PLDT cautious about next year’s outlook

CEBU, Philippines — Despite its encouraging performance as of the third quarter of 2022, the PLDT Group has adopted a cautious outlook for 2023, saying it is expecting a tough year ahead with several uncontrollable crises faced by the global economy.

During the recently concluded PLDT 2022 briefing for the company’s performance in the first nine months of 2022, PLDT chairman Manuel Pangilinan expressed apprehensions about 2023’s outlook, despite the opening of the economy from COVID-19 restrictions.

Pangilinan mentioned the rising interest rates that could cause borrowing cost to increase, which in turn dampens the investors’ interest to invest. The geopolitical unrest between Russia and Ukraine also puts pressure on the rise of fuel and oil costs.

 “At this time that the consumer wallet is diminished—when consumer income is under threat and Government finances are challenged—investments will emerge as a primary recovery tool. Hence, investments are needed, both by the Government and the private sector to drive the economy forward,” said Pangilinan.

“The supreme task of nation-building is one that the Group is very serious about. We help as many people as we can, especially those below the line poverty, in partnership with Government. After all, the essential task of PLDT, and indeed the ultimate test of our effectiveness, transcends the goal of delivering goods and services for profit. It is, and will remain, the improvement of people’s welfare,” Pangilinan added.

As the PLDT Group sustains its transformation initiatives against the backdrop of toughening economic headwinds, the management has offered similarly tempered optimistic views for the business.

“Our third quarter performance has shown that the business continues to do well amidst external challenges—first COVID-19, then inflation and high-interest rates, not to mention the ever-present typhoons—and the indication so far is that the full year performance will be ahead of last year especially as the fourth quarter is typically a good one. We must focus and execute well,” added Alfredo S. Panlilio, PLDT and Smart Communications President and Chief Executive Officer (CEO).

“Ultimately, PLDT’s main advantage is having three revenue engines with strong competitive and complementary positions. This has made the PLDT Group resilient in challenging times. We are also watching our capex levels, especially the impact of the weakening peso on our dollar-denominated debts and imported capex, even capex committed in previous years and

current ones. With the disciplined effort led by our Transformation Office, we are trying to manage some softness in our topline, as well as tightly control our costs,” Panlilio noted.

"In recent years, we have taken bold steps to ensure telco leadership in many aspects: from our aggressive network transformation to our continuous product and service innovations. At the end of the day, we must remember that everything that we do is not just because we love technology: We are here to serve our customers and remain relevant to them, assuring them that they can count on us," Panlilio said.

Despite increasing economic headwinds, Consolidated Service Revenues (net of interconnection costs) grew by 4.5 percent, or ?6.1 billion, to a nine-month all-time high of  ?141.9 billion in the first nine months of 2022, as consumers thrived on their digital lifestyles in the new normal.

In the third quarter, PLDT Group’s Service Revenues grew by four percent, or ?1.7 billion, to ?47.7 billion, compared with the same period last year.

Data and broadband, which grew by nine percent or ?9.3 billion to ?113.2 billion in the first nine months, continues to drive growth, contributing 80 percent of Consolidated Service Revenues.

PLDT is in the process of reviewing its consolidated capex (capital expenditure) for 2022, which could exceed the initial capex guidance of P85 billion. Once the review is completed, PLDT will issue a separate disclosure on the matter. — LPM