As a result, the Philippine economy posted robust Gross Domestic Product (GDP) growth of 7.6% in 2022, surpassing the previous year’s 5.7%. Unemployment rate for 2022 fell to 5.4% versus 7.8% the prior year. The total number of unemployed declined to 2.7 million, lower than 3.7 million in 2021, with the labor force participation rate improving to 64.7% versus 63.4% the prior year.
Also, overseas remittances remained buoyant despite the adverse global economic environment as overseas Filipino workers sent money to support families at home, reaching a record US$32.5 billion, surpassing by 3.6% the previous high of US$31.4 billion set in 2021. This continued to support the country’s consumption-driven economy.
Looking back, the country’s economic performance, particularly in the fourth quarter, was all the more remarkable given such headwinds, including: inflation reaching a 14-year high at 5.8%; rising interest rates; a slackening global economy as China’s economy remained sluggish, continued conflict in Ukraine; and, weakening of the Philippine Peso versus the US Dollar.
The prices of goods and services rose faster than wages in 2022, which eroded purchasing power and curbed consumption as households struggled with rising prices and interest rates. Coming into the first few months of 2023, as inflation and interest rates remain high, economic experts and analysts believe these factors will again take a toll on consumption in 2023 as households find their way around to make ends meet with an already squeezed family budget.
Globe Supports New Administration’s Goals of Improving the Lives of Every Filipino
Nevertheless, we are heartened by the new administration’s vision that follows a track of sustainable and inclusive development, where businesses thrive, intellectual property rights are protected, climate risks are mitigated, and Filipinos are given equitable access to opportunities to reach their own aspirations. Globe, having the Philippines’ most reliable mobile network, supports the administration’s goal to digitalize government processes and provide universal connectivity across the country. As such, count on Globe to be an enduring partner towards attaining national goals aimed at improving the lives of every Filipino.
Review of Globe’s 2022 Performance
Against this backdrop, Globe sustained its record breaking pace in 2022. Your company recorded all-time high revenues of ₱158 billion, up 4% against the same period last year. Corporate data and mobile services, complemented by the continuous growth from non-telco services, consistent with our shift into becoming the Philippines’ leading digital solutions platform, mainly drove the topline expansion as more Filipinos adopt the digital lifestyle. Total data revenues as a percentage of total consolidated service revenues increased to 81% from 80% last year. Our mobile and home broadband customer base reached 86.7 million and 2.6 million, respectively.
Imbued with the goal of providing a #1stWorldNetwork for our customers nationwide, Globe’s capital expenditure (capex) for 2022 reached a new record of P101.4 billion, surpassing by 9% the previous record set last year and represents 64% of gross service revenues and 128% of full year EBITDA. Majority or 86% of capex was allocated for data requirements to ensure that customers will have access to more relevant digital solutions and best-in-class connectivity wherever they are.
Globe put up 1,702 new cell sites, upgraded around 13,600 mobile sites to LTE, and installed 2,267 new 5G sites nationwide. Moreover, your company deployed over 1.4 million fiber-to-the-home lines versus 1.45 million lines from a year ago.
Globe’s Pivot to a Full-Fledged Tech Enterprise
Globe, with its strategic and purpose-led pivot from a traditional telecommunications company to a full-fledged tech enterprise, now offers a suite of innovative digital solutions through its portfolio companies in financial technology, healthcare, edutech, entertainment, adtech, e-commerce, manpower, information technology services, venture capital investment, and most recently, climate tech.
GCash, the Philippines’ number one finance app and the only Philippine double unicorn valued at over US$2 billion during its last capital raise in November 2021, sustained its market leadership, growing to 76 million registered users, 5.8 million merchants and social sellers, and 855 GLife merchant partners. Amid its dominance as an e-wallet with over 5x more active users than the nearest e-wallet based on statistics from reputable third party provider data.ai, GCash likewise pioneered and scaled digital financial services across credit, savings, wealth and insurance products. GCash has disbursed over ₱57 billion of loans life-to-date across 2 million unique borrowers. These milestones were achieved with a suite of products spanning revolving credit lines, cash loans and buy-now-pay-later (BNPL), providing loans to more Filipinos who need it the most, backed by its proprietary credit score.
