PLDT, the largest phone company in the Philippines, announced that key executives, including chief financial officer (CFO) Anabelle Lim-Chua, have left the company following an internal probe into the company’s substantial overspending, reports Nikkei Asia.
Lim-Chua, a highly respected executive who was named the Philippines’ best CFO in 2021, opted for early retirement on April 16 after being on leave since the budget overrun was reported in December 2022.
Mario Tamayo, senior vice president and network head, and Mary Rose Dela Paz, senior vice president and chief procurement officer, also left the company.
The overspending occurred at a time when PLDT faced criticism from then-President Rodrigo Duterte, as well as intense competition in the telecoms sector. This partially contributed to a 60% decline in PLDT’s profit in 2022.
PLDT’s legal troubles aren’t over
PLDT’s internal investigation, which covered activities from 2019 to 2022, has been deemed “substantially complete” as of March. The company stated that there is no need to restate its historical financial results. PLDT claims the investigation found no evidence of fraud, intentional concealment or bad faith conduct by any PLDT employees.
Although the budget overrun issue has been addressed internally, PLDT still faces legal challenges. Several class action suits have been filed against the company in the United States by investors seeking compensation for losses.
PLDT had previously estimated that it overspent PHP 48 billion ($884 million) on capex from 2019 to 2022 during an aggressive push to upgrade its network infrastructure. However, after signing Settlement and Mutual Release Agreements with major vendors, the amount was reduced to PHP 33 billion ($608 million).
In December 2022, PLDT suspended four executives pending the outcome of the investigation, including the heads of finance, procurement, and networks, and another official responsible for directing the company toward specific equipment suppliers and vendors. By the end of that month, PLDT had concluded discussions with 80% of the vendors involved in the outstanding commitment as of 2022.
Remaining PLDT execs are optimistic
Despite the budget overrun, PLDT Chairman Manuel Pangilinan remained optimistic in a March statement, stating that the company’s profit would have been “north of PHP 50 billion” without the depreciation cost. He also reported a 10% increase in telco core income, which excludes asset sales, to PHP 33.1 billion and expects 2023 numbers to surpass 2022.
However, PLDT’s wireless segment experienced a 5% revenue decline in 2022, which the company attributes to inflation and competition from rivals, particularly in the last quarter of the year.
In March, PLDT President and CEO Alfredo Panlilio emphasized the company’s strong performance, stating, “We still have one of the highest EBITDA margins in the region.”