PLDT Inc. on Thursday, Dec. 22, said its core business remains strong despite its P48 billion budget overrun.

"There was no fraud, no anomalies, no evidence of overpricing, and no unrecorded transactions in relation to the overrun," Chairman Manuel V. Pangilinan said in a disclosure to the Philippine Stock Exchange after holding a special investors briefing on Wednesday.

In that briefing, PLDT's top management assured the fund managers, investment analysts and bankers, that its business overall remains "healthy and robust even as it continues to address its elevated Capex spend and undergoes a comprehensive process review".

PLDT’s earnings before interest, taxes, depreciation, and amortization for 2022 will remain unaffected by the Capex overrun and is on track to hit P100 Billion, as originally indicated.

The telco's core net income is expected to reach between P32.6 to P33 Billion, as guided, according to Pangilinan.

In addition, PLDT expects to be able to pay the balance of the regular dividend for the full year 2022 estimated at P45 per share; and the remaining special dividend of P42 per share.

This would bring total dividends for 2022 to P134 per share or 88 percent of 2022 expected earnings.

“The bulk of the P48 Billion Capex overspend involves the procurement of network equipment necessary to provide stronger connectivity to subscribers, specifically 5G cell sites for our mobile network and fiber rollout. There will be no write-off of these assets,” the PLDT chairman said.

When asked about the context within which the overspend was made, PLDT President and CEO Alfredo S. Panlilio explained that a confluence of factors occurred.

These includes PLDT having to regain network leadership following years of under-investment in Capex; the threat from former President Duterte for telcos to shape up; intense competition in the telco sector with the then anticipated entry of DITO funded by China Tel, as well as the emergence of a competitor in the fiber space, Converge.

Finally, the occurrence of the Covid-19 pandemic and the resultant lockdowns and quarantines, which required the installation of speedy fiber connections in millions of households for work and school, pushed network teams to fast-track rollouts.

“However, to the extent of the Capex ordered, we plan to reduce fresh Capex starting in 2023," said Panlilio.

"Thereafter, we expect Capex to reduce steadily. 2023 will be a year of consolidation as we continue to strengthen and grow the business. We strive to be better,” he elaborated.

Negotiations with vendors are ongoing, while simultaneous reviews of network project monitoring and process flows are being undertaken, says PLDT Chief Legal Counsel Marilyn A. Victorio-Aquino.

“Rest assured that we will provide additional disclosures in due course. What we want to avoid is premature disclosure, that could harm the public shareholders,” she reasoned.

Asked to comment on the statement of PSE President Ramon Monzon that the bourse does not see any indication of any fraudulent trades prior to the disclosure, Pangilinan responded he “welcome(s) this bit of good news from the PSE” and added that “this confirms that no insider trading occurred in respect of last Friday’s disclosure.”