NEXT GENERATIONmaynilad sustainability report 2016

3

About the Theme and Cover Vision and MissionOur Sustainability Highlights Messages from the Chairman and PresidentAbout this Report

W H AT M AT T E R S T O U S

Caring for Water Source Our Purpose: Enhancing Access, Reliability, and Service Ensuring High Levels of Wastewater Management

H O W W E C R E AT E V A L U E

W H O W E A R E

Minimizing our Ecological Footprint Cultivating Engaged Employees Embracing More Communities Strengthening Effective Governance

W H AT E N A B L E S U S T O C R E AT E V A L U E9 4

1 0 41 2 61 4 8

3 85 68 0

Annexes GRI Content Index External Assurance Statement Acknowledgements

1 7 41 9 42 0 22 0 4

Our Materiality Process Stakeholder Engagement and Management

2 83 2

678

1 0

1 9

Maynilad Sustainability Report 2016

20

36

92

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CONTENTS

M O V I N G F O R W A R D162

operational efficiency

business growth

organization and people development

7 6

ABOUT THE THEME AND COVER

The Sustainability Report looks at

Maynilad through the different themes that

piece together the whole picture of the

company’s inclusive business approach.

The globe-themed cover alludes to

the company’s NextGen program with

the pillars of organizational and people

development, operational efficiency,

and business growth. Interspersed with

waves, this image sends the message

that Maynilad is embedding this business

strategy in all its operations.

The title of similar name, Next Generation,

is also fitting for the content of the

The Global Reporting Initiative (GRI)

Standards is our primary guide in preparing

this report. GRI™ is an independent

international organization that has

pioneered corporate sustainability reporting

since 1997. In using GRI, we have been

ABOUT GRI

report, which captures the first year of the

program’s implementation in providing

meaningful water solutions. This sets the

stage for the succeeding years, showing

that Maynilad stays true to its tagline, “higit

sa tubig ang aming serbisyo.”

guided in reporting on what matters to

our organization and our impacts to the

environment and society.

For more information, visit

www.globalreporting.org.

We are the leading water solutions

company in the Philippines

with a strong presence across Asia.

VISION

MISSIONWe provide safe, affordable,

and sustainable water solutions

that enable those we serve to lead

healthier, more comfortable lives.

9 8

OUR SUSTAINABILITYREPORT

11 10

The year 2016 will live down Maynilad’s history as a banner year of change and

renewal. This is fully embodied by our Next Generation 2016-2018 program,

which despite being less than a year old has already set the stage for our long-

term strategies beyond 2018.

Exemplifying change at top management is our new president, Ramoncito

Fernandez. With his business acumen, fresh perspective, and inclusive brand of

leadership, I am confident that our various departments will further strengthen

collaborative ties to hit our service-obligation targets.

Already, we are seeing remarkable results.

Our customer satisfaction score is up

to 3.36 out of a possible 4, which

means we have now “exceeded

standards.” Our ultimate goal,

however, is to provide world-class

service and a nonstop supply of

potable water at higher pressures to

all our customers.

Toward this goal, we now align our

focus on three categorical areas:

operational efficiency, business

growth, and organization and people

development.

MESSAGE FROM THE CHAIRMAN

Dear Stakeholders,

Our customer satisfaction score is

up to 3.36 out of a possible 4, which

means we have now “exceeded

standards.” Our ultimate goal,

however, is to provide world-class

service and a nonstop supply of

potable water at higher pressures

to all our customers.

“

102-14

13 12

B U S I N E S S G R O W T H

We are keen to extend our market reach

beyond the West Zone into other local and

international markets. Our expansion drive

now involves various areas in Bulacan, Cavite,

Laguna, and Bicol. Through our sister company,

Metro Pacific Water Investments Corporation,

we are likewise entering new markets such as

commercial buildings, factories, subdivisions,

high-rise buildings, industrial parks, and other

water districts outside the West Zone.

Our initial foray into expanding our

geographical reach has already resulted in

pioneering ventures in countries like Indonesia,

O P E R A T I O N A L E F F I C I E N C Y

Our focus on operational efficiency must

translate to better results in water delivery,

sewerage and sanitation, and customer service.

This year, we delivered safe and affordable

water to more than 9.33 million people in the

West Zone—a coverage of 94.3 percent. This

equals to a billed volume of 498.60 million

cubic meters, surpassing our target of 494.82

million cubic meters. These are testaments

to our conscientious efforts to preserve our

watershed and prepare for the effects of climate

change. They are also a result of our work to cut

down Non-Revenue Water, which is now at 30

percent.

But even with these accomplishments, a fraction

of our customer base still does not receive

water pressure of at least 16 psi or full 24-hour

water service. We thus designed a plan that

will double our capital expenditure (CAPEX)

spending to P14 billion for the next three years,

while also doubling the amount of infrastructure

projects that we implement per year.

In terms of sewerage, we increased our

coverage to 1.4 million customers. However,

we are still 12 percentage points short of

our 27 percent target due to external factors

that delayed our project progress, such as lot

acquisition and right-of-way issues. In direct

response to these setbacks, we are working

double time to fast track the completion

of sewerage systems in Pasay, Parañaque,

Muntinlupa, and Valenzuela.

In terms of customer service, we are establishing

a Key Accounts Relations Department to

provide strategic guidance that will foster

trust and better relations with our clients. We

also launched our Higit sa Tubig: Isip, Puso, at

Gawa (Beyond Water: Mind, Heart, and Action)

program to transform the entire Maynilad

culture into one that puts customer satisfaction

at the top of our priorities.

O R G A N I Z A T I O N A N D P E O P L E D E V E L O P M E N T

Maynilad’s Next Generation program will never

succeed without the right people and teams

to drive it forward. We thus reorganized some

job functions and offices to sharpen our focus,

align functions with expertise, and create

fresh synergies within and among our various

departments and business units.

In support of our people development

initiatives, we are adopting a competency-

based human resource management system to

design more relevant and responsive learning

and growth programs for our employees.

This year, we have also increased our IMS

certificates to 209, proving our dedication

to integrating top standards in sustainability

and organizational excellence into our daily

operations.

where we signed a joined venture agreement

with PT Moya Indonesia. This partnership is set

to extend our services overseas through pipe

network design, installation, and non-revenue

water and wastewater management.

With our outstanding managers and employees

at the helm, I am confident that we will exceed

past gains and fully transform into a total water

solutions company that is able to seize more

market opportunities here and overseas.

O U R W A Y F O R W A R D

As we move closer to becoming a world-

class total water solutions company, I wish to

thank all our employees and partners for your

collaborative spirit, fresh ideas, and invaluable

work day in and day out.

We still have quite a way to go toward fully

resolving much of the service obligation issues

that still hamper our long-term growth. Despite

all these challenges, I am certain that our

advances in operational efficiency and human

resource development will very soon run parallel

with our business expansion targets.

MANUEL V. PANGILINANCHAIRMAN

15 14

MESSAGE FROM OUR PRESIDENT

Dear Stakeholders,

As we continue to work for a stronger customer value proposition, I am heartened

to report that Maynilad’s various departments have hit the ground running toward

our Next Gen targets. Against a challenging operating environment, we pushed

forward in shifting our focus from billed volume to the longer-term metrics of

operational efficiency and organizational development.

Our teams also worked with one mind to deliver our customer obligations in a

timely manner. This strong sense of teamwork has enabled us to respond quickly

to complaints and resolve diverse issues ranging from water availability and billing

disputes to quicker processing of applications and faster installation times.

To further improve the delivery of service to our customers, we allocated about

P17.1 billion as CAPEX. More than half of this amount, or around P12.9 billion,

went to strengthening the infrastructure and operations of our water delivery

services for more people in the 17 cities and municipalities that we cover in the

West Zone.

Well aware of the negative effects of over-extracting groundwater, this budget

covered the expansion of our water services. In Cavite, for example, we were able

to connect more customers after taking over the water systems of 33 subdivisions

in Bacoor and Imus in 2015. This expansion added a total of 5,985 household

connections to Maynilad’s water distribution network. As a result, about 26,987

people who used to rely on deep or shallow wells now enjoy potable, piped-in

water supply 24 hours a day, at a strong pressure ranging from 7 to 16 psi. With

this, we are up to 1,312,223 customers in 2016. This enabled us to garner a total

billed volume of 498.6 million cubic meters.

102-7

17 16

We then allotted some P3 billion for Maynilad’s

Non-Revenue Water (NRW) reduction program,

a cornerstone of our corporate strategy. In

this area, we stepped up our efforts to resolve

challenges involving meter management, leak

repairs, pipe replacements, and District Metered

Area (DMA) management. Our DMA NRW has

been consistently decreasing with each reporting

cycle. For this reporting year, we have reduced our

average water loss to 30 percent compared to last

year’s 31 percent. This is equivalent to 9 million

liters recovered per day. We understand the

severity of NRW and its adverse impacts both on

the planet and to our company’s bottom line. As

such, we vow to continually improve our services

to reduce our NRW and achieve more notable

results in the next years.

Meanwhile, around P1.1 billion went to

wastewater management projects, which

include the construction of much-needed Water

Reclamation Facilities (WRF) in Central Manila

and Cavite, widening of conveyance systems

for these new WRFs, and the development

of sewerage systems in Quezon City and

Valenzuela. The remaining amount in our

wastewater budget went to automation of

facilities, lot acquisitions, maintenance, and

sanitation programs. For the wastewater that

we treat, we ensure that these are within

government standards before discharge. We

managed to treat 58 million cubic meters

of wastewater and remove 3.1 million kg of

oxygen-demanding pollutants this year.

In terms of energy efficiency and conservation,

we continue to note increasing energy use,

which is expected given our very active

expansion and rehabilitation drives. Despite

this surge in power use, we achieved an

energy intensity value of 133.52 kWh/million

liters produced, a decrease from our 2015

value of 137.39 kWh/million liters — a clear

indicator of our prudent and efficient use of

this precious resource. Our GHG emissions,

meanwhile, have reached 69,973.93 tonnes

of CO2e, a decrease by 0.19 percent vs. 2015

emissions. We worked doubly hard to offset

these numbers, particularly through embedding

the Greenhouse Gas Quantification, Reporting,

Validation, Verification standards into our

operations. All these figures demonstrate how

we have been able to make huge strides toward

lowering our impacts and thus move closer to

becoming a truly sustainable water company.

We also continue to give back to the

community through our core business strategy,

as well as the many inventive CSR programs

that we have locked in. Our core business alone

has been able to generate 24,288 jobs in 2016.

Complementing this figure are our livelihood

programs Sining Ipo and Habing Buhay. In

addition, we have other social programs

in place that work for heightened disaster

response and risk reduction systems, improve

our forest covers through tree and mangrove

planting drives, among other strategic social

concerns aligned with our business goals.

Our overall efforts garnered us various awards in

the 8th Annual Global CSR Summit and Awards,

the ASEAN Corporate Sustainability Summit,

the Asia Sustainability Reporting Awards,

and the 2016 Asia Corporate Excellence

& Sustainability Awards. But beyond these

accolades, I wish to remind our employees and

partners that the best reward in our work is our

ability to elevate the living conditions of entire

communities by upholding their right to water

and sanitation.

The investments that we continue to pour into

public infrastructure. Our inclusive business

approach. The increasing number of jobs that

we create to enable more Filipinos to achieve

gainful employment and ultimately lead happier

and healthier lives. All these form the very heart

and center of what drives us to work harder

each day. Toward these ends, rest assured that

we will continue to innovate and find creative

solutions for a stronger company and a truly

sustainable future for more Filipinos.

RAMONCITO S. FERNANDEZPRESIDENT AND CEO

We had a change in leadership on January

1, 2016 with the appointment of Ramoncito

S. Fernandez (RSF) as President and CEO.

Our past president, Victorico P. Vargas,

now serves as Assistant Director of First

Pacific Company and Head of Business

Transformation of the PLDT Group.

Before his appointment to Maynilad, RSF

was the President and CEO of Metro

Pacific Tollways Corp. (MPTC), Tollways

Management Corp. (TMC) and MPCALA

Holdings, Inc. Under his leadership, profits

increased threefold and expansion efforts

grew in the tollways group, along with

championed programs in customer service

satisfaction and innovation.

RSF has extensive experience in international

carrier business, administration, materials

management, industrial marketing, and sales.

Aside from the tollways group, he previously

headed several business groups with the

Philippine Long Distance Telephone Co.

(PLDT), and Pacific Investments Corp., MPTC,

TMC, Manila North Tollways Corp., Cavitex

Infrastructure Corp., MPCALA Holdings, Inc.,

Easytrip Services Corp., and some of PLDT’s

subsidiaries.

19 18

We align our narrative

to the 17 UN Sustainable

Development Goals which

were adopted by 193 countries

last September 2015.

P R I M A R Y C O N TA C T

Atty Roel S. Espiritu, SAVPCorporate Quality, Environment, Safety, & Health

roel.espiritu@mayniladwater.com.ph (+632) 981-3481

S E C O N D A R Y C O N TA C T

Engr. Enrique G. de Guzman, AVPIntegrated Management System (IMS)

enrique.deguzman@mayniladwater.com.ph (+632) 981-3436

Maynilad reaffirms its commitment to

sustainable development with the publication

of our fifth Sustainability Report, Next

Generation.

This covers our economic, environmental,

and social performance over the period of

January 1 to December 31, 2016. Similar to

last year’s report, Beneath the Surface which

was published in February 2017, Maynilad

is aligning our narrative to the 17 United

Nations Sustainable Development Goals

(SDGs), which were adopted by 193 countries

in September 2015. The SDGs are aimed at

ending poverty, protecting the planet, and

ensuring prosperity for all.

This report has been prepared in accordance

with the GRI Standards: Core option. It has

successfully completed the GRI Materiality

Disclosures service, which verifies that the

General Standard Disclosures 102-40 to 102-

49 were correctly located in both the GRI

Content Index (see pages 194-201) and in the

text of this report.

The external assurance statement is found in

pages 202-203. Our Sustainability Reports

from 2012 to date have all been externally

assured.

ABOUT THIS REPORT

Last year, we highlighted our 2015

performance to transition to the GRI

Standards and through this new report, we

are continuing our promise to report annually.

Maynilad is also publishing a separate 2016

Annual Report to highlight the company’s

financial disclosures.

As we continuously strive to improve

reporting to our stakeholders, we welcome

any feedback or inquiry to help us improve

our reporting. These may be coursed to the

following contact details for prompt action.

102-50, 102-51, 102-52, 102-53, 102-54, 102-55, 102-56

21 20

WHO WE ARE

Metro Pacific Investments

DMCI Holdings Incorporated

Marubeni Corporation

Others

52.8%

Maynilad Water Services, Inc., or

Maynilad, is the largest private water and

wastewater services provider in the country,

headquartered at the Metropolitan Water and

Sewerage Services (MWSS) Compound in

Balara, Quezon City in the Philippines.

We are under the management of DMCI-

MPIC Company, Inc., a joint venture between

DMCI Holdings, Inc. and Metro Pacific

Investments Corporation (MPIC).

In 2013, Japanese trading conglomerate

Marubeni Corporation bought 20 percent

of total shares in the company. Other

subsidiaries under these shareholders such

as PhilHydro and Metro Pacific Water are not

part of Maynilad’s sustainability initiatives, and

are hence not included in this report.

Maynilad is a concessionaire of the MWSS

for the National Capital Region’s West Zone,

serving about 9.33 million people comprising

a 94.3 percent service area coverage. We

cover certain areas in the capital City of

Manila, as well as in Makati and Quezon

Cities. Maynilad likewise serves the entire

cities of Caloocan, Las Piñas, Malabon,

Muntinlupa, Navotas, Parañaque, Pasay,

and Valenzuela. We are also responsible for

some parts of the nearby province of Cavite,

particularly the cities of Bacoor and Imus, as

well as the towns of Kawit, Noveleta, and

Rosario.

We serve the West Zone through 12 Business

Areas (BA) offices, which are clustered into

four Business Districts, namely North, Central

A, Central B, and South. We have 3 water

treatment plants, 14 deep wells, 30 reservoirs,

30 pump stations, 17 WRFs, 2 sewage and

septage treatment plants, and one

septage treatment plant to drive our

operations.

Continuous expansion of pipe networks within

our concession area has brought Maynilad’s

service area coverage to 94.3 percent, with a

total water pipe network of 7,637 kilometers.

25.2% 2%20%

OUR VALUES

C U S T O M E R S E R V I C E

H O N E S T Y A N D I N T E G R I T Y

E N T R E P R E N E U R S H I P

We view excellence as a means and not an

end. To maintain our operational efficiency

and industry leadership, we push our

people to excel by being diligent and

innovative in their work.

T E A M W O R K

L O V E F O R C O U N T R Y

We consider our customers as our growth

partners. Providing them with affordable,

high-quality water solutions precedes

generating business value for our company

and shareholders.

We deal with our stakeholders with honesty

and integrity. We will always do what is

right and fair for the sake of our customers,

shareholders, and the environment.

We encourage creative thinking and

deliberate execution. We expect our

people to manage our company’s resources

with a strong sense of initiative, ownership,

and accountability in order to balance the

needs of our customers with those of our

other stakeholders.

We actively partner with the public sector

so that we can provide even more Filipinos

with water solutions that will spur national

development and secure the environment.

We value our people and consider their

success as our own. This is why we provide

them with the support, responsibilities,

and opportunities that will allow them to

develop individually and with the company.

102-1, 102-2, 102-3, 102-4, 102-5, 102-6, 102-7 102-16

C O M M I T M E N T T O E X C E L L E N C E

23 22

M AY N I L A D 2 0 1 3 - 2 0 1 4 S U S TA I N A B I L I T Y R E P O R T

Asia Sustainability Reporting Awards 2016 Winner, Asia’s Best Stakeholder Reporting Winner, Asia’s Best Environmental Reporting Philippine Quill Awards 2016 Award of Excellence, Publications Category 51st Anvil Awards 2016 Gold Anvil Award, Public Relations Tools: Publications 2016 Asia Corporate Excellence & Sustainability Awards Top Green Companies in Asia

M AY N I L A D 2 0 1 3 A N N U A L R E P O R T

8th Annual Global CSR Summit and Awards 2016 Platinum Award, Best Environmental Excellence Award ASEAN Corporate Sustainability Summit & Awards Winner, Resource Efficiency Category Don Emilio Abello Energy Efficiency Awards 2016 Two Outstanding Awards (PAGCOR PS, LMTP 2) Two Outstanding Energy Manager Awards (Michael Buligan – Water Network and John Jerald De Jesus – Water Production) Certificate of Recognition for Maynilad’s ISO 50001 Certification

E N E R G Y M A N A G E M E N T S Y S T E M

51st Anvil Awards Gold Anvil Award

AWARDS AND RECOGNITION

1st ASEAN Red Ribbon Outstanding Workplace Award 10th DOLE GKK Regional Institution Category NCR Champions (LMTP 2, Central Depot, FCOM BA) Individual Category NCR Champion (Conrado Soriano)

O C C U PAT I O N A L S A F E T Y A N D H E A LT H

25 24

Certificate of Achievement

PA R T N E R S H I P T O C L E A N , R E H A B I L I TAT E , A N D C O N S E R V E T H E M A N I L A B AY

O U T S TA N D I N G D E V E L O P M E N T P R O J E C T F O R TA L AYA N S E W A G E T R E AT M E N T

ADFIAP Awards 2016 LANDBANK Adjudged Winner

T H I N K M AY N I L A D I N N O F E S T

51 st Anvil Awards Gold Anvil Award

M AY N I L A D S I M P L E N G G I N H A W A

51 st Anvil Awards Gold Anvil Award

“ G R A B E A N G M AY N I L A D ” A U D I O - V I S U A L P R E S E N TAT I O N

51 st Anvil Awards Gold Anvil Award

M AY N I L A D 8 K E Y S T E P S T O S E R V I C E E X C E L L E N C E

41 st Annual PSTD Conference Gawad Maestro

10th DOLE GKK National Institution Category Gold Award (LMTP 2) Institution Category Silver Award (Central Depot, FCOM BA) Individual Category Gold Award (Conrado Soriano)

49th National Industrial Safety Convention 2016 SOPI Award of Excellence for Achieving 20,753,356 MHNTLA

WHAT MATTERS TO US

29 28

Maynilad promises to go beyond water

provision and transform into a total water

solutions company that puts a premium on

customer engagement.

The key material aspects of our operations

were derived from our Five-Point Strategy

for Growth, Maynilad’s Mission and Vision

statement, and our Quality, Environment,

Safety, and Health (QESH) Management

OUR MATERIALITY PROCESS

Framework. Moving forward with our

NextGen program, we will continue to

imbibe the same important topics in our

strategies and day-to-day operations.

