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Sunday, April 14, 2024

Typhoon, pandemic cited in P48-B PLDT overrun

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THE management team of PLDT Inc. admitted fault on oversight functions over the P48-billion budget overruns it recently unearthed within the organization, an irregularity that they blame on Typhoon Odette and the pandemic.

One of the analysts who joined the company’s briefing for investors and analysts on Wednesday disclosed that PLDT bigwig Manuel V. Pangilinan personally explained, in part, how the company incurred billions of pesos in budget overruns.

“They explained the decisions on the capex. The explanation they gave was the typhoon and the pandemic. They needed to install broadband to houses quickly due to pressure from Duterte and competitors. Vendors have been installing equipment even before asking approval. So they deploy first even before being budgeted in the capex. That’s the only explanation that I understood,” said an analyst who requested anonymity.

The analyst further explained that they were told that when personnel requested for capex disbursement, the management “did not ask if this was within the budget.”

“The management acknowledged that they failed to ask. Then at the same time, those who requested for the capex did not provide anything,” the analyst said.

Pangilinan did not welcome reporters who camped near the analysts’ briefing room at the Dusit Thani Manila on Wednesday. Security personnel quickly blocked media off inside a makeshift holding room inside the hotel’s gym when PLDT Spokesman Cathy Y. Yang went ahead of Pangilinan.

Shortly after Yang left, reporters were allowed to go out of the hotel gym.

PLDT officials have been mum on the real reason behind the so-called budget overruns.

Friday last week saw PLDT announcing that it had a “budget overrun” of P48 billion, which represents 12.7 percent of its total capital expenditures (capex) spend of P379 billion over the last four years. The overruns, uncovered through “ongoing internal forensics,” were incurred when PLDT Chairman Manuel V. Pangilinan was the concurrent president and CEO of the telco titan.

He stepped down in mid-2021 and was replaced by Alfredo S. Panlilio, who was then chief revenue officer and president of subsidiary Smart Communications Inc.

Despite this, the telco highlighted that, as far as initial investigations are concerned, “fraudulent transactions, procurement anomalies, or loss of assets arising from the capex spend” are “not uncovered.”

Cooperating with regulators

THE Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE), and the Capital Markets Integrity Corp. (CMIC) are separately conducting inquiries on the elevated capex spend and the trading activities on PLDT shares before its disclosure on Friday.

“PLDT has responded to separate requests for clarifications and answers from SEC and PSE, and will continue to respond promptly to any further requests. The company is also gathering all the information requested by CMIC,” PLDT Assistant Corporate Secretary Abner T. Alberto said in a regulatory filing to the local bourse.

He further told the stock exchange that PLDT also needs to “understand the range of issues involved and the extent of the matter.”

“Until this information is complete, any announcement would have been premature to the detriment of the public shareholders. Last Friday’s disclosure was done not one day sooner because PLDT needed time to conduct its investigation of the contracts and expenditures involved as well as to meet its major vendors for reconciliation of outstanding amounts and project status. It also needed to identify and indicate in the disclosure its action plan moving forward,” Alberto said in the disclosure.

PLDT SVP and Head of Consumer Business Jeremiah de la Cruz, in a chance interview, said PLDT is “working together as one team” to address the issues.

He declined to give further details, but noted that “it’s business as usual for us at PLDT Home.”

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