Standards

PAS 1 (Revised)

Presentation of Financial Statements

Amendment to PAS 1: Capital Disclosures

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

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

PAS 2 Inventories

PAS 7 Statement of Cash Flows

PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

PAS 10 Events after the Reporting Date

PAS 11 Construction Contracts

PAS 12 Income Taxes

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

PAS 16 Property, Plant and Equipment

PAS 17 Leases

PAS 18 Revenue

PAS 19 Employee Benefits

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


Adopted Not Adopted

Not Applicable

PAS 19 (Amended)

Employee Benefits

PAS 20 Accounting for Government Grants and Disclosure of Government Assistance

PAS 21 The Effects of Changes in Foreign Exchange Rates

Amendment: Net Investment in a Foreign Operation

PAS 23 (Revised)

Borrowing Costs

PAS 24 (Revised)

Related Party Disclosures

PAS 26 Accounting and Reporting by Retirement Benefit Plans

PAS 27 Consolidated and Separate Financial Statements

PAS 27 (Amended)

Separate Financial Statements

PAS 28 Investment in Associates

PAS 28 (Amended)

Investments in Associates and Joint Ventures

PAS 29 Financial Reporting in Hyperinflationary Economies

PAS 31 Interests in Joint Ventures

PAS 32 Financial Instruments: Disclosure and Presentation

Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Not Early Adopted

Amendment to PAS 32: Classification of Rights Issues Not Early Adopted

Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities Not Early Adopted

PAS 33 Earnings per Share

PAS 34 Interim Financial Reporting

PAS 36 Impairment of Assets

PAS 37 Provisions, Contingent Liabilities and Contingent Assets

PAS 38 Intangible Assets

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


84


Adopted Not Adopted

Not Applicable

PAS 19 (Amended)

Employee Benefits

PAS 20 Accounting for Government Grants and Disclosure of Government Assistance

PAS 21 The Effects of Changes in Foreign Exchange Rates

Amendment: Net Investment in a Foreign Operation

PAS 23 (Revised)

Borrowing Costs

PAS 24 (Revised)

Related Party Disclosures

PAS 26 Accounting and Reporting by Retirement Benefit Plans

PAS 27 Consolidated and Separate Financial Statements

PAS 27 (Amended)

Separate Financial Statements

PAS 28 Investment in Associates

PAS 28 (Amended)

Investments in Associates and Joint Ventures

PAS 29 Financial Reporting in Hyperinflationary Economies

PAS 31 Interests in Joint Ventures

PAS 32 Financial Instruments: Disclosure and Presentation

Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Not Early Adopted

Amendment to PAS 32: Classification of Rights Issues Not Early Adopted

Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities Not Early Adopted

PAS 33 Earnings per Share

PAS 34 Interim Financial Reporting

PAS 36 Impairment of Assets

PAS 37 Provisions, Contingent Liabilities and Contingent Assets

PAS 38 Intangible Assets

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


85


Adopted Not Adopted

Not Applicable



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

Amendment to PAS 39: Eligible Hedged Items

PAS 40 Investment Property

PAS 41 Agriculture

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

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


Adopted Not Adopted

Not Applicable

SIC-7 Introduction of the Euro

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

SIC-12 Consolidation - Special Purpose Entities

Amendment to SIC - 12: Scope of SIC 12

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

SIC-15 Operating Leases - Incentives

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

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

SIC-29 Service Concession Arrangements: Disclosures.

SIC-31 Revenue - Barter Transactions Involving Advertising Services

SIC-32 Intangible Assets - Web Site Costs

86


Adopted Not Adopted

Not Applicable

SIC-7 Introduction of the Euro

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

SIC-12 Consolidation - Special Purpose Entities

Amendment to SIC - 12: Scope of SIC 12

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

SIC-15 Operating Leases - Incentives

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

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

SIC-29 Service Concession Arrangements: Disclosures.

SIC-31 Revenue - Barter Transactions Involving Advertising Services

SIC-32 Intangible Assets - Web Site Costs

87

Ayala Foundation Management and Staff

88

Jaime Augusto Zobel de AyalaFernando Zobel de AyalaChairmen

Maria Lourdes Heras-de LeonPresident

Programs

Rowena LopezSenior Director

Ramon MirandaDirector, Education Adviser

Mercedes BarcelonSenior Manager, Sustainable Livelihood Adviser

Dino Rey AbellanosaSenior Manager, Visayas Operations

Archimedes VelascoSenior Manager, Mindanao Operations

Maria Paz BaylonJulie BerganiaChiara CruzaIreneo Demecais Jr.Mariecar FernandoCecilia PalmaJoseph Anthony QuesadaManagers