In our previous sustainability reports,

lowering our ecological footprint was

treated as an implicit must-have within our

other focus areas. In 2016, however, we’ve

raised it as our main focus area.

This is especially important as Maynilad

endeavors to meet the United Nations

SDGs – which include environment-

related Goals 6, 13, 14, and 15 – and our

commitment to international standards

on environmental management, energy

management, and greenhouse gas

reporting, managing our environmental

impact has been brought at the forefront.

102-46 102-46

31 30

STEPS AND GOVERNING PRINCIPLES

OUR PROCESS

We looked at several frameworks that anchor our

business operations to our mandate, including

our Vision and Mission, the QESH Management

Framework, and the GRI Standards. We also

noted the environmental and social contexts in

the localities that we serve.

I D E N T I F I C AT I O N

Sustainability ContextStakeholder Inclusiveness

P R I O R I T I Z AT I O N

MaterialityStakeholder Inclusiveness

We chose our key focus areas based on the

KPIs of the different departments seen through

a shared value perspective, the stakeholder

concerns that arise from the delivery of our

services, and the enablers that could facilitate the

delivery of our value proposition. Together, these

comprise the material aspects for our company.

V A L I D AT I O N

CompletenessStakeholder Inclusiveness

We brought the material aspects to Maynilad’s

management to evaluate the relevance of the

topics to the company’s operations. This is also

to ensure that no important focus area is missed.

R E V I E W

Sustainability ContextStakeholder Inclusiveness

With the increasing recognition of business

contributions to the UN SDGs, we further

aligned our materiality framework to have a

clear understanding of our role in meeting these

universal goals, especially SDG 6 on Clean Water

and Sanitation.

S K I L L E D & E N G A G E DW O R K F O R C E

M O R E W AT E R C O N N E C T I O N S & S E W A G E S E R V I C E S

S E C U R E D W AT E R B O D I E S F O R S O U R C I N G & R E C E I V I N G

- Employee wellness and safety programs- Training and capacity building

- Financial capital infusion- Economic contribution- Efficient operating systems - Regulatory and legal compliance

- Risk assessment and management - Strategic partnership- Restoration of water-related ecosystem

S O C I A L I N C L U S I O N

L O W E R N R W L O W E N V I R O N M E N TA L F O O T P R I N T

- Special privilege programs- Customer programs

- Efficient operating systems- Innovative technologies

- Energy and resource conservation- Pollution reduction

OUR MATERIALITY FRAMEWORK

SUSTAINABLEWATERSOLUTIONsafe affordable dependable

102-46102-47

33 32

ENGAGING OUR STAKEHOLDERS

STAKEHOLDER AND REASON FOR ENGAGEMENT

STAKEHOLDER CONCERNS

Our stakeholders are the cornerstones of Maynilad’s continued sustainability. As we strive to grow

further, we aim to nurture our relationships with our stakeholders and pursue more innovative

mechanisms to ensure our business’ responsiveness and inclusiveness.

MODE AND FREQUENCY OF ENGAGEMENT AND OUR RESPONSE

Career development

Safe work environment

Open communication

Regular trainings

Employee benefits

Employee relationship

E M P L O Y E E S

ensure that our operations, as well as our

relationship with stakeholders, are all running

smoothly.

We are constantly in touch with our employees through regular general meetings and assemblies,

and the Maynilad Employee News. Supervisors and rank-and-file employees alike are empowered

through a Collective Bargaining Agreement. Trainings geared towards capacity building and career

development are also regularly conducted.

102-40, 102-42, 102-43, 102-44

102-40, 102-42, 102-43, 102-44

Regulatory disclosures

Building parterships

Policy alignment with areas of

national interest such as green

initiatives and biodiversity protection

G O V E R N M E N T

regulates Maynilad, which is a concessionaire of

MWSS, a government agency. We make sure to

abide by its laws and policies. We also frequently

work with numerous local government units and

involve them in our programs and projects.

We strive to comply with government requirements and regulations and regularly communicate

policy and other relevant matters to concerned government authorities. As part of the Next Gen

program, we plan to create a Government Relations Department to expedite this.

Our shareholders communicate their vision and align it with the company’s mandate through

monthly board meetings and management reports. Outcomes from these engagements translate

to an operation that is focused on innovation. They are a strategic pillar to grow the business

outside the West Zone concession area.

Value creation

Dividends

Corporate governance

Continued earnings growth

S H A R E H O L D E R S

drive Maynilad’s operation to business growth and

value creation. Major shareholders are represented

in the Board of Directors, which is Maynilad’s

highest governing body.

We engage our labor union groups through negotiations to renew their respective CBAs, which

cover economic provisions such as salary adjustment and mechanisms such as Labor Management

Councils and Grievance Committees. Maynilad also consults with the labor unions whenever there

are complaints concerning salaries or other company rules and their members are involved.

Labor relations

Salaries and wages

Employee welfare

Human rights

T R A D E U N I O N S

are composed of the two labor union groups

in Maynilad, one representing our rank and

file employees and the other representing our

supervisory employees.

35 34

STAKEHOLDER AND REASON FOR ENGAGEMENT

STAKEHOLDER CONCERNS

C I V I L S O C I E T Y O R G A N I Z AT I O N S

serves as our partners in promoting developmental

and environmental advocacies.

Building partnership

Community development

Governance

Environmental protection and preservation

Water cost and water “rights”

MODE AND FREQUENCY OF ENGAGEMENT AND OUR RESPONSE

I N D U S T R Y PA R T N E R S

share their knowledge on best industry practices

and help us become more efficient and effective

in attaining our operational goals.

Continuing support and long-term

partnership and membership

As a member of various industry groups that share our beliefs and commitments, we regularly

participate in conferences, workshops, and other similar events that nurture relationships with

our peers in the business.

We maintain close ties with various local and international NGOs that share our developmental

causes. We organize dialogues, prepare presentations, and should an issue need to be brought to

court, we promptly respond through legal means.

102-40, 102-42, 102-43, 102-44102-40, 102-42, 102-43, 102-44

Transparency

Long term partnership

Ethical behavior

Clear procurement policies

S E R V I C E P R O V I D E R S / S U P P L I E R S

are our partners in implementing various

programs and services while ensuring that our

quality, environment, safety, and health policies

are adhered to.

We engage our service providers through our procurement management system which

follows ethical policies and guidelines.

C U S T O M E R S A N D L O C A L C O M M U N I T I E S

are our top priority. We ensure that they are

provided with safe, affordable, and sustainable

water and wastewater services.

Customized plans

Faster resolution of complaints

Loyalty/rewards program

Better payment system

Maynilad hotline

Care and support for community

Life improving programs

Support for good governance

through ICT

We conduct the Customer Satisfaction Survey (CSAT), disseminate information through the

TextTubig Infoboard, and strive to address customer concerns or complaints as quickly as possible

or within the time allotted by our service obligation. We constantly monitor our systems to mitigate

service interruptions, all throughout the year. Low-income households are also given special

rates or arrangements to settle their arrears. Before every new project, we also conduct public

consultations to solicit community concerns and comply with regulatory requirements.

We engage our communities through various programs and projects, notably our Special Privilege

Programs within the West Zone.

HOW WE CREATE VALUE

39 38

Over the last century, the global

consumption of fresh water has alarmingly

grown faster than the world’s population.

Here in the Philippines, there is growing

concern for our limited fresh water

resources amid a ballooning population,

rapid economic growth, and the growing

amount of pollution.

CARINGFOR WATER SOURCES

Despite these challenges, our ability

to ensure that our water resources are

managed in the best possible way is vital

to Maynilad’s business. We thus support

all measures that protect and nourish

our water resources, and work closely

with the National Water Resources Board

(NWRB), the Metropolitan Waterworks and

Sewerage Services (MWSS), and other key

agencies. Together, we uphold policies and

frameworks that foster bigger investments

in water infrastructure. At the same time,

we actively protect our available water

sources and address water scarcity in some

of our poorest communities and areas that

still lack access to sustainable water lines.

41 40

W AT E R W I T H D R A W A L A N D P R O D U C T I O N

Water withdrawal and production rates

at Maynilad are dependent on customer

demand and water delivery, in turn, is in

response to such demand. To further enhance

the efficiency of our water withdrawal and

production processes, we are constructing

more treatment plants and expanding or

refurbishing existing infrastructure. These

include the 100 million liters per day (MLD)

Expansion at Putatan Water Treatment

Plant, Umiray Angat Transbasin Project

Rehabilitation Phase 2, Design and Build

Contract for La Mesa Treatment Plant 1

Process Improvement Works, Putatan Water

Treatment Plant Development Plan-Phase 2,

and the La Mesa Development Plan-Phase 2.

Raw water coming from Angat Dam that is

meant for domestic use is transmitted to

Metro Manila through Ipo Dam, a diversion

dam, 7 kilometers downstream of Angat, in

Norzagaray, Bulacan. The Ipo Watershed,

meanwhile, straddles three municipalities:

Norzagaray and San Jose Del Monte in

Bulacan, and Montalban in Rizal. Runoff

within the watershed is conveyed through its

main tributary rivers namely, Sapang Anginan,

Sapang Binenet, Sapang Ipo, and Sapang

Paco.

To protect these natural reservoirs, Maynilad

maintains strong collaborative linkages in

managing the Angat Reservoir multi-purpose

water source.

We are also looking for new water sources

to improve our supplies. These tasks are

handled by the Water Source Department

under our Water Supply Operations Division.

This department is responsible for carrying

out thorough planning and feasibility studies

toward protecting our current streams

and discovering new water sources. The

department is made up of two sections: the

Water Source Development section and the

Hydrology and Operations section.

The Water Source Development section is

currently conducting seven feasibility studies.

These include the Putatan Water Treatment

Plant (PWTP) Intake Extension, focusing on

the extension of the PWTP intake from the

offshore of the western lobe of Laguna Lake;

the Kaliwa Dam and Reservoir Water Supply

Project, which seeks to explore the potential

of Kaliwa as an additional water source; and

the Manila Bay Desalination Plant, which

focuses on Manila Bay as a new water source

by desalination. Aside from these projects,

the section is studying 18 other water bodies

in Regions II, III, and IV-A as possible new

water sources.

The Hydrology and the Operations section,

on the other hand, conducts complementary

researches on new water sources and

constantly studies and monitors the status of

existing water sources, such as the Laguna

Lake and the Ipo Reservoir. The section’s

services range from measuring flow from

water sources to getting water samples

for water quality testing and assessing the

hydrology of water sources.

43 42

Water released from Angat Dam is transmitted

through Ipo Dam, and treated at the two

plants in La Mesa, namely, La Mesa Treatment

Plants 1 and 2 (LMTP 1 and LMTP 2). LMTP 1

is a conventional-type plant with a maximum

design capacity of 1,500 MLD while LMTP 2 is

a pulsator-type plant with a design capacity of

900 MLD.

Another source of water is Laguna de Bay, a

lake in southern Luzon. Water from the lake

is treated at the PWTP, the country’s largest

Water Withdrawal

membrane-based water treatment plant that

pioneered the use of large-scale microfiltration-

ultrafiltration and reverse osmosis. The plant

now has a design capacity of 150 MLD.

To increase our productivity, we have the

following key CAPEX projects: the 100 MLD

PWTP costing P5 billion and the Putatan WTP1

development plan (phase 2) costing P56 million;

the 21 MLD Cavite WRF costing P675 million;

the installation of an additional liquid chlorine

storage at LMTP 2 costing P60 million; some

303-1, 303-2

Water Production

LMTP 1 Process Improvement Works costing

P971 million; a 30 million liter Aguinaldo

Reservoir and pump station worth P410 million;

and the Flow Metering (Phase 2) at La Mesa

costing about P68 million.

Our water withdrawal for this year increased

by 7.20 percent, from 846,536.51 million

liters in 2015 to 907,496.80 in 2016. Of this

volume, 93.26 percent was withdrawn from

Angat Dam, a 5.03 percent increase from the

raw water withdrawal in 2015. The remaining

6.74 percent was withdrawn from the Laguna

de Bay, which saw a 50.12 percent increase in

water withdrawal from 2015. The substantial

increase in water withdrawn from the lake is due

to the additional 50 MLD production capacity

from the ultrafiltration (UF) system which started

operations in April of 2015.

After raw water is treated at the plants, it is

then ready to be distributed to customers.

From our raw water, we managed to treat a

total of 864,564.72 million liters, representing

a 5.22 percent increase from last year’s

water production. Both LMTP 1 and LMTP

2 registered a 5.05 percent increase while

PWTP showed an 8.81 percent increase,

particularly due to improvements in PWTP.

A few years ago, PWTP was under producing

due to the poor and inconsistent quality

of water from Laguna de Bay, with its high

ammonia content, high total dissolved

solids (TDS), and algal bloom resulting in an

unpleasant taste and odor. Further, PWTP’s

original process design was not enough to

treat the varying quality of the lake’s water.

We therefore had to improve the plant’s

design to enable PWTP to produce water

according to demands in the south.

In July 2013, Maynilad tapped V.A. Tech

WABAG (Phil.) Inc. to build and design

Biological Aerated Filters (BAF) for ammonia

mitigation. In November of the same year,

the same firm was tasked to build and design

the Dissolved Air Flotation (DAF) upgrade,

and to install a 50 MLD UF membrane

system. These projects, set for completion by

phase, seek to increase PWTP’s capacity from

100 MLD to 150 MLD.

Some improvements were already in place

by April 2015, enabling PWTP to increase

its production. The stabilization period is

still ongoing and process period for the two

projects are set to start soon.

2014 2015 2016

PWTP

LMTP2

LMTP1 498,331.20

285,429.10

25,187.61

515,005.20

290,816.10

40,715.21

539,922.40

306,452.40

61,122.00

PWTP

LMTP2

LMTP1

23,335.49

284,511.54

470,963.87

38,351.41

290,145.87

497,168.86

41,731.06

305,472.54

517,361.12Production in million liters

Withdrawal in million liters

45

Losses and Recovery

Inevitably, some water loss occurs from

raw water withdrawal to water treatment.

Recovery of this water is important to

decrease the net water loss in our system.

The ideal water recovery is 100 percent of

water lost but an acceptable figure internally

is 50-60 percent of water lost at LMTP 1 and

at least 95 percent at LMTP 2.

Losses are primarily incurred at the LMTP 1

and 2 filter beds through cyclic backwashing

or the inability of these plants to fully recover

backwash water from the lagoons and

recovery tanks, which have accumulated

significant amounts of sludge. Losses at

LMTP 1 and 2 are also a result of evaporation

and small leaks in the numerous gates

that all go to the lagoons. Losses at PWTP

1, meanwhile, are incurred through back

washing and the use of reverse osmosis.

Backwash water at LMTP 1 is conveyed and

stored in four lagoons, while backwash water

at LMTP 2 is conveyed to the recovery tanks

and immediately recovered for another cycle

of treatment.

The lagoons were dredged of sludge in 2015

to 2016, resulting in the storage capacity

being restored to nearly its original level.

Only limited scouring during the recovery

period was noted, which cleared turbidity in

recovered water.

In 2016, PWTP 1 losses were incurred

through backwashing of the BAF,

ultrafiltration-microfiltration-reverse osmosis

membranes and longer use of reverse

osmosis. Recovered wash water is mixed

along with newly withdrawn water from the

lake and pumped together into the plant for

treatment. Although water recovery is done

in PWTP 1, separate recordings of both raw

lake water withdrawal and wash water are

currently not available.

Water Loss

Water loss from both LMTP 1 and 2 increased

by 4.60 percent from 2015 levels. PWTP’s

water loss, meanwhile, increased by 720.33

percent, resulting in a total water loss surge

of 72.62 percent, while losses from both

LMTP 1 and 2 increased by 4.60 percent from

2015.

We attribute the marked increase in water

loss from PWTP to the extended operation

of the six reverse osmosis trains brought

about by the high TDS in the lake water. The

concentrate produced is 1 MLD per reverse

osmosis, which is then conveyed back into

the lake. Brine outfall is about 2 kilometers

from the shoreline, monitored monthly by the

Laguna Lake Development Authority (LLDA)

and is reported in the self-monitoring report

(SMR).

During the period, BAF and the different

membranes also needed to be backwashed

more frequently than normal to maintain the

quality of water produced.

In order to decrease water loss in PWTP,

Maynilad has devised some strategies, such

as continuously improving the upstream

treatment process, so that the treated water

being fed into the BAF and the different

membranes will not require frequent

backwashing.

Water Loss Water Recovered

30,137.01 6,514.29

24,870.37 8,140.20

42,932.08 9,967.50

2014

2015

2016

Water Loss and Recoveredin million liters

47 46

Through our continued efforts to increase

water recovery, we managed to increase

this metric by 22.45 percent in both LMTP

1 and 2 relative to 2015 levels. For LMTP 1,

the target for water recovery is at least 60

percent of plant losses or as needed. LMTP

1, however, did not meet this target in 2016

due to the mandatory periodic cleaning of

the 12 sedimentation basins. During this

activity, the sludge generated in the process

303-3

that were stored at the basin’s bottom were

being dumped into the lagoons, which made

recovery not advisable.

For LMTP 2, the target for water recovery is

at least 95 percent of the backwash water.

LMTP 2 succeeded in meeting this target in

2016 because its process design specifically

required the consistent recovery of at least 95

percent of the backwash water.

Water Recovery

Deepwells

We have a total of 14 deep well pump

stations, five of which are operational while

nine are on standby. These pump stations

produced 2.44 million liters of water per day

in 2016.

Reservoirs

We have a total of 30 reservoirs, 28 of which

are operational. These reservoirs discharged

a total of 181,230 million liters of water in

2016.

Pump Stations

We have a total of 30 pump stations that

collectively produced an average 1,668

million liters of water per day in 2016.

Operational

Standby

Liters of water per day in million liters

5

9

2.44

Total

Liters of water discharged in million liters

30

181,230

Operational 28

Total number of pump stations

Liters of water per day in million liters

30

1,668

49 48

We have 1,104 pressure regulating valves,

890 of which are automated. Despite not

being able to surpass the 85 percent target,

we still managed to reach an impressive

figure of 75.79 percent, providing 98.23

percent availability.

These pressure regulating valves increase

our efficiency by providing timely data

availability for analysis; removing the time

consumed during manual logger installation,

dismounting, and data downloading; and

providing a low-pressure alarm notice, which

improves resolution time of the valve failure.

Moving forward, we will aim for more

advanced pressure management, increased

reserved capacity, increased plant efficiency,

reliability redundancy, a more optimized

network through hydraulic models, and

making a central control center.

Operational Efficiency

Chemical Use in Water Treatment

301-1

Various chemicals are used in treating raw water

to ensure that the water we distribute is safe for

consumption. Our efforts include safeguarding

against algal and bacterial growth, removing

metals and ammonia, and lessening turbidity

and unpleasant taste and odor, among others.

Our use of chemicals is dictated by the amount

of water produced and by the quality of raw

water being treated.

Aluminum sulfate and polyaluminum chloride

are the two primary coagulants used in LMTP 1

and 2. These are used alternately depending

on raw water turbidity.

Aluminum chlorohydrate is used in PWTP1

primarily as a coagulant to remove or neutralize

suspended and other charged particles to a

low, manageable level before the water enters

pressure regulating

valves installed1,104

the BAF and membrane filtration system. Our

use of aluminum chlorohydrate increased in

2016 due to periods of increase in raw water

turbidity and the continuing stabilization

period process requiring a higher dose of this

chemical. Use of liquid chlorine also increased

because the chlorine dosing system with

increased capacity had started operating for

PWTP. On the other hand, there was a decrease

in the use of sodium hypochlorite due to

the increased use of liquid chlorine and the

operation of the BAF to mitigate ammonia.

Because of these measures, chemical use

and chemical use intensity increased by 6.84

percent and 1.54 percent, respectively, from

2015 levels.

2014 2015 2016

1,483.96 4,368.68 1,547.19

315.99 955.40 1,303.38

2,105.93 1,871.14 2,707.08

1,898.21 1,854.36 1,965.20

5,655.33 6,341.86 8,979.82

854.19 1,454.18 1,496.03

0.0158 0.0205 0.0208

Sodium Hypochlorite

Aluminum Chlorhydrate

Polyaluminum Chloride

Liquid Chloride

Aluminum Sulfate

Others

Intensity in tonne chemicals used/m3 water produced

Total12,313.62 16,845.62 17,988.70

Chemical Usein tonnes *

* Chemical use reported in the 2015 Sustainability Report follows this unit.

