MOVING ON A forensic review of PLDT’s P48-billion budget overrun showed “no evidence of fraud,” says company chair Manuel Pangilinan. —INQUIRER FILE PHOTO
MANILA, Philippines -PLDT Inc. is ready to move on from the P48-billion budget overrun issue that dragged its 2022 net income and resulted in multiple class action suits in US as it wrapped up the investigation into the financial fiasco.
The telco giant led by tycoon Manuel Pangilinan stressed that “no evidence of fraud, intentional concealment or bad faith conduct on the part of any employee of the company” has been uncovered from the forensic review conducted by external counsel, mirroring the initial probe done previously.
The overspending concern was revealed in December, with the company admitting the amount has accumulated for a few years already. PLDT previously said the budget overrun was due to high capital expenditure (capex) level as it ramped up purchases of 5G technology.
PLDT uncovers P48-B ‘budget overrun’, revamps management
“It is incumbent upon the management and the board to get back on the saddle and move on, move forward, and demonstrate that despite this big hump on the road, the financial and operating conditions of the company remain strong and robust,” the billionaire said during a press briefing in Makati on Thursday.
Along with this, the listed telco has completed negotiations with major vendors, bringing down the debt to about P33 billion.
PLDT, in response, has put in place measures to prevent the overspending from happening again.
Danny Yu, the company’s group controller, said there have been “refinement policies regarding budgeting, as well as the accruing process.”
“There is also improvement to project management systems to efficiently monitor capex spending,” he added.
Last year, its capex grew by 9 percent to P96.8 billion, which went to the deployment of fiber ports and investment in data center and cable systems, among others. Capex guidance for 2023 is lower at P80 billion to P85 billion.
Pangilinan said the company would borrow P19 billion this year to finance some of the telco giant’s expenses.
“We will focus on bilateral loans provided to us by our bankers. We still have bank lines,” said PLDT treasurer Leo Posadas.
Involved officials
As for the lifting of the suspension of key officials amid the financial debacle, Pangilinan said they have yet to address the issue.
PLDT also said the US law firms that filed class action law suits against the company have yet to serve them the papers.
PLDT acknowledges US class action suit
The Inquirer previously reported that Sophia Olsson, a PLDT investor, filed the lawsuit on behalf of other plaintiffs in California as they demand compensation from the losses they incurred after PLDT securities’ price drop due to the budget overrun issue.
Olsson is represented by The Rosen Law Firm, P.A. Law firms Bernsteid Liebhard LLP and Robbins LLP likewise filed class action suits, according to their separate notices.
Last year, PLDT Inc. saw its net income plunge by 60 percent to P10.49 billion, as it incurred “accelerated” depreciation amounting to P51.2 billion.
Total revenues were up 6 percent to P205.25 billion for the period. Service revenues climbed by 4 percent to all-time high P190.1 billion last year.
PLDT president and CEO Al Panlilio said the company’s fundamentals have remained strong as evidenced by its earnings before interest, tax, depreciation and amortization growing by 4 percent to P100.48 billion. This was the first time PLDT breached the P100-billion mark.
This year, the telco giant is eyeing to increase its revenues by mid-single digit.
“Despite the adversities, I remain convinced that PLDT will not only survive but thrive; our core business is strong and our people endured, inspired by our singular mission of safeguarding and enhancing shareholder value,” Pangilinan added.