Message
from the
Chairman
To our valued
stakeholders,
In my previous Chairman’s Message, I spoke about the VUCA environment (“Volatile, Uncertain, Complex, Ambiguous”) and how I expected this would be the “new normal” moving forward, given the dynamic world we live in. Last year’s events have shown just how little has changed.
Geopolitical concerns continue to cause worry across the globe, as regional conflicts continue to stew in Europe and the Middle East. Concerns on reliability of crop supply are increasing, as inclement weather and changing climate patterns affect harvests. Commodities such as coffee and cocoa are hitting multi-decade highs – even above the elevated levels I cited last year. And our interconnected world is being unshackled by rising protectionism and trade barriers in an increasingly multipolar world. As I write this, we are a few weeks out from the “Liberation Day” reset of the world’s largest economy, with massive tariff announcements on friend and foe alike, which were just as quickly suspended.
Truly, the “new normal” in 2024 still felt very abnormal, with the VUCA environment still very much part of the equation.
But this time we are seeing a small but noticeable return to confidence and growth in the regions where we operate – the bright optimism that comes from being part of a young and diverse market, 600 million strong. Southeast Asia continues to show growth prospects well above the global average, with the Philippines and Vietnam both expected to clock GDP growth above 6% in the coming year, and Indonesia aiming for above 5%.
In the Philippines in particular, the recovery in purchasing power seems to be underway. While there is no single pivot point that can be conclusively highlighted as the start of the turnaround, we are seeing quite a few data points painting a brighter picture for the year ahead.
As of the March 2025 reading, Philippine inflation had fallen to under 2%, well below the high single digit levels in 2023. Prices of key commodities such as sugar, flour, and the all-important rice, have begun to come down on the back of government support and lower importation costs. And wages, running behind the cost inflation of the last two years, have started to catch up. A majority of provincial wage boards have increased local minimum wages by between 5-9% during the 2nd half of 2024, with more announcements in the 1st quarter of 2025.
To our valued
stakeholders,
In my previous Chairman’s Message, I spoke about the VUCA environment (“Volatile, Uncertain, Complex, Ambiguous”) and how I expected this would be the “new normal” moving forward, given the dynamic world we live in. Last year’s events have shown just how little has changed.
Geopolitical concerns continue to cause worry across the globe, as regional conflicts continue to stew in Europe and the Middle East. Concerns on reliability of crop supply are increasing, as inclement weather and changing climate patterns affect harvests. Commodities such as coffee and cocoa are hitting multi-decade highs – even above the elevated levels I cited last year. And our interconnected world is being unshackled by rising protectionism and trade barriers in an increasingly multipolar world. As I write this, we are a few weeks out from the “Liberation Day” reset of the world’s largest economy, with massive tariff announcements on friend and foe alike, which were just as quickly suspended.
Truly, the “new normal” in 2024 still felt very abnormal, with the VUCA environment still very much part of the equation.
But this time we are seeing a small but noticeable return to confidence and growth in the regions where we operate – the bright optimism that comes from being part of a young and diverse market, 600 million strong. Southeast Asia continues to show growth prospects well above the global average, with the Philippines and Vietnam both expected to clock GDP growth above 6% in the coming year, and Indonesia aiming for above 5%.
In the Philippines in particular, the recovery in purchasing power seems to be underway. While there is no single pivot point that can be conclusively highlighted as the start of the turnaround, we are seeing quite a few data points painting a brighter picture for the year ahead.
As of the March 2025 reading, Philippine inflation had fallen to under 2%, well below the high single digit levels in 2023. Prices of key commodities such as sugar, flour, and the all-important rice, have begun to come down on the back of government support and lower importation costs. And wages, running behind the cost inflation of the last two years, have started to catch up. A majority of provincial wage boards have increased local minimum wages by between 5-9% during the 2nd half of 2024, with more announcements in the 1st quarter of 2025.
These twin reliefs on household budget pressure – lower costs and higher wages – along with general positive sentiment have helped improve consumer confidence as measured by the Bangko Sentral ng Pilipinas. We are transitioning away from a period where households were trading down due to abnormal cost pressures towards a period of moderation and quiet optimism around recovery. While 2024 was tough for the Filipino, 2025 is looking up.
Perhaps it is fitting that the theme of URC’s integrated report is Navigating Transitions. The last year has seen its fair share of challenges, and the company has had to pivot and adjust to the changing environment. But we have sailed through those choppy waters with aplomb, and reinforced our mission to continue delighting customers with good food choices, running the gamut from value to premium.
With this reminder of what makes URC unique, we will continue investing for the long-term despite short-term bumps along the way. In 2025, both our new flour mill in Sariaya, Quezon and our new megaplant in Malvar, Batangas will be coming online,
adding more headroom for growth in the Philippines. We are planning to purchase additional land in Thailand and Malaysia as we prepare for further overseas expansion. And we continue to build capacities and capabilities in our branded businesses, adding more headroom for growth in both our core categories and in adjacent segments.
Ultimately, all this preparation today is in service of navigating the transition towards our vision of tomorrow: a strong and resilient URC, creating and providing sustainable value growth for our stakeholders – our employees, consumers, customers, suppliers, and shareholders.
We welcome you on board, and look forward to your participation.
Lance Y. Gokongwei
Chairman
