CHAIRMAN’S MESSAGE
Remarks of Federico R. Lopez, chairman and CEO, at the Lopez Holdings Corporation Annual Stockholders’ Meeting on Sept. 14, 2026
Held at https://conveneagm.com/ph/lpzasm2026

Annual Stockholders’ Meeting
Lopez Holdings Corporation
14 September 2026

COMPOUNDING GOOD CHOICES
The Compounding Value of Stewardship

Dear valued stakeholders,

At first glance, 2025 appeared less turbulent than the year before it. The dramatic disruptions that defined much of 2024—from climate extremes to geopolitical tensions and market volatility—seemed, at least temporarily, to ease.

Yet beneath the surface, the forces shaping our world continued to build.

We are increasingly operating in an environment where outcomes are not driven by isolated events, but by forces that compound over time. Across economies, institutions, and natural systems alike, change accumulates gradually until its effects become unmistakable.
Compounding is often associated with finance, where small gains sustained over time create significant long-term value. But the principle extends far beyond capital. In institutions, compounding reflects the cumulative effect of disciplined choices carried forward consistently across years and decades. In stewardship, it reminds us that the choices we make today—sustained across decades—ultimately shape the resilience of the systems entrusted to us.
Compounding, however, is not inherently positive. Emissions layered year after year compound into atmospheric change. Wrong investment decisions compound fragility. Small misalignments, repeated over time, eventually reshape entire systems.

But the reverse is equally true. Capabilities accumulate. Partnerships deepen. Strategic flexibility expands. Good choices, sustained consistently, alter trajectories.

This principle has long guided the evolution of Lopez Holdings Corporation and its investments.
Since its founding, the Company has sought to steward investments that contribute meaningfully to nation-building while creating long-term value for shareholders. Many of the businesses within the Lopez Group operate on extended time horizons. Energy systems, infrastructure networks, industrial ecosystems, residential communities, and educational platforms all evolve across decades. In such systems, direction matters more than speed.
Across generations, our Group has therefore sought not merely to participate in industries, but to help build institutions capable of enduring periods of disruption, transition, and reinvention.
This year’s Annual Report theme — “Good Choices: The Compounding Value of Stewardship”— reflects that continuing belief.
One clear example of long-term stewardship can be seen in the evolution of our energy investments through FPH. This year marks ten years since we made one of the most consequential decisions in our history: the commitment that we would not build, own, or operate coal-fired power plants.

At the time, coal remained the dominant source of baseload power in many markets, while renewable technologies had yet to achieve their current scale and competitiveness. The decision therefore required accepting near-term constraints in favor of longer-term alignment with structural realities that were only beginning to emerge. It was not a decision made in response to prevailing sentiment. It was a decision grounded in trajectory.

Over the past decade, the global energy landscape has changed profoundly. Renewable technologies have scaled rapidly. Carbon risk has become increasingly embedded in capital allocation decisions. Energy security concerns have reinforced the value of indigenous and diversified energy systems.

Today, through First Gen, we are the country’s largest producer of renewable energy, with a diversified portfolio spanning geothermal, hydro, wind, and solar resources built through decades of sustained investment. These investments strengthen not only decarbonization efforts but also the long-term energy security and competitiveness of the Philippines.

What began as a difficult strategic choice became the foundation upon which further good choices could compound.

Clarity of direction compounds advantage.

Beyond our physical assets, resilience ultimately depends on people. Together with our employees, customers, suppliers, and communities, we continue taking concrete steps toward environmental stewardship and regeneration.

The compounding of good choices is therefore not simply a slogan. It is a framework for stewardship.

That stewardship is becoming increasingly urgent.

In early 2026, global monitoring agencies confirmed that 2025 ranked among the three warmest years ever recorded, with global average temperatures approaching 1.5°C above pre-industrial levels. Atmospheric carbon dioxide concentrations continued rising, reflecting the accumulated result of decades of industrial activity.

These are no longer distant projections. They are measurable realities.

Climate change illustrates compounding in its purest form. Every year’s emissions accumulate upon those that came before. The consequences emerge gradually, then suddenly. What appears manageable for years can eventually cross thresholds beyond which adaptation becomes increasingly difficult and expensive.

The Philippines continues to experience the direct consequences of these compounding events. In 2025 alone, the country faced more than twenty tropical cyclones, alongside severe flooding, extreme rainfall events, and dangerous heat conditions across several regions.

Climate-related disruptions are becoming more complex, more persistent, and more costly.

For countries such as ours — exposed both to physical climate risk and to energy import volatility — the direction of transition will increasingly determine long-term resilience and competitiveness.

Across the broader Lopez Group, our businesses continue evolving with this reality in mind. Through energy transition, resilient infrastructure, sustainable land development, manufacturing, and human capability-building, we seek to contribute to systems capable of enduring the stresses of a changing century.

Taken together, our businesses represent more than a portfolio of investments. They reflect an enduring belief that stewardship, exercised consistently across generations, can help create institutions capable not only of surviving change, but of contributing positively to society through periods of profound transformation.

This remains our enduring mission: to forge collaborative pathways for a decarbonized and regenerative future.
In a century increasingly defined by constraint — carbon constraint, resource constraint, and time constraint — the quality of our choices will matter more than ever.

The responsibility before us is therefore clear: to ensure that what compounds, year after year and decision after decision, is resilience rather than fragility, and long-term value rather than short-term extraction. That is the responsibility we have accepted — and the responsibility we intend to uphold.

Thank you for your continued support.