Globe’s ESG Commitments
Strengthening our commitment to sustainability, Globe remains a signatory to the UN Global Compact and is committed to uphold its ten principles on Human Rights, Labor, Environment and Anti-Corruption. The company has also committed to support the Task Force on Climate-Related Financial Disclosures to increase transparency on climate governance, strategy, risk management, and targets.
As the first publicly-listed company that committed to set science-based targets and an official participant in the Race to Zero, Globe partnered with South Pole, a climate action strategy expert, in building our Net Zero roadmap. We also partnered with Aon Global Risk Consultants (Aon) and utilized the engagement with The Climate Service’s (an S&P Global company) Climanomics platform in developing a climate scenario analysis, identifying the company’s climate-related physical risks, transition risks, and opportunity factors. We also invested in a sustainability software, through DNV Synergi Life, to automate the ESG data collection process, enhance analysis capabilities, and report our progress against our targets.
Globe recognizes that the fight against climate change will only be successful through collective action. Hence, we became a member of the Global Climate Action Fund (GCAF) established by W-Foundation, a United Nations Framework Convention on Climate Change (UNFCCC) partner that seeks to discover and support global climate action technologies and ideas through the members of the alliance.
In terms of our ESG Ratings, Globe maintains its A rating in MSCI, B rating in CDP, for environmental transparency, and; membership in the FTSE4Good Index for seven straight years since 2016. Financial Times has also recognized Globe as one of the Climate Leaders in Asia Pacific in 2022.
As a result of its strong adherence to the pillars of corporate governance (CG) engrained in its corporate culture and ways of working, Globe’s CG standards and practices continue to be acknowledged by domestic and international award giving bodies. Globe was recognized among the Top 3 Philippine Publicly-Listed Companies, ASEAN Top 20, and ASEAN Asset Class in the Philippines at the ASEAN Corporate Governance Scorecard (ACGS) Awards Ceremony in December 2022. Globe was also the only telco that bagged the prestigious five (5) Golden Arrow Award for Corporate Governance organized by the Philippines’ Institute of Corporate Directors (ICD). The International Finance Awards also named Globe the “Best Corporate Governance Company - Telecom – Philippines 2022” through its publication’s issue in January 2023 with Globe as the only Philippine entity and telco in the roster of awardees in the category.
Globe also took home the first-ever United Nations Sustainable Development Goal (UN SDG) Awards under the People Category, hosted by the UN Global Compact Network Philippines (UNGCP), for its holistic COVID response efforts.
Globe’s Mission of Generating Sustained Value for Shareholders
Staying true to our mission of generating sustained value for our shareholders, we also paid out ₱14.4 billion in common share dividends. This represents about 68% of 2021 core net income, in line with our dividend policy of 60 to 75% of prior year’s core net income. Globe is committed to a sustainable dividend policy in line with earnings and cash flow generation.
Globe Board Developments
On behalf of the other board members, I would like to acknowledge the significant contributions of our outgoing directors, Mssrs. Allen Lew, Romy Bernardo and Rex Mendoza, and Mme. Saw Phaik Hwa. Mr. Lew, in his return as a member of the Globe board in 2021, served as Co-Vice Chairman. Prior to that, Mr. Lew was first elected to the Globe board in 1995 and assumed the role of Vice Chairman in 1996 and 1997, and Co-Vice Chairman in 1998 and 1999. While Mr. Bernardo spent a total of 22 distinguished years as a director with Mr. Mendoza and Ms. Saw serving on the board for nine and eight years respectively as independent directors with Mr. Mendoza being in the Lead Independent Director role in the last five years. We wish them all the success in their future endeavors.
In closing, I am deeply proud of the way the Globe leadership team and the entire organization handled the many challenges in 2022 by uplifting lives through innovations that show care, compassion and kindness. I also would like to thank our board for its engagement and advice amid another challenging year.