102-48

51 50

MITIGATING THE EFFECTSOF CLIMATE CHANGE, LA NIÑA, AND EL NIÑO

102-11, 102-15

Significant changes observed in climate

patterns today have made managing our

water resources more challenging. The

extent of change in rainfall intensity and

the occurrence of droughts have led to

serious problems within the Ipo and Angat

watersheds. These are compounded by

adverse human activity in the area, such

as charcoal-making and illegal logging.

All these underscore the need to mitigate

climate-change risks and ensure that our

water sources adapt to volatile weather

conditions.

The effects of climate change are further

exacerbated by La Niña, which produces

episodes of heavy rainfall, causing flooding

and soil erosion. Another recurring weather

phenomenon, El Niño, may result in

drought or very minimal rainfall, resulting

in lower water supply. Studies have

shown that changes in climate affects the

variability and intensity of the El Niño and

La Niña phenomena.

53 52

During the wet season and La Niña,

Maynilad faces a host of challenges

including rainfall intensity, variability, and

timing. High rainfall intensity affects the

turbidity of raw water, making it more

difficult to treat. The variability of climate

patterns affects water source management

planning. Accurately forecasting weather

events for more than six months ahead

of time is very difficult, thereby affecting

decision-making for reservoir operations.

Also, timing when and how long a weather

event will occur defines the duration of the

event’s impact on reservoir and treatment

plant operations.

The impact of these factors on the Ipo

Dam is primarily raw water turbidity. Longer

and more intense rainfall, together with a

degrading watershed condition, can cause

flooding, carrying soil and sediments from

the watershed down to its tributary rivers.

This, in turn, may further carry bed loads to

the reservoir, reducing its capacity. Floating

debris such as tree branches and logs

also affect reservoir operations as these

may damage facilities or clog raw water

conveyance.

Ipo Dam also has a very close range of

operating level required to meet the flow

requirement of the treatment plants located

around 22 km downstream; hence, spilling

becomes inevitable during floods.

Very turbid raw water is beyond the

treatment capacity of our plants at present.

As a result, we need to plot varying levels

of production and increase chemical use

to enable the plants to comply with the

standards of Philippine National Standards

for Drinking Water (PNSDW ).

Scouring of over-accumulated sludge at the

bottom of LMTP 1 basins results in poor in-

house water quality, while removing larger

sludge at LMTP 2 is beyond the capacity of

the existing conveyance system. There is

also a risk of land and water contamination

with plant discharge.

To mitigate these risks, prudent dam

operations and controlled spilling are set

at critical levels. Our Common Purpose

Facilities (CPF) closely monitor the

rainfall, release from Angat Dam, and Ipo

water level and quality. We also closely

coordinate with various stakeholders such

as the NWRB, MWSS, PAGASA, Maynilad,

Wet Season and La Niña

Manila Water, Bulacan Provincial Risk

Reduction Management Council (PDRRMC),

Provincial Government of Bulacan,

National Power Corporation (NPC), Angat

Hydropower Corporation (AHC), National

Irrigation Administration (NIA), and local

government units (LGUs). During this

period, the CPF implements its standard

operating procedures for the rainy season,

which usually brings in floods.

The following upgrades are also being put

in place in our facilities:

We awarded the rehabilitation project

of LMTP 1 to a Filipino-Japanese

consortium in December 2016. This is

expected to provide the following process

improvements: 1) installation of lamella

plates, which will remove the sludge from

the bottom of sedimentation basins; 2)

use of hydraulic mixing in the coagulation

process; 3) automation of filter backwashing

with use of scour air; and 4) construction

of a sludge management facility to avoid

accumulation and storage on site.

Rehabilitation work on LMTP 2 is expected

to be awarded by June 2017 to treat water

with high turbidity (>1,000 NTUs) and

improve existing sludge conveyance. This

project will provide process improvements

that include installation of lamella plates,

modification of clarifier basins, and

replacement of electrical system; improve

existing conveyance system that can

accommodate increased sludge volume

during high turbidity episodes; and create

an innovation laboratory.

55 54

Dry Season and El Niño

During the dry season and El Niño,

variability and timing remain as our

top challenges as variability affects the

preparedness of reservoirs and treatment

plants. Timing, on the other hand, defines

the extent of the dry season’s impact on

reservoir and treatment plant operations.

These also affect the availability and quality

of raw water.

Since Angat Dam supplies nearly around

95 percent of Metro Manila’s potable

water supply, raw water availability must

be prioritized especially during abrupt El

Niño occurrences. During dry seasons, the

water level at Angat may be lower than

the critical low water level. The greatest

risk during this period is scarcity of supply

and poor raw water quality, particularly

episodes of raw water containing a high

concentration of manganese. Dry periods

also lead to taste and odor problems due

to algal blooms in Laguna de Bay, as well as

high concentrations of dissolved solids and

ammonia.

Poor raw water quality leads to high

chemical costs for treatment and reduced

water production. To mitigate these

risks, prudent dam operations by pre-

determining allocations for all stakeholders

of Angat Dam is done by the NWRB. We

also control the Ipo Dam gates to ensure

LMTP requirements are met while storing

extra water at La Mesa Dam. We then

implement process improvement projects,

such as the Putatan Development Plan

Phase 2.

During the dry season, the common

purpose facilities (CPF) closely coordinates

with the Angat Technical Working Group

(TWG), composed of members from NWRB,

NIA, NPC, AHC, MWSS, and PAGASA.

During coordination meetings, the TWG

plans the raw water allocation to manage

the Angat water level. This is also the

avenue for the CPF team to raise concerns

regarding the needed raw water allocations

for both concessionaires.

The permanent solution to minimize the

impacts of climate change on existing water

sources is to improve watershed conditions

and maintain it thereafter. Potential new

water sources are determined through

feasibility studies, subject to coordination

and approval by MWSS.

Preserving our Watersheds

Watersheds are geographic areas through

which water flows across the land and drains

into a common body of water, such as rivers,

lakes, and oceans.

The Ipo Watershed and its forests—part

of our watershed system that supplies

around 97 percent of Metro Manila’s water

requirements—span an area of around 6,000

hectares and are some of our most important

natural assets.

Beyond the delivery of water, Maynilad

actively works to ensure that our

water sources are well managed and

environmentally protected and conserved

starting from the very source. As such, we

follow strict land-use and water management

304-1, 304-2, 304-3

practices to improve the quality of the

water and other natural resources within our

watersheds.

Recognizing that trees are indispensable

in the sustainability of watersheds, and

therefore our water supply, Maynilad

established the Plant for Life program, which

taps volunteers and partner agencies to

reforest the Ipo Watershed as well as plant

mangrove propagules in Manila Bay. So far,

the program has planted 70,700 indigenous

seedlings at the Ipo Watershed with the help

of 1,187 participants. Some of these native

species include narra (Pterocarpus indicus),

kupang (Parkia timoriana), and antipolo

(Artocarpus blancoi).

El Niño advisory no. 6, issued on August 5,

2015, stated that moderate El Niño conditions

persisted across the equatorial Pacific Ocean.

Leading climate models also suggested that it

may intensify from moderate to strong El Niño

in the last quarter of 2015, lasting until early

2016. This was followed by El Niño advisory

no. 7, issued on September 4, 2015, which

advised that a mature and strong El Niño was

already present in the tropical Pacific Ocean,

likely to strengthen further before the end of

2015 and may last until the first half of 2016.

Given these updates, Maynilad embarked

on different water conservation schemes and

efficient dam operations that had Angat Dam

at 213.71 meters at 12 midnight of December

31, 2015.

We also assembled an El Niño task force to

carry out mitigating actions in case of strong

El Niño in order to help the plant continue

operating within the required service levels.

El Niño in 2016

57 56

As Maynilad continues to grow its profits, we

also expand the social and environmental

motives that are inherent in our business

model. Given the advances we have already

made, we are now in a better position to

support the government’s developmental

targets and help achieve the UN SDG on

water. In this regard, we will work harder

to ensure the availability and sustainable

management of water for the communities

that we serve.

OUR PURPOSE:ENHANCING ACCESS, RELIABILITY, AND SERVICE

Our obligation to improve access to

water and enhance sanitation and health

services will always be central to our growth

strategies. We therefore continue to

refurbish and expand our infrastructure in an

environmentally sound, socially responsive,

and economically supportive manner,

particularly in communities that have yet to

access clean and potable water services.

Today, our sustained investments in water

infrastructure, service improvement, and

support for marginalized communities all

signify our corporate mantra of putting

customers first over billed volume as our top

corporate goal.

59 58

C O N C E S S I O N B O U N D A R YL G U B O U N D A R Y

S E R V I C E C O V E R A G E :

94.3%P O P U L AT I O N S E R V E D :

9.33 M*

As a water utility and a public trust,

product quality, safety, and affordability

are inevitably cornerstones of the Maynilad

brand. This led us to develop NextGen as

our new flagship program, which ultimately

puts our service to our customers at the

very front and center of our business

agenda.

W AT E R D E L I V E R Y

True to our mandate of delivering safe and

affordable water to our customers, this year

we posted a record 112.9 percent service

area coverage using the unconstrained

water-served population and 94.3 percent

using the constrained water-served

population – up from 108.3 percent and

93.6 percent in 2015, respectively. Our

expanded infrastructure and water-lines

enabled us to serve more than 9.33 million

people in the West Zone and adjoining

areas, up from 9.17 million people in 2015.

102-15

The unconstrained water-served population

is computed by multiplying the number of

Maynilad accounts per city or municipality

by the number of persons per account

based on the results of the University of the

Philippines National Engineering Center

2011 Consumer Survey. Constrained water-

served population is computed using the

same formula for unconstrained water-

served population except that the product

is capped by the total population in each

city or municipality.

O U R C U S T O M E R S :F R O N T A N D C E N T E R

* Values in the illustration represent constrained percent service coverage and the served population

in millions per municipality.

61 60

The number of our customers increased

by 4 percent to 1,312,223, surpassing

our target of 1,309,831 for the year. This

indicates an increase in demand for our

services and also a considerable return

on our investments. We further strive to

increase our customer base and target to

1,354,604 customers for 2017.

Total Customer Accounts

Some of our customers receive both water

and sewer services. Their number increased

by 5 percent from 63,383 in 2015 to 66,021

in 2016.

Water Water and Sewer

1,190,062 59,898

1,265,625 63,383

1,312,223 66,021

2014

2015

2016

Billed Volume

Billed volume directly translate to the

amount of water that our customers

receive and is our biggest income stream.

This year, billed volume increased by 4

percent to 1,365.54 MLD from 1,318.59

MLD in 2015. We are pleased to note that

this amount surpassed our 2016 target of

1,354.20 MLD.

Similarly, total billed volume increased by 4

percent, from 481.53 million cubic meters

in 2015 to 498.60 million cubic meters in

2016. We also surpassed our 2016 target of

494.82 million cubic meters.

1,266.86

1,318.59

1,365.54

2014

2015

2016

102-7

Number of accounts Average Billed Volumein million liters per day

63 62

Water pressure is a key issue in our

concession and a challenge we vow to

overcome and fully resolve.

As all of our connections now experience a

pressure of at least 7 psi, we are taking the

next step by targeting to reach at least 16

psi for 100% of our connections next year.

This year, we worked double time to get

closer to this goal, resulting in a 5.10

percentage-point increase of customers

Water Pressure Customer Distribution

who are enjoying a water pressure of at

least 16 psi. This was a result of initiatives

on total or partial pipe replacement,

pump station operation adjustments,

resetting of the pressure regulating valves

(PRVs), improvements on supply plus the

normalization of raw water quality at PWTP.

Our 1,104 PRVs give us timely data

on pressure and low pressure alarm

notifications improve our resolution times

to any problems on pressure as well.

2014 2015 2016

32.80%

67.20%

29.30%

70.70%

24.21%

75.79%

Customers Receiving 24-hr Service

With our NextGen program, we magnify

our focus on uninterrupted water availability

and nonstop customer support. We

acknowledge that we fell short of our 2016

target of reaching 85.13% connections with

nonstop water service. This was due to our

effort to increase our supply by 50 MLD

consequently contributing to a modest

depletion in our network and a reduction of

service levels. To catch up, we are planning

to energize and fully complete our Putatan

2 and North A Annex CAPEX projects by

2017, and we have adjusted our 2017

target to 77.4 percent for a more realistic

target in light of these upgrades.

Furthermore, we have started building a

supplementary pumping station inside

the La Mesa Compound to improve water

pressure. The North A Annex will serve

more than 84,000 households in Quezon

City and Caloocan, of which some 10,000

will be new customers. Other pumping

stations currently under construction are in

Muntinlupa and Cavite. In total, we have

allocated P883 million for the construction

of new pumping stations in 2016, bringing

us to a total of 27 pumping stations

producing an average of 2,126 MLD

throughout the West concession area.

2014 2015

95.55%

67.15%

94.94%

70.66%

7 psi

16 psi

2016

91.97%

75.74%

7 psi

16 psi

7 to < 16 psi

At least 16 psi

Water PressureCustomer Distribution

Customers Receiving 24-hr Service

65 64

There are now more customers who avail of

our online billing, the MyWaterBill program.

Through this, Statements of Account (SAO)

can be viewed through the MyWaterBill

website, allowing greater convenience

to customers. From 210,871 customers

availing of this online service in 2015,

the number has significantly increased

by 70 percent, or 358,899 customers,

in 2016. This is due to the program’s

additional features, such as sending

Online Billing

of payment notifications to customers

via SMS/e-mail and allowing them to

make online payments at any given time

through accredited bank sites linked in

the MyWaterBill website, all of which are

provided free of charge.

For 2017, we aim to cover 75 percent of

our billed customers under this online

service.

2014

2015

80,653

210,871

2016 358,899

E N S U R I N G S A F E W AT E R Q U A L I T Y

Maynilad subscribes to strict standards

and principles required by the Philippine

National Standards for Drinking Water

(PNSDW). To uphold drinking water

specifications, we collected 102,751

samples, which were analyzed for physico-

chemical parameters, heavy metals,

organic compounds, radiological elements,

pesticide residues, and disinfection by-

products. We send samples that do not

meet the standards to the head of the

102-11, 416-2

concerned plant and the Environmental

Management Department of Maynilad for

their prompt action. Data generated by our

laboratory are also reported to the DENR

through Maynilad’s biannual Environmental

Compliance Certificate (ECC) Monitoring

Report and Annual Report being submitted

to the Environmental Management Bureau

of the Department of Environment and

Natural Resources.

Number of accounts availing of online billing

67 66

Our sampling methodology is a population-

based tripartite sampling with local

government units (LGU) and MWSS. For

coliform bacteria, we have 1 sample per

10,000 population monthly. At least 95

percent of the samples taken should be

negative. In case of unsatisfactory results,

we immediately conduct re-samplings and

take additional samples from the left and

right of the original sampling point until

the questionable water has achieved the

satisfactory result.

For physico-chemical properties, we have

one sample per 10,000 people per year

distributed evenly. Further, we have two

samples per 100,000 people per year

for metals and two samples per 500,000

people per year for organic pollutants. We

have monthly meetings with MWSS and

the Department of Health to discuss our

sampling results and ensure the quality

of the process and safety of the product.

In 2016, we had an issue in Muntinlupa

with the presence of trihalomethane, a

product of chlorine reactions with organic

compounds.

To address this, we upgraded the capability

of the Putatan Water Treatment Plant

(PWTP) to remove the precursors of these

compounds from the very start of the

treatment process by using biofiltration

before the water enters the membrane

filters. Additionally, we employed

ultrafiltration to remove smaller particles

that microfiltration could not remove.

As due diligence, we instituted a systematic

increase in the monitoring of areas

influenced by the PWTP. Aside from the

required PNSDW parameters, we included

ammonia and chloramine content in our

monitoring of the distribution system in

2016. These compounds contribute to taste

and odor issues that can manifest in our

customer’s taps. For the water quality at the

intake, we included microscopic biological

examination of the algae in our repertoire

to monitor the occurrence and density of

taste and odor algae species.

Some results of our 2016 data gathering

are found in Annex B.

Special Programs

Aside from our standard billed services,

we also focus on social inclusion through

various special programs. The number

of customers who received discounts on

installation cost decreased by 46 percent,

from 29,271 in 2015 to only 15,788 in

2016. This decrease is due to the success

of our ongoing discounted installation cost

initiative, which already connected a large

number of our target communities to the

Maynilad network, causing the proportional

decrease in the number of program

enrollees for this reporting year.

Lifeline customers are categorized under

those that consume a maximum of 10

cubic meters per month. There was a 7

percent increase in the number of lifeline

customers, from 263,019 customers in 2015

to 280,547 customers in 2016.

The number of low-income households that

enjoy discounts decreased by 5 percent

from 221,621 in 2015 to 210,647 in 2016.

This is due to the change in the category of

these households from Class D to higher-

income class.

There was a 5 percent increase in the

number of households receiving senior

citizen discounts, from 2,157 in 2015

to 2,270 in 2016. A total P336,863 in

discounts were availed by households with

senior citizens, who receive a 5 percent

discount as mandated by law.

69 68

Discounted Installation Cost

Lifeline Customers

< 10 m3

2014

2015 29,271

2016 15,788

41,160

2014

2015

223,437

263,019

2016 280,547

Low-Income Households

Senior Citizen Discounts

2014

2015

211,520

221,621

2016 210,647

Number of Low-Income Households

2014

2015

3,278

2,157

2016 2,270

-%%Brgy.rgy.

Number of accounts with discount

Lifeline customers in number of accounts

Households with Senior Citizen Discounts in number of accounts

71 70

Customer Satisfaction

102-43, 102-44

As embodied in NextGen, we are

strengthening our focus on customer

experience by improving the touch points

between the company and our customers.

From our previous revenue and billed

volume focus, we have now moved to a

more customer-centric mindset.

We are migrating from a Customer

Service Information System to a Workflow

Management System to better monitor new

customer applications and other customer

concerns, enabling us to enhance overall

customer experience.

Customer Satisfaction (CSAT) Score

A key indicator in our relationship with our

customers is the CSAT score. Our CSAT score

improved in 2016 at 3.36 from 2.99 in 2015,

based on surveys conducted among our

customers with service concerns. This means

that we are now “Exceeding Standards,”

from only “Meeting Standards.” All scores

covering all classes of complaints and

requests (C1 to C4) increased – a testament

to our company’s renewed vigor and industry,

particularly in the prompt handling of

customer concerns and complaints.

We send these results to their respective

Business Areas to sustain advances and

address areas for improvements. We are

also constantly enhancing our survey

questionnaire to better capture our

customers’ sentiments.

In addition, we established a Key Accounts

Relations Department, with the objective of

taking care of large accounts’ volume and

collection. The department is also in charge

of providing strategic relationship guidance

to better know our customers, understand

their needs, and ultimately garner their trust

and full support.CSAT score for 20163.36

Complaints and Requests

While there was an increase in service-

related complaints in 2016, we are glad

to note that we have a resolution rate of

98 percent within 10 working days. This

means we were able to promptly address

56,904 out of the total 57,898 complaints.

Our customer satisfaction score in this area

also increased from 2.88 in 2015 to 3.26

in 2016, following better water quality and

availability, increased water pressure, and

more frequent and timely water advisories.

C1: Service-related complaints

There was a 6 percent decrease in billing-

related complaints, from 60,417 in 2015 to

56,735 in 2016. Of this total, 99 percent

were resolved within 10 working days.

The company’s timeliness and improved

accuracy in billing, as well as faster billing

resolution periods, helped increase our

customer satisfaction score in this area from

2.80 in 2015 to 3.07 in 2016.

C2: Billing-related complaints

20,327

35,922

2016 57,898

2014

2015

72,629

60,417

2016 56,735

2014

2015

73 72

We received 46,628 application requests

in 2016, which is 7 percent lower than in

2015. All these applications, or around 99

percent, were resolved within five working

days.

Our faster processing of applications and

better basic orientation platforms have

helped increase our customer satisfaction

score in this aspect from 3.12 in 2015 to

3.52 in 2016.

C3: Application requests

There was a 9 percent decrease in

installation requests, from 41,173 in 2015

to 37,476 in 2016. Better timeliness of

installation has resulted in higher customer

satisfaction in this area, from 3.20 in 2015

to 3.60 in 2016.

C4: Installation requests

43,526

49,900

2016 46,628

2014

2015

38,264

41,173

2016 37,476

2014

2015

2016

N O N - R E V E N U E W AT E R

Amid population growth and rapid

industrialization, Maynilad must constantly

face the challenges posed by non-revenue

water (NRW) or water that is lost in any

segment of our entire service line.

We believe that NRW reduction is the

more cost-effective measure to guarantee

sustained water supplies for both existing

customers and upcoming markets. Along

with NRW reduction, common problems like

product and revenue loss, intermittent water

supply, health risks and poor water quality,

environmental impacts of water spills, poor

company image, and customer dissatisfaction

are lessened.

