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Pangilinan says PLDT’s budget overrun issue ‘largely resolved’

Businessman Manuel V. Pangilinan, the chairman of PLDT Inc., on Thursday said the multi-billion peso capital expenditure (capex) overrun issue which hounded the Philippines’ largest telco has been “largely resolved.”

“The capex overrun issues have largely been resolved; it is time in 2023 for PLDT to face forward, and move on. We should now channel our energies towards keeping the PLDT Group well-positioned for growth amidst this challenging macro-economic environment,” Pangilinan said in a disclosure to the Philippine Stock Exchange.

In December last year, PLDT disclosed it incurred P48 billion in capex overrun or unexpected budgetary increment from 2019 to 2022, blamed on speedy installations of fiber connections, COVID-19 pandemic, and intense competition as the telco works to regain market leadership.

This was later scaled down to P33 billion after settlements with major vendors.

The budget overrun issue triggered a management shakeup in PLDT with the exit of key officials.

A class action lawsuit was also filed against current and former PLDT executives in relation to the capex overspend issue before a United States court.

The telco has been saying that its internal probe into the issue has not uncovered fraud, anomalies, or overpricing.

At a press briefing in Makati City, PLDT chief financial officer Danny Yu said as of the first quarter of 2023, the telco has already settled with vendors about P11 billion to P14 billion of the P33-billion capex overrun.

“We’ve learned a lot from the audit…a lot of programs and processes and really systems have to be in place and we’re putting the controls in a strict procurement process and monitoring of approvals,” PLDT president Alfredo Panlilio said.

Despite resolving the capex overspend issue, Panlilio said PLDT will stick with its capex guidance of P80 billion to P85 billion this year, which is lower than the around P97 billion it spent last year.

In the January to March period, PLDT saw a relatively flat net income of P9 billion, on the back of a 5% increase in revenues to P52.36 billion from P49.83 billion.

“Because of soaring inflationary pressures, we must strive to attain cost-efficiency and operational excellence in order to provide leveled-up customer experiences while keeping our products and services affordable for our subscribers. We continue with our transformation initiatives to strengthen our core business as we plan for our growth strategies,” Panlilio said.—AOL, GMA Integrated News