Following an upgrade by Standard & Poor’s (S&P) last week, Philippine Long Distance Telephone Co. (PLDT) became the first corporation in the country’s history to be considered “investment grade” by the world’s top credit rating agencies.
In a statement on Monday, PLDT chairman Manuel V. Pangilinan said this was an affirmation of the company’s new strategy of investing heavily in the media sector that would pave the way for the country’s long-term growth.
“We are gratified that PLDT is the first corporation in the country to obtain such ratings from the three major global credit watchers—S&P, Moody’s Investor Service and Fitch Ratings,” PLDT CEO Napoleon Nazareno said.
PLDT’s long-term dollar credit was upgraded to the minimum investment-grade rating of “BBB-” by S&P last week, following an upgrade to the Philippines’ sovereign credit standing to a notch below investment grade.
The upgrade on the Philippines was a reflection of the country’s improved economic fundamentals—a result of the administration’s better tax collections, low inflation and a growing services sector.
PLDT is rated at “Baa3” by Moody’s and “BBB-” by Fitch. Both ratings are considered “investment grade,” which indicates a high probability that the company will be able to meet its financial obligations.
“The overall financial strength and competitive advantage of PLDT are reflected in the distinction of being the only Philippine company whose debt ratings are similarly regarded as investment grade by all three rating agencies,” PLDT chairman Pangilinan said.
Pangilinan, managing director of PLDT’s largest shareholder Hong Kong’s First Pacific Co. Ltd., said the company’s rating upgrade showed the financial sector’s confidence in the company’s plan to pour in billions to the group’s media businesses.
“This affirms the soundness of our business strategy to transform PLDT into a multimedia services group, which has placed the company in the best possible position to enhance its leadership position far into the future,” Pangilinan said.
Last May, PLDT announced a plan to invest P6 billion in MediaQuest Holdings, a subsidiary of the company’s Beneficial Trust Fund. MediaQuest owns Associated Broadcasting Corp., which operates the TV5 network.
It also has investments in radio, pay television, and print publications, including a minority stake in newspaper BusinessWorld and the Philippine Daily Inquirer.
In an unrelated development, GMA Network Inc. chairman Felipe L. Gozon denied that his family, together with the company’s other shareholders, had signed a deal to sell the television station to the Pangilinan group for P52 billion.
Reacting to an Inquirer report, which quoted sources privy to the discussions between GMA and the Pangilinan group, Gozon said “we are not the source of the information.”
“We have not signed anything with the supposed buyer,” said Gozon, who owns GMA together with the Jimenez and Duavit families.