We were able to reduce the annual average

NRW level by 1 percentage-point from 31

percent in 2015 to 30 percent in 2016. The

equivalent volume is 9 million liters per day.

Since we embarked on a large-scale NRW

reduction program in 2007, we have built

the capacity of our personnel in various

aspects of NRW reduction and management.

2014

2015 201634%

650 31%

593

30%

583% NRW

NRW in million liters per day

% NRW and NRW in million liters per day

75 74

Aside from addressing our own NRW

challenges, we have also been sharing our

knowledge and expertise with several local

and international water utilities to improve

their own capabilities in NRW management.

We have helped water utilities from

Bangladesh, India, Indonesia, Nepal, United

Arab Emirates, Senegal, South Africa, and

Vietnam. Locally, we have been instrumental

in building up the capacities of water districts

in Iloilo City and Cagayan de Oro City.

With the start of the Maynilad Next Gen

program, NRW Operations has been

decentralized and reintegrated into our

various Business Areas, paving the way

for improved efficiency in responding to

anomalies in the system and in leakage

management. We also created an NRW

Services section to better cater to local and

international clients.

Maynilad’s NRW program is designed to

address both physical and commercial

components.

To address physical losses, active leakage

control (ALC) is implemented. This aims to

locate all leaks, both surfacing and non-

surfacing, using sophisticated leak-detection

equipment. This is followed by speedy and

lasting leak repair solutions.

To address commercial losses, we constantly

aim to stop illegal connections and replace

faulty meters. The company also implements

selected pipe replacement projects that

rehabilitate segments of the network that

are no longer economical to maintain. This

program addresses both leakage and illegal

connections.

District Metered Area Management

Maynilad’s NRW management strategy uses

the Distric Metered Area (DMA) approach,

which breaks down the network into smaller,

more manageable areas. DMAs are small

isolated areas where the volume of water

entering and leaving the system is measured.

Hydraulic Systems (HSs) are clusters of DMAs,

including the primary lines. Formation of

DMAs and HSs are necessary to quantify

and separate the losses in the primary and

secondary mains. This enables the company

to assess each system and identify the

specific sources of NRW.

We reached full DMA coverage in 2012, and

as of December 2016, we had 138 HSs and

1,589 DMAs. The increase in the number of

DMAs is due to the splitting of large DMAs

and the conversion of multiple inflow DMAs

into a single inflow, plus the establishment

of DMAs in expansion areas. Moreover, we

installed electromagnetic flow meters (EMF)

with automated meter reading capabilities for

more accurate and reliable measurements of

DMA supply.

The performance indicators of each DMA

are continuously monitored, and the focus

of diagnostic activities depends upon their

performance. Thus, Maynilad has adopted

the International Water Association (IWA)

classification of DMAs. Under the IWA,

DMAs are classified as Type A DMAs, which

are world class; Type B DMAs, which are

good performing but have potential for

improvement; Type C DMAs, which are bad

performing; and Type D DMAs, which are the

worst performing DMAs with very high NRW

indicators.

By the end of 2016, Maynilad had 1,589

DMAs, 541 (34 percent) of which were Type

A; 269 (17 percent) were Type B; 293 (18

percent) were Type C; and 486 (31 percent)

were Type D. We promptly worked on

step testing, leak detection, and repair for

Type C and D DMAs. Sustenance activities

were implemented in type A and B DMAs.

Continuous monitoring and evaluation were

done in these DMAs to ensure that their low

NRW are sustained.

District metered

areas1,589

77 76

2015

Active Leakage Control

Physical losses, caused by leaks in the

distribution system, contribute around 70

to 80 percent of our total losses. Maynilad

commits to active leakage control and

persistently looks for non-surfacing leaks.

These programs are implemented by the

Leak Detection Management Department,

made up of highly skilled leak detectives

specializing in the use of different modern

sounding and correlating instrument.

Maynilad uses leak noise detectors and

correlators, as well as tethered leak

detection equipment, which is capable of

audio and visual inspection from inside

the pipes without water interruption. In

addition, we use the Sahara Leak Detection

System for big pipes and JD7 Investigator

for small pipes.

In 2016, 3,700 kilometers of secondary

and tertiary pipes were detected, finding

5,080 underground leaks. In addition,

292 kilometers of primary lines were

investigated, locating 61 leaks.

20162014 2015

58,122

42,444

41,171

53,207

38,110

41,171

52,253

28,872

27,936

This was followed by speedy and quality

leak repairs. Of the 52,253 received leak

reports from both customers and staff,

28,872 were found to be actual leaks, and

27,936 of which were repaired in 2016. The

resolution rate was 98 percent, while the

average leak repair runtime was eight days.

Primary leaks fall under leaks from pipes

that are larger than 300 millimeters in

diameter. In 2016, 101 primary line leaks

were repaired, lower than 2015’s total of

122 because of the lower leak frequency

present in primary lines.

122

122

2016 101

2014

4,000

4,300

4,600

2014

2015

2016

Pipes Checked in kilometers

Leaks reported

Actual leaks

Leaks repaired

Leaks

Primary Leaks Repaired

79 78

Massive Meter Replacement

To maintain the accuracy of billed volume

measurement, Maynilad implements a five-

year replacement cycle for 15-millimeter

velocity meters. Maynilad also introduced

the use of volumetric meters that are

capable of measuring very low flows and

have a 10-year useful life span.

In 2016, we replaced 127,159 velocity

meters, most of which were installed in

2011. We replaced 76,137 of these old

units with volumetric meters, and 51,022

with new velocity meters.

VolumetricVelocity

99,963

59,618

51,022

136,304

78,001

76,1372016

2014

2015

Selective Pipe Replacement

We replace pipes when continuous

diagnostic and maintenance activities

become too costly. Selecting which pipes

to replace is based on the volume of

NRW, maintenance costs, age and type

of materials, and the need to improve

service levels in the area. Selective pipe

replacement is done as the last resort only

after undergoing systematic diagnostic

process.

In 2016, Maynilad was able to replace 196

kilometers of pipe lines. We conducted

major rehabilitation work in Bacoor City,

Paranaque City, the districts of Tondo in

Manila and Fairview in Quezon City, and

Muntinlupa City. We also realigned and

replaced 19 kilometers of pipe lines as a

result of road and drainage construction

projects.

Maynilad pipe replacement contractors

follow strict procedures to ensure the safety

and security of all stakeholders. These

entail the placement of appropriate board-

ups, lights, and signages; the deployment

of additional traffic aides to man the area;

and the temporary restoration of diggings

to make roads passable during the day.

170

235

1962016

2014

2015

Meter Replacement Pipes Replaced in kilometers

81 80

As much as 80 percent of the potable water

consumed by our customers turns into

wastewater. If left untreated this will pollute

our seas and rivers with harmful pathogens

and expose us all to serious sanitation and

health risks.

ENSURINGHIGH LEVELS OF WASTEWATER MANAGEMENT

At Maynilad, we take these concerns

seriously and aim to go over and beyond

standard steps in treating and managing

our overall wastewater outputs. Our

wastewater program seeks to be at par

with global standards and is geared for

sustained growth in all fronts, especially

for the environment and the welfare of our

communities.

83 82

Sewerage Coverage

S E W E R A G E A N D S A N I TAT I O N

For every one percent increase in coverage,

we can serve an estimated 100,000 more

people. We thus seek to enlarge our

investments in water reclamation facilities

and other related infrastructure to further

widen our coverage.

We are glad to report a 9 percent increase

in the number of people reached by our

sewerage services, up from 1,286,799

people in 2015 to 1,401,590 in 2016.

Despite this marked increase, however,

we still fell short of our ambitious 27

percent coverage target for the year, as we

covered only 15 percent. This was caused

by delays in project completion stemming

from lot acquisition and right-of-way issues

beyond our control. We have learned from

1,071,321

1,286,799

1,401,5902016

2014

2015

experience and will proactively address the

root causes of these delays as quickly as

possible.

In addition, we are creating a new Business

Plan that will reflect the status of our

sewage coverage projects and targets

accurately. The progress of ongoing

projects, namely the Pasay, Parañaque,

Muntinlupa, and Valenzuela Sewerage

Systems, are in full swing. Moreover, lot

acquisition for future projects are being

done at an earlier stage to give enough

time to address unforeseen issues that may

arise. The final wastewater coverage target

at the end of the concession remains to be

100 percent while our short-term target for

2017 is a coverage of 19 percent.

Moving forward, the WRF and pump station

sites of our 2018-2022 projects are already

being validated and shall be acquired

ahead of time.Total Population Covered

85 84

Sanitation Coverage

Our sanitation coverage represents

the number of people that have been

offered desludging services, which we are

constantly improving as well as promoting

to more people. For this year, we achieved

59 percent coverage, accounting for a 36

percent increase in the number of people

who availed of our sanitation services,

which has reached 5,499,835. This increase

was mainly due to the operation of the

Alabang-Zapote Septage Treatment

Facility, which increased our capacity and

coverage in the south. As we enter the next

five-year sanitation cycle, we are setting our

target to 81 percent by 2021, beginning

with 10 percent by 2017. This periodic

resetting of sanitation coverage target is in

accordance with the Compliance Period of

the concession agreement.

Sewer Lines

The total length of our sewer lines

remained the same in 2016. Moving

forward, we anticipate an increase in the

length of sewer lines as we add more

operational sewerage systems.

522

527

5272016

2014

2015

C O N C E S S I O N B O U N D A R YL G U B O U N D A R Y

S A N I TAT I O N C O V E R A G E :

59%

P O P U L AT I O N S E R V E D :

5.50 M*

* Values in the illustration represent constrained percent service coverage and the served population

in millions per municipality.

Length of Sewer Lines in kilometers

87 86

W AT E R R E C L A M AT I O N F A C I L I T I E S

Our sewerage and sanitation services

include the collection, transport, treatment,

and discharge of wastewater. In following

these steps, we practice proper water

resource management that is rooted in

environmental stewardship and health issue

prevention.

We have a total of 17 WRFs, two sewage

and septage treatment plants and one

septage treatment plant.

Our WRFs have a total capacity of 541,917

MLD.

We were able to increase the total volume

of wastewater treated and discharged by

2 percent from 57,120,333 cubic meters in

the previous year to 57,981,304 in 2016.

This was made possible by the increase in

our sewerage and sanitation coverages and

the process optimization of our facilities as

well as our increased plant availability.

44,707,406

57,120,333

57,981,3042016

2014

2015

Wastewater Treated and Discharged in cubic meters

89 88

With the addition of our Alabang-Zapote

Septage Treatment Plant, there was a significant

53 percent increase in the number of septic

tanks desludged in 2016, aggregating to

96,594 septic tanks from 63,134 septic tanks in

the previous year.

We desludge the septic tanks of domestic

customers once every five to seven years. The

collected septage is carried by vacuum trucks

to the Veterans WRF in Project 7, Quezon City;

the Dagat-Dagatan Sewage and Septage

Treatment Plant in Caloocan; or the Alabang-

Zapote Septage Treatment Plant in Las Piñas.

D E S L U D G I N G

Desludged Septic Tanks

41,873

63,134

96,5942016

2014

2015

In these facilities, the collected septage is

dewatered, processed into biosolids, and

further treated and safely disposed by our

contractors at their respective composting

facilities.

F.G. Agro, our hauling and treatment partner,

collects biosolids and further processes them

by drying them for 20 to 30 days. This process

brings down the moisture content of the

sludge to around 80 to 60 percent. These are

then transferred to a composting area, where

carbon and microorganisms are added. Once

finished, the treated biosolids are applied into

agricultural lands in Central Luzon to enrich soils

with nitrogen for growing sugar cane.

Number of Desludged Septic Tanks

91 90

Customers who Availed of Desludging Services

There was a 58 percent increase in the

number of customers who availed of

Maynilad’s desludging services, from

66,817 in 2015 to 105,374 in 2016. We

attribute this increase to our intensive

advertising campaigns, resulting in

heightened awareness among the public

of the crucial need for proper sanitation

services.

52,878

66,817

105,374

2014

2015

2016

W A S T E W AT E R M A N A G E M E N T306-1

Pollution Load Abatement

The effective and safe collection and

processing of sewage is important both to

our community’s health and the sustained

success of our concession. We only

discharge treated wastewater into water

bodies once we are certain that it has been

treated properly using the latest treatment

technologies and following all government

discharge limits and regulations. However,

the amount of pollutants removed varies

year on year, as it is dependent on the

pollution concentration of the wastewater

collected by the combined sewer system.

This resulted in a qualitatively lower

amount of pollution removed for this year

compared to 2015.

1,829,003

4,820,669

2015 2016

1,794,646

72,322

1,731,943

3,171,521

1,600,121

42,178

BOD

COD

TSS

Oil and Grease

Pollution Load Abatement in kilograms

Number of accounts availing of Desludging Services

WHAT ENABLES US TO CREATE VALUE

95 94

As one of the biggest water utility companies

in the country, environmental responsibility is

one of Maynilad’s priorities in executing our

long-term sustainability strategy.

The company’s commitment to help end

environmental degradation and mitigate

the effects of climate change is now being

embedded into our day-to-day operations.

This is evident in our heightened efforts

MINIMIZING OUR ECOLOGICAL FOOTPRINT

toward resource optimization; proper use

of materials; proper waste management,

treatment, and disposal; and proper energy

management and subsequent reductions in

greenhouse gas emissions.

We also subscribe to various Integrated

Management System (IMS) certifications

to standardize our technical processes.

These include the ISO 14001:2004 for our

environmental management systems and the

ISO 50001:2011 for our energy management

systems.

As a testament to Maynilad’s strong sense

of environmental stewardship, the company

now subscribes to a total of 209 ISO

certificates from only 150 in 2015. Our full list

of ISO certificates can be found in Annex L.

97 96

We use various types of materials for our

operations and projects. These materials

range from water meters to pipes to

various fittings. It is imperative that we have

proper inventory management to provide

continuous and uninterrupted service.

To ensure the availability of materials

when needed while optimizing costs, we

implement regular customer engagement

with end-users, materials training,

continuous maintenance of our online

Stock Materials Catalogue, stock keeping

unit rationalizations, and benchmarking our

supply chain practices.

In 2016, we achieved a service level target

of 99.67 percent, higher than our targeted

98 percent. Our 2016 Physical Inventory

yielded a very minimal net variance of

P13,776.74 for Central Depot with zero

variance for all satellite depots. This year-

end inventory result is a big improvement

over various years’ and from last year’s net

inventory variance of P98,718.96.

M AT E R I A L S U S E D301-1

Valves, hydrants, accessories

Water meters and spare parts

2014

2015

2016

7,646

7,309

691,297

448,498

472,806

1,157,8002014

2015

2016

1,178,971

1,288,725

Materials Used in pieces

7,924

S O L I D W A S T E306-2

One of the targets of SDG 12 is to

substantially reduce waste generation

through prevention, reduction, recycling,

and reuse. We seek to contribute to this

Global Goal by upholding our subscription

to ISO 14001:2004 or the Environmental

Management Systems, and aiming to

reduce the wastes that we create, while

soundly managing waste disposal and

treatment.

Our systems involving solid wastes

follow a strict set of guidelines to ensure

that they are properly segregated. Our

biodegradables and residuals are collected

daily and are disposed in accordance with

an established waste disposal scheme.

Our recyclables, varying on the amount

accumulated, are collected at least once a

month, and are either sold to junk shops

or recyclers, or donated to charitable

institutions.

Our total solid waste amounted to

46,660.15 kg for this year. This accounts

for 48 reporting facilities out of the total

115 facilities, including business areas,

water treatment plants, materials depots,

and WRFs. This is an improvement from

the 21 facilities that reported in 2015, and

we continuously aim to increase this in the

succeeding years.

Pipes and fittings

10,202.0214,544.8921,913.24

Biodegradable RecyclablesResiduals

Solid Wastein kilograms

99 98

H A Z A R D O U S W A S T E306-4

1,300.30

134.70

306.00Generated

In Storage

Disposed

Contained container and

paint cans

1,033.00

789.10

1,172.00

Ink cartridges

942.00

227.75

174.70

Oil contaminated rags and materials

17,478.00

39.00

6,818.00Generated

In Storage

Disposed

Used oil

3,352.00

0.00

2,840.00

Used batteries

1,305.40

906.80

859.70

Used bulbs and fluorescent lamps Hazardous wastes pose significant threats

to human health and the environment. We

thus make sure that we fully comply with

Republic Act 6969 or the Toxic Substances

and Hazardous and Nuclear Wastes

Control Act of 1990. We properly store our

hazardous wastes and engage government-

accredited suppliers for their proper

transport and treatment. From storage to

disposal, we are well aware of where our

wastes go.

To improve our performance in this area,

we are now including hazardous waste

categorized as in storage, disposed, and

generated in our reporting metrics. A total

68 percent of hazardous waste in storage

is used oil, while 80.86 percent of our

disposed waste are ink cartridges and used

bulbs and lamps. Meanwhile, 88.99 percent

of our generated hazardous waste are ink

cartridges, used oil, and used batteries.

Hazardous Waste in kilograms

101 100

E N E R G Y C O N S U M P T I O N302-1, 302-3

We established an Energy Management

System through ISO 50001 to effectively

monitor the energy consumption of

our facilities and find ways to decrease

our overall energy consumption and

intensity. Our energy consumption for

this year increased by 2.26 percent

from 112,886,862.53 kWh in 2015 to

115,436,790.25 in 2016. However, our

energy intensity decreased from the

previous year’s 137.39 to 133.52 kWh per

million liters of water produced, proving

that we are moving towards fully utilizing

the energy that we consume.

This decrease in intensity is materialized

through our focused efforts on LMTP 1

and 2, La Mesa Pump Station, Villamor

Pump Station, PAGCOR Station, Pasay

Pump Station, and Tondo Sewage Pumping

Plant – seven of our most energy-intensive

facilities. These include initiatives such as

reduced operating hours of some pumps

from the Tondo Sewage Pumping Plant

and the optimization of generator sets

from the LMTP 1. Through various energy

management activities, we were able to

save P10,923,842.87.

2014

2015

2016

With our current initiatives in fuel efficiency,

we also managed to reduce our fuel

consumption by 29.40 percent or 50,047

gigajoules equivalent of fuel consumed

in 2016. One measure that contributed to

this achievement is the Fleet Management

program, where we transitioned from old,

company-owned vehicles to leased vehicles

that are new and regularly checked for

efficiency.

Energy Consumption in kWh

95,777,777.80

112,886,862.53

115,436,790.25

Consumption

122.98

137.39

133.52

Fuel Consumption in gigajoules

2014

2015

2016

12,667

21,023

7,647

Intensity kWh/ML water produced

Gasoline Diesel

60,195

49,870

42,400

103 102

G H G E M I S S I O N S305-1, 305-2, 305-4

Climate change is one of the biggest issues

facing our world today. As a company with

a certified carbon footprint, we own up to

our contribution to this global problem and

are thus taking strategic and calculated

steps to reduce our greenhouse gas

emissions.

One of the targets of SDG 13 is to

integrate climate change measures into

organizational strategies and planning,

and we are doing so by embedding ISO

14064-1:2006 and ISO 14064-3:2006 or

the Greenhouse Gases Quantification,

Reporting, Validation, and Verification

standards into our operations. This year,

we constructed the Maynilad Safety

Center, which we target for the Building for

Ecologically Responsive Design Excellence

(BERDE) 2-Star Rating – the Maynilad Safety

Center. As of the design stage audit, the

green building passed for 1-Star BERDE

Rating.

We managed to decrease our GHG

emissions by 0.19 percent in 2016. Our

total of 69,973.93 tonnes of CO2e consists

of 4,249.20 tonnes from our Scope 1

emissions and 65,724.73 tonnes from our

Scope 2 emissions. Our Scope 1, or Direct

GHG, consists of stationary combustions

from our generator sets and fleet vehicles.

Our Scope 2, or Indirect GHG on the other

hand, comes from the electricity that we

purchased. The emission factors used are

from 2016 figures of the Department of

Energy.

6,496.79

4,249.202016

2015 63,342.30

65,724.73

Scope 1 Scope 2

GHG Emissions tonnes CO2 equivalence

0.085

0.081

Intensity tonnes CO2e/ML water

produced

5,872.942014 54,156.26 0.074

B I O D I V E R S I T Y

Mangrove forests are important sanctuaries

for fish and other marine animals. They also

provide protection from storm surges and

tidal waves, especially in vulnerable coastal

communities.

For this reporting year, we planted 25,000

mangroves with the help of 348 volunteers.

