BIZ BUZZ: MVP’s closed-door briefing
With a whopping P48-billion in “budget overruns” under scrutiny, PLDT chair Manuel Pangilinan admitted to investors he had been remiss in poring over the telco’s accumulated capital expenditures (capex) in recent years.
Moving forward, he said network monitoring and procurement would have to be tightened.
“Nobody is shirking from their responsibility. I take command responsibility and Al [Panlilio] also takes full responsibility,” Pangilinan a.k.a. MVP said in an investors’ briefing on Wednesday, based on the transcript of the meeting obtained by Biz Buzz.
“But when people allege that there are no controls process in place, it’s simply not right,” he stressed.
He was responding to an analyst who asked where internal controls may have broken down and what’s being done about it.
MVP said PLDT’s internal process was “actually not bad.” The network unit implements the infrastructure rollout while procurement of any equipment is subject to bidding. Before any purchase order action is taken, it is checked with the finance unit. Software SAP (Systems Applications and Products in Data Processing) also records everything.
“So, the data are there. It is within the system,” MVP said. “The question is: to what extent are the accumulated and unspent capex reported at our level?”
MVP said he himself had not thought of asking his people—who were under pressure to upgrade the system amid cutthroat competition and a former President Rodrigo Duterte who was breathing down their neck to improve service—whether they had carryover capex (or those rolled over from the previous year).
So when this unraveled sometime in October, “nabulaga kami! (we were caught by surprise).”
The bulk of the capex surge happened in 2020 and 2021 and when it finally dawned on those involved in internal supply chain, they tried to correct it, MVP said.
Four vendors, namely Cisco, Huawei, FiberHome and Ericsson, are the key players here. During the briefing, MVP and his team assured investors that a significant chunk of the capex had been delivered and that the assets—mostly related to 5G rollouts—are sitting in the warehouses of either PLDT or the vendors and are just waiting to be installed once PLDT is ready to do so.
On allegations that there may be anomalous related transactions, MVP said he isn’t a stockholder of any of these, and neither is anyone else in the organization.
“And we do have a governance committee and part of their portfolio is to look at related party transactions. There is a policy in place and that is reviewed every time there is a governance committee meeting…” he said.
“But you know when you are at the board level, you rely on the information supplied to you, unless you ask more questions. And that question about accumulated capex, was not raised, unfortunately.”
Recall that MVP had been focused on Metro Pacific Investments Corp. during the last few years when the “capex party,” as some people describe it, happened. Now he has no choice but to take control once more.
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