The infrastructure that builds people

MANILA, Philippines – I came back to the Philippines in 2012 with my wife and our then very young children, after spending more than a decade overseas. The country’s economic resurgence had just started, and the political climate was very encouraging for many foreign-based Filipinos to return. I was privileged to join the Ayala Group as head of strategy and was very excited to contribute meaningfully to the country that has given me and my family so much.

At Ayala, we pride ourselves on our long heritage of contributing to national development. Back then, we were undergoing a period of massive diversification. We had just started investing in new businesses aligned to the national agenda—particularly in energy and transport infrastructure, while our core businesses in real estate, banking, telecommunications and water distribution were all rapidly growing.

But we also knew that there was more we could do as a group to build what we called “social infrastructure” and develop Filipino human capital. For instance, we were facing tremendous education challenges then, which led to more recent findings where 91 percent of Filipino 10-year-olds cannot understand simple text at their grade level, and 83 percent did not have minimum proficiency in math. We also realized that six out of 10 Filipinos died without seeing a doctor, while our medical staff and hospital bed ratios all fell far below World Health Organization recommendations.

As such, we started laying the groundwork for our social infrastructure investments in private education and private health care.

AC Education, under Fred Ayala, was established in 2014. Our early investments in private K-12 schools and universities would lead to our eventual partnership with the Yuchengco group in iPeople—one of the leading education groups today, with over 80,000 students enrolled in our network of Mapua schools, National Teachers College, APEC Schools and University of Nueva Caceres. iPeople’s objective is to deliver accessible, quality education at scale.

Meanwhile, AC Health was established in 2015. Having worked in health care previously in the United States, I pitched that there was a case to be made for affordable, quality health care in the Philippines, and that, as Ayala, we could do so much by investing in the space. I received the full support of our principals and board and embarked on building our health portfolio.

I look back at the last 10 years of founding and growing AC Health with immense pride. What started out as small experiments is now a nationwide network of seven hospitals, 18 multispecialty clinics and over 300 corporate clinics under the Healthway Medical Network, and a combined footprint of 900 drugstores between Generika and St. Joseph Drug, with IE Medica and MedEthix for our pharmaceutical importation.

Last year, we welcomed Temasek-backed ABC Impact as a minority partner into AC Health, demonstrating financial value in the ecosystem we have built. Today, that ecosystem serves more than 6.5 million Filipinos, and we are now in the transformative phase of our growth trajectory as a leading industry player.

Leading AC Health over the last decade also strengthened my conviction that social infrastructure—such as health care—is powerful platforms to partner with government.

For instance, during the pandemic, we worked hand-in-hand with Secretary Charlie Galvez, Secretary Vince Dizon, and the Duterte administration to expand COVID-19 testing and vaccination nationwide through our T3 public-private partnership. Since 2022, I have chaired the Private Sector Advisory Council for Health for President Marcos, collaborating with the Department of Health, PhilHealth and the Food and Drug Administration to strengthen health care delivery. All these deepened our appreciation of the impact of public-private partnerships (PPP) in building Filipino human capital.

Bringing all these together, our chair Jaime Augusto Zobel de Ayala, or JAZA, has often spoken about a powerful equation for growth and progress: getting health care, education and livelihood right. I would add a resilient environment to that equation. The latest World Bank Human Capital Report reinforces this view. Human capital—the health, knowledge and skills of people—is a nation’s most valuable asset, driving economic growth and social progress. Social infrastructure enables human capital to operate efficiently at scale.

Thus, today, Ayala is taking a more deliberate approach to supporting the growth of our people and the country through our newly established Ayala Social Infrastructure Group. By being more intentional at aligning our efforts across health

care (AC Health), education (iPeople), community development and livelihood (Ayala Foundation), and the environment (Ayala Sustainability), we aim to maximize impact and inclusion. Working with national and local government, academe, nongovernment organizations and community partners, we seek to strengthen these services and create the conditions for Filipinos to become their best selves.

Our experience in all these sectors has also reinforced a common lesson: these challenges are deeply interconnected. Better health outcomes are linked to education. Economic opportunity depends on both. Communities thrive when these systems work together.

As such, while continued investment in physical infrastructure is important, we must invest just as intentionally in the social foundations that make thriving possible. Social infrastructure is the infrastructure that builds people—and, in turn, a stronger and more prosperous nation.

The World Bank Human Capital Report underscores another important point: where human capital is built matters. It calls for social investments in homes, workplaces and neighborhoods, in partnership with local governments and community institutions. Impact is most meaningful when it is felt directly by people where they are.

For instance, in health care, it has been inspiring to launch our PPP with the province of Iloilo to establish and operate dialysis centers across their district and provincial hospitals. We have also built a strong partnership with Valenzuela City, helping expand dialysis, cancer and ambulatory care services. We are grateful for the progressive leadership and the trust of Gov. Arthur Defensor Jr. and Mayor Wes Gatchalian.

In terms of environmental sustainability, Valenzuela City has also shifted its police patrol fleet to electric vehicles through a partnership with ACMobility, while Makati City, under Mayor Nancy Binay, became the first local government unit in the country to source its electricity from renewable power through ACEN.

It is encouraging to see these cities advance clean energy solutions to address growing concerns around energy security and fuel costs.

Meanwhile, Ayala Foundation, under the leadership of Tony Lambino, has leveraged its decades of experience in education into scalable interventions at the local level to address the learning crisis. Together with the Department of Education (DepEd), Khan Academy Philippines, ACEN, Globe and other local and international partners, the CENTEX Digital Education program supported more than 1,600 students in San Marcelino, Zambales last year. Through a 12-week pilot in nine public elementary schools, students doubled their math scores (from an average of 27 percent to 56 percent), equivalent to four months of additional learning. This year, DepEd Zambales is scaling CENTEX Digital to 60 schools to benefit at least 22,500 learners. We hope to replicate the model in other localities.

While much has been achieved, much more needs to be done. I am excited to elevate all our social infrastructure platforms to partner both at the national and local levels. Imagine the impact we can collectively create when we bring our different institutions and capabilities together in a common cause.

The country’s future will ultimately be determined by us, as a people. If we want a stronger, more prosperous Philippines, then we must invest our resources, time and talents in building the infrastructure that matters most—the systems that bring out the best in our people and enable them to thrive. INQ

(Paolo F. Borromeo is managing director and chief social infrastructure officer of Ayala Corporation, overseeing the group’s work across health care, education, community development, livelihood, sustainability, state affairs, and external communications. He concurrently serves as vice chair of AC Health and the Ayala Foundation.)