We seek to rehabilitate mangrove areas

in Cavite City, Kawit, Noveleta, and

Rosario in Cavite Province to help protect

its coastlines and manage our carbon

footprint simultaneously. This year, together

with experts from the Ateneo de Manila

University and Philippine Business for the

Environment as well as partners from the

local community and DENR, we measured

21,287.16 tonnes as baseline carbon

stock which will serve as reference for

future carbon sequestration and offset

calculations.

The Angat and Ipo Watersheds are the

source of 97 percent of Metro Manila’s

water resources.

As such, we continuously endeavor to

ensure its protection and conservation.

We contributed P7.5 million to support

the forest guards who are continually

protecting these critical areas. Recognizing

that trees are an integral part of this

ecosystem, Maynilad also established the

Plant for Life program. This program taps

volunteers and partner agencies to reforest

the Ipo Watershed. This year, we were able

to plant 70,700 seedlings with the help of

1,187 participants. To increase the survival

rates of the seedlings, we continue to

work in collaboration with the indigenous

communities around the watershed who

safeguard the seedlings until they mature.

See Annex E for our planting partners.

seedlings planted70, 700

304-1, 304-2, 304-3

2,975.202009 (baseline)

27,238.37 0.035

105 104

CULTIVATING ENGAGED EMPLOYEES

Through the years, we have seen how a

dynamic and highly engaged work force

can increase not just productivity but also

innovation and the company’s triple-bottom

line performance. Because of this, our

employee engagement has long been a top

concern.

Our employee engagement and retention

scores improve every time we take measures

to empower our people. As such, we require

management to enable employees to meet

tangible goals by giving them a challenging

yet fair amount of responsibility, coupled with

the appropriate tools to succeed.

We also aim to provide our people with

sufficient space for autonomy, opportunities

for mastering their craft, and an enhanced

sense of purpose by articulating, in the best

way possible, our development goals.

We seek to employ the best talents in the

country regardless of their ethnicity, religion,

or gender. We consider eligible applicants

equally and fairly throughout the hiring

process. We look beyond physical disabilities

and focus more on a candidate’s potential

to help advance our sustainability cause and

business goals.

Back in 2015, we launched a program

called Higit sa Tubig: Isip, Puso, at Gawa

(Beyond Water: Mind, Heart, and Action)

to hasten the transformation of Maynilad’s

workforce culture into one that puts customer

satisfaction first before all other key result

areas.

Since then, Higit sa Tubig has engaged

over 600 Maynilad employees including key

officers and board of directors of two union

groups, who now embody our enhanced

focus on customers in both mind and spirit.

107 106

E M P L O Y E E S TAT I S T I C S102-7, 102-8, 405-1

As we continue to expand our business and

services, we saw a 4 percent increase in our

workforce in 2016, reaching a total of 2,229

employees. Of the 156 new employees,

112 are males and 44 are females. For this

year, we have a low 2.33 percent turnover

rate of 52 employees consisting of 31

males and 21 females.

We seek to attract the best candidates

and strive to select the best person for

each job. We ensure that the recruitment

and selection of potential employees are

conducted in a professional and lawful

manner.

All applicants are treated fairly, with respect

and courtesy, to ensure that the applicant’s

experience remains positive regardless of

the outcome.

We consider recruitment and selection a

public relations exercise, wherein factors

that may affect our reputation must always

be considered throughout the process. As

such, part of our hiring policy is ensuring

that recruitment materials such as audio

visual presentations, as well as job fair

booths, corporate portfolios and other

marketing materials, are in compliance with

the company’s brand policy.

New Hires401-1

Employee Turnover

0

0

2

2014

2015

2016

New Hires

64

33

36

Over 50 years old 30-50 yrs old Below 30 years old

195

125

118

1

0

2

2014

2015

2016

Employee Turnover

26

17

29

Over 50 years old 30-50 yrs old Below 30 years old

60

42

21

109 108

Composition by Employee Contract

Our direct employees are composed

of permanent and project-based hires.

Out of our current 2,229 permanent

employees, 1,679 are male and 550 are

female. With the increase in employees,

job positions also increased in many levels.

Executive-level employees increased by 2

percent, managers increased by 6 percent,

supervisors increased by 9 percent, and

rank-and-file employees increased by 2

percent.

We also hire project-based employees.

In 2016, there was a 4 percent increase

in their number, which has now reached a

total of 335 project-based employees.

Meanwhile, the number of our indirect

employees – consisting of security,

maintenance and housekeeping personnel,

drivers, and other administrative staff hired

through a third-party agency – increased by

8 percent in 2016.

Breakdown of Permanent Employees

Indirect Employees

54

57

58

2014

2015

2016

258

288

304

Executive Manager Supervisor

373

368

401

Rank-and-file

1,386

1,434

1,466

16

19

19

2014

2015

2016

116

116

132

Maintenance Personnel

Drivers Housekeeping Personnel

149

158

178

Others

12

13

13

2014

2015

2016

2,071

2,147

2,229

Permanent Project-based

315

323

335

Composition by Employee Type

Security

307

311

322

111 110

Collective Bargaining Agreement

The percentage of employees covered by

collective bargaining agreement is 75.33

percent in 2016.

employees covered by

collective bargaining

agreement75.33%

T R A I N I N G A N D D E V E L O P M E N T404-1

We focus on four areas for competency

development. First, we prioritize programs

based on how they will favorably impact our

business efficiency, service obligation, and

business development targets. Second, we

develop internal trainers or coaches who

are responsible for providing development

programs for their respective teams. Third, we

have put in place a senior-level management

program to ensure leadership succession.

Finally, we report return investments and use

these as leverage in justifying an appropriate

budget to sustain the company’s training

needs.

For this reporting year, we trained a total of

1,269 employees and 222 service providers,

reaching a cumulative total of 69,639 training

hours in 2016. Our average training hours

decreased due to our increasing number

of employees. We aimed to reach 3,753

participants in trainings conducted in 2016 and

managed to attract 6,241 participants, 166%

higher than our target.

Average Training Hours*

77.9468.0965.67

2014

2015

2016

55.4048.4450.59

Executive Manager

Supervisor

32.30

34.13

40.65

Rank-and-file

11.67

15.18

22.5

2014

2015

2016

102-41

102-48

* The average training hours in 2014 and 2015 were corrected from the previous Sustainability Reports due to a

change in calculation.

113 112

Training Evaluation

With our increased focus on employee

development as one of the pillars of Next

Gen, the trainings we conducted in 2016

were rated relatively high, all of them

scoring higher than 3, just slightly lower

than the perfect score of 4.

We conduct training based on employee

specialization, enabling us to train some

of our employees through internal training

platforms. This is not only economical,

but also better in terms of employee

development.

With this initiative, we managed to save

P17.1 million, a 34 percent increase from

last year’s savings of P11.36 million.

Internal Trainers

TYPE SCORE

Core

Leadership

IMS

Professional/Technical

3.64

3.41

3.42

3.47

2014

2015

2016

5.52

11.36

17.1

Savings from using Internal Trainings in million php

H E A LT H M A N A G E M E N T403-2

Hospitalization

The number of Maynilad employees being

hospitalized as a result of various ailments

continued to decrease from 2014 to 2016.

Only 128 employees, or 5.79 percent of

the total workforce, were hospitalized in

2016. This is significantly lower than the

192 employees, or 8.9 percent of the

workforce, hospitalized in 2015. The total

medical hospitalization cost amounted to

P9,274,686.78 in 2016.

Of the total number of hospitalization

cases in 2016, the top causes were

cerebrovascular disease, fracture of the

femur, gastrointestinal hemorrhage,

hypertensive cardiovascular disease,

submucous leiomyoma of uterus, acute

appendicitis, pneumonia, fracture of right

tibia, diabetes-related conditions, among

others.

2014

2015

2016

210

192

128

Number of hospitalizations

Percentage of employees

10.10%

8.90%

5.79%

115 114

Health Management Programs

Weight Loss Challenge

We launched our first company-wide

weight loss challenge program in 2016 to

encourage overweight or obese employees

to lose their excess pounds. The program

aims to help all our employees reduce

their risk of developing lifestyle-associated

diseases and prevent further complications.

On its first year, 478 employees

participated in the program, resulting in a

26.38 percent reduction of overweight staff

members.

Full Implementation of Online Pharmacy

We fully implemented our online pharmacy

program in 2016. This new program aims to

provide easy access to cheaper medicines

reduction of

overweight/obese

employees26.38%

Php worth of savings119,734.60

Enhanced Vaccination Program

After the company successfully negotiated

a significant discount of 54.62 percent on

various vaccines, we observed a much higher

enrollment rate for employees and their

dependents under this preventive medicine

program. As such, our enhanced vaccination

program is expected to significantly reduce

cases of communicable diseases, which may

lead to more serious complications that may

require hospitalization. Medical expense and

absenteeism are likewise expected to be

reduced as a result of this proactive approach

to healthcare.

To improve the productivity of employees

exposed to certain biological agents, we

provide them with free vaccination that will

prevent them from harboring the disease. We

vaccinated 90 percent of employees at risk

of hepatitis A and 84.92 and 90.69 percent

of those at high risk of rabies and tetanus,

respectively.

Because of our enhanced vaccination

program, there were no cases of rabies,

tetanus, or hepatitis A in 2016. There

were only six cases of flu and 65 cases of

pneumonia in the previous year.

Oral Cavity Reduction Program

This program aims to educate employees

on the importance of oral health. Our

goal is to boost employee confidence

through proper oral healthcare, while

simultaneously preventing serious dental-

related conditions among our ranks even

before such ailments arise.

For this year, 71 percent of our employees

availed of oral prophylaxis and 93 percent

sought dental treatments or consultations.

These procedures enabled us to achieve

zero instances of cavities for 25 percent of

our employees.

E - PHARMACY

to our employees and their dependents,

aside from maximizing treatment

interventions for those who already require

maintenance medication for chronic

diseases. We managed to provide savings

of P119,734.60 through discounts on some

medicines and health products, as well as

through promotional initiatives.

117 116

Improved Employee Health

Education and Awareness

Believing that prevention is always better

than finding a cure, we improved our

employee health education and awareness

through company-wide health forums and

road shows, employee health exemplars

bulletins, medical and dental bulletins, and

features in our Ripples magazine.

Annual Physical Examination and

Random Drug Testing

Required by the Department of Labor and

Employment, both tests are in compliance

with our existing policies. In 2016, we

had a 99.45 percent compliance for the

annual physical examination (APE) and

99.12 percent compliance for random drug

testing (RDT).

Five employees confirmed positive, two

of whom resigned; the remaining three

successfully completed rehabilitation and

have since returned to work.

Voluntary Blood Donation

As part of our corporate social

responsibility program, we conducted

six blood-letting activities in three areas,

collecting blood donations from 264 of our

employees.

Through this drive, we were able to assist

the medical needs of 16 employees and

their dependents, aside from making more

blood donations available to the general

public.

Chemical Hazard Surveillance

and Audiometry

These occupational health programs

are provided to our employees who are

exposed to both chemical and physical

hazards. These monitor their level of

exposure so that early appropriate

interventions, if necessary, are already

administered.

All or 100 percent of our employees

exposed to chemicals were found to be

negative for chemicals nearing the toxic

threshold. We also registered a 100 percent

compliance for audiometry with subsequent

referrals for evaluation of an Ear-Nose-

Throat (ENT) specialist.

AUDIOMETRY 2016 FREQUENCY

CNRW

WATER NETWORK

WATER PRODUCTION(Putatan)

WATER PRODUCTION(La Mesa)

Every year

Every year

Every year

Every 2 year

HEAVY METAL ANALYSIS 2016

METALS

Water Production(La Mesa and Putatan)

Central Lab

Aluminum

Lead

LAST DONE

May 2016

Sept 2016

August 2016

August 2016

NO. OF EMPLOYEES

72

50

78

56

ManganeseMercuryArsenic

CadmiumChromium

CadmiumArsenic

ChromiumMercury

FREQUENCY

Every 5 years

Every year

Every 2 years

LAST DONE

May 2015

May 2015

May 2015May 2015May 2015May 2015May 2015

May 2015May 2015May 2015May 2015

NO. OF EMPLOYEES

42

3

2219113

1133

119 118

O R G A N I Z AT I O N A L D E V E L O P M E N T

In 2016, we formalized a succession

planning system which categorically

identifies and classifies potential successors

into three groups: those who are ready

immediately, those who will be ready in 1

to 2 years, and those who will be ready in 3

to 5 years.

The potential successors who have been

identified were then assessed by their

superiors, customers, subordinates, and

peers in terms of perceived leadership and

performance.

The results were then combined with

their performance ratings to arrive at an

aggregate score for each candidate.

A development program that combines

classroom training with cross-functional

assignment and project management

will then be launched to enhance the

leadership and management skills of

our candidates. The number of ready

successors by the end of the development

program will be measured to evaluate the

effectiveness of the system.

Succession PlanningMON TUES WED

Health Support Clubs

This program particularly caters to our

hypertensive and diabetic employees to

maximize treatment interventions.

It also aims to educate and prevent further

complications or hospitalizations.

NO. OF INTERNAL PROMOTION TO KEY ROLES

AVP

Senior Manager

Junior Manager

Assistant Manager

8

28

1

28

121 120

Customer Experience Boot Camp

Integral to our concession agreement with

MWSS are service obligations that we have

to comply with and adhere to consistently.

While we are religiously complying with all

the obligations provided in the agreement,

the Business Operations Group, led by

Christopher Lichauco, believe that the

company can still improve its performance

using stricter internal standards.

Beyond compliance to the agreement,

sound observations and relevant data

indeed showed that we can still enhance

our performance to reach greater

customer satisfaction. Hence, the Business

Area Operations partnered with our

Human Resources department to design

and organize the Maynilad Customer

Experience Boot Camp with the goal

of improving our customer experience

through stronger collaborative efforts

across divisions.

As Next Gen’s emphasis is on customer

service, this is a clear and promising step

forward for Maynilad in achieving our goals.

Boot Camp Highlights

Ten cross-functional groups (composed

of employees from different divisions and

ranks) were formed to address the current

issues we are facing. All groups participated

in a teambuilding activity together with Top

Management Teams (TMT) and facilitator

Yeyette Albert to simulate how the different

functions could collaborate to produce a

more satisfying customer experience.

As an incubation period, the participants

were then given one and a half months

to discuss and work on solutions and

recommendations for their assigned issues.

These were then presented to the TMT for

approval and implementation.

In addition, the Boot Camp organized a

conference that featured companies with

excellent customer service. Donnie Tantoco

of Rustan’s Supermarket, Ana David of

Security Bank, and Irene Isleta of St. Luke’s

Medical Center shared their company best

practices with the attendees.

123 122

We achieved a productivity index

(manpower per thousand connections ratio)

of 1.70, which surpassed our base yearly

target of 2.1.

Even with this high efficiency index, we

still seek to further encourage innovation

among our employees through various

initiatives, such as the annual Innofest

Program. This competition showcases the

most innovative ideas from our employees;

it also serves as our platform to recognize

and reward brilliant, homegrown concepts.

For three years now, this competition has

received some 190 innovation entries from

more than 300 employees.

I N C R E A S I N G W O R K P L A C E E F F I C I E N C Y

E N C O U R A G I N G I N N O V AT I O N

productivity index1.70

In 2016, two grand winners of the Innofest

Program were chosen out of ten finalist

teams. The Let’s Vault in Team won with

their Lego Vault, a lightweight, heavy-

duty chamber made from special steel

that is quicker to install than conventional

concrete chambers, along with the

Wave Team, which conceptualized a

Watertight Air Valve Enclosure, or WAVE, a

maintenance-free enclosure for protecting

air valves. Both ideas were developed to

minimize public inconvenience while still

performing Maynilad’s operations.

The members of the two winning teams

received an all-expense paid trip to

Singapore along with new iPad Air 2. The

eight other team finalists, meanwhile, were

treated to a trip to Cagayan De Oro.

125 124

Maynilad had a total of 322 security

personnel in 2016. We make sure that

they are well-equipped with the proper

skills through various trainings in character

development, drills and formations, and

roles and responsibilities on physical

security system, basic investigation

procedures, and gun safety and firearms

handling.

S E C U R I T Y

security personnel

322

The safety of all our employees will

always be a top concern for Maynilad’s

management. As a testament to this

commitment, we are proud to report a total

of 4,208,092 MHNLTA (Man Hour No Lost

Time Accidents) for this year. This puts us

at a total of 21,846,919 hours by end of

2016, from a 2015 year-end MHNLTA of

17,638,827 hours.

In 2016, we inspected a total of 560

projects, 382 of which had no violations.

We also inspected 86 facilities, conducted

51 emergency preparedness and response

S A F E T Y

cumulative MHNLTA

21,846,919

drills, and performed 106 work environment

measurement (WEM) audits. An accident/

incident comparison between 2015 and

2016 showed that less workplace and

vehicular accidents occurred during this

reporting year.

* For 2015, the MHNLTA is 4,019,264 hours and the total as of year-end is 17,638,827 hours.

102-48, 403-2

127 126

It is in our best interest as a public utility to

empower our stakeholders by enhancing

mechanisms for social inclusion. We

therefore strive to continuously expand

the benefits of our business operations by

including more communities and business

partners into the continuously growing

Maynilad family.

As we make our presence felt on a wider

scale, we also endeavor to enrich the

lives of more people, particularly those

EMBRACING MORE COMMUNITIES

who continue to live with limited clean

water and wastewater services, and those

who have yet to be part of the economic

mainstream.

We have sustained our collaborations in

and out of the company to advocate for

access to water, poverty alleviation, health,

youth empowerment, and environmental

responsibility. Our campaign in these

aspects have been instrumental in ensuring

business sustainability and strengthening

our brand of service that goes beyond

clean, reliable water.

Notably, 2016 was another momentous

year for us, as we successfully enabled

various Maynilad teams to engage different

customer segments; government officials,

including regulators and local government

leaders; marginalized communities,

particularly indigenous people and disaster

survivors; and various industry partners,

sister organizations, and advocacy groups.

203-2, 413-1

129 128

In 2016, we led the inauguration of STM-Riverview, the newest

Samahang Tubig Maynilad community in Quezon City. With our

assistance, an informal settler group composed of 60 families were

able to organize themselves into a cooperative-based organization

so they can effectively manage their own water system installed by

Maynilad.

Samahang Tubig Maynilad (STM)-Riverview

This year, we partnered yet again with social

business, Tubig Pag-asa, to end the dependence of

around 150 families on so-called “water syndicates”

that sell overpriced water at P30 to P35 per drum.

Last year, we carried out this program in Magtalhai

and Dinamita in Bacoor and we extended it

this year to Upper Sucat. We also constructed a

“ginhaWASHarea” or communal toilet-and-bath

facility to give residents easy access to a sanitation

facility while allowing us to properly collect the

community’s septage. Families benefiting from

these two schemes become legitimate Maynilad

customers and are also able to save P300 to P400

a month.

Pag-asa sa Patubig Partnership

W AT E R F O R T H E P O O R E M P O W E R I N G C O M M U N I T I E S

We continue to empower the Dumagat sculptors of Ipo Watershed

by supporting their works of art. After their mentorship under

artist Tata Raul Funilas and the success of the Sungka Series, these

talented Dumagats were tapped to create exquisite wine holders

that became part of Maynilad’s 2016 Christmas giveaways.

Sining Ipo

131 130

Each Habing Buhay (life weave) handcraft is made from water

lilies, woven by skilled members of the Laguna Bay community

surrounding Maynilad’s Putatan Water Treatment Plant.

This livelihood initiative enables Maynilad to turn water lilies from

a work nuisance into a source of wealth and artistry for some of

our partner communities. The lilies are harvested to improve the

quality of water for fishing activities and for treatment into drinking

water by Maynilad.

This also addresses the clogging of the plant’s intake facility due to

the overgrowth of water lilies.

Habing Buhay continues to provide additional income to

low-income families, weaving a stronger partnership among

stakeholders for a healthier and more sustainable Laguna Lake.

This year, the weavers underwent training under the DOST-Forest

Products Research and Development Institute in advanced water

lily crafts involving leathers, dyes, and more intricate patterns.

Habing Buhay

Kapwa, a Filipino word denoting the value of kinship or “being

one for the other,” is a line of hand and homecare products made

by the women of a community in Tondo, Manila, empowered by

Maynilad through the Samahang Tubig Maynilad (STM) program.

Maynilad helps in marketing and product development, while our

training partner, the DOST, teaches the members how to produce

their merchandise, consisting of hand (hand wash, lotion and

sanitizer) and homecare (detergent, all-purpose cleaner, fabric

conditioner, etc.) products. Through Kapwa, we saw the ability of a

livelihood project to empower women who used to rely solely on

the meager income of their husbands. The women of STM Tondo

now have a livelihood project that helps them make ends meet for

their families.