Zyriel AbejeroLibby Josephine AbesamisFrancis Ian AgatepMary Rose Erika BarjaJohn Tobit CruzChester Lei FabianMaria Mia Farrah FalcisJohn Christopher Paul GulayDennis MateoJessieree Anne MatienzoPepito RabagoMary Ann SantiagoChristine Joy SarigumbaMelissa YamsonStaff

Rosalina AcostaEbony LautnerJessica Sandra ClaudioMaria Meliza TubaMarcia Czarina MedinaConsultants

Arts and Culture

Ma. Elizabeth GustiloSenior Director

Kenneth EsguerraSenior Manager, Ayala Museum

Suzanne YupangcoSenior Manager, Filipinas Heritage Library

Maria Bernadette SamsonAprille TijamManagers

Miguel Carlos AcostaVerne Alexander AhyongAndre Grego Angeles IIIMaria Cecilia AysonAlezza Marie BuenviajeMaria Loreta BustoRoland CruzFaye Johanna CuraGilbert de JesusFelicia Marie de Vera Marie Julienne EnteLucky EstebanPaula Nikola FernandezRosemarie FiguerresCarla GamalindaJo Ann GandoMicaella Angelica Gonzales Arnaldo LegaspiHannah Jade LimJaime MartinezMarinella Andrea MinaCarla Margarita MuñozJulius Jacob NolascoJoy Kathleen PeñaElena RoblesPablo RuizJanuary SalvadorAna Victoria TamulaArnold TorrecampoMarjorie VillafloresStaff

Nina HuangFiona TingConsultants

Strengthening The Capacity Of Civil Society Organizations In The Philippines

Socorro CamachoChief of Party

Gina EstiponaSenior Manager

Ma. Victoria AlcosebaRhandy Rowan Managers

Liza AgulloCandice Elaine BismonteValentina GanglMichael Anthony SantosStaff

Finance and Corporate Services

Aditas Vivian SantamariaSenior Director and Chief Financial Officer

Ludette Christie DomingoSenior Manager, Finance

Jose BarcelonaSenior Manager and Chief Information Officer

Chaffee AlphaErwin Gopez Managers

Joysen AccadChristian Martin AndradaArwin AysonMaureen BañagaTeresita CailoRizza Erika DanganPhilip Neri DellosdeImelda FatallaKristel Ann GalvezShirley GrospeJocelyn HernandezEscolastica NonogRenie PensotesTirzah SalongaApril TamayoStaff

Human Resources and Administration

Tyne Dignadice Jr.Director

Erwin IbarretaSecurity Manager

Sarah SevillaManager

Francis EstolanoCeleste KatigbakRosalinda Navera Mary Grace ParungaoKathleen Jan PlandanoMaria Cindy PoyaoanRoanna SicatJosie Viaña Michael Villegas Staff

Ramona VelascoConsultant

Strategy, Communications, and Partner Care

Jin Paul de GuzmanManager

Bayani Alonto Jr.Jennifer BascoguinElisabeth BaumgartStaff

89

Ayala Foundation, Inc.10F Ayala Wing, BPI Building 6768 Ayala Avenue cor. Paseo de Roxas Makati City, Philippines Tel (632) 717 5800Fax (632) 813 4487 to 88www.ayalafoundation.org

Ayala Foundation, Inc.

Visayas Operations 4F Krizia Building Gorordo Avenue, LahugCebu City, Philippines Tel/Fax (6332) 412 2405

Directory

90

Ayala Foundation, Inc.

Mindanao Operations2F Climbs Building, Tiano Pacana Street Cagayan de Oro City, Philippines Tel (638822) 729 497

Ayala MuseumMakati Avenue corner De la Rosa Street Greenbelt Park Makati City, Philippines Tel (632) 759 8288 Fax (632) 757 2787www.ayalamuseum.org

Filipinas Heritage Library6F Ayala MuseumMakati Avenue corner De la Rosa Street Greenbelt Park Makati City, Philippines Tel (632) 759 8288 local 36www.filipinaslibrary.org.ph

91

Editorial and Design DirectionAyala Foundation Strategy, Communications, and Partner Care Group

Internal AuditAyala Foundation Finance and Corporate Services

Cover Concept and DesignK2 Interactive (Asia) Inc.

Layout and DesignStudio Dialogo

PhotographyErik Liongoren (Operations and Management and Staff)Wig Tysmans, Paco Guerrero (Board of Trustees)Jay Fernando (El Nido, Palawan)Ayala Foundation

Paper informationThe cover of the 2013 Ayala Foundation Annual Report is printed on Naturalis uncoated paper, made from 55-percent post-consumer waste. The main pages are printed on 100-percent wood-free Taiga, made from elemental chlorine free (ECF) unbleached pulp.

Ayala Foundation, Inc.10F Ayala Wing, BPI Building6768 Ayala Avenue corner Paseo de RoxasMakati City, 1226 Philippineswww.ayalafoundation.org

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