NEXT NEXT A forensic review of the PLDT’s P48 billion budget overrun found “no evidence of fraud,” says the company’s chairman, Manuel Pangilinan. – FILE PHOTO OF QUESTIONER
MANILA, Philippines — PLDT Inc. is poised to get over the P48 billion budget overrun problem that took a toll on its net income in 2022 and prompted multiple class-action lawsuits in the U.S. as it closed its investigation into the financial fiasco.
The telecoms giant, run by tycoon Manuel Pangilinan, stressed that “no evidence of fraud, willful concealment or malicious conduct on the part of any employee of the company” was uncovered during its forensic review by an outside attorney, mirroring the original investigation conducted earlier.
Concerns about overspending were revealed in December, with the company admitting the amount has been piling up for a number of years. PLDT previously said the budget overrun was due to high capital expenditures (capex) as it increased purchases of 5G technology.
PLDT uncovers “over budget” at P48-B and overhauls management
“It’s on management and the board of directors to get back in the saddle and keep going, moving forward and showing that the company’s financial and operating conditions remain strong and robust despite this big hump along the way,” the billionaire said during a Press conference in Makati on Thursday.
In addition, the listed telecom company has finalized negotiations with major providers and reduced debt to about P33 billion.
In response, the PLDT has taken action to prevent the overspending from happening again.
Danny Yu, the company’s group controller, said there have been “refinement guidelines in terms of budgeting as well as the accumulation process.”
“There are also improvements in project management systems to monitor capital expenditures efficiently,” he added.
Last year, capital expenditures grew by 9 percent to P96.8 billion, which included the provision of fiber optic connections and investments in data centers and cable systems. The Capex forecast for 2023 is lower at 80-85 billion pesetas.
Pangilinan said the company will borrow 19 billion pesos this year to fund part of the telecom giant’s spending.
“We will focus on bilateral loans made available to us by our bankers. We still have bank lines,” said PLDT Treasurer Leo Posadas.
Officials involved
Regarding the lifting of suspensions of key officials amid the financial debacle, Pangilinan said they have yet to address the issue.
PLDT also said the US law firms that have filed class action lawsuits against the company have yet to serve them the papers.
PLDT Acknowledges US Class Action
The Inquirer previously reported that Sophia Olsson, a PLDT investor, filed the lawsuit on behalf of other plaintiffs in California seeking compensation for losses they suffered after the price of PLDT securities fell due to the budget overrun.
Olsson is represented by The Rosen Law Firm, PA The law firms of Bernsteid Liebhard LLP and Robbins LLP also filed class actions, according to their separate filings.
Last year, PLDT Inc. saw its net profit fall 60 percent to 10.49 billion pesos as it suffered an “accelerated” write-down of 51.2 billion pesos.
Total revenue for the period rose 6 percent to 205.25 billion pesos. Service revenue rose 4 percent last year to an all-time high of 190.1 billion pesos.
PLDT President and CEO Al Panlilio said the company’s fundamentals remained strong, as evidenced by earnings before interest, taxes, depreciation and amortization growing 4 percent to 100.48 billion pesos. This was the first time PLDT broke the 100 billion plague mark.
This year, the telecom giant is aiming for mid-single-digit revenue growth.
“Despite the odds, I remain convinced that PLDT will not only survive but thrive; Our core business is strong and our people endure, inspired by our unique mission to secure and grow shareholder value,” added Pangilinan.
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