These women have now grown more assertive and closer to

each other, all because of Kapwa and the STM. The STM has also

uplifted the lives of low-income families who previously suffered

from waterborne illnesses and costly water rations.

Kapwa

133 132

We held the first Cooperative Management

Training for our social enterprise groups

(including some community-based water

associations) in 2016. The training series

covered the fundamentals of a cooperative,

including more particular management

skills like policy formulation and auditing.

Cooperative Management Training

D I S A S T E R R E S P O N S E

Ranging from fires to natural calamities, our

disaster response activities aim to directly

respond to challenges brought about

by such unfortunate events. We see the

importance of giving back even to those

who are not part of our concession area to

strengthen both our brand and the spirit of

humanitarianism among our people.

In 2016, we and our Business Areas

responded to at least 12 fire incidents by

providing much-needed water to affected

communities. The amount of water

contributed amounted to around P560,000.

Bacoorenong Mandaragat Games

We celebrated Bacoor City’s 345th

founding anniversary with the 3rd

Mandaragat Games in 2016. Maynilad

and the Mamamayan Para sa Lambat at

Dagat Cooperative conceptualized the

annual games to promote the livelihood of

Bacoor’s poor fisherfolk and engage coastal

communities to help in cleaning up Bacoor

Bay, the southern inlet of Manila Bay. The

2016 Mandaragat Games included de-

motor/de-sagwan boat races, horizontal/

vertical palosebo sa tubig, tagisang-hatak

sa baybayin, and a shellfish cook-off.

We also partnered with the MVP CSR

Council in conducting relief efforts by

providing food packs in El Niño-stricken

areas in Mindanao. Among the areas we

covered are Kidapawan City in North

Cotabato, where we helped 1,029 families;

M’lang in North Cotabato with 100 families;

President Roxas in North Cotabato with 160

families; and Arakan in North Cotabato with

650 families.

Our Mission Ginhawa team, comprised

of Advocacy and WSO personnel, went

to Kalinga-Apayao, Tuguegarao and

Peñablanca, Cagayan to bring water relief

and teach Lawin-hit communities how

to use the 300 water filters donated by

Maynilad.

135 134

C H A M P I O N E D W AT E R , H E A LT H A N D T H E E N V I R O N M E N T

With the support of our Parañaque Business Area and the

Parañaque City Government, Maynilad inaugurated 12 FAITH

(Food Always In The Home) Gardens. FAITH Gardens is a home

food security program that aims to provide a steady source of

fresh vegetables to Pantawid Pamilyang Pilipino Program (4Ps)

beneficiaries, senior citizens, and other marginalized groups in

the city. Under this partnership, we installed 260-gallon overhead

water tanks and drip irrigation systems and provided technical

assistance in setting up each community garden. We also

conducted Ginhawa Gardening Workshops to equip residents with

the right skills to start their own backyard gardens, with or without

a plot of land.

Faith Gardens and Ginhawa Gardening Workshops

Eight barangays were taught proper

hygiene practices, including ways to

properly clean water containers to prevent

dengue infestation in households. We also

distributed our award-winning Anti-Dengue

Mosquito trap—a simple, innovative, and

affordable way to fight dengue.

Anti-Dengue Campaign

The award-winning water education

program Daloy Dunong engaged more

than 14,000 elementary and high school

students on the importance of water, good

hygiene, and environmental responsibility.

Since its inception in 2012, Daloy Dunong

has visited more than 350 schools and

engaged 50 other various groups outside

campuses. In the process, close to 110,000

children have been converted into “Water

Warriors” or young champions for water,

health, and the environment.

Daloy Dunong

137 136

Lingkod Eskwela gave more students access to potable water by

installing drink-wash facilities in the most populous and resource-

deficient public schools in the West Zone. The initiative also

served as a relationship-building tool for the Business Areas. The

project, which installed drink-wash areas in 44 public schools, was

inaugurated at the Polytechnic University of the Philippines in

collaboration with the Business Areas and Business Operations and

Central Services – Revenue Enhancement Management.

Lingkod Eskwela Drink-Wash Areas

In support of the Brigada Eskwela program

of the Department of Education (DepEd), we

sent employee-volunteers to help refurbish

classrooms and upgrade water and sanitation

facilities in 30 public schools throughout our

concession area.

We kicked off our participation in the program

with the installation of a new drink-wash

station and bidets at the Parañaque National

High School. Our employee-volunteers also

replaced busted faucets and flushes to make

these operational in time for the opening of

classes. We also presented our back-to-school

preparations to DepEd’s Oplan Balik Eskwela

Command Conference, an inter-agency group

formed to ensure an orderly school opening.

Brigada Eskwela

Signing of the Earth Day 2016 Covenant

We joined leaders from various government agencies, civil society

groups, and the private sector in signing the Philippine Earth Day

2016 Covenant last April 22, 2016. The covenant established the

Philippines’ support to the Paris Agreement, adopted during the 21st

United Nations Framework Convention on Climate Change (UNFCCC)

Conference of Parties.

Zapote River Festival

We supported the Villar Sipag Foundation’s week-long

commemoration of the Battle of Zapote Bridge in Las Piñas City. As

a long-time partner of the foundation, we supported key events,

including the February 13 kick-off program, an inter-school street

band competition, the 2nd Las Piñas Run, and the inauguration of the

Zapote River Drive.

139 138

GinhaWASH

In addition to the hospitals, health centers, and barangay halls that

GinhaWASH helped last year, bidets and drinking fountains were also

installed in select public schools and government establishments this

year to reinforce good hygiene among school children. Ten drinking

fountains were also installed in transport terminals, including six LRT

stations, for the benefit of commuters. We believe that the program will

help emphasize ideal hygienic practices that the beneficiaries will be

able to practice in their own homes.

DepEd WinS Policy

Along with UNICEF and other local and international NGOs, Maynilad

formed part of the committee that would strengthen DepEd’s Policy

and Guidelines for the Comprehensive Water, Sanitation and Hygiene

in Schools (WinS) Program. This shows how we have become a major

influencer in establishing W.A.S.H. strategies in and out of the West

Zone.

Wastewater Education Module

True to our corporate slogan of delivering service beyond water, we

piloted the implementation of our Wastewater Education Module in high

schools located in areas affected by our Wastewater Expansion Program,

mainly the San Juan River Basin. Covering steps in the urban water cycle,

this module is a light alternative for teaching students to draw practical

solutions on wastewater management from their own experience.

141 140

Manila Bay Sunset Partnership

We joined Land Bank of the Philippines and 21 other institutional

partners in keeping Manila Bay clean to protect its remaining coastal

resources. More than 70 volunteer employees joined in the coastal

cleanup, adopted esteros for cleanup, and made mudballs, which help

improve the water quality in Manila Bay.

Water Warrior Ultimate Frisbee Clinics

Our employee coaches taught ultimate Frisbee to some 200 youth from

poor families in 10 communities. The initiative also served as a vehicle

for us to update barangay officials and customers on ongoing service

concerns in their areas.

Marathons and Sports Sponsorships

To promote a healthy and active lifestyle, we continued to support

sports programs like marathons, golf tournaments, and basketball

leagues through sponsorships, hydration support, and training

programs.

143 142

F O R G I N G I N S T I T U T I O N A L PA R T N E R S H I P S

World Water Day 2016: Water and Jobs

Eighteen exemplary individuals and organizations were

awarded during the 2nd World Water Day (WWD)

Awards, led by Maynilad in partnership with the

NWRB. Maynilad established the awards to recognize

champions who have significantly promoted water

and environment sustainability, as well as to inspire

Filipinos to make a difference through environmental

stewardship and greater access to clean water.

Aside from the awards, we also led several WWD-

related activities, including an inter-agency sungka

tournament, participated in by more than 30

government and private organizations, and the WWD

Run for Water, joined by some 1,500 runners. The run,

which we co-led with the Department of Interior and

Local Government, highlights the need to strengthen

collaboration among agencies and organizations to

fast-track the national water and environmental agenda.

Sungka is a Filipino game of strategy, where players

compete for marbles that go to corresponding holes

while protecting one’s “home” from running out

of marbles or occupants. Sungka evokes resource

management and the need to foster

strategic partnerships among stakeholders

(the WWD partners) in their common

interest to preserve Ipo Watershed. Among

these stakeholders are the indigenous

Dumagats (the sungka blocks used in the

tournament are shaped out of driftwood

by Dumagat sculptors from Ipo Watershed

under the Sining Ipo livelihood program).

The principles of the game echo the

efforts of Maynilad and our indigenous

brothers and sisters to protect Ipo, the

source of drinking water for millions of

people. This underscores the importance

of collaboration in the responsible

management of a finite and crucial resource

such as water, an imperative underscored

every year during World Water Day.

Further, Maynilad led other WWD events

such as mangrove-planting activities in

Kawit and Noveleta, Cavite, as well as a

Kids Foam Bath hygiene awareness drive in

Bacoor, Cavite together with Tubig Pag-asa

and Water and Life Philippines.

Together with the Palayan Water District

and Baler Water District, we were also

tapped by the Local Water Utilities

Administration to conduct teaching

sessions to more than 500 elementary

school children in Baler Central School.

The activity sought to address the need for

water education and sanitation in Typhoon

Lando-struck Aurora province.

145 144

Global Handwashing Day

To stress the importance of good health and

proper hygiene, we joined the observance of the

annual Global Handwashing Day in October 15,

an international advocacy to promote the value of

handwashing with clean water and soap. In celebrating

the event, we visited seven schools and one depressed

community to teach some 2,000 school children the

proper steps in handwashing and the value of water

through fun, engaging water-themed activities.

O U T R E A C H E S

Ipo Elementary School Computer Lab

We joined the inauguration of the MVP Computer Laboratory at Ipo

Elementary School, where more than half of the students are from

Dumagat families living in the Ipo Watershed. Pitching in equipment

and volunteer work to put up the 20-unit IT facility were DepEd,

PLDT-Smart Foundation, Manila North Tollways Corporation – North

Luzon Expressway, and the Technological Institute of the Philippines.

We garnered a total of 16 volunteer hours and provided 10 units and

a printer.

Community Outreach

In our continued efforts to help more

communities, we supported at least

12 other outreach activities in 2016,

organized by different partners,

including the MVP Group Paskong

Kapatid, as well as various medical

and dental missions.

147 146

E N G A G I N G O U R V E N D O R S

Contractors and suppliers are important

stakeholders and partners in our

operations. Contractors provide various

infrastructure and maintenance services,

while suppliers provide office supplies,

equipment and logistical services.

We persistently seek to influence our

vendors toward improved sustainability

practices. We engage them in a quarterly

general assembly for policy updating and

to inform them of upcoming projects. We

also conduct performance evaluations;

failure in these evaluations would mean

suspensions for three to six months.

A contractor’s handbook was also created

to guide vendors in doing business with

Maynilad.

To recognize those who meet our strict

performance standards, we hold the

annual Top Achievement for Partners (TAP)

Awards. Now on its sixth year, the TAP

Awards have continuously sustained the

excellent performance among suppliers,

contractors, and consultants who contribute

in our continued service improvements in

the West Zone.

We also help vitalize the local economy

by choosing local vendors over their

foreign counterparts. Most of our supplies

are procured from 383 local suppliers,

representing 98.71 percent of our total

number of accredited suppliers. All of our

56 contractors accredited in 2016 are also

local, and their engagement with Maynilad

has generated a total of 24,288 jobs in the

same year.

Our Supply Chain

Two main components of our supply

chain have substantial impacts on the

environment and society. These are pipe-

laying and rehabilitation works to supply

water and enhance existing services to

our customers, and our sanitation services

which removes sewage and septage from

our customers’ homes.

In order to start laying or rehabilitating

pipes, we have to obtain necessary permits

from the government and inform the

community at large as these would have

environmental impacts such as dust and

noise pollution, as well as social impacts

such as traffic, safety risks, and possible

interruptions to the operations of adjacent

businesses. To limit these impacts, we

put safeguards in place. Our suppliers

follow strict procedures such as placing

board-ups, lights, and signages as well

as temporary restoration to make roads

passable during the day.

Our sanitation services also require the

same rigor. In putting up water reclamation

facilities, we acquire permits from the

government and also get the affected

communities’ approval. We have to assure

102-9, 308-2, 414-2

communities that concerns such as odor

from wastewater and biosolids are properly

mitigated. Biosolids are also hauled by

an accredited supplier for use as soil

conditioners. * In 2015, we had a total of 174 accredited suppliers, where 168 were local suppliers.

102-48, 204-1, 414-2

149 148

STRENGTHENING EFFECTIVE GOVERNANCE

Our leadership is driven by a strong

commitment to nation-building and a

vision of competing within the region in

accordance with our company values.

Our leadership team is unwavering in our

principles and skilled in their craft. With

them, we are heading towards becoming

one of the top water and wastewater

service providers in the Philippines and

in the broader Asia-Pacific region. Our

Board and Management Team have

proudly enabled us to consistently meet

performance targets for almost a decade.

151 150

B O A R D O F D I R E C T O R S405-1

Our Board of Directors is composed of

ten select individuals, eight of whom

are male and one female, with seven

Filipino and three Japanese nationals.

The responsibilities of the board include

the upholding of high ethical standards;

the continuous practice of fairness,

transparency, and accountability;

the alignment of the company with our

vision, mission, and the best interests

of our shareholders; and the guiding,

monitoring, and evaluation of Management

performance.

Manuel V. Pangilinan Chairman

Atty. Marilyn Victorio-Aquino

Director

Ramoncito S. Fernandez Director

Isidro A. Consunji Vice Chairman

Jose Ma. K. Lim Director

Kensuke Tatsukawa Director

Randolph T. Estrellado Director

Takeshi Kurioka Director

Manabu Sugawara Director

Jorge A. Consunji Director

153 152

Board Meetings

Aside from the six regular meetings

conducted annually, the Board of Directors

may gather for a special meeting upon the

call of the Chairman of the Board or upon

request of the majority of directors. These

meetings require strict attendance, both

for regular and special meetings, and are

always recorded. On the occasion that the

Chairman is unavailable, the President may

represent him and lead discussions on his

behalf.

Composition and Selection of the Board102-24

The members of our Board of Directors

are chosen using a special criterion by

the Nomination Committee. These nine

members are elected at the Annual

Stockholder’s meeting. To maintain an

unbiased space for decision-making, Board

memberships are either executive or non-

executive. Non-executive directors have

expertise and diverse experience equaling

the executive members and are fully able to

participate during Board discussions.

Avoidance of Conflict of Interest102-25

Any person with a reason for engagement

in a competing business with or against

the Corporation or any of its subsidiaries

or affiliates is considered unqualified to be

a member of the Board of Directors. The

Board considers the adoption of guidelines

on the number of directorships that its

members can hold in stock and non-stock

corporations, taking into consideration

the capacity of a director to diligently

and efficiently perform his or her duties

and responsibilities. The CEO and other

executives may be covered by a lower

indicative limit for membership in other

Boards. This also applies to independent

or non-executive directors serving as full-

time executives in other corporations.

This serves to maintain their integrity in

their performance and responsibilities as a

member of the Board.

Disclosure and Transparency

Because we believe that transparency

is one of the most important aspects

of corporate governance, we extend

greater effort in gaining the trust of the

Management, stockholders, and the

different people involved with Maynilad’s

work. All important information about our

company are reported to MPIC, DMCI,

Marubeni, MWSS, and other shareholders.

It is our duty to report any violation of our

Code of Business Ethics, and ensure that

risk measures are implemented in a timely

manner. Throughout the reporting process,

due diligence and confidentiality are strictly

observed.

155 154

G O V E R N A N C E S T R U C T U R E A N D C O M M I T T E E S

102-18, 102-24

Our Governing Committees support our

Board of Directors in the implementation

of their functions and responsibilities.

They provide through the designing and

developing of frameworks that the Board

uses in order to fulfill their objectives and

resolve appropriate issues and concerns.

Executive Committee

The Executive Committee is given

particular authorities by the Board of

Directors through a majority vote. The

members of the Executive Committee

are given a restricted power to decide on

key matters regarding management and

corporate affairs in the absence of the

Board, if the matters are urgent.

Risk and Audit Committee

The Risk and Audit Committee supports

the Board through checks and balances

and independent reviews. These help

in strategically developing Maynilad’s

policies on governance, risk management,

financial reporting and audits, information

technology, and security, in full compliance

with applicable internal and external laws,

rules and regulations.

Compensation and Remuneration Committee

The Compensation and Remuneration

Committee’s job is to determine the most

appropriate and equitable remuneration

of corporate officers and directors. The

Committee evaluates, reviews, and makes

recommendations based on accepted best

practices. It ensures that the compensation

provided is consistent with the Maynilad

culture, business strategy, and corporate

environment.

Nomination Committee

The Nomination Committee is responsible

for reviewing all candidates for positions

in our Board of Directors, including all

candidates to positions that specifically

warrant the Board’s approval. A minimum

of three members of the committee reviews

and evaluates nominees for qualification,

and ensures valid, fair, and effective

appointments.

157 156

O U R M A N A G E M E N T T E A M

Our Top Management Team is comprised

of trained and experienced professionals

working for the company’s inclusive growth.

Specific tasks are assigned to the team by

the Board of Directors with the expectation

of fulfilling them with the utmost

professionalism and expertise.

Ramoncito S. Fernandez

President and CEO

Randolph T. Estrellado COO and CFO

Christopher J. Lichauco Head, Business Area

Operations

John Patrick C. Gregorio

Head, Commercial & Marketing

Antonio F. Garcia Head, Wastewater

Management

Atty. Lourdes Marivic P. Espiritu

Head, Legal & Regulatory Affairs

Irineo L. Dimaano Head, Central Non-

Revenue Water

Francisco A. Arellano Head, Corporate

Quality, Environment, Safety & Health

Yolanda C. Lucas Head, Porgram Management

Arturo Celso D. Baranda

Head, Corporate Logistics

Francisco C. Castillo Head, Information

Technology Services

Eric J. Montes Head, Integrated Asset

Management

Mitchie M. Arcaina Head, Human

Resources

Marcos D. de Jesus Head, Technical

Services

Ronaldo C. Padua Head, Water Supply

Operations

159 158

E C O N O M I C V A L U E D I S T R I B U T I O N

102-7, 201-1

We fully support the UN’s SDG 8, which is

the promotion of decent work for all and

equitable economic growth.

We believe that inclusive growth enables

lasting development, so we seek to

transform our business into an engine

for the growth not only of our business

partners and shareholders, but also of the

larger community where we operate.

We accomplish this primarily by ensuring

that our business remains viable and

profitable, so we can continue to contribute

to public funds and enlarge the number

of employees and suppliers who stand to

benefit from our success.

In addition, we invest in corporate social

responsibility (CSR) programs that promote

market inclusivity and shared value

creation. We also support philanthropic

projects that improve the health and well-

being of our immediate communities.

Across all these programs, our Finance

Department ably assists the company in

allocating budgets, promptly processing

payments, compensating our employees,

and remitting taxes to the government.

F U N D M A N A G E M E N T H I G H L I G H T S102-7, 102-45, 201-1

In 2016, we generated P20.03 billion in

revenues, including receipts from other

fees and services, in 2016. This represents

a 6 percent increase in total revenues

compared in 2015.

Using GRI Standards in accounting for our

direct economic contribution to society,

we disbursed around P10 billion, or 50

percent of our revenues, as payments

or contributions to our key stakeholder

groups.

We paid 19 percent, or P5.88 billion, to our

suppliers. About 9 percent, or P1.80 billion,

was paid to loan providers as payment

for interests, while disbursements to our

shareholders are based on an equitable

profit-sharing scheme determined by the

Board. We released another 8 percent, or

P1.99 billion, to cover employee salaries

and benefits.

Meanwhile, our payments to the

government totaled P305.76 million,

9 percent higher than in 2015. This

includes disbursement for taxes, licenses

and regulatory costs. Our direct local

community investments, on the other hand,

amounted to P22.78 million.

Dividends and service concession payables

were at P2 billion and P1.21 billion,

respectively.

We reinvested the remaining 50 percent or

P10.03 billion of our consolidated revenue

to our company, not accounting dividends

and service concession fees.

These figures come from the annual

financial statement of Maynilad Water

Services, Inc. For more information, please

refer to our audited financial statements

found in our 2016 Annual Report.

161 160

E N T E R P R I S E R I S K M A N A G E M E N T

Using the ISO 31000 standards, we

identified our risks according to their

significance and likelihood and drew up

action points to mitigate them. The risks

were identified by the Enterprise Risk

Management Committee composed of

representatives from various Divisions of

Maynilad. The identified risks are reviewed

by the President and submitted to the

Board of Maynilad for discussion and

appropriate action by its Audit and Risk

Committee. The results of the process

are also shared with the Audit and Risk

Committee of the Board of MPIC.

