Mariano Marcos State University

College of Business, Economics and Accountancy

Batac, Ilocos Norte

CORPORATE SOCIAL RESPONSIBILITY

OF
PETRON CORPORATION

Submitted by

Kyle Zmellic Castueras

Revianne Doroni
Peter John Juan
Meliza Madamba
Hazel Ann Martinez
BS Accountancy II

Submitted to

Dr. Ninfa S. Asia

Dean

Summer SY 2010-2011
THE PHILIPPINES’ LEADING OIL COMPANY
PETRON CORPORATION is the largest oil
refining and marketing company in the
Philippines. Supplying nearly 40% of the
country’s oil requirements, our world-class
products and quality services fuel the lives of
millions of Filipinos.

BUSINESS DESCRIPTION

Petron Corporation (Petron) is a Philippines-

based company. The Company is the refiner
and marketer of petroleum products in the
Philippines. As of December 31, 2010, Petron
had seven subsidiaries:

New Ventures Realty Corporation engaged in

acquiring and developing land; Petrogen
Insurance Corporation engaged in serving the
insurance requirements of Petron and its
allied business partners, such as contractors,
suppliers and dealers;

Overseas Insurance Corporation engaged in expediting the reinsurance of Petron's insurable interests as
covered by Petrogen Insurance Corporation; Petron Foundation, Inc. engaged in functioning and
operating as a charitable and research foundation;

Petron Freeport Corporation engaged in selling fuels, including gasoline, kerosene, diesel, lubricants and
greases, as well as operate retail outlets, restaurants, and convenience stores;

Petron Marketing Corporation is engaged in the fuel business, and Petron Singapore Trading Pte. Ltd.
established in 2010.
 Petron Corporation's over 75 years of existence in the Philippines
is a further testament to its commitment to providing quality
products and services.

Petron's colorful history dates back to September 7, 1933 when

the Socony Vacuum Oil Company of New York and the Standard
Oil Company of New Jersey formed the Standard Vacuum Oil Company (Stanvac). The end of the venture
in the early '60s split the marketing and refining interests of the company between Esso and Mobil.

In 1973, Esso sold its business to the government which became the Philippine National Oil Company or
PNOC. Subsequently, Mobil also sold its share of the refinery to PNOC.

The oil refining and marketing units in PNOC were eventually merged to form Petrophil, which was later
renamed as Petron.

As part of the government's privatization program, PNOC sought a strategic partner that would give
Petron a reliable supply of oil, plus access to state-of-the-art refining technology. The result was a
partnership with the world's largest oil producer, Saudi Aramco.

On February 3, 1994, PNOC and Aramco Overseas Company BV signed a share purchase agreement that
gave both a 40% stake in Petron. The remaining 20% of Petron shares were sold to the public.

In May 2008, the Ashmore Group acquired Aramco’s 40% stake in Petron. Following a mandatory tender
offer, an additional 10.57% was acquired by the London-based fund.
 
The PNOC likewise sold its share to another Ashmore subsidiary. Such divestment resulted in the
Ashmore Group holding approximately 90.57 percent of the outstanding shares of the company.
Leaders Behind The Success

RAMON S. ANG, Filipino, 56 years old, is the Chairman/Chief Executive Officer and Executive Director of
Petron since January 8, 2009. He is also the Chairman of the Board Executive Committee and
Compensation Committee. He is currently the Vice Chairman of San Miguel Corporation (SMC) and
President & Chief Operating Officer of SMC, Chairman of Liberty Telecom Holdings Inc. and Vice
Chairman and Director of Manila Electric Company. He also holds executive and directorship positions in
various SMC subsidiaries.

