PLDT meets suppliers, moves to cut budget overrun

PLDT Inc. on Tuesday said it is in talks with suppliers for discounts and the cancellation of certain components of delayed projects to reduce its PHP 48-billion budget overrun.

“The ongoing discussion with the principal vendors includes negotiation on discounts and cancellation of certain portions of delayed projects that have not been started or completed, which would reduce the capex (capital expenditure) overrun,” the company said in a disclosure to the stock exchange.

The Pangilinan-led company added that its discussion with suppliers also includes the possible replacement of certain projects that will be canceled.

On the alleged unrecorded transactions, the company said that its recent disclosure on capex spending “did not mention any unrecorded transactions.”

It clarified that the ongoing discussion with the vendors referred to in its disclosure will provide the company with “more information and basis to determine the appropriate treatment of the PHP 48 billion on our books.”

“The P48-billion expenditures are expected to be completed in 2022 to 2023 barring any delays,” it said. These will then enter its financial statements as they are completed, it added.

“These are projected to be completed from 2022 to 2023 (and possibly 2024 should there be delays),” it said.

According to the company, its chairman, Manuel V. Pangilinan, received information in October 2022 on the accumulated capex spend “reflecting a total amount which is higher than the projected capex spend.”

The company estimates a budget overrun of about P48 billion, which represents about 12.7% of its PHP 379-billion capex over the past four years. It attributed the budget overspending to site rollout, transport projects, and ports rollout.

“After receipt of the information and further internal verification, the company undertook an internal forensics investigation mandated by the company’s Board and Audit Committee with the assistance of an external consultant,” PLDT noted.

The company also denied reports of employee suspension in connection with the budget overrun.

“The concerned officers are on leave with pay to allow the conduct of an independent investigation on the elevated capex spend, although they have made themselves available to the company to answer questions or provide clarifications as needed,” PLDT said.

The company stressed that its “forensic investigation is still ongoing,” adding that thus far, “no fraudulent transaction, procurement anomaly, or loss has been identified or uncovered.”

It plans to borrow PHP 35-45 billion in the next two years for “general corporate purposes including, but not limited to, payment of capex and dividends.”

Meanwhile, the company disclosed in separate disclosures on Tuesday that Mr. Pangilinan bought 3,000 PLDT shares at prices ranging from PHP 1,235 to PHP 1,269 apiece, while PLDT President and Chief Executive Officer Alfredo S. Panlilio also bought 3,000 shares at PHP 1,270 each.

Both executives made the transaction on Dec. 19.

PLDT Vice-President Luis Gregorio D. Casas also acquired 170 PLDT shares on Dec. 19, while PLDT Vice-President Radames Vittorio B. Zalameda disposed of 120 shares on Dec. 9, bringing his total disposed PLDT shares to 550.

PLDT shares closed 2.6% higher at PHP 1,262 apiece on Tuesday.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin with input from Justine Irish D. Tabile