The risks we identified have potential

significant impact to the sustainability of

our business and to the environment and

community that we operate in. The top five

risks for 2016 are regulatory risks, water

supply risk, natural calamities, chemical

supply, and financial risks.

Regulatory risks may result in penalties,

low tariffs, and non-achievement of service

obligation targets. To mitigate this, we

conduct regular review and monitoring

of compliance, submit requirements on

time, and seek MWSS approval on any

enhancement on system process and

design.

Water supply risk, on the other hand, is

the non-provision of water supply to our

customers on a 24/7 basis. This results in

customer complaints and non-compliance

with regulatory obligations. Often caused

by high turbidity levels in the WTPs

which affects the our’ normal production

levels, we mitigate this risk through our

enhancement plans for our WTPs such as

the resiliency plan for PWTP.

Next on the list are natural calamities that

can be caused by liquefaction, ground

subsidence, earthquakes, and flash floods

– threatening our operations and our ability

to provide quality service to our customers.

We are in the process of establishing our

Business Continuity Plan to manage this.

We have also conducted Probabilistic

Seismic Hazard Assessment for all Maynilad

facilities to evaluate our readiness for

earthquakes and reinforce our facilities as

needed.

Chemical supply risk refers to the non-

availability of chemicals needed for water

treatment and production which also affects

our ability to deliver water 24/7. This risk

is driven by inadequate forecasts, delayed

delivery of chemicals, limited storage, and

limited sources of chemicals. Mitigating this

includes continuous sourcing of suppliers

and entering into long-term contracts for

the procurement of major chemicals. The

construction of additional storage for 200

tonnes of liquid chlorine is also being done.

Financial risk is due to the non-adjustment

of tariff rates, non-implementation of

approved tariffs, and unprogrammed

expenditures in projects. In response, we

ensure adequate planning and review of

our CAPEX programs. For the tariffs, we are

undergoing arbitration, the results of which

are expected to come out in 2017.

102-11, 102-15

163 162

MOVING FORWARD

With the achievements we made in 2016

and Next Gen embodied within our

organization, we are confident that we will

make more significant strides in the years

to come.

We will continue to increase the

populations that we serve and seek out

novel markets that need our assistance.

All these will be achieved with our valued

customers and our service obligations to

them in mind.

165 164

N E X T G E N E R AT I O N

Maynilad Next Generation is a three-

year business strategy with the goal of

further improving our capability to meet

service obligations while increasing

enterprise value to USD 2.2 billion by

2018. The program has three pillars:

operational efficiency, business growth, and

organization and people development.

The first year’s objectives of the Next Gen

program includes informing the entire

Maynilad organization about the company’s

new strategic direction, encouraging the

employees to accept the change, and

challenging the employees to reach our

CAPEX disbursements for the year.

The Maynilad Next Gen “Organization

Transformation Group” or OTG is

responsible for ushering in this change.

The OTG’s primary task is to ease the

process of transformation. To ensure that

the entire organization supports the Next

Gen vision, the OTG conducted town

hall meetings, training and development

sessions, and group learning activities

that detailed how we can build on the

success of the past years and prepare the

organization for sustained growth. These

events also stressed the reasons why our

company will not be able to meet our

service obligations unless a new business

model is adopted.

Ultimately, Next Gen was formed from

the need to catch-up in our CAPEX

disbursements. With the target to sustain

growth, meet our service obligations, and

prepare ourselves for future challenges,

we conducted a thorough review of our

existing organizational structure to address

our gaps.

Operational Efficiency

We plan to intensify our efforts to meet

our comprehensive service obligations

for water, sewerage and sanitation,

and customer service. We established

a catch-up plan that would double our

average annual CAPEX spending. With

this in mind, we plan to hire, realign, and

develop more people to assume critical

roles and positions, particularly in areas

that require high technical proficiency and

specialization. We also plan to streamline

internal business processes and conduct

comprehensive risk assessments to ensure

that CAPEX spending is done prudently

and efficiently.

167 166

Business Growth

Nearing our 100 percent water coverage

within the West Zone, we are looking to

expand our reach to local and international

markets through a strong partnership with

our sister company, Metro Pacific Water

Investments Corporation. This partnership

opens opportunities for new business

ventures in the form of water solution

products and services that we continuously

develop and innovate. With this, we are

looking to soon expand to various business

areas specific to Bulacan, Cavite, Laguna,

and Bicol.

Organization and People Development

The last pillar of Next Gen is the primary

driver of the program itself. With a focus

on employee development, we are

accelerating organization and people

development initiatives to boost our

capability to meet set goals and targets.

To do this, we are reorganizing and creating

several Maynilad offices to ensure focus

and alignment of functions. We are also

creating synergy within and among the

different business units along with our

major people development and people

management initiatives to complement

each other.

Among these changes are the re-

integration of BA-NRW technical teams

into the business areas; the reorganization

of the Program Management Division; the

centralization of all procurement functions

under the Logistics Division; the creation of

the Integrated Asset Management Division;

the creation of the Business Development

Project Managers positions; the creation

of the Government Relations Department

under Commercial and Marketing; creation

of the Systems, Process, and Methods

Department under Corporate QESH; the

transfer of the Internal Audit Department

to the Office of the President; the transfer

of the Administration Department to

the Human Resources Division; and the

transfer of the Maynilad Water Academy to

Commercial and Marketing.

169 168

Impacts

Next Gen’s impacts on specific

departments are seen through changes in

their operations and their targets and key

performance indicators. In the case of the

Business Area Operations Department,

there is a shift from revenue and billed

volume to a more customer-centric

mindset. This shift in focus is executed by

migrating the customer service information

system to the workflow management

system to better monitor the new water

service applications and customer

concerns.

Strategic relationship management is also

provided by the Key Accounts Relations

Department to better know our customers,

understand their needs, develop customer

intimacy, and foster trust. In terms of

targets and key performance indicators

(KPIs), the shift to a more customer centric

approach can be seen by focusing on

customer service KPIs and maintaining

customer response and resolutions above

targets.

I N F R A S T R U C T U R E P R O J E C T I N V E S T M E N T S

To enhance the water supply and pressure

in the West Zone, we have earmarked

around P9.2 billion – or more than half of

our 2017 CAPEX – for water infrastructure

projects. This budget covers infrastructure

that impact both our water source and

delivery programs, and our wastewater

management projects.

Over P4.2 billion will cover improvement

works upstream, from our La Mesa and

Putatan Water Treatment Plants, pumping

stations and reservoirs, to installation

works for our service expansion, and

enhancements of Common Purpose

Facilities (CPF) in the Bigte Basins, La Mesa

Aqueduct and Ipo Dam. From this, P4

billion is slated for the NRW Management

and Service Expansion Program.

On the other hand, P5 billion will cover our

wastewater management projects, which

includes the increase of our sewerage

coverage and maintenance of our

compliance with environmental standards.

In particular, this amount will support

our construction of a new WRF and its

accompanying conveyance system in Las

Piñas.

Aside from these 2017 project investments,

we are also expecting to reap the benefits

of our earlier investments, such as the

development of the sewerage systems in

Valenzuela and Muntinlupa. These projects

are covered by our World Bank loan to

help us accelerate the development of

sanitation infrastructure in Metro Manila.

The Valenzuela WRF, with its 60 MLD

design capacity, will begin operations by

January 2018 and will treat the wastewater

discharges of over 300,000 people in

Valenzuela City. On the other hand, the

Tunasan WRF in Muntinlupa City, with

a 20 MLD design capacity, will begin

operations in September 2018 and will

serve approximately 92,000 customers in

Barangay Tunasan. Set to provide efficient

and high-quality treatment that will meet

effluent standards, these new facilities will

improve the quality of our receiving bodies

of water and reduce incidence of water-

borne diseases in the West concession area

by 2021.

171 170

TOPIC RELATED GRI DISCLOSURE

201-1L O W E R N R W

M O R E W AT E R C O N N E C T I O N S A N D S E W E R A G E S E R V I C E S

201-1

203-2

416-2

S E C U R E D W AT E R B O D I E S F O R S O U R C I N G A N D R E C E I V I N G

303-1

303-2

303-3

304-1

MATERIAL TOPIC AND ITS BOUNDARY

304-2

306-1

306-5

102-46, 102-47

WHY IT IS MATERIAL AND OUR INVOLVEMENT

BOUNDARY

This is material within our company

and to our customers in the West

Zone of Metro Manila and other

adjacent provinces.

Lowering non-revenue water is important as it

addresses water loss, thereby increasing the

actual metered water used by customers and

adds to our revenue. It also aids in decreasing

the amount of water withdrawn daily as water

needs are addressed.

This is material within our company,

our government regulating

body, and communities/potential

customers as we add more water

connections.

This is material within our company,

the government regulators, our

industry and CSO partners, and

communities around our water

sources and receiving water bodies.

It is part of our concession agreement with the

government to give safe water and sewerage

services to our concession area and address

the needs of communities. This will also further

increase the economic value that we generate.

Water is our primary resource and protecting

and securing its sources is of utmost

importance. The effluents that we discharge

should also be within standards to conserve

the remaining of the ecology of the receiving

water bodies.

102-46, 102-47

173 172

TOPIC RELATED GRI DISCLOSURE

401-1

403-2

404-1

405-1

406-1

407-1

S K I L L E D A N D E N G A G E D W O R K F O R C E

L O W E C O L O G I C A L F O O T P R I N T

301-1

302-1

302-3

305-1

305-2

S O C I A L I N C L U S I O N 204-1

413-1

414-2

305-4

306-2

306-4

307-1

308-2

WHY IT IS MATERIAL AND OUR INVOLVEMENT

BOUNDARY

This is material within our company

and our employees.

Our employees are our partners in delivering

services to our customers. A skilled and

engaged workforce better ensures low

turnover rates, excellent services and

operations, and the living out of our

values. We also guarantee the safety of our

employees, both from occupational hazards

and from discrimination. Our employees

are also free to create unions and bargain

collectively.

This is material within our company,

our government regulators, our

suppliers, and communities.

This is material within our company,

our government regulators, our

suppliers, and communities.

As a responsible company that relies on

the environment for the sustainability of our

business, we endeavor to keep our ecological

footprint low and within environmental

standards. This involves managing our solid

wastes, hazardous wastes, water use, energy

use, and greenhouse gas emissions. We also

influence our suppliers to be mindful of their

environmental impacts.

We are tasked to provide services to everyone

in our concession area with various economic

backgrounds. We provide special rates for

lower income customers and also engage the

communities we are located in to further know

their needs and build better relationships.

We also influence our suppliers to be socially

responsible and minimize social impacts.

102-46, 102-47 102-46, 102-47

175 174

ANNEX

Annex A: Raw Water Quality Results

mg/

L

01

2

345678

Angat Downstream Putatan Raw

Value

PNSDW Limits

DISSOLVED OXYGEN

mg/

L

010

20

304050607080

Angat Downstream Putatan Raw

Value

PNSDW Limits

TOTAL SUSPENDED SOLIDS

90

MPN

/100

ml

02000

4000

600080009000100001200014000

Angat Downstream Putatan Raw

Value

PNSDW Limits

FECAL COLIFORM

Angat Downstream Putatan Raw

Value

PNSDW

Lower Limit

PH

01

2

3456789

PNSDW

Upper Limit

177 176

Annex B: Finished Water Quality ResultsM

PN/1

00 m

L

0.940.96

0.98

11.021.041.061.081.1

LMTP 1 Putatan

2016

PNSDW Limits

TOTAL COLIFORM

1.12

LMTP 2

LMTP 1 Putatan

PH

LMTP 2

01

2

3456789

Value

PNSDW

Lower Limit

PNSDW

Upper Limit

AC

U

02

4

681012

LMTP 1 Putatan

2016

PNSDW Limits

COLOR

LMTP 2

TURBIDITY

NTU

01

2

3456

LMTP 1 Putatan

2016

PNSDW Limits

LMTP 2

HARDNESS

mg/

L

050

100

150200250300350

LMTP 1 Putatan

2016

PNSDW Limits

LMTP 2

179 178

Annex C: Water Coverage per Municipality

City / Municipality Water coverage2016 Water Covered

Population (Unconstrained)

% coverage

NCR

Manila 1,899,990 128.4%

Quezon City 2,523,937 124.2%

Caloocan 1,752,084 109.1%

Malabon 356,034 104.8%

Navotas 221,696 83.0%

Valenzuela 756,904 122.5%

Las Piñas 782,121 128.6%

Makati 101,847 186.1%

Muntinlupa 455,952 89.6%

Parañaque 907,682 137.2%

Pasay City 528,381 138.3%

Cavite Province

Bacoor 380,105 60.4%

Cavite City 106,367 108.6%

Imus 240,515 64.7%

Kawit 65,572 70.8%

Noveleta 30,223 61.1%

Rosario 55,827 62.1%

Total 11,165,236 112.9%

Annex D: Status of Deep Wells

Location Q (m3/hr) Status DistrictBagong Silang Phase 10 Deepwell Station 4.17 Standby North District

Bagong Silang Phase 9 Deepwell Station 4.58 Standby North District

Goodwill Deepwell Station 30.42 Standby North District

Remarville Deepwell Station 26.25 Standby North District

Rockville 2 Deepwell Station 27.1 Standby North District

Tanada Deepwell Station 46 Standby North District

Rainbow 10.83 Standby North District

J. Felipe Deepwell Station 28.85 Standby South Cavite

Malagasang 2D Deepwell Station 60.78 Active South Cavite

Molino Deepwell Station 40 Standby South Cavite

New Crescini Deepwell Station 52 Standby South Cavite

New NWF4 Deepwell Station 75.8 Standby South Cavite

Pandawan Deepwell Station 47 Active South Cavite

Poblacion Deepwell Station 36 Active South Cavite

Rivero Deepwell Station 32.08 Standby South Cavite

Imus Deepwell Station 30 Inactive South Cavite

San Nicolas Deepwell Station 12 Inactive South Cavite

NWF1 Deepwell Station 41 Inactive South Cavite

NWF2 Deepwell Station No Data Inactive South Cavite

NWF3 Deepwell Station 33.75 Inactive South Cavite

Georosville Deepwell 42.08 Inactive South Cavite

Aav R229B Deepwell Station 79.5 Standby South Putatan

ASV3 Deepwell Station 26.8 Active South Putatan

ASV4 St Jude Deepwell Station 26.8 Active South Putatan

Sonera 1 Deepwell Station To Check Standby South Putatan

Mutual 1 Deepwell No Data Inactive South Putatan

181 180

Annex E: Planting Partners in 2016

Participants Number of Participants/VolunteersMangrove

Air Force 15th SW, DENR PENRO-Cavite, Maynilad

53

GMA7, PNP Maritime, DENR PENRO-Cavite, Maynilad

78

JCI Manilena, BJMP, PCG/CGS Cavite, DENR PENRO-Cavite, Maynilad

93

The Bodyshop, DENR PENRO – Cavite, Maynilad

53

DENR PENRO-Cavite, Maynilad 71

Ipo

Judge Juan Luna HS – Batch 1991, Maynilad

36

DENR PENRO – Bulacan, NCIP, Ms. Earth Foundation, Maynilad

155

TV5 and Alagang Kapatid Foundation, Maynilad

76

APO Fraternity, Maynilad 86

Baesa Seventh-Day Adventist Church, Maynilad

95

Safety Organization of the Philippines, Maynilad

71

Dumagat Community 26

Maynilad (WSO Division) 67

Clean Pacific, Maynilad 65

Maynilad (TSD Division) 57

Maynilad, UP-IBA, MC-IBA, UP Green League

52

Maynilad (BA-NRW) 78

Maynilad, Gold Link 129

Maynilad, DOLE-NCR, Mabuhay Vinyl Corp. 65

Maynilad (CQESH, WMD), Philippine Dental Association

129

Annex F: Water Reclamation Facilities

Facility Technology Capacity (cubic meter/day)

Receiving body of water

Operational pe-riod/Status

Dagat-dagatan Sewage and Septage Treatment Plant

Waste Stabilization Pond (Conventional Lagoon System) / Dewatering (Screw Press)

26,000 / 450

Maypajo Creek *Turned-over facility from MWSS; Rehabililtated in 2004-2005

Alabang WRF Conventional Activated Sludge

10,000 Pasong Diablo Creek

*Turned-over facility from AAVA in 2009; Rehabilitated in 2012

Congressional WRF

Sequencing Batch Reactor

567 Culiat Creek 2011

Baesa WRF STM Aerotor 390 Dario Creek 2011

Legal WRF Sequencing Batch Reactor

409 Dario Creek 2012

Grant WRF Sequencing Batch Reactor

621 Dario Creek 2012

San Antonio WRF

Moving Bed Bioreactor

3,310 San Francisco River

2013

Paltok WRF Moving Bed Bioreactor

4,900 Maribolo Creek 2013

306-5

183 182

Facility Technology Capacity (cu.m./day)

Receiving body of water

Operational period/Status

Tandang Sora WRF

STM Aerotor 1,200 Dario Creek 2013

Del Monte WRF Moving Bed Bioreactor

3,510 San Francisco River

2013

Project 7 Sewage and Septage Treatment Plant (Veterans Village WRF)

Sequencing Batch Reactor / Dewatering Screw Press

2,400 / 240 Culiat Creek 2013

Paco WRF Moving Bed Bioreactor

410 Estero de Santibañez

2013

Tatalon WRF Sequencing Batch Reactor

8,100 San Juan River 2013

Samson WRF STM Aerotor 1,900 San Francisco River

2015

Bahay Toro WRF Conventional Activated Sludge

13,400 Dario Creek 2014

Bagbag WRF Sequencing Batch Reactor

10,400 Dario Creek 2014

Talayan WRF Conventional Activated Sludge

15,400 San Juan River 2015

Kapiligan WRF Moving Bed Bioreactor

6,000 San Juan River 2015

Alabang Zapote Septage Treatment Plant

Dewatering (Screw Press)

500 2016 (Process Proving)

Annex G: Reservoirs

Reservoir Name Year Constructed Capacity (ML)

Refilling Discharging Status (as of May 2017)

AAV Reservoir 1 Turned over Sept 2009

7.57 Pumped from Putatan PWPS

Pumped to distribution system

Utilized

AAV Reservoir 2 Turned over Sept 2009

9.46 Pumped from Putatan PWPS

Pumped to distribution system

Utilized

Algeciras MWSS 38 Gravity Pumped to distribution system

Utilized

Ayala Southvale (ASV)

Turned over Sept 2009

2.84 Pumped from Daang Hari PS

Pumped to distribution system

Utilized

Bacoor Nov-13 10 Pumped from Pagcor PS

Pumped to distribution system

Utilized

Baesa 2012 5 Gravity Pumped to distribution system

Utilized

Bagbag 1979 200 Gravity Gravity Utilized

Binuksuk MWSS 30 Pumped from LMPS

Gravity Utilized

Caloocan Rehabilitated by MWSI in 2008

19 Gravity Pumped to distribution system

Utilized

D. Tuazon MWSS 19 Gravity Pumped to distribution system

Utilized

Ermita MWSS 19 Gravity Pumped to distribution system

Utilized

Espiritu MWSS 19 Gravity Pumped to distribution system

Utilized

Fairview # 3 MWSS 1.51 Gravity NA Not Utilized

Fairview # 4 MWSS 1.14 Gravity NA Not Utilized

JP Ramoy 2012 2 Gravity Gravity Utilized

La Mesa (ARPS) 1998 Hanjen Engg

50 Gravity Pumped to distribution system

Utilized

185 184

Reservoir Name Year Constructed Capacity (ML)

Refilling Discharging Status (as of May 2017)

Litex 2013 2 Pumped from Amlac Inline

Pumped to distribution system

Utilized

Novaliches Rehabilitated in 1991

7 Gravity Pumped to distribution system

Utilized

Noveleta MWSS 8 Pumped from Pagcor PS

Pumped to distribution system

Utilized

Pagcor PS Operated in June 2011

23 Gravity Pumped to distribution system

Utilized

Pasay MWSS 19 Gravity Pumped to distribution system

Utilized

Putatan 2011 22 Pumped from PWTP

Pumped to distribution system

Utilized

Sacred Heart 1 (old)

10 pumped from North A

Pumped to distribution system

Utilized

Sacred Heart 2 (new)

Operated in May 2014

10 Pumped from North A

Pumped to distribution system

Utilized

Sangley Cherry 2013 1.2 Pumped from Noveleta PS

Pumped to distribution system

Utilized

Sangley Fort San Felipe

2013 1 Pumped from Noveleta PS

Pumped to distribution system

Utilized

Sangley Fuel Depo

2013 0.5 Pumped from Noveleta PS

Pumped to distribution system

Utilized

Sauyo (Bagbag) 2012 2.5 Pumped from Bagbag Booster

Gravity Utilized

Tondo MWSS 19 Gravity Pumped to distribution system

Utilized

Villamor PS Operated in April 2010

10 Gravity Pumped to distribution system

Utilized

Aguinaldo Ongoing Construction

30 Pumped from Patindig Araw PS

Pumped to distribution system

Ongoing construction

Annex H: Training Programs

Program Type Number of ProgramsTarget Actual

Core 6 6

Leadership 8 10

IMS 19 30

Professional/Technical under each division

BAO 18 21

CQESH 20 25

PMD 13 26

Logistics 10 17

C&M 12 19

LRA 7 4

HR 17 24

ITS 7 21

TSD 16 18

WMD 25 36

WSO 57 70

Finance 9 11

Total 244 338

Reservoir Name Year Constructed Capacity (ML)

Refilling Discharging Status (as of May 2017)

Octaviano Ongoing construction

10 Pumped from Magdiwang PS

Pumped to distribution system

Ongoing construction

Magdiwang Ongoing construction

40 Pumped from Marcos Alva-rez PS

Pumped to distribution system

Ongoing construction

Toclong 2016 35 Pumped from Pagcor PS

Pumped to distribution system

Completed, for commis-sioning

Sacred Heart 3 (newest)

Ongoing construction

50 Pumped from North A Annex PS

Gravity Completed, for commis-sioning

Victoria 2017 20 Pumped from Daang Hari PS

Pumped to distribution system

nearing completion, for commis-sioning

187 186

Annex I: Health Forums

Date Business Area/Offices Attendees Number of Employees %

01 3 - Feb Tondo BA 45 59 76%

02 5 - Feb SMPM Forum 47 68 69%

03 17 - Feb Putatan 39 45 87%

04 19 - Feb Water Network 53 171 31%

05 8 - Mar HO - Finance 26 72 36%

06 15 - Mar HO- IT/ Legal & Regulatory 15 32 47%

07 22 - Mar HO - Commercial & Marketing/ OP/ COO 9 31 29%

08 12 - Apr Sampaloc BA 44 59 75%

09 13 - Apr DDSSTP/TSPS 33 79 42%

10 19 - Apr HO - CQESH/Wastewater Mgt 48 64 75%

11 4 - May N/Val BA 55 80 69%

12 18 - May Imus BA 44 59 75%

13 1 - Jun Quirino/Roosevelt 71 82 87%

14 6 - Jun South Cal 42 59 71%

15 8 - Jun HO- Logistics / Business Ops Central Services 34 86 40%

16 13 - Jun Malabon/Navotas 49 70 70%

17 17 - Jun La Mesa Treatment Plant 27 167 16%

18 23 - Jun HO - PMD 29 39 74%

19 14 - Jul Soccea Bonna 27 27 100%

20 21 - Jul HO - HR 29 39 74%

21 5 - Aug North Cal 88 98 90%

22 10 - Aug Faiview/Commonwealth BA 55 92 60%

23 17 - Aug Muntinlupa BA 59 70 84%

24 25 - Aug HO - Technical Services 33 83 40%

25 7 - Sep Paranaque BA 23 72 32%

26 14 - Sep Alabang Sewage Plant 27 3 900%27 21 - Sep CNRW 56 64 88%

Annex J: Influent and Effluent Water Quality

01

2

345678

Legal STP Grant STP

Influent

Effluent

PH

9

Baesa STP

10

DAO 90-35 Lower Limit

DAO 90-35 Upper Limit

010

20

304050607080

Legal STP Grant STP

Influent Effluent

BOD

90

Baesa STP

100

DAO 90-35 Limit

mg/

L

306-1

189 188

Annex K: Accounts Offered with Desludging Services

010

20

304050607080

Legal STP Grant STP

Influent Effluent

TSS

Baesa STP

DAO 90-35 Limit

mg/

L

Municipality 2014 2015 2016Caloocan 6,059 75,297 32,778

Las Pinas 3,086 32,888 26,987

Makati 84 118 181

Malabon 3,337 8,551 383

Manila 2,483 42,085 2,698

Muntinlupa 77 135 16,257

Navotas 3,450 444 117

Paranaque 554 1,663 23,761

Pasay 260 21,170 3,929

Quezon City 103,625 17,763 26,310

Valenzuela 12,994 1,916 25,276

Bacoor 2 6,883 24,002

Imus 12 103 18,036

Rosario - - 340

Cavite City 129 141 184

Noveleta - - 2,712

Kawit - 22 5,158

TOTAL 136,152 209,179 209,109

Annex L: IMS Certificates

ISO 9001

ISO 14001

OHSAS 18001

ISO 14064

ISO 17025

ISO 20000

ISO 50001 TOTAL

2007 2 1 3

2009 1 2 2 5

2010 0

2011 1 1 1 1 4

2012 14 13 13 40

2013 11 11 11 1 1 35

2014 14 7 7 1 29

2015 14 15 15 44

2016 17 17 17 8 59

Total 74 67 66 2 1 1 8 209

Risk Impact Mitigation Responsible MonitoringIf production pattern is unreliable

Bagbag level target not met

Reduce/ Increase production to hit target Bagbag level

La Mesa Treatment Plant 1

Production pattern target versus actual

Closely monitor Bagbag level

La Mesa Treatment Plant 1

Bagbag level target versus actual

Defective Electrical Equipment & System Integration, Inc. meter

No measurement of raw water

Use LMTP data as reference

Common Purpose Facilities

LMTP production

Annex M: Risk Management

102-12

191 190

Risk Impact Mitigation Responsible MonitoringOpening of Manila Water Company, Inc. by-pass to Balara Treatment Plant

Inability to meet production pattern due to difficulty in LP2 withdrawal at portal

Increase LP1 production

La Mesa Treatment Plant 1

LMTP production

Throttling of LP2 2.1m by-pass

La Mesa Treatment Plant 2

Angat Water Optimization Project Reservoir & Pumping Station level

Convene CPF-TWG to agree on withdrawal timing during peak hours

Common Purpose Facilities/Maynilad Water Services, Inc./Manila Water Company, Inc.

Daily data/measurement

Actual release to MWSS is less than the allocation

Inability to meet production

Call attention of AHC, NWRB, and MWSS

Common Purpose Facilities/Maynilad Water Services, Inc./ Manila Water Company, Inc.

Angat tailrace measurement

Opening of low level outlet

Inability to meet production due to reduction in raw water

Maximize recovered backwash water

La Mesa Treatment Plant 1 and La Mesa Treatment Plant 2

Recovery flow meter

Poor quality of raw water

Proper dosing of chemicals

Process Control Services, LP1 and LP2

Actual versus recommended dosing data

Stratified water quality sampling in Ipo and LMTP inlet and outlet

Process Control Services

Water quality within PNSDW

Ensure enough supply of treatment chemicals

Support Services

Daily maintaining balance

Risk Impact Mitigation Responsible MonitoringStrict implemen-tation of 60/40

No flexibility in raw water requirements

Raise issue of Sharing Protocol to MWSS

Ronaldo C. Padua

CPF implementation

Defective recovery pump

Reduction in LMTP production

Acquire spare recovery pump; quick repair

Treatment Plant Maintenance/La Mesa Treatment Plant Operations

Recovery flow meter and pump operation

Recovery pumps clogged

Reduction in LMTP production

Ensure wet well and pumps chamber always free of sludge and unwanted plants

La Mesa Treatment Plant Operations/Treatment Plant Maintenance

Recovery flow meter and pump operation

Continuous reduction on MWSS allocation

Reduction in LMTP production

Notice to customers

Business Areas Customer complaints

Media campaigns

Commercial & Marketing

Customer complaints

Establish different reduction schemes

Water Supply Operations

Reduction in actual production; accuracy in water availability

Clogging of low level outlet

Loss of available raw water

Ensure operability of Low Level Outlet intake screen

Angat Hydropower Corporation (thru CPF)

Angat tailrace measurement

Removal of clog thru declogging valve

Angat Hydropower Corporation (through Common Purpose Facilities)

Angat tailrace measurement

193 192

Risk Impact Mitigation Responsible MonitoringIntake (radial gate and butterfly valve) malfunction

Reduction in LMTP Production

Immediate re-port/repair and availability of chain block

Treatment Plant Maintenance/La Mesa Treatment Plant Operations

Inspection report and Job orders

Regular maintenance

Treatment Plant Maintenance/La Mesa Treatment Plant Operations

Inspection report and Job orders

Defective LP2 2.1 meter by-pass

No flexibility in treated water

Regular maintenance

Treatment Plant Maintenance/La Mesa Treatment Plant 2

Inspection report and Job orders

Power Failure Reduction in LMTP production

Ensure synchronized genset operation and regular exercise with load

Treatment Plant Maintenance/La Mesa Treatment Plant Operations

Weekly genset exer-cise report/Contrac-tor's Job Order

Malfunction of chemical dosing facilities (chlorine, Alum/polyaluminum chloride, polymer, potassium permanganate, and caustic soda)

Reduction in LMTP production; plant shutdown

Regular maintenance and exercise especially the potassium permanganate and caustic soda dosing system

Treatment Plant Maintenance/La Mesa Treatment Plant Operations/Contractors for newly upgraded chemical dosing facilities

Weekly exercise report/Job Order

Defective existing spectro- photometer

No monitoring of critical parameters during El Niño like manganese, iron

Availability of spare equipment

Process Control Services

Daily accuracy check

352

Fire Relief Faith Garden

No. of Hours No. of Volunteers

VOLUNTEERS

Mission Ginhawa

Brigada Eskwela and other school-based volunteer

activities

Manila Bay SUNSET

Partnership Program Inc.

Coastal Clean-up

Annex N: Volunteers

44

352

7

400

50

1,760

170312

78

195 194

GRI Standard Page Number Omission

GRI 101: Foundation 2016

General Disclosures

GRI 102: General Disclosures 2016

Organizational Profile

102-1 Name of the organization 20

102-2 Activities, brands, products, and services

20

102-3 Location of headquarters 20

102-4 Location of operations 20

102-5 Ownership and legal form 20

102-6 Markets served 20

102-7 Scale of the organization 15-17, 20, 61, 106-109, 158, 159

102-8 Information on employees and other workers

106-109

102-9 Supply chain 147

102-10 Significant changes to the organization and its supply chain

No significant change to the organization and its supply chain.

102-11 Precautionary Principle or approach

50-55, 65-66, 160-161

102-12 External initiatives 189

102-13 Membership of associations

Global Water Intelligence, International Water Association, Philippine Water Works Association, Philippine Business for the Environment

GENERAL DISCLOSURES

GRI CONTENT INDEX

GRI 102: General Disclosures 2016

Strategy

102-14 Statement from senior decision-maker

10-13

102-15 Key impacts, risks, and opportunities

50-55, 59, 160-161

Ethics and integrity

102-16 Values, principles, standards, and norms of behavior

21

Governance

102-18 Governance structure 154-155

102-24 Nominating and selecting the highest governance body

152, 154-155

102-25 Conflicts of interest 153

Stakeholder engagement

102-40 List of stakeholder groups 32, 33, 34, 35

102-41 Collective bargaining agreements

110

102-42 Identifying and selecting stakeholders

32, 33, 34, 35

102-43 Approach to stakeholder engagement

32, 33, 34, 35, 70

102-44 Key topics and concerns raised

32, 33, 34, 35, 70

Reporting practice

102-45 Entities included in the consolidated financial statements

159

102-46 Defining report content and topic Boundaries

28, 29, 30, 170, 171, 172, 173

102-47 List of material topics 31, 170, 171, 172, 173

102-48 Restatements of information

49, 111, 125, 146

102-49 Changes in reporting No significant changes in list of material topics and topic boundaries.

102-50 Reporting period 19

102-51 Date of most recent report 19

197 196

GRI 102: General Disclosures 2016

102-52 Reporting cycle 19

102-53 Contact point for questions regarding the report

19

102-54 Claims of reporting in accordance with the GRI Standards

19

102-55 GRI content index 19, 194-201

102-56 External assurance 19, 202-203

GRI Standard Page Number Omission

GRI 200 Economic Standard Series

Economic Performance

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

170-171

103-2 The management approach and its components

158-159

103-3 Evaluation of the management approach

158-159

GRI 201: Economic Performance 2016

201-1 Direct economic value generated and distributed

158-159

Indirect Economic Impacts

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

170-171

103-2 The management approach and its components

126-127

103-3 Evaluation of the management approach

126-127

GRI 203: Indirect Economic Impacts 2016

203-2 Significant indirect economic impacts

126-127

Procurement Practices

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

146

103-3 Evaluation of the management approach

146

GRI 204: Procurement Practices 2016

204-1 Proportion of spending on local suppliers

146

MATERIAL TOPICS

GRI Standard Page Number Omission

GRI 300 Environmental Standard Series

Materials

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

48-49, 96

103-3 Evaluation of the management approach

48-49, 96

GRI 301: Materials 2016

301-1 Materials used by weight or volume

48-49, 96

Energy

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

100-101

103-3 Evaluation of the management approach

100-101

GRI 302:Energy 2016

302-1 Energy consumption within the organization

100-101

302-3 Energy intensity 100-101

Water

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

170-171

103-2 The management approach and its components

40-46

103-3 Evaluation of the management approach

40-46, 174-177

GRI 303:Water 2016

303-1 Water withdrawal by source 42-43

303-2 Water sources significantly affected by withdrawal of water

42-43

303-3 Water recycled and reused 46

Biodiversity

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

170-171

103-2 The management approach and its components

55, 103

103-3 Evaluation of the management approach

No measurement of survival yet.

GRI 304:Biodiversity 2016

304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protect-ed areas

55, 103

304-2 Significant impacts of activities, products, and services on biodi-versity

55, 103

304-3 Habitats protected or restored 55, 103

199 198

Emissions

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

102

103-3 Evaluation of the management approach

102

GRI 305:Emissions 2016

305-1 Direct (Scope 1) GHG emissions 102

305-2 Energy indirect (Scope 2) GHG emissions

102

305-4 GHG emissions intensity 102

Effluents and Waste

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

170-171

103-2 The management approach and its components

91, 97, 99

103-3 Evaluation of the management approach

91, 97, 99, 187-188

GRI 306:Effluents and Waste 2016

306-1 Water discharge by quality and destination

91, 187-188

306-2 Waste by type and disposal meth-od

97

306-4 Transport of hazardous waste 98-99

306-5 Water bodies affected by water discharges and/or runoff

181-182

Environmental Compliance

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

65-66, 99

103-3 Evaluation of the management approach

65-66, 99

GRI 307:Environmental Compliance 2016

307-1 Non-compliance with environmen-tal laws and regulations

We did not have instances of breaching environmental laws as we are taking steps to ensure that we meet environ-mental standards.

GRI Standard Page Number Omission

Supplier Environmental Assessment

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

147

103-3 Evaluation of the management approach

147

GRI 308:Supplier En-vironmental Assessment

308-2 Negative environmental impacts in the supply chain and actions taken

147

GRI 400 Social Standard Series

Employment

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

104-106

103-3 Evaluation of the management approach

104-106

GRI 401:Employment

401-1 New employee hires and employ-ee turnover

106-107

Occupational Health and Safety

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

113-118, 125

103-3 Evaluation of the management approach

113, 125

GRI 403:Occupational Health and Safety

403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

113, 125

Training and Education

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

111

103-3 Evaluation of the management approach

112

GRI 404:Training and Education 2016

404-1 Average hours of training per year per employee

111

201 200

GRI Standard Page Number Omission

Diversity and Equal Opportunity

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

104-109, 150-151

103-3 Evaluation of the management approach

104-109, 150-151

GRI 405:Diversity and Equal Opportu-nity 2016

405-1 Diversity of governance bodies and employees

106-109, 150-151

Non-discrimination

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

104-109

103-3 Evaluation of the management approach

104-109

GRI 406:Non-discrimina-tion 2016

406-1 Incidents of discrimination and corrective actions taken

No incidence of discrimina-tion.

Freedom of Association and Collective Bargaining

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

32-33

103-3 Evaluation of the management approach

32-33

GRI 407:Freedom of Association and Collective Bargaining

407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

No part of our operation puts to risk the right of association and collective bargaining.

Local Communities

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

126-145

103-3 Evaluation of the management approach

No evaluation of programs conducted yet.

GRI 413:Local Communi-ties 2016

413-1 Operations with local community engagement, impact assessments, and development programs

126-145

Supplier Social Assessment

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

172-173

103-2 The management approach and its components

146-147

103-3 Evaluation of the management approach

146-147

GRI 414:Supplier Social Assessment 2016

414-2 Negative social impacts in the sup-ply chain and actions taken

146-147

Customer Health and Safety

GRI 103:Management Approach 2016

103-1 Explanation of the material topic and its Boundary

170-171

103-2 The management approach and its components

65-66

103-3 Evaluation of the management approach

65-66

GRI 416:Customer Health and Safety 2016

416-2 Incidents of non-compliance concerning the health and safety impacts of products and services

No incidents of non-compli-ance concerning the health and safety of products and services. We are taking steps to ensure that our customers get safe water.

Unique Maynilad Disclosures

Disclosure Page Number

Operational Efficiency

Water Withdrawal and Production 40-43

Progress on NRW Reduction 73-74

Pipes Replaced 79

Leaks Reported and Repaired 76-77

Employee Engagement

Employee Engagement and Drivers No employee engagement

survey done for 2016.

Workplace Efficiency and Innovation 122

Employee Volunteerism 191

203 202

ACKNOWLEDGEMENTS

CQESHRoel S. Espiritu

Kris G. Catangcatang

Marionne Kristel U. Mariano

Gianna I. Veracruz

Chester Y. Del Rosario

Enrique G. De Guzman

John Emmanuel B. Martinez

Sarah Lynn S. Duroy

Mark Paul S. Capati

Jimer R. Felices

Justine G. Madlangsakay

WSOMa. Ana E. Tria

Marianito H. Barahan Jr.

Anna Belen G. Herrera

Kerwin T. Aganon

Ramoncito N. Fernandez

Erwin S. Miranda

Jessica H. Agarap

Ressie D. Vicente

Alvin Ryan C. Ong

London-Philip L. Israel

Salvador S. Leyble

Joseph De Guzman

Archie Barria

Marvin M. Villanueva

Resurreccion B. Medrano

Ginny Vivien T. Calaycay

WMDJan Patrick S. Reyes

Ann Margarett M. Caranto

Benerly D. Ampo

Ryan E. Villamer

LRAAtty. Prescila Bartolome-Culala

Atty. Marianina Claudette D.

Guilbert

CNRWRonald Jeremy B. Salamat

Benson Jhon A. Martin

HRChristian Reginald Indon

Russel M. Cristi

Rhesa Angelie M. Perez

Mae Liza S. Velasquez

Ma. Elizabeth H. Obanil

Nancy D. Espenilla

Ricardo Jose G. Miranda

Jo-Ann R. Pabilona

Djunah Fe D. Escobar

Lorejane A. Eguia

BAOJenneyfer A. Rueda

Jeric Daniel M. Axalan

Bernadette Joy R. Cometa

CMDJennifer Rufo

Karmina M. Alejandro

Rosmon M. Tuazon

Edmundo M. Perez II

Oliver B. Sta. Ana

Arrianne M. Gamotin

Mikhail D. Sanchez

PMDYolanda C. Lucas

Jannebelle L. Dellosa

Angela Mae A. Selga

Sheila Frances P. Pajanustan

Sheryl Vina B. Cecilio

LOGISTICSDeobie M. Mendoza

Maria Teresa M. Artiaga

Clarisse Joy S. Gomez

Henry Z. Espedillon

Allan S. Figueroa

Ronulfo G. Gaylon

Grace A. Laguardia

Glenneth S. Magtalas

Samuel Gerald T. Saludez

Mark Jason M. Herrera

Joshua D. Sarmiento

Mayflor S. Tomarong

Ericson S. Garcia

FINANCERachelle R. Cajurao

Cybele L. Regalado

Jerome Paolo R. Cruz

Ferdinand Luna

Liza R. Briones

TSDMyra P. Tacderan

Juan Paulo T. De Leon

Ailyn C. Cabral

METRO PACIFIC WATERYang G. Villa

NAPOCOREliseo Calija

Roque De Guzman

Christian Espiritu

ANGAT HYDROPOWER CORPORATIONGeung Jeon Han

Paul D. Causon

WWW.MAYNILADWATER.COM.PH