First Pacific may up stake in PLDT

Hong Kong’s First Pacific Co. Ltd. said yesterday it had discussed raising its 24.3 percent stake in the Philippines’ largest phone firm, Philippine Long Distance Telephone Co. (PLDT), two years after dropping plans to sell the holding.

"The board loosely discussed the possibility of First Pacific increasing its stake in PLDT. But this is not our priority at this point in time," First Pacific chief executive officer Manuel Pangilinan said yesterday.

"It is just one of the many options we are looking at to further strengthen First Pacific’s presence in the region," he said in a mobile phone text message. He did not elaborate.

Pangilinan is also chairman of PLDT, which dominates the country’s fixed- and mobile-phone services through two cellular brands – wholly owned Smart Communications and 45-percent owned Pilipino Telephone Corp (Piltel).

First Pacific’s talk of increasing its stake, already the biggest single holding in PLDT, is a complete turnaround from its plan two years ago to sell all its shares to the Manila-based Gokongwei group, which runs the country’s third-biggest telecoms group, Digital Telecommunications Inc.

Pangilinan, who was then president of PLDT, strongly opposed the plan because of PLDT’s strong growth potential. Its shares have risen almost five-fold from an October 2002 trough.

PLDT – whose market capitalization of more than $3 billion makes it the country’s second-biggest listed company – expects its net income this year to rise by more than half to P17-P18 billion from P11.2 billion in 2003.

Its first-quarter net income more than doubled to P5.24 billion, as more Filipinos took advantage of cheaper cellular services.

Pangilinan said at First Pacific’s annual meeting on Monday the telecoms and food conglomerate could resume paying a dividend next year if it sees stronger performances at PLDT and its noodle making unit, Indofood Sukses Makmur Tbk.

PLDT, which has not paid a dividend since 2001, is expected to pay out 10 percent of its 2004 profits next year.

The company was once a limping giant unable to roll out land lines to the country’s 7,100 islands and burdened by debt-ridden Piltel. It was nursed back to health by Pangilinan, who headed First Pacific’s takeover in 1998 from the Manila-based Cojuangco group.

Pangilinan became PLDT’s chairman in February.

PLDT shares rose 1.49 percent, or P15, to P1,020 as the main index finished 0.81 percent higher.