ERIC O. RECTO, Filipino, 46 years old, is the President/Executive Director of the company since October
7, 2008.He became a director of Petron on July 31, 2008. He is a member of the Board Executive
Committee and the Nomination and Compensation Committees. He is currently the Chief Executive
Officer of Eastern Telecommunications Philippines, Inc. (ETPI) and Vice Chairman & President of ISM
Communications Corporation, ETPI’s parent company. He is also Vice Chairman of Philweb Corporation
and Alphaland Corporation. He was previously Undersecretary of the Department of Finance, in charge
of both the International Finance Group and the Privatization Office.

BERNARDINO R. ABES, Filipino, 79 years old, has been a non-executive Director of the company since
July 2001. He is currently the Chairman of the Government Service Insurance System, following a three-
year term as Chairman of the Social Security Commission.

EDUARDO M. COJUANGCO, JR., Filipino, 74, is a non- executive Director of Petron since January 8, 2009.
He is also the Chairman and Chief Executive Officer of San Miguel Corporation. He is also the Chairman
and Chief Executive Officer of Ginebra San Miguel Inc.; Chairman of ECJ & Sons Agricultural Enterprises
Inc., Eduardo Cojuangco Jr. Foundation Inc., and San Miguel Purefoods Company Inc.. 

RON W. HADDOCK, American, 69 years old, is a non-executive Director since December 2, 2008. He is a
member of the Audit Committee and an alternate member of the Executive Committee. He sits as the
Chairman of the Board of Ashmore Energy International which he has occupied since September 2006.
 Management committee

RAMON S. ANG
Chairman & CEO

ERIC O. RECTO
President

LUBIN B. NEPOMUCENO
Senior Vice President & Gen. Manager

EMMANUEL E. ERAÑA
Senior Vice President & Chief Financial Officer

RAMON V. DEL ROSARIO

Vice President, Retail Marketing

MIGUEL V. ANGELES
Vice President, Commercial Marketing

ROWENA O. CORTEZ
Vice President, Supply

PETER PAUL V. SHOTWELL

Vice President, Depot & Plant Operations

SUSAN Y. YU
Vice President, Procurement

FREDDIE P. YUMANG
Vice President, Refinery

MA. CONCEPCION F. DE CLARO

Vice President, Corporate Planning

MA. CRISTINA M. MENORCA

Vice President, Controllers

ALBERT S. SARTE
Vice President, Treasurers

 
Petron's leadership extends across various segments of the downstream oil sector capturing over 38% of
the total market.

Petron sell fuel oil and diesel in bulk to industrial customers in power generation, construction, land and
marine transports, fishing, and various manufacturing sectors.

They also supply jet fuel to airlines, including Philippine Airlines and other international and domestic
carriers.

Petron retail gasoline, diesel, and kerosene to motorists, public transport operators through our more
than 1,400 retail stations. Petron Gasul, the leading LPG brand is likewise available to consumers
through our nationwide dealership network.

Petron likewise started to embark on the production of high-value petrochemical products, a strategic
decision which further improves not only Petron's financial viability but likewise its deliberate
positioning in the regional market.
PETRON FOUNDATION. Corporate citizenship and social responsibility are values firmly held in Petron
Corporation.  This is highlighted in the company’s corporate mission: caring for the community and the
environment. In pursuit of this mandate, Petron Foundation implements programs to secure the future
of the Filipino children and fuel their hopes through corporate social responsibility endeavors in the
areas of education, environment, health & human services and advocacy.

COMMUNITY SERVICE

Bataan Integrated Coastal Management  Program 

A comprehensive and long-term

program to manage the coastal and marine
resources of the province. It aims to promote
sustainable development in the province,
calling for the effective resolution of conflicts
arising from the multiple uses of coastal and
marine resources through an interactive, multi-
sectoral and interdisciplinary approach to
develop and implement a strategic
environmental management plan. It seeks to
manage the coastal and marine resources of
the province and, in the long term, help
rehabilitate the Manila Bay.
Project H.O.P.E. - Helping Filipinos Overcome Poverty through Education

It is focused on providing a specialized learning program for the underserved children and
youth.  For the children, the focus will be on sending elementary-aged kids from Grades 1 to 6, keep
them there, keep them well, and make sure that they learn. Support programs for the scholars’ parents
are also provided.  Parallel to this is the building of Petron Schools in areas where the need for a venue
for education is greatest. The program for the youth, on the other hand, will be focused on promoting
entrepreneurship among the youth.

