Risk Management
FILRT's risk governance is led by a Board Audit and Risk Oversight Committee which considers strategic, operational, financial and compliance risks, sets the tone for risk treatment and assesses risk monitoring and assessment reports. The President and CEO serves as the risk executive for FILRT.
The table lists down the significant risk items with the corresponding risk mitigation actions.
| TOP RISKS | COMPANY RESPONSE |
|---|---|
| Philippine macroeconomics and demand for commercial space | Continued development of Filinvest City and interconnections with government's planned transport infrastructure |
| COVID-19 pandemic and resulting economic downturns and mobility restrictions | Support to and compliance with government's directives on COVID-19, on both health and deferred payments Focus on its leasing strategy to multinational global firms, including BPO, IT and traditional companies Various measures for the safety of tenants, customers, suppliers, service providers and employees |
| Government's real estate-related policies | Engagement with national agencies during the public consultations on policies or regulations under development |
| Related party transactions | Corporate governance provisions and related party transactions policy Application of arms-length principle in all dealings Compliance with BIR transfer pricing guidelines |
| Lease-related risks: global leasing trends, vacancies, reduced occupancy, untimely expiration or early termination of leases, delays and inability to collect rent payment, volatility in market rental rates | Leasing policies on screening tenant applicants Securing appropriate mix of tenants; Security deposits and advance rent Reconfiguration of tenant spaces where required Flexibility to tenant needs |
| Loss of PEZA accreditation, tax exemptions and incentives | Compliance with conditions in accreditations and permits Timely renewal of permits and filing of mandatory reports |
| Competition in real estate market | Continuous investments in quality properties Continuous repair and maintenance of properties |
| Illiquidity of real estate investments | Active management of capital structure Well-balanced risk management strategy |
| Increase in operating expenses | Optimization of operating costs Operational efficiencies, including energy management and digital solutions |
| Litigation risks and regulatory disputes | Relationship management with regulators Adoption of clear dispute resolution mechanisms |