Chairman's Letter

DEAR FELLOW SHAREHOLDERS

After a two-year battle with a once-a-century pandemic humanity has emerged victorious and wiser. Our companies – particularly our core holdings of Indofood, MPIC, PLDT, and PacificLight Power – have returned to their pre-pandemic trend of growth.

In fact, we have seen many record highs in their reported numbers, resulting in record highs at First Pacific. The wider investor community began to wake up our goal of Creating Long-Term Value in Asia during the course of the year, sending our share price up by more than one-third in 2023.

Our overall strong performance came against the background of relatively strong growth in our main markets. Against a global average of 3.1% growth across the globe, in ASEAN we saw GDP growth of 4.2% for the ASEAN-5 and the International Monetary Fund in its most recent estimates forecasts an acceleration to 4.7% in 2024 with our two largest markets growing even faster: Indonesia with growth of 5.0% in both 2023 and 2024, and the Philippines seen delivering an even more impressive 5.3% in 2023 and 6.0% in 2024.

There are risks, however. Commodity price spikes may be chief among them. Conflicts in the Middle East and in Ukraine risk generating fresh adverse supply shocks to the global recovery, with potential spikes in food, energy, and transportation costs. Container shipping costs have already sharply increased, and the situation in the Middle East remains volatile. Further geoeconomic fragmentation could also constrain the cross-border flow of commodities, causing additional price volatility. More extreme weather shocks, including floods and drought, could, together with the El Niño phenomenon, also cause food price spikes, exacerbate food insecurity, and jeopardize the global disinflation process.

Still, anyone who knows us well knows we are skillful at managing costs, as a glance at the margins at Indofood and PLDT would testify. We are aware of the potential risks lying ahead, and we are cognizant of the opportunities which lie before us, whether they be in toll road expansion at MPTC, fintech initiatives at PLDT, or solar power possibilities for Meralco and First Pacific itself.

Our Companies continue to focus on delivering what consumers want even as they anticipate how best to continue delivering for the needs of their customers in the near term and beyond. We are alert to evolving consumer tastes and demands and are responding accordingly with the aim of delivering quality products and services at a good price, today and going forward.

I am fully confident in expecting steady and strong earnings growth at these companies in the years ahead. I have a famously long-term outlook for my investments, but I cannot help but expect strong prospects in the near and medium term for First Pacific.

Yours sincerely
Anthoni Salim
Chairman
27 March 2024