Tulong Aral ng Petron

A long-term program undertaken by Petron Foundation that hopes to secure a better future for
our country’s less privileged children by giving children the chance to get into school, keeping them
there, keeping them well, and making sure that they learn.

Beyond giving its scholars an educational assistance of school uniforms, supplies and a daily
meal allowance, Tulong Aral is providing reading programs in partnership with Sa Aklat Sisikat
Foundation and Ronald McDonalds House Charities through their Bright Minds Read program.

Presently, there are over 3,000 Tulong Aral ng Petron scholars in 80 public elementary schools
across Metro Manila. There are another 730 scholars in Mindanao.

COMMUNITY REDEVELOPMENT

Petron Schools

Petron Foundation is building the PETRON SCHOOLS to give children access to venues for
learning, especially in the most remote or conflict-afflicted areas in the Philippines.

Youth Entrepreneurship Education

The company is taking a step further by initiating an entrepreneurial education and

development program, which hopes to develop the Filipino youth to become wealth creators. By
leveraging on Petron’s competencies, the company can help enhance the current high school curriculum
on entrepreneurship, give them opportunities for employment and, in the long-term, guide them to
become entrepreneurs.
 Together with the Technical Education, Skills and Development Authority (TESDA) and the
DepEd, a competency-based entrepreneurship education curriculum is being developed and piloted in
the Muntinlupa Business High School, the first and only business high school in the Philippines.

Caring for the COMMUNITY.

Petron Foundation looks to providing assistance to indigent communities with programs to address basic
health and human services. These include the Lakbayanihan medical missions and disaster management
and relief operations. There is also continued support to Lakbay Alalay, the 19-year, Marketing-led
motorist assistance project that has become a tradition for people trekking to the provinces during the
Lenten break.

EMPLOYEE DEVELOPMENT

Volunteerism in action or VIA

Petron is able to exhibit the kind of corporate leadership where promises are fulfilled,
commitments are honored and pronouncements are lived up to. With VIA, the company has been able
to do so with programs that engage the employees, the earliest going back to 1988. Quite fittingly, the
acronym VIA also best describes how the volunteerism program appeals to employees: VIA is a way, a
path or an opportunity by which employees can get directly involved in doing good for society in
whatever way they can. 

By taking part in the various CSR programs, Petron employees are able to go beyond their
professional chores and be involved in making a difference in society, be it planting trees, distributing
relief goods, building houses, telling stories to grade school children, sharing time with street kids or
cleaning the coast. It is during these instances that the employees get a deeper sense of fulfillment in
what they do for others, and galvanizes their commitment to serve beyond their duties.
ENVIRONMENTAL SAFETY

Petron’s terminals and

depots across the country have
been regularly leading coastal
cleanups, tree and mangrove
planting, environmental awareness
programs and other ecology
friendly initiatives.

Petron also has a major stake in the rehabilitation of the La Mesa Watershed, the last remaining
forest of its kind in Metro Manila. In 2005, we inaugurated the 1.2-kilometer Petron Fitness and Nature
Trail and the 2,500-seater Petron Amphitheater at the La Mesa Ecopark inside the watershed.

Reaping the REWARDS of corporate citizenship

Happily, Petron has had the good fortune to be rewarded in its efforts “to do good” to others. One
success indicator has been the windfall of recognitions that its CSR programs have received from
respected organizations, among them the prestigious Anvil and Gold Quill Awards.

The Anvil and Gold Quill awards were in recognition of outstanding public relations efforts to advocate
and sustain Petron’s programs to as many of our publics as possible.  These acknowledgments validate
the company’s work as good corporate citizens and consequently its leadership role